APRIL 28, 2005 -- Under the terms of the fiscal 2006 federal budget agreement announced Thursday afternoon by House and Senate negotiators, the Senate Finance Committee is under instructions to recommend cuts totaling $10 billion over the period 2006–2010. But it's too soon to tell whether there are enough votes on the committee to take all $10 billion from Medicaid, say Senate staffers and health care lobbyists.

Logically, that suggests that Medicare cuts may yet be in the offing under the reconciliation process, which allows spending reductions to be approved in the Senate by a simple majority. But there are reasons to doubt that Medicare will be used to hit the $10 billion target, analysts said.

Sen. Gordon H. Smith, R-Ore., was successful in the budget negotiations in preventing the Finance Committee from having to come up with ways to cut Medicaid or other programs under the panel's jurisdiction by the larger amount that negotiators had proposed—$16 billion.

Even so, it's unclear whether Smith and Maine Sen. Olympia J. Snowe, another key Republican on the committee, will agree to $10 billion in Medicaid reductions. Smith appears to have reached an agreement with the Bush administration on creating a Medicaid commission that would issue recommendations by September on how to make cuts of that size, but how much weight that panel will have with the moderates whose support is key to Medicaid cuts is unclear.

Critics of Medicaid cuts predict that the commission won't be credible, saying it will be dominated by the administration. Smith said on the Senate floor Thursday that "it is my strong urge and plea" that "this commission will be conducted by the Institute of Medicine." But other sources said HHS Secretary Michael O. Leavitt would likely appoint the members of the commission.

Smith himself appeared to concede the likelihood of that, saying Leavitt "is a person in whom I have implicit confidence. He is a man of integrity, he is a man of his word. He understands that his reputation and mine are on the line in constructing the kind of commission that is inclusive, that is bipartisan, that is academic in its nature."

Smith added that, "ultimately you have to trust people to be good, to live up to the public statements that they make."

Liberals wasted no time attacking the idea of a Leavitt-controlled panel. It "appears that a very partisan Medicaid commission may be appointed by the Bush administration. This is the precise opposite of what was originally intended [in legislation proposed by Smith and Sen. Jeff Bingaman, D-N.M.], and will make it a sham commission," said Ron Pollack of Families USA.

Perhaps more of a problem for the administration was the reaction of Montana Sen. Max Baucus, the top Democrat on the Finance Committee whose centrist views helped the White House obtain passage of the Medicare overhaul law. Baucus opposes a Leavitt-appointed commission and made his views known to Leavitt, according to a Senate aide.

Details of how the commission would work were sketchy late Thursday, but a Senate source said that in addition to preparing an interim report by Sept. 1, 2005, it would prepare a final report by Dec. 31, 2006. GOP staffers said Medicaid cuts would not begin before 2007.

Sources said various options were on the table but that one scenario might entail a Leavitt-appointed commission and a larger advisory group that would be named by congressional leaders and the administration. However, the workings of the commission "might still be in flux," one Hill source said.

But once any commission issues a report, the Energy and Commerce Committee in the House and the Finance Committee in the Senate would largely be responsible for how to make the cuts and how big they would be. "I can't tell you what the committee will do," said a Senate aide, adding that it's up to the panel to determine how to carry out the instructions.

Obviously that leaves Medicare as a possibility. But Finance Chairman Charles E. Grassley, R-Iowa, says he does not want to cut Medicare. And Energy and Commerce only has partial jurisdiction over Medicare while the other House panel with jurisdiction, Ways and Means, is charged only with making $1 billion in cuts to programs under its control.

According to one Medicaid analyst, Senate Finance Committee cuts may be more realistic at the $5 billion level than at the $10 billion level. Getting to the former figure through limits on asset transfers and changes in pharmacy reimbursement would be difficult but doable, the analyst said. The National Governors Association, meanwhile, emphatically denied Thursday that governors have reached agreement on a plan involving several billions of dollars in cuts.

APRIL 25, 2005 -- Managed care executives urged federal policy makers Monday to support uniform standards that would be used by both government programs and private health plans to measure the performance of doctors in delivering "ambulatory" care—treatment of patients who aren't hospitalized.

Insurers and medical groups are working on a common set of standards and their embrace by the Centers for Medicare and Medicaid Services (CMS) would be a key step toward starting performance-based payment of doctors in Medicare, observers say.

Without a uniform set of standards, medical offices won't have the time or administrative staff to report data showing how individual doctors do on the performance measures, analysts say.

Speaking at a Capitol Hill briefing sponsored by America's Health Insurance Plans (AHIP), Dr. Samuel Nussbaum, chief medical officer at Wellpoint Inc., urged congressional aides to encourage CMS to work with industry on common standards. Dr. W. Allen Schaffer, senior vice president at Cigna, added that the lawmakers should increase funding of research by the Institute of Medicine and the Agency for Healthcare Research and Quality (AHRQ) to improve the quality of health care.

AHIP President Karen Ignagni also urged greater funding of AHRQ to help speed the widespread adoption of medical research findings by the National Institutes of Health (NIH). NIH gets $30 billion a year in funding but AHRQ's budget to help spur adoption of those and other findings on how to improve care is only about one percent of the NIH budget, Ignagni said.

As health costs keep rising at a steady clip, both Congress and the Bush administration are struggling with ways to increase the value purchasers get for their health care dollar. Those efforts now center on attempts to promote payment based on quality, including in Medicare.

A CMS spokesman said the agency is working with industry through the National Quality Forum to agree on common standards and is part of a group called the Ambulatory Quality Care Alliance that aims to have uniform measures ready later this year that doctors can use to begin reporting data on a voluntary basis. There's much speculation, however, that Congress will pass legislation later this year requiring doctors to have to begin reporting such data as soon as next year in order to avoid Medicare payment cuts.

APRIL 25, 2005 -- Seniors often skip doses, take smaller doses, or fail to fill their prescriptions when faced with costly drug regiments, according to a Tufts–New England Medical Center study published recently in the journal Health Affairs.

Among seniors with no drug coverage, 36.8 percent did not adhere to specific drug regimens, while 35.2 percent of low-income seniors and 34.9 percent of those with three or more chronic conditions failed to adhere to their prescribed doses, researchers found.

"With one-quarter of seniors now lacking such coverage (the Medicare drug benefit) clearly has the potential to bring both financial relief and improved health care quality to this group," Dana Gelb Safran, director of the Health Institute at Tufts–New England Medical Center, stated in a news release.

But, Safran added, the report's findings "remind us that the potential for the new Medicare drug benefit to mitigate high drug spending—and enable seniors to adhere to their prescription regimens—will depend on the generosity of Part D coverage in 2006 and over the long term."

The Commonwealth Fund and the Henry J. Kaiser Family Foundation supported the research compiled by Safran and her colleagues.

Another Health Affairs article analyzes the use of a discount card program for seniors in the year before the Medicare prescription drug discount program that began in 2004. Both the drug card and the new Medicare drug benefit are part of the Medicare drug law (PL 108-173).

Enrollment and claims data show that seniors who actively enrolled in drug cards before the Medicare discount prescription drug card saved 20 percent overall on their prescription drug purchases but still spent more than $1,300 a year on medication.

The research done by senior scientist Cindy Parks Thomas and her colleagues at the Schneider Institute for Health Policy at Brandeis University showed that three-quarters of enrollees who actively purchased a card used it at least once during the year, compared with only 37 percent of those who received cards automatically as part of an insurance benefit.

"To the extent that low card use could be attributable to lack of understanding of the value of the card or how to use it, seniors and others new to a coverage program might require considerable outreach and education to be able to take advantage of it," Thomas stated in a news release. "This is important to consider in implementing Medicare Part D, in light of penalties for delayed enrollment." The research was supported in part by UnitedHealth Group.

A third report concludes that seniors with chronic medical conditions are likely to pay much more of their own money for prescription drugs than the average beneficiary under Medicare's new prescription law.

Using data from Medicare's Current Beneficiary Survey, Bruce Stuart, a professor at the University of Maryland School of Pharmacy in Baltimore, compared simulated drug spending under the Medicare Part D benefit for seniors with diabetes, chronic lung disease, and mental illness.

Given the premium, deductible and coinsurance, and uncovered expense known as the "doughnut hole," Stuart projects that the average beneficiary who signs up for the standard Medicare drug benefit will spend $722 out of pocket in 2006. By contrast, beneficiaries with one of the studied chronic conditions will pay much more: $1,581 for those with diabetes; $1,435 for those with chronic lung disease and $1,844 for those with mental illness.

APRIL 29, 2005 -- Slightly more than a year from now, a fast-growing movement of hospitals, medical societies, and government agencies aims to have saved its 100,000th life by improving the way health care is delivered in the nation's medical facilities. On Friday, the Centers for Disease Control and Prevention announced that it will help out by lending its expertise in preventing and monitoring hospital-based infections.

Called the 100,000 Lives Campaign, the project is the brainchild of Donald Berwick, M.D., head of the Cambridge, Mass.–based Institute for Healthcare Improvement. Berwick is angry about the failure of the health care system to apply what is known about how to reduce medical errors and improve the quality of care.

He sees the setting of a specific goal as a flashpoint for action by the many doctors and hospitals he says share his frustration. He may be right; four months after announcing the campaign, the institute has almost met its goal of enlisting 2,000 hospitals in the effort.

By June 2006, the initiative aims to save the 100,000 lives by making six types of improvements in hospitals: creating "rapid response" teams that quickly mobilize to provide care when a patient's condition unexpectedly deteriorates; following proven procedures for treating heart attack patients; using validated processes to prevent ventilator-acquired pneumonia; preventing infections through the proper use of catheters; preventing infections in surgery patients through correctly timed use of antibiotics; and preventing dangerous drug interactions. Berwick estimates that the six improvements would save 230 lives per year in a 500-bed hospital.

CDC said its main activity will be to help the institute gather data tracking the progress of hospitals in the six areas of improvement. The American Medical Association, the American Nurses Association, the Joint Commission on Accreditation of Healthcare Organizations, the Veterans Health Administration, the Centers for Medicare and Medicaid Services, and the Agency for Healthcare Research and Quality (AHRQ) also have endorsed the campaign.

Separately, AHRQ has launched a Web site, http://psnet.ahrq.gov, designed to provide a single national source of information on patient safety resources and research. The portal allows a particular type of provider, say an anesthesiologist, to set up the site to learn about the latest research studies, news, programs, and conferences relevant to improving patient safety in his or her specialty.

APRIL 27, 2005 -- More than 20 million working Americans do not have health care coverage, leaving them unable to see a doctor when they need one and in poorer health than Americans who have health care insurance, according to a new report from the Robert Wood Johnson Foundation.

The study, released Wednesday during a kickoff event for "Cover the Uninsured Week" (May 1–8), found the problem is pervasive in every state. Those with the highest rates of uninsured residents among employed adults include Texas (27 percent), New Mexico (23 percent), and Florida (22 percent). States with the lowest rates of uninsured working Americans include Minnesota (7 percent) and Hawaii (9 percent).

Nationally, 41 percent of uninsured adults report being unable to see a doctor when they needed one over the past year because they could not afford to do so, compared to just nine percent of adults who have health care coverage.

"The cost of health care is far outstripping the growth in wages for most Americans," said Dr. Risa Lavizzo-Mourey, president and chief executive officer of the Robert Wood Johnson Foundation. "Something's got to give."

Speakers at Wednesday's event implored lawmakers to take action now to provide health care coverage to the 45 million Americans, both employed and unemployed, who do not have it.

"I have always thought this is far and away the most important issue," said Sen. Ron Wyden, D-Ore., adding Congress must "look at creative ways to start filling in the gap."

Wyden, along with Sen. Orrin G. Hatch, R-Utah, helped create a nonpartisan 14-member citizens group charged with developing innovative ways to overhaul the nation's $1.8 trillion health care system.

Public involvement and political accountability will be critical to finding ways to cover the uninsured, Wyden said. "No one is minimizing how difficult this is."

Howard Schultz, chairman of the Starbucks Coffee chain, said providing health care coverage is a critical business issue. But companies like his that provide health care insurance for their workers have had to pay more to do so to help pay the health care costs of the uninsured, he said.

"In the last 12 months, we have paid more for employee health insurance than we do to buy the raw materials for our company," Schultz said. "If we can't sustain this benefit then no company in America is going to do it."