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November 10, 2008

Washington Health Policy Week in Review Archive f19cb1fc-6153-4835-a8be-d72490bf9987

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Advocates, Lawmakers Begin Preparations for Comprehensive Overhaul of U.S. Health System

By Leah Nylen, CQ Staff

November 6, 2008 -- Democrats plan to advance a single, comprehensive bill to revamp the health care system, but will follow President-elect Barack Obama's blueprint for a health care overhaul, according to health care advocates and a congressional aide who spoke at a Families USA briefing Thursday.

Sen. Edward M. Kennedy, D-Mass., and his Senate Health, Education, Labor and Pensions Committee staff have already begun to craft a comprehensive overhaul that includes changes to coverage, cost, and quality, said Michael Myers, the committee's staff director.

"With the Obama victory, the question is no longer whether we will pursue comprehensive health reform, but when and what form," Myers said.

Myers said Kennedy instructed the staff to begin discussions with stakeholders this summer. Since then, they have held a number of roundtables and HELP committee staff have begun consulting with staff on the Senate Finance Committee, which has jurisdiction over the Medicare and Medicaid programs. Myers said the discussions have mostly involved Democrats in the House and Senate, but they plan to begin consulting with Republicans now that the election is over.

Separately Thursday, health care analysts appearing at another post-election forum played down the likelihood that the new administration and Congress would pursue a comprehensive bill.

"The bottom line is, the vast majority of people who vote have health insurance," said Robert Laszewski, a 20-year veteran of the health insurance industry who is president of the firm Health Policy and Strategy Associates. "People don't want it enough." He also said composing a comprehensive bill would be contentious, even among Democrats, and that the looming fiscal crisis—"a $1 trillion budget deficit this year"—would prove too large an obstacle.

Instead, he urged Obama and his congressional allies to pass piecemeal legislation that would extend the State Children's Health Insurance Program (SCHIP), prevent physicians from facing a Medicare payment cut next December, and potentially provide a tax credit to small businesses, among other things, calling it "a fairly good starter package" that would be "bipartisan all the way."

Laszewski also warned Obama of overreach. "Harry and Louise are alive and well," he said, referring to the industry ads that helped marshal public opinion against President Clinton's health care overhaul in 1993. The forum where Laszewski appeared was sponsored by Congressional Quarterly and the Public Affairs Council.

Myers said they have not yet begun drafting the legislative language, nor have they finalized particular aspects of an overhaul, although Democrats hope to expand coverage, reduce premium costs, and improve the quality of care. Although Myers said the Democrats plan to use Obama's health care plan as a model, he declined to provide more specifics, such as whether it would include the mandate on health coverage for children.

The "one-bill" approach is a crucial part of Kennedy's strategy for getting an overhaul passed. According to Myers, Kennedy plans to work on the bill in the full committee to allow all the members a chance for input.

"There's a growing recognition that the best way, maybe the only way, if for Democrats to unite around one bill," Myers said.

House Energy and Commerce Chairman John D. Dingell, D-Mich., recuperating from knee surgery, spoke briefly via conference call. He called the current system "broken and inadequate" and said he backed a comprehensive overhaul that would help the uninsured get coverage. Later Thursday, in a letter to House Democrats, Dingell said he supported a broad overhaul "so that nearly 50 million Americans without health insurance can get the care they need, and that those Americans with health insurance can continue to afford it in times of economic distress such as now."

Health care advocates from several organizations said they plan to aggressively push for an overhaul. Dennis Rivera, chairman of SEIU Healthcare, said his organization plans to hire 5,000 people to travel the country and drum up support for an overhaul.

Ron Pollack, executive director of Families USA, said they will advocate for getting an overhaul on the table within the first 100 days of the new administration.

He noted that in 1993 President Clinton's health care overhaul did not come until the fall, after Clinton had expended significant political capital on the North America Free Trade Agreement, the budget, and an initiative on gays in the military.

We have "a better shot if health care reform is early on the agenda," Pollack said.

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Democrats to Make Children's Health Program a Top Priority

By Alex Wayne, CQ Staff

November 6, 2008 -- Democrats are expected to pass a large expansion of children's health insurance early next year, making good on a campaign promise dating to 2006.

Lobbyists from child advocacy groups have been meeting with the staff of key Democratic lawmakers and committees responsible for the State Children's Health Insurance Program (SCHIP) in recent weeks, urging them to pass an expansion of the program as one of their first acts of the new Congress.

House Speaker Nancy Pelosi appears poised to meet the demand; she told National Public Radio on Wednesday that an SCHIP expansion "will probably be one of the first bills we would put on President Obama's desk."

The legislation came to President Bush's desk twice, and he vetoed it both times.

Child advocates say it is critical to keep a new SCHIP bill separate from a much larger, comprehensive health care overhaul that is one of President-elect Barack Obama's top priorities.

"I think there's a growing understanding . . . that given the economy, you should do SCHIP quickly, and it actually builds momentum for broader reform and doesn't step on it," said Gordon Whitman, a spokesman for the PICO National Network, a coalition of churches and faith-based community organizations.

"We don't want people to get it confused with overall health reform," said Jim Kaufman, vice president of the National Association of Children's Hospitals.

When Democrats took control of Congress in 2006, they promised that a large SCHIP expansion would be a top priority. The program was created in 1997 to cover children from families that are low-income but not poor enough to qualify for Medicaid, the much larger health entitlement.

About 7.1 million people, mostly children, were enrolled in the program at some point in 2007, according to the Centers for Medicare and Medicaid Services. The government expects to spend about $6.1 billion on SCHIP in fiscal 2009.

House Democrats passed a bill in 2007 that would have expanded SCHIP spending by nearly $50 billion over five years, but the Senate did not consider the measure. Instead, the Senate passed a bipartisan bill (HR 976) that expanded SCHIP by $35 billion over five years, to about $60 billion. But Bush vetoed the measure, as well as a second, very similar bill (HR 3963) that Democrats had hoped would draw a veto-proof majority. It did not.

Child advocates think that the bill the new Congress will pass will be similar in policy to the Senate bill that Bush vetoed. But thanks to inflation, it will have to include greater spending to cover the same number of children—perhaps as much as $50 billion over five years.

"You're effectively doing the Senate bill with a couple of tweaks," said Bruce Lesley, president of First Focus, a child advocacy group.

That includes one significant and controversial tweak. In 1996, Congress passed a law (PL 104-193) that forbids legal immigrant women and children from enrolling in Medicaid or SCHIP for the first five years that they are in the country. Child advocates have long sought to lift that prohibition, and see their opportunity under Obama.

Democrats face a problem paying for the expansion. The bill that Bush vetoed was paid for with an increase in tobacco taxes, including a 61-cent increase in the cigarette tax to $1 per pack. But that same tax increase won't pay for the larger expansion that is now contemplated.

"I think it will probably be one of the bigger issues," Lesley said.

Democrats also face a deadline. New spending on SCHIP is authorized only through the end of March—after that, the program would have to run only on money in reserve, and many states would quickly face shortfalls in their programs.

"Given the looming March deadline, states are looking to Washington for guidance on how this program will be structured," said Dr. Jay E. Berkelhamer, chairman of the American Academy of Pediatrics' Subcommittee on Access. The pediatricians' group also is lobbying for a quick SCHIP expansion.

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Experts Urge New Health Care Payment Methods

By John Reichard, CQ HealthBeat Editor

November 4, 2008 -- No matter which party fares best in Tuesday's presidential and congressional elections, there's bipartisan agreement that changes in health care payment are an important and perhaps underrated piece of the puzzle over how to overhaul the U.S. health care system. A new survey from The Commonwealth Fund and Modern Healthcare magazine, a hospital industry trade publication, finds varying levels of support among experts for payment alternatives but also widespread agreement that the current "fee-for-service" system must be changed.

The survey by Harris Interactive of some 222 health care experts from the worlds of business, insurance, labor, academia, government, and advocacy found that 69 percent think the current fee-for-service system is not effective at encouraging high-quality and efficient care.

The study defined fee-for-service as a system that reimburses individual services such as doctor visits, medical procedures, and tests "rather than paying for the most appropriate care over an episode of an illness or a year-long period. This system creates incentives to provide the maximum number of complex services, even when there may be better, simpler, and lower-cost ways to treat a condition."

"Support for fundamental reform was strong across all sectors," the study found.

Enthusiasm for payment alternatives waxes and wanes, with "fee-for-service" a hardy survivor. "Capitation" for example, was in vogue in the mid-1990s as the key to greater efficiency but never became dominant. The payment method—involving prepaid, fixed sums of money for health care over given periods of time, with providers left holding the bag if they ran up above-budget treatment costs—was identified with tighter control by managed care plans of access to treatments and providers. Those tighter controls inspired public resistance to the rise of managed care.

But the search for alternatives to straight fee-for-service has become more pressing as health care costs consume an ever-growing share of the nation's Gross Domestic Product.

The survey found that "majorities cited bonus payments for high-quality providers (55 percent) and public reporting of information on provider quality and efficiency (53 percent) as effective or very effective policy strategies in improving health system performance."

"Fifty-one percent felt bundled per-patient payment—defined as a single payment for all services provided to the patient during the year, with bonuses based on quality—would be effective or very effective." Support for the bundled approach grew if it was combined with what the pollsters called a modified form of fee-for-service payment; a combination of bundled and modified fee-for-service payment drew the support of 62 percent of the experts surveyed.

Fifty-seven percent of respondents said "shared accountability for resource use" would be effective or very effective in improving efficiency. Shared accountability entails holding providers accountable for the level of resources they use in providing care of their patients over time and sharing any savings with them.

Finally, 85 percent of those surveyed favored increased payments for primary care and 74 percent backed giving doctors payments to have their practices serve as a "medical home" for patients to improve coordination of their care including preventive treatment. Seventy-seven percent of respondents voiced support for payments for "transitional care" services, such as phone calls to high-risk patients following discharge from the hospital. Almost three-quarters said Medicare should negotiate pharmaceutical prices and engage in competitive bidding for durable medical equipment and 56 percent backed creation of a "Medicare health board" that would allow Medicare to innovate in payment and benefits policy within guidelines established by Congress.

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Mulling Obama's Early Health Care Moves

By John Reichard, CQ HealthBeat Editor

November 5, 2008 -- The plan Barack Obama will pursue and the strategy he will follow is of course uncertain—but that isn't stopping Democratic health policy analysts from opining about the moves Obama will make on health care early in his presidency.

Interviews with those analysts suggest Obama will move quickly to assemble his team, with former Senate Majority Leader Tom Daschle possibly playing a leading role. Other Democrats associated with the Center for American Progress, a left-leaning think tank, also may have key slots, these analysts suggest.

Obama is able to draw on the experience of former Clinton administration health aides, who can not only help him assess talent but also warn him against missteps they made in their failed attempt to win congressional passage of Clinton's universal coverage plan, the Health Security Act.

Former Clinton health aides include Christopher Jennings, who served for eight years in the White House as a health policy adviser to Bill and Hillary Clinton; Dan Mendelson, who was in charge of health care budgets at the Office of Management and Budget; Jeanne Lambrew, who succeeded Mendelson in that capacity; and Nancy-Ann DeParle, who headed the Health Care Financing Administration, the predecessor agency to the Centers for Medicare and Medicaid Services.

Others, to name but a few, include Judy Feder, a professor at Georgetown University who served as principal deputy assistant secretary at the Department of Health and Human Services in the Clinton administration; Kevin Thurm, a former Rhodes Scholar who served as liaison between HHS and the Clinton White House; and Kenneth Thorpe, a health policy professor at Emory University who served as deputy assistant HHS secretary for health policy in the Clinton administration.

"I think you will see many of them going back," said Mendelson, who now heads the Washington, D.C., consulting firm Avalere Health. But former Clinton aides are well launched in post-government careers in business, academia, and consulting. While likely to lend their expertise when asked it doesn't follow that they would all be willing to step back full time into the fray.

There is also likely to be a limit to how many Obama will ask, since a number of his picks are likely to come from the cadre of advisers he relied on during his presidential campaign.

Those advisers include Brookings Institution fellow Jason Furman, whose expertise includes tax policy; Harvard University economist David Cutler; domestic policy adviser Neera Tanden; Harvard University health policy professor David Blumenthal, an expert on health information technology; and Dora Hughes, a former Senate Health, Education, Labor and Pensions committee staffer who serves on Obama's personal Senate staff and is an expert on disparities in health care relating to race, ethnicity, and gender.

How Obama will slot these various names is unclear. But John Podesta, who heads the Center for American Progress and served as chief of staff to President Clinton, is expected to call the shots on health care during the transition. He was one of three people announced Wednesday to co-chair Obama's transition effort, known formally as the Obama-Biden Transition Project.

One Democratic analyst said it is premature to play the name game—picking likely names to take key posts such as Centers for Medicare and Medicaid Services administrator and Food and Drug Administration commissioner for example. That's because Obama has to think through how ambitious he wants his health overhaul plan to be and consider the chemistry of the team he is trying to assemble.

A smaller-scale effort on health would dictate different appointments than a major overhaul effort, the analyst says. And until the top health post is filled, second-tier appointments such as CMS administrator and FDA commissioner may not be filled because of the need to again consider the chemistry between those at the top and their subordinates.

Figuring out the right formula to produce the best chemistry also may mean taking stock of appointments at OMB, the White House Domestic Policy Council, and the White House National Economic Council. Those appointments if done properly can smooth interagency relationships.

Part of the teamwork calculations may also include senior positions at the Treasury Department. With strong interest on the part of Republicans as well as some Democrats in changing the tax code to promote insurance coverage, Treasury may have a significant role in the health overhaul debate.

When Obama settles on his top appointments and how he wants to structure his health policy the pace of lower level appointments may pick up.

Because of Daschle's interest in health policy and his close relationship with Obama—Obama's personal staff includes former Daschle aides—the former South Dakota senator may play a role on health care akin to that of Hillary Clinton in the Clinton administration.

"It seems clear Senator Daschle will play a key role in health care reform no matter where he ends up," said another analyst, a former HHS official in the Clinton era. The precise appointment he would hold is unclear.

Podesta and Daschle's ties to Obama highlight the role the Center for American Progress may play as a showcase of the incoming administration's thinking on health policy. Not only are Podesta and Daschle affiliated with the center, but so too is former Clinton health aide Lambrew. Now a faculty member at the University of Texas, Lambrew recently joined with Daschle to write a book on overhauling health care called "Critical: What We Can Do About the Health Care Crisis."

Other writing and speaking by Lambrew suggests what may be a key part of Obama's early health care strategy, an attempt to tie a health care overhaul to action on the economy.

While the staggering costs of the Wall Street bailout would seem to rule out an ambitious health care overhaul, Democrats mention several potential strategies for coping with the costs involved, including scorable savings from capping and trading pollution permits to making a health overhaul plan part of budget reconciliation, a tactic that allows legislation with protection from filibuster.

Another is to link health care to economic stimulus legislation, which wouldn't require payment offsets. Lambrew urged in Oct. 28 testimony before the House Ways and Means Committee that Congress pass legislation in a post-election lame-duck session temporarily boosting federal payments for Medicaid and the State Children's Health Insurance Program.

But Lambrew urged a much more ambitious link. "In 2009, this committee and the new Congress should consider health reform as part of comprehensive economic reform," she said. "It is necessary," Lambrew said, adding that "job growth, savings, and public investments in other priorities such as education will continue to be stifled if health system problems continue unchecked."

"It is also an opportunity to put the nation on a path to prosperity. The return on the investment—slowing the long-run rate of health care cost growth through system improvements and seamless coverage—would arguably be the most significant economic achievement in decades."

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Panel Offers Array of Suggestions to Overhaul U.S. Health System

By Leah Nylen, CQ Staff

November 3, 2008 -- The Center for American Progress has some suggestions for the next president on a health care overhaul: Change the payment system to encourage more doctors to study primary care and promote greater care coordination.

While several health groups have released blueprints or white papers on a potential overhaul, the Center for American Progress could have some sway over a future administration should Democratic candidate Barack Obama win the presidency: The center's president, John Podesta, an Obama adviser, will head up the Illinois senator's transition team.

More than a dozen health experts contributed to the 110-page report, which was published in conjunction with the Institute on Medicine as a Profession at Columbia University.

Each the six chapters offers recommendations on aspects of a potential overhaul, including changes to the infrastructure and organization of health care delivery as well as quality of care and payment incentives.

"We are in desperate need for federal leadership," said David Rothman, the director of the institute. "Real progress is going to require federal commitments."

At Friday's forum, the authors emphasized the need for change to the Medicare payment system, arguing that private insurers will follow Medicare's lead.

"The effect of the [current] payment system dramatically undervalues primary care," said Paul Ginsburg, president of the Center for Studying Health System Change and primary author of the chapter on payment incentives.

Ginsburg said Medicare should revamp its payment system to better reflect the cost of delivering the service. He also advocated moving away from the "fee-for-service" model and instituting policies that promote greater care coordination, such as capitation payments for management of chronic conditions.

Other authors, including Robert Berenson, a senior fellow at the Urban Institute, noted that the country may soon find itself with a shortage of doctors trained in the fields of primary care and geriatrics because those areas tend to pay less.

"We are going to have a real problem in access to care," Berenson said. "Next year Congress has to deal with reimbursement."

Congress could consider increasing reimbursements or offering funding for programs such as the National Health Service Corps that offer loan repayment, he said. But an even more innovative approach would be for Congress to create new pay models that promote changes in medical organization, such as multispecialty group practices, according to Berenson.

Other authors focused on the importance of providing information to ensure quality of care. Chiquita Brooks-LaSure, a staff member on the House Ways and Means Committee and a former director of Avalere Health, said Congress should look into ways to incorporate new technologies, such as health information technology and comparative effectiveness research.

Katherine Hayes, vice president of health policy at Jennings Policy Strategies Inc., encouraged the adoption of chronic disease self-management programs. These programs are designed to teach patients how to better manage their illnesses, since the majority of care related to chronic diseases occurs at home. Hayes suggested that Medicare also could change reimbursement rates and also could promote the adoption of self-management programs.

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Study Assesses Patients' Views on Quality of Hospital Care

By Neda Semnani, CQ Staff

November 7, 2008 -- A new study on hospitals' quality of medical care shows 63 percent of patients reported being satisfied, but they also point to areas for improvement.

Researchers at the Harvard School of Public Health (HSPH), Boston's Brigham and Women's Hospital, and Boston's Veterans Affairs Health Care System found that although patients reported being generally satisfied with the quality of care they received, they were less satisfied when asked about specific aspects of care, such as the quality of pain management and patient discharge instructions provided.

The study, published in the New England Journal of Medicine, found that hospitals with higher levels of overall patient satisfaction were also more likely to be those with a greater nurse-to-patient ratio, a public hospital, or private nonprofit institutions. Such hospitals were also more likely to have scored higher in areas of "nursing services, discharge instructions, communication with nurses, and communication about medication."

Researchers also uncovered significant regional disparities in patient satisfaction levels, with Birmingham, Ala., representing the highest patient satisfaction ratings in the country and East Long Island, N.Y., as the lowest.

The study reported that patients also considered clinical expertise in treating conditions like heart attack, heart failure, and pneumonia when rating the quality of care, but that clinical excellence was no longer the sole barometer for measuring quality. "Until now, we have lacked information on how patients feel about their care," said Ashish Jha, the lead author and assistant professor of health policy at HSPH. This study demonstrates that as medical care has become increasingly hi-tech, Jha said, "the basic needs of patients have gotten lost."

"Our study confirms there need be no trade-off between ensuring that care is technically superb and addressing the needs of patients," agreed Arnold Epstein, senior author and chairman of health policy at HSPH.

Nancy Foster, vice president for quality and patient safety policy with the American Hospital Association (AHA), argued that the report does not mention enough of how hospitals are attempting to address gaps in how patient needs are being met. She pointed to Web sites like HospitalCompare, which were created in partnership with hospitals, as clear examples of hospitals' efforts. She also pointed out that studies like this one are drawing from information disseminated by the hospital group.

"Hospitals are working diligently to collect information on the patient experience, because we know there are opportunities for us to better serve them," Foster said.

The study was funded by the Commonwealth Fund and the Robert Wood Johnson Foundation and used information collected by the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) patient surveys, the first national patient assessment survey. The HCAHPS survey asked patients to rate communication with doctors, communication with nurses, communication about medication, quality of nursing services, discharge preparations, and pain management. Their responses were matched against AHA-provided information about hospital characteristics.

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