Categories

Tag: Congress

Op-Ed: On Health Reform, Obama Faces a New Foe: Other Democrats

Harris Meyer Democratic Senator Maria Cantwell of Washington is a prime reason President Obama will have a hard time getting health care reform passed this year. Let me explain this seeming oddity. At a news conference on May 27 in Yakima, Wa., the purportedly liberal Cantwell, who represents a state that voted 58 percent for Obama, announced her support for two new, bipartisan bills that would advance a key goal of Obama’s reforms — increasing access to primary care physicians and other doctors who are in short supply. As Massachusetts has discovered, making sure nearly everyone has health insurance doesn’t help if there aren’t enough doctors to take care of them.

The two bills Cantwell endorsed feature provisions that would cost the federal government billions of dollars a year — scholarships and loan forgiveness for medical students who serve in shortage areas, increased funding for the National Health Service Corps, higher Medicare payments to primary care doctors, more Medicare funding for resident physician training, interest-free loans for hospitals starting new residency training programs, etc.Continue reading…

David Gratzer is Nice. Dennis Kucinich is not.

6a00d8341c909d53ef0105371fd47b970b-320wi I had David Gratzer on THCB a while back. He was so nice, that it was really hard for me to get mad with him—even though his book was basically a pack of lies. He seriously suggested that the UK under Blair was NHS was going to covert into an American-type system, and he couldn’t answer why he allowed his wife to come here and be uninsured!  (Of course my father the gynecologist always told me that all psychiatrists are nuts anyway)

Then last week the single payer crowd finally got to appear before a Congressional committee, and for some bizarre reason Gratzer was there too (I guess he provided balance).  And the very nice David Gratzer finds that Dennis Kucinich is not quite so nice. Watch this…

MedPac on Steroids

I’ve long argued that Medicare reform will pave the way for healthcare reform, and that the Medicare Payment Advisory Commission’s (MedPac’s) recommendations could serve as a brilliant blue print for overhauling Medicare.  (Also see our Century Foundation report on Getting More Value From Medicare).

Now President Obama appears to be backing a proposal that would empower MedPac to realize its vision for reform.  Earlier this week, in a White House meeting with Senate Democrats, the president  reportedly “went out of his way” to mention a bill, introduced by Senator Jay Rockefeller ( D-W.Va)  that would move decisions about Medicare benefits away from Congress, by turning MedPAC into an independent executive agency.  Currently, MedPac is an independent panel that advises Congress. It has no formal power. But under Rockefeller’s bill it would be able to implement its recommendations and fund policy initiatives.

Wednesday afternoon, the White House announced that the President has gone a step further by releasing a letter from President Obama to Senators Max Baucus and Ted Kennedy.  The letter extends the remarks that the president made yesterday, which came close to endorsing Rockefeller’s bill. Writing to Kennedy and Baucus, the  President indicated that the administration could find another $200 to $300 billion for health care reform, linking that proposal to “giving special consideration to the recommendations of the Medicare Payment Advisory Commission” (MedPAC), “a commission,” he noted, “created by a Republican Congress . . . Under this approach,” the president continued, “MedPAC’s recommendations on cost reductions would be adopted unless opposed by a joint resolution of the Congress. This is similar to a process that has been used effectively by a commission charged with closing military bases, and could be a valuable tool to help achieve health care reform in a fiscally responsible way.”

These savings,  he added, “will come not only by adopting new technologies and addressing the vastly different costs of care [in different parts of the country], but from going after the key drivers of skyrocketing health care costs, including unmanaged chronic diseases, duplicated tests, and unnecessary hospital readmissions.”

Giving MedPac the Authority to Take the Politics Out of Fees for Doctors & Hospitals

Under Senator Rockefeller’s bill, MedPac would have the authority to set reimbursements for doctors and hospitals.  As Rockefeller explained in a recent Senate Finace Committee meeting:  “I think that [this is] the best way to take politics out of all of this is to take Congress out of the setting of reimbursements for doctors under Medicare and Medicaid and for hospitals, because there  is a group of 17  . . . completely dispassionate people,” who could do this, Rockefeller explained, referring to MedPac.

“And I think one of the [reasons] you have your $700 billion of wasted money every year,” Rockefeller added,  “is the fact that there are too many political judgments made because there’s too much lobbying and Congress can — you know, unless they’re all health care experts, can fall victim to that. So the idea of MedPAC having the power to set those fees, reimbursement fees, to me is enormously attractive, takes politics right out of it and takes Congress right out of it.”

At the hearing, White House budget director Peter Orszag indicated circumspect support for Rockefeller’s bill: “Your idea of — I think we’ve referred to it as  MedPac on steroids, or a much more powerful role for a body that is widely respected– is one approach.”

What Exactly Does MedPac Recommend?

Until now, most reform advocates have ignored MedPac. The reports that the independent advisory panel issues in March and June of each year are long.  They are dense with detail. And they are very, very smart. The commissioners  understand that health care quality could be higher if we spent less on care.

They have digested the Dartmouth research revealing that when patients in some parts of the country receive more aggressive and more expensive care, outcomes often are worse.  They realize that doctors and hospitals should be rewarded for the quality of the care they provide, not the quantity.  As HealthBeat has reported, they know that the fee schedule that Medicare now follows favors specialists while underpaying primary care physicians,  and they have suggested re-distributing Medicare’s dollars “in a budget neutral way”– hiking fees for primary care while lowering fees for some specialists’ services. They have pointed out that some very lucrative procedures appear to be done too often, in part because they pay so well. The Commission has advised targeting these procedures and comp ring them to alternative treatments—just in case a less expensive approach might turn out to be more effective (and not as risky for the patient), as pricier, more aggressive treatments.

Finally, MedPac notes that some hospitals actually make a profit on Medicare’s payments. This is because these hospitals are more efficient: patients typically spend fewer days in the hospital and see fewer specialists. There are fewer readmissions, And generally, outcomes are better. MedPac suggests that when private insurers pay hospitals more, they may simply be rewarding less efficient hospitals for lower quality care. (And of course, private insurers pass those higher payments along to their customers in the form of higher premiums.)

MedPac goes beyond looking at how we pay providers.  Investigating Medicare Advantage, it has described the care that private insurers are providing as somewhere between “disappointing” and “depressing.”  Taking a look at the boom in hospital construction, MedPac noted, in its March 2008 report that “much of the added capacity is located in suburban areas and in particular specialties, raising the possibility that health care costs will increase without significantly improving access to services in lower income areas”. (Here, I can’t help but think about the current controversy over whether Hackensack University Medical Center should be building a new for-profit facility in a nearby suburb.)

As for the drug industry, in its June 2008 report to Congress MedPac observed that “researchers have shown that bias in industry-sponsored trials is common.” Because we lack disinterested, “evidence-based” information about new products, MedPac noted “we do not know which treatments are necessary for which types of patients. Guidelines do not exist . . . to delineate how much care is typically needed . . . and when patients are unlikely to improve with additional treatment.” In the same report, MedPac cast a cold eye on just how quickly we adopt bleeding-edge medical product and procedures to treat “most common clinical conditions” without “credible, empirically based information” to tell us “whether they outperform existing treatments and to what extent.” In other words, we need unbiased comparative effectiveness research. Those who make a profit on new products and procedures should not be involved.

These are exactly the radical but truthful recommendations that would make any well-paid health care lobbyist shudder.  No wonder the Bush administration ignored MedPac’s advice for eight years.

Now, a new White House is taking MedPac’s recommendations to heart. And Congressional leaders also seem to recognize the link between Medicare reform and national healthcare reform.  In April, HealthBeat reported that Senate Finance Chairman Max Baucus had declared that Medicare would become “the big driver” behind national health reform. Now, it’s becoming clear what Baucus meant.

Maggie Mahar is an award winning journalist and author. A frequent contributor to THCB, her work has appeared in Barron’s and Institutional Investor. She is the author of “Money-Driven Medicine: The Real Reason Why Healthcare Costs So Much,” an examination of the economic forces driving the healthcare system, and the increasingly influential HealthBeat blog, one of our favorite health care reads and where this piece first appeared.

Connecting finance to coverage

Repeating his message that Health Costs Are the Real Deficit Threat OMB Director Peter Orszag goes into the not exactly friendly territory of the WSJ Opinion pages and explains that practice variation is unnecessary and wasteful, comparative effectiveness research is a good idea. and that changing financial incentives for providers is necessary if we are ever to get health care costs under control.

The question is, how much of this gets included in the woffling coming out of Sen Max Baucus’ Senate Finance Committee? Here’s the press release on the options they’re considering. It’s a little like Stalin in 1930 saying, ‘the people are starving, we may collectivize the Kulaks, or we may rent them their farms back, or we may do nothing, or all of the above”. OK you may think I’m kidding but they give four different options for what a public plan may look like, six different approaches to small group and individual market reform (none of which deal with the smallest employers), and nothing about Orzsag’s concept of “changing financial incentives for providers”. Apparently that’s unrelated to insurance reform. (Yes yes I know they’ve floated some trial balloons about that too….)

What worries me is that because of the downturn and Orszag shining the light on the finance issue, we may have the chance to both fix coverage and finance. But I don’t see this all happening together.

So far I haven’t seen anything to change my mind about what’s going to come out of this process. So to bore all of you still reading I’m going to repeat what I said when I reviewed Tom Daschle’s (remember him?) book Critical.

So my guess is that the Federal Health Board, if it gets established, will get defanged by lobbyists immediately. The consequence of that is that the mish-mash of an “expand what we got now” system will cover a few more people at a lot more cost (as has been the Massachusetts experience). That’s OK because suddenly we’re rich (or at least suddenly the government is pretending it is!). But in a few years the stimulus will end and health care costs will have kept going up. Then we’ll realize that due to more cuts in Medicaid & subsidies for the working poor, and continued cream skimming and bad behavior by private-sector health plans, enough people have fallen through the cracks of the incremental expansion that we’ll be back where we are today again.

CODA: Click here to have some fun as to what happened when Baucus lined up 13 Democratic economists to talk about health care to his Committee and somehow couldn’t find even one who was in favor of single payer…

Registration

Forgotten Password?