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Latest On Health
Reform from Washington week of 12/18/09 |
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“The crucial hour…the part of the game when
you have got it on the line”: That’s how Sen. Ron Wyden, D-Ore.,
described this moment in the health reform debate.
The Senate is still
hoping to pass its version of a bill by Christmas. Senate
leaders are focused on what they need to do to get to 60 – the
number of votes necessary to overcome a Republican filibuster.
Democrats have 60 members of their caucus, but Joe Lieberman, a
Connecticut Independent who caucuses with the Democrats,
announced on national television on Sunday that he would vote
against the bill in its current form. “You’ve got to take out
the Medicare buy-in,” he said. “You’ve got to forget the public
option.” The next day, 12 Democrats sent Senate Majority Leader
Harry Reid a letter saying they, too, were concerned about the
Medicare buy-in. So the feeling in Washington is that the
Medicare buy-in, and the public buy-in to a
federal-employee-type program as well, will be dropped from the
Senate bill.
Monday
night the Senate Democratic caucus met in the Capitol to talk
about the bill. On Tuesday, they went to the White House to meet
with President Obama. The rumor in Washington was that at the
end of the meeting, the President would announce that the Senate
Democrats had agreed on a bill and had 60 votes to overcome a
Republican filibuster.
However,
that dramatic ending didn’t occur. Instead, the President
announced he was “cautiously optimistic” that a bill would pass.
Speaking from the Roosevelt Room, with four senators at his
side, he said the White House and Congress were on the verge of
"an achievement that's eluded congresses and presidents for
generations, an achievement that will touch the lives of every
American. But there are still some differences that have to be
worked on,” he said. “This was not a roll call. This was a
broad-based discussion about how to move forward.
"There
is broad consensus around reforms that will, number one, protect
Americans against the worst practices" of health insurers, the
President continued. "We agree on reforms that will finally
reduce the costs of health care."
Later,
the Senate voted on four amendments, the first to be voted on
since the middle of last week. Included was an amendment that
would have allowed individuals, pharmacies and drug wholesalers
to re-import prescription drugs from foreign countries, where
they are sold cheaper. The amendment failed 51-48 (by agreement
between the majority and minority leaders, it takes 60 votes to
pass an amendment), largely because it would have disrupted the
agreement already made between the White House and drug
manufacturers to help pay for reforms.
So far,
370 amendments have been filed. Just over 20 have been
considered. But the pace can be accelerated by rolling certain
amendments with majority support into one big “manager’s
amendment.” Senate leaders are preparing that amendment right
now.
Meanwhile, on the House side, Majority Leader Steny Hoyer said
the House would be able to pass a health care bill without a
public option. A few weeks ago, Speaker Nancy Pelosi had
indicated that would not be possible. Rep. Hoyer said that
Senate Majority Leader Harry Reid “does not have the votes for a
public option, so in a world of alternatives you’ve got to focus
on what you can get.” He also said even without a public option,
“the guts” of the bill remain. To him, the guts are providing
insurance coverage to 30 million people who are without it now.
Rep.
Hoyer also dismissed the idea that the House would just rubber
stamp the bill the Senate passes. “There's significant,
important differences between what the Senate is proposing and
what we proposed,” he said, “and those matters will have to be
discussed."
Dueling
cost reports
Last week, the chief
actuary of CMS, the agency that runs Medicare and Medicaid,
released his report on the Senate reform plan. He said the
Senate plan:
-
Would
threaten the profitability of 20 percent of U.S. hospitals
and nursing homes in the next
10 years
-
Would
result in some hospitals, doctors and other providers
cutting back on the number of Medicare patients they take
because of the low reimbursement rates
-
Would
increase total national health expenditures by .7 percent
-
Has
such weak penalties for not buying insurance that the
mandate wouldn’t have a significant impact
-
Would
result in some small employers with low-wage employees
terminating their insurance plans and letting the employees
qualify for taxpayer-subsidized coverage through the
exchange
-
Would
result in new health care taxes and fees being “passed
through to health consumers in the form of higher drug and
device prices and higher insurance premiums”
-
By
2013, enrollment in Medicare Advantage plans would decrease
by about 33 percent (from a projected level of 13.7 million
under current law to 9.2 million under the proposal)
On the positive side, CMS said the Senate
plan would extend the life of the Medicare program and would
reduce premiums and cost-sharing by about $700 a year per
couple. Read the full report
here.
Meanwhile, this week the White House Council of Economic
Advisers released a
paper that came to a different set of conclusions:
-
By
2019, total federal spending on the Medicare and Medicaid
programs would be lower if the Senate bill passes than it
would be without reform
-
From
2016 to 2019, the annual growth rate of federal spending on
Medicare and Medicaid will be at least .7 of a percentage
point lower than it otherwise would have been
Christina Romer, chairwoman of the council,
told the New York Times, “We are going to be expanding coverage
to 30 million Americans. You can’t do that and not spend more.”
Freshmen
amendment package
A group
of 11 freshman Democratic senators led by Sen. Mark Warner,
D-Va., have filed an amendment that focuses on cost containment
and delivery reforms. It has won the support of a cross section
of important interests, including the Business Roundtable,
AFL/CIO, hospital groups, pharmacists, the AARP, the White
House, some of the nation’s top economists, and the former head
of the federal agency that oversees Medicare and Medicaid, Mark
McClellan.
In the
memo describing the amendment package, the freshmen say their
amendments would take Medicare changes further than the Senate
bill would “by replacing studies with action, recognizing
success stories already underway, modernizing Medicare’s tools
to evaluate and implement delivery system reforms that work, and
broadening the scope of the (Health and Humana Service)
secretary’s authority to put effective cost containment in
place.”
The
package includes amendments that would:
-
Require
Medicare to implement true pay-for-performance for an
expanded list of providers – including hospices, ambulatory
surgical centers, psychiatric hospitals and others – by 2018
-
Expand
accountable care programs – that is, coordinated care by
physician groups – to private plans as well as to Medicare
-
Modernize Medicare’s data systems so that data can be shared
in a “reliable, complete and timely manner” with providers
and beneficiaries
-
Broaden
the scope of the new Independent Medicare Advisory Board to
look at total health system spending and make system-wide
recommendations to assure that we are lowering costs not
shifting them
Read the memo from the freshmen
here.
Humana’s
view: These amendments represent a good next step, but if they
all pass they would only save $200 million over 10 years. There
is still much work to be done around cost containment and
delivery system reforms.
Study
shows advantage of Medicare Advantage
Last
Friday, AHIP released the third in a series of reports comparing
patterns of care among patients enrolled in Medicare Advantage
plans and in Medicare's traditional fee-for-service program.
Based on the simple average of 18 areas and 10 companies
studied, the risk-adjusted comparisons showed reductions in
hospital days (20 percent fewer for Medicare Advantage),
admissions (11 percent lower for Medicare Advantage), emergency
room visits (24 percent fewer for Medicare Advantage), hospital
re-admissions for the same diagnosis in a calendar quarter (39
percent lower for Medicare Advantage), and potentially avoidable
admissions (10 percent lower for Medicare Advantage enrollees).
The new
data suggest that a wide variety of Medicare Advantage plans in
various parts of the country – large and small, regional or
national, for-profit or not-for-profit – are able to help
patients avoid inpatient hospital stays, emergency room visits,
re-admissions, and potentially avoidable admissions, relative to
the results shown in FFS.
Read the
report
here.
What is
in the Senate bill?
Following last week's breakthrough compromise on health reform,
Majority Leader Reid called a special caucus meeting to update
the rest of his Senate Democratic colleagues on the tentative
deal. The components of the compromise agreement included:
-
The
Medicare "buy-in" option for people aged 55-64,
-
The
Federal Employee Health Benefit Plan-style program that
would be offered under the oversight of the Office of
Personnel Management,
-
A
"trigger" provision that would create a government-run plan
if the program run by OPM didn't achieve desired results,
-
Additional regulations on health insurers, including a
requirement that health plans spend at least 90 percent of
premium dollars on health care services – i.e., a 90 percent
MLR (medical loss ratio) requirement.
The deal was negotiated by a group of 10
Senate Democrats – five liberals and five centrists. But two
business groups were unhappy with the result. The U.S. Chamber
of Commerce rallied more than 70 business leaders, association
executives, and local chambers of commerce members from 18
states to Capitol Hill for a meeting with Senate Republicans.
The group gathered to urge Congress to start health reform
deliberations over and draft reform that lowers cost.
Meantime, the National Federation of Independent Business
(NFIB), one of the nation's largest small-business associations,
released a letter in opposition to the Senate health care reform
proposal. Among its reasons for disagreement, NFIB says that the
current bill does not reduce costs for small-business owners and
their employees, and that the bill's small-business taxes,
mandates and lack of cost controls equal a future "worse than
the status quo."
Read the full letter.
At least
some elements of the compromise – the Medicare buy-in and the
public plan – are being dropped during the current negotiations.
House
committee says MA plans profit too much
Last
week, House Democrats released a report that says private health
insurance companies offering Medicare Advantage plans "funnel
billions of dollars toward company profits, and to marketing and
advertising rather than to patient care."
The
report, from Democrats on the House Energy and Commerce
Committee, targets 34 insurers, including Humana, and was
released as lawmakers push forward on legislation to overhaul
the nation's health care system, including significant cuts to
Medicare Advantage.
The
report, titled "Profits, Marketing, and Corporate Expenses in
the Medicare Advantage Market," claims that from 2005 to 2008,
MA insurers devoted $27 billion to profits, marketing and other
expenses. Supporters of the report assert that "requiring all
Medicare Advantage insurers to have a medical loss ratio of 85
percent would provide billions of dollars in additional medical
services to seniors." Get the full report
here.
Karen
Ignagni, president and CEO of America's Health Insurance Plans
(AHIP), said Wednesday that "Medicare Advantage plans provide
essential health care services that are not available in the
traditional Medicare program, including disease management, care
coordination, and prevention and wellness initiatives.
"Recent
reports have found that seniors in Medicare Advantage receive
higher quality care compared to fee-for-service Medicare." Those
reports include the AHIP study discussed above.
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