March 22, 2010

March 22: Health Care Reform News


Minnesotans in Congress feel the pressure

Building up to Sunday's climactic House vote on health care, Minnesotans on both sides of the fight were scrambling to influence the outcome, which could come down to a handful of lawmakers.


The health care bill got a last-minute push from Mayo Clinic executives Jeffrey Korsmo and Bruce Kelly, who issued a statement Friday calling the Democrats' plan "an initial step toward ensuring quality, affordable health care for all Americans." But the Mayo Clinic, which does not typically take public positions on overall legislation, added that "more needs to be done in the form of future legislative action."


Star Tribune, by Kevin Diaz, 3/21/2010



Senate passes GAMC plan, but Mayo critical of fix 

The Minnesota Senate on Thursday approved a bill that would provide a scaled-back version of a health program care for some of the state's poorest residents…


For hospitals that serve the patients, it will mean deep funding cuts for hospitals, said a Mayo Clinic lobbyist. "It's not fair or accurate to call this reform. It's dramatic and severe budget cuts," said Mayo Clinic lobbyist Frank Iossi.


Post-Bulletin, by Heather Carlson, 3/19/2010



Health Care End Game

With the U.S. House of Representatives poised to vote on health-care reform in days, the battle over how to fix the nation's health-care system has reached the boiling point…


AOL Health has asked the leaders of some of the nation's top hospitals to give us their take on health-care reform. Here's what they had to say: Jeffrey Korsmo Executive Director, Mayo Clinic Health Policy Center Korsmo says the Mayo Clinic Health Policy Center has four main areas of concern when it comes to health-care reform. The first of those is providing patients a higher quality of care, and that includes better service as well as better safety at a lower cost.


AOL Health, by Deborah Huso, 3/17/2010


Mayo Clinic health care reform mentions:

CNN, POLITICO, Washington Post, MPR, Post-Bulletin, KAAL TV, Post-Bulletin, Star Tribune, Chicago Sun-Times, Winona Daily News, La Crosse Tribune,, Chicago Daily Herald, Star Tribune, MinnPost


Top stories


Obama Hails Vote on Health Care as Answering ‘the Call of History’

The New York Times
March 22, 2010


Congress gave final approval to legislation that would provide medical coverage to tens of millions of Americans and remake the U.S. health care system along the lines proposed by President Obama.


Related coverage:

House Passes Landmark Health Bill, Politico

House Passes Health-Care Reform Bill Without Republican Votes, The Washington Post

House Passes Historic Health Bill, The Wall Street Journal

Health Care Victory for Obama in the House, USA Today


Editorials and analysis:


Big Win for Obama, but at What Cost?

The New York Times

March 22, 2010


The House’s passage of health care legislation late Sunday night assures that whatever the ultimate cost, President Obama will go down in history as one of the handful of presidents who found a way to reshape the nation’s social welfare system.


Health Care Reform, at Last

The New York Times

March 22, 2010


The passage of the health care bill was an accomplishment of historic proportions. Yet this is a start on overhauling the system, not the end.


Legal and Political Fights Loom for Democrats
The New York Times

March 21, 2010


The battle over health care is poised to move swiftly from Congress back to the country as Democrats, Republicans and a battery of interest groups race to define the legislation and dig in for long-term political and legal fights.


Huge Win for President Obama, but Split Decision for House Democrats

March 22, 2010

It’s hard to overestimate the magnitude of President Barack Obama’s historic victory on health care reform Sunday night — but the win was a split decision for Democrats, not a knockout.

Vast Ambition, Colossal Risk
The Wall Street Journal
March 22, 2010

How the health bill is perceived in both the short term and long run may well depend on whether its advocates can convince Americans that, at least on this issue, the U.S. is up to the task.

Looking ahead:

Get Ready For The Senate's Health Vote Slog
March 21, 2010

Action on health care legislation now shifts to the Senate, where the process is expected to be slow and frustrating. In other words, business as usual in that chamber.


Senate Has Some Work Left on Health-Care Bill

The Washington Post

March 22, 2010


The year-long battle over reshaping more than one-sixth of the U.S. economy will now move across the Capitol. The House's approval of the Senate's version of health-care legislation, which President Obama expects to sign into law swiftly, also will send to the Senate a 153-page package of amendments to that legislation. There, Democrats will implement an obscure, but commonly used, reconciliation rule to try to pass the revisions based on a simple majority and avoid a Republican filibuster.


Next Front: Selling What Congress Did

March 22, 2010


With sweeping health care reform almost reality, another battle is about to begin to define what it means for a skeptical public.




All High-Risk Pools are Not Equal: A Look at the Minnesota Model

Health Affairs

March 19, 2010


Should the expansion of high-risk pools indeed become part of federal health reforms, elected officials might want to replicate some features of a pool in a state with relative success: Minnesota.




Stanford Medical School to Expand Ethics Rules

The New York Times

March 22, 2010


Volunteer teachers may no longer give paid speeches drafted by the makers of drugs or medical devices, rules that full-time faculty members already follow.


Lesser-Known C-Diff a Bigger Hospital Threat than MRSA?

USA Today
March 22, 2010


In community hospitals in the Southeast United States, an easily spread bacterium appears to have overtaken MRSA as the most common hospital-acquired infection. But a pilot project in Ohio found that pushing hard on things such as hand washing and thorough cleaning can lower rates of that bug significantly.


Doctor’s Stethoscope Cover Aimed at Hospital Infections

The Boston Globe

March 22, 2010

Richard Ma, M.D., invited the Stethguard a necktie-shaped plastic sheath that slips over a stethoscope, aimed at reducing hospital-acquired infection.

State news


MA: Hospital Chief Urges More Cost Oversight

The Boston Globe

March 22, 2010


Massachusetts regulators should more closely oversee hospital costs, including setting prices, limiting new programs that make money for hospitals but drive up overall costs, and even sitting in on contract negotiations with insurers, Paul Levy, chief executive of Beth Israel Deaconess Medical Center, said on the final day of hearings into the state’s escalating healthcare costs.


FL: Jackson Costs Balloon Without Warning

The Miami Herald

March 22, 2010


A new contract between Jackson Health System and a consulting firm raised eyebrows among county commissioners. Why? A history of sticker shock.




Arizona Drops Children's Health Care Program

The New York Times

March 22, 2010

Faced with a $2.6 billion projected shortfall next year, Arizona's new budget will leave 47,000 low-income children without health insurance. Although three states, including Arizona, have in the last year capped enrollment in the Children's Health Insurance Program, Gov. Jan Brewer (R-Ariz.) signed yesterday the first state budget in the nation to drop the program entirely, reports the New York Times.


Reform efforts


CBO Score for the Reconciliation Bill


March 20, 2010


The CBO’s estimate of the direct spending and revenue effects of the reconciliation bill.


American Hospital Association Backs Health Bill

The Chicago Tribune

March 22, 2010


The American Hospital Association endorsed the Democratic health reform bill as President Barack Obama and leaders in the U.S. House pushed for the bill's passage.


In Health Care Reform, Boons for Hospitals and Drug Makers
The New York Times
March 22, 2010


With a sweeping overhaul of the nation's healthcare system, Congress would be giving the healthcare industry as many as 32 million additional paying customers in the next few years. Hospitals and drug makers, which supported the final legislation, would be clear beneficiaries, analysts say, even if the outlook for insurers was less certain.


Winners and Losers in the Affected Industries, The Wall Street Journal (subscription required; full text below)



Increased Primary-Care Interest Not Enough to Affect Physician-Shortage Trend
Fierce HealthCare
March 22, 2010
More U.S. medical students participating in this year's matching program picked internal medicine residencies than in 2009, but only 3.4 percent more, according to the American College of Physicians, not nearly enough to put a dent in the primary-care shortage dilemma facing the U.S.

Winners and Losers in the Affected Industries
The Wall Street Journal
March 22, 2010
Insurers Get Premium

After more than a year battling Democratic health-overhaul proposals, insurers face changes that will reshape their market. But they also realize it could have been worse.

With the legislation and the expected package of changes, insurers stand to get more than 20 million new customers. New health-insurance "exchanges," where consumers can shop for policies, will provide an easy way to reach these new customers. And the penalty for people who don't buy in is somewhat tougher than laid out earlier.

Meanwhile, taxes on the industry of roughly $70 billion over the next 10 years, once slated to go into effect next year, are now pushed off until 2014—and some tax-exempt plans are able to duck half of that fee.

A public option is nowhere in sight, nor is a new federal agency that President Barack Obama had envisioned to rule on insurance-premium increases, which would likely have been harmful to insurers' business.

Significant new opportunities exist for health insurers that run Medicaid plans and sell individual insurance products.

Still, the industry says it is not happy with the final product because it doesn't solve the problem of rising health-care costs. Insurers had wanted more substantive changes in the way hospitals and doctors are paid, tying reimbursement to quality rather than volume. In the bill, such payment changes are primarily pilot programs.

Over a year ago, the industry said it would overhaul the way it does business, putting an end to practices such as denying applicants with pre-existing health conditions, if a strong mandate that individuals buy insurance encouraged healthy people to buy coverage, balancing out the costs from treating sicker people. "If the bill passes, the access expansion would be a very important step forward, but we still have a cost crisis that needs to be addressed," said Karen Ignagni, president of America's Health Insurance Plans, the industry's trade group.

In 2014, the more far-reaching changes kick in: requirements that plans sell insurance to all applicants, that all Americans purchase coverage, and that health insurance exchanges get up and running to sell it to them.

Insurers are also protesting stepped-up cuts to the lucrative government subsidies the industry receives for administering Medicare Advantage plans, privately run programs for seniors."This will reduce benefits and raise prices for seniors," says James Roosevelt Jr., chief executive of Tufts Health Plan, a large Medicare Advantage provider in Massachusetts. In the days leading up to the vote, insurers continued to press their case that health-care premiums are likely to go up under the bill, chiefly for younger Americans. That is because a three-to-one limit on how much plans can charge older versus younger buyers could push prices for a 20-year-old up by 50%, says trade group Blue Cross Blue Shield Association. Insurers also say a requirement for individuals to buy is not strong enough, likely pushing up prices if young people opt out.

Within six months, insurers will need to end the controversial practice of revoking a policyholder's coverage. They will need to start covering young adults less than 26-years-old on their parents' policies, as well as children with pre-existing conditions. And they will need to eliminate co-pays for some preventative services and lifetime limits that plans will spend on a policyholder's benefits.

The Department of Health and Human Services will be given some oversight of large premiums increases—but insurers say they don't know how that will be defined. Starting next year, health plans will have to pay out 85% of premiums they collect from group customers in medical care, and 80% of premiums on medical care for individuals. Those measures could have significant ramifications on insurers' profitability, and an effort is under way to shape just how regulators define what counts as a medical expense. "We will have to gear up pretty quickly…to make sure we don't violate the law of the land," said G. William Hoagland, Cigna Corp.'s vice president of public policy.

At Cigna's Hartford, Conn., location, the company has had 30 to 40 people working over the past year and a half on "what if" scenarios. AHIP estimates that implementing a change such as ending lifetime benefit limits will require nearly a dozen distinct steps, including writing new contract language, setting and seeking regulatory approval for new rates, and writing new marketing material. Robert Laszewski, a former insurance executive who is now a consultant, says insurance premiums are likely to go up over the next couple of years since plans will want to bank as much capital as possible before more substantive reforms kick in during 2014.

That is the year that "could make or break" the health overhaul, said Ms. Ignagni. By then, the new exchanges—and new health plans to sell on them—will have to be ready. And while individuals will be required to buy insurance, industry executives' chief complaint with the legislation is that the requirement might not be strong enough to give healthy people an incentive to buy. "It's going to be a very difficult market for insurers" in 2014, Mr. Laszewski says. "It could have been a lot worse, but I don't think there is anyone in the insurance industry who is celebrating right now."

—Avery Johnson

Drug Makers Win

If there is a winner in all this, it is the pharmaceutical industry.

Drug makers—which got on board early with reform—stand to shell out nearly $5 billion more than they had originally agreed to. But on balance, the overhaul looks likely to benefit the companies because more people will have insurance to pay for prescription drugs.

It is "probably the industry that came out best," said Ira Loss, senior health-policy analyst at Washington Analysis, a research firm.

Drug companies will have to contribute $84.8 billion over 10 years to help pay for the health legislation.

But drug makers also won 12 years of protection against generic-like competition for biotech drugs, an increasingly important and lucrative business.

Companies avoided several measures pushed by some Democrats that would have cut revenue, notably proposals allowing the government to negotiate the price of medicines sold through the Medicare Part D drug benefit for the elderly.

The legislation also doesn't bar pharmaceutical companies from paying generic drug makers to delay the launch of less-expensive copies, which the Obama administration and several Democratic lawmakers had originally wanted.

Under the health legislation, pharmaceutical and biotechnology companies would pay a tax on drug sales in the U.S., beginning next year. Companies would also provide discounts to eliminate half of the "donut hole" gap in Part D drug coverage that forces some seniors to pay a significant portion of the cost.

Yet even that concession might end up benefiting companies, since some seniors have stopped buying medicines in the gap because they can't afford the costs, analysts say.

The industry's trade group, the Pharmaceutical Research and Manufacturers of America, has estimated the net impact of an overhaul on the industry's U.S. revenue would range from a gain of 1% to a loss of 2%.

The industry had spent heavily to promote passage of the legislation. Just last week, Americans for Stable Quality Care, an advocacy group that receives heavy funding from PhRMA, ran supportive television commercials in districts with key Democrats. Dan Mendelson, president of Avalere Health, which has been advising health-care companies about the legislation, said drug makers were already factoring an overhaul into their financial planning. Now, "they can say, 'This is what we are living in, and now we can plan,' " he said.

The picture for the medical-device industry is less rosy, and some companies, such as Johnson & Johnson, make both pharmaceuticals and medical devices. Device makers face a 2.3% tax on U.S. sales of certain products, starting in 2013, the industry's trade group says. The tax is estimated to raise $20 billion over 10 years.

The industry's trade group, the Advanced Medical Technology Association, has expressed concern about the impact of the tax, especially on small companies, many of which are not yet profitable. The group has also said device companies would be doubly hit by the overhaul, because in addition to the tax they would face pressure to cut prices from hospitals and other buyers squeezed by the legislation.

—Jonathan D. Rockoff

Hospitals' Aid Problem

The legislation will give hospitals something they desperately need: more patients whose insurance will pay the bills. But officials at public and urban hospitals also worry that the law calls for cutting millions in federal aid dollars.

Hospital officials say they are pleased that an estimated 32 million more Americans will be insured, and that the bill contains many steps to reign in the harshest insurance practices, such as caps on yearly or lifetime coverage and denying insurance for pre-existing conditions. There are also steps to reward the health-care industry for keeping people healthy, rather than paying for each service, a change that is expected to hold down costs, said Rich Umbdenstock, president and chief executive of the American Hospital Association. The bill sets up pilot programs that could pay hospitals and physicians to coordinate each patient's care for a fixed amount of money.

Still, administrators were disappointed that the plan calls for cutting annual increases to Medicare reimbursement rates. They had also hoped for a solution to caring for a growing population of uninsured illegal immigrants, who, by law, must be given emergency care but who often can't afford to pay. The new legislation will not allow illegal immigrants to buy coverage on the insurance exchanges.

Officials who run some of the nation's largest public hospital systems say that the bill could be a wash for them. At Los Angeles County Department of Health Services, which treats 700,000 patients annually, uncompensated care for new patients—largely uninsured, many of whom were immigrants—totaled $22 million and helped contribute to the department's $200 million deficit, said Carol Meyer, chief of operations for the Los Angeles County Department of Health Services. "We believe a number of people will fall through the cracks," she said.

The legislation includes cuts in federal aid for so-called Disproportionate Share Hospitals, large urban-care centers that treat great numbers of indigent people. The cuts begin in 2014. While the proposed cuts are less severe than earlier versions of the bill, the AHA had argued that the cuts would punish hospitals that care for the indigent.

Montefiore Medical Center, a private nonprofit in the Bronx borough of New York City, could lose half of the its $100 million in annual DSH payments, according to Steven Safyer, president and CEO. "There is not a lot of upside in insurance reform in the Bronx," Dr. Safyer said.

—Suzanne Sataline

Strain on Doctors

The overhaul's extension of insurance to millions of more Americans likely will add to the patient loads of many doctors, which could exacerbate the physician shortage and raises questions about whether having insurance will really mean gaining access to health care.

The legislation includes a "very modest expansion" in federal funding for medical residency training and training for other health professionals, but "it's far below what we think the population growth and aging population will require," said Darrell Kirch, president and chief executive of the Association of American Medical Colleges. The group, nonetheless, supported the legislation.

The American Medical Association, the nation's largest physician group, also backed the overhaul despite misgivings about some provisions. On Friday, the AMA praised the bill's expansion of insurance coverage and the elimination of insurers' ability to reject covering a patient based on pre-existing conditions, as well as its incentives for disease prevention and wellness.

Several medical groups, including the AMA, applauded the final passage of the bill late Sunday night as a needed first step but reiterated that changes beyond those in the bill are needed.

The American College of Physicians called the bill's passage "historic" but said it would continue to ask Congress about improving pay for primary-care physicians in a patient-centered coordinated care model.

The U.S. already faces a shortage of more than 100,000 physicians in the next 15 years, and only 27,000 new doctors are trained each year, the Association of American Medical Colleges says. The demands placed on physicians by the new legislation may lead to greater use of other health-care professionals, such as nurse practitioners and physician assistants. "It'll pressure us to redesign care models so we will intelligently use non-physician providers," said Dr. Kirch.

The legislation doesn't address another big objective for doctors—eliminating a pending 21% cut in Medicare reimbursement rates. The cut has been repeatedly delayed by Congress, but physicians were pushing to have it eliminated. Lawmakers have balked at doing so because it would add billions to the official deficit figure.

Doctors are also worried about the bill's creation of an independent payment advisory board that would oversee the Medicare system and be free from direct congressional oversight. AMA President James Rohack on Friday called the board "problematic," because doctors could then be subject to "double jeopardy" where both Congress and the board could issue reimbursement rate reductions.

To persuade more doctors to take Medicaid patients, the bill increases reimbursement rates for Medicaid—the state and federal program that covers health care for the poor—for some services to be equal to that of Medicare. But it also could create an influx of patients for doctors that will accept new patients and participate in the Medicaid program.

"I think they'll get bombed," said Jim Greenwood, chief executive of Concentra, an employer-based provider of medical care that employs over 1,000 clinicians, said of physicians who accept Medicaid.

Concentra doesn't accept Medicaid in its clinics because of the low reimbursement rates and will continue this practice even with the improved Medicaid rates, said Mr. Greenwood.

The higher Medicaid reimbursements also apply only to primary-care physicians and not to specialists. "It's a tilt toward primary care and away from specialists," said Phil Miller, a spokesman for Merritt Hawkins, the largest physician search firm in the U.S.

"There's no question that something has to be done to make primary care more attractive. Unfortunately, I don't know if robbing Peter to pay Paul makes sense."

—Shirley S. Wang


Tags: health care reform, Health Policy, Health Policy

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