March 26, 2010

March 26: Health Care Reform News


Sen. Klobuchar says health care bill will help lower costs, deficit

After running through an obstacle course of Republican amendments and procedural objections, the Senate on Thursday afternoon approved of a package of changes to the Democrats’ sweeping health care overhaul, capping a bitter partisan battle over the most far-reaching social legislation in nearly half a century.


Minnesota Sen. Amy Klobuchar said the Senate passage of the Health Care and Education Reconciliation Act "is an important step" toward lowering health care costs and reducing the nation's deficit…


"The health care reform bill includes some of my key priorities. It would begin to rein in costs and reward quality care through the use of the value index, something I worked extensively with the Mayo Clinic to include.”


Coon Rapids ECM Publishers, 3/25/2010



Top stories


Final Votes in Congress Cap Battle on Health Bill

The New York Times

March 26, 2010


Congress on Thursday gave final approval to a package of changes to the Democrats' sweeping health care overhaul, capping a bitter partisan battle over the most far-reaching social legislation in nearly half a century.


Related coverage:
Health Bill Clears Congress, Politico

Congress Approves 'Fixes' to Health-Care Law, The Washington Post


In Iowa, Obama Calls Health Bill ‘Pro-Business’

The New York Times

March 26, 2010


President Obama began an aggressive White House public relations blitz to sell his newly signed health care overhaul to a skeptical and sometimes confused public.


More Doctors Giving Up Private Practices

The New York Times
March 26, 2010


The delivery of medical care is changing as more young physicians take jobs with heath systems.


Former Mayo Clinic CEO Denis Cortese, M.D. on CNN with Sanjay Gupta, M.D.

March 20, 2010


Dr. Sanjay Gupta visited with former Mayo Clinic CEO, Denis Cortese, M.D. on March 20 to discuss a variety of topics about health care in America.  To watch the interview, mouse over the video window to activate the video controls and fast-forward to 8:40.


Effects of the New Health Care Legislation on Mayo Clinic Patients (document attached)
Mayo Clinic
March 25, 2010

The Mayo Clinic Health Policy Center has developed a fact sheet for Mayo patients that explains how health care reform will affect care at Mayo Clinic.



The Growing Financial Burden Of Health Care: National And State Trends, 2001–2006

Health Affairs

March 26, 2010


The financial burden of health care—the ratio of total out-of-pocket spending for health care services and premiums to total family income—continues to increase nationally. As a result of this trend, more people have been exposed to high costs and lack essential services. This study examines trends nationally and among selected states between 2001 and 2006.




To Screen or Not to Screen? Experts Weigh Merits of Breast Cancer Screening vs. Overtreatment

Minneapolis Star-Tribune

March 26, 2010


For years, officials have promoted breast cancer screening as the best way to spot the disease and save lives. Yet mammograms are far from perfect and come with an unwelcome side effect: Up to a third of women treated for breast cancer after being identified by the test don't actually need the biopsies and drugs.


State news


Video: Sebelius: Reform Bill is "State Friendly"

March 26, 2010


Despite worries by governors about the new administrative costs reform will impose, HHS Sec. Kathleen Sebelius tells POLITICO's 'Health Care Diagnosis' video series that she thinks it's 'the most state-friendly Washington-designed bill I've seen in a very long time.'


FL: `Management Watch' Details Released for Jackson

The Miami Herald
March 26, 2010


The top executives of Miami-Dade County and Jackson Health System have released an agreement revealing details of the county's "management watch" of the troubled hospital system.


NY: Hospitals Under the Knife

The Wall Street Journal
March 26, 2010


The nation’s largest public hospital system plans to slash its work force—including doctors and nurses—by about 10% over two years as government aid drops and the number of uninsured patients jumps.


Health care: To sue or not to sue

March 26, 2010


The question of whether states should sue over federal health care reform is a legal matter that is quickly turning into a partisan wedge issue, pitting governors against their own attorneys general in states where they come from different political parties.


Healthcare Reform Fallout: Which States are the Winners?

The Christian Science Monitor
March 26, 2010

States' Medicaid programs will have to grow dramatically to meet the demands of healthcare reform. Those states that have already started the process could come out ahead financially.



Health Reform: What Does It Do to Medicare?

March 26, 2010


Part two in a five-part series on the keys to health care reform’s success or failure.



The First Test of New Health Law: Covering Hard-To-Insure People
Kaiser Health News
March 26, 2010

In a test of the Obama administration's ability to smoothly implement the sweeping health care overhaul law, officials at the Department of Health and Human Services have just 90 days to launch an insurance program for people who can't get private coverage because of health problems.

Federal Agencies to Iron Out Health Care Details

March 26, 2010


The health care bill President Obama signed this week is more than 2,400 pages long. Still, it doesn't contain many of the details about how it will work and how it will be enforced. The responsibility for explaining the bill falls to workers in the trenches at government agencies.


Obama Administration


Kathleen Sebelius: 'Important Changes' Coming

March 26, 2010

With the 22 strokes of President Barack Obama’s pen this week, Health and Human Services Secretary Kathleen Sebelius became vastly more powerful, with huge responsibility — and leeway — as the bill’s massive changes are implemented.



The Good and Bad in Health Care Reform for Small Businesses

USA Today
March 26, 2010


Columnist Rhonda Abrams outlines how the new health law affects small businesses.


Companies Take Health-Care Charges (subscription required; full text below)
The Wall Street Journal
March 26, 2010


In the wake of Washington's health-care overhaul, some companies are taking big one-time charges for anticipated costs, fanning tension with the administration over the legislation's impact on corporate America.

Three companies that were among vocal opponents of the legislation have warned they would see an immediate impact on their earnings as a result of the loss of deductions on tax-free subsidies they receive for providing retiree prescription-drug benefits.

On Thursday, Deere & Co. said it would take a $150 million one-time charge in the current quarter related to the loss of deductions. Earlier in the week, Caterpillar Inc. reported a $100 million charge and AK Steel recorded a $31 million charge.

Beginning in 2006, companies have received a 28% federal subsidy, up to $1,330 per retiree, tax-free, to help pay for prescription-drug coverage. Until now, companies could deduct the subsidy from their taxes, essentially getting a second benefit from the money. Under the new law, companies will no longer be able to deduct the subsidy, but it remains tax-free.

Although the changes don't go into effect until 2013, companies say they have to take the charge to earnings now, to reflect the loss of the future tax deductions. In all, the S&P 500 companies will take a combined hit of $4.5 billion to first-quarter earnings, estimates David Zion, an analyst with Credit Suisse.

Administration officials say companies are exaggerating the impact of the loss of the deduction because of their general unhappiness with health reform.

"During the past year, I have heard from CEOs from across the country that skyrocketing premiums are crippling the competitiveness of their companies," said Commerce Secretary Gary Locke. "It is simply not responsible to suggest that the new health-care law is bad for business."

Jim Dugan, a Caterpillar spokesman, said the company's announcement wasn't politically motivated. "We take a very prudent and cautious approach as it relates to all of our filings with the SEC and other regulatory agencies," he said.

Caterpillar and other companies declined to detail how they arrived at the actual charges. They have wide latitude in how they calculate the amount, including different assumptions on coverage levels and mortality rates.

About 40,000 Caterpillar retirees receive company-sponsored drug benefits. A March employer-funded analysis of the impact of the health-care bill by human-resource consultant Towers Watson put the average lifetime value of the prescription-drug subsidy deduction at $2,800. That calculation would put the loss of the deduction at $112 million for Caterpillar, assuming the benefits remain unchanged.

The one-time charge is a hefty number because the company is taking the impact right away of the future changes over the life of the retirees.

But the actual impact on cash flow is much less. The loss of tax deductions for Caterpillar would be closer to about $7 million a year, or less than 1% of last year's profit of $895 million, based on a 35% corporate tax rate and the $20 million in annual subsidies that the company said it expected to receive in papers filed with the Securities and Exchange Commission. Mr. Dugan confirmed by email that these figures are accurate.

Ken Golden, a spokesman for Deere, declined to discuss how the company arrived at its $150 million figure, or how many retirees are covered by the company's plan. He said it was too soon to say how retiree plans could be affected at the company.

Several companies that appear to have received the prescription-drug subsidy, based on SEC filings, declined to comment, including Citigroup Inc., Duke Energy Corp. and Whirlpool Corp.

"Given that the legislation is brand-new and subject to ongoing changes, we won't be offering comment," said Jill Saletta, a Whirlpool spokeswoman.

Congress granted the subsidy to employers to encourage them to continue to provide prescription-drug coverage to retirees after it adopted the Medicare prescription-drug benefit in 2003.

In 2004, companies booked billions of dollars in gains for the anticipated subsidies, but many later reduced benefits anyway.

Still, an estimated 1,400 private-sector companies still offer prescription-drug benefits for retirees, covering several million people, according to Roland McDevitt, who is the director of health-care research at Towers Watson.

The change in the law is expected to affect primarily industrial companies with retirees represented by collective bargaining pacts, whose benefits are more difficult for companies to cut.

The subsidy has been controversial from the beginning. Companies have been able to receive subsidies even when retirees pay some or all of the cost of the prescription drugs, and have been allowed to deduct the cost of the benefits that retirees pay for. Now, they'll continue to receive the tax-free subsidy based on their retirees' contributions, but won't be able to deduct the amounts.

"Companies not only get the get the subsidy tax-free, but they then deduct the amount. Our bill simply closes the loophole," said White House Press Secretary Robert Gibbs on Thursday.

Tags: health care reform, Health Policy, Health Policy

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