The Senate Finance Committee voted earlier today 14-9 to approve the America's Healthy Future Act. All the Dems voted for it, and Sen. Snowe was the only Republican who voted for it. The committee's approval allows the process to proceed to merger with the Senate HELP bill and then to the floor. The Congressional Budget Office (CBO) has estimated that the bill would cost $829 billion over the next decade and reduce the deficit by more than $80 billion. One reason it's less costly than the House bill is that it doesn’t fix the SGRrrr.

The CBO has slowed activity in the House as they analyze costs and debate whether the House SGR fix must be added to the cost of HR 3200. So, floor action there is unlikely in the next two to three weeks; and the Senate will take some time to sort through their issues as well as they try to merge the Finance and the HELP Committees bills. In terms of more details about the activities on the bills:

First, on the House side:

• The caucus considered several options for reducing the gross cost of their bill to $900 billion, none of which had great appeal to House members.  But that does seem to be an agreed-upon goal. And CBO is watching.
  
  
• The conversation regarding the public option revolved around a version that would use Medicare +5% rates, negotiated rates, or “some combination thereof.”  The last reference appears to suggest a trigger-like mechanism for starting with negotiated rates but moving to Medicare-like rates if savings targets are not achieved – an idea discussed in some of this morning’s press reports.  In sum, a “robust” public option appears likely in the House.  Leadership’s strategy is that is the best means of producing the left-most version in conference, although with the Senate heading for 60 or 61 votes at most, how far that issue can shift in conference is dubious at best.
  
  
• One means of lowering the cost of the bill that’s being considered in the House is to raise the Medicaid eligibility threshold from 133% of poverty to 150%, with the federal government absorbing most, if not all, of those incremental costs.
  
  
• The high-end insurance plan tax is unlikely to be included in the first House-passed bill, although many caucus members acknowledged some version of it is likely to come out of conference with the Senate.

Then, on the Senate side:

• “Rule 28”, which prohibits extraneous provisions from being included in House-Senate conference negotiations, will apply to the HELP-Finance merger process.  Staff for both committees have been adamant that provisions not included in either the final HELP or Senate bills will not be considered at this stage.  We predict that “rule” (more of a “guideline,” as Dr. Peter Venkman would say) will get broken at least once, but it is an added barrier to new issues being introduced to the process in the near term.  The “Manager’s Amendment” laid down once the Senate has moved to the reform bill could include new provisions, and there will likely be extensive consideration of amendments on the floor.
  
  
• Due to the fact that the $81B “surplus” in the Finance bill is “off budget” – because it is derived from new payroll/Social Security tax revenues – we think it is unlikely that the provider “fees” and other offsets and revenue raisers in the bill will change meaningfully during the merger process with HELP.
  
  
• Many Senate Democrats do not consider this the final word on, or even as necessarily relevant to, the public plan debate in that chamber.  Sens. Carper and Snowe continue to push their approaches to a fallback public plan, with the key distinction being Carper’s is almost exclusively state-managed, while Snowe’s would entail a single, federally-chartered corporation that would administer the state-based plans where the trigger has been pulled.  Neither appears to have made significant concessions to the other at this point, but inclusion of some compromise version looks probable via an amendment on the Senate floor.

Every day these and other issues are being debated and debated. We’re in there, pushing for the SGR fix, tort reform, and protection of the physician right of ownership, among other issues. And, we’re always reminding everyone about the 2010 Payment Rule debacle -- and asking they do something about so we can turn our attention to reform.

Texas Senator Cornyn proposed an amendment last week in the Senate Finance debacles to mandatorily enroll himself and all fellow Senators in the Medicaid program! Wouldn’t they love that?! I loved it.

The committee members voted to soundly defeat it. Gee. Why? They wouldn’t want to be in a program that pays the doctors 40% of what underfunded Medicare does? Cornyn deserves an award for this.

The Congress is proposing to expand the Medicaid program massively in all of the current bills. But none of them would even think of being enrolled personally -- it’s woefully underfunded.

*** Sen. John Cornyn, official Senate photo. ***

With Congress back in session today, the party’s over in terms of bipartisan planning, and the POTUS will address a semi-reluctant joint session of Congress Wednesday evening to lay out what the “at minimum” health reform agenda needs to be.

Gang of Two
The Senate Finance Committee is hurrying to get their proposed bill out before the big speech Wednesday. Chairman Baucus has apparently lost the support of the Gang of Six, except for Senator Snowe (R-ME), who’s still talking with him. He’s going to put the bill out anyway. He has leaked some details of his proposal, including that it will provide access for all Americans, and cost about $900 billion over 10 years.

Families and individuals earning less than 133% of the federal poverty level ($29,000 for a family of four) will be covered in the expanded Medicaid program at government expense; those who earn more than 133% of the FPL but less than 300% ($66,000 for a family of four) will get subsidies on a sliding scale to help buy private coverage through new insurance exchanges. Those above 300% of FPL must purchase it themselves through the exchanges, or be covered through their employer, or face some kind of tax penalty. Employers will be encouraged to cover all their employees, but not forced to do so. However, if they don’t, they must pay for part of the coverage costs by contributing into state insurance exchanges that will help uninsured persons get affordable coverage, have a choice of plans, and have portability of coverage if they change jobs or move within the state.

He will not include a “public option” in the exchanges, but will promote insurance reform and publicly owned insurance coops (such as Group Health of Washington State, which is organized and owned by its beneficiaries). He has trimmed back the mandated minimum benefits to try to keep costs down and premiums more affordable (and interestingly, Snowe apparently thinks he has cut benefits back too far). He raises some of the funding through a new tax on insurers who offer coverage that is over the average costs of family coverage (about $13,000 per year for a family of four). This is a clever switch from taxing people with coverage over that amount, as proposed by others. I don’t know if he will have ‘MedPAC’ on steroids “federal reserve’ body to oversee health policy decisions for Congress (with less politics and more expertise). That’s all I know. 

It’s somewhat strange to me that how we’re going to pay for reform isn’t the headline issue being debated: Instead, the controversy is all about the public option, the base closure commission idea (MedPAC on steroids), death panels, whether federal money can be spent on abortion, and other matters. It does seem like most of Congress and most Americans are still prepared to support expanding access to all Americans, to propose needed insurance reforms, and to figure out a way to put the brakes on rising costs to ensure that health care and health care spending remain affordable. (We would add with respect to the latter goal that improving quality is the proven means of reducing the cost curve, and that there is no effective way of doing that in the bills proposed thus far. So, it will be interesting to see if Mr. Baucus includes any of the pilot ideas we have proposed to incentivize and improve quality.)

Socialistic Europeans?
There were quite a few chuckles at the European Society of Cardiology about the incessant bashing by some members of Congress of the National Health Service (NHS) and other allegedly “lefty strategies supposedly diminishing the lives of those socialistic Europeans.” Most European cardiologists I talked with at ESC felt this is almost humorous, even though they recognize that cardiologists and physicians in this country in general are the most highly compensated on the planet, and that our hospitals often have much more technology and money to spend than theirs. The difference in outcomes are not great, and clearly Europe is ahead of us in some areas. And, despite problems in every country, Europeans have a lot of pride in the progress their nations are making as they should.  Incidentally, I was interested recently to see income comparisons between compensation of American versus European physicians based on ‘purchasing power.’ When that comparison is made, American physicians aren’t doing much better than many of their European counterparts.

Next Steps
So what happens now that the Congress is back?  The House will start entertaining amendments to HR 3200, similar amendment discussions are ongoing with respect to the Senate HELP bill, and when this week the Senate Finance is announced, the Senate has to put its two bills together into one proposal, which will be no easy task. Once that happens, the House and the Senate will appoint a conference committee to take the amended House proposal and the amended and combined Senate proposal and try to craft a unified proposal to be passed by both the House and the Senate, and that the President will be willing to sign. That has to happen between now and the New Year.

So, despite Congress still being out -- this has been quite a month! This month of September and the two months following are likely to be one hell of a rollercoaster ride. More on the Baucus bill below.

*** Image from Flickr (peve.de). ***

The two economist titans, Uwe Reinhardt and Paul Ginsberg had an interesting point-and-counterpoint on payment reform last month that was published on the Health Affairs blog.  Reinhardt suggests shifting away from the present, price-discriminatory system of semi-arbitrary private sector pricing toward an all-payer system. He sees this as a transition to a future system based on bundled payments per episode of illness for acute care, and a new and better version of capitation for chronic care and prevention.

Ginsburg suggests that an all payer system might put pressure on doctors to contain costs in a "far less radical" manner than the public option proposed by many advocates of health reform. Ginsgurg praises the "success" of Maryland’s all-payer system. (Health Affairs will cover Maryland’s in detail in their Sept. 9 issue).

I am fond of both of these exceedingly thoughtful and smart gentlemen. But, I think both suggested methods could be scary for doctors and patients without a phase in or glidepath from where we are to any new model. As they sparred in a friendly fashion, I was reminded metaphorically of the old Godzilla and Mothra movies, where the altercations resulted in no damage to the fighters, but instead destruction of the infrastructure all around (and I supposed we would be the people running down the street screaming).

Uwe's proposal would be far simpler than competition around the present 20,000 or so itemized charges or list prices each hospital uses, or the more than 9000 list prices for doctors in the physician fee schedule. He also suggest associations (like ACC) might negotiate with insurers in a region (a state?) as is done in Germany, and make the results binding for both doctors and insurers. Doctors would then charge all insurers or patients the same price for identical procedures.  Medicare and Medicaid could be part of the arrangement he thinks. Pretty radical. Some major anti-trust relief would be needed, and there are clearly risks associated. But, hmmmm.

As I discussed briefly last week, the Energy & Commerce, Education & Labor, and Ways & Means committees introduced their tri-comm health care reform bill, America’s Affordable Health Choice Act of 2009 (HR 3200, hyperlinked here for your reading pleasure). The President and others celebrated it as a landmark bill at the White House, while the Congressional Budget Office (CBO) Director, economist Doug Elmendorf, ruined their party by proclaiming the bill as an unsustainably expensive instrument that will destabilize the economy unless modified to reduce costs over time. CBO has always been the "skunk at the garden party" or worse, but this time they made House leaders and the President quite upset.  

What's In It
We strongly support access for all. But the CBO concerns are legitimate. Congress has espoused a set of worthy visions to improve quality and care coordination and efficiency, but the teeth for getting that done -- other than with the same old ineffective price controls -- aren’t yet there. A reform bill that works is certainly still possible after the debate gets going more openly. But, beyond the unspecified vision, the implementation strategies are not there. And, there are a lot of provisions in HR 3200 (many inspired by organized labor) that will alarm many of you if you read all the detail -- just understand this is a political process, and the House knows that most of that won’t survive the Senate’s scrutiny. One real concern for us is that there is no tort reform in this House version, and there probably won’t be anything to start with in the Senate health or finance versions either. 

We applaud the House for its commitment to provide access to health care to basically all US citizens, and in particular for eliminating the SGRrrr for the next 10 years. That’s huge -- $230 billion worth of what would otherwise be cuts to physicians. We praise their huge Medicaid coverage expansion, combined with taking the payment of that program away from states (which have paid on the CHEAP), and providing better payment to physicians. They put a good deal of new money into prevention and primary care, and they add money to offset physician workforce shortages. We also appreciate their establishment of a positive future Medicare physician payment updates (MEI) and favorable spending targets for updates in the future. We’re also well positioned with NCDR and the IC3 Program for their significant payment and delivery reform models, such as incentives for physicians and their expansion and improvements to the Physician Quality Reporting Initiative (although this program still lacks sufficient payment incentives ... a 2% "incentive" is close to useless for most practices). 

ACC President Fred Bove has expressed our praise of these positive elements to the three committees (that would infuse almost $300 billion of new dollars to delivery of patient care), but without praising or referring at this point to the elements of the plan that are undefined (the public option, for example), or to those we must work to amend because they are just plain bad policy (the imaging cuts, their attempt to undermine specialty hospitals, and their attempt to prohibit opting out of public coverage programs). We will work with House and Senate members to eliminate those elements -- none of which should survive Senate Finance scrutiny thankfully. The Senate will not buy the House’s income tax funding approach for HR 3200 as currently configured either. More...

The House Dems yesterday released their 1,000+ page bill for health care reform called "America’s Affordable Health Choices Act of 2009." It includes positive first steps toward physician payment reform by revising the flawed SGRrrr (sustainable growth rate) formula. To positively improve quality, it would continue funding for the Physician Quality Reporting Initiative (PQRI) through 2012, and provide an appeals process and faster feedback on reports. It also makes some long-overdue improvements to the Medicaid program.

Other Provisions
The bill also would:

• Require all Americans to purchase health insurance or be fined, although those making less than $88,000 annually would be able to get a subsidy.
• Get rid of copays and deductibles for preventative care
• Make it illegal to deny coverage for pre-existing conditions
• Create a public plan
• Raise taxes for the wealthy – as much at 5.4 percent for incomes above $350,000

The bill also promotes testing Accountable Care Organizations, which have proven to be models for high quality, low cost health care. We hope more emphasis will be placed on quality improvement through the use of registries so we can measure our way to success. We also need to stress the importance of the application of physician-developed appropriate use criteria, rather than arbitrary imaging changes.

‘Inaction is not an option’
House Speaker Nancy Pelosi (D-Calif.) said that the House plans to vote on the bill before lawmakers break for August recess. As the details emerge, we look forward to more specifics on the payment reform provisions –- these reforms will be necessary to ensure that the access reforms the bill makes will be sustainable.  Until we completely change the way the U.S. payment system is structured, we’ll never be able to bend the cost curve of health care spending.

The Senate Committee on Health, Education, Labor and Pensions (HELP) last week outlined its broad goals for reforming the American health care system. Among the top goals: improving the delivery system; enhancing prevention and wellness; reducing fraud and abuse in public and private health systems; and establishing shared responsibility for financing of reform efforts. Nobody can argue with the goals, but how the heck do we get there? We’ll need more details and some HELP.

The Committee appropriately suggests that health care reform legislation should encourage adoption and use of health IT; promote evidence-based medicine; facilitate health literacy; and include strategies for tackling preventable medical errors and hospital readmissions. It also proposes better managing chronic conditions through care coordination, medical homes and community health teams. Again—we agree. I mean, duh.  But, how do we systematically do that? ACC is working with leaders in the Senate and House as they continue to flesh out these and other proposals and develop overarching health reform legislation. For the latest information on health reform, visit http://qualityfirst.acc.org.

Meanwhile, President Obama met this week with key Democratic Senators Baucus and Kennedy and reaffirmed his support for the creation of a government-sponsored “public plan” health insurance option — the issue that invokes the most angst and opposition from Republicans who might otherwise support some kind of overarching health reform legislation (as an alternative to national bankruptcy?). Read more in the New York Times and The Washington Post. 

For me, it’s what is not in these articles and stories that is most concerning. Consider the following:

IF the SGRrr payments are flat for ten years as projected, how do we prevent tens of thousands of doctors from just throwing in the towel, exacerbating the access problem? If we move the delivery system toward integrated groups, and transform payment from fee-for-service to bundling or episodes of care (or capitation) to align payment incentives with quality improvement, who receives and distributes the payment bundles?  Hospitals? New entities?  If the money goes to hospitals to dole out to doctors, should doctors all be employees of hospitals to be able to share in the huge profits hospitals make from? Or could bundles go directly to doctor groups? If so, how would they be organized if not already in integrated systems? And, if any of this is going to work in terms of payment incentives, gainsharing, and new potential relationships between physician specialties and hospitals, isn’t some anti-trust relief going to be needed? Is that part of the reform plan?

And, where is the med-mal relief plan that we will need to reduce defensive medicine costs? And, what if a new public plan is created that pays less than what it costs for some doctors to produce the required care? In the current Medicare program, it is illegal to balance bill patients to cover costs. Will a future potential Medicare-for-all concept of Medicaid, the new ‘public plan,’ and Medicare allow doctors to opt out--or will we be forced into a kind of pseudo-public employment? If the new public system were to become untenable and unfair in terms of reimbursement (let’s say the government has some budgetary problems in the future?), would doctors be prohibited from opting out of the program and still seeing patients who were willing to pay them directly?

And what about EMTALA? If health reform achieves universality, is EMTALA to be sunsetted? Do on-call stipends go away? Why or why not?

None of these ‘details,’ among many, many others, are currently included in the emerging principles of reform discussions. It’s a little scary. We really need to think about these details. It seems to me that after we pass whatever we pass this year, we’re going to have a year or two of very messy details and divisive issues to deal with.   

Medicare Payment Advisory Commission reported last week that 28% of Medicare beneficiaries had trouble finding a new primary care physician in 2008, up from 24% the year before. Some other stats they noted:

• The problem is even worse with Medicaid. A 2005 Community Tracking Physician survey showed that only 50% of physicians accept this insurance.
  
  
• HMOs are problematic as well. Recent surveys from New York show a 10% yearly dropout rate [among providers] from the state's largest HMO, the Health Insurance Plan of New York (HIP), and a 14% drop-out rate from Health Net of New York, another big HMO.
  

This data reveals that the Medicare access problem -- before the boomer hit -- is serious already. We need to bolster primary care, but also to fix the entire Medicare mess.

*** Image from Flickr (Ben Zvan). ***

Other big news of late last month was the unseating of long-standing Chair Dingell (D-Mich.) from Energy and Commerce by Henry Waxman (D-Calif.). What does that mean? Waxman is an expert of Medicaid and public programs (other than Medicare), but he understands a lot about Medicare as well. He loves health care policy. Dingell has pretty much delegated it. Waxman leans pretty far to the left for a lot of Blue Dog Dems, and he is a good friend of Ms. Pelosi -- he also loves regulations. But, one bit of good news; I have been a friend of his for over 20 years. I respect him, and can argue with him without making him mad. He will accelerate the reform process and be a player. He’s very big in bird-dogging conflicts with industry and oversight activities, including fraud and abuse. We’ll be fine with that.

With the apparent but surprising decision to have Hillary Clinton become the Secretary of State (this is gutsy of Obama), we lose a health advocate in the Senate who could have filled in for Senator Kennedy on his Health, Education, Labor and Pensions Committee if he unfortunately were to be unable to stay in that role. 

It’s safe to say that there is still a lot of excitement and enthusiasm buzzing in Washington about the prospects of moving the health reform agenda forward in a big way next year. Daschle will be able to help sell a strategy to his buddies in the House and Senate very effectively. Too bad he also has to be saddled with solving the SGRrrr nightmare. That looms as an ugly $300 billion mess. But, this evolution of this presidential transition -- so far at least -- is generally quite positive for us I think.

HHS Secretary Leavitt last week warned that Medicaid now covers more than 50 million American (one out of six citizens). With the program costs rising much faster than Medicare’s % rates -- Medicaid expects an 8% jump this year -- the program is untenable for the federal budget, and even more so for states. This perfect storm scenario begs the need to real system change…