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Tuesday, 08 July 2008
ELECTION 2008
Presumptive Democratic presidential nominee Sen. Barack Obama (Ill.) on Sunday during a speech at the annual conference of the National Council of La Raza announced a proposal to help small businesses offer health insurance to employees, the New York Times reports.
Under the proposal, small businesses would receive a refundable tax credit valued at as much as 50% of health insurance premiums for employees (Zeleny, New York Times, 7/14). Small businesses would have to offer a "quality health plan" for all employees and cover a "meaningful" share of the cost to qualify for the tax credit, according to Jason Furman, economic policy director for the Obama campaign. Small businesses would receive the full tax credit, which would be phased out as companies become medium sized. Finalization of the details of the phase out and other parts of the proposal would require negotiation with the Department of Treasury and Congress, Furman said (Trottman, "Washington Wire," Wall Street Journal, 7/13).
The proposal would cost about $6 billion annually (New York Times, 7/14). Obama would finance the proposal in part through a plan to allow market entry of generic versions of biotechnology medications, which would increase competition and reduce federal spending on such treatments. In addition, Obama would use some savings from a reduction in disproportionate share hospital payments included in his health care proposal. Obama credited his former rival for the Democratic presidential nomination, Sen. Hillary Rodham Clinton (D-N.Y.), for the small business tax credit idea (Reuters/Washington Post, 7/13).
Comments
Obama said, "I'm announcing my plan to provide real relief for small-business owners crushed by rising costs" (New York Times, 7/14). The proposal would "help more employers provide health benefits for their workers instead of making it harder for them," he said, adding, "We know that small businesses are the engines of economic prosperity in our communities, particularly Latino communities" (Roug, Los Angeles Times, 7/14). In addition, Obama said, "My plan won't impose any new burdens on small businesses. Instead, we'll help them not just create new jobs, but good jobs -- jobs with health care, jobs that stay right here in America, the kinds of jobs we need in our communities" (Johnson, AP/Philadelphia Inquirer, 7/14).
Tucker Bounds, a spokesperson for presumptive Republican presidential nominee Sen. John McCain (Ariz.) criticized the proposal as an expensive mandate that would have "a devastating impact" on small businesses. He said, "This is an obvious and crude effort to spackle together a quick political fix, but it lacks specifics, lacks funding and he lacks credibility" (New York Times, 7/14).
According to the Arizona Republic, the proposal is part of an effort by the Obama campaign to attract Hispanic voters, who have become "an increasingly influential political force in electorally crucial" states (Nowicki, Arizona Republic, 7/14).
Health Care Proposals
In other election news, the Republic on Monday compared the health care proposals of Obama and McCain and examined the importance of the issue in the presidential election.
"Nearly everyone agrees that there is no magic pill for the nation's health care ills," but Democrats and Republicans disagree on proposals to address the issue and have begun "wooing voters with plans that offer a stark contrast on the best way to ensure high-quality, affordable medical care for the masses," according to the Republic. According to recent polls, U.S. residents expect the next president to address the problems with health care and often cite the issue as one of their top three domestic issues, but the "prospect of reforming the nation's health care system is a tricky one," the Republic reports (Alltucker, Arizona Republic, 7/14).
Editorials
Summaries of three recent editorials that address issues related to health care in the presidential election appear below.
- Baltimore Sun: Some "significant weaknesses in the social safety net intended to protect older citizens are becoming apparent" and indicate the need for reforms to Medicare and Social Security, but proposals to address the issue from both presidential candidates have "serious shortcomings," according to a Sun editorial. According to the editorial, Medicare is "in trouble," adding that within the next 10 years, the "cost of providing senior health care" through the program is "expected to soar by billions of dollars, requiring significant increases in withholding taxes or cuts in coverage for senior citizens." In addition, traditional pensions that "provided a dependable guaranteed income are disappearing, as is employer-provided retirement health insurance," the editorial states. "The answers to all of this are likely to be painful," the editorial states, adding, "Among the possibilities: cuts in health benefits, more years of work for many, some form of universal health care, mandated retirement savings plans and tax increases" (Baltimore Sun, 7/14).
- New York Times: "McCain's main campaign promises" on health care and other issues "would lead to huge budget deficits," and, because "McCain cannot balance the budget on a crusade against pork and a one-year freeze in a sliver of federal spending," he either "has a secret plan to balance the budget or he's blowing smoke," according to a Times editorial. "It is safe to assume there is no secret plan," the editorial states, adding, "To balance the budget in the face of ever-increasing tax cuts would require untenable near-term cuts in Medicare, one of the biggest drivers of budget imbalance," a move that "would harm elderly Americans, arguably Mr. McCain's most important constituency." The editorial states, "Controlling Medicare costs is essential to restoring budget health," but "no politician, least of all Mr. McCain, is simply going to slash the life out of the program." According to the editorial, the "demands of a tanking economy, coming on top of years of unmet needs," such as health care, "will require the next president to spend more and to raise taxes to support that spending" (New York Times, 7/12).
- Washington Post: The proposal from McCain to balance the federal budget by 2013 is "not credible," a Post editorial states. According to the editorial, although McCain has said that he would reduce federal spending on entitlement programs by $160 billion as part of the proposal, he "does not explain how." In addition, "McCain's opposition to the pending Medicare bill does not offer comfort on his willingness to deal with entitlements," as he appears "willing to reverse $13 billion in scheduled cuts to doctors but opposes paying for it by reducing overpayments to the private Medicare plans," the editorial states. The editorial adds, "These overpayments -- the plans cost, on average, 13% more -- are just about the lowest-hanging fruit in tackling Medicare" (Washington Post, 7/14).
CAPITOL HILL WATCH
Legislation (HR 6331) that would delay a 10.6% reduction to Medicare physician fees, scheduled to take effect on July 1, could lead to a reduction to physician fees of more than 20% in 2010 unless a long-term solution is found, the New York Times reports.
Although the recently passed bill would delay a reduction to physician fees for 18 months, it would not alter the Medicare payment formula that Congress established in 1997. CMS sets payment rates for 7,000 different services under Medicare once annually, using a "complex formula" that sets goals for spending on physician services based on the annual gross domestic product. Under the plan, payments are reduced if actual spending exceeds the goals. When Congress passes a bill to delay those reductions, Medicare is directed to recoup the funds by making larger reductions in future years.
Some physicians say the formula works well "when the economy is booming," according to the Times. The formula treats all physicians equally, regardless whether they keep beneficiaries in good health or control spending. The formula also does not establish appropriate and inappropriate increases in services or mandate which services can be done in physicians' offices instead of hospitals. Lawmakers from both parties agree the policy is "broken," according to the Times.
Many physicians want the formula eliminated because they say their costs are rising faster than the rate of fee increases. However, the Congressional Budget Office found that if Congress based physician fee increases on the rate of medical inflation, it would cost $65 billion over the first five years and another $200 billion over the ensuing five years. Health policy experts and lawmakers say that if the issue remains unresolved, it "will come back to haunt" the next president and Congress, the Times reports (Pear, New York Times, 7/13).
Interests Continue Lobbying
AARP and America's Health Insurance Plans are actively pursuing their goals related to the recently passed Medicare legislation because President Bush has vowed to veto it, The Hill reports (Young, The Hill, 7/13). The Bush administration opposes the bill because it would make cuts to Medicare Advantage, which it believes would reduce choices for beneficiaries, according to the Chicago Tribune (Graham, "Triage," Chicago Tribune, 7/11). AARP in a letter asked Bush to reconsider vetoing the measure. The group also forwarded 45,000 e-mails from members and proponents of the legislation to the White House. AARP plans to run advertisements supporting an override vote should Bush veto the bill. It will also encourage beneficiaries to visit lawmakers' offices and organize a letter-writing and telephone campaign.
AHIP is attempting to convince lawmakers to change their vote on the legislation if an override vote occurs because they believe the measure will reduce access to plans under MA (The Hill, 7/13). CBO last week said that as many as 2.3 million beneficiaries could leave MA if the bill becomes law ("Triage," Chicago Tribune, 7/11). AHIP is targeting press releases that project how many beneficiaries will lose access to MA plans if the measure becomes law in states such as Georgia, Pennsylvania and Virginia, the home states of Republican senators who originally opposed the measure but changed their votes last week, according to The Hill.
The Hill reports that "the campaigns by the AARP, AHIP and others may be moot." If Bush vetoes the measure, House and Senate leadership say the chambers will quickly hold veto-override votes. Sixty-five representatives or three senators would have to change their positions and vote against a veto override for the measure to fail. Eight of nine Republican senators who changed their votes last week and approved the bill have said they would vote for a veto override, according to The Hill. The remaining vote, Sen. Lamar Alexander (R-Tenn.), has not disclosed whether he would vote for or against an override. Sen. Kit Bond (R-Mo.), who voted against the bill, also said he would vote for an override (The Hill, 7/13).
Bidding Program
The legislation to delay physician fee reductions also would have implications for suppliers of durable medical equipment under Medicare, CQ Today reports. It would delay for 18 months a competitive bidding pilot program that went into effect in 10 of the largest Metropolitan Statistical Areas on July 1. It also would cancel contracts awarded to about 325 companies out of more than 1,000 that submitted bids.
According to CQ Today, some of the contract winners are preparing to cut back expansions that were made to fulfill the new contracts and some are contemplating bringing legal action if the program is rolled back and delayed. Jeffrey Holman -- president of First Priority Medical Services, one contract winner -- said that companies might have little legal recourse if the program is rolled back because the contracts specified that they were "subject to changes in regulation and law." He said that companies losing the awarded contracts might only be given reparation if CMS chooses to do so.
Holman also said that the program likely will help fight fraud discovered in the system and that if the program is rolled back, providers that take part in such schemes would be allowed back into the system. "They just let all the bad guys right back in the business," Holman said. The Government Accountability Office has found that more than 10% of Medicare payments annually to DME suppliers are "improper," according to CQ Today (Wayne, CQ Today, 7/11).
Private Fee-for-Service Networks
The legislation also would require so-called private fee-for-service plans under MA to establish provider networks, Florida Health News reports. The plans are the fastest growing and highest paid of all offerings in MA. Although just 1.7 million of the 44 million U.S. residents under Medicare are enrolled in fee-for-service plans, such plans have grown eightfold over the last two years, according to the Medicare Payment Advisory Commission. The plans would have until 2011 to establish the networks under the bill. Current Medicare law does not have such a requirement, which often makes it difficult for many beneficiaries to find a provider within a reasonable distance of their home, according to Florida Health News (Jaffe, Florida Health News, 7/11).
Bush Administration
The Washington Post on Sunday reported that while Bush has recently been "engaging in the kind of conciliation with opponents that his administration has often avoided," his "willingness to compromise remains limited" and he continues to threaten to veto the Medicare legislation.
The Medicare bill had support from 18 Republicans in the Senate and many Republicans in the House. According to the Post, "Even two of Bush's staunchest Senate allies," Texas Sens. John Cornyn and Kay Bailey Hutchinson, "abandoned him and switched sides." White House spokesperson Tony Fratto said that any perceived change has more to do with a change in the political climate than a change in White House strategy (Eggen/Kane, Washington Post, 7/13).
SCHIP Expansion
With the Democrats' "big win" on Medicare, a House Democratic leadership aide said that the issue of SCHIP expansion might be brought up in Congress again, the Wall Street Journal reports. The aide said there is a "strong possibility" that there will be a new vote on expanding the program. However, the "broad backing for the Medicare bill may not translate to SCHIP," according to the Journal. Last year, there were not enough votes in Congress to override a veto of legislation that would have expanded the program (Goldstein, "Health Blog," Wall Street Journal, 7/11).
Opinion
Two newspapers published an editorial and a letter to the editor related to the Medicare bill. Summaries appear below.
- New York Times: The debate over the Medicare bill has "underscored a disturbing truth: many of the private plans that participate in" MA "have become a far too costly drain on Medicare's overstretched budget," the Times writes in an editorial. The editorial continues, "Private health plans were promoted in the 1980s and 1990s in the belief that they could reduce costs and improve care through better management," and "for a while, they did." However, "policy changes" by the Bush administration and the formerly Republican-controlled Congress "led to exactly the opposite outcome," according to the Times. The Times writes, "The Democrats in Congress, and the Republicans who dared to join them, deserve thanks for removing part of the subsidy." The editorial concludes, "Bush should drop his veto threat and adopt the principle that Medicare should pay the same amount for all beneficiaries" (New York Times, 7/14).
- Tyler Wilson, Wall Street Journal: HHS Secretary Mike Leavitt "fails to mention the problems with the [Medicare DME] bidding program" when "leading the effort to retain" it, American Association for Homecare President and CEO Wilson writes in a Journal letter to the editor. Leavitt compares "prices of medical equipment from licensed providers to equipment obtained on the Internet," which "comes without 24-hour support, patient/caregiver education, accreditation, state licensing or quality control," Wilson writes. In addition, Wilson writes that Leavitt "did not mention that the bidding program has loopholes allowing unlicensed companies to provide sensitive equipment" and "has awarded contracts to companies located miles away from the service area to provide equipment they have rarely or never previously provided." Wilson concludes, "Congress should put this program on hold until we can be assured that Medicare beneficiaries will be treated with dignity once again" (Wilson, Wall Street Journal, 7/14).
New Hampshire Sen. John Sununu (R) on Thursday said that his six-part health care plan would make health coverage more affordable for uninsured individuals and small businesses, the Nashua Telegraph reports. Sununu's plan would give a family without access to employer-sponsored health coverage a tax credit worth as much as $6,000 for health care expenses; allow small businesses to pool together to negotiate lower insurance rates; allow individuals to purchase coverage from any U.S. insurance company; encourage families to use health savings accounts; place limits on medical liability lawsuits; and encourage better use of technology to improve efficiency and reduce errors. The first four parts of the plan are outlined in legislation (S 3072) proposed by Sen. Roger Wicker (R-Miss.), which Sununu is co-sponsoring.
Sununu called his tax credit plan a "bit more targeted" than presumptive Republican presidential nominee Sen. John McCain's (Ariz.) proposed plan, which would provide a tax credit worth as much as $5,000 to any family and eliminate the tax exclusion employers receive for offering health coverage.
Len Nichols, a health policy expert at the New America Foundation, said that studies show that such tax credit plans could reduce the ranks of the 46 million uninsured U.S. residents by two million to six million people. Nichols said, "You are going to get some coverage but not take a huge bite out of the uninsured," adding that for middle-income, healthy, self-employed U.S. residents, a "credit might put them over the top" to purchase insurance. "I'd give him high marks for trying, high marks for making it a credit, but you have to think about what also needs to happen in the individual market to be effective," Nichols said (Nashua Telegraph, 7/11).
Sen. Chuck Grassley (R-Iowa) on Thursday in a letter to the American Psychiatric Association asked that the group provide an accounting of its financing to address concerns that monetary contributions from drug makers could improperly influence the decisions of researchers and physicians, the New York Times reports. The association is the "voice of establishment psychiatry, publishing the field's major journals and its standard diagnostic manual," according to the Times. In 2006, the drug industry comprised 30% of the APA's $62.5 million in financing. About half of that money went to drug advertisement in journals and exhibits at the annual meeting, and the other half went to fellowships, conferences and industry symposiums at the annual meeting.
Grassley, the ranking member on the Senate Finance Committee, in the letter wrote, "I have come to understand that money from the pharmaceutical industry can shape the practices of nonprofit organizations that purport to be independent in their viewpoints and actions." Studies have shown that researchers paid by a drug maker are more likely to report positive findings when evaluating that company's drug, the Times reports. Psychiatrists earn less than other doctors on average, but many seek to supplement their income through speaking arrangements with drug makers. Grassley's investigations have shown that these arrangements can be "lucrative" and that "some top psychiatrists" don't report all their income, the Times reports. Grassley's letter named several psychiatrists taking contributions from drug makers. In addition, a study of Vermont psychiatrists showed they receive more money from drug makers than any other specialty, according to the Times.
The APA board held a closed-door meeting this weekend, in part to discuss the increasing amount of scrutiny and questions about conflict of interest. "With every new revelation, our credibility with patients has been damaged, and we have to protect that first and foremost," former APA president and current president of Sheppard Pratt Health System Steven Sharfstein said. APA President-Elect Alan Schatzberg said that blocking or restricting researchers from trying to develop medications "will mean less opportunities to help patients with severe illnesses," adding, "Drugs that are helpful may not be developed by big pharmaceutical companies ... and we need some degree of communication between academia and industry" to expand options available for patients.
Nada Stotland, the current APA president, said, "The larger issue here is that there's a revolution going on" in how medical professionals handle drug industry money. She added, "That's good, that's what we need, and I believe we've been on the cutting edge of that revolution in many ways." She said the organization began reviewing contributions from drug makers last March.
Paul Applebaum, director of the Columbia University Department of Psychiatry, said, "I think we may be coming to a point where hospitals and medical schools have to get serious about sanctioning," adding, "You can suspend doctors' privileges, or suspend their right to treat patients; both have a huge impact on income and career. But if you're serious about these disclosure policies, you have to be willing to back them up" (Carey/Harris, New York Times, 7/12).
Opinion Piece
Pharmaceutical industry money, particularly in the field of psychiatry, is "corrupting medical practice and the maintenance of our country's health," Lawrence Diller, a behavioral-development pediatrician living in California, writes in a San Francisco Chronicle opinion piece. The failure of leading psychiatrists to report drug financing is "important, scary and tragic," Diller writes, and is "one more stake in the heart of American academic medicine's credibility with frontline doctors." According to Diller, in the current climate, "drug company research money, professional medical education and direct advertisements ... tilt" patients toward "biologically brain-based solutions, rather than nondrug ... approaches." He adds, "Research funding must be directed to the needs of patients and their doctors -- not the bottom line of stockholders."
Diller continues, "More money must be directed toward head-to-head competition between existing generics and the new products, and toward more studies comparing nondrug or combination approaches to drug-only interventions." Legislation introduced by Grassley and Sen. Herb Kohl (D-Wis.) would "require more vigorous reporting and enforcement on payments" received by medical professionals from drug makers, according to Diller. He states, "But in addition, we need laws to have the federal government, along with the major academic research centers, coordinate and direct the use of drug company money in medical research. This is not pie-in-the-sky wishing," concluding, "Such reform was precisely what the doctors of 100 years ago accomplished in this country" (Diller, San Francisco Chronicle, 7/13).
MEDICARE
Private auditors over about three years have recovered almost $700 million in Medicare overpayments to hospitals and other health care providers in six states as part of a recovery audit contractor program, the Wall Street Journal reports. Under the program, CMS pays auditors a portion of the amount of improper Medicare payments that they identify.
Auditors reviewed $317 billion in Medicare claims and found $1.03 billion in improper payments, most of which involved claims filed in New York, California and Florida. Medicare overpayments account for $992.7 million of the improper payments, and underpayments accounted for $38 million. The cost of the program amounted to about 20 cents per dollar, with $187.2 million paid to auditors. Providers appealed 14% of the alleged Medicare overpayments and successfully challenged about 4.6% of the overpayments.
Tim Hill, CFO and director of the Office of Financial Management at CMS, said, "All in all, we're very happy with the results," adding, "It returned a lot of money to the trust fund, particularly when you think that we're talking about three states."
The program has "drawn fire" from providers, "who call it overly aggressive and too confrontational," the Journal reports. However, CMS has begun to expand the program nationwide. CMS plans to revise the program to require auditors to use clinically trained personnel to ensure that they evaluate medical necessity consistently with other agency operations and to communicate with providers about audits in more detail. In addition, CMS plans to add staff to oversee the program and allow providers to track audits (Francis, Wall Street Journal, 7/14).
HEALTH CARE MARKETPLACE
U.S. residents increasingly "are learning that individual caps that seemed large quickly max out" because of the rising costs of health care, the AP/Detroit News reports. As a result, several patient advocacy groups are encouraging insurers to increase the limits, which do not adjust for inflation. In addition, lawmakers are currently considering two bills that would mandate such adjustments, according to the AP/News.
According to a survey by the Kaiser Family Foundation and Health Research and Educational Trust, 1% of U.S. employer-based single coverage health plans in 2007 set limits on benefits below $1 million. The study also found 22% of single coverage plans set caps from $1 million to less than $2 million.
The cost for work-sponsored health plans is expected to increase 9.9% this year and 9.6% in 2009, according to data from the PricewaterhouseCoopers Health Research Institute, the AP/News reports. Mike Thompson, a health care and employee benefits expert at the institute, said, "The nature of caps is that over time it becomes easier and easier to hit (them) because the costs of health care services keeps going up."
Jerry Flanagan, health care policy director for Consumer Watchdog, said health insurance hides the actual costs of health care, noting that most consumers are unaware how quickly $1 million "can evaporate" unless they have had to deal with a serious illness. Flanagan said, "You can eat through a million-dollar lifetime cap in two or three surgeries."
Rep. Anna Eshoo (D-Calif.), who in 1996 unsuccessfully proposed legislation regarding lifetime caps, intends to reintroduce the bill this summer, while Sen. Byron Dorgan (D-N.D.) in March introduced a similar bill in the Senate, the AP/News reports.
Health insurance industry officials say that federal laws requiring higher coverage caps would increase the cost of coverage and that lower caps offer consumers a wider variety of coverage benefits. Robert Zirkelbach of America's Health Insurance Plans said, "I think the discussion needs to move into why do some health care services cost hundreds of thousands of dollars and what can we do to address those issues" (Murphy, AP/Detroit News, 7/14).
STATE WATCH
The role of states in reforming health care, among other topics, was discussed Saturday at the National Governors Association meeting in Philadelphia, the Washington Post reports.
Former president Bill Clinton opened the meeting -- which included more than 50 current and former governors -- by urging governors to make their states "laboratories of democracy" and take small but effective steps to deal with problems such as childhood obesity. The meeting also included a "vigorous dialogue and substantial disagreement" over several topics, including whether health care can be reformed via states' efforts.
HHS Secretary Mike Leavitt, a former NGA chair, said if the federal government sets health care standards for practice and gives states deadlines, states can and "will solve this problem." Former Massachusetts Governor Michael Dukakis (D), speaking on whether states can effectively reform health care, said, "It isn't going to happen." Dukakis called the Massachusetts universal health care bill he signed a failure, according to the Post. He recommended expanding Medicare to the entire population.
Former Washington state Gov. Dan Evans (R), after listening to several governors' proposed health care policies, said, "The two presidential candidates should have been here to listen, not to talk," (Balz, Washington Post, 7/13).
C-SPAN's "Washington Journal" on Saturday included an interview with former HHS Secretary Tommy Thompson to discuss health care issues and the impact they will have on the presidential 2008 election ("Washington Journal," C-SPAN, 7/12).
Massachusetts regulators on Thursday said they expect more than a 300% increase in the number of state residents who will appeal penalties in the next year for failing to obtain health coverage under the state's health insurance law, the Boston Globe reports. The Commonwealth Health Insurance Connector Authority has allocated $3.3 million, nearly 10% of its $39 million fiscal year 2009 budget, for the 8,000 appeals the board expects to process. In FY 2008, the board received an estimated 2,000 to 2,500 appeals. Connector officials attribute the expected increase to the large hike in penalties -- from $219 per person this year to a maximum of $912 next year.
The Connector board also is considering regulations that would establish a minimum standard for coverage, which also would raise the price of coverage. The board has scheduled a public hearing on its proposed regulations for Sept. 12 and plans to vote on a final package in October. If approved, the rules would take effect Jan. 1, 2009 (Lazar, Boston Globe, 7/11).
Hinds County, Miss., Chancery Court Judge William Singletary recently ruled against a hospital tax proposed by Gov. Haley Barbour (R), saying that only the state Legislature has the authority to set taxes or fees paid by hospitals, the Memphis Commercial Appeal reports. The tax, intended to cover a $90 million gap in the state Medicaid budget, was originally proposed in 2006. It would have applied to hospitals' general revenues.
Barbour had rejected criticism that the tax would hurt hospitals and noted that other options proposed by the Legislature do not offer permanent fixes to the state's budget problems.
Barbour said that as a result of Singletary's decision, he would cut Medicaid spending by $34 million per month in order to balance the state's budget. The cuts, which would take effect Aug. 6, would decrease funding for physicians, dentists, home health agencies and hospitals. He said, "I'm going to do it, even though it's a terrible thing," adding, "I hope that the Legislature will come back in August and that the House will come forward with a permanent, fair and sustainable solution." The Legislature, whose session begins Aug. 4, could stop the cuts by raising taxes. In the past several months they have been "deadlocked" on how to address the Medicaid funding gap, the Commercial Appeal reports (Connolly, Memphis Commercial Appeal, 7/11).
COVERAGE & ACCESS
Many private not-for-profit hospitals in San Francisco agreed Thursday to treat participants of Healthy San Francisco, the city's universal health care program, the San Francisco Chronicle reports.
Under the agreement, patients will pay between zero and $250 per hospital admission, all of which will go to the Healthy San Francisco fund. The hospitals, which include California Pacific Medical Center, St. Francis Hospitals and St. Mary's Hospitals, will not receive any money.
Hospital executives said that they agreed to treat the 25,000 program participants because it is morally correct, will limit expensive emergency department visits and will increase the amount of charity care they provide in exchange for large tax breaks. Many hospitals earlier this year were criticized when the city's Department of Public Health found that private hospitals received $79 million annually in tax breaks but spent just $16 million on charity care each year.
"Lives are being changed, and our health care delivery system is being strengthened," Mayor Gavin Newsom said. Mitch Katz, director of the public health department, said that the partnership makes long-term financial sense for the hospital. "Ultimately, if everyone who's uninsured is part of Healthy San Francisco, then there is no group of unaffiliated, uninsured people anymore walking into emergency rooms," Katz said.
John Graham, director of health care studies at the Pacific Research Institute, questioned the agreement, saying, "Hospitals do not treat people for free." Graham said, "What this looks like is that they are trying to keep Gavin Newsom and the San Francisco (Board of Supervisors) happy by giving them some political support" (Knight, San Francisco Chronicle, 7/11).
HEALTH ON THE HILL FROM KAISERNETWORK.ORG AND CQ
Mary Agnes Carey, associate editor of CQ HealthBeat, discusses Senate passage of a bill that would halt a Medicare physician payment cut, a Senate-House agreement on mental health parity legislation and House action on changes to veterans' health care services in this week's "Health on the Hill from kaisernetwork.org and CQ."
According to Carey, the Senate voted 69-30 to approve by a veto-proof majority a bill that would block a 10.6% Medicare physician payment cut. Sen. Edward Kennedy (D-Mass.), who made his first appearance in the chamber since undergoing brain surgery last month, voted for the bill, which gave Majority Leader Harry Reid (D-Nev.) the 60 votes needed for cloture. Once that threshold was reached, several Republicans reversed their "no" votes. President Bush is expected to veto the bill, but if all 69 senators vote to override the veto, it will become law. The House also is expected to override the veto. The legislation also would delay for 18 months a competitive bidding program for durable medical equipment, prohibit or limit certain sales and marketing practices of Medicare Advantage and other drug plans, and provide easier ways for beneficiaries to qualify for and enroll in the Medicare prescription drug benefit's low-income subsidy program. The bill's financing provisions would phase out indirect medical education payments to MA plans and restrict some private fee-for-service plans by requiring the formation of provider networks.
Carey also discusses an agreement between House and Senate negotiators on mental health parity legislation that calls for studies to determine whether insurers are discriminating against certain conditions or failing to cover some treatments. The House version of the measure would require private health insurers to cover a specific list of conditions, which the White House, insurance companies and business groups say is too broad. In addition, the Senate has raised concerns about provisions of the House bill that would restrict so-called specialty hospitals and change how Medicaid reimburses for prescription drugs. However, Democratic leaders from both chambers have said that passing mental health parity legislation remains a priority for this year.
In addition, Carey discusses House bills dealing with veterans' health care. One bill would set up a three-year pilot program allowing veterans who live in remote areas access to health services through outside providers. The House Committee on Veterans' Affairs also approved legislation that would extend mental health benefits to veterans' family members who receive nonservice-related treatment. Another measure would prohibit certain copayments from catastrophically disabled veterans' treatment. Mark up on these bills is expected on July 16.
Carey also says that the House Energy and Commerce Health Subcommittee approved a bill that would allow full-time students older than age 18 who become severely ill to maintain their parents' health insurance if they take a leave of absence from school. The bill would require outside health plans to sustain coverage for up to one year. Another measure approved by the subcommittee aims to give FDA the tools necessary to review applications for brand-name and generic animal drugs. In addition, the Senate is expected to resume debate on legislation that would reauthorize the $50 billion President's Emergency Plan for AIDS Relief program, after leaders agreed to consider 10 Republican amendments. The largest of these amendments -- submitted by Sen. Jim DeMint (R-S.C.) -- aims to trim $15 billion from the legislation. Other amendments would remove a provision that would repeal a ban on HIV-positive visitors to the U.S., while another would redirect money to improve American Indian drinking water and law enforcement (Carey, "Health on the Hill from kaisernetwork.org and CQ," 7/14).
The complete audio version of "Health on the Hill," transcript and resources for further research are available online at kaisernetwork.org.
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