1. Moving Ahead Lest anyone think that things have been quiet since health care reform was passed in March, the administration is moving ahead with all deliberate speed. As the New York Times reported on April 17, "President Obama is assembling a high-level team to carry out key elements of the overhaul and is considering moving faster than the law requires to put them into action." You can read the article here: http://www.nytimes.com/2010/04/18/health/policy/18cost.html?emc=eta1.

Health and Human Services Secretary Kathleen Sibelius, a former insurance commissioner and governor of Kansas, "has begun work on the first of what will be numerous regulations for Medicare, Medicaid and private health care providers. Within her department, she has reorganized the Centers for Medicare and Medicaid Services to make room for an innovation center intended to test ways of reimbursing providers that could reduce spending while improving patient care."

As the article notes, cost containment will be taken very seriously and quotes former head of the Congressional Budget Office, Robert Reischauer, saying "This act sets a foundation, I think, upon which effective cost controls can be built."

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2. The Ongoing Cost Containment Debate Critics of the recently passed health care reform bill got some support by a newly released report by Rick Foster, the chief actuary of the Centers for Medicare and Medicaid Services (CMS). The report states: "The additional demand for health services could be difficult to meet initially with existing health resources and could lead to price increases, cost shifting, and/or changes in providers' willingness to treat patients with low-reimbursement health coverage." It also suggests that some employers will stop offering healthcare coverage, since the employer penalty for not doing so is low and other alternatives will now exist for employees: "A number of workers who currently have employer coverage would likely become enrolled in the expanded Medicaid program or receive subsidized coverage through the [Health] Exchanges." Click here to read the article.

An April 22 Associated Press article on the MSNBC web site (click here) provides further detail about the findings, and notes that, "The report found that the president's law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1 percent. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion."

The report is sure to aggravate the continued debate about the merits of the reform bill and how we can ever begin to control costs without someone feeling the brunt of such controls. Essentially we only have three choices:

a. Continue the status quo and let tens of thousands die and suffer from lack of insurance, and many more go bankrupt;

b. Make comprehensive reforms that give almost everyone coverage but impose no cost control pain, and instead raise costs even higher;

c. Do "b" and impose the pain somewhere. Fortunately, we've finally ruled out "a." The debate is the extent to which we are doing "b" or "c." The administration and many economists and health care experts say the latter, while others say the former.

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3. Just Say No? An April 6 New York Times article, "In Medicine, the Power of No," suggested that despite the new availability of comparative effectiveness research (CER) to help guide decisions by patients and doctors on which treatment might be best for them, Americans generally think "more" and "more expensive" are better. Thus we rejected the managed care effort by insurance companies to steer doctors to the lowest cost but (supposedly) still effective care. The article (click here) notes a three-step process that could save costs if followed:

The first is learning more about when treatments work and when they don't. "All too often," the Institute of Medicine reports, the data is "incomplete or unavailable." As a result, more than half of treatments lack clear evidence of effectiveness, the institute found. It says the most promising areas for research include prostate cancer, inflammatory diseases, back pain, hyperactivity, and CT scans vs. M.R.I.'s for cancer diagnosis...

The second step — and maybe the most underappreciated one — is to give patients the available facts about treatments. Amazingly, this often does not happen...

When patients are given information about potential benefits and risks, they seem to choose less invasive care, on average, than doctors do, according to early studies...

The health act requires Medicare and other agencies to help hospitals and doctors give patients more information — which is practically a no-lose proposition. In the course of receiving more control and more choice, two distinctly American values, patients will probably help hold down costs...

The final step is the bluntest. It involves changing the economics of medicine, to reward better care rather than simply more care. Health reform doesn't go nearly far enough on this score, but it is a start.

The tax subsidies for health insurance will shrink, which should help people realize medical care is not free. And doctors who provide good, less expensive care won't be financially punished as often as they now are.

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4. Is There a Doctor in the House? Even before the health care reform effort was relaunched in 2009, experts have been concerned about a growing shortage of physicians, especially primary care doctors. This stems from overall population growth, an increased number of older Americans, as the baby boomer bulge moves up the age curve, longer life spans, and more care for chronic conditions. According to an article in the April 8 issue of The Annals of Internal Medicine, by Robert Doherty (click here), even before considering the impact of the health reform bill, "The United States faces a shortage of 35,000 to 44,000 primary care physicians for adults by 2025. Population growth and aging will increase the workloads of family physicians and general internists by 29% between 2005 and 2025."

However, the health reform act has several provisions to both try to reduce the shortfall and compensate for it by increasing reliance on other heath care professionals, such as nurse practitioners:

− "increased funding for National Health Services Corps and Title VII health professions programs."

− "a new program to provide grants and graduate medical education dollars to primary care residency programs at teaching health centers."

− "The law requires residency programs to redistribute at least 65% of unfilled slots in non–primary care programs to primary care residency or general surgery residency programs."

− "The PPACA also establishes the Primary Care Extension Program to support best practices in primary care and will train more advance-practice nurses, although states will continue to govern the services that they can provide."

− "increased Medicare payments for primary care encounters by 10% starting in 2011 and continuing through 2016, and increased Medicaid payments for visits and vaccines by primary care physicians to no lower than the Medicare rates for years 2013 and 2014."

The author, who is "the senior public policy adviser for the American College of Physicians," also reviews the cost control and coverage expansion measures in the bill and concludes: "Rather than asking whether the PPACA does everything to improve access and lower costs, we should ask how it compares with the status quo. By this measure, the PPACA is an extraordinary achievement .... The health reform law is a work in progress, not the end of the story. As it is implemented, changes will be inevitable."

Part of the solution to filling the doctor shortage gap is by expanding the number of and role of nurse practitioners. Maggie Mahar's April 19 Health Beat blog describes the resistance by some physicians to giving these highly educated professionals more authority in directing medical care. But she advocates strongly for their expanded use. An expert cited by Mahar says that, "Nurse Practitioners are registered nurses with a graduate degree, usually a masters, though by 2015, a doctorate, or a DNP, in nursing practice will be the standard for all graduating nurse practitioners." Plus, "research shows that patient satisfaction is often higher among patients who see NPs. These days, many primary care docs are burned out."

Further, nurse practitioners are less expensive (i.e., median pay is a little less than half of what a primary care physician earns). Finally, they tend to be more patient-oriented, caring, and willing to take more time with patients, which is just what is needed for many patients: "In a 21st century medical school, many argue, students need more training in patient-centered medicine: how to educate patients so that they can collaborate in managing chronic diseases; how to share decision making with patients; how to manage pain; how to tailor end-of-life care with an eye to the individual patient's greatest desires and worst fears." To read the full article, click here.

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5. Why We Needed Insurance Regulation If there's any doubt about the need to regulate health insurance companies, an article by Reuters, and published on April 22 on the MSNBC web site should erase that doubt (click here). The story relates how Wellpoint, which covers about 1 in 9 Americans under names of various subsidiaries, used a computer program to identify and systematically cancel policies of women with breast cancer. "The software triggered an immediate fraud investigation, as the company searched for some pretext to drop their policies, according to government regulators and investigators.

Once the women were singled out, they say, the insurer then canceled their policies based on either erroneous or flimsy information." Tens of thousands lost their insurance due to this practice of "rescission." Pregnancy was another target of the Wellpoint, due to the expense of complications of pregnancy and neonatal care. Even so, the article says that the new health reform law may not successfully end this practice, unless further regulations are made clear and are backed up by strong enforcement. An important enforcement mechanism would be a third party review of any such attempted cancellations.

Another component of insurance regulation in the new law is the requirement that health insurance carriers pay at least 80 percent of premiums towards medical claims and improving care. For large groups, the target is 85 percent. But according to an April 18 article in the Washington Post (click here), already "one of the nation's largest insurance companies reclassified certain expenses in a way that increased its so-called medical-loss ratio. In January, WellPoint began including under medical benefits such costs as nurse hotlines, ‘medical management,' and ‘clinical health policy.'" As the article indicates, the requirement is a mixed bag of incentives: "At its simplest, it encourages insurers to cut overhead expenses. In addition, it might give insurers pause before raising copayments and deductibles, turning away applicants with preexisting conditions, or squeezing payments to doctors and hospitals, because each of those steps would reduce medical spending and make it harder for insurers to meet the required ratios.

On the other hand, the target ratios might give them added incentive to raise premiums. By doing so, they could keep overhead and profit fixed."

The article notes another regulation that will help prevent insurance companies from trying to just enroll healthier individuals is that the health exchanges will use "risk adjustments," so that "health plans that attract disproportionately healthy populations will be penalized, and plans that attract disproportionately sick populations will be awarded additional payments."

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6. Reducing Medical Errors Even though we all know (I hope) that we are not perfect, we sometimes think our physicians and hospitals are. Of course, to err is human and the data shows it. So despite all the attention paid to the benefits, mandates, and costs under the new health care reform law, reducing medical errors and hospital-induced infections could be a very important part of the gains from the bill.

An article in the April 1 online version of the Albany Times Union (click here) notes the research that "More than a million Americans are harmed each year as a result of their medical care -- not their underlying condition -- and an estimated 100,000 die. Another 100,000 people die from hospital-acquired infections." As the article explains,

"The law uses Medicare payments to motivate hospitals. Those that reduce readmissions and have better outcomes in several areas -- including care for heart attacks, pneumonia and preventing infections -- will be rewarded with higher payments.

Hospitals that have high rates of hospital-acquired conditions such as bed sores, falls and urinary tract infections caused by catheters will receive reduced payments.

Medicare patients make up about half of all hospital visits, so changing the Medicare payment structure has the power to transform the entire industry."

The article goes on to detail steps in the bill – such as requirements to report errors and infection rates, and financial incentives and penalties – that should motivate providers to reduce these problems. A similar analysis of the new law's potential impact on errors and infections can be found at the Commonwealth Fund site's blog: click here.

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7. Medicare Advantage Doing OK According to an article on the business manager web site, BNET, Medicare Advantage plans will not face big cuts next year (click here). MA plans are the insurance company alternatives to Medicare that are targeted to get less money from the Medicare system to help fund health reform. When enacted in 2003 they got on average an extra 14% over what it costs regular Medicare enrollees. That 14% subsidy is being phased out, but now the change for 2011 will only be a freeze on the money they get from the government, instead of an initial cut of up to 4%.

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8. Universal Participation Many conservatives now complain about the individual mandate (first proposed by former Senate Leader Bob Dole), but it is essential to any stable health care system. Not only does having everyone in the system help equalize costs for all. But allowing healthier people to drop out and then enroll when they need care would increase costs for everyone else in the insurance pool. These "adverse selectors" pay less into the pool over time than they take out of it in paid expenses.

In "Why We Need the Individual Mandate," Jonathan Gruber writes at the Center for American Progress (click here) that without the mandate, only a third as many of the uninsured now expected to be covered would be, fewer employers would provide coverage (adding another 15 million to the uninsured), and costs for individual coverage would rise by 40%.

As he notes, the new health care law's mandate starts in 2014 and "imposes a penalty on individuals who remain uninsured even though they can afford health insurance—if coverage costs less than 8 percent of their income. The penalty is a fixed dollar amount (rising from $95 to $695 from 2014 to 2016) or a percentage of income (rising from 1 percent of income to 2.5 percent of income from 2014 to 2016), whichever is larger."

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9. New Kaiser Poll Shows Insights on Americans' Understanding, Concerns, and Sources of "Information" about Health Reform A Kaiser Health Foundation tracking poll, taken about two weeks after passage of the health reform law, shows that 55% are still confused about the new law. Also, seniors were the most skeptical about the new law helping them, versus doing more harm than good. Not surprisingly, the "most important" source of information about the law is cable news—especially for Republicans. Democrats also relied most on cable news, but also to a greater extent on traditional network news, newspapers and their websites. You can draw your own conclusions about who gets the most biased and filtered "information," and why so many Republicans (and seniors) are still against the reform bill.

According to the report, "While opinion on the overall legislation may be divided, the survey suggests that the provisions which will be implemented in the short term are considerably more popular. Asked about 11 of the elements scheduled to start this year, most Americans held favorable views of each, and many were popular on a bipartisan basis. Overall, nearly nine in 10 say they favor providing tax credits to businesses with under 25 workers that provide health insurance to workers, and eight in 10 have favorable views of regulations that would end insurance company rescissions, mandate access to basic preventive care, and provide financial help to those seniors in the "'doughnut hole.'"

You can find the report here: http://www.kff.org/kaiserpolls/upload/8067-F.pdf

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10. Kaiser Health News Shoots Down the Myths We know the myth making will not cease for a long time yet. So it’s good to see many organizations, such as AARP, Families USA, and Kaiser Health News (KHN) keep up the myth busting. On March 31, KHN reviewed and concluded as false or only partly true seven claims relating to:

− use of comparative effectiveness research to ration care,

− undermining of Medicare Advantage plans,

− hiring of “thousands” of IRS agents to check for mandated coverage,

− longer waits for getting primary care appointments,

− changes to the military TRICARE system,

− federal government employees having to participate in the new health exchanges, and

− illegal immigrants getting free care.

Click here to read KHN’s assessment.

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11. Changes to the Bucks Voices Web Site Now that the health care reform act is law, Bucks Voices is in the process of updating our web site and hope to activate it in the coming weeks. Meanwhile, there is lots of information on our current site as a resource including links to the new health care reform act and timeline for implementation.

The new features will: provide access to what the new law means for you, track implementation of the numerous parts both at the federal and the state levels, follow the research and pilot projects to reduce costs, and offer daily news feeds about health care reform. We are also going to have these e-updates available from the Bucks Voices web home page.

We would like to get your stories about how the law is impacting you personally as we move through the implementation timeline. The most immediate impact now would be allowing young adults to stay on their parents’ policy until they are 26 years old. By July the high-risk insurance pool for the uninsured with pre-existing conditions will be available in all states. If either of those provisions affects you or someone in your family, we want to hear your story. You can still use our current web site contact information for those stories.

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12. Action Steps Under the new health care reform act, states have an important roll to play. We urge you to contact Governor Rendell today and ask what the Commonwealth of Pennsylvania is doing to comply with the following requirements:

1. How will Pennsylvania set up a high-risk pool for people who have been uninsured for six months and who have a pre-existing condition? How will this new safety net be advertised?

2. How will the Governor begin to develop the State Insurance Exchange that is supposed to replace the high-risk pool in 2014? Will he reach out to neighboring states to make it a Regional Exchange?

3. How will the Pennsylvania government publicize the immediate tax credit of up to 35% of premiums for small businesses with fewer than 25 employees and average annual wage of less than $50,000 to take advantage of this provision for 2010 tax returns?

4. How will Governor Rendell’s administration enforce the stricter limits on how much private insurers can increase rates?

5. Will the governor participate with a proposal for a federal grant to pilot a medical malpractice reform project?

6. Will the Governor share his plans early in the process and allow ample time for public participation and to observe the implementation process? You can address your letter to: Governor Edward Rendell, 25 Main Capitol Bldg., Harrisburg, PA 17120.

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