April 26, 2010
This week's edition of the Chandler Chicco Companies-DC Health Policy Pulse includes:- One Month In
- Publicizing Physician Payments
- New Cost Estimates
- Health Reform 2.0
- Not a Good Idea
- Health Policy Politics: Shootout in North Dakota
- Perspective: Reforming Reform
- Healthcare Playmaker Profile: CMS Chief Actuary Rick Foster
One Month In
It’s been just over a month since President Obama signed the first of two health reform bills that together will transform the way health care is paid for – and perhaps delivered – over the next ten years. Many of the bill’s most important provisions do not become effective until 2012 – 2014 or later. But some start now. This week, for example, states must decide whether they wish to join a program that creates high risk insurance pools for people with pre-existing conditions. Beyond preparing for implementation, interest groups are mobilizing to influence the rulemaking process that will determine the details of how the reforms will work. And reform supporters and opponents are developing plans to frame the issue as November’s elections move ever closer.
Publicizing Pharma Physician Payments
Buried in the new health reform law is a provision that may, yet again, change the way drug companies interact with physicians. Under the law, drug companies are required to begin recording any physician payments that are worth more than $10 in 2012 and to report them on March 31, 2013. Included in the reporting requirements are stock options, research grants, knickknacks, consulting fees and travel to medical conferences. These details will be published online in a searchable database starting September 20, 2013. The law does not apply to nurses, physician assistants and others, but does apply to medical doctors and teaching hospitals. The new law makes no changes to existing rules regarding what payments and practices are or are not legal.
http://www.kaiserhealthnews.org/Stories/2010/April/26/physician-payment-disclosures.aspx
New Cost Estimates
Last week, Rick Foster, the CMS Chief Actuary, issued a revised estimate of the cost of the health reform bill signed into law last month. His office estimates that the new law will, in fact, increase healthcare expenditures by $311 billion over the next ten years. This estimate is $77 billion higher than his December estimate, which looked at the cost of the Senate-passed bill. The increased costs are due to expected increases in utilization by the formerly uninsured. On the bright side, it looks like Medicare will be around and solvent until at least 2029. Good news for me.
http://www.modernhealthcare.com/article/20100423/NEWS/304239966/0#
Health Reform 2.0
In a related story, and as many had predicted, it appears that there may be more “reform” coming. We are beginning to hear discussion of what needs to happen to truly bend the cost-curve. While there are some savings included in the new law, the bill does little to significantly reduce healthcare costs. As a result, insurance premiums are likely to continue their steep annual rise. This is not a surprise. Passing health reform this year required a focus on expanding coverage, eliminating unpopular insurance practices, etc. But now, employers are likely to demand Congress do something to reign in cost increases that, according to some, may accelerate as a result of reform. And you thought passing health reform this year was hard.
http://finance.yahoo.com/news/Health-care-laws-unfinished-apf-3704361887.html?x=0
Not a Good Idea
Last week, the Reuters News Service released a story that purported to show that Wellpoint, the large insurer that earlier this year revived health reform single-handedly by proposing premium increases of up to 39% on some policies, was systematically working to drop coverage for those individuals diagnosed with breast cancer. According to the story, Wellpoint is using an algorithm that identifies such patients and launches an investigation into the patients’ claims with the goal of rescinding the policy. Wellpoint’s CEO denied the specific charges. And HHS Secretary Sebelius attacked the company and the practice.
http://www.reuters.com/article/idUSTRE63M2YM20100423
Health Policy Politics: Shootout in North Dakota
North Dakota is a “Red State.” Democratic presidential candidates have no hope of carrying North Dakota. Its citizens are traditionally in favor of a limited role for government. However, for the last 20 years, the North Dakota’s congressional delegation has been entirely Democratic. They’ve had two Democrats in the Senate and their lone congressman has also been a Democrat. But that may change after November. An open Senate seat and Democratic Rep. Earl Pomeroy’s support for health reform have made both seats vulnerable to a GOP takeover.
http://www.inforum.com/event/article/id/276669/group/News/
Perspective: Reforming Reform By Al Jackson, CCC Washington
It happened faster than I expected. But it happened nonetheless. Policy makers, analysts and others are looking at the just-signed health reform bill and recognizing that what was passed was largely “gain,” with little associated “pain.” That’s not surprising, but it is clearly not enough.
It is expected that fewer Americans, because they have insurance, will wait until they are desperately ill to seek care, and then seek that care in the most expensive settings, like the hospital emergency department. That is a good thing. And, if more younger, healthy people are added to the insurance pool, it should cost less to insure all of us.
But it is also likely that many of those who are today uninsured an untreated will need treatment, some for chronic illnesses that require ongoing drug therapy or hospitalization. That will likely increase expenditures. New, improved drugs will cost more. And enhanced medical technology will require significant outlays by hospitals and require enhanced reimbursement to pay for the miracles they can deliver.
Society cannot afford 15% - 20% insurance premium increases each year. So something must be done. There are many suggestions as to what that might be. There are no easy choices left, however. Passing health reform this year was easy compared with what’s to come.
Healthcare Playmaker Profile
Richard Foster, Chief Actuary, Centers for Medicare and Medicaid Services
As the chief actuary for the Centers for Medicare and Medicaid Services (CMS), Rick Foster is responsible for compiling all actuarial estimates and analyses at CMS. He conducts studies to project total national health expenditures, and estimates the financial burden of present and future health programs. As chief actuary, Foster reports directly to the President and Congress – not to the CMS Administrator – and his reports play a major role in setting health policy. His independent analyses have sometimes been troubling to both Democratic and Republican administrations.
Just last week, Foster and his team of experts at the Office of the CMS actuary, prepared and released a memorandum titled, “Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ As Amended.” Foster said that increasing health care to the 34 million uninsured residents would cost $828 billion over 10 years, and the overhaul would save $577 billion. A more detailed breakdown of the report can be viewed here. To read what the blogosphere is saying about the numbers, click here.
For more information or to subscribe directly to the CCC-DC Health Policy Pulse, please email healthpolicypulse@chandlerchiccocompanies.com or call CCC-DC Health Policy Pulse Editor Al Jackson at 202-609-6002 or contributor Katherine Lea at 202-609-6021.
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