WellAware - Health Policy News Jan 28 2011

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WellAware

Health Policy News from M2

January 28, 2011

WellAware is a weekly update on actionable health policy news for the business and investing community.

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Federal

Obama Signals Willingness to Correct “Flaws” in HCR Law
In his State of the Union address January 25, President Obama said that while he opposes repeal of health reform, he is open to considering improvements. He specifically called out the 1099 provision, stating: “we can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses."

Members of Congress enthusiastically applauded the statement. Obama was referring to a bill that Sen. Baucus (D-Mont.) and Senate Majority Leader Reid (D-Nev.) introduced January 25 that would repeal an unpopular provision in the healthcare reform law that requires employers to fill out a 1099 tax form every time they spend $600 on goods and services.

Obama also said he would look for ways to reduce health care costs in programs such as Medicare and Medicaid, and he would work to spur innovation (see related story in Not in the News Yet)

President Obama's State of the Union address echoed the call for austerity that many governors have already voiced in their own state-level speeches to legislatures, and left little doubt that states should not look to Washington for fiscal help.

Link to article


Kaiser Poll Finds Mixed Views on Replacing or Defunding Health Reform
While the public is still divided on health reform, opposition to the new law increased in January as the GOP began efforts to repeal it, according to a new survey by the Kaiser Family Foundation and the Harvard School of Public Health.

The survey, conducted just prior to the House repeal vote, also showed that “there is no groundswell of public support for overturning the law, that many individual components of the legislation remain popular across the political spectrum and that a majority of Americans oppose the idea of lawmakers using the appropriations process to defund or slow down implementation of the law,” Kaiser says.

While most respondents say they prefer spending cuts over new taxes as the key means of reducing the deficit, “there is little public consensus about where to achieve meaningful savings” and a majority opposes any spending reductions in two of the largest entitlement programs - Medicare and Social Security.

Link to report


US Physicians Fear Health Reform Could Worsen Care for Patients
Almost two-thirds of US doctors are concerned that health reform could lower quality of care, by flooding physician offices and lowering their income, according to a new Thomson Reuters survey.

The survey of over 2,900 doctors found many predict the legislation will force them to work harder for less money. "When asked about the quality of healthcare in the U.S. over the next five years, 65 percent of the doctors believed it would deteriorate with only 18 percent predicting it would improve," Thomson Reuters said.

Link to article


GAO Names AHA-Backed Candidates to PCORI Methodology Committee
The Government Accountability Office has appointed 15 people to the Methodology Committee for the Patient-Centered Outcomes Research Institute (PCORI), established by the health reform law to conduct comparative clinical effectiveness research.

The committee will help PCORI develop and update methodological standards and guidance for the research. AHA nominated two of the committee members: Mark Helfand, M.D., staff physician at Portland VA Medical Center and professor of medicine/medical informatics and clinical epidemiology at Oregon Health & Science University; and Brian Mittman, director of the VA Center for Implementation Practice and Research Support at the Department of Veterans Affairs Greater Los Angeles Healthcare System.

Notably, Naomi Aronson, PhD, Executive Director, Blue Cross and Blue Shield Association Technology Evaluation Center, was also named to the Committee. Of the 15 designees, Mittman and Aronson seem to represent the real-world application of comparative effectiveness research. No patient advocates were named to the Committee, nor were representatives for most health care industries. Additionally, no representatives from the Centers for Medicare and Medicaid Services (CMS) or the Food and Drug Administration (FDA) will serve on the Committee.

In addition to the 15 members named January 21, the directors of the Agency for Healthcare Research and Quality and National Institutes of Health (or their designees) will serve on the committee.

Link to release


NIH To Create New Center for Translational Medicine
The National Institutes of Health (NIH) is creating the National Center for Advancing Translational Sciences (NCATS) in an attempt to spur translational medicine – moving promising preclinical research into the clinical development stage.

Francis Collins, Ph.D., NIH director, expects to have the center up and running by October 1.

The center is the result of a review conducted by the NIH Scientific Management Review Board (SMRB) at the request of Collins. The SMRB concluded that a successful translational medicine program could not be created through incremental changes that augment and expand an existing body within the agency but instead would be achieved best through a new center systematically engineered to accelerate translation.

The formation of NCATS largely dismantles the National Center for Research Resources (NCRR), which on January 16 said most of its programs would be spread across four NIH institutes.

NCATS will adopt NCRR’s Clinical and Translational Science Awards program as well as select projects from the National Human Genome Research Institute, the National Center for Research Resources, and the director’s common fund. For example, the new Cures Acceleration Network, which was authorized by the Affordable Care Act, would also be part of NCATS. These programs are together valued at over $700 million, according to The New York Times.

"The final budget for the proposed center is unknown at the present time," the NIH notes. "For the most part, the budget and staff for each relocated program will remain with that program. Thus, the overall budget for NCATS will be the sum of the imported programs—an amount much smaller than the several billion dollars currently being spent on translational research by existing institutes and centers."

Link to article
Link to article


Government Will Cover Greater Costs for RECs to Help Providers Adopt HIT
The federal government will provide more funding across four years for regional extension centers (RECs) that have been established to help health care providers adopt health IT, according to an announcement posted on January 25 in the Federal Register.

RECs are designed to help health care providers demonstrate meaningful use of electronic health records to qualify for Medicare and Medicaid incentive payments.

RECs have received federal grants under the stimulus package to cover 90% of their costs for two years, and then were expected to receive a 10% federal share in the next two years. However, the Office of the National Coordinator for Health IT said that it would continue the 90/10 cost-sharing plan over four years due to current economic conditions.

Link to article



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State

State Budget Pressures Will Further Affect Medicaid Spending in 2011; Cuts to Physician and Hospital Payments Among Likely Areas for State Cuts
Facing dire budget situations, states in 2011 are likely to make cuts to their Medicaid programs in two areas: lowered payments to doctors and hospitals, and cuts to the types of services they cover. In the first area – cuts to payments for doctors and hospitals - states have substantially cut back on reimbursement rates already over the past two years. Any further cuts may mean that in some states, health care providers will stop seeing Medicaid patients.

In the area of cutting the types of services they cover, South Carolina, for example, plans to stop providing hospice care for the terminally ill. Massachusetts will stop paying for dentures. North Carolina has stopped covering surgery for the clinically obese.

Nationally, Medicaid accounts for nearly 22% of state spending, according to data from the National Association of State Budget Officers. Illinois and Missouri spend the highest percentages on Medicaid, at 32.8% and 32.5%, respectively. Wyoming Medicaid spending comes in lowest at 7.3%, and Texas spends 7.5%.

The squeeze on Medicaid budgets comes at a time when some types of cuts, such as changes in eligibility, cannot be made, given the terms of federal health reform law.

Link to article


NGA Names Wisconsin, Oregon Governors to Lead HHS Committee
Wisconsin Gov. Scott Walker (R) was named Chair of the National Governors Association’s committee on Health and Human Services on January 21. Oregon Gov. John Kitzhaber (D) was named Vice Chair. The committee’s purview includes health care and Medicaid issues.

Walker favors repealing health reform, and Wisconsin has joined the multi-state lawsuit against the health reform law.

Link to article


Mississippi Insurance Exchange Would Cover Approximately 500,000 Uninsured
About 500,000 Mississippians without health insurance may soon have access to a web portal to shop for insurance and determine whether they are eligible for Medicaid under the new federal health care law. But state lawmakers are first required to reach agreement on operational issues. All states must have an insurance exchange up and running by January 1, 2014.

At least three pending bills in the Mississippi legislature would determine how the exchange would be run and who would run it, but many issues remain.

The Insurance Department would prefer a nonprofit board operate the exchange made up of 16 members, 11 of whom would have voting rights. The voting members would include insurance companies, a consumer advocate, insurance agents, small-business owners, a health care provider, a hospital representative, and an actuary.

House Medicaid Vice Chairman Robert Johnson, (D), said a state agency or a hybrid of state agencies running the exchange would provide better customer service and safeguards against politics affecting the process.

Link to article


Vermont Should Enact Single Payer System, Harvard Team Recommends
A group of Harvard researchers is recommending that Vermont adopt a single payer system of health coverage, saying it would save the state $500 million in the first year. William Hsiao, Harvard School of Public Health presented a set of recommendations to the legislature and Gov. Shumlin (D) the week of January 17.

In an interview with the Burlington Free Press, Hsiao said that some of the savings would come from administrative simplification. “When you have a single payer, then there won't be any sales, marketing or underwriting expenses. And there won't be any commission paid for insurance or brokerage fees,” he said. “That is a really big chunk. It is close to $200 million.”

Another source of savings would be the fact that all claims would come into one data bank, allowing the creation of physician profiles to detect over-use and fraud, he said.

Link to article


Pennsylvania Seeks Federal Funding For Those with Pre-Existing Conditions
Pennsylvania Gov. Tom Corbett (R) is seeking more federal money to help cover some people who have pre-existing medical conditions and who are scheduled to lose their state-subsided health insurance soon.

The Corbett administration wrote to HHS Secretary Sebelius on January 24 seeking more money and looser eligibility rules for PA Fair Care. State officials say more than 40,000 people in the AdultBasic program are expected to lose their state-subsidized insurance when money runs out February 28.

The Corbett administration is trying to help AdultBasic enrollees get coverage through other, albeit more expensive, options. PA Fair Care is for those who can’t obtain health insurance because of pre-existing conditions; it requires an applicant to be without health insurance for six months before enrolling.

Link to article


Texas Nursing Home Operators Concerned About Cuts of 34%
The Texas House of Representatives' budget proposal for fiscal year 2012-2013 includes cuts to Medicare providers of 34%, three times higher than nursing home advocates expected.

Nursing home operators, who say nursing facilities are already losing money at Medicaid's current reimbursement rate, worry that the cut currently under consideration would put non-profit nursing homes out of business. Medicaid provider rates were cut by 1% in September and an additional 2% cut will occur in February.

The Texas Association of Homes and Services for the Aging says the current Medicaid reimbursement rate for nursing homes is less than $125 per day. The proposed cut would lower it to $80.

Link to article


States Continue to Struggle with How or Whether to Move Forward in HCR
West Virginia lawmakers are weighing the state's options in terms of health reform, as state officials continue ongoing efforts to implement the law and Congress debates repealing it.

The Governor's Office of Health Enhancement and Lifestyle Planning continues to engage in implementation efforts, including setting up insurance exchanges, despite the GOP-led House vote to repeal the law and pending state lawsuits challenging its key provisions.

On the other hand, in South Dakota, state lawmakers have introduced two bills that target federal health reform.

One bill would declare unconstitutional any federal law that "interferes with the right of any person" to choose their own coverage or decline to purchase health insurance. The bill says such federal laws violate the rights of the states.

The other measure would make it a felony for any federal or state agent to enforce the health care bills passed by Congress. State Attorney General Marty Jackley has already joined a legal challenge to the new law. Gov. Dennis Daugaard (R) also opposes the federal law.

In Idaho, the attorney general has concluded that efforts to reject federal health care reform through the 18th-century doctrine of nullification are unconstitutional.

Some Idaho Republicans are pushing this idea, something Thomas Jefferson espoused in 1799 to argue that states could reject federal laws they found to violate the U.S. Constitution.

But a Democratic legislator asked the AG's office for its opinion on the theory. In a four-page letter, Assistant Chief Deputy Attorney General Brian Kane writes that the Constitution doesn't allow states to "pick and choose" which federal laws to follow.

Republican Sen. Monty Pearce says the bill will go ahead, as planned, in the House State Affairs Committee.

Link to WV article
Link to SD article
Link to ID article




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Not in the News...Yet

Has Big Pharma Become Big Biotech? Big Pharma Leads in Innovation, As Venture Capital Investment in Biotech Grows 3% in 2010
Once-innovative companies in the biotech sphere have come to resemble big pharma, with the attendant focus on lifecycle management and fighting patent expirations, “Seeking Alpha” blogger Jason Chew says. At the same time, big pharma has accumulated as much in the way of biotechnology capabilities as any biotech. “What is left to differentiate Big Pharma from Big Biotech?” he asks. “In general, Big Pharma is bigger, with higher revenue and a larger market cap. They are also more diversified; some have diagnostics, animal care units, and generics. Also, growth rates are still higher for the large biotechs. Still, it appears the differences are disappearing fast.”

“Big Pharma is resurgent just as Big Biotech is losing steam,” Chew contends. “With a web of collaborators ranging from university labs to small biotechs to fellow pharmas,” big pharma companies are focused on innovation.

Meanwhile, venture capital backing of biotech companies has recovered from its 2009 low. In 2010, biotech venture capital investing grew 3% in terms of total dollars and 8% in terms of total deals, according to a MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association, based on data from Thomson Reuters.

This represents a significant comeback from 2009, in which biotech investing plummeted 19% during the economic crisis.

The industry dropped to second place overall behind software, with $3.7 billion going into 460 deals. In the fourth quarter, biotech investing declined 24 percent in dollars and fell 15 percent in the number of deals from the third quarter with $685 million going into 94 rounds. That's a large drop from Q4 2009, when investing grew 10 percent over the previous quarter. Life Sciences and Networking and Equipment industries were the only two industries not to post double-digit growth numbers in 2010.

These numbers come on the heels of a recent report showing that disease-focused charities are stepping up to “restart the engine” of drug development; these charities are becoming the new financiers of early-stage drug development, during an uncertain healthcare environment and a healthcare market that has performed poorly.

Government investment in technology, including health care, was also featured in President Obama’s state of the union address January 25. Obama said he would soon send a budget to Congress that would spur innovation -- and create jobs -- through investments in technology development and research, including biomedical research.

Link to article
Link to article
Link to article




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Releases of Note

AHA Supports Linking Pay to Wellness? AHA Calls on Hospitals to Implement Successful Wellness Practices for Employees
In its report “A Call to Action: Creating a Culture of Health,” the American Hospital Association identifies emerging, successful practices in hospital employee health and wellness. The report calls on hospitals and their employees to be “leaders in creating a culture of health.” AHA includes seven specific recommendations for hospitals:

•Serve as a role model of health for the community.
•Create a culture of healthy living.
•Provide a variety of program offerings.
•Provide positive and negative incentives.
•Track participation and outcomes.
•Measure for ROI.
•Focus on sustainability

Each recommendation contains details or examples for implementation. For example, under “Serve as a role model of health for the community, AHA offers the following:

•Use wellness programs as pilots to export to the whole community as part of a population-based approach to health care
•Offer health and wellness program benefits to all dependents of employees
•Work with local employers to build an integrated, regional approach to health and wellness
•Provide free wellness programs at local community centers.
The report touches briefly on the potential of linking pay to employee wellness. The most serious challenges to program effectiveness include “motivating employees over extended time periods,” and “financial restrictions or limitations.”

Link to report


Report: Payers Should Support ACOs with Investments in HIT
“Substantial financial and time investments are required to accomplish changes in care delivery, even among groups of providers affiliated with one another for many years,” according to a new qualitative research study of seven provider organizations from the Center for Studying Health System Change, as reported by the National Institute for Health Care Reform.

A common challenge for health care organizations’ efforts to improve care is implementing changes with minimal disruption to patients and productivity, the institute says.

To achieve improvements in care delivery, the seven provider organizations “tapped existing financial reserves or external grant funding.”

The providers also sought strong physician and organizational leadership and encouraged transparency and flexibility when making changes. “As payers develop guidelines to contract with ACOs, they will need to support providers’ capability to develop and sustain improvements in care delivery, such as new health information technology and data reporting systems,” the institute finds.

Link to report



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