WellAware - Health Policy News Apr 11 2011

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WellAware

Health Policy News from M2

April 15, 2011

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

FY 2011 Funding Compromise Includes Cuts Related to Health Care Reform
The Administration and the Senate and House leadership reached a compromise on a FY 2011 Continuing Resolution last week to fund the government through the remainder of the fiscal year. The agreement averted the potential for a government shutdown.

Negotiators agreed to $38.5 billion in cuts. “When this agreement is signed into law, Congress will have taken the unprecedented step of passing the largest non-defense spending cut in the history of our nation – tens of billions larger than any other non-defense reduction, and the biggest overall reduction since World War II,” according to a statement released by the House Appropriations Committee leadership.

The CR includes billions in health spending cuts – for example, more than $1 billion for HIV/AIDS, viral hepatitis, sexually transmitted diseases and tuberculosis prevention, and about $600 million for community health centers. The bill also ends funding for two programs included in the health reform law: it eliminates funding for the free choice voucher provision, as well as the Consumer Operated and Oriented Plan, or CO-OP, provision. The CO-OP was established as a way to foster the creation of qualified not-for-profit health insurance issuers that would offer health plans in the individual and small group markets.

Under the CR, HHS will receive a total of $70.6 billion in FY 2011, which is approximately $5 billion more than proposed in earlier appropriations efforts. This new total is about $3.5 billion less than HHS received in the prior fiscal year.

“The bill rejects the elimination of the $750 million Prevention and Public Health Fund that was proposed” in an earlier appropriations bill, according to a summary released by the Senate Appropriations Committee. This mandatory funding was appropriated in the health reform law.

Link to article
Link to Continuing Resolution
Summary of FY2011 Appropriations


HHS Announces “Partnership for Patients” to Improve Care and Lower Costs
HHS Secretary Sebelius has announced a new national partnership that is intended to save 60,000 lives by stopping millions of preventable injuries and complications in patient care over the next three years.

The Partnership for Patients also “has the potential to save up to $35 billion in health care costs, including up to $10 billion for Medicare,” the agency says. Over the next ten years, the partnership could reduce costs to Medicare by about $50 billion and result in billions more in Medicaid savings. To date, “more than 500 hospitals, as well as physicians and nurses groups, consumer groups, and employers have pledged their commitment to the new initiative.”

HHS will invest up to $1 billion, made available under the Affordable Care Act; $500 million of that funding has been made available through the Community-based Care Transitions Program. Up to $500 million more will be dedicated from the CMS Innovation Center to support new demonstrations related to reducing hospital-acquired conditions.

HHS says the partnership will target all forms of harm to patients but will start by asking hospitals to focus on nine types of medical errors and complications where the potential for dramatic reductions in harm rates has been demonstrated by pioneering hospitals and systems across the country. Examples include preventing adverse drug reactions, pressure ulcers, childbirth complications and surgical site infections.

Link to release




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State

Alaska House takes stand against health care reform
The Alaska House has approved a bill intended as a rebuke to federal health care reform efforts. In a largely party line vote, House members moved to make it the policy of the state of Alaska to oppose the insurance mandate in the Affordable Health Care and Patient Protection Act. The bill now goes to the Senate.

House Bill 1, sponsored by Rep. Carl Gatto, R-Palmer, is intended to respond to an encroachment on state rights by the federal government in health care reform. “It is the policy of the state of Alaska that a person has a right to accept or decline any mode of obtaining health care and services,” Gatto said, describing the bill.

While stating the bill would be difficult to enforce, he said there are already court rulings supporting his contention that the federal health care reform effort is unconstitutional in a court case involving Alaska.

Link to article


Iowa: Democratic Lawmakers Defend Health reform in Federal Appellate Court
Two Democratic members of the Iowa Senate are among more 150 lawmakers from 26 states who have filed an amicus brief in defense of last year’s federal health care reform, placing them in direct opposition to Gov. Terry Branstad who joined the suit against the law.

By signing an amicus brief filed in the U.S. Court of Appeals for the 11th Circuit, Sens. Jack Hatch of Des Moines and Joe Bolkcom of Iowa City say that they are “standing against the right-wing attorneys general and governors,” including Branstad, “who are playing politics with the health security of Iowa families by pressing a partisan lawsuit at odds with the framers’ vision of the Constitution.”

“There is no question that the framers of the Constitution would have viewed the health law as constitutional,” said Hatch, “and we have confidence that the courts will ultimately agree.”

Link to article


Massachusetts Marks Fifth Anniversary of Health Care Reform Law
Five years ago, then-Gov. of Massachusetts Mitt Romney signed what he called a bold health reform law. Romney, a Republican, teamed up with Democratic House and Senate leaders to avoid losing hundreds of millions of federal health care dollars. Romney thanked the business, health care and consumer group leaders who supported the law.

The push for near-universal coverage did not go as smoothly as planned. More residents than expected signed on to free or subsidized coverage. However, three years into the law, a report from the Massachusetts Taxpayers Foundation concluded that it was coming in under budget.

There is little solid research that shows residents are healthier or are living longer as a result of the law. However, 98 percent of the state’s residents now have health insurance. Five years after enacting reform, Massachusetts has the lowest uninsured rate in the country. That is the main accomplishment of the law, according to Harvard School of Public Health Associate Dean Nancy Turnbull.

Turning to costs, she said that at this point, “it’s very clear that without controlling health care costs, the law is not financially sustainable. And unless we find durable ways to control costs, we won’t be able to sustain the coverage extension. Whether there’s the commitment to do that remains to be seen.”

Link to article


Missouri Democrat AG Supports Lawsuit Against Health Care Reform
Missouri Attorney General Chris Koster, a Democrat, has entered a 35-page amicus brief in support of case brought by 26 states against the health care reform law. The move comes after months of silence on the issue from Koster, who switched parties in 2007 and who is up for re-election next year. The brief doesn't argue that the whole law should be repealed, just that the health care mandate should be struck down.

The attorney general's brief echoes previous legal opinions that mandating health care exceeds Congress' ability to regulate commerce between states. Koster says government either needs to "justify the provision on alternate constitutional grounds, or strike down the individual mandate."

Republicans have already criticized Koster's brief for not going far enough. Meanwhile, Koster sent a letter to leaders in the Missouri Legislature stating that the brief "is emphatically not based on any opposition to the expansion of health coverage for uninsured Americans," Koster wrote. "To the contrary, I favor the expansion of health coverage."

Link to article
Link to article


Oklahoma Returns $54 Million Innovator Grant
In February, HHS awarded $241 million to seven “Early Innovator” states “to design and implement the information technology (IT) infrastructure needed to operate Health Insurance Exchanges.” This week, one of the grantees, Oklahoma, decided to return their $54 million grant, saying the state would handle the creation of a “Health Insurance Private Enterprise Network” on their own.

Gov. Mary Fallin (R) chose to return the funds, despite supporting the state’s application for the grant previously, after the Oklahoma Senate refused to consider a bill passed by the House to authorize the creation of a health insurance exchange in the state. At a news conference at the Capitol, the Governor said, “We all support the repeal and the replacement of the federal health care bill. We do believe it is unconstitutional."

The grant is the largest Affordable Care Act funding received by a state to be returned.

Link to article
Link to Innovator Grant Awards


Vermont Health Plan Criticized by Allies in Single-Payer Movement
Vermont's proposed healthcare reform falls short of the single-payer overhaul it's being billed as, the advocacy group Physicians for a National Health Program said.

The doctors group said the bill passed by the Vermont House late last month falls "far short" of single-payer reform. The bill would create a public program open to all state residents by 2017 but would retain a role for private insurers.

"This would negate many of the administrative savings that could be attained by a true single-payer program," PNHP said in a statement, "and opens the way for the continuation of multi-tiered care." The group also criticized the bill for not addressing long-term care coverage and for not proposing a "concrete funding plan" for the public plan.

Link to article


Washington House Votes to Establish Exchange Under Health Reform
Washington state House members have approved a bill to establish a health benefit exchange by 2014 in compliance with federal health reform.

The measure now returns to the Senate for approval of amendments.

If the bill passes, Washington will be eligible to apply for federal grants to aid in the exchange's implementation. Lawmakers would determine the scope of the exchange next session.

Link to article




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Not in the News...Yet

Mostashari Next Head of Office of the National Coordinator for HIT
Farzad Mostashari, M.D. has been selected to lead the Office of the National Coordinator for Health Information Technology (ONCHIT). Mostashari started at ONCHIT in 2009 as the Deputy National Coordinator for Programs and Policy. He came to ONCHIT the New York City Department of Health and Mental Hygiene where he was Assistant Commissioner for the Primary Care Information Project.

Dr. Peter Basch, medical director for electronic health records and health IT policy at MedStar Health, Columbia, Md., and a volunteer adviser to ONC, said about the pick, "What we don't need now is someone to re-conceptualize health IT," he said. "We've got a good plan. What we need now is a closer."

Mostashari said under his lead ONCHIT would “double-down” on advancing three components of HIT policy: 1) Intensifying "boots on the ground" 2) Generating ways to learn about advancing HIT without having to centralize; and 3) Improving population health decision-making.

"We need to understand better what's happening in the industry and the market, and this will be a continued part of our agenda," he said. "And, we have to continue to watch out for the little guy. The market doesn't look out for the little guy – that will have to be the role of government."

Bottom line: Mostashari sees the current HIT tensions clearly: many stakeholders mean many policy objectives. In the meantime, the marketplace will move ahead with solutions for providers and patients.

Link to article
Link to article




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Releases of Note

Health Cost Drivers Include Rising Demand, Aging Population, Chronic Disease
A report from the American Hospital Association says “the demand for health care is rising due to advances in medicine, an aging population and a rising burden of chronic disease. At the same time, the costs to pro¬vide that care are increasing: new devices and drugs are adding to hospital expenses for each service; workforce shortages are driving up wage rates; and hospitals are making significant investments in clinical information technology, quality measure¬ment, care coordination and compliance with increasing regulatory and payer requirements.”

“Understanding these cost drivers is critical to developing strategies to contain costs,” AHA says.

While “hospital care remains the largest single category of health care spending,” hospital care “as a percent of total spending on health care services and supplies has actually declined from 43 percent in 1980 to 33 percent in 2009, AHA says, citing CMS data released in January 2011.

In addition, “growth in spending on hospital care has lagged behind growth in health insurance premiums, pharmaceuticals, and other services,” according to the report.

For example, AHA notes that Baylor Regional Medical Center in Plano, TX implemented an evidence-based intervention created by the Institute for Healthcare Improvement to eliminate ventilator-associated pneumonia (VAP). The institution reports no cases of VAP and direct cost savings of $150,000 per patient, totaling more than $3 million in savings from March 2007 through April 2009.

Link to report




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