WellAware - Health Policy News Apr 4 2011

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WellAware

Health Policy News from M2

April 8, 2011

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

Rep. Ryan Budget Proposal Attempts to Change the Conversation
The GOP budget proposal for 2012, introduced by Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, includes a number of cuts to entitlement programs. Overall, the budget would privatize Medicare for future retirees, cut spending on Medicaid and other domestic programs, and offer sharply lower tax rates to corporations and the wealthy.

Ryan said the plan would create jobs, promote growth, and rebuild an economy ravaged by recession and “relentless government spending, taxing and borrowing.”

According to one blogger, “under the Ryan plan, Medicare as we know it would be abolished.” The plan calls for the payment of subsidies to allow Medicare patients to buy private health insurance. The amount of the subsidy would differ depending on income. The eligibility age for Medicare would also increase from 65 to 67. That change would take place in increments from 2022 until 2033.

Under the Ryan plan, seniors would shop for health insurance from private insurance companies. The Ryan plan calls for this “shopping” to be done at health insurance exchanges which would be set up by each state.

State based health insurance exchanges are a key provision of the Affordable Care Act which Ryan is proposing to repeal in its entirety.

Reacting to the proposed GOP budget, Alaska Gov. Sean Parnell (R) said that House Republicans have “proposed a bold, serious, fiscally responsible federal budget for 2012 that cuts $6 trillion in federal spending over the next 10 years and puts America on a path to balance the budget and begin paying down the national debt.”

“By giving states more freedom and flexibility, we can employ cost-saving measures and tailor solutions for the benefit of our unique populations,” Gov. Parnell said.

Congressional Democrats attacked the plan as an extreme attempt to balance the budget on the backs of the most vulnerable Americans. House Minority Leader Nancy Pelosi (Calif.) blasted it on Twitter as “a path to poverty for America’s seniors & children and a road to riches for big oil.”

In an analysis of the budget plan issued Tuesday, the non¬partisan Congressional Budget Office said that “most beneficiaries who receive premium support payments would pay more for their health care than if they participated in traditional Medicare,” with 65-year-olds covering an average of twice as much of their total health-care costs.

***See reactions from the states below.

Link to blog
Link to Gov. Parnell’s reaction
Link to article




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State

Governors React to Ryan Proposal
Democrats are describing Budget Chairman Paul Ryan’s (R-Wis.) proposal to overhaul Medicare as a voucher program, but Ryan is rejecting the label.

Ryan and conservatives are dubbing the plan “premium support,” in which Medicare makes a payment to a private insurance plan chosen by seniors. The amount of Medicare support would be means tested. But Democrats suggest Ryan’s 2012 budget is a rehashing of his proposal to provide a voucher to seniors to purchase insurance on their own.

Voucher has become somewhat of a dirty word in the Medicare arena. When Ryan first pitched vouchers in 2009, the proposal received a chilly reception from his party and polling showed little support for it. Fifty-one percent oppose a Medicare voucher plan, while 35 percent support it, according to a 2010 Associated Press-GfK poll.

Democratic Governors also expressed dismay at the proposal to turn Medicaid into a block grant.

In a letter to congressional leaders, New York Gov. Andrew Cuomo (D) expressed his opposition to the proposal. “Such a drastic overhaul of the Medicaid program is neither necessary nor desirable,” he wrote.

Separately, four prominent Republican governors expressed their support for Ryan’s efforts. Govs. Rick Perry (TX), Bob McDonnell (VA), Haley Barbour (MS) and Chris Christie (NJ) said that “on behalf of Republican governors, we applaud the bold FY 2012 budget proposal.”

“Medicaid reform is welcome and the Republican Governors overwhelmingly support the creation of a Medicaid block grant program,” they stated. “This well established approach will give states the freedom to innovate, share best practices, and create cost-effective ways to deliver quality health care to our most vulnerable populations.”

Link to blog
Link to Cuomo letter
Republican reaction


Florida Medicaid Managed Care Pilot Shows No Clear Evidence of Cost Savings
In the two counties in which Florida Medicaid has moved to a managed care pilot program, “there is no clear evidence” that the program is saving money, according to an analysis prepare by Georgetown University’s Health Policy Institute for the Jessie Ball DuPont Fund.

In addition, if any money is being saved, “it is not clear whether it is through efficiencies or at the expense of needed care,” the analysis says.

The “opt-out” provision gives beneficiaries the choice of enrolling in employer-sponsored insurance if it is available to them but requires families to pay all applicable coinsurance and cost sharing. “According to the latest data submitted by the state, there are currently 21 persons enrolled in the “opt-out” program – less than .01 percent of current pilot participants. As a result, per capita administrative costs likely will continue to be extremely high and the program most likely is not cost-effective,” the authors state.

Link to analysis


Idaho Blocks Implementation of Federal Health Reform
Idaho’s Senate has voted to block the federal health reform law in the state. The measure now goes to Gov. C.L. Otter (R) after the 24-11 Senate vote.

A previous nullification effort to block the federal law failed in the Senate after Idaho's attorney general advised lawmakers it would violate the U.S. and Idaho constitutions. Proponents say changes remedy that - while still making certain Idaho isn't tied to the federal reform effort.

Link to article


Illinois State Employees Lose Two HMO Options; New Contracts Save $$
Over 100,000 state employees in central Illinois will have to change their health insurance coverage next month after the state said it is dropping two popular HMOs. The Health Alliance and Humana insurance programs will no longer be part of the state's health program after June 30. 115,000 state employees, their dependents and retirees are affected.

The Department of Healthcare and Family Services, which administers state worker health plans, said the health insurance contracts were put out for bid, and the new contracts will save the state $102 million in the next budget year. Over the next 10 years, the state expects to save $1 billion on employee health costs.

Link to article


Massachusetts Governor Pushing for Bill Addressing Health Care Costs
Gov. Deval Patrick (D) cautioned against debating his health reform proposal “to death” and said he would like the legislature to consider his bill this summer after completing work on the fiscal 2012 budget. But a top House lawmaker questioned the governor’s claim that there is a “broad-based consensus” on how to rein in costs.

The call for action comes as Massachusetts approaches the five-year anniversary of health care reform that served to expand coverage to over 98 percent of residents, but deferred significant changes to address cost drivers. Patrick is also gearing up for his role as a surrogate in President Barack Obama’s re-election campaign when he will likely be called upon to defend the state’s health reform efforts on which national reform was modeled.

Patrick said changing the payment model for health care by shifting away from fee-for-service will alter behaviors among medical professionals, reduced unnecessary tests and improve the quality of care. “I am a private marketeer, not a market fundamentalist. I don’t think the market always gets it right and I don’t think the market has gotten it right in this case,” Patrick said, banging his fist on the podium.

Majority Leader Ronald Mariano (D), however, said he worried that Massachusetts risked a repeat of the 1990s when the state embraced HMOs and limited-networks plans only to have them challenged by the so-called patients’ bill of rights. “I disagree there’s a broad-based consensus that this bill is going to cut costs for anybody,” Mariano said.

Health and Human Services Secretary JudyAnn Bigby said per capita spending on health insurance is projected to increase in Massachusetts to $18,000 a year per person, up from $10,000 today, threatening small businesses and family budgets.

Link to article


Minnesota HMOs Will Return Extra Profits from Public Contracts
Four large nonprofit health plans will return some profits from public health care contracts to the state under a yearlong deal announced by Gov. Mark Dayton (D).

Blue Cross Blue Shield of Minnesota, HealthPartners, Medica and UCare — the biggest of the health plans that contract to cover more than 500,000 subsidized patients — agreed to limit their 2011 profits from state business to 1 percent. Any earnings above that will come back to the state next year, flowing into the general fund and a special fund tied to the MinnesotaCare health plan for the working poor.

The profit cap is the latest development in the governor's push to curb HMO earnings from public contracts. It comes a day after the state Human Services Department launched a website displaying financial details about health plans.

Human Services Commissioner Lucinda Jesson said she and Dayton decided last week to focus instead on the current year's contracts, after health plans reported 3.8 percent profits on 2010 state-managed care contracts, up from 2.6 percent in 2009.

Representatives for the health plans said the state's projected $5 billion deficit in the next two years factored into the deal with Dayton. "We believe this one-time contract amendment is appropriate given the state's current financial situation," said HealthPartners spokeswoman Amy von Walter.

Link to article


West Virginia Becomes Second State to Pass Exchange Legislation
West Virginia Gov. Earl Ray Tomblin (D) has signed legislation to authorize the creation of an insurance exchange. The state follows California, which became the first to authorize its exchange in September.

The West Virginia legislation sets up the exchange within the insurance commissioner's office, and will cover the small-business market and the individual market in the exchange.

Link to bill




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Not in the News...Yet

Consortium Joins Health Plan EMRs in Data Sharing Effort
Five leading health systems – the Mayo Clinic, Geisinger, Kaiser Permanente, Intermountain Healthcare, and Group Health Cooperative – have announced a new initiative to securely exchange electronic health data, with the first data exchange planned in the next year. The consortium will utilize standards-based health information technology to share data about patients electronically.

These health organizations are largely closed medical systems, and will likely play a large role in the Accountable Care Organization effort under health reform. An ACO must have a high-level electronic medical records system in order to be effective and to qualify for enhanced Medicare payments.

The goal of the consortium is to demonstrate better and safer care with better data availability. If a patient from one system gets sick far from home and must receive health care in another system — or if any system sends patients to another — doctors and nurses at each of the consortium systems will be able to easily and quickly access invaluable information about the patient's medications, allergies, and health conditions, allowing them to provide the right kind of treatment at the right time and avoid unintended consequences like adverse medication interactions.

"This collaborative effort exists because we all have reached the same important conclusion about linking and sharing patient-specific data," said George Halvorson, chairman and chief executive officer of Kaiser Permanente. "Our…belief is that when doctors have real-time data about patients, care is better and more effective."

Link to press release
Link to article




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Releases of Note

Kaiser "Center for Total Health" to be “Interactive Learning Destination”
Kaiser Permanente has opened the Center for Total Health, an “interactive learning destination” for “innovators, leaders, influencers, thinkers and believers in wellness to talk about health,” the company says.

The center demonstrates what Kaiser Permanente and others are doing to advance health and care delivery in the US. “A major part of Kaiser Permanente’s commitment to total health is sharing best practices and facilitating discussions that will improve the health of our nation,” said company President and COO Bernard Tyson.

The center features interactive displays intended to inspire dialogue about improving health and wellness.

“The center will be the first place that leaders and the general public can go to see the real-world convergence of health, health care technology and innovation,” said Philip Fasano, chief information officer and executive vice president of Kaiser Permanente.

Link to release




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