Ohio Health Policy Review

Weekly Update on Federal Reform

Senate Health Committee, 2 House panels pass reform bills
Following Wednesday’s party-line vote approving health care legislation out of the Senate Health Committee, today both the House Committee on Education and Labor and the House Ways and Means approved a reform bill (Source: “House Panels Approve Health Plans,” New York Times, July 18, 2009).

In both House votes, three Democrats crossed party lines and voted against the measures. The votes mean three of five Congressional committees that are considering reform legislation have now passed out bills, all without a single Republican vote.

“There’s a value in achieving bipartisanship,” said Sen. Chris Dodd, the Connecticut Democrat who is chairing the Senate Health, Education, Labor and Pensions Committee in Sen. Ted Kennedy’s absence. “but I will not sacrifice a good bill for that. The people we are working for are not our colleagues, but the American public.”

Senate majority leader, Harry Reid of Nevada, has said he hopes to have a health care bill on the floor by July 27. However, the goal seems unlikely to be reached as the Senate Finance Committee continues to negotiate for a more bi-partisan bill out of its committee.

CBO: Reform bills won’t ‘bend the curve’
Testifying at a Senate hearing yesterday, Congressional Budget Office Director Douglas Elmendorf said that proposed health reform legislation will not slow the rate of growth for federal health care spending (Source: “How expensive is proposed healthcare legislation?” Christian Science Monitor, July 17, 2009).

“In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,” Elmendorf told the Senate Budget Committee during his testimony, which was based on preliminary analysis of the House Tri-Committee bill and the Senate Health Committee bill.

According to CBO’s recent budget update, if current law is not changed, 56 percent of the cost growth in Medicare and Medicaid over the next 25 years will be attributable to “excess cost growth.”

That is, more than half of rising health costs are projected to be the result of an increase in medical spending per person, over and above normal inflation. This, in turn, is mainly the result of new medical technology, drugs, and other health-related innovations.

“Excess cost growth is the primary factor driving the growth of federal spending on Medicare and Medicaid, even over the intermediate term,” concludes CBO.

With CBO scoring playing such a large role in the debate over reform legislation, the nonpartisan Partnership to Fight Chronic Disease has issued a white paper, “Health-Care Cost Projections for Diabetes and other Chronic Diseases:The Current Context and Potential Enhancements" (pdf, 16 pages), that contends that the CBO’s practice of estimates costs out over 10 years may not provide an accurate picture of health care costs, in light of the long-term costs of treatment for diabetes and other chronic diseases.

Also this week, the conservative Heritage Foundation released its own analysis, titled “Understanding CBO Health Cost Estimates.”

Analysis: Health reform likely will require state, federal law changes
A new analysis posted on the Web site for the journal Health Affairs examines the intricate relationship between potential federal health reform that includes a national health insurance purchasing exchange or a public plan and the necessary changes that will be required to both state and federal law (Source: “Health Care Reform Requires Law Reform,” Health Affairs Web Exclusive, July 16, 2009).

Tim Jost, a professor at the Washington and Lee School of Law, contends that, “If Congress does create a purchasing exchange or a public plan, it should consider establishing federal coverage and underwriting rules that would preempt existing state standards. The new federal standards would apply to all health plans, public and private, within the exchange, and also to all insurers that compete with the exchange,” according to a press release announcing the article.

The paper examines the ways in which federal and state health care regulations interact with and limit each other. It also examines the effects of both federal and state laws on private actors.

Jost also sets forth the legal reforms that may be necessary if Congress enacts comprehensive health reform, if the states end up taking the lead on reform, or if only limited health reform occurs.

Report urges long-term care inclusion in reform debate
A policy brief  by Georgetown University researchers offers long-term-care policy options for federal reform (Source: “New Report Offers Policy Recommendations for Including Long-Term Care Services in Health Care Reform,” SCAN Foundation press release, July 16, 2009).

Funded by the SCAN Foundation, "Long-Term Care in Health Care Reform: Policy Options to Improve Both,” (pdf, 33 pages) offers four policy options:

• Expand Medicaid Support for Home and Community‐Based Services
• Improve Coordination of Medical and Long‐Term Care for Medicare‐Medicaid “Dual Eligibles”
• Improve Coordination of Medical and Long‐Term Care for Medicare Enrollees with Chronic Conditions
• Establish Public Insurance Protection for Long‐Term Care for the Broad Population

State budget: Health services funding cut, some coverage expansion provisions OK'd

The state budget passed by the General Assembly last night has providers from around the state bracing for serious cuts (Source: “Ohio’s two-year budget could devastate some community health services, cost jobs, businesses,” MedCity News, July 14, 2009).

Mental and behavioral health organizations are set to see millions of dollars of funding cut under the new budget. 

The National Alliance on Mental Illness of Ohio estimates that state funding for community addition prevention and treatment services will be cut by 30 percent and community mental health services will drop by 16.5 percent over the next two years.  The Ohio Association of County Behavioral Health Authorities estimates that the cuts will result in 14,000 Ohioans losing mental and behavioral health services.

Nursing home organizations say they are anticipating a loss of $184 million over the next two years and hospital officials say that the budget’s provision calling for $125 million worth of new hospital franchise fees could result in layoffs or reduction in services.

On a somewhat more optimistic note, some of the proposals for expanding health coverage that were original offered by Gov. Ted Strickland in his original budget proposal made it through the cost-cutting process (Source: “Ohio Department of Insurance working to provide health care coverage to underinsured without waiting for national health reform,” Cleveland Plain Dealer, July 14, 2009).

The biennium budget includes the following provisions related to expansion of coverage:

• Capping premiums in the Open Enrollment Program at about $400 a month, a move that is estimated to allow 52,000 Ohioans with pre-existing conditions to obtain coverage
• Allowing uninsured employees of small businesses to use cafeteria plans to purchase coverage with pre-tax dollars
• A new rule allowing dependents up to age 28 to be covered by employer-sponsored insurance plans, at no additional cost to employers
• A requirement that insurance companies report what portion of premiums is being spent on health care, marketing, administrative costs and profits

Ohio Healthcare Coverage and Quality Council sets first meeting

The newly formed Ohio Healthcare Coverage and Quality Council is scheduled to hold its first meeting at 1 p.m. tomorrow, July 15, on the 31st floor of the Riffe Center in Columbus.

The Council was created by Executive Order of Gov. Ted Strickland in March.

“The Council builds on Ohio’s participation in the State Coverage Initiative (SCI), the SCI report issued in July 2008, the State Quality Improvement Institute, and the Ohio Health Quality Improvement Plan,” according to the state’s healthcare reform Web site.  “The Council will continue to bring public and private health care leaders together, with state legislators, to implement strategies to improve the quality and efficiency of the health care system.”

A list of the Council’s 33 members also has been posted. In addition to the list, Health Policy Institute of Ohio President William Hayes also will be a member of the Council.

ODH gets $10 million for flu preparedness

The Ohio Department of Health announced yesterday that the state has been given $9.8 million in federal funds to increase preparedness for swine flu outbreaks (Source: “Ohio to receive $9.8M to prepare for swine flu,” Toledo Blade, July 13, 2009).
 
The funding is Ohio’s share of a $260 million national program to help states and communities provide for continued planning and preparations for H1N1 flu. Between 2005 and 2008, Ohio received $17.4 million for pandemic flu planning efforts.

A free H1N1 vaccine is expected to be provided to states in the fall by the federal government. The $9.8 million will not be used for that purpose.

Federal report shows mixed results for child well-being

A new federal report on child well-being found that in 2007 more children in the U.S. are getting recommended vaccinations and are covered by insurance, although there was a slight uptick in the number of children living in poverty, and that is without considering the current recession (Source: “Overall Health of U.S. Children a Mixed Bag,” Dayton Daily News/HealthDay News, July 11, 2009).

Among the findings of the Federal Interagency Forum on Child and Family Statistics report, titled America's Children: Key National Indicators of Well-Being, 2009, were that:

• 89 percent (73.9 million children) had health insurance in 2007, up from 88 percent in 2006
• 18 percent of U.S. children lived in poverty, up from 17 percent the year before

Weekly update on federal reform

Congress returns from recess to mull 5 reform plans
Congress returned from its weeklong Independence Day recess on Monday with five separate health reform plans to consider (Source: “Congress back to wrestle with healthcare reform,” Washington Post, July 6, 2009).

As legislators begin to weigh provisions from each plan with an eye toward melding them into a single bill, financing of the plan has become hotly debated, particularly whether taxing benefits will be required. At the same time, revised Congressional Budget Office estimates for health reform dropped the price tag from $1.6 trillion to $1 trillion, renewing optimism by some in Congress that a financing strategy could be achieved.

"The issue is going to be getting a bill that looks affordable without a substantial increase in taxes," said Bob Blendon, a health policy and political analysis professor at Harvard University. "The lower the total cost, the less you are going to have to find the financing to do this."

Federal insurance czar concept floated
Congressional Democrats are floating a proposal to create a presidentially appointed “health choices commissioner,” to oversee an independent agency charged with regulating the insurance marketplace (Source: “Need for federal insurance czar is questioned,” Associated Press, via Google, July 7, 2009).

House Democrats have released an 800-page draft bill outlining the establishment of the Health Choices Administration. Among the responsibilities of the commissioner and the new agency would be to run a national purchasing pool through which individuals and small businesses could pick medical coverage from among private and government-sponsored plans. The agency also would decide at what point the pool would be opened to all employers and who would qualify for federal subsidies for buying coverage.

State regulators say the federal commissioner would duplicate efforts now being done at the state level.
"We have concerns that a federal commissioner would not provide adequate protection for our consumers, and that the bill as drafted duplicates functions that exist in states across the nation," said Oklahoma Insurance Commissioner Kim Holland, speaking on behalf of the National Association of Insurance Commissioners.

Proponents of having a federal commissioner, however, say a national health insurance purchasing pool needs a regulator at the federal level. "If we're going to have a national insurance exchange, you can't have it run by 50 regulators in the states," said William Vaughan, a senior policy analyst with Consumers Union, publisher of Consumer Reports.

White House, hospitals agree to $155 billion savings plan 
Vice President Joe Biden announced today that hospital officials have agreed to a deal that would create $155 billion in savings to the national health system (Source: “White House, hospitals reach deal on health care,” Associated Press, via Google, July 8, 2009).

Among the cost savings would be a $50 billion reduction in payments currently paid through Medicare and Medicaid to hospitals for treatment uninsured and low-income patients. That move is being criticized by the National Association of Public Hospitals and Health Systems and the National Association of Childen’s Hospitals, which were not directly involved in talks with the administration.

As support for tax wanes, Congress eyes other financing options
With several new polls showing strong opposition to taxing employer-provided health insurance, Congressional Democrats have begun exploring other means of financing health reform legislation (Source: “Congressional Dems eye health care funding options,” CNN, July 7, 2009).

According to a New York Times/CBS News poll, 70 percent of respondents oppose the tax and only 20 percent said they would support it. A Kaiser Family Foundation survey found 54 percent of respondents opposed the tax.

"When you get numbers like that, it certainly causes you to look for alternatives," said Sen. Kent Conrad, D-North Dakota, who chairs the Senate Budget Committee.

Conrad said a House Democratic proposal to tax sugary drinks is no longer being considered because of strong opposition in Congress, but a move, favored by President Obama, to lower tax deductions for Americans with annual incomes greater than $250,000 is still on the table. Another option being considered is increasing the Medicare payroll tax.

House Majority Leader Steny Hoyer, D-Maryland, told reporters the House committees are planning to finalize health care legislation next week. A vote on the House floor is expected at the end of the month.

Group of Congressional Democrats opposes abortion inclusion in federal plan
Although none of the five reform proposals being considered by Congress specifically mentions abortion, 19 anti-abortion Democrats, including two from Ohio, are voicing concern that tax dollars could be used to fund abortions (Source: “Anti-abortion Democrats in Congress vow to oppose health care packages that don't exclude procedure,” Cleveland Plain Dealer, July 8, 2009).

Ohio representatives Marcy Kaptur and Steve Driehaus are among a group of legislators that sent a letter to House Speaker Nancy Pelosi late last month stating that they would oppose any reform package that included spending tax dollars on abortions.

"We cannot support any health care reform proposal unless it explicitly excludes abortion from the scope of any government-defined or subsidized health insurance plan," says the letter. "By ensuring that any health care package will not fund or require funding for abortions, we will take this controversial issue off the table so that Congress can focus on crafting a broadly supported reform package."

Both Sen. George Voinovich and Sen. Sherrod Brown, though differing in their overall views on abortion, said through their offices that they oppose including abortion coverage in any new federal health plan. Although Brown supports abortion rights in general, he said that any future federally funded health plan should follow the lead of current federal programs  and only pay for abortions in cases of rape, incest or to save the life of the mother.

Cleveland health access program struggles to get off the ground

The Cuyahoga Health Access Partnership, conceived two years ago to improve access and coordinate care for the poor and uninsured in Cleveland, is struggling to raise enough money to get the program off the ground (Source: “Cuyahoga Health Access Partnership threatened by hospitals' reluctance to commit funds, resources,”Cleveland Plain Dealer,  June 29, 2009).

The program, modeled after ones in San Francisco and Detroit, would pair major hospitals with free clinics and health plans, create a network that allows more uninsured people to get consistent care with primary-care physicians and specialists and would eventually reduce the need for emergency room visits.

The Partnership, which was convened by the county two years ago, agreed to set up a one-year operation with an executive director, board, grant writers and a medical-records system to track patients. The program will operate with a $350,000 budget with the goal of helping up to 3,600 uninsured in the first year, eventually reaching up to 21,700 within a few years.

The initial deadline for area hospital systems, free clinics and health plans to say specifically what they are willing to contribute passed last week. Organizers said all responses had not been received and deadline for a plan to be formed has been extended to July 6.

Report offers recommendations to states setting up medical homes

A new report from the National Academy for State Health Policy compiles information from Medicaid and Children’s Health Insurance Programs in 10 states to formulate a list of recommendations for other states considering implementing the medical home model (Source: “Medical home recommendations for states,” Modern Healthcare, June 28, 2009).

Information from Colorado, Idaho, Louisiana, Minnesota, New Hampshire, Oklahoma, Oregon, Washington —in addition to North Carolina and Rhode Island which have well-developed medical home initiatives—led to five major strategies for other states to consider in developing their own plans:

• Forming partnerships with key players (including patients, providers and private sector payers) whose practices the state seeks to change.
• Defining medical homes to help establish provider expectations and implementing processes to recognize primary care practices that meet those expectations.
• Aligning reimbursement and purchasing to support and reward practices that meet performance expectations.
• Supporting practices to help advance patient-centered care.
• Measuring results to assess whether their efforts are succeeding in containing costs, improving quality and patient experience. Forming key partnerships.

The Commonwealth Fund-sponsored report, titled “Building Medical Homes in State Medicaid and CHIP Programs,” (pdf, 68 pages) is available on the Commonwealth Fund’s Web site.

Promoting the development of patient-centered medical homes is one of four ““Core collaborative transformational strategies” identified in the recently released Ohio Health Quality Improvement Plan (pdf, 45 pages).

Feds delay release of EHR ‘meaningful use’ definition

David Blumenthal, the Obama Administration’s point man on health information technology, has asked the federal Health IT Policy Committee’s meaningful use working group to amend recommendations on what defines “meaningful use,” a definition critical to determining who will receive a share of $19 billion in federal EHR money (Source: “First draft of EHR ‘meaningful use’ definition unveiled,” American Medical News, June 29, 2009).

"We had a lively discussion, and it was decided after considerable input on the topic of meaningful use that we would take it back to discussion to work on it a little bit longer," Dr. Blumenthal said. He said the committee expects to unveil revised recommendations by July 16, the date of its next scheduled meeting. The definition was originally expected to be released by late June.

In other health information technology news, the Agency for Healthcare Research and Quality is requestion information from small- and medium-sized practices on tools for analyzing and redesigning workflow before and after HIT implementation (Source: “AHRQ Seeks I.T. Workflow Options,” Health Data Management, June 25, 2009).

According to a notice (pdf, 3 pages) published in the Federal Registry, responses to questions will be incorporated into a toolkit used to assist small- and medium-sized practices in analyzing or redesigning workflow, either before or after health IT implementation. Comments should be submitted on or before August 24. Electronic responses should be addressed to WorkflowRFI@ahrq.hhs.gov. 

Franklin Co. mental health board sues state over funding formula

The Alcohol, Drug and Mental Health Board of Franklin County is filing suit against the state, claiming that it was deprived of its share of funding for as long as a 10 years (Source: “ADAMH board to sue state over mental health funding,” Columbus Dispatch, June 29, 2009).

While the state acknowledges that its previous funding formula, which was based heavily on hospital use, was unfair to the county because ADAMH was successful at providing treatment that kept residents out of state mental hospitals.

The state is proposing that the formula fix be phased in over 10 years to avoid cutting payments to other counties. However, the county is asking for a temporary restraining order that would force the state to pay up sooner.

ADAMH officials estimate that if they are awarded the money earlier, 2,000 additional county residents would start or continue treatment in the coming year.