Friday, January 16, 2009

• Kaiser Daily Reports Will Not Publish Jan. 19-20

 

Kaiser Daily Reports Will Not Publish Jan. 19-20
[Jan 16, 2009]

      The Kaiser Daily Health Policy Report will not publish from Jan. 19 to Jan. 20 in observance of the Martin Luther King Jr. holiday and the presidential inauguration. The report resumes publication on Wednesday, Jan. 21.

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House Democrats Announce $825B Economic Stimulus Package With $157B for Health Care
[Jan 16, 2009]

      House Democrats on Thursday announced a two-year, $825 billion economic stimulus package that includes more than $157.5 billion for health care programs, CQ HealthBeat reports (Carey/Attias, CQ HealthBeat, 1/15). The package includes a provision that would provide $87 billion to increase temporarily federal funds for state Medicaid programs (Herszenhorn, New York Times, 1/16). In addition, the package includes funds for a provision that would allow low-income workers who lose jobs that did not include health insurance to apply for Medicaid through 2010 (Wayne, CQ Today, 1/15).

The package also includes a provision that would provide $39 billion in federal subsidies for COBRA -- which allows recently laid-off workers to retain their group health insurance, provided that they pay 102% of the premiums (Hall/Lightman, McClatchy/Miami Herald, 1/16). Under the provision, workers who lost their jobs and their health insurance after Sept. 1, 2008, could receive subsidies to cover the cost of two-thirds of their premiums under COBRA (Taylor, AP/Philadelphia Inquirer, 1/16). The package also includes a provision that would extend the period of time recently laid-off workers ages 55 or older could retain their health insurance under COBRA (McClatchy/Miami Herald, 1/16).

The package also includes provisions that would provide $20 billion for health care information technology and $1.1 billion for comparative effectiveness research conducted by the Agency for Healthcare Research and Quality.

Other Health Care Provisions
Other provisions in the economic stimulus package related to health care spending include:

• $550 million to modernize technology at Indian Health Service hospitals and health care facilities;
  
  
• $3.75 billion for construction of new Department of Defense health care facilities and $455 million for renovations of such facilities;
  
  
• $950 million for repairs and renovations of Department of Veterans Affairs health care facilities (CQ HealthBeat, 1/15);
  
  
• $2 billion for renovations at NIH facilities and new agency research grants and $1.5 billion for renovations at university laboratories that conduct research sponsored by the agency;
  
  
• $3 billion to promote preventive care and wellness programs;
  
  
• $1.5 billion for renovations and expansions of community health centers;
  
  
• $600 million to train primary care physicians who agree to enter the National Health Service Corps;
  
  
• $900 million for research into an experimental pandemic flu vaccine and countermeasures for potential chemical and biological attacks; and
  
  
• $462 million for construction and renovations of CDC facilities (CQ Today, 1/15).

Prospects for Passage
House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) said that they seek to complete work on the economic stimulus package before the Presidents Day recess. The House Appropriations Committee and the House Ways and Means Committee plan to hold mark ups on the package next Thursday, with the House scheduled to vote on the package on Jan. 28. The Senate plans to consider the package during the first week in February. According to the Washington Post, Senate Democrats have said that that their "stimulus wish list" could include many provisions not included in the House version of the package and cost as much as $900 billion (Murray/Kane, Washington Post, 1/16).

Reaction
According to the New York Times, the package announced by House Democrats "emphasized mostly Democratic principles," such as "helping the unemployed pay health care costs," and raised concerns from Republicans (New York Times, 1/15). House Minority Leader John Boehner (R-Ohio) said that the package appears to "be grounded in the flawed notion that we can simply borrow and spend our way back to prosperity" (Bendavid et al., Wall Street Journal, 1/16). House Appropriations Committee ranking member Jerry Lewis (R-Calif.) said, "This legislation appears to blanket government programs in spending with little thought toward real economic results, job creation or respect for the taxpayer" (Dennis/Kucinich, Roll Call, 1/15).

Paul Ginsburg of the Center for Studying Health System Change said of the provisions in the package related to COBRA, "That is a pretty dramatic health policy step to address the difficulty some near-elderly have in getting health coverage" (USA Today graphic, 1/16).

Robert Bixby, executive director for the Concord Coalition, said, "These may be worthwhile things like health care, technology and scientific research," but "these are all things that require some long-term strategy." He added, "I question whether shoveling money out the door in a stimulus bill is the way to do it" (Hook/Puzzanghera, Los Angeles Times, 1/16).

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SCHIP Bill Passes Senate Finance Committee
[Jan 16, 2009]

      By a 12-7 vote, the Senate Finance Committee on Thursday approved SCHIP reauthorization and expansion legislation that could add four million children to the program, the AP/Boston Globe reports (AP/Boston Globe, 1/16). The bill, introduced by committee Chair Max Baucus (D-Mont.), would expand the program by $31.5 billion over four-and-one-half years. The House passed a similar bill (HR 2) on Wednesday. The bill now goes to the floor, where Senate leaders are expected to amend Baucus' language into the House-passed bill and send it to conference to resolve any differences.

The Finance Committee adopted an amendment by Sen. John Rockefeller (D-W.Va.) that would allow states to waive the federally mandated five-year waiting period for documented immigrants seeking public health benefits in the case of pregnant women and children. The provision, included in the House bill, could add "several billion dollars" to the cost of the measure, CQ Today reports. According to CQ Today, the provision "was the only major point of disagreement" between the House and Senate versions of the bill.

Republican members of the committee were "upset" over several facets of the bill, CQ Today reports. They expressed concern regarding provisions that would eliminate the waiting period for documented immigrants, loosen citizen and residency documentation requirements, change policies on how to deal with people who transfer from private insurance to SCHIP and lessen income limits.

Republicans proposed several motions to increase restrictions for immigrants seeking SCHIP coverage; however, just one was adopted. The provision, submitted by Finance Committee ranking member Chuck Grassley (R-Iowa), would require states to review citizenship or legal residency status of SCHIP beneficiaries during the process of verifying beneficiaries' income levels. Under the provision, SCHIP enrollees who lose their documented status while enrolled in the program would be disenrolled. The committee also adopted an amendment from Sen. Olympia Snowe (R-Maine) that would allow states to offer dental insurance to children who have private health coverage but do not have dental coverage.

Grassley said that passing SCHIP reauthorization would complicate efforts to pass health care overhaul legislation later in the year. "In a lot of ways it makes more sense to do a simple extension of SCHIP for two years so we can work through how to fold SCHIP into a program that covers everyone," he said (Armstrong, CQ Today, 1/15).

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President-Elect Obama Promises To Reform Medicare, Social Security
[Jan 16, 2009]

      President-elect Barack Obama on Thursday during an interview with editors at the Washington Post promised to reform Medicare and Social Security, "saying that the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs," the Post reports.

Next month, Obama said that he will convene a "fiscal responsibility summit" before he delivers his first budget proposal to Congress. According to Obama, efforts to improve and sustain the fiscal health of the U.S. will require efforts to reduce health care costs, prevent the insolvency of Medicare and stabilize Social Security. He said, "The big problem is Medicare, which is unsustainable. ... We can't solve Medicare in isolation from the broader problems of the health care system."

In addition, Obama said, "We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else's." He added that efforts to reform Medicare and Social Security will require a "bargain" with U.S. residents (Shear, Washington Post, 1/16).

U.S. Adults Believe Obama Will Achieve Campaign Promises
The majority of U.S. adults believe that Obama will achieve all of his 10 major campaign promises on health care and other issues, according to a recent USA Today/Gallup Poll, USA Today reports. The poll, conducted by landline telephones and cell phones between Jan. 9 and Jan. 11, included responses from 1,031 adults and had a margin of error of plus or minus three percentage points (Page/Hall, USA Today, 1/16).

According to the poll, 62% of adults believe that Obama will achieve his promise to expand health insurance to all children during his presidency, and 73% cited that goal as "very important." Fifty-six percent of adults believe that Obama will reduce health care costs for the average U.S. family by as much as $2,500 annually during his presidency, and 70% cite that goal as "very important," the poll found. Sixty-one percent of adults believe that Obama will end restrictions on federal funding for embryonic stem cell research during his presidency, and 42% cite that goal as "very important," according to the poll (USA Today graphic, 1/16).

Additional Federal Medicaid Funds for States
In a recent interview with USA Today, Obama discussed the need to provide states with additional federal Medicaid funds, among other issues. He said that the economic stimulus package under consideration in Congress would include such funds because Medicaid is "needed to deal with vulnerable populations." In addition, he said that the stimulus package, among other provisions, will include measures that seek to "help providers, hospitals, medical practices, who are accepting Medicare, they've got to get computerized so everybody's got an electronic medical record and we finally move out of a paper system, which can reduce error and reduce costs" (USA Today, 1/16).

Editorial, Opinion Piece

• Washington Post: The "fiscal responsibility summit" that Obama plans to convene next month could "be window dressing, cosmetic exercises to talk about hard choices rather than make them," but Obama "deserves the benefit of the doubt" on his promise to "get entitlement costs under control," a Post editorial states. According to the editorial, although Obama "declined to tip his hand about what sacrifices he envisioned" as part of efforts to reform entitlement programs, he "said a commission to make recommendations on entitlement spending that would then go to Congress for an up-or-down vote is 'something worth talking about'" (Washington Post, 1/16).
  
  
• Gerald Seib, Wall Street Journal: The "harder part" for Obama after he enacts an economic stimulus package is "trying to follow that up by creating what is coming to be known in Obama circles as a Grand Bargain: getting everyone to agree to clean up the nation's budget mess in a really big way, one that doesn't just fix the problems being created now, but also addresses the frightening long-term problems America was going to face anyway to pay for Social Security and Medicare in coming decades," Journal columnist Seib writes. He writes, "For this Grand Bargain to work, all sides would agree to sacrifice some part of their agenda." The "price they would agree to pay would be unhappiness -- temporary, perhaps, but real -- among their constituents and favorite special interests," but their "reward would be a cure for problems everybody knows they'd have to deal with a few years down the road," according to Seib. For example, he writes, Medicare beneficiaries will have to agree to pay higher premiums. Seib writes, "Washington may shy away" from such "big trade-offs," but the "Obama era of big problems at least creates the opening for that kind of big debate" (Seib, Wall Street Journal, 1/16).

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Health Care Provisions for Economic Stimulus, Policymaker Health Reform Efforts Are Top Priorities for U.S. Public, Survey Finds
[Jan 16, 2009]

      The public ranks action on health care highly as part of efforts to address the current economic recession and also views overhauling health care as one of the top priorities for President-elect Barack Obama and the new Congress, according to a national survey by the Kaiser Family Foundation and the Harvard School of Public Health, CQ HealthBeat reports (Reichard, CQ HealthBeat, 1/15). For the survey, which has a margin of error of plus or minus three percentage points, researchers conducted telephone interviews with a random sample of 1,628 U.S. adults from Dec. 4, 2008, to Dec. 14, 2008 (Freking, AP/Kansas City Star, 1/15).

Priorities
According to the survey, 45% of adults rank helping businesses keep or create jobs as their top priority, followed by 33% who say helping the newly unemployed afford health insurance coverage is their top priority. Thirty-one percent of adults rank providing states with more federal help for lower-income residents' health care as the top priority. Repairing the country's infrastructure, cutting taxes for the middle class or helping people pay their mortgages each were picked by 27% of adults as a top priority. Thirteen percent of adults say the top priority should be helping large businesses hurt by the recession (Kaiser Family Foundation release, 1/15).

The survey found that 73% of U.S. adults' top priority for Obama and the new Congress is improving the economy, followed by 48% who named fighting terrorism and 43% who named reforming health care as the top priority. Other top priories included reducing the federal budget deficit (for 39% of adults), improving public schools (37%), working to create more clean energy sources (36%) and dealing with Iraq (35%). In addition, 61% of U.S. adults believe that given the current economic recession, "it is more important than ever to take on health reform now" (CQ HealthBeat, 1/15).

The survey also found that 61% of Democrats say action on health care is their top priority, compared with 23% of Republicans (CQ HealthBeat, 1/15). In addition, 77% of Democrats think health reform "is more important than ever" due to the economy, while 62% of Republicans believe the nation "cannot afford to take on health reform now." According to the survey, 51% of adults favor increasing spending on SCHIP, including 62% of Democrats, 55% of political independents and 29% of Republicans, while 39% favor maintaining current program funding levels (Kaiser Family Foundation release, 1/15). In regard to health care reform, 39% of adults say affordability is the top priority, followed by 30% who say expanding coverage is their top priority and 18% who say improving the quality and cost-effectiveness of the health care delivery system (CQ HealthBeat, 1/15).

Expanded Coverage, Trade-Offs
The survey suggests the public is split in its willingness to sacrifice financially to cover more individuals, with 49% of adults saying they are not willing to pay higher insurance premiums or taxes, while 47% saying they are (AP/Kansas City Star, 1/15). Fifty-nine percent of Democrats and 49% of political independents would pay higher insurance premiums or taxes to pay for expanded coverage, while 67% of Republicans and 47% of political independents say they are not willing to do so (CQ HealthBeat, 1/15).

Of options to pay for expanding health insurance, 72% strongly or somewhat favor increasing cigarette taxes, 70% strongly or somewhat favor increasing taxes for people in families with annual incomes above $250,000 and 61% strongly or somewhat favor repealing current income tax cuts for those with annual incomes higher than $250,000 (Kaiser Family Foundation release, 1/15).

Seventy-eight percent of adults favor requiring health insurance companies to cover anyone who applies regardless of pre-existing conditions (Appleby, USA Today, 1/15). When presented with the argument that this requirement might increase health insurance costs for healthier people, 72% of adults still supported it (CQ HealthBeat, 1/15).

According to the survey, about seven in 10 U.S. adults say they favor requiring employers to provide health insurance. When presented with the argument frequently cited by critics that this might cause some employers to lay off workers, about three in 10 U.S. adults support an employer mandate. Sixty-seven percent of adults favor requiring all U.S. residents to have health insurance and providing help for those who could not afford it. When presented with the argument that some people might be required to buy health insurance they find too expensive or do not want, support drops to 19% (AP/Kansas City Star, 1/15).

The survey found that 65% of adults would be less likely to support a health reform plan that would involve the federal government too much in personal health care decisions, while 61% would be less likely to support a plan that increases insurance premiums or out-of-pocket costs and 56% would be less supportive of a plan that limits an individual's choice in physicians.

Comments
Kaiser Family Foundation President and CEO Drew Altman said, "The economic crisis has created an unprecedented window of opportunity for health reform. But we are in the early happy talk stage on health reform, and the window could close if policymakers cannot move fairly quickly to take advantage of the opportunity they have."

Robert Blendon, a professor of health policy and political analysis at the Harvard School of Public Health, said, "We can see the framework of a winning package of health reform proposals from the public's perspective. But the reality is that there are some key distinct differences among partisans that will pose a challenge to policymakers" (Kaiser Family Foundation release, 1/15).

Mollyann Brodie, a Kaiser Family Foundation vice president and director of Public Opinion and Media Research for the foundation, said, "As we have learned from past debates, public support looms for health reform largest at the beginning of the debate, but it's relatively easy to chip away at that support with arguments about trade-offs" (AP/Kansas City Star, 1/15).

The survey is available online.

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Government Accountability Office Report Finds Flaws in FDA's High-Risk Medical Device Approval Process
[Jan 16, 2009]

      FDA continues to use a review and approval process created in May 1976 for high-risk medical devices that does not do enough to ensure that the products are safe and effective, according to a report released on Thursday by the Government Accountability Office, the AP/Denver Post reports. The report noted that at least 228 medical devices between 2003 and 2007 had been approved without a thorough evaluation, including about 24 high-risk devices such as heart defibrillators, artificial hip joints and electrodes for pacemakers (Alonso-Zaldivar, AP/Denver Post, 1/15).

FDA has "promised for decades that it would fix the problem," but has not, according to the New York Times. As a result, GAO stated in the report that "it is imperative that FDA take immediate steps" to resolve issues with the system (Harris, New York Times, 1/16). According to the AP/Post, the "root of the problem" appears to be that "FDA never fully carried out the intent of a decades-old change in the law" (AP/Denver Post, 1/15).

On May 28, 1976, Congress passed legislation that established a three-tiered classification of medical devices, which grouped medical devices based on their risk level to consumers and whether they were required to undergo the FDA-regulated 510(k) review process or a more rigorous premarket approval process, or PMA, USA Today reports. Medical devices were grouped in three classes: I, II or III. Devices under class I, such as tongue depressors and elastic bandages, were deemed to be the least risky. Class II devices, including mercury thermometers and blood pressure cuffs, were designated as moderately risky (Rubin, USA Today, 1/16). Devices such as pacemakers and replacement coronary valves and other similar high-risk devices were grouped in class III (New York Times, 1/16). Class I and class II devices generally were required to undergo the 510(k) review process, while most class III items received the PMA review, according to USA Today. However, certain types of class III devices that had been approved for the U.S. market before May 28, 1976, were exempt from the PMA review and still could be cleared through the 510(k) process. Congress then allowed many class III products to undergo token reviews if they were deemed nearly identical to products approved before the 1976 rules.

However, Congress in 1990 enacted the Safe Medical Devices Act, a companion law to the original legislation that directed FDA to develop new regulations to reclassify all pre-1976 approved class III devices receiving class I and class II reviews (USA Today, 1/16). The new regulations mandated that all class III devices undergo the more rigorous PMA review process, even if they are similar to devices approved before May 28, 1976. Although FDA in 1995 planned to write the new rules, the GAO report stated, "When asked for their time frame for doing so, however, the [FDA] officials did not provide one" (New York Times, 1/16).

The report noted that the agency has continued to approve new class III devices under the old rules and still had not amended them for 20 types of pre-1976 devices. "GAO recommends that FDA expeditiously take steps to issue regulations" for all such devices, the report stated (USA Today, 1/16). The report did not specify if any patients sustained injuries as a result of using devices that were approved under the old review process (AP/Denver Post, 1/15).

Karen Riley, a spokesperson for FDA, said the agency has been working to address the problems with its review process. Riley said, "In general we agree with the GAO's conclusions" to reclassify the 20 device types or require that they undergo the PMA review (Favole, Dow Jones, 1/15). She added that the agency is "considering legal and procedural options to accomplish this objective," but she did not specify a timeline for resolving the problem (AP/Denver Post, 1/15).

Implications of GAO Report
According to Dow Jones, the GAO report comes just a week after a group of nine scientists at FDA sent a letter to President-elect Barack Obama's transition team, citing concerns with the agency's approval process and urging the incoming administration to conduct an overhaul of the agency's "corrupted" scientific review process (Dow Jones, 1/15). Although "the allegations are a separate matter from concerns raised" in the GAO report, "taken together, they probably will raise the congressional scrutiny over FDA's medical devices branch," the AP/Post.

Rep. Frank Pallone (D-N.J.), chair of the House Energy and Commerce Health Subcommittee, said, "GAO's investigation confirms my concerns that the approval process for medical devices is woefully inadequate," adding, "For years, Congress has required high-risk medical devices to undergo stringent premarket review, but GAO's findings show that is simply not happening in every case." Pallone said he plans to conduct hearings on the oversight processes of medical devices at FDA (AP/Denver Post, 1/15).

The GAO report is available online (.pdf).

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UnitedHealth Agrees To Pay $350M To Settle Class-Action Lawsuits Filed Over Alleged Underpayment for Out-of-Network Services
[Jan 16, 2009]

      UnitedHealth Group on Thursday agreed to pay $350 million to settle three class-action lawsuits filed by physicians and health plan members over allegations that the company underpaid for out-of-network medical services, the New York Times reports (Abelson, New York Times, 1/16). On Tuesday, UnitedHealth agreed to settle an investigation by New York state Attorney General Andrew Cuomo (D) that found health insurers understated the portion of reimbursements for which they are responsible for such services by as much as 28% in some cases, or hundreds of millions of dollars over the last 10 years.

Health insurers pay for a certain percentage of the usual and customary rates for such services, based on an estimate of the cost for such procedures in the same geographic area. Ingenix, a subsidiary of UnitedHealth, operates the Prevailing Healthcare Charges System, a database used by most health insurers that determines the usual and customary rates. The database contains information on more than one billion claims from more than 100 health insurers. Health insurers compare out-of-network claims with those found in the database and reduce the claim to a "reasonable" amount before they reimburse providers or members.

Under the agreement with Cuomo, UnitedHealth will pay $50 million to finance the development of a new database that an undetermined university will operate (Kaiser Daily Health Policy Report, 1/13). The latest settlement, which requires court approval, will pay health plan members and physicians for out-of-network services provided since 1994 (Fuhrmans, Wall Street Journal, 1/15). UnitedHealth will admit no wrongdoing under the settlement.

Reaction
Reed Tuckson, chief medical officer and a vice president at UnitedHealth, said, "We are so pleased to put the issue behind us so we can focus on the important work of assisting physicians."

Nancy Nielsen -- president of the American Medical Association, which participated in a federal class-action lawsuit filed against UnitedHealth in New York state -- said, "The Ingenix database has corrupted the system for paying out-of-network medical bills, resulting in patients and physicians being cheated by health insurers" (Japsen, Chicago Tribune, 1/15).

Plaintiff attorney Barbara Quackenbos filed an objection with one of the judges involved in the lawsuits over concerns about the amount of the settlement. She said, "We believe the amount agreed to is inadequate and does not reflect as meaningful a settlement as could be negotiated."

Objections from Quackenbos and other plaintiff attorneys raise questions about whether the two judges in New York state and New Jersey who have overseen the lawsuits will approve the settlement, the Times reports (New York Times, 1/16). According to the Chicago Tribune, the settlement could prompt other health insurers that use the database operated by Ingenix to reach similar agreements (Chicago Tribune, 1/15).

Aetna
In related news, Aetna on Thursday agreed to contribute $20 million to help finance the development of the new database, the AP/Minneapolis Star Tribune reports (Murphy, AP/Minneapolis Star Tribune, 1/15). Aetna will pay the $20 million in installments over five years.

Cuomo said, "With this agreement, the tide is turning against the corrupted reimbursement system that took hundreds of millions of dollars from the pockets of patients nationwide," adding, "Health insurers will no longer be able to distort their data, leaving patients with unfair bills" (Levick, Hartford Courant, 1/16). In addition, Cuomo said, "We will not stop until the entire industry has been reformed. We are aggressively pursuing the other health insurance companies" (Yaniv, New York Daily News, 1/16).

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Rhode Island House Will Not Move To Block Gov. Carcieri's 'Global Medicaid Waiver'
[Jan 16, 2009]

      Rhode Island state legislators will not vote to block Gov. Donald Carcieri's (R) "unprecedented" plan to overhaul the state Medicaid program, which will subsequently take effect Monday, state House Speaker William Murphy (D) said Wednesday, the Providence Journal reports (Peoples/Needham, Providence Journal, 1/15).

Under the deal, negotiated between the Carcieri administration and CMS acting Administrator Kerry Weems and known as the "global Medicaid waiver," the state will limit Medicaid spending to $12.4 billion through 2013. In exchange for capping spending, the state will receive broad authority to change services, such as nursing home care, subsidized transportation for the elderly and beneficiaries with disabilities, health insurance for low-income children and parents, and prescription drug coverage for seniors. State Department of Human Services Associate Director Murray Blitzer said that if the state runs out of its allotted funds before the five-year mark, it will lose matching federal funds, which would force the state to pay the program's full cost or cut services (Kaiser Daily Health Policy Report, 12/10/08).

The decision by the House not to vote eliminates the possibility of halting the plan. The plan could have been stopped if both the state House and Senate voted against the proposal by Thursday, a deadline that the lawmakers imposed for themselves last year (Needham, Providence Journal, 1/13).

Many officials say they remain unclear on how the plan will affect the state's Medicaid beneficiaries, the Journal reports. Carcieri "has repeatedly promised transparency and legislative oversight if the agreement takes effect," but "some lawmakers are reluctant to take the Carcieri administration at its word," according to the Journal (Providence Journal, 1/15).

State senators have proposed legislation requiring strict oversight of the overhaul. The bill states, "No changes in the state Medicaid program shall be made without the express approval by a legislative body." The bill also defines three categories of potential changes and requires legislative approval for all changes except those that do not affect "beneficiary eligibility, benefits, overall health care delivery systems, payment methodologies or cost sharing" (Peoples, "Projo 7 to 7 News Blog," Providence Journal, 1/15).

State Senate Finance Committee Chair Daniel DaPonte (D) said, "If they're going to make major changes to the Medicaid program, the legislature would have to sign off," adding, "We have an obligation, from a public policy perspective, to have substantial oversight" (Providence Journal, 1/15). Daponte said he wants both the House and Senate to adopt the measure this week. Although the House is working on a similar bill, House leaders have said they do not expect to vote on it this week ("Projo 7 to 7 News Blog," Providence Journal, 1/15).

Letter
Rhode Island's four federal representatives on Tuesday wrote a letter to Carcieri warning that the waiver "could pose serious risks to the Medicaid program, leading to unprecedented cuts" affecting both beneficiaries and health care providers. The letter, signed by U.S. Sens. Jack Reed (D) and Sheldon Whitehouse (D) and U.S. Reps. James Langevin (D) and Patrick Kennedy (D), reiterated concerns that details of the overhaul remain vague. "Despite numerous public briefings, ... a detailed plan and justification are still not public and accessible," the lawmakers wrote, noting that their own requests for specifics have not been answered. They added that the "state has not provided data on the impact on beneficiaries, nor has it provided projections of state spending, savings, or the assumptions and methodologies on which such projections are based."

The letter also stated that "from the information we have, one aspect of the waiver seems quite clear:" that the "aggregate cap on spending could leave the state up to $842 million short of its projected obligations over five years ... because the cap is based on national projections in the president's budget and does not factor in Rhode Island's specific circumstances -- including a significant aging population and skyrocketing unemployment." The lawmakers also expressed concern that "there are no protections to ensure that essential benefits are available to those for whom they are medically necessary, and the specific changes that the state will seek remain unknown" (Gregg, "Projo 7 to 7 News Blog," Providence Journal, 1/13).

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Kaiser Daily Health Policy Report Highlights Medicaid News in Two States
[Jan 16, 2009]

      Summaries of recent news involving Medicaid in Kentucky and Wisconsin appear below.

• Kentucky: The deficit in the Kentucky Medicaid program has grown to $231.8 million from $183 million last year, Cabinet for Health and Family Services Secretary Janie Miller told the House Appropriations and Revenue Committee on Wednesday, the Louisville Courier-Journal reports. Miller said the deficit is increasing because more state residents -- currently 747,000 people -- are eligible for Medicaid (Loftus, Louisville Courier-Journal, 1/14). She said that about 3,000 state residents enroll in Medicaid each month. According to Miller, the state's share of the deficit for the federal match is about $69.5 million. State officials are hoping the federal government passes a stimulus that will help offset the deficit (AP/Lexington Herald-Leader, 1/14). The committee is hearing from state officials in preparation for addressing the state's projected budget shortfall of $456 million during the current fiscal year (Louisville Courier-Journal, 1/14).
  
  
• Wisconsin: The administration of Gov. Jim Doyle (D) on Wednesday announced a plan to tax revenue of most hospitals in the state to garner about $393.5 million more in federal aid, the Milwaukee Journal Sentinel reports. According to officials at the state Department of Health Services, every $1 of tax revenue would generate $1.65 from the federal government for Wisconsin hospitals. The majority of the money would be returned to hospitals that treat Medicaid patients. Some of the funding would pay health care costs for 41,000 low-income, childless adults. If the hospital tax is enacted, the state could use tax dollars originally planned for health care to help relieve the state budget deficit. Some Republicans are critical of the plan. State Senate Republican Leader Scott Fitzgerald called it a "sick tax" and said he was concerned the money would be used for things other than health care (Walters/Forster, Milwaukee Journal Sentinel, 1/14).

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Kaiser Daily Health Policy Report Feature Highlights Recent Blog Entries
[Jan 16, 2009]

      "Blog Watch" offers readers a roundup of health policy-related blog posts.

The American Prospect's Ezra Klein looks at whether Office of Management and Budget director-designate Peter Orszag can unite "budget hawks" and "reformers" with his argument "that fiscal responsibility means health care reform."

Michael Cannon of Cato@Liberty points to a new paper on how to improve care coordination, saying, "government prevents coordination of care, and that improving coordination requires reducing government's role."

Igor Volsky of the Center for American Progress Action Fund's Wonk Room looks at data showing few children enrolling in SCHIP had private insurance prior to enrolling in the program.

David Brailer on the Health Affairs Blog lays out a health information technology agenda for President-elect Barack Obama. Brailer, whom President Bush tapped as the first National Coordinator for Health Information Technology, said both Bush and Obama agree that "information technology is essential to reforming our health care system."

Michael Miller of the Health Care Policy and Communications Blog looks at trends in health care spending and says because physicians control such a large part of health spending, "it will be crucial to change how healthcare is delivered if health care costs are to be controlled."

Bob Laszewski of Health Care Policy and Marketplace Review looks at UnitedHealth Group's settlement with New York Attorney General Andrew Cuomo over fees for out-of-network services and says, "$50 million is peanuts compared to the out-of-network customary and reasonable savings any one of the big health plans achieves every year and this settlement makes the ability of state medical societies and trial lawyers to attack the system much harder."

John Goodman of his eponymous Health Policy Blog proposes using SCHIP funds to make the federal income child tax credit refundable and conditional upon proof of the child's health insurance. Goodman says this idea could test competition between public or private plans because parents could use the tax credit for either SCHIP, Medicaid or private insurance.

Health Populi's Jane Sarasohn-Kahn looks at ways the economic recession may lead to more underinsured and uninsured U.S. residents, especially if employers raise deductibles or if laid-off workers cannot afford COBRA policies. Sarasohn-Kahn writes, "Employers in the midst of the recession are looking for ways to stem health cost increases -- they were doing so in fairly good times, and now in the 2007-9 recession, are intensely concerned about health benefit costs."

Marilyn Werber-Serafini of the National Journal's Health Care Expert Blog asks, "Would it really do much good to extend the length of COBRA health insurance coverage as part of an economic stimulus package? Would people really sign up? Does COBRA ever really work well?" Responders include Karen Davis, James Gelfand, Newt Gingrich, Ron Pollack, Uwe Reinhardt, Raymond Scheppach and Andy Stern. Judith Graham of the Chicago Tribune's Triage posts resources on COBRA.

Paul Testa of the New America Foundation's New Health Dialogue looks at Obama's comments and new reports on investing in health IT and notes, "health IT must be incorporated within broader changes to our health care system."

Jonathan Cohn of the New Republic's new health care blog, The Treatment, looks at congressional Democrats' plan to pass SCHIP reauthorization and efforts to enable children of documented immigrants to enroll in the program.

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Government-Run Health Care Would Lead to 'Dependence on State,' WSJ Opinion Piece Says
[Jan 16, 2009]

      President-elect Barack Obama and the Democratic-controlled Congress' attempts "to push us toward government-run health care" are an example of the "shift from a market-based economy to a political one in which the government picks winners and losers and extends its reach and power in unprecedented ways," Peter Wehner, senior fellow at the Ethics and Public Policy Center, and Rep. Paul Ryan (R-Wis.), member of the House Budget and Ways and Means committees, write in a Wall Street Journal opinion piece.

Obama's proposed "Medicare-style government plan" would allow it "to charge artificially low premiums by paying fees well below private rates." According to Wehner and Ryan, such a plan would "devastate" private health insurance companies trying to compete and would result in "the nationalization of the health care sector, which today accounts for 16% of U.S. gross domestic product."

In addition, government-run health care "will be profoundly detrimental to the quality of American medicine" because the government's lower costs would make private investment more of a financial risk. According to Wehner and Ryan, this would result in less private participation and delays to the development of "potentially lifesaving treatments." In addition, the proposed government-run system would place the U.S. "on a glide path toward European-style socialism," which might negatively affect the economy because tax cuts would result in cuts to health care and would not easily be enacted, they write.

Wehner and Ryan call for a plan that can be formed using tax credits, high-risk pools, "insurance choice" and "regulatory reform" that will "help the uninsured find coverage in the private sector and use market incentives to contain costs." Wehner and Ryan write that "we will move from a limited welfare state into a full-blown one" if the U.S. relies on nationalized health care, which "will lead here, as it has elsewhere, to passivity and dependence on the state" (Wehner/Ryan, Wall Street Journal, 1/16).

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Medical Device Group President Cites Measures Needed To Reduce Health Care Costs in Washington Post Letter to the Editor
[Jan 16, 2009]

      A Jan. 12 Washington Post column written by Robert Samuelson highlighted a "'no gain without lots of pain' theory to controlling health care costs" -- under which the "only way to make health care affordable is to restrict doctors' and patients' choices and access to clinical advances" -- but "better alternatives" exist, Advanced Medical Technology Association President and CEO Stephen Ubl writes in a Post letter to the editor.

"At the top of the list is doing a better job of preventing illnesses," Ubl writes, adding, "Better management of chronic disease, which accounts for 75% to 80% of health care costs, is critical." According to Ubl, "We also need to improve how we pay for health care to reward high-quality care and efficiency" and "accelerate the development of the new treatments and cures that extend and improve lives."

He concludes, "In the long run, the best way to solve the health care cost problem is to prevent disease and, when it does occur, to detect it sooner and treat it more quickly and more effectively" (Ubl, Washington Post, 1/16).

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Commonwealth Fund Study Examines Swiss, Dutch Health Systems
[Jan 16, 2009]

      "The Swiss and Dutch Health Insurance Systems: Universal Coverage and Regulated Competitive Insurance Markets," Commonwealth Fund: A new CWF study found that policies in Switzerland and the Netherlands intended to ensure universal coverage and low administrative costs could help inform U.S. health care reform efforts. According to the study, the systems in both countries are similar to the Massachusetts universal coverage law. The countries both cover all but 1% of their population -- compared with the U.S., where 15% of the population is uninsured -- because of individual mandates to purchase health insurance and premium assistance for low-income citizens. In addition, both countries spend about 5% of health care costs on administrative costs, compared with 7% in the U.S. The study also points to other policies that the U.S. could emulate, including national standards for basic coverage for private insurance, which guarantees benefits are comprehensive for acute care services; tight regulation of basic health insurance markets, which lead to low overhead costs; and risk equalization systems that help reduce incentives for insurers to collect healthier enrollees (Leu et al., Commonwealth Fund, 1/16).

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