Posts Tagged ‘George W Bush’

Study Tracks Development of ACOs

Wednesday, December 14th, 2011

Accountable care organizations (ACOs) are the biggest thing in healthcare today, and a new study by Leavitt Partners quantifies exactly how hot they are.  ACOs, as defined in the Patient Protection and Affordable Care Act (ACA), are a delivery model that offers doctors and hospitals financial incentives to provide quality care to Medicare patients and keep costs affordable.

Even though ACOs are not yet operating, there are already 164 “ACO entities” in the country, according to a report by Leavitt Partners, a consulting firm led by Mike Leavitt, a former governor of Utah and Secretary of Health and Human Services during President George W. Bush’s administration.  In his survey of ACOs, Leavitt examined news releases, media reports, trade groups and conducted interviews and concluded that a health system is an ACO if it either self-identified as one or was “adopting the tenets of accountable care.”  The study included systems that work with private payers rather than Medicare.

Of the 164 “ACO entities” identified, 99 are sponsored by hospital systems, 38 by physician groups and 27 by insurers.  They are in 41 states, although there were vast regional discrepancies.  Poor, rural regions reported minimal ACO growth.

“A quiet scramble is clearly underway,” Andrew Croshaw, managing director at Leavitt Partners and director of the Leavitt Partners Center for ACO Intelligence, said.  “In certain markets, competition to establish leadership is already emerging.”

Due to the rush to complete the study, ACOs may be prolific in certain areas while sparse in some regions of the country.  Even though ACOs are still a new concept, certain states are already home to significant accountable care activity, primarily in Texas, California, and Michigan.  In general, states with larger populations have more ACOs.  “Adoption of this model will vary greatly due to both regional differences as well as variations among the sponsoring entities,” the report states.

Of the 164 ACOs that researchers examined, nearly 60 percent were established by hospitals or health systems, indicating a trend toward hospital systems leading the development of ACOs.  Leavitt Partners examined the trends of “ACO or ACO-like organizations,” meaning the report loosely defined an ACO as an entity that is “financially accountable for the healthcare needs of a population, manages the care of that population and bear that responsibility at an organizational level.”

The success of the various ACOs is still not known. According to the report, although there are different models of providing accountable care, the most successful approaches at achieving an ACO’s goals is still undecided.  “With neither a set definition, nor a national method for identifying ACOs, it is difficult to precisely identify and study such organizations,” according to the report.  “It is possible that some of the organizations, which should be considered ACOs, are missing from our study and some, such as organizations that self-identify as ACOs but will never ultimately adopt any type of care coordination or bear any risk for a population, may not belong.”

The final ACO rule provides more flexibility for eligible providers and increases the amount of possible bonuses.  The Centers for Medicare & Medicaid Services (CMS), which released the rule in October, also decreased the number of quality measures from 65 in five domains to 33 in four domains.  Although the full implications of the rule are not yet known, providers’ responses reflected their desire for long-term care to actively participate.  ”We certainly want to ensure skilled nursing and post-acute facilities are part of the cost-saving model,” according to the American Health Care Association President and CEO Mark Parkinson.

There are some who are not quite so bullish about ACOs. One is J. Thomas Rosch, commissioner of the Federal Trade Commission, who is deeply skeptical about ACOs.  According to Rosch, “even in the most optimistic scenario, the savings to Medicare from the ACO program are no more than a rounding error.”  He also believes that there is a possibility that providers may form ACOs not to collaborate or improve healthcare, but to gain market share.

“Against the very meager prospects for cost savings, there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.  The net result of the Shared Savings Program may therefore be higher costs and lower quality healthcare — precisely the opposite of its goal,” Rosch said.

Will Cuts in Healthcare Save the Federal Budget?

Tuesday, December 6th, 2011

Healthcare budget and policy experts are waiting for Washington to eventually face the difficult task of finding even more savings to cut the deficit.  They anticipate that health spending — which makes up more than 20 percent of the federal budget — will be targeted.  Some healthcare leaders are already planning to redirect a debate they’re expecting in 2013.  They hope to prevent spending from being shifted from one part of the system to another.  Jack Lewin, chief executive of the American College of Cardiology, said that proposals to address the basic causes of high healthcare costs have mostly been ignored in Washington.

“We talk about them all the time, but there’s nothing that we’re doing in any of these proposals to get that done,” Lewin said.  “What we would like to get on the table that’s not there is a paradigm shift in thinking about how you control costs.”  According to Thomas Scully, a former Medicare administrator under President George W. Bush and now a senior counsel at Alston & Bird, an Atlanta-based law firm, “There’s going to be a Round Two (of cuts), but after the election, because of the economic pressures exerted by the national debt.”

Proposals include reducing payments to providers; asking beneficiaries to pay more for coverage; and raising the Medicare eligibility age.  The healthcare interests that might take another hit in 2013 want to start planning now.  Several key healthcare leaders – the majority of whom have been through other cost-cutting campaigns — say efforts to reduce spending too often transfer costs from the federal budget and individuals, insurers, doctors and hospitals.

These worries have caused “people from dramatically different quarters to start thinking about what to do to get their hands around this” and redirect the conversation, said Karen Ignagni, president of America’s Health Insurance Plans.  “I’ve been talking to a range of stakeholders about how to work together…to urge policymakers to look at what’s already out there now and build on it.”

The Patient Protection and Affordable Care Act (ACA) is one element of this debate.  Administration officials and other supporters of the law say it will help drive down costs through initiatives designed to promote primary care, emphasize on preventive medicine, study treatments to evaluate their effectiveness and rate hospitals and other providers on quality.  Other healthcare authorities counter that the law will not strongly impact costs because its reforms are small and will mature incrementally.

Additionally, the law saves money by cutting Medicare payments to hospitals and other providers; it also places some unwelcome standards on health plans.  For example, insurers cannot reject people with pre-existing conditions, must justify rate increases of 10 percent or more, and send rebates to consumers if they don’t spend a minimum of 80 percent of premiums on healthcare.

Writing in the Washington Post, Drew Altman and Larry Levitt – both with the Kaiser Family Foundation — note that “Healthcare costs are driving people into poverty.  Indeed, if the burden of healthcare expenses were not taken into account, then 10 million fewer people would have been classified as poor.  One of the biggest jumps in poverty under the new method is among people with private health insurance.  We tend to think of such people, most of whom get coverage through their jobs, as being better equipped to handle the cost of getting sick.  But even those who are insured are increasingly vulnerable to high healthcare costs, in no small part because, as costs keep rising, employers have shifted more of the burden onto workers.  The share of employees with an insurance deductible of $1,000 or more for single coverage has tripled in the past five years.  The trend is especially strong among small businesses, where half of workers faced a deductible of at least $1,000 in 2011.  For those on the edge of poverty, a big medical bill could send you over it — even if you have insurance.  The effect of healthcare costs is particularly acute for the elderly, with the proportion of seniors living in poverty increasing from nine percent under the official census measure to 16 percent under the alternative measure.  An astounding 49 percent of seniors are living at or below twice the poverty level, a threshold at which people are still considered low-income (up from 35 percent under the official method).

“It’s up to us to get really serious with the agenda so that, when the time comes after the election, we are prepared to offer serious proposals that deal with costs and that do not impair the quality of care,” said Ron Pollack, executive director of the consumer group Families USA.

U.S. Supreme Court Is Likely to Decide On the ACA This Term

Tuesday, October 11th, 2011

As of the first Monday of October, the United States Supreme Court is back in session and likely to make what could be a momentous decision on the Patient Protection and Affordable Care Act (ACA).  The nation’s highest court will consider President Barack Obama’s landmark healthcare overhaul, which impacts almost everyone in the country.  The Obama administration’s request last week that the justices resolve whether or not the healthcare law is constitutional makes it more likely than not that they will deliver their verdict by next June, shortly before the president and his Republican opponent move into the fall general election campaign.

Already, the GOP presidential candidates are taking advantage of virtually every debate and speech to attack Obama’s major domestic accomplishment, which extends health insurance to more than 30 million people who now lack coverage.  If, as expected, the justices agree to review the law’s constitutionality, those deliberations would define the court’s coming term.  Their decision could rank as the court’s most momentous since the December, 2000, ruling that sent George W. Bush to the White House.

According to the Med Page Today website, “The Obama administration petitioned the Supreme Court to decide on the constitutionality of the ACA, making it very likely that the high court will hear at least one of the cases challenging the landmark healthcare reform law before next year’s presidential election.  The U.S. Appeals Court for the 11th Circuit ruled in August that the individual mandate provision of the ACA is unconstitutional.  The Justice Department had until November to ask the Supreme Court to hear the case, but filing its petition sets the stage for oral arguments in the spring, and a final decision in June — at the height of Obama’s re-election campaign.  The 11th Circuit case was filed by 26 states that object to the ACA on a number of fronts, but opposition to the individual mandate is the main thrust of their argument.  The individual mandate, considered the linchpin of the law, requires everyone to have health insurance by 2014.  In its petition, lawyers for the Obama administration said the appeals court decision is ‘fundamentally flawed.’”

Supreme Court analysts say it is difficult to predict how the court would rule on the conservative challenge to the health care law.  Miguel Estrada argued several cases before the Supreme Court as an official with the Justice Department in the 1990s.  “The issues are really hard. Every time you ask the Supreme Court to overturn an act of Congress, it is a very difficult thing for the court to do. And Congress comes to the Supreme Court with a presumption of deference (to Congress) and constitutionality,” said Estrada.

Writing on the Big Think website, Robert de Neufville writes that “The administration’s decision strongly suggests that it will ask the Supreme Court to hear the case, since it doesn’t want the 11th Circuit’s decision to stand.  That puts the Supreme Court in the difficult position of having to rule on a politically charged piece of legislation during an election year.  Rick Hasen (of the Election Law Blog) that a Supreme Court decision is win-win for Obama: either the court affirms the constitutionality of the law or it seems to overreach by overturning it.  By the same token, ruling on the law may be a lose-lose proposition from the perspective of the court.  Whatever the court decides it will seem to be taking sides in a political struggle.  As Slate’s Dahlia Lithwick says,  there may not be five justices who want to want to make the court itself an election-year issue.  Lithwick says that “I don’t think Chief Justice John Roberts wants to borrow that kind of partisan trouble again so soon after Citizens United, the campaign-finance case that turned into an Obama talking point.  And I am not certain that the short-term gain of striking down some or part of the ACA (embarrassing President Obama even to the point of affecting the election) is the kind of judicial end-game this court really cares about.  Certainly there are one or two justices who might see striking down the ACA as a historic blow for freedom.  But the long game at the court is measured in decades of slow doctrinal progress — as witnessed in the fight over handguns and the Second Amendment — and not in reviving the stalled federalism revolution just to score a point.” 

The editors of Bloomberg Business Week fear the collateral damage that overturning the ACA might cause.  They note that “Should the Supreme Court take up healthcare reform this year?  So far, only one appeals court has ruled that the ‘individual mandate’ in ObamaCare — the requirement that virtually everybody must buy insurance, with government assistance if needed — overreaches the federal government’s powers under the commerce clause of the Constitution.  It’s not a trivial argument.  But an affirmative ruling would be a huge departure from our understanding of the commerce clause going back to the New Deal.  If the healthcare law’s individual mandate is unconstitutional, so is much of what the government has been doing for 80 years or so, and it will be the duty of the Supreme Court to sort through the ruins of the federal government as we know it and find a few shards to start building again.  We can’t help but suspect that the court will choose to avoid this opportunity, by not taking the case, by finding some other grounds for ruling, or by upholding ObamaCare.

“Ever since it passed in 2010, ObamaCare has been attacked as a costly and possibly unconstitutional intrusion of the federal government into people’s lives.  Almost the central issue in the campaign for the Republican presidential nomination has been the resemblance between ObamaCare and the state healthcare plan enacted in Massachusetts under then-Governor Mitt Romney.  Today, most Democrats feel the less said the better.  But if the new law loses in the Supreme Court, the political ramifications may look very different.  If the Supreme Court kills healthcare reform, it will stay dead a long time.  It took 17 years before anybody felt like scaling that mountain again after Hillary Clinton’s failure two administrations ago.”

Medicare Part D Costs Expected to Fall in 2012

Monday, August 22nd, 2011

Medicare Increased competition between Medicare Part D plans, greater generic drug use and more transparency for consumers are why the Center for Medicare and Medicaid Services (CMS) expects lower Medicare prescription drug premiums next year.  Next year, the average Medicare prescription drug plan premium will cost approximately $30, compared with an average of $30.76 in 2011, according to the Department of Health and Human Services (HHS).  CMS Administrator Dr. Donald Berwick said that the average premium is about 44 percent lower than what was estimated in 2003.

The Part D drug benefit,  enacted when George W. Bush was president, lets seniors and others on Medicare sign up for a privately administered, government-subsidized health plan to purchase their prescriptions.  The program enjoys high popularity with beneficiaries and has proven to be far less costly than budget analysts originally expected, partly because of competition among private plans and the growing use of less costly generic drugs.

HHS also announced that nearly 900,000 Americans in the Medicare Part D “doughnut hole” have benefited from a 50 percent discount in brand-name drugs in 2012.  HHS estimates that out-of-pocket savings on drug costs for Medicare beneficiaries to be about $461 million from January through June of this year.  The Obama administration has worked to strengthen the Medicare drug benefit with the help of the Patient Protection and Affordable Care Act (ACA).  The law phases out the coverage gap, long seen as one of the program’s weaknesses.  Last year, approximately four million seniors received $250 rebates because they fell into the gap in coverage.  This year, the law will provide 50 percent discounts on prescriptions for those who hit the doughnut hole.

Seniors can chose from a variety of Part D plans,  and Dr. Donald Berwick, administrator of the Center for Medicare and Medicaid Services, said competition “clearly helps” keep premiums from rising.  At the same time, he warned against overextending Part D.  HHS said 17 million seniors have received at least one preventive healthcare service without a co-pay.  The ACA eliminated co-pays for many preventive services under Medicare and will ultimately do the same for private insurance.

“This decline in the average creates more risk for plans like ‘Humana’ and ‘United Health’ that have a significant portion of the Part D members,” said Peter Costa, a Wells Fargo analyst.  Costa said one reason for the lower bids could be last year’s joint venture between Humana and Wal-Mart stores to offer Medicare drug coverage with the lowest premiums in the country.

“The Affordable Care Act is delivering on its promise of better health care for people with Medicare,” said HHS Secretary Kathleen Sebelius.  “People with Medicare who hit the doughnut hole are paying less for their prescription drugs, 17 million Americans have received free preventive services and prescription drug premiums will remain low.  These are important steps that are making a difference in the lives of millions of Americans right now.”

“Medicare beneficiaries will have more affordable prescription drug coverage next year as a result of vigorous competition in the Part D program and Medicare drug plans’ efforts to encourage seniors to choose the most affordable medicines,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans.  Ignagni noted that “taxpayers are also saving billions of dollars as the total cost of the program continues to be far below original projections.”

Will Proposed Medicare Reform Leave Seniors Out in the Cold?

Monday, April 11th, 2011

A Congressional proposal to reform Medicare will transfer a significant share of the cost to the nation’s senior citizens – a constituency that is known for high voter turnout in elections.  The Congressional Budget Office (CBO) added fodder for critics, concluding that the majority of future retirees would pay considerably more for healthcare under the “Path to Prosperity” approach — which turns Medicare into a voucher-like plan for Americans who are currently 54 and younger.  Representative Paul Ryan

(R-WI), who introduced the plan, said “We don’t want to turn the safety net into a hammock that lulls people to lives of complacencies and dependencies, into a permanent condition where they never get on their feet.”  Instead of coverage for a set of prescribed benefits, Americans in their mid-50s and younger would receive a federal payment to purchase private insurance from a choice of government-regulated plans.  If the proposal becomes law, beginning in 2022, Americans would have a vastly different experience when they became eligible for Medicare.  The age for eligibility would rise from 65 to 67, according to the CBO.

Ryan’s proposal slashes $1.4 trillion from Medicaid over the next decade.  He proposes to cut $630 billion off the budget by more or less repealing the Patient Protection and Affordable Care Act’s provisions that extend coverage to include anyone living on less than 133 percent of the poverty rate — just under $30,000 for a family of four.  Additionally, Ryan’s plan eliminates subsidies for private insurance premiums for those just above the poverty line.  According to CBO estimates, nearly 17 million people without insurance would have been covered by the Medicaid expansion.

Representative Chris Van Hollen (D-MD), the ranking Budget Committee Democrat, said Republicans are protecting tax breaks for corporations and the wealthy to the detriment of the middle class and the poor.  “It doesn’t reform Medicare, it deforms and dismantles it,” Van Hollen said.  As for Medicaid, Ryan’s proposal “rips apart the safety net” for poor and older people.  “A typical beneficiary would spend more for healthcare under the proposal,” according to the CBO analysis.  “Although the uncertainty in future federal spending on healthcare would decrease under the proposal, that uncertainty would be transferred to future beneficiaries,” the CBO analysis said.  “If the volume, complexity, and costs of medical services turned out to be greater than expected, future beneficiaries would pay higher premiums and cost-sharing amount than are currently projected.”

Ryan’s budget resolution would improve the nation’s overall fiscal health, cutting projected deficits in President Obama‘s budget and moving the federal government towards a surplus by 2040, according to the non-partisan CBO.  Ryan believes that the cuts are necessary to save the programs.  “This is not a budget.  This is a cause,” he said.  “The social safety net is fraying at the seams.”  Chip Kahn, president of the Federation of American Hospitals, said that Ryan’s proposal would “result in the loss of health coverage for millions of low-income Americans, reduce critical benefits for others, and make it more difficult for hospitals, clinicians and other healthcare providers to deliver the care so many need.”  Other critics maintain that Ryan’s approach will shift the higher costs to individuals, much as the change from defined-benefit pensions to 401(k) plans has increased retirement risk.  Senior citizens, the disabled and the poor likely will pay more for healthcare, even as Washington pays less.  Additionally, Ryan’s plan would permanently extend George W. Bush’s tax cuts.

“The idealized notion that older consumers would be making these annual choices may have some merit as an idea, but it doesn’t seem to be taking place in practice,” said Patricia Neuman, director of the Medicare Policy Project at the non-partisan Kaiser Family Foundation.  Picking the right health plan could become even more critical if premiums outpace federal subsidies.  In 2010, 50 percent of the nation’s Medicare recipients reported incomes of less than $21,000 a year, according to a Kaiser Family Foundation analysis.

In an opinion piece in the Seattle Post-Intelligencer, the “Monday Morning Economist” Stephen Herrington writes “The tax cut proposal is not getting the attention it deserves.  If it shapes up to be anything like was described in Ryan’s Road Map, it will create massive dislocations and disruptions in the economy.  Ryan’s plan was/is to cut the top tax bracket from 35 percent to 25 percent with the promise/expectation that this would not impact revenues.  In a departure from the standard ‘trickle down’ excuse for tax cuts, Ryan meant/means to offset the admitted loss in revenues by eliminating all manner of deductions.  The deductions in our current tax code, such as medical, mortgage and state income tax expense are there for a purpose.  Eliminating them will introduce wild distortions in markets and effectively push the tax cuts for the rich onto the other 98 percent of us.  Elimination of the medical expense deduction will intensify the impact of the Medicare/Medicaid part of the plan.  It is as if Ryan thinks the magic of the free market can absorb any shock in real time.  No more mortgage deduction?  No problem, I just won’t buy a house at all until the lack of the mortgage deduction causes prices to fall by half.”

Virginia Judge Rules Against a Key Proviso of Healthcare Reform Law

Monday, December 20th, 2010

A conservative federal judge in Virginia has ruled that a key provision of the Patient Protection and Affordable Care Act is unconstitutional. Specifically, U.S. District Judge Henry Hudson overturned the section of the healthcare reform law that requires all Americans to purchase healthcare insurance starting in 2014.  The Obama administration will appeal the decision, which is likely to end up before the United States Supreme Court.  Previous lawsuits in Michigan and Florida have been dismissed and additional cases are pending, including one filed by 20 other states.  Hudson agreed with Virginia Attorney General Kenneth Cuccinelli in saying the mandate overstepped the Constitution.

Hudson, who was appointed to the federal bench by George W. Bush, explained his decision this way.  “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market,” he wrote.   “In doing so, enactment of the (individual mandate) exceeds the Commerce Clause powers vested in Congress under Article I (of the Constitution).  The outcome of this case has significant public policy implications.  And the final word will undoubtedly reside with a higher court.  At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health insurance coverage — it’s about an individual’s right to choose to participate.”

We are confident that this law is constitutional, and we are confident that the Supreme Court when, and if, it hears this case will agree that it’s constitutional,” an Obama administration official said.   White House healthcare reform director Nancy-Ann DeParle said the administration is encouraged by the two other judges who have upheld the law.  She noted that the Justice Department is presently reviewing Hudson’s ruling.

Democrats May Use “Nuclear Option” to Pass Healthcare Reform

Tuesday, May 12th, 2009

The Obama administration is playing hardball to force Congress to pass healthcare reform legislation before the end of the year – preferably without the customary Republican-led filibuster delaying the final vote. obamahealthcare President Obama’s aggressive approach to protect healthcare legislation from Republican filibusters demonstrates the magnitude this ambitious reform package and has come to be called in some circles the nuclear option.

The agreement between the White House and Congressional Democrats lets healthcare legislation that meets budget targets win approval by a simple Senate majority — a process called reconciliation.  Not surprisingly, Republican leaders are up in arms about the no-filibuster deal, claiming that healthcare is too important to be exempt from the Senate’s usual rules.

Republicans have threatened to use their own procedural weapons to bog down the Senate if the Democrats try to restrict filibusters.  Options include forcing multiple votes on routine bills, inaction on administration nominations, or requiring lengthy legislation to be read in full.  Even some Democrats – notably Kent Conrad of North Dakota and Max Baucus of Montana – are uncomfortable with reconciliation.  Other Democrats point out that Senate Republicans successfully used reconciliation to enact President George W. Bush’s tax cuts in 2001 and 2003.

The president is relying on his significant political capital to push his agenda through, relying on unwavering support from his sizable Senate Democratic majority.  This is likely to total 60 Senators once the Minnesota courts finally certify Al Franken’s victory, and as a result of Arlen Specter’s surprise exit from the Republican Party. That could give President Obama the filibuster-proof majority he wants.