Posts Tagged ‘budget’

« Older Entries

White House: Ending Pay-for-Delay Pharma Deals Would Save Americans $11 Billion

Monday, April 29th, 2013

Earlier this month, the White House released its proposed budget for Fiscal Year 2014. While the White House’s budget plan includes some Medicare benefit cuts, such as raising premiums for Part B and Part D, it includes some policy proposals to help lower drug costs for consumers and the government that we at Community Catalyst support, including a ban on “pay-for-delay” deals between brand-name and generic pharmaceutical companies. Obama’s April 10 proposal, “Reducing the Deficit in a Smart and Balanced Way”, reasons that restricting pay-for-delay agreements would “increase the availability of generic drugs and biologics” and deliver $11 billion in savings to federal health programs over the next 10 years.

Pay-for-delay settlements are agreements in which the brand name drugmaker pays a generic company to delay bringing a generic drug to market. A ban on these agreements would improve patient access to affordable, generic versions of necessary pharmaceuticals while lowering health care costs. Federal Trade Commission Chairman Jon Leibowitz praises proposals to ban pay-for-delay deals, noting they would “reduce the deficit by billions of dollars without raising taxes or cutting critical programs.”

Despite this fiscal wisdom, all of the House and Senate bills proposed to stop this anticompetitive behavior have failed. If Obama’s 2014 budget proposal is enacted, it will bolster the FTC’s ability to investigate and intervene in these companies’ shady back-room dealings. We hope that would inspire Congress to finally pass the Preserve Access to Affordable Generics Act, putting a stop to these deals, once and for all.

While the White House budget doesn’t address how to reimburse the billions of dollars that have already been unfairly taken from consumers and taxpayers, it serves as a symbolic victory highlighting the Administration’s awareness that pay-for-delay deals cost us all, whether as consumers or as tax payers. A case about the legality of pay-for-delay is pending before the Supreme Court (as we have discussed here), with a decision expected by June. Whether Congress, the Administration or the Supreme Court does it, it’s now abundantly clear that our government must take action to stop these deals. As Arthur and Zachary Kaplan explain in their CNN opinion post, “the right prescription for making medicines cheaper and better is to encourage competition, not stifle it with backroom deals where everyone gets a great deal except for the patients.”

Additionally, the Administration recommends reforms to save another $3 billion, by preventing companies from making small changes in a biologic drug and using them to delay competing versions (often called ‘evergreening’) and by making it possible for companies to begin making “biosimilar” (generic) versions of these very expensive biologic drugs five years earlier.

Overall the Administration’s prescription drug recommendations emphasize the importance of ensuring prescription are more affordable for consumers. We at Community Catalyst are glad to see these vital proposals recommended and are hopeful they will be enacted to benefit consumers.

– Khadijah M. Britton, Program and Policy Associate
Prescription Access and Quality Project

Tags: , , ,
Posted in prescription drugs | No Comments »

The Insider: ACA opponents are counting their chickens too soon (and even if they win, they lose)

Tuesday, April 17th, 2012

Pouring over the entrails
Like ancient soothsayers seeking to read the future from the condition of the liver of an animal sacrifice, the political and policy addicts are picking through the transcripts of the oral arguments at the Supreme Court trying to guess what the justices will do and when they will do it. Of course, no one really knows what will happen and that makes everyone an expert. The truth is the basic dynamic remains the same after the oral arguments as it was before them: If the Supreme Court’s conservative justices make a decision based on their political inclinations, the ACA will be struck down in part or in total. If they decide on the merits, it will be upheld (probably by a 6-3 margin).

Did the oral arguments give any clues to which way the justices are leaning? Yes and no. There do appear to be two to three votes to strike the entire law and four to uphold. Justice Scalia, who some observers thought could vote to uphold based on his previous decisions and the fact that one of his former clerks, now a federal judge, voted to uphold the ACA at the 6th Circuit, now appears unlikely to do so. In fact, Scalia’s comment that the problem of cost shifting from the uninsured could be solved by allowing hospitals to turn away emergency cases based on patients’ inability to pay, was one of the most chilling moments in the proceedings.

The two justices hardest to predict in this instance—Kennedy and Roberts—seem to me to be unlikely to vote for a total take down on a 5-4 vote, but that is just a hunch.

Here’s another gut feeling for what it is worth (not much, admittedly): While most observers expect a decision to come down in June, the court could issue a decision sooner. An early decision is more likely to be a bad one, i.e. if they are going to take down the whole law, it doesn’t make sense to wait until June. So buckle up for the next few weeks because time is on our side (I think).

The House Republican Budget (AKA the Ryan plan)–it’s worse than you think
While the eyes of the health care world were trained on the Supreme Court, a health care dystopia emerged from the House of Representatives and was quickly embraced by candidate (soon to be presidential nominee) Mitt Romney. If this budget becomes law, it would create a health care revolution, and not in a good way. The budget blueprint is really the same old same old Robin Hood in reverse—tax cuts for the rich and benefit cuts for everyone else—that Ryan and company offered up last year. Among the “highlights” it would:

  • • Repeal all of the insurance reforms and coverage expansions in the Affordable Care Act (elimination of pre-existing condition exclusions, preventing insurers from charging women more than men for health insurance, tax credits for individuals and small businesses) while keeping all of the spending reductions in the law (the very same spending reductions that Republicans have campaigned against).
  • • Shift thousands of dollars in health care costs onto Medicare beneficiaries.
  • • Block grant the Medicaid program, shifting billions in new costs onto states, while giving them the green light to cut eligibility and benefits.
  • • Proposes the virtual elimination of federal spending on all programs other than Social Security, Medicare, Medicaid and the military.

Think I am exaggerating? Check this out (emphasis added):

“The C.B.O. analysis of Ryan’s plan finds that by 2050, all the government’s discretionary spending, including defense, would represent just 3.75 percent of G.D.P. Given that defense spending in the postwar era has never been less than three percent of G.D.P., and that Republicans won’t consider cutting it, the rest of the government’s discretionary spending would have to be squeezed out of that remaining 0.75 percent. This is a derisory number—in the entire postwar era, it has never been less than eight percent. In practical terms it would make most of what the federal government does—from maintaining infrastructure to air-traffic control and environmental regulation to crime fighting—unaffordable. Ryan’s path to prosperity, in other words, is a path that ends with the federal government spending its money on health care, Social Security, and the military, and little else.”

OK, pretty bad you might think. But, as the TV pitchmen say, wait, there’s more. All of these bad things would occur if the budget did what its authors want you to believe it does. But it doesn’t. Specifically, the budget documents assume that massive tax cuts for the wealthy and for corporations will be offset by closing unspecified tax loopholes, but they won’t be.

The fact that the loophole closures are not specified should set off alarm bells. The reason they are not spelled out is that making up for the lost revenue would require massive changes in the main exclusions that benefit middle class Americans–the tax treatment of health insurance and home mortgage interest. Eliminating those tax benefits for the middle class would be wildly unpopular, so Republican budget writers (and endorsers) are trying to avoid talking about it. There is also great doubt as to whether they could ever actually do it.

The more likely alternative would be either continued deficits—savage program cuts to pay for tax breaks for the wealthy without even the poor excuse of deficit reduction—or even more savage cuts, beyond what is intimated in the budget, in order to hit the deficit targets. Since almost everything else has already been eliminated if you take the budget at face value, this translates down to even more cuts in health care.

There’s probably a better word than “marvelous” to describe this.

Replace: It Don’t Come Easy
Buoyed by the tough questioning by Supreme Court justices, Republican lawmakers are already anticipating the demise of the ACA. This is creating renewed interest in the “replace” side of the repeal and replace mantra. But attacking the ACA has always been easier than offering an alternative vision. There is a reason they have made so little headway on replace in the two years since the ACA passed, and the problem isn’t going to go away. (In fact, if they get their wish and the Court strikes the ACA, it will land right in their laps.)

Their problem is this: all the Republican ideas that actually work to reduce the number of uninsured and lower health care costs—such as tax credits to make private coverage more affordable, competitive insurance marketplaces and an individual responsibility to purchase coverage if it is affordable—are already in the ACA. The ones that are left on the table—like capping damages in malpractice cases and allowing insurers to sell policies across state lines—do little or nothing to expand coverage or reduce costs.

Not only that, but there are signs that their hostility to the ACA, which includes important benefits for women such as free access to contraception and elimination of gender rating, is hurting them at the polls.

The only other arrow left in their quiver is to reduce federal health spending by shifting more costs onto everyone else. (See it’s worse than you think.) By rejecting the moderate Republicanism, which is what the ACA really is, the GOP has backed itself into a corner. They have been at least somewhat successful at using demagoguery to demonize the ACA, but as soon as they have to put their own ideas on the table, they will find that the public likes them even less.

– Michael Miller, Director of Strategic Policy

 

Tags: , , ,
Posted in Affordable Care Act implementation, Health Reform Insider | 1 Comment »

Obama’s Budget: An Imperfect Reminder That We Can Cut Costs Without Undermining Care

Tuesday, February 14th, 2012

President Obama released his 2013 budget proposal yesterday. In the short run, it’s a mere formality. With a divided Congress in an election year, Obama’s budget is dead on arrival. But our national conversation about entitlement reform is far from over, and the health care cost-containment approach in Obama’s budget will inform that debate.

Obama’s budget reduces Medicare spending by $300 billion, and cuts another $55 billion from Medicaid. The good news is that Obama achieves many (but unfortunately not all) of these savings by weeding out wasteful spending rather than by pushing costs onto beneficiaries. For example, his budget:

  • • reduces overspending on prescription drugs by requiring drug manufacturers to pay the same rebates for low-income Medicare recipients as they do for Medicaid beneficiaries
  • • improves access to low-cost generic drugs by ending “pay for delay” agreements, a practice that allows brand-name drug manufacturers to pay generic drugmakers to keep their products off the market
  • • creates incentives for nursing homes to avoid needless and costly hospitalizations by providing better primary care to residents

The President proposes that the savings outlined in his budget replace the $1.2 trillion in across-the-board cuts scheduled to go into effect in January 2013 (“the sequester,” triggered by the failure of the Super Committee.) As far as the health care budget is concerned, the policies outlined above represent a marked improvement over the across-the-board cuts: they target the waste in our system rather than indiscriminately cutting good health care spending along with the bad. These policies not only save federal dollars, they actually strengthen Medicaid and Medicare.

The Bad News
Unfortunately, not all of the President’s cost-containment proposals are preferable to the across-the-board cuts. The sequester exempts Medicaid from cuts, but the President’s budget shifts billions in Medicaid costs onto states by: 1) reducing federal Medicaid matching rates, 2) limiting states’ ability to use provider taxes to finance Medicaid, and 3) increasing Medicare cost-sharing requirements (which would increase state Medicaid costs since Medicaid pays the Medicare cost-sharing requirements for the “dually-eligible”).

Shifting Medicaid costs onto states is not much better than shifting those costs directly onto vulnerable beneficiaries. Experience tells us that states are likely to compensate for their lost funds by scaling back on benefits like prescription drugs or dental care, raising premiums and co-pays, or cutting already-low provider reimbursement rates – all of which create barriers to needed care for the millions of seniors, children and people with disabilities who rely on Medicaid.

President Obama’s budget also cuts the Prevention and Public Health Fund by $4 billion over ten years. Since slowing our nation’s’ health care costs depends on our success at reducing the incidence of chronic illness, cutting prevention funding is a particularly short-sighted strategy.

We’ll Take More of “The Good”, Please
There is far more we can do to save money in our health care system without resorting to policies that would harm access to care for our nation’s most vulnerable citizens or undermine efforts to improve the health of Americans. For example, we should:

  • • Incentivize hospitals to reduce harmful care. The Affordable Care Act began adjusting Medicare payments to provide a stronger incentive to hospitals to prevent complications, such as hospital-borne infections and readmissions. As we outline in this paper, Medicare can do much more to reduce these harmful events. Doing so would not only save the federal government over $100 billion dollars, it would reduce deaths and suffering caused by avoidable infections, other preventable conditions, and needless hospitalizations.
  • • Tax sugar-sweetened beverages. This would bring in over $100 billion dollars in needed revenue over the next 10 years. And by lowering the consumption of sodas, a tax on sugary drinks would reduce the burden of obesity, diabetes, and heart disease on Americans’ lives and our health care costs.

As they debate entitlement reform, politicians will try to convince us that we have no choice – that slowing health care spending necessitates scaling back on our promise to care for our seniors, people with disabilities, and low-income families. By building off of the strengths in President Obama’s cost-containment approach, we can prove them wrong. We can – and we must — reduce our health care spending while strengthening Medicaid and Medicare.

-Katherine Howitt, Senior Policy Analyst
-Michael Miller, Policy Director

 

Tags: , , , ,
Posted in Affordable Care Act implementation | 1 Comment »

Congress’s Gifts: Coal and a Bit of Gold

Tuesday, December 20th, 2011

Viewed through the lens of the approaching holidays, the spending bill Congress wrapped up last weekend is a mixed bag for the Affordable Care Act and other health programs.

Overall, the big gift is that the major health care cuts House Republicans had proposed earlier in the year were averted. But some programs and ACA initiatives will get Grinch treatment if President Obama signs the omnibus spending bill as expected. And perversely that may leave even less money for next year.

The bill authorizes nearly $1 trillion in spending to keep nine major areas of the federal government in operation through the end of the federal fiscal year which ends September 30, 2012. It was passed by the House Friday and the Senate Saturday, avoiding the gridlock of last year largely because the spending totals were defined by the Budget Control Act of August as part of the deal to raise the amount of money the federal government could borrow. But the details of how $6 billion in cuts would be spread across the nine areas were decided by congressional committees over the last few weeks.

One key Affordable Care Act initiative designed to help hold down growing health costs – the Independent Payment Advisory Board – got gutted. The ACA established the board to recommend cuts in Medicare spending starting in 2013 if needed. But the board, yet to be set up, has been a favorite target of those opposing the ACA, and the new spending bill cuts the board’s funding from $15 million to $5 million. It’s unclear if the board will be able to fulfill its promise of recommending smart savings.

Congress took a more charitable view toward the Prevention and Public Health Fund, including the full $1 billion authorized in the ACA, which will help reduce spending in the long run by preventing illness. Some of the money is being used to backfill programs previously supported with other federal dollars, such as the proven Racial and Ethnic Approaches to Community Health program. Community Transformation Grants are funded at $280 million, up from $145 million in 2011.

The expansion of community health centers to serve millions more people, another provision of the ACA, will continue. The centers got level operating funding, and about a $200 million increase from funding in the ACA. And Children’s Hospitals Graduate Medical Education Program will also be level funded (although the program still requires long-term reauthorization).

Other areas got more coal in their stockings:

  • • The ACA initiative to support development of Consumer Operated and Oriented Plans (CO-Ops) to compete with private insurers will be cut $400 million (following a $2.2 billion cut last year), leaving only $3.4 billion to support start-up.
  • • The Substance Abuse and Mental Health Services Administration will be cut $27 million, although two programs that send money to the states – the Substance Abuse Block Grants and Mental Health Block Grants – will see increases.
  • • The National Health Service Corps, which trains doctors to serve disadvantaged communities, will be cut by $24 million, a substantial chunk of change that is partly offset by funding in the Affordable Care Act.

It isn’t a great year for ribbons and bows.

-- Alice Dembner, Deputy Policy Director

Tags: , , ,
Posted in Affordable Care Act implementation | 1 Comment »

Debt-Ceiling Compromise Kicks Medicaid Fight Down The Road

Wednesday, August 3rd, 2011

Yesterday, the president signed a bill that ended months of intense negotiations over lifting the country’s debt-ceiling. But for the fate of Medicaid – and the millions of seniors, people living with disabilities, and low-income children who rely on the program – the negotiations are just beginning.

What’s the deal?
In short, the final compromise lifts the debt ceiling enough to last until after the 2012 election and puts in place two stages of cuts in government spending.

In the first stage, caps are immediately placed on discretionary spending, saving $917 billion over 10 years.

In the second stage, a bipartisan joint committee is tasked with developing legislation to reduce the deficit by another $1.2 – $1.5 trillion over 10 years. Failure by the committee to produce an agreement by Thanksgiving or by Congress to enact their plan by December 23 would trigger automatic across-the-board cuts in federal spending to achieve $1.2 trillion in savings. If the Committee agrees on – and Congress enacts – less than $1.2 trillion in deficit-reduction, the across-the-board cuts will be triggered to make up the difference.

Let’s start with some good news
Medicaid and Medicare were spared any immediate cuts in the first stage. That said, the first stage cuts include significant short-run spending reductions; any serious economist will tell you that cutting federal spending in the midst of an economic downturn will only worsen the nation’s employment outlook. These larger economic forces certainly have implications for state budgets and Medicaid, but that’s a blog for another day.

The picture is murkier in the second stage. While Medicaid and Medicare are very much at risk for major cuts in a compromise that the joint committee might broker (more on that below), Medicaid is completely exempt from the automatic across-the-board cuts that would be triggered if the committee fails to achieve $1.2 trillion in deficit-reduction. Medicare benefits are also largely protected: across-the-board cuts to Medicare are limited to 2 percent of the programs’ costs and can only come from cuts to providers and insurers.

This is an important victory. Inside reports suggest that Republican negotiators demanded that Medicaid be added to the mix of programs that could face cuts in the event of the trigger, but the Obama administration refused to budge on this point. Consumer advocates deserve credit: they worked tirelessly over the past few months to send a strong message to Congress and to the White House that Medicaid matters. It’s clear that Obama took that message to heart.

Now the bad news – we’re not even close to out of the woods
Relief that Medicaid will escape unscathed should across-the-board cuts be triggered must be tempered by the understanding that the trigger may not be pulled, and that committee members will consider deep cuts to Medicaid in their efforts to broker a deal.

It is difficult to predict whether the committee will succeed. On the one hand, the terms of the process were constructed specifically to put immense pressure on both parties to avoid the across-the-board cuts. If committee fails to reach a compromise, all $1.2 trillion in deficit-reduction would come from program cuts – violating Democrats’ vows to ensure revenue increases are part of any deficit-reduction package. And 50 percent of the triggered across-the-board cuts must come from the defense budget – a painful prospect for Republicans.

On the other hand, competing pressures may prevent the committee from reaching a compromise. Republicans may prefer cuts in military spending to a compromise that includes tax-increases. And if they can’t broker a deal that includes tax-increases, Democrats may prefer to allow the across-the-board cuts to be triggered since at least Medicaid and Medicare benefits are protected from those cuts.

While there is considerable debate about the likelihood that the committee will succeed, the prospects for Medicaid are grim if a deal is brokered. Having already slashed discretionary spending by nearly a trillion dollars in the first stage, it will be difficult for the committee to find more savings in those programs. That leaves revenue increases and entitlement spending as the only real options for significant deficit-reduction.

Both parties have already drawn lines in the sand around revenue increases, with Democrats insisting on including them as part of a final deal, and Republicans vowing to vote against any package that includes them. But if significant revenue increases are not part of the solution, for the committee to succeed the cuts required to Medicaid and Medicare would absolutely devastate these programs. According to a statement by Robert Greenstein, president of the Center on Budget and Policy Priorities: “The deal that President Obama and Speaker Boehner were negotiating several weeks ago would have raised Medicare’s eligibility age, raised Medicare cost-sharing charges, shifted significant Medicaid costs to states, modified cost-of-living adjustments in Social Security and other benefit programs (and in the tax code), and instituted other entitlement savings. Those steps would have saved $650 billion to $700 billion over ten years. The joint committee would have to produce cuts twice as deep.”

And even if Democrats succeed at ensuring revenues are part of a deal, Medicaid would still likely sustain very significant cuts, such as the ones that were already on the table during earlier negotiations. Those cuts would jeopardize the health and financial security of millions of seniors, people living with disabilities, and low-income children who rely on Medicaid, and they would shift new cost burdens onto already-strained state budgets.

Making a dark picture worse, Congress needs to act this December to avert an automatic cut in Medicare doctor reimbursement rates (the “doc-fix”). While this is unrelated to the debt-ceiling negotiations, Congress will need to offset the costs of the doc-fix – about $300 billion for a 10-year fix – and they will likely look to find these savings in Medicaid and Medicare. These savings would be in addition to whatever cuts the deficit-reduction committee enacts.

Where does that leave us?
Medicaid lives to fight another day, and we should celebrate this success. But let’s celebrate while we roll up our sleeves. The fight starts anew today, and it’s not going to be easy.

– Katherine Howitt, Senior Policy Analyst

Tags: , , , ,
Posted in Affordable Care Act implementation, Medicaid | No Comments »

Medicaid and the Media: Sharing Stories for Good

Friday, July 29th, 2011

The past few months have been rife with intense debate over our nation’s budget and the debt ceiling. Predictably, entitlement programs, especially Medicaid, have been on the chopping block in these conversations. While legislators were proposing plans that would put the health of children, people living with disabilities, and seniors at risk, advocates across the country have organized to send a clear message: Medicaid matters.

Advocates have sent this message and garnered vital media attention by holding events, writing letters to the editor and op-eds, contacting their representatives, and most importantly, sharing the stories of the people in their communities whose lives would be at stake without Medicaid. Here are just a few success stories of advocates achieving positive media coverage for Medicaid:

  • – Highlighting stories of people whose lives have been improved by Medicaid: Health Care for All Massachusetts recently held a rally outside of Senator Scott Brown’s Boston office. Medicaid recipients provided moving testimonials about how the program has supported their families during difficult times and has helped them live independent lives. They urged Senator Brown to put his constituents above party politics and to stand up for Medicaid.
  • – Finding a creative news hook: After Paul Ryan was spotted sipping a $350 bottle of wine, Citizen Action of Wisconsin capitalized on the news coverage to highlight his hypocrisy. They held an impromptu wine tasting outside of Ryan’s office in Racine, WI to protest the contrast of the massive cuts to Medicaid and Medicare in his plan and the lavishness of his personal spending. Their efforts gained national attention when it was the center-piece of a Mother Jones blog post .
  • – Partnering with and featuring the voices of other stakeholders: Rhode Island KIDS COUNT shared their research with Dr. Maggie Kozel, a Rhode Island pediatrician, adding statistical weight to her personal experiences with Medicaid and CHIP. In an opinion piece on Huffington Post, Dr. Kozel argued that cuts to Medicaid are a misguided and alarming attempt to cut the budget and would result in harm to children and no savings.
  • – Writing op-eds: Sara Gagne-Holmes from Maine Equal Justice Center thanked the state’s delegation for promising to protect Medicaid in an op-ed to the Bangor Daily News. She reminded Mainers that their federal delegation would need continued support in their efforts to defend vulnerable people reliant on Medicaid to live independent, healthy lives.
  • – Encouraging legislators to step up their support for Medicaid: Many elected officials have stood up for Medicaid, knowing how much the program improves life for many of their constituents. Maryland Citizen’s Health Initiative approached Chris VanHollen about writing an op-ed in support of Medicaid. His strong piece was published the Baltimore Sun.

The above are robust examples of interacting with media to share how vital Medicaid is to the health and prosperity of our communities. As the budget frenzy reaches its height, there is still more work to do to keep this message at the forefront and protect Medicaid and the health of children, people with disabilities and seniors who need long-term care.

– Christine Lindberg, communications associate

Tags: ,
Posted in Medicaid | 1 Comment »

The Insider: Where Health Care Stands in the Debt Ceiling Negotiations

Tuesday, July 12th, 2011

This weekend Speaker Boehner rejected President Obama’s call for a “grand bargain” that would include both cuts to Medicare and Medicaid (and Social Security) along with tax increases to reduce the projected federal debt by about $4 trillion. Instead, Mr. Boehner seems to be indicating that there are not enough votes in the Republican caucus for a deal that includes tax increases – any deal should only include cuts.

You may ask yourself, well, how did I get here?
Back in April, along with a spirited defense of the role for government in the economy, the President laid out a comprehensive approach to debt reduction. The deal he outlined included cuts in military spending, and tax increases. It also included a fix for the Medicare physician payment formula to end the annual ritual of finding funding for a temporary rate patch. Although one can question whether it is either fair or logical to use cuts in Medicaid to partially pay for an increase in Medicare physician payments, as the administration proposed, at least there was some overall balance to the approach. The concern is that as the negotiations continue, the same scope of Medicare and Medicaid cuts would remain on the table without the other elements of the deal.

Equally concerning is the composition of the proposed cuts. Although definitive information about the negotiations is hard to come by, the health care proposals identified in the media are mostly a combination of missed opportunities and bad ideas.

Let’s take a look at each category:

Missed Opportunities

Graduate Medical Education
One proposal on the table is to reduce federal funding for graduate medical education. Instead of focusing on reducing GME funding, a better approach would be to make better use of existing funding by redirecting funding to increase the supply of primary care physicians as outlined here.

Medicare Bad Debt
Another proposal is to eliminate funding for Medicare bad debt. This is another missed opportunity. A reduction in bad debt should contain an explicit exclusion that free care given pursuant to a financial assistance policy would still be reimbursed, giving hospitals an incentive to actually qualify people for financial assistance. This would not only help Medicare beneficiaries, but also low-income underinsured people who often have a hard time obtaining financial assistance.

Bad ideas

The main bad ideas on the table are variations on the theme of shifting costs onto Medicare and Medicaid beneficiaries, including blended rate (combining regular federal Medicaid match, CHIP match and enhanced match for new eligibles under the ACA into a single rate); eliminating or curtailing states’ use of provider taxes; and increases in Medicare cost sharing, all of which will shift costs onto state Medicaid programs and result in cuts in rates or benefits.

A better way
In a plan presented to the Senate Democratic caucus, Budget Chair Kent Conrad outlined a better approach that relies more on progressive taxes and less on health care cuts.

Nor does Conrad’s proposal exhaust the opportunities. In a future post we will look at some of the policy options that could generate federal health care savings that improve quality, efficiency and the underlying health of the public without hurting Medicare and Medicaid beneficiaries.

– Michael Miller, Policy Director

Tags: , , , ,
Posted in Health Reform Insider | No Comments »

States of Innovation

Wednesday, June 29th, 2011

states of innovation logo

Saving Money, Saving Lives:
Maryland Paves the Way on Payment Reform

As policymakers across the country look to balance their budgets, some are turning to Medicaid, recycling the same harmful policies they’ve used year-after-year: eliminating coverage for vulnerable Americans, restricting critical benefits like prescription drug coverage, imposing premiums on those who can’t afford them, and slashing already-low provider reimbursement rates.

Community Catalyst and Georgetown University Health Policy Institute Center for Children and Families created the States of Innovation blog series to shine a spotlight on states that are trying to find a better way. We will highlight states that are pioneering new approaches to making Medicaid more sustainable without harming – and often by improving – care for the millions of vulnerable seniors, people with disabilities, children and low-income parents that rely on Medicaid. Our inaugural blog focuses on an initiative in Maryland to reduce the incidence of costly hospital-acquired infections and other medical errors.

SOI intro line

By improving how Medicaid and other health insurers reimburse hospitals, Maryland dramatically lowered its rates of costly, potentially avoidable events (PAEs) such as hospital-acquired infections. Maryland’s initiative is far more exciting than that sentence would lead you to believe, and we’ll tell you why.

What’s Really at Stake
Wonky terms like “potentially avoidable events” – and even wonkier acronyms like “PAEs” – obscure what this is really about: the hundreds of thousands of people each year whose lives are shortened and who endure needless pain or lengthy hospital stays because of preventable medical errors.

Indeed, “PAE” takes on personal meaning to people like Ginny Harvey. In 1996, Ginny broke her ankle stepping off a curb and had surgery at a prominent hospital in Boston. That’s where her story should have ended.

But during her hospital stay she acquired a staph infection, which quickly escalated into a fast-moving bone infection. After enduring 28 surgeries over the course of five years – including painful bone and muscle graphs – Ginny was forced to amputate her leg to save her life. “The staph infection did not ruin my life,” she says, “but it has altered my life forever.” For more on Ginny’s story, click here.

Maryland vs. Medical Errors
Maryland is tackling this type of hospital-acquired infection and other medical errors head on. Before we talk about how the state is doing it, let’s start with why we selected Maryland for our debut blog in the series. The state achieved tremendous results across the health care system (not just in Medicaid) in just the first year of their initiative:

  • – A nearly 20 percent reduction in hospital-acquired infections, like the type that Ginny suffered from.
  • – A 12 percent drop in overall hospital-acquired complication rates. This includes infections but also other harmful preventable events like accidental punctures during invasive procedures.
  • – More than $60 million in savings. Because the health care needed to treat these types of preventable complications is extremely costly, as Maryland’s complication rates dropped so did its health care costs.

How Did Maryland Do It?
Maryland’s reforms build on a common-sense concept: hospitals should get paid more for providing higher quality care, and less for providing harmful care. This may seem obvious, but many states’ Medicaid payment methodologies fully reimburse hospitals for the costs associated with treating harmful conditions that could have been prevented. Those payment systems fail to reward hospitals for investing in preventing the types of infections Ginny endured.

The Affordable Care Act will soon require all states to take the first step: stop paying for the costs associated with a handful of medical errors that are virtually always preventable, such as operating on the wrong body-part. But these particularly egregious and extremely rare medical errors represent only a tiny sliver of the potentially preventable hospital-acquired complications that alter families’ lives and drive up our nations’ health care costs every day.

Maryland is the first state to tackle a broader list of 49 adverse events including ones that are usually – but not always – preventable, such as the type of infection that invaded Ginny’s bones. Because these infections are not always preventable, and no hospital could be expected to lower its rate to zero, Maryland did not eliminate payment altogether for the costs associated with them. Instead, it adjusted a portion of hospital payments based on the rates of these complications; hospitals that do a good job at avoiding these events relative to their peers get a little extra money, and hospitals with a relatively high rate get a little less. This provides hospitals with the incentive to lower their overall rates of complications – saving money and saving lives.

The Real Question: Why Aren’t Other States Doing It?
Remarkably few states are following Maryland’s lead. And while they leave this cost-saving option on the table, Republican Governors are flocking to Capitol Hill and insisting that they need to cut vulnerable Americans off Medicaid to get their budgets under control. For example, Governor Christie is requesting that CMS allow New Jersey to freeze Medicaid enrollment for parents earning more than $439 a month. This proposal would result in 23,000 people being denied health coverage, and would save the state only nine million dollars.

Harmful eligibility cuts like these are unconscionable, particularly when New Jersey – and other states like it – could save even more money through payment reforms like Maryland’s that improve health care quality and better families’ lives.

To learn more about moving payment reform in your state’s Medicaid program, please read Community Catalyst’s policy brief. Over the summer, Community Catalyst will also be releasing model Medicaid payment reform legislation, as well as a state-by-state report card to help you track which states are following Maryland’s lead.

-Katherine Howitt, Policy Analyst
Community Catalyst

This blog was based partly on an interview with Robert Murray, Executive Director of Maryland’s Health Services Cost Review Commission.

Tags: , , ,
Posted in Medicaid | 3 Comments »

Ryan’s Plan CHIP-ing Away at Children’s Coverage

Monday, April 11th, 2011

House Budget Committee Chairman Paul Ryan’s Federal Fiscal Year 2012 budget blueprint, dubiously titled The Path to Prosperity, has damaging implications for children’s health. The Republican budget plan would dramatically cut funding for Medicaid and the Children’s Health Insurance Program (CHIP), health insurance programs that cover about 30 million children—almost a third of all children living in our country today.

Chairman Ryan would cut Medicaid and CHIP by a staggering $2 trillion over the next 10 years by doing the following:

  1. Slashing the Medicaid Budget: Ryan’s proposal would cut $771 billion in federal spending from the Medicaid program. According to the Congressional Budget Office, “federal spending for Medicaid would be 35 percent lower in 2022 and 49 percent lower in 2030 than currently projected.”
  2. Transforming Medicaid into a Block Grant: Under a block grant, states that use up their federal Medicaid allotment will no longer be able to receive additional federal funds when costs go up or enrollment increases. Cash-strapped states will be left high and dry, and will have to make up the difference by raising taxes, cutting other spending, or shrinking their Medicaid programs.
  3. Repealing the Affordable Care Act: Ryan’s blueprint repeals most of the new health law’s major provisions, including its language extending CHIP through 2019 and fully funding the program through 2015. This means that CHIP would not receive any federal funding past 2013, its reauthorization date prior to the Affordable Care Act’s (ACA) two-year funding extension. Repealing the ACA would also cut an additional $627 billion from Medicaid—bringing total Medicaid cuts to $1.4 trillion—and would have a host of other detrimental effects on children’s access to quality health care.

States will have to fill in these funding gaps somehow, which could mean cutting reimbursement rates to providers and hospitals, limiting benefits, or reducing eligibility levels. No matter how states work to fill in these gaps, children are likely to lose out. Children represent half of all Medicaid enrollees, but account for only 20 percent of Medicaid spending—meaning that huge numbers of children could be adversely affected by program cuts yet save the federal government comparatively little money.

The impact of limiting benefits is particularly concerning for children. As Jocelyn Guyer from the Georgetown Center for Children and Families points out in a recent Say Ahhh! blog post, families rely on these programs “for hearing tests and glasses so their children can grow and learn, as well as for physicals so they can play sports. In many families, Medicaid provides children with the medical care that they need so they can thrive in the face of common medical conditions such as asthma and ADHD.”

While Ryan’s budget proposal may be a path to prosperity if you’re a wealthy individual or corporation in line to receive some $1.8 trillion in tax cuts, it certainly isn’t a path to prosperity if you’re a family who depends on Medicaid or CHIP for your child’s asthma medications, eye tests, or flu shots. Our nation cannot afford to ignore the needs of its children. We can and should do better.

—Maia Fedyszyn, Program Associate, New England Alliance for Children’s Health

Tags: , ,
Posted in children's health | 1 Comment »

The Insider: (Budget) Love Don’t Come Easy

Tuesday, February 15th, 2011

Legal Scene: You Can’t Hurry Love
Although VA Attorney General Cucinelli is seeking expedited review of the case against the Individual Responsibility Requirement (IRR), most court-watchers think this is unlikely to happen. The Supremes rarely reach down to bypass lower courts and do so even more rarely if the Justice Department opposes the move (which in this case it does). Meanwhile “guess how they’ll vote” remains an active pastime. For those who like to back up their speculation with a little cash, the online futures market is predicting that the IRR will be found constitutional (about a 70 percent chance) in light trading.

Want to do something more useful than speculating or gambling? Go out and educate people on the benefits of the ACA. The court won’t make its decision in a vacuum and what people think, matters.

You may be recused
When the SCOTUS finally does get the case, how many justices will actually hear it? Legislators on both sides of the aisle are already battling over this. Orrin Hatch is demanding Elena Kagan recuse herself because when she was Soliciter General, she had taken part in discussions of the ACA within the administration. Democrats are countering with a demand that Clarence Thomas recuse himself because of his wife’s political activities in opposition to the ACA.

Meanwhile, some Democrats in the Senate are not waiting for the Court ruling on the IRR, they are going out and seeking alternatives. This is a misguided effort. First, from a policy perspective, the alternatives will work less well. Perhaps, more importantly, the search for an alternative presumes that a consensus can be built within Congress for constructive modifications when in fact no such consensus is possible. The goal of the current Republican leadership is to bury the ACA, not to modify it.

There are slasher films and then there are slasher films
Remember that movie last year about the guy who was trapped while hiking and had to amputate his own arm in order to stay alive? That seems like a good metaphor for the Obama budget — it’s nasty and painful. But it’s better than the alternative if the proposals from House Republicans for the remainder of FY 2011 are any guide — $1.3 billion cut to community health centers and elimination of all funding for the national health service corps, which provides funding for doctors to work in underserved communities — the political equivalent of the Texas Chainsaw Massacre.

The U.S. economy has yet to really emerge from the worst economic crisis since the Great Depression. Although there are some signs of improvement, there are also many signs of continuing weakness, including in the housing market. With state and local job cuts already a drain on the economy, and more public employee cuts on the horizon in the next state fiscal year, it is premature to be contracting federal spending. While some commentators are making this point, it seems to have little traction on Capitol Hill where the main debate is between the President and his critics on the right. As a result, the budget debate appears to be shaping up as a rerun of the debate on the expiring Bush tax giveaways, and we already know how that movie ended.

Does the public support cuts?
In pursuing spending cuts, aren’t politicians just responding to the demands of their constituents? That’s a hard question. As with questions about health reform, it depends on how you ask. In general, the public seems to prefer the abstract idea of cuts over taxes, but is much less willing to embrace specific spending reductions.

Meanwhile, advocates for programs across the federal budget are rallying around their specific area of concern. This is understandable, but the moment seems to require a broader approach. Arguments that accept the basic premise that spending on human needs must be reduced but posit that somebody else should be cut increase the chance of a food fight over a shrinking pie. For an alternative approach, check out the good work being done by the folks at the Coalition for Human Needs There’s still time to sign on to their statement on budget priorities.

What does it all mean for health care activists?
The approach being pursued by Congressional Republicans is clearly a health care disaster. President Obama’s budget is more of a mixed bag. Although there are some good proposals to reduce health care spending — such as eliminating the ability of drug companies to pay generic drug firms to delay market entry (“pay-for-delay”) — there are also some painful reductions. Most troubling is a proposal to reduce the ability of states to use provider taxes to help fund their Medicaid budgets. While the proposed reduction in allowable taxes, from 6 percent in FY2014 to 3.5 percent in FY2017 and beyond, does not start phasing in until 2015, there are two likely effects. First, it will likely have a chilling effect on states that might be considering these taxes to help balance their budgets in the short run, making cuts in benefits more likely. Second, it will force states to find alternative revenue sources at roughly the same time they are expanding eligibility under the ACA, adding substantive and political challenges to implementation. In general, our view is that the federal government should be doing more, not less to help finance the Medicaid program.

Still, for the most part, the President’s budget spares health care programs from serious harm. But we shouldn’t rest easy. The debate in Congress is sure to be difficult and health care will not emerge unscathed. As difficult as the current budget moment may seem, it is likely that even greater challenges lie ahead when the focus of debate moves from FY2012 to long term debt reduction, which will put health care squarely in the spotlight.

– Michael Miller, Policy Director

Tags: , , ,
Posted in Health Reform Insider | No Comments »

« Older Entries