We now face an opportunity—and an obligation—to turn the page on the failed politics of yesterday’s healthcare debates. … My plan begins by covering every American. If you already have health insurance, the only thing that will change for you under this plan is the amount of money you will spend on premiums. That will be less. If you are one of the 45 million Americans who don’t have health insurance, you will have it after this plan becomes law. No one will be turned away because of a preexisting condition or illness.
— Barack Obama, Speech in Iowa City, Iowa, May 29, 2007
Cost, coverage and choice. The debate over healthcare reform largely boils down to these three topics, although within each there are complicated and controversial issues under consideration as Congress and the White House attempt to move healthcare reform legislation forward.
The Obama administration has identified the following fundamental goals for comprehensive health reform:
- Reduce long-term growth of healthcare costs for businesses and government.
- Protect families from bankruptcy or debt because of healthcare costs.
- Guarantee choice of doctors and health plans.
- Invest in prevention and wellness.
- Improve patient safety and quality of care.
- Ensure affordable, quality health coverage for all Americans.
- Maintain coverage for those who change or lose their jobs.
- End barriers to coverage for people with pre-existing medical conditions.
Clearly, these are laudable goals and most would agree necessary elements of meaningful health system reform. But as history and the legislative process this year in Congress can attest, they are more easily proposed than achieved. Even as the support of the American public for some kind of healthcare reform remains fairly solid, opinion polls suggest increasing skepticism about the details of the effort to overhaul the nationâs healthcare system.
For neurosurgeons, the legislation proposed thus far can be reduced to two basic themes: First, specialists and particularly surgeons are overpaid while primary care doctors are underpaid; therefore healthcare reform legislation must increase fees paid to primary care physicians and focus more resources on preventive services. Second, the healthcare delivery system must be retooled to focus on quality rather than quantity; therefore tests, procedures and expensive technology should be eliminated in the absence of proven benefit to patient care and health outcomes.
The Environment for Health Reform
Much has been made about past failed attempts at enacting national health system reform, from the days of President Franklin D. Roosevelt through the administration of President Bill Clinton. There have been many reasons cited for these failures, including the complexity of the issues, ideological differences, the lobbying of special interest groups, and the lack of individuals willing to make personal sacrifices. However, it seems that passage of meaningful healthcare reform legislation this year is possible if not probable. From a political standpoint, there are a number of key differences that exist today compared to the last attempt at major health system reform in 1994.
Both then and now, the Democrats controlled the White House, House of Representatives and Senate, and the president made healthcare reform a centerpiece of his domestic agenda. However, in addition to holding a sizable majority in the House, the Democrats now number 60 in the Senate. This is the magic number necessary for a political party to invoke cloture—a procedural device that cuts off debate and prevents a filibuster. Congress also has passed a resolution allowing it to bypass regular order and consider healthcare reform in what is called the budget reconciliation process. This fallback procedural approach would allow reform legislation to pass with only a simple majority in each chamber of Congress.
Policymakers also feel more compelled to move forward this year because the ranks of the uninsured have risen from 37 million in 1994 to nearly 47 million in 2009. In addition, fewer Americans are now covered by employer-sponsored health insurance.
Many people believe that the most important difference between then and now, and what makes health reform a must, is the explosion of healthcare costs. In 1994, health spending was approximately 13 percent of gross domestic product; in 2009 it is nearly 18 percent of GDP. Medicare and Medicaid spending as a percentage of GDP also has risen from 3.5 percent to nearly 5 percent. Costs of employer-provided health benefits have doubled, the unemployment rate stood at 9.7 percent in August compared to 6.5 percent in 1994, and the budget deficit as a percentage of GDP is now over 13 percent compared to 2.9 percent in 1994.
Lastly, the Obama administration reportedly has made a number of “deals” with many key stakeholders to get them to support rather than oppose (as they did in 1994) reform efforts. Groups that have announced some kind of support for the presidentâs efforts include the American Medical Association, American Hospital Association, America’s Health Insurance Plans, and Pharmaceutical Research and Manufacturers of America.
Whether altogether these factors will be enough to achieve healthcare reform remains to be seen, but the chances for reform may be better now than at any other time in our nation’s history.
Details of the Health Reform Legislation
While the final chapter on healthcare reform is not even close to being written, the details of the legislation that are emerging largely reflect the vision of President Obama and the Democrats in Congress. The list of issues affecting neurosurgeons is long, and organized neurosurgery is working to ensure that the final legislation reflects neurosurgery’s position on healthcare reform (see AANS/CNS Position on Healthcare Reform, page 12).
The principal bill under consideration in the House is the America’s Affordable Health Choices Act, H.R. 3200. This bill has been amended by the three House committees with jurisdiction over healthcare reform—Ways and Means, Energy and Commerce, and Education and Labor—and now must be reconciled into a final version by the speaker of the House and the House Rules Committee, which is controlled by the speaker.
In the Senate, the Health, Education, Labor and Pensions Committee, known as HELP, amended the aspects of reform under its jurisdiction, including issues related to coverage, health plan standards, quality, and public health, but not issues related to Medicare and Medicaid or financing, which are under the control of the Finance Committee. The Finance Committee has yet to release its version of the bill, and Chairman Max Baucus, a Montana Democrat, and Charles Grassley of Iowa, the senior Republican on the committee, are attempting a bipartisan approach to reform. However, the Finance Committee released three option papers in the spring that signaled the direction it is taking.
Some key reform legislation provisions of particular interest to neurosurgeons follow.
Protections and Standards for Health Plans
- Legislation in the House and Senate includes a number of reforms to the health insurance marketplace. It prohibits the application of preexisting condition exclusions; requires guaranteed issue and renewal of insurance policies; ensures the adequacy of provider networks; and limits the variation in health insurance premiums.
- Basic Benefits The House and Senate bills require health plans to cover certain basic benefits. Under the House bill the benefit package would be developed by the Health Benefits Advisory Committee, chaired by the U.S. Surgeon General. At least one practicing physician must be a member of this committee. The Secretary of the Department of Health and Human Services would determine the benefit package under the Senate bill.
- Consumer Protections The House and Senate bills require health plans to meet certain marketing standards. They are required to establish a timely internal grievance and appeals mechanism and establish an external review process for denied claims. Under the House bill claims must be paid on a timely basis, based on Medicare’s current rules.
- Health Choices Commissioner The House legislation creates the Health Choices Commissioner role, which is responsible for overseeing and enforcing the health plan rules. The commissioner can collect data for the purpose of promoting healthcare quality and value and may share such data with the federal government.
- Health Insurance Exchange The House and Senate legislation creates a nationwide Health Insurance Exchange, or gateway, to give people the ability to choose from a variety of health plans. All individuals are eligible to purchase an exchange plan, as are those whose existing employer coverage is deemed insufficient by the federal government. Once deemed eligible to enroll, individuals would be permitted to remain in the exchange until becoming Medicare-eligible.
- Benefits Under the House bill, the Health Choices Commissioner specifies the benefits to be made available through exchange-participating plans. The commissioner also determines network adequacy and establishes cost-sharing for out-of-network services. Under the Senate bill, the Secretary of HHS undertakes these functions.
- Public Health Insurance Option The House bill authorizes the federal government to operate a low-cost health insurance plan. The plan is capitalized with $2 billion from the federal treasury. Physicians who participate in Medicare will be enrolled automatically as providers in the public plan, but they can opt out. For the first three years, physician reimbursement rates will be based on Medicare plus 5 percent. However, in subsequent years, the U.S. Department of Health and Human Services will have the authority to set rates—higher or lower—and physicians will have no administrative or judicial recourse to challenge payment rates. Furthermore, HHS may use “innovative payment mechanisms and policies” such as bundling, accountable care organizations, pay for performance, and the medical home, to reimburse physicians under the public plan. Medicare balanced-billing limitations apply as do Medicare’s fraud and abuse rules. The Senate has not finalized its policy on the public health insurance option.
Tax Code Changes
The House bill makes a number of changesto the current tax code to achieve universal coverage. Employers have certain cost-sharing requirements for health insurance coverage, and those choosing not to provide coverage must pay an excise tax of 8 percent of average employee wages. Individuals who do not have health insurance coverage are required to pay a tax of 2.5 percent. Universal coverage also is paid for, in part, through increased income taxes on those who make over $350,000 per year as follows: $350,000-$500,000, 1 percent; $500,000-$1 million, 1.5 percent; and over $1 million, 5.4 percent.
Medicare Improvements
- Sustainable Growth Rate In the House bill, the $245 billion debt accumulated under the sustainable growth rate formula is erased, and the new target growth rate system replaces the SGR. The TGR is basically identical to the SGR except that there are two expenditure targets—one for primary care and preventive as well as evaluation and management services, and one for all other services. In addition, the physician spending growth rate is slightly higher. Spending for primary care services is permitted to grow at the rate of gross domestic product plus 2 percent, and all other services are allowed a growth target of GDP plus 1 percent. The details of the Senate proposal are not known at this time, but it is expected that the Senate will neither repeal the SGR nor forgive the debt. Rather, the Finance Committee proposal is likely to include only another temporary “fix” to prevent the 22 percent physician payment cut in 2010, replacing it with a modest increase in physician reimbursement.
- Misvalued Codes Under the Medicare Physician Fee -Schedule The House bill requires the HHS secretary to periodically identify “misvalued” codes used under the physician fee schedule. It further calls for appropriate adjustments to the relative values associated with those codes by identifying the codes that have the fastest growth or substantial changes in practice expense, codes for new technologies, and multiple codes that frequently are billed for a single service. The bill also requires the HHS secretary to establish a process to validate relative value units under the physician fee schedule. This “shadow RUC” is in addition to the American Medical Association’s Relative Value Update Committee, which currently values physician work. Similarly, the Senate Finance Committee released an options paper that demonstrates its interest in establishing an expert panel to assist the Centers for Medicare and Medicaid Services in evaluating and adjusting payment for potentially misvalued physician services.
- Payment for Efficient Areas The House legislation provides a 5 percent incentive payment for physicians practicing in areas that are identified as being the most cost-efficient areas of the country. The Senate is considering options that would cut payments to those physicians in areas that are deemed cost-inefficient.
- Physician Quality Reporting Initiative The House bill extends through 2012 the current 2 percent bonus paid under the Physician Quality Reporting Initiative. The Senate is considering options that would extend the bonus payment through 2010, but after that physicians would be required to participate in PQRI or have their fees cut to a maximum of 5 percent.
- Payment for Imaging Services The House bill decreases reimbursement for the technical component of imaging services, which would affect those physicians who own and operate imaging equipment. The Senate is considering development and utilization of appropriateness criteria for ordering diagnostic imaging services and requiring physicians to report utilization data on designated imaging procedures, including those for low back pain, musculoskeletal disease and headaches. Physicians identified as ordering too many tests to treat these conditions would then face a 5 percent cut in Medicare payment.
- Specialty Hospitals The House legislation prohibits physician ownership of new specialty hospitals, but grandfathers the ownership of all physician-owned hospitals existing prior to 2009. Existing hospitals are permitted to expand in a limited fashion. The Senate is likewise considering this option.
Promoting Primary Care and Coordinated Care
- Accountable Care Organizations The House legislation authorizes pilot programs to develop alternative payment models based on the concept of accountable care organizations. ACOs can include groups of physicians organized around a common delivery system (e.g., a hospital), an independent practice association, a group practice or other common practice organizations. ACOs that reduce overall costs and meet certain quality targets will be financially rewarded. HHS is authorized to implement ACOs on a permanent basis if the HHS secretary determines that they result in less spending. The Senate also is likely to include a provision aimed at moving more physicians into ACOs.
- Medical Home Legislation in the House and Senate expands the current medical home pilot projects under which primary care physicians are paid additional money to coordinate patient care.
- Increased Payments to Primary Care Physicians The House bill gives primary care physicians a 5 percent bonus payment. The Senate is considering an option that would give them a 10 percent bonus payment, of which 5 percent would be budget neutral. That is, 5 percent would be reallocated from the pool of funds paid to nonprimary-care physicians.
Quality Improvement
- Comparative-Effectiveness Research The House bill establishes the Center for Comparative Effectiveness Research within the Agency for Healthcare Research and Quality to conduct, support and synthesize research that compares the effectiveness of healthcare items and services. The legislation calls for a 15-member commission to govern the center and prohibits the center and the commission from mandating coverage, reimbursement or other policies to any public or private payer. The Senate is considering establishment of an independent CER entity outside of the federal government and more protections to ensure that the research focuses on clinical effectiveness, not cost effectiveness, and is guided by expert advisory panels subject to a peer-review process, with adequate opportunity for public comment. The Senate also supports appropriate firewalls to ensure that the CER institute could not mandate coverage or reimbursement policies.
- Quality Measures The House and Senate legislation requires HHS to establish national priorities for performance improvement and to develop new quality measures that reflect these priorities and assess the efficiency and resources used in providing medical care.
- Best Practices The House bill creates the Center for Quality Improvement and charges it with identifying, developing, evaluating, disseminating, and implementing best practices in the delivery of healthcare services.
Physician Payments Sunshine
Both the House and Senate bills contain provisions requiring manufacturers and distributors of drugs, devices, biological products or medical supplies to report to the government any payments or other transfers of value to physicians that exceed -5.
Fraud and Abuse
The House and Senate bills contain increased penalties for Medicare fraud and abuse and give the Centers for Medicare and Medicaid Services increased authority to implement programs to prohibit waste, fraud and abuse.
Physician Workforce
The House and Senate legislation implements a number of policies to encourage more medical students to go into primary care. It allocates unused residency positions funded by Medicare to primary care and funnels graduate medical education funds to residency training programs in nonhospital settings. In addition, the bills in both the House and Senate establish medical student loan repayment programs for those in identified health professional shortage areas, including primary care and general surgery. The legislation also provides grant funding to establish pilot projects for the regionalization of trauma and emergency care.
Prevention and Wellness
The House and Senate bills also contain extensive sections focusing on wellness and prevention and create a number of new programs aimed and improving the nationâs overall health.
Medical Liability Reform Left Out of the Legislation
From the perspective of most physicians, the House and Senate bills cannot be considered comprehensive healthcare reform because they do not include any meaningful medical liability reform. It is well documented that medical liability reform is crucial to protecting patientsâ access to quality care and slowing the rising cost of healthcare. The inefficiencies of the current medical liability system, escalating and unpredictable awards, and the high cost of defending against lawsuits, even those without merit, contribute to the increase in medical liability insurance premiums, which are at or near all-time highs. As insurance becomes unaffordable or unavailable, physicians must make tough decisions, including altering or limiting their services because of liability concerns, which impedes patient access to care. In addition, the cost of the liability system is borne by everyone as defensive medicine adds billions of dollars to the cost of healthcare each year, which means higher health insurance premiums for patients.
Last October, then-candidate Barack Obama wrote in the New England Journal of Medicine that he would be “open to additional measures to curb malpractice suits and reduce the cost of malpractice insurance. We must make the practice of medicine rewarding again.” The AANS, with the Congress of Neurological Surgeons and other coalition partners, are pressing Congress and President Obama to heed these words and include effective medical liability reform in the final healthcare reform bill.
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| Table: Advantages and Disadvantages of Potential Medical Liability Reforms Click to enlarge |
Outlook for Reform
As of press time, it is hard to predict the outcome of the healthcare debate. The three House committees with jurisdiction over healthcare reform have completed their work, and a final version of the House bill likely will be drafted and voted on by the House of Representatives sometime between late September and mid-October. In the Senate the HELP Committee finalized its version of health reform legislation, but the critical Finance Committee has yet to produce a bill, although, as previously noted, this committee has done quite a bit of preliminary work on various policy options for inclusion in its version of reform legislation. Once the Finance Committee completes its work, a final bill must be drafted for consideration by the full Senate. President Obama has called on Congress to send him a bill to sign by October, but most observers believe that it is impossible to meet this deadline and that it is more realistic to look at passage just before or after Thanksgiving—assuming Congress can pass a bill at all.
Given the politics, particularly on such wedge issues as the public health insurance option, individual and employer coverage mandates and increased taxes, plus the trillion dollar price tag, odds for passing “comprehensive” reform are probably 50-50 at best. Despite these steep odds, it is virtually certain that Congress will pass some form of healthcare legislation this year. One of the key incentives to act is the looming 22 percent Medicare physician pay cut scheduled to go into effect on Jan. 1, 2010. Few members of Congress would want to go home for the December holidays without having fixed this problem. There also are other issues on which Congress and the president are likely to reach bipartisan consensus, including improvements for primary care and the implementation of some health system reforms, such as the creation of the health insurance exchange and eliminating preexisting conditions exclusions.
In the end, especially if the majority of Americans are basically happy with their current health coverage, as most polls demonstrate, any reform legislation that achieves passage is likely to fall short of the president’s proposed fundamental goals. However, neurosurgeons can expect that the
Katie O. Orrico, JD, is director of the AANS/CNS Washington office.
Healthcare Reform Resources
The following Web sites offer key information on the policy options under consideration from a variety of perspectives:
www.aans.org/legislative/aans/Neuro_HealthCareReform.asp
www.ama-assn.org/ama/pub/advocacy/health-system-reform.shtml
https://healthcarereform.nejm.org/?query=rthome
www.healthreform.gov/
www.gop.gov/solutions/healthcare/resources
www.majorityleader.gov/members/health_care.cfm
https://finance.senate.gov/healthreform2009/home.html