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Can a New York Congressional Race Affect Medicare’s Future?

May 26, 2011
12:55 pm

The Capitol Hill publication Politico had an interesting headline this morning.  It read, “Is Any Medicare Reform Political Suicide?”  That’s a natural question to ask, given the fact that the political pundits are pegging a Republican defeat in this week’s special congressional election in New York’s 26th district on Congressman Paul Ryan’s Medicare reform plan.  (The fact there was a Tea Party candidate on the ballot siphoning off votes from the Republican candidate likely made a difference as well, but the Ryan angle makes better copy.)

This is a question, though, that deserves serious discussion.  Has Medicare reform replaced Social Security as the so-called ‘third rail’ of American politics – touch it and you die, politically?

Let’s certainly hope that’s not the case.  The recently-released Medicare trustees report was a harsh reminder that the program’s window of financial solvency is closing, more rapidly than previous trustees reports projected.  In this political climate, we’ve seen rhetoric that would lead us to believe that the choice is between the Ryan plan and keeping Medicare as it is.  Both sides of that equation are false.  The Ryan plan isn’t the only proposal out there that deserves consideration, but maintaining the status quo isn’t an option at all.

Even the New York Times editorial page acknowledged today that politicians “will have to admit that Medicare cannot keep running as it is.”

We simply can’t afford to allow serious discussions on how to protect Medicare’s future become politically radioactive.  Doing nothing will eventually leave policymakers with a choice of deep benefit cuts or tax increases in order to keep the program solvent.  Perhaps the consensus will be that the Ryan plan, as currently written, isn’t the answer.  But then, that shouldn’t rule out  consideration of the premium support model, for example, advocated by former Clinton budget director Alice Rivlin and former Senator Pete Domenici (R-NM).

The bottom line is, though, that politicians need to let go of the short-term gains that come from demonizing those who advocate Medicare reforms.  Instead, both political parties need to realize that pretending the status quo is a viable option only hastens an undesirable future.

Congresswoman Schwartz Wins USA Today Face-Off

May 24, 2011
1:43 pm

It wasn’t a head-to-head battle, as such, but Congresswoman Allyson Schwartz (D-PA) squared off against the USA Today editorial board yesterday on the subject of the Independent Payment Advisory Board (IPAB), and I believe the lawmaker clearly made the better arguments.

USA Today’s editorial made the point that the IPAB, created as part of the Affordable Care Act to curb Medicare costs, is essential to do the job that Congress won’t in cutting program spending.  The newspaper compared the new board to the base closing commission that successfully shuttered unneeded military installations.

That’s a dubious argument, though, at best.  The base closing commission carefully studied the value and usefulness of military bases before choosing which ones could be closed without undermining national security.

IPAB will function in a completely different way.  If Medicare spending goes above arbitrary levels, then the board will bring the ax down on program budgets without regard to quality, value or seniors’ access to healthcare.   We’re facing a near future in which the senior population will be rising in number while physicians will be in shorter supply.  Simply cutting provider payments is the wrong answer.

Congresswoman Schwartz, in her response, acknowledged that Medicare costs must be contained, but she wrote that the solution is to reduce costs through innovations in health delivery to “reduce errors, eliminate duplication and waste, use technology to safely share information, and coordinate care between practitioners and settings.” 

She said it best when she wrote, “The threat of reduced payments is the least imaginative option.”  She’s absolutely right, and Washington can and should address the Medicare cost issue more creatively and effectively without diminishing healthcare for those who need it most.

Vermont and The Road Less Traveled

May 13, 2011
11:16 am

When it comes to health policy, all eyes seem to be cast toward New England these days.   The high-profile issue this week is Mitt Romney’s defense of the health reform enacted during his Massachusetts governorship and his battle with the Wall Street Journal over its merits.

I think, however, a more interesting story is developing in Vermont.

Later this month, Vermont Governor Peter Shumlin is expected to sign legislation that would, in essence, create a single-payer healthcare system in the state.  The framework of the proposed Green Mountain Care system is essentially this (it’s explained very well in a question-and-answer piece in The Washington Post):  The state would roll up all of its payers – state and local employees, Medicaid and Medicare beneficiaries, individual and small group plans – into one system, with all of the dollars received for their coverage going into Green Mountain Care, which would become the sole health payment system in the state.  Vermont will need Medicare and Medicaid waivers from the Obama Administration to make this work, as well as cooperation from the state’s largest insurer, Blue Cross Blue Shield of Vermont, which has already declared its support (and would likely be the hands-on administrator for the new system).

Sounds neat and simple, and it’s getting raves from those who have long supported a national single-payer system, but there are some critical questions left to be answered.

First, what does Vermont do with the large employers who are self-insurers and covered under federal ERISA regulations?  One theory, expressed in the Washington Post articles, is that these employers will be taxed anyway to help pay for Green Mountain Care and, therefore, they’ll decide it’s cost-efficient to put their employees in a system they’re helping to finance.

Another question concerns the dual challenges of how to pay for a state-run single-payer system and how to contain healthcare costs to make it affordable.  Part of Vermont’s answer is the creation of a Green Mountain Care Board, sort of a revved-up version of the controversial Independent Payment Advisory Board (IPAB) that would have rate-setting powers for doctors, hospitals, pharmaceutical products and medical devices. 

This is where Vermont’s economic and healthcare future gets a little precarious.  You see, there’s a major difference between enacting state policy and writing federal laws.  If individuals and employers believe they’re being hurt by a new state law, it’s not all that difficult to pick up stakes and move to another jurisdiction.

Will employers be open to the higher taxes that will accompany a single-payer healthcare system?  What will happen when the state has to ratchet down on physician reimbursements to keep Green Mountain Care affordable?  Will New Hampshire be the beneficiary of Vermont’s sharp swing to the left in health system transformation?

Some groups will, no doubt, judge Green Mountain Care a success if it drives private insurers out of the marketplace and replaces them with state-run healthcare.  Vermont citizens, though, may hold their judgment until they see if jobs and doctors start an exodus across the state line.

The Week’s Most Interesting Healthcare Reading (that you might have missed)

May 06, 2011
1:10 pm

With the front pages focused on foreign policy and national security of late, there have been a number of interesting health-related stories that may have skipped your attention.  Here are a few we found worth highlighting:

•      Ian Read, CEO of Pfizer, an HLC member, had an interesting discussion with the Wall Street Journal on the pharmaceutical industry’s social obligation to patients.

•      In a significant eye-opener, veteran Congressman Barney Frank (D-MA) said medical liability reform should be a part of deficit reduction, and shouldn’t be applied only to Medicare cases.

•      The Healthcare Leadership Council and several other health and employer organizations have formally advocated repeal of the Independent Payment Advisory Board (IPAB), saying it would result in costs being shifted to consumers.

•      AdvaMed, the association representing medical technology innovators, announced that former President George W. Bush will attend its annual conference in September.

•      Eli Lilly has joined with other advocacy organizations and employers to launch the Campaign for Modern Medicines, a public education initiatives focused on the legislative and regulatory steps necessary to bring new medicines to patients faster.

Medicare Reform Not Always a Partisan Issue

May 02, 2011
1:31 pm

At this moment, there appear to be few issues that elicit has much partisan rhetoric as Medicare reform.  Ever since Congressman Paul Ryan (R-WI) released the House Republicans’ 2012 budget proposal – a proposal that includes a transition of Medicare to a “premium support” model, in which the federal government will provide a financial contribution to assist beneficiaries in choosing from a list of private health coverage plans – there has been a pitched battle in the media between Democrats and Republicans over whether such a change would mean essentially an end to Medicare and be harmful to beneficiaries.

But the Washington Post reminded us this weekend that the premium support concept has its roots in bipartisanship.  The idea was, in fact, endorsed by the Bipartisan Commission on the Future of Medicare, which did its work in the late 1990s.  One of the co-chairs of that commission, then-U.S. Senator John Breaux (D-LA) championed the approach, saying “Medicare as we know it is going to end by itself if we don’t make some changes.” 

More recently, Alice Rivlin, President Clinton’s budget director, worked with Congressman Ryan on a bipartisan premium support proposal when they were both members of President Obama’s bipartisan deficit reduction commission (although she makes it clear that she does not support the current Ryan plan).

Senator Breaux and I have served together as co-chairs of the Medicare Today coalition, a group that helps provide information to seniors about the Medicare Part D prescription drug benefit.  Senator Breaux has told me that his work on the Part D issue has convinced him that seniors value the ability to make their own healthcare decisions, including a choice of coverage plan, and that supporting this freedom of choice really should be a bipartisan objective.

It isn’t bipartisan today, but we can only hope that as work continues on making Medicare sustainable for future generations, we’ll rediscover the bipartisanship that existed on Senator Breaux’s Medicare commission and see Democrats and Republicans working together to make changes the program needs to live on for future generations.