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The Sleeping Danger

January 24, 2013
10:18 am

Some suggest the Independent Payment Advisory Board (IPAB) is a beast without teeth.  After all, President Obama has yet to nominate any individuals to serve on the 15-member board, and lower-than-norm Medicare spending increases suggest that IPAB wouldn’t be triggered to act anyway to cut Medicare costs.  That’s the benign view.  By contrast, the American Association of Neurological Surgeons in its Neurosurgery Blog referred to IPAB yesterday as “No Good Rotten Very Bad News for Medicare.”

On the whole, we believe the neurosurgeons’ perspective is the correct one.

Yesterday, Congressman Phil Roe (R-TN) and a bipartisan list of cosponsors introduced the “Protecting Seniors’ Access to Medicare Act,” a measure that would repeal IPAB.  It’s imperative that Congress act on this legislation this year and not put the issue on a back burner in the mistaken belief that is not a real threat to Medicare beneficiaries.

As to the matter of the President not yet nominating anyone to serve as IPAB members, Margot Sanger-Katz pointed out in yesterday’s National Journal that IPAB’s power does not disappear with a lack of appointees.  The board’s power doesn’t disappear, but rather shifts to the Secretary of Health and Human Services, still leaving the executive branch with unprecedented powers over Medicare spending that are traditionally (and, we believe, constitutionally) reserved for Congress.

Also, leaving IPAB in place creates a false sense of security that reforming the Medicare program is not an urgent imperative, that a failsafe mechanism is there to keep spending increases from becoming excessive.  But, as I pointed out in my letter to Congressman Roe yesterday, “”the bulk of any recommended spending reductions will almost certainly come in the form of payment cuts to Medicare providers.  This will affect patient access to care and innovative therapies.”  Certainly, the number of health providers refusing to see new Medicare patients because of comparatively low reimbursement rates on the increase, arbitrary IPAB cuts that focus on numbers without regard to access, quality or value represent an ill-conceived solution to Medicare’s financial challenges.

IPAB may not look particularly dangerous to millions of Medicare beneficiaries at the current moment, but it inevitably will be.  It needs to be defused before it can do serious damage.

Attacking the National Obesity Problem, Community by Community

January 18, 2013
2:02 pm

An important development took place today in the war against obesity, one of the nation’s most significant healthcare challenges.  At the winter meeting of the U.S. Conference of Mayors in Washington, D.C., the Conference joined with Weight Watchers CEO David Kirchhoff to announce a new Healthy Communities Grant Program that will commit tangible resources to improving the health of at-risk populations.

There is no questioning the link between obesity and significant health problems.  A report by the Robert Wood Johnson Foundation issued last fall included projections that, by 2030, every state in the union will see at least 44 percent of its citizens classified as obese, with 13 states hitting obesity rates over 60 percent.  The report also projected this obesity epidemic will result in diabetes rates increasing from the current 1.9 million new cases per year to almost eight million new cases annually.  Heart disease and stroke will see similar escalations.

That’s what makes today’s announcement by the mayors and Weight Watchers, a Healthcare Leadership Council member, so significant.

In three cities, particularly in low-income areas with higher-than-normal risks of obesity, pilot initiatives will be launched to bolster their current wellness programs with steeply discounted Weight Watchers memberships for local residents who quality based on health status and financial need.  The key here is that Weight Watchers programs have a track record of proven effectiveness in helping people not only lose weight but, more importantly, manage their weight through healthy eating and lifestyles.

As Kirchhoff said, “If we do nothing, by 2030, estimates predict roughly half of all U.S. men and women will be obese.  We need to act now with solutions that are proven to be effective.  Collaborating with the U.S. Conference of Mayors on this initiative is part of our commitment to form unique relationships with mayors to tackle obesity with community-based solutions.  Through this effort, we can provide Weight Watchers’ proven approach to weight loss to individuals who otherwise would not be able to afford our program.”

At HLC, we’ve seen on programs from Medicare drug coverage to linking uninsured people with health coverage resources that community-based approaches provide the greatest opportunity for success.  For the sake of our nation’s health, let’s hope the Conference of Mayors-Weight Watchers alliance yields significant gains in weight loss and healthy lifestyles.  Maintaining a sustainable, affordable healthcare system depends on reducing the factors, including obesity, that lead to serious, and expensive, chronic diseases.

Taxes and Consequences

January 11, 2013
1:32 pm

When health insurance premiums go up, howls of indignation are almost certain to follow.  We’re seeing that in various news stories around the country right now, as likely premium hikes for 2013 are coming into clearer focus.

An article today in Politico, though, makes clear that any finger-pointing directed at health insurers is misplaced.  The Jennifer Haberkorn piece notes that a major factor in premium increases is the Patient Protection and Affordable Care Act (PPACA) or, more specifically, the taxes on health insurance companies that are part of the health reform measure.

PPACA includes a tax on insurers that begins at $8 billion in 2014 and, within four years, increases to $14 billion.  Because many health insurance policies being written this year carry over into 2014, that forthcoming tax is affecting today’s premiums.  In fact, according to a report by the Oliver Wyman consulting firm, the health insurance taxes and fees included in PPACA will increase the costs to cover an individual in the small group market by $2,800 on average.

So, the organizations that will inevitably protest rising health coverage costs and urge state regulators to deny requested rate increases would do well to remember that you can’t have new taxes and fees without also accepting the pricing consequences that invariably come with them.  And, if Congress is concerned about the impact on consumers and small businesses, then lawmakers should revisit the wisdom of paying for health reform with health sector taxes that have a negative impact on the economy.

Washington’s Economic Disconnect

January 07, 2013
1:40 pm

The December employment report issued by the Department of Labor found that the health care sector was responsible for one of every three new jobs created during the month.  This is not an aberration.  In 2012, as the economy still struggled to gain positive traction, more than 391,000 new healthcare jobs were created, making it the second most dynamic sector in job creation after professional services.  And most healthcare jobs tend to have higher-than-average salaries, leading to increased tax revenues.

That’s what makes the “fiscal cliff” bill passed by Congress, as the calendar turned to 2013, so perplexing.  Besides the tax increases and postponing the planned budget sequester, the measure included a number of financial boosts for various industries.  There was, among other goodies, $59 million for biofuels, $78 million for NASCAR and $222 million for Puerto Rican rum producers.

Even the motion picture industry (at more than $10 a pop for tickets, who knew Hollywood was an endangered business?) had $248 million dropped into its lap.

And yet, for a healthcare sector that is driving economic recovery, there were few good tidings.  Yes, the nation’s physicians avoided a massive cut in Medicare payments, but it was paid for by trimming hospitals’ already-thin financial margins.  The medical device tax that is literally eliminating jobs remained intact, as did the taxes and fees being assessed to other health sectors as part of the Patient Protection and Affordable Care Act.

One would think Washington’s decisionmakers would want to fuel a demonstrably-successful engine of job growth instead of putting on the brakes.

Then again, maybe we’ll see a better grade of movies in 2013.

Striking Back Against the IPAB Power Grab

January 03, 2013
3:06 pm

One of the key criticisms of the Independent Payment Advisory Board (IPAB) is that it encroaches upon congressional powers.  The IPAB provisions in the Patient Protection and Affordable Care Act (PPACA) state that the 15-member panel’s Medicare spending cut recommendations must take effect unless Congress approves an alternative that achieves at least the same level of savings.  The law also dictates that the IPAB recommendations will be placed on the congressional fast track with limited debate.

Today, Congress, or at least the House of Representatives, decided to reclaim its traditional prerogatives.

The rules for the newly-sworn-in 113th Congress include language that essentially declares that the House, not a board of political appointees, will decide how Medicare spending decisions will be made.  The rules state that the House will not be bound by PPACA requirements that IPAB recommendations cannot be changed or repealed, or that debate must be limited.  In fact, the House, according to The Hill’s Healthwatch blog, would appear to be signaling that it won’t be compelled to bring the IPAB recommendations up for a vote at all.

Of course, the preferable policy alternative is to pass legislation to repeal the ill-conceived IPAB concept altogether.  As we’ve discussed in this space previously, the IPAB structure will almost certainly lead to arbitrary Medicare cuts that are intended to hit numerical targets instead of improving the value of healthcare.  Yes, Medicare can and must be made more cost-effective.  Simply chopping away dollars, and likely reducing healthcare access and undermining quality improvements in the process, is not the way to do it.

But until Congress acts to do away with IPAB, the House’s new rules represent welcome preventive medicine.