July 02, 2014
The White House’s Council of Economic Advisors released a report this week that is clearly intended to intensify the pressure on the 24 states that have, thus far, refused to expand their Medicaid programs, as provided for under the Affordable Care Act. As we recall, the U.S. Supreme Court ruled that the federal government cannot compel states to go along with the Medicaid eligibility expansion and many, predominantly with Republican governors and/or legislatures, have elected to pass.
In its report, the White House’s economic advisors make the point that almost 5.7 million more Americans will have health coverage in 2016 if these currently non-compliant states embrace expansion.
We’ve made clear in this space the Healthcare Leadership Council’s view that Medicaid is not the best option for reducing America’s uninsured rolls. Medicaid’s reimbursement rates for doctors and hospitals, significantly lower than private insurance and even Medicare, underscore the point that coverage does not necessarily equal access. Nonetheless, less-than-ideal coverage is better than no coverage for the millions of Americans who need healthcare but can’t afford to pay the providers who are delivering that care.
But, while it’s easy to blame states for not getting on board, the Administration needs to recognize its own responsibilities in this area.
It is fortuitous timing that the White House report was released in the same week that the state of Indiana submitted its proposal to the Department of Health and Human Services for an expansion of its Healthy Indiana program as an alternative to enlarging traditional Medicaid. As Indiana governor Mike Pence wrote in an op-ed, Healthy Indiana 2.0 is a better fit for the sensibilities of his state in that in that enrollees can take greater control of their own healthcare decisions through contributions to private accounts that are not unlike health savings accounts.
As he put it, “As national leaders in healthcare innovation, Hoosiers understand empowering people to take greater ownership of their healthcare choices is better than government-driven healthcare.” Pence backed up his rhetoric with metrics showing that Healthy Indiana participants use preventive health services at a high rate while making less use of expensive emergency room care.
The Indiana case, as well as the movement toward innovative Medicaid plans in Iowa, Arkansas and other states, emphasizes the argument that flexibility is critical in bringing Medicaid expansion to all 50 states. It’s simply a political reality that many states with conservative-leaning leaders do not like ‘Obamacare,’ don’t necessarily trust the federal government to keep its promises in regard to financial support for Medicaid expansion and are not going to change their current programs.
On the other hand, granting flexibility to make better use of private health plans and to incorporate patient engagement and responsibility can help resolve a situation in which we’re essentially two separate nations when it comes to Medicaid. HHS approving the Indiana proposal would be an excellent step in this necessary direction.
April 07, 2014
Wing of Zock is the blog for faculty, students, administrators and other stakeholders connected to medical schools and academic teaching hospitals. Recently, the blog carried a post that I think is well worth publishing in this space. While a debate is ongoing concerning the value and advisability of private philanthropic investment in medical research, more attention needs to be paid to the anemic pace of federal funding for the foundational biomedical research that leads to new treatments and cures.
Ann Bonham, Ph.D, the chief scientific officer for the Association of American Medical College elaborated on this point eloquently and effectively in her Wing of Zock post. We’re pleased to repost it here….
On March 15, 2014, The New York Times Sunday edition published a front page story by William J. Broad, “Billionaires with Big Ideas Are Privatizing American Science.” The piece drew nearly 500 comments on the Times’ website in 24 hours, debating the pros and cons of philanthropic support for research.
Philanthropic investment in research is most welcome, but I was struck that this story made the front page, over a much less flashy yet far more important story: that the nation’s entire biomedical research enterprise may be in peril from a lack of federal investment. However generous, philanthropy cannot begin to substitute for a national commitment to medical research.
Between 1998 and 2003, the federal government essentially doubled the funding for biomedical research through appropriations made to the National Institutes of Health (NIH), the largest funder of basic biomedical science in the world. That significant investment led to breakthroughs in the diagnosis or treatment of many diseases in the past decade that were derived from basic science funded, at least in part, by the NIH.
Basic science is a high-risk investment. It can be serendipitous and unpredictable, and requires a large upfront commitment of time and energy. Some of the most major breakthroughs begin with small, unglamorous steps that require unimaginable commitment of time and energy, yet can eventually result in innovative new diagnostics, treatments, and sometimes cures.
As one example, in the 1960s, Dr. Osamu Shimomura and colleagues examined the properties of bioluminescence—the biochemical emission of light by living organisms—in jellyfish. He asked the question: How do these organisms biochemically emit light? An interesting question, although it would hardly have made the front page of the New York Times, or otherwise garnered much attention. The team identified a key protein, named aequorin, and elucidated how it worked chemically to make light emission possible. The finding eventually led to the identification of “green fluorescent protein” or GFP.
Shimomura did not work alone; other investigators made critical contributions to developing GFP as a biochemical marker that makes it possible to monitor gene expression and track the resultant protein movement within individual cells. GFP is now one of the most widely used scientific tools, enabling many other remarkable discoveries of how genes, proteins and cells function in health and disease. For the development of GFP, Shimomura and others were awarded the 2008 Nobel Prize in Chemistry, nearly five decades after his original discovery.
I have previously noted my favorite example: Dr. Elizabeth Blackburn and collaborators performed experiments, more than three decades ago, on Tetrahymena (or “pond scum”), a single-celled protozoan,to answer a fundamental question: How do cells overcome an inherent biological step that shortens their DNA molecules each time the cell undergoes normal replication? Given this phenomenon, the strand of DNA could become so short with repeated cell divisions that part of the genetic blueprint would be lost, and humans would lose their ability to develop normally. Another interesting question, but the future impact on medicine and science was still to come.
As it turns out, discoveries made using this seemingly unremarkable pond-dwelling organism uncovered the existence of a protective cap on the ends of the pieces of DNA, “telomeres,” that essentially protects the DNA during cell division. That discovery triggered thousands of additional experiments in laboratories around the world that continue to this day. And because of those studies, each one building on prior work, we have an advanced understanding of cells that serves as the basis for innovative treatments for neurodegenerative disorders and cancer. Dr. Blackburn and her colleagues were awarded the Nobel Prize in Physiology or Medicine in 2009.
Those are two examples. There are thousands of others. Based on current investment trends, it is unlikely that philanthropic donors or private sector research and development would have been interested in funding the original exploratory research on pond scum. Historically, the federal government has been the primary funder of this sort of high-risk basic science, because of both the proximal outcomes—fundamental discoveries that lead to clinical breakthroughs—and the distal outcomes—a stronger, more competitive and productive nation. These basic breakthroughs taking place in laboratories across the nation, and the public support that makes them possible, rarely are covered in the news or seen in the public eye.
Despite vocal bipartisan support for fundamental biomedical research, the commitment to federal funding does not match the rhetoric. We are now in the middle of an “un-doubling” of the NIH budget. In 2014, the federal appropriations for NIH—while nominally about $30 billion—is closer to the year 2000 level ($20 billion) when inflation and costs of doing research are considered. This year’s appropriation fell far short of simply breaking even with 2012. As a result, there are far fewer NIH-funded research project grants. Some of the brightest scientists in the nation have lost federal support and are shutting down their laboratories and laying off skilled technicians, unable to support their research teams and forced to put bold new ideas on hold. Even the most committed of our younger scientists are thinking twice about beginning a career in research in the public interest. This lost momentum and collapse of research infrastructure stifles potential breakthroughs from high-risk basic science that will take decades to recover, or may not be salvageable at all.
All this leads to one question: Now what? As the GFP and pond scum stories illuminate, we can start by turning our basic science breakthroughs into headlines that will captivate the public, and better explain the time lag between discoveries and clinical translation. But most important, we should rethink altogether how Congress allocates funds for biomedical research.
Current funding for NIH is in the discretionary spending category, which makes it subject to an annual appropriations process by Congress. What if Congress, while honoring the annual appropriations process, committed to a multi-year, predictable, modest increase in funding for biomedical research? The relative risk of committing to a steadily increasing funding scheme over the current annual appropriations process, which has resulted in the sobering and unrelenting decline in federal dollars, seems quite low—especially when considering the impacts of federal support on the health of our citizens who make our nation more productive, more competitive, and more innovative.
So let’s not be diverted into arguing the pros and cons of philanthropic funding for research. Instead, let’s focus on preserving the much larger and essential public investment that saves lives.
March 11, 2014
If I had the ability to make anything required reading for the powers that be in Washington, D.C., it would be Dr. Marc Grodman’s blog post on The Hill’s website. Dr. Grodman is CEO of Bio-Reference Laboratories, Inc., a New Jersey-based clinical lab and is also a member of the Healthcare Leadership Council. In his post, he explains clearly and compellingly that simply cutting healthcare spending is not inherently synonymous with achieving a more cost-effective healthcare system.
Dr. Grodman uses the Medicare reimbursement cuts faced by clinical laboratories as his example, pointing out that simply chopping away at Medicare payments for lab services will undermine the advancements laboratories have made in developing genetic testing “that precisely identify disease, (enabling doctors) to select the best treatment for each patient,” speeding the healing process and reducing overall healthcare costs.
If reimbursement cuts hamper this progress, he writes, physicians must rely more on trial and error, leading to greater redundancy, higher cost and reduced quality.
This is true for clinical labs, but it speaks to a larger issue surrounding healthcare policymaking. Even though per-capita Medicare spending is at historic lows, many on Capitol Hill insist there’s a healthcare spending problem. In part, they are right because the aging of the baby boom population and the rapid growth in new Medicare beneficiaries will lead to a rise in utilization of healthcare services. We can’t address this rapid growth in patient numbers and demands, however, by enacting healthcare budget cuts that have no correlation with healthcare value.
As Dr. Grodman writes, “We have yet to establish the balance between managing the cost to provide and access healthcare with maintaining the ability for development at all levels of the care spectrum.”
Finding that balance is imperative if we’re to meet the daunting healthcare challenges that are inevitable and that can’t be addressed without health innovation.
February 19, 2014
In a town that thrives on disagreement, there is a stunning degree of unanimity around the idea that the Center for Medicare and Medicaid Services (CMS) is moving in the wrong direction with its proposed regulations that would bring about sweeping changes to the Medicare Part D prescription drug program.
Over 230 organizations – representing patients, seniors, multiple healthcare sectors, employers and Americans with disabilities — have signed a letter that was delivered to CMS, urging the agency to withdraw the proposed rules. The letter states that the regulations “will severely impede beneficiaries’ access to affordable health plans and medications and threaten “to disrupt the positive effect the (Part D) program is having on beneficiaries’ health and the Medicare program as a whole.”
In thinking about these proposed rules, the first question that comes to mind is……why? The Medicare Part D program, as it stands, is an irrefutable success story. It has the approval of 90 percent of seniors. Average monthly premiums have remained at steady, affordable levels. And the cost to taxpayers over the past decade has been more than 40 percent below original Congressional Budget Office projections.
So why attempt to “fix” what isn’t at all broken?
These rules aren’t a case of tinkering at the margins of the Part D program. We’re talking about fundamental changes in how the system operates. The rules would place new restrictions on the Part D plan options available to seniors. There would be changes in the range of medications that could be available in certain pharmaceutical classes. And Congress’s clear intent that pharmaceutical pricing be determined by private sector negotiations – with the federal government keeping hands off – would be blatantly disregarded. Part D’s success in delivering affordability and healthcare quality would be placed at risk.
This is not to say that CMS, healthcare sectors and patients shouldn’t work together to continually improve the Medicare prescription drug program, but any changes should build upon the fundamental principles of consumer choice and competition that have made the program successful and improved the health and well-being of millions of beneficiaries. These proposed regulations don’t meet that criteria and, in fact, would undermine those core strengths.
November 21, 2013
There is more good news on the healthcare cost front. The White House Council of Economic Advisers has issued a report noting that real per capita healthcare spending has increased in this decade at an average annual rate of just 1.3 percent. This lower spending rate – which encompasses Medicare, Medicaid and private health insurance – represents the lowest healthcare price inflation rate in 50 years.
(Reasonable people will have differences on the reasons for this cost containment success. The White House, understandably, wants to give ample credit to the Affordable Care Act. Some say it’s a result of the nation’s economic stagnation. I would argue that innovations in many healthcare sectors – documented in detail here – are providing patients and consumers with higher quality at less cost.)
This continuing trend regarding healthcare costs deserves special attention as a special joint congressional committee negotiates budgetary issues. There is a desire among many lawmakers to do away with all or part of the budget sequester and replace it with targeted cuts. The data we’re seeing from the White House and other sources underscores that there is no compelling reason to target healthcare programs for arbitrary reductions, cuts that could have an adverse impact on access, quality and innovation and undo many of the successes we’re seeing in containing long-term cost escalation.
Instead, if Congress is looking for some possible pools of money to replace sequester cuts, a good idea might be hiring the Pentagon some better accountants to see what the military is getting for trillions of dollars in spending that has, according to a Reuters investigation, never been sufficiently audited. Just a thought.