Eating an Elephant
A sampling of the plateful of proposals in the Senate health care reform bill.
By Charles R. Meyer, M.D.
On December 24, 2009, the U.S. Senate delivered a Christmas present to the American people: a health care reform bill. Whether the present was a glittering jewel or a lump of coal depends on one’s politics and one’s view of the plight of the health care system. Lawmakers had spent months coming up with ideas, haggling over prices, and measuring value; and throughout much of the process, the spirit seemed decidedly un-Christmaslike. The product of their efforts was a 2,400-page tome with innumerable titles, sections, and parts reminiscent of those toys with 1,000 moving parts that baffle dads for hours on Christmas afternoon.
Despite the apparent Christmas Eve victory for Democrats promoting health care reform, the battle is far from over. Reconciling the differences between the House and the Senate bills promises to be contentious. The House and Senate debate on the compromise bill will likely revisit many of the hot-button issues that have made headlines during the last nine months. And if signed legislation leaves President Barack Obama’s desk, the battleground will shift as individual states then grapple with the state-related provisions of the legislation. Indeed, in some states action is already being taken to block what is seen as undue and perhaps unconstitutional federal control of state health care delivery.1
The complexity and expanse of the Christmas Eve bill, the Patient Protection and Affordable Care Act (HR 3590), has become legendary. Many months ago, I decided to try to educate myself about the bill as it developed. I read books about health care reform. I monitored an online course about the topic offered by Princeton University. And I read pertinent New York Times and Washington Post articles and op-ed pieces whenever I saw them. Obscuring a true understanding of the bill was the cant and the rant from both sides of the political spectrum fueled by inflammatory labels such as “death panels,” the “Nebraska compromise,” and “the Louisiana purchase.” Lots of heat and little light were coming out of the media reports from Washington, so I felt I needed to go to the original source.
Yet when I viewed the bill on Thomas.loc.gov, I had the same feeling I remember having when I first opened my neuroanatomy book and saw the hundreds of polysyllabic terms describing an intricate, tangled structure. Although comprehension seemed like an insurmountable task, I decided I needed to eat the elephant. So I took my first bite.
Reading the Bill
Understanding how a Congressional bill is constructed was the first challenge. Bills appear in outline form with headings identifying the levels of the outline—title, subtitle, part, and subpart in descending order with sections appearing as expansions at all levels of the outline. HR 3590 contains 10 titles: quality affordable health care for all Americans, role of public programs, improving the quality and efficiency of health care, prevention of chronic disease and improving public health, health care workforce, transparency and program integrity, improving access to innovative medical therapies, community living assistance services and supports (CLASS), revenue provisions, and strengthening quality, affordable health care for all Americans. Each of these titles has multiple subtitles, which in turn have multiple parts that ... you get the idea. And then there are the amendments. The so-called Manager’s Amendment, which hit the Senate floor December 19, added another 384 pages to the overall bill. Clearly, I needed a waiter’s recommendations to consume this beast.
So I looked for guidance. Unfortunately, Mr. Cliff hadn’t come out with a yellow-and-black booklet on HR 3590, but I did find helpful summaries on a number of websites. The American College of Physicians posted a summary in grid format on December 21.2 The AMA has a similar grid.3 The Congressional Budget Office’s letter to Senate Majority Leader Harry Reid also contains a good analysis.4
Health Care Coverage
One of the driving forces for health care reform this year was the number of Americans without health insurance. Since the 45 million who are uninsured lack insurance for a variety of reasons, HR 3590 provides added coverage through multiple mechanisms. It enables an estimated 15 million more people to qualify for Medicaid by allowing anyone with income below 133 percent of the federal poverty level (FPL) to qualify. (The current FPL is $10,830 for an individual in the lower 48 states and $22,050 for a family of four.) For people whose income falls between 133 percent and 400 percent of poverty, the bill provides tax credits on a sliding scale to fund premiums for qualified health plans. It pulls in people previously ineligible for insurance by banning exclusions based on pre-existing conditions and, in one of the provisions that will start in 2010, it creates a temporary high-risk pool with subsidized premiums for those who have been denied insurance for more than six months.
Responding to widespread concern about government involvement in health care, the Democrats in the Senate scrapped the so-called public option included in the House bill. They have, however, continued to support the idea of an insurance exchange, a marketplace of insurance plans that meet defined criteria for benefit packages, hospital contracting, and cost margins. A new section added in the Manager’s Amendment called for the establishment of “multi-state plans” modeled on the Federal Employees Health Benefit plan. The bill also establishes a Consumer Operated and Oriented Program (CO-OP) to encourage the creation of nonprofit, member-run health insurance companies in all states. All of these provisions attempt to rebut the allegation that the federal government is entering the health insurance fray as a player with unfair advantages.
With all of these proposals, Congress cracks open the door to the health care system for individuals who were previously denied coverage and businesses that were limited in what they could purchase. If they choose not to enter, HR 3590 spells out penalties for individuals and businesses.
In a nod to the late Sen. Edward Kennedy, who promoted long-term care coverage in his last days, HR 3590 creates a national, voluntary, payroll deduction-funded, long-term care insurance program for people with functional limitations, known as the CLASS act. This would supplement, not replace, Medicaid and private long-term care insurance.
Although not the revolution envisioned by some, HR 3590 clearly would change health care coverage by ushering an estimated 32 million uninsureds into the ranks of the insured. If passed in its original form, the bill would initiate a major reworking of the insurance industry. It bans disqualification for pre-existing conditions and eliminates the practice of rescinding insurance policies after adverse experiences. It prohibits placing lifetime or annual limits on the dollar value of coverage. And it requires health plans to report the proportion of premium dollars spent on clinical services and quality efforts and rebate consumers when that amount is less than 85 percent for large group plans and 80 percent for small group and individual plans, thus putting the squeeze on administrative costs. For health insurance companies, the rules will change.
Quality Initiatives
Many physicians fear that HR 3590 will also change rules for the practice of medicine. Indeed, HR 3590 is chock full of proposals to evaluate the quality of medical practice. It establishes a nonprofit Patient-Centered Outcomes Research Institute to conduct comparative effectiveness research and “recommend but not mandate” what works and what doesn’t. It promotes tort reform through five-year grants for state-based demonstration projects. Additional pilot projects would investigate paying for episodes of care (bundling payments), creating health care homes, and designing performance-based programs for hospitals. As with many quality initiatives, the underlying presumption and hope in these proposals is that costs would come down as quality rises.
Commentators contend that prevention and wellness also save money in the long run. Although the economics of that hypothesis have been briskly debated, the drafters of HR 3590 clearly believe it. The bill establishes a National Prevention, Health Promotion, and Public Health Council to coordinate prevention, wellness, and public health activities. It eliminates cost sharing for preventive services for Medicare, Medicaid, and qualified health plans. And it promotes employer-based wellness programs through grants and technical assistance.
Cost and Containment
Much of the Republican attack on HR 3590 has focused on cost, and the nonpartisan Congressional Budget Office (CBO) has gotten pulled into the donnybrook, issuing revision after revision of its estimates of what the bill would cost. Its latest installment calculates that the bill would result in a net budget deficit reduction of $132 billion in the years 2010 through 2019, an apparent fiscal miracle that vaporizes the projected outlays of $871 billion over the same period. Yet the CBO has numbers to back up that estimate. The revenue that offsets this hefty spending comes from excise taxes on high-premium insurance plans, penalties on individuals and businesses that opt out of health insurance, tax revenues from an expanded insurance industry fueled by the federal subsidies for new enrollees, and a quirky tax on tanning salons. Cost savings also contribute to the deficit reduction and originate primarily from Medicare and Medicaid—$186 billion from permanent reduction in annual Medicare updates for nonphysician services, $118 billion from changing the payment method in the Medicare Advantage program, and $43 billion from reducing payments to hospitals that benefit from the Disproportionate Share rule in Medicare and Medicaid.
Despite the latest CBO estimates, opponents still contend that the proposed legislation will lead to a more bloated federal government and doesn’t really address cost containment. Defenders of the Senate bill believe some of the pay-for-value proposals and the redistribution of payment to primary care providers starts to chip into cost containment. In a proposal that recently has drawn widely publicized heat from health care providers around the country who view it as a product of lobbying by the Mayo Clinic, HR 3590, beginning in 2015, modifies physician payment based on a quality/cost index. Allegations erupted that utilizing a pay-for-value formula that ignores unfavorable demographics that burden other geographic areas or health systems would result in a “windfall” for certain communities and health care organizations such as Mayo.
Another potential shift of money that has prompted controversy comes from a provision in the bill that provides bonuses for primary care physicians whose allowed Medicare charges consist of at least 60 percent of designated primary care services. After putting more money in the pockets of primary care doctors, the bill slices reimbursements for imaging services by modifying the reimbursement formula for advanced imaging.
Also, much of HR 3590’s hope for cost containment resides in basically untested pilot programs. In a recent New Yorker article, Atul Gawande, M.D., argues that pilot programs hold promise for solving the cost-containment conundrum by making a tenuous analogy—that they’re similar to programs that turned around American agriculture in the early 1900s.
Conclusion
HR 3590 is exhaustive and exhausting, and makes for a very big meal indeed. This summary only nibbles at the edges. Will it pass? As I write this, the bill sits in a House/Senate conference committee. But the recent Republican victory in the Massachusetts senatorial election has further complicated its passage. What that final legislation will contain is uncertain.
What is known is that HR 3590 is reform not revolution. It would open up the medical system to many more people and thus would accomplish its main goal and, in so doing, offer a patch to a rapidly fraying health care safety net. Yet its reforms would come slowly over the next nine years and, even if the most optimistic predictions of cost savings come true, might not start quickly enough to save a dysfunctional system from spiraling out of control. MM
Charles Meyer is editor in chief of Minnesota Medicine.
Reference
1. Kirkpatrick D. Health lobby takes fight to the states. New York Times, December 28, 2009. Available at: www.nytimes.com/2009/12/29/health/policy/29lobby.html?partner=rss&emc=rss. Accessed January 11, 2009.
2. Senate Health Reform Bill, H.R. 3590, the Patient Protection and Affordable Care Act: Snapshot of Key Issues. American College of Physicians. December 21, 2009. Available at: www.acponline.org/advocacy/where_we_stand/medicare/healthreformbill.pdf. Accessed January 22, 2010.
3. Health System Reform Legislative Summary Chart of Major Provisions. American Medical Association. December 21, 2009. Available at: www.ama-assn.org/ama1/pub/upload/mm/399/hsr-hr3962-hr3590-comparison-chart.pdf. Accessed January 22, 2010.
4. Congressional Budget Office. Letter to Senate Majority Leader Harry Reid. November 19, 2009. Available at: www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf. Accessed January 22, 2010.