At Last, HHS Releases the Affordable Health Insurance Exchanges Rule

On March 12, 2012, HHS finally released the long-awaited Affordable Health Insurance Exchanges final rule that was published in the Federal Register on March 27. The Affordable Care Act (ACA) mandates that all states set up a state-run insurance exchange to be ready to go live in January 2014 or else the federal government, through HHS, will step in and implement an exchange pursuant to its discretion. The states have until January 1, 2013 to prove to HHS that they have taken the steps to create an operable exchange pursuant to the standards and that they will be ready to go live in January 2014. If HHS finds that the state is unprepared or not complying with the minimum standards, HHS will step in and create the exchange under its own direction.

The exchange is designed to allow consumers and small businesses the option to choose a private health insurance policy through a web-based platform. Kathleen Sebelius, the Secretary of HHS, states in a news release that the new exchange policies will “give states the flexibility they need to design an exchange that works for them,” and the exchanges will provide a marketplace for Americans for “one-stop shopping for health insurance,” which the federal government hopes will drive down costs for consumers by increasing competition among insurers and improving access to health care. Individuals that purchase a qualified health plan through an exchange may be eligible for a tax credit according to a recently released regulation by the IRS, known as the health insurance premium tax credit.

According to HHS’s news release, the final rules provides guidance to the states on how to structure the exchanges in two keys areas: (1) setting standards for establishing Exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an Exchange, and certifying health plans for participation in the Exchange; and (2) establishing a streamlined, web-based system for consumers to apply for and enroll in qualified health plans and insurance affordability programs. The final rule also provides details on the roles of agents and brokers in the exchange and provides for privacy protections for enrollee data. The private insurance industry is pleased that the final rule also allows enrollees of the exchange to purchase insurance through private entities and still have access to the subsidies. Essentially, the final rule tasks the states with setting up an acceptable exchange and provides the standards and framework for doing so. Future rules by HHS will have to address how HHS will establish exchanges in states that do not implement one since this is not dealt with in this final rule.

To date, HHS has issued nearly $670 million to thirty three states and the District of Columbia to get them started on setting up an exchange. HHS announced, as of March 2012, that the “majority of the states have taken significant steps in building Exchanges.”

HHS’s new release fails to mention the backlash among a number of states (mainly Republican-led) and in general, from opponents of the ACA, that view the Act as unconstitutional and an abuse of federal power. Most recently, the Republican governor of Wisconsin, Scott Walker, has reportedly turned down $37 million in federal funding to set up the state’s exchange. Governor Walker stated that he will not begin implementing an exchange until the Supreme Court has issued a decision on the constitutionality of the ACA. Walker, like many Republicans, opposes the ACA and the creation of an exchange on the grounds that it is an “encroachment of Obamacare in our state, which has the potential to have a devastating impact on Wisconsin’s economy.” In defense of his position, Walker refers to Wisconsin’s reputation as a health care innovator and its success in achieving a high level of health insurance coverage, without the involvement of the federal government.

For Wisconsin and the several other states that have refused federal funding, including Kansas and Oklahoma, the regulations provide that HHS will step in and set up an exchange if the states refuse to take such action. Given the continued opposition across the country surrounding the ACA’s provisions, the backlash among the states is not surprising and will certainly continue until the Supreme Court makes its ruling on the constitutionality of the individual mandate and the Medicaid expansion provision in the upcoming months. If the Supreme Court rules that the individual mandate is unconstitutional and that the provision is not severable from the remainder of the Act, then the entire Act including the state exchange provisions will be struck down.

Whether you align yourself with the Republicans or Democrats, or another political party of choice, it is important to remember — politics aside — that 17.7 percent of Americans in December 2011 were uninsured. Even if the Supreme Court strikes down the whole Act or parts of the ACA, future action and legislation will be necessary to remedy the sad state of health care coverage in America and improve the quality and delivery of health care services.

HHS Seeks to End Healthcare Disparities, Announces Pipeline Program for Public Health and Biomedical Science

Case Western’s Disparities blog has a brief article/announcement  well worth considering.  They write:

The Department of Health and Human Services has devised a plan to end racial and ethnic disparities throughout the United States. The new plan will focus on recruiting undergraduates from underserved communities and steer them towards a careers in public health and biomedical science.

The Case Western blog links to an article from Medpage Today which adds that in addition to the pipeline program, HHS has come forward with a plan

for allocating more resources to community health centers, a call to train more people in medical interpretation to help serve patients with a limited command of English, and a push for reimbursement for interpretation services.

Medpage Today also notes that

The strategy tackles a long-acknowledged and persistent problem in the U.S. healthcare system: racial and ethnic minorities are more likely than whites to experience poorer quality care; more likely to suffer from serious illnesses, such as diabetes or heart disease; and less likely to get preventive care.

And that

The report calls attention to racial and ethnic disparities in the healthcare workforce. According to a 2008 report from the Association of American Medical Colleges, although Hispanics account for about 16% of the total U.S. population, they make up less than 6% of all physicians. African-Americans account for a similar percentage of the U.S. population, but only a little more than 6% of all doctors are black.

I think Case Western gets it right when they say that

This approach is to attempt to diminish these disparities by creating grounds for all to become a part of the ever growing field of public health and biomedical sciences and be able to relate to the populations in which the racial and ethnic occur and provide better care while doing so.

Without diminishing the need for technical ability, to be able to understand and relate to a patient is no small thing. To be able to effectively communicate is key in a medical setting.

Last summer I wrote the following:

A recent study highlighted in the Wall St. Journal’s Health Blog points to both a discrepancy in perception between hospital doctors and their patients and a failure to communicate.

The study was conducted by Douglas P. Olson, MD and Donna M. Windish, MD, MPH. The authors noted as “Background” in the study abstract that:

Hospital surveys indicate lack of patient awareness of diagnoses and treatments, yet physicians report they effectively communicate with patients. Gaps in understanding and communication could result in decreased quality of care. We sought to assess patient knowledge and perspectives of inpatient care and determine differences from physician assessments.

The results of the study were derived from two validated questionnaires given to inpatients treated by “house doctors” over a course of roughly eight months at one hospital.The corresponding doctors were also queried. Eighty-nine patients and 43 doctors participated.

According to WSJ:

The survey – which the authors note is limited by its reach (one institution), patient characteristics (older, indigent and less-educated than average), and general responses, rather than one-to-one-patient-physician comparisons – is published in the Archives of Internal Medicine.

The results? From the abstract:

• Only 18% of patients knew their main doctor by name.
• Sixty-seven per cent of doctors believed their patients knew them by name.
• Fifty-seven per cent of patients knew their diagnosis.
• Seventy-seven per cent of doctors believed their patients knew their diagnosis.
• Fifty-eight per cent of patients thought that physicians always explained things in a comprehensible way.
• Twenty-one per cent of doctors stated they always provided explanations of some kind.
• Sixty-six per cent of patients reported receiving a new medication in the hospital, 90% noted never being told of any adverse effects of these medications.
• Ninety-eight per cent of doctors stated that they at least sometimes discussed their patients’ fears and anxieties.
• Fifty-four per cent of patients said their doctors never did this.

Interestingly enough,the WSJ article notes that the

responses didn’t significantly differ by sex, age, race, language or payment source, for the patients, or level and type of training, for the doctors.

Only 57% of patients knew their diagnosis? Which is to say that 43% did not? 90% not told of potential adverse reactions to new medication?

——————————————————————————————————————————————————————————

The study did not take into account the race or linguistic ability of the doctors– just level and type of training. Given the paucity of African American and Hispanic doctors, one wonders if one could have produced a significant number for doctor race and language. But we do know this– as stated above, the healthcare outcomes for racial and ethnic minorities is significantly worse than that of Whites. Is it far-fetched to think that cultural knowledge and linguistic ability– in a practice that requires communication– could lead to better outcomes? I have no belief that the HHS plan is the be all, cure all. But I think it’s a good step in the right direction.

Medpage Today offers the following quote: “Health disparities have burdened our country for too long,” said Assistant Secretary for Health Howard Koh, MD, MPH. “This plan reaffirms and revitalizes a national commitment to helping all persons reach their full health potential.”

Godspeed.

Why Reduce Health Care Costs?

One rare point of elite consensus is that the US needs to reduce health care costs. Frightening graphs expose America as a spendthrift outlier. Before he decamped to Citigroup, the President’s OMB director warned about how important it was to “bend the cost curve.” The President’s opponents are even more passionate about austerity.

Journalists and academics support that political consensus. Andrew Sullivan calls health spending a “giant suck from the rest of the working economy.” Gregg Bloche estimates that “the 30% of health care spending that’s wasted on worthless care” is “about the price of the $700 billion mortgage bailout, squandered every year.” He calls rising health spending an “existential challenge,” menacing other “national priorities.” Perhaps inspired by Children of the Corn, George Mason economist Robin Hanson compares modern medicine to a voracious brat:

King Solomon famously threatened to cut a disputed baby in half, to expose the fake mother who would permit such a thing. The debate over medicine today is like that baby, but with disputants who won’t fall for Solomon’s trick. The left says markets won’t ensure everyone gets enough of the precious medical baby. The right says governments produce a much inferior baby. I say: cut the baby in half, dollar-wise, and throw half away! Our “precious” medical baby is in fact a vast monster filling our great temple, whose feeding starves our people and future. Half a monster is plenty.

But when you scratch the surface of these sentiments, you have to wonder: is the overall level of health care spending really the most important threat facing the country? Is it one of the most important threats? There are many ways to raise revenue to pay for rising health costs. Aspects of the Affordable Care Act, like ACOs and pilot projects, are designed to help root out unnecessary care.

I am happy to join the crusade against waste. But why focus on total health spending as particularly egregious or worrisome? Let’s explore some of the usual rationales.

Terrible Tax Expenditures and Suspect Subsidies?

Employment-based insurance gets favorable tax treatment, and much Medicare and Medicaid spending is drawn from general revenues. So, the story goes, medicine’s big spenders don’t have enough “skin in the game.” Once health and wealth are traded off at the personal level (as the Harvard Business School’s Clayton Christensen advocates), people will be much less likely to demand so much care. Government can attend to other national priorities, or individuals will enjoy higher incomes and will be free to spend more.

I respect these arguments to a point, but I worry they partake of the “nirvana fallacy.” If I could be certain that leviathan would repurpose all those wasted health care dollars on infrastructure, or green energy, or smart defense, or healthier agriculture, I’d be ready to end tax-advantaged health insurance in an instant. But I find it hard to imagine Washington going in any of these directions presently.

Giving tax dollars back to taxpayers also sounds great, until one processes exactly how unequal our income distribution is. In 2004, “the top 0.1% — that’s one-tenth of one percent — had more combined pre-tax income than the poorest 120 million people.” To the extent health-related taxes are cut, very wealthy households may see millions per year in income gains; the median household might enjoy thousands of dollars per year. Sure, middle income families will find important uses for those funds (other than bidding up the price of housing and education). But at what price? What if the insurance systems start collapsing without subsidies, and more physicians (who are already expressing a desire to work less) start seeking out pure cash practices? A few interactions with the the very wealthy may be far more lucrative than dozens of ordinary appointments.

Consider the math: billing a $20,000 retainer from each of 50 millionaires annually may be a lot more attractive to physicians than trying to wrangle up 500 patients paying $2000 each—or, worse, getting the money from their insurers. There are about 10 million millionaires in the US; that’s a lot of buying power. One $10,000 score by a cosmetic dentist from such a client could be worth 400 visits from Medicaid patients seeking diagnostic procedures. Providers are voting with their feet, and a Medicaid card is already on its way to becoming a “useless piece of plastic” for many patients. Given those trends, simply reducing health care “purchasing power” generally risks some very troubling outcomes for the very people the health care cost cutters claim to protect. No one should welcome a health care plutonomy, where the richest 5% consume 35% of services, regardless of how sick they are.

Is Anyone Underpaid in Health Care?

Health commentators rightly draw attention to big insurer CEO paydays. Top layers of management at hospitals and pharma firms are also getting scrutiny. Wonks are up in arms about specialist pay. Read more

Secretary Sebelius Gives a Recap of 2010

As we head into a day which promises to bring us the politics of health reform writ large– in the form of a repeal vote staged in the House– I thought it might serve to listen for a moment or two to Health and Human Services Secretary Kathleen Sebelius give an HHS recap of 2010.

There are more than enough pundits engaged in the dynamics of tomorrow’s promised vote, so I’ll opt out for the moment. But I will say this: I’ve listened to a number of commentators refer to the vote in the House as “merely symbolic.” As it concerns present repeal of the health reform law, the vote will prove futile; but to think that that many career politicians were engaging in such an act for mere “symbolic” benefit is to miscalculate badly. These are smart people– smart enough to get, and in many cases stay for decades, elected.

Having said that, there’s a practical side to the HHS overview of 2010 that I rather appreciated. In case you missed it:

Office of the Inspector General Releases 2011 Work Plan

On October 1, the Office of the Inspector General (“OIG”) of the U.S. Dept. of Health & Human Services (“HHS”) released its Work Plan for Fiscal Year 2011 (“Work Plan”).  Each year, the OIG briefly outlines activities that OIG “plans to initiate or continue with respect to the programs and operations” of HHS.  Various offices within OIG conduct audit, evaluation, investigation, enforcement, and compliance activities.

Continuing Work Within OIG

Many of the topics outlined in the Work Plan were included in last year’s plan.  Although the repeated inclusion of these areas of focus makes compliance easier for facilities, audits should still be conducted in the following areas:

• Provider-based status
• Observation services (as part of an outpatient visit)
• Part A hospital capital payment
• Critical access hospitals
• Medicare disproportionate share payments
• Duplicate graduate medical education payments
• Hospital readmissions
• Hospital admissions with conditions coded present-on-admission
• Inpatient rehabilitation facility transmission of patient assessment instruments
• Medicare excessive payments

New Issues to be Targeted

“What we’re really looking at are four or five really brand new issues,” said Stephen Miller, JD, chief compliance and privacy officer for Trenton, NJ-based Capital Health System, Inc. for HealthLeadersMedia.com.

• Brachytherapy reimbursement
• Replacement of devices received at no cost or reduced cost
  • According to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., in Marblehead, MA, “Since the medical devices replacement issue can be a difficult billing procedure to comply with, facilities should certainly do an in-depth process audit in this area.”
• Safety and quality of intensity-modulated radiation therapy (IMRT) and image-guided radiation therapy (IGRT)
  • Indicates a responsiveness on the part of OIG to headlines regarding quality concerns.  In March, the Nuclear Regulatory Commission fined Philadelphia Veterans Affairs Medical Center $227,500, its second largest fine ever against a medical institution, after “unprecedented number” of radiation errors in treating prostate cancer patients.
• Hospitals’ application of the “three-day rule” and “one-day rule” under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010
  • Many hospitals have had difficulty in billing under the new rules, which redefined what services are related to the admission, and therefore not eligible for Medicare payment within the defined window.  According to Mackaman, “IPPS facilities should be vigilant about reviewing the current three-day rule, and the non-IPPS hospitals should review the addition of the one-day rule.”  CMS guidance on this topic can be found here.

OIG Review of FDA Administration

As HealthReformWatch previously reported, nine Food & Drug Administration (“FDA”) scientists from the Center for Devices and Radiological Health (“CDRH”) sent a letter to President Obama stating, in relevant part, that:

the scientific review process for medical devices at the FDA has been corrupted and distorted by current FDA managers, thereby placing the American people at risk. Managers with incompatible, discordant and irrelevant scientific and clinical expertise in devices…have ignored serious safety and effectiveness concerns of FDA experts. Managers have ordered, intimidated and coerced FDA experts to modify scientific evaluations, conclusions and recommendations in violation of the laws, rules and regulations, and to accept clinical and technical data that is not scientifically valid.

These scientists also wrote to Congress in 2008, accusing the top FDA officials of “serious misconduct” in ignoring scientist concerns and “approving for sale unsafe or ineffective medical devices,” according to the N.Y. Times.

According to Washington G-2 Reports, OIG also stated on September 29 that “it would re-examine the concerns of those FDA reviewers, and broaden the scope of its inquiry.”

This coming year, OIG intends to investigate CDRH “policies and procedures for resolving scientific disputes about approval of devices.”  The Work Plan states that OIG will:

review a sample of administrative files for disputed device decisions and assess the extent to which regulations, policies, and procedures were followed during the dispute resolution process. We will also assess whether CDRH managers and staff are aware of and trained on policies and procedures for resolving scientific disputes.

Additionally, OIG will continue to review FDA oversight of investigational new drug applications, the process for device approval, and oversight of postmarketing surveillance studies of medical devices.

Our Own Devices

Health care finance is always going to be a contentious topic. Two recent stories about devices in health care show the unexpected ways in which technological innovation can generate new burdens, worries, and ethical dilemmas for patients and their families.

Katy Butler authored a heart-rending account of her father’s decline (and her mother’s near-exhaustion as a caregiver) in the NYT last week. Her father’s stroke changed both his and Butler’s mother’s lives:

The day before [the stroke], my mother was an upper-middle-class housewife who practiced calligraphy in her spare time. Afterward, she was one of tens of millions of people in America, most of them women, who help care for an older family member.

The story of what happens next is long and complex, but for health policy makers the nub comes down to a decision the family must make about whether to implant a permanent pacemaker when her father needs surgery to repair a hernia:

[T]he cardiologist, John Rogan, refused to clear my dad for surgery unless he received a pacemaker. . ..  The decision fell to my mother — anxious to relieve my father’s pain, exhausted with caregiving, deferential to doctors and no expert on high-tech medicine. She said yes. One of the most important medical decisions of my father’s life was over in minutes. . . .

[If my father's primary care physician had] had the chance to sit down with my parents, he could have explained that the pacemaker’s battery would last 10 years and asked whether my father wanted to live to be 89 in his nearly mute and dependent state. He could have discussed the option of using a temporary external pacemaker that, I later learned, could have seen my dad safely through surgery. But my mother never consulted Fales. And the system would have effectively penalized him if she had. Medicare would have paid him a standard office-visit rate of $54 for what would undoubtedly have been a long meeting — and nothing for phone calls to work out a plan with Rogan and the surgeon.

Medicare has made minor improvements since then, and in the House version of the health care reform bill debated last year, much better payments for such conversations were included. But after the provision was distorted as reimbursement for “death panels,” it was dropped. In my father’s case, there was only a brief informed-consent process, covering the boilerplate risks of minor surgery, handled by the general surgeon.

Butler’s family’s situation was clearly a troubling one. I do not agree with her harsher critics, who charge the New York Times has used her story to promote its political agenda:

The New York Times is continuing its promotion of the Obama administration’s cost-cutting health care legislation three months after it was signed into law. Central to the newspaper’s support for the bill is its drive to cut back on “unnecessary” treatments and procedures and to target for elimination “overly generous” insurance benefits. . . . The article is a cynical attempt to utilize the author’s family’s personal story—unarguably tragic and heartrending—to make the case that artificial pacemakers are being widely over-utilized.

But I was also troubled by Butler’s quoting the following studies:

In a 1997 study in The Journal of the American Geriatrics Society, 30 percent of seriously ill people surveyed in a hospital said they would “rather die” than live permanently in a nursing home. In a 2008 study in The Journal of the American College of Cardiology, 28 percent of patients with advanced heart failure said they would trade one day of excellent health for another two years in their current state.

I have not experienced “advanced heart failure,” but I know people who do, and it’s inconceivable to me that they would trade a day of “perfect health” for two months, much less two years, of stasis. Moreover, as Alasdair MacIntyre argues in his book Dependent Rational Animals, caring for others and being dependent are essential, important human experiences.

As I read Butler’s piece, I kept wishing that society had done more (perhaps along the lines of Britain’s Social Care programs) to help her family.

But even some forms of aid for the cared for (and their caregivers) are filled with philosophical complexities. Consider the Paro, a robotic seal I blogged about in last month and back in 2006. The Paro has been approved as “a Class 2 medical device (a category that includes powered wheelchairs)” to help soothe elderly patients. Here is one example of its powers:

One recent morning, staff at Marian Manor in Pittsburgh, one of Vincentian Collaborative’s homes, circulated three Paros among residents gathered for a sing-a-long. As 77-year-old Anita Biro sat down at a table, she berated two fellow residents and told them to leave, recalls Beth Kuenzi, activities manager for the home’s dementia unit. But when Ms. Kuenzi put Paro in front of Ms. Biro, her mood changed. As Ms. Biro stroked the robot’s synthetic fur, the machine batted its eyelashes and tracked movement with its head and eyes.

“I love this baby,” Ms. Biro cooed. Aides also take Paro to residents’ rooms to get them to socialize. At another Vincentian home, Lois Simmeth, 73, doesn’t always participate in group activities, but she ventures into the hall when she hears Paro’s sounds.

“I love animals,” explains Ms. Simmeth. She whispered to the robot in her lap: “I know you’re not real, but somehow, I don’t know, I love you.”

MIT Professor Sherry Turkle concedes that the Paro has some very good effects, but wonders “Why are we so willing to provide our parents, then ourselves, with faux relationships?” Another article explores advances in “building a machine that fills the basic human need for companionship.” Turkle, again, questions the larger social context:

[S]ome social critics see the use of robots with such patients as a sign of the low status of the elderly, especially those with dementia. As the technology improves . . . it will only grow more tempting to substitute Paro and its ilk for a family member, friend — or actual pet — in an ever-widening number of situations.

“Paro is the beginning,” she said. “It’s allowing us to say, ‘A robot makes sense in this situation.’ But does it really? And then what? What about a robot that reads to your kid? A robot you tell your troubles to? Who among us will eventually be deserving enough to deserve people?”

These are all fantastic questions, all-too-ready to be answered by techno-libertarian fantasists. I look forward to tracing the degree to which the decision to approve Paro as a covered device could reflect the larger ethical concerns explored by Dov Fox in his piece on the “gap between ethics and law” in other health decisionmaking.

Obama Grants Gays Hospital Visitation & Care Decision Rights

Recently, President Obama submitted a memorandum to the Secretary of the Department of Health and Human Services, granting gay and lesbian partners of hospital patients visiting rights and the right to be acknowledged as persons designated to dictate care choices for patients incapable of making such decisions.  The action was said to have been spurred by the story of a lesbian woman Janice Langbehn who was denied visitation when her partner was admitted to Jackson Memorial Hospital in Miami after she suddenly collapsed.  The patient later died, and Langbehn was not by her side due to the hospital’s policy of allowing only family members visitation rights.

In his memorandum, the President took account of such personal stories and requested that the Secretary of HHS take steps towards ameliorating the issue by ensuring that all hospitals participating in Medicare and Medicaid respect the rights of patients to designate their visitors and care coordinators in the event of incapacitation.  A partner in a gay relationship, thus,  could be one specified in advance directives and health care proxies.

The President stated that visitation privileges may no longer be denied “on the basis of race, color, national origin, religion, sex, sexual orientation, gender identity, or disability.” Specifications regarding whether or not a line will be drawn between unmarried partners and non-intimate relationships were not included in the memorandum; however, it did mention that HHS would be responsible for determining the technical aspects of implementing the grant.

Interestingly,  response from conservative groups was not particularly adverse. Perhaps the spectre of refusing to allow death bed visitations between partners, such as Ms. Langbehn’s ordeal, loomed as a form of cruelty difficult to countenance. The NY Times noted that

The socially conservative Family Research Council issued a statement calling the issue of medical rights for gay men and lesbians “a complete red herring” but saying it had “no objection” to individuals conferring decision-making powers to whomever they wish.

The Obama Administration reached out to groups like Catholic Health Association before releasing the memorandum in an attempt to ensure that the grant would not face any obstacles within the religious community. The Catholic Health Association noted that the order “reaffirmed basic human rights for each person at most critical points of their lives.”  The NY Times further noted that the group’s president, Sister Carol Keehan, stated “Everybody in this country has a right to say, If I can’t speak for myself, this is the person I want to speak for me.”

Rationing or Cost Effectiveness?

In today’s Wall Street Journal, Scott Gottlieb, a former senior official with both the FDA and the Centers for Medicare and Medicaid Services (CMS), warns that “Government Health Plans Always Ration Care.” Aside from recasting the same old aspersions about “rationing,” Gottlieb warns that if reform efforts can’t tame health care costs, the “government will turn to a less appealing but more familiar tool to cut costs: the regulation of access to drugs and medical services.”

Of course, “access” can mean many things. Theoretically, Americans have “access” to the best medical technologies in the world. But practically, most Americans-including those with health insurance-don’t actually access this type of care and couldn’t even if they tried. The bottom line is that every health insurer in the world, public or private, has to “ration” for the simple fact that health care resources are not unlimited. Only wealthy citizens truly have “access” to the best medical care money can buy, regardless of the country they live in or the health system they live under. That won’t change with or without major health reform.

Gottlieb is worried that reformers might formally embrace recommendations by the Medicare Payment Advisory Committee (MedPAC), which currently has a broad statutory mandate to advise Congress on the Medicare program. He also warns that rationing is “a European import,” as if no health insurer in the United States has ever had to draw the line somewhere and decide what not to pay for. For example, Gottlieb warns about organizations like the Committee for the Evaluation of Medicines in France and the Institute for Quality and Efficiency in Health Care in Germany. He doesn’t mention the National Institute for Health and Clinical Excellence (NICE) in the United Kingdom, but it drew similar scorn after the economic stimulus package funded comparative effectiveness research here in the United States. Gottlieb cautions that European countries “aren’t shy about rationing.”

Gottlieb is correct in one aspect: these organizations are prevalent in Europe. However, he misses three important points.

First, the countries in Europe that Gottlieb warns about spend considerably less than we do on health care (and don’t suffer negative health consequences for it).

Second, wealthy residents in pretty much all of these countries can purchase services and technologies over and above what the organizations that Gottlieb warns us about approve.

And third, we’re not exactly strangers to these organizations in the United States. Gottlieb is concerned about European imports, but he’s ignoring our home grown organizations, like the Agency for Healthcare Research and Quality (AHRQ), which makes new technology assessments for Gottlieb’s old agency, CMS, and supports comparative effectiveness research. Or the Medicare Evidence Development and Coverage Advisory Committee (MEDCAC), which also performs new technology assessments. In fact, it’s no secret in Washington that Medicare has long considered some amalgam of cost effectiveness and comparative effectiveness in its coverage decisions, even if nothing in the Medicare statute explicitly allows it to do so. (CMS has long stretched the definition of “reasonable and necessary” in section 1862(a)(1)(A) of the Social Security Act to fit its fiscal realities, even if CMS or its precursor, HCFA, haven’t been successful in cementing cost effectiveness as a formal criterion, as evidenced through failed rulemaking in 1989 (54 Fed. Reg. 4,302) and 2000 (65 Fed. Reg. 31,124)).

And just as importantly, private insurers make cost and comparative effectiveness determinations too, either by following Medicare’s lead, as expressed through national and local coverage determinations (NCDs and LCDs), or by setting up their own new technology evaluation systems, like BlueCross BlueShield has with its Technology Evaluation Center. Though the offical duties and decisionmaking processes of these organizations differ, the health care community generally understands these decisions as implicitly factoring in cost effectiveness or at least clinical effectiveness-thus doing precisely what the anti-reformers like Gottlieb warn about.

Alzheimer’s, Dementia Triple Individual Health Care Costs

According to U.S. News & World Report, a recent Alzheimer’s Association report estimates that Alzheimer’s disease and dementia triple health care costs for afflicted seniors.

In its report, the Alzheimer’s Association found that:

The average annual health-care cost for someone older than 65 with Alzheimer’s or another form of dementia was $33,007 in 2004 — three times more than the $10,603 for people that age without the conditions.

Deaths from Alzheimer’s disease rose by 47 percent from 2000 to 2006 while the number of deaths from several other major diseases — including heart attack, stroke, breast cancer and prostate cancer — fell during that period.

States in the Rocky Mountains and Northwest will see the number of people with Alzheimer’s disease increase by at least 81 percent between 2000 and 2025.

By 2025, California and Florida will each be home to more than a half-million people with Alzheimer’s disease.

Experts agree that the U.S. needs to invest more into Alzheimer’s research to keep costs low in the future. Some even advocate that the U.S. Government double its annual budget for Alzheimer’s research to $1 billion.

The aging of the Baby Boom Generation is one of the major reasons for the growing concern over the costs of living with Alzheimer’s disease. Said Dr. P. Murali Doraiswamy, a psychiatry professor at Duke University Medical Center,

The bottom line is that we are an aging society, and if we don’t find a cure to delay or halt the disease, we are soon going to become an Alzheimer’s nation.

Dr. David Blumenthal: National Health Care Information Technology Coordinator

President Obama has appointed Dr. David Blumenthal as the National Health Care Information Technology Coordinator. Dr. Blumenthal is a former Harvard Medical School Professor who, as reported by Kaiser.org, “has conducted a number of studies related to health care IT” and has “served as director of the Institute for Health Policy at the Massachusetts General Hospital/Partners HealthCare System and as a senior adviser to President Obama during his campaign.”

As National Health Care IT Coordinator, Dr. Blumenthal can be expected to play a large role in the direction of how the 19 billion dollars apportioned for Health IT in the recently enacted stimulus package will be spent.

Dana Blankenhorn over at ZDNet Healthcare has written a short and interesting post on Dr. Blumenthal. Among other things worth noting in the post, Blankenthorn writes that Blumenthal has been quoted as “saying IT grants should go to inner-city and rural hospitals, as well as small practices, while most health IT money should go to incentives for improving the quality of care.”

As for the choice of Dr. Blumenthal, Blankenhorn writes

The good news is he’s a policy expert and not a vendor. The bad news is he’s a policy expert and not a technologist. He is a renowned health IT advocate who knows his way around bureaucracies but he is not a geek.

This means Blumenthal has not expressed a view on open source vs. proprietary software. He also hasn’t gotten his hands dirty in the health IT trenches.

Having said that, one might hope that Dr. Blumenthal is familiar with the work of  Professors Sharona Hoffman & Andy Podgurski.

Sebelius to Head HHS, Not Everyone is Thrilled

President Barack Obama formally nominated Kansas Governor Kathleen Sebelius as Secretary of Health & Human Services today, according to USA Today.  We have been following the likelihood of Sebelius’ nomination since Tom Dachle withdrew his nomination last month.

Sebelius made a reputation for herself as Kansas’ insurance commissioner for eight years before being elected governor.  While insurance commissioner, she established herself as a consumer advocate capable of reining in health care spending.

Sebelius has been the favorite to head HHS, but her nomination has raised concerns among anti-abortion advocates such as the conservative Catholic League, according to U.S. News.  Troy Newman, president of Wichita-based Operation Rescue, says that the group will aggressively oppose Sebelius’ confirmation in the Senate.

According to KSALLink.com, Sebelius said in a statement responding to the issue that as a public official she has worked hard to ensure that abortions are “rare, safe and within the bounds of the law.”

President Obama will host a summit later this week with representatives from various health care sectors to address his plans to revamp the U.S. health care system.  No word on whether Howard Dean, a physician and former governor of Vermont, will be in attendance.  FOXNews.com reports that Dean has expressed his disappointment with being passed up for the nomination again, stating:

“I was pretty clear that I would have liked to have been Secretary of HHS but it is the president’s choice and he decided to go in a different direction.”

Obama to Unveil Plan for Health Care Reform

With the economic stimulus package signed, President Obama will turn his focus to “revamping the U.S. health care system,” according to Bloomberg.com. Obama is expected to outline his plan for providing affordable medical coverage to all Americans when he submits his budget to Congress on February 26.

During his campaign, Obama proposed creating a public plan to compete with private health insurers and taking steps to reduce administrative costs, such as putting health records in digital form.

Bloomberg.com reports that an administration official said the president may look to reduce payments to private Medicare Advantage plans to help pay for the changes.

Democrats estimate that $15 billion of the annual $94 billion in subsidies granted to Medicare Advantage plans are the result of “overpayments.” The private insurance companies that administer those plans counter that the money is used to pay for services not covered under Original Medicare, such as prescription drugs and vision, dental, and chiropractic care.

It follows that the president will likely make public his nomination for secretary of health and human services soon after he unveils his plans for health care reform. Kansas Governor Kathleen Sebelius has been touted as the front-runner for the nomination.

However, according to the AP/Kansas City Star, Governor Sebelius has not yet spoken with President Obama regarding the position. The Obama administration is reportedly using “extreme caution” in choosing the next nominee in order to avoid another embarrassing mistake.

New Candidates to Head HHS Emerge, Suspense Mounts

Two additional candidates have emerged as possible nominees to be secretary of health and human services, reports The Washington Post. According to Democratic sources in and around the White House, those candidates are Lloyd Dean and Jack Lew.

Dean is chief executive of San Francisco-based Catholic Healthcare West and was recently named one of the top 25 minority health care executives by Modern Healthcare Magazine. Lew was involved in health care reform during the Clinton Administration and worked in the White House Office of Management and Budget, according to The Post. One small snag, reports The Post, is that Lew was recently confirmed as deputy secretary of state.

Yesterday we reported that Kansas Governor Kathleen Sebelius was at the top of Obama’s list to replace former Senator Tom Daschle as the nominee for U.S. Secretary of Health & Human Services. Sebelius removed herself from consideration for a cabinet position last December, citing the need to reform Kansas’ budget. However, The Wall Street Journal reports that Gov. Sebelius told Ron Pollack, president of Families USA, that she would accept the nomination for secretary of health and human services.

Sebelius, Podesta on Obama’s Short List to Replace Daschle

A top official in the Obama administration says that Kansas Governor Kathleen Sebelius is at the top of the list to replace former Senator Tom Daschle as President Obama’s nominee for Secretary of Health & Human Services, according to the AP/Kansas City Star. This comes after Daschle withdrew his nomination last week, leaving many wondering about the future of U.S. health care reform.

Sebelius has been praised by advocacy groups for the “watchdog role” that she played for eight years as insurance commissioner before she became governor. The Kansas Governor was an early supporter of Obama’s campaign for the presidency. After Obama won the election in November, she was in consideration for several cabinet posts. In early December though, she announced that she had removed herself from consideration for a Washington job, citing Kansas’ budget problems that needed her attention.

Also on Obama’s short list is former White House chief of staff under President Clinton, John Podesta, and Tennessee Governor Phil Bredeson. Some advocacy groups are reportedly lining up to oppose the nomination of Democratic governor from Tennessee. Bredeson remains under consideration but was not as likely as Sebelius to make the final cut, the senior official said.

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Health & Taxes

Only a few short months ago, Barack Obama was elected President of the United States of America. Supporters rejoiced, “Yes we did!” Shortly after that historic event, then President-elect Obama announced his nomination of former senator Tom Daschle to be his secretary of health and human services. Advocates of universal health care reform were ecstatic.

With the release of Critical: What We Can Do About the Health-Care Crisis and his nomination for U.S. Secretary of Health and Human Services, it seemed that Tom Daschle was the solution to all of our nation’s health care woes: a fragmented and inefficient patchwork of public and private payors, rising costs, too many government ties to the private sector, and a lack of uniformity on the proper spelling of “health care.”

Yet it appears that that dream is over: Daschle announced today that he is withdrawing his nomination for Secretary of Health and Human Services. CNN.com reports that, in announcing his withdrawal, Daschle said:

[I]f 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction.

The president said Tuesday he accepts Daschle’s decision “with sadness and regret,” according to CNN.com.

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