President Obama, the

111th Congress… and

You… Health Care I.T.

and Changing US Health Care

Jeanne Scott

talking-head-in-chief

health-politics.com

DISGRACED FEDERAL RESERVE CHAIRMAN

Economic Strom Clouds May

Prevent Any Real Action

U.S. Economy: An Even Shakier Future

“With the economy likely to be weak for several quarters, and with some risk

of a protracted slowdown, consideration of a fiscal package by the

Congress at this juncture seems appropriate.”

Ben Bernanke, October 20, 2008

“It will take at least 18 months to turn around the U.S., even if

President-elect Barack Obama does everything perfectly.”

Nobel Prize-winning economist Joseph Stiglitz, November 9, 2008

18 Months? We Want it NOW!

… Barack Promised It To UsWith a $10 TRILLION national debt …With financial sector bailouts planned that will cost $1.8 trillion … With wars in Afghanistan and Iraq and costing $10+billion a month …With Americans continuing to balk at almost any form of increased taxes …

How can any meaningful health care reform even be on the table?

Answer: It Really Can’t…

“Americans... still believe in an America where

anything's possible - they just don't think their

leaders do.”

"Once you choose hope, anything's possible." ~ … … Christopher Reeve

But let’s talk about it any way, after all we did just elect a man who said:

And, Paradoxically… Rahm Emanuel Says

“When it gets rough out there, a lot of business leaders get out of the car and say, 'We're OK with minor reform.' I'm challenging you today, we're going to

have to do big, serious things.”

And Senate Finance Committee chaircritter, Max Baucus added:

In speaking to the Wall Street Journal’s Economic Council on November 18:

"Health care reform is very much linked to the broader economic issues that

the country is facing. Our view is that there is the energy now to make this a

top priority."

So, Who Won? Who Lost, Election 2008?

Election 2008: the Winners and Losers

Big Winner: CHILDREN Democrats in the House have already passed an expansion of the 1997 S-CHIP, originally sponsored by a GOP-controlled Congress and signed into law by a Democratic president. The Senate is expected to concur.Mandating coverage for ALL U.S. children was a critical component in Obama’s 2008 health care campaign. Unlike Hillary Clinton and nearly every other Democratic candidate, (and Republicans Romney and Schwarzenegger) Obama did not propose an individual mandate for all Americans. But he did say every child would have to be covered.

S-CHIP and the Bush Veto

“ALL AMERICANS HAVE ACCESS TO HEALTH CARE. AFTER ALL, YOU JUST GO TO AN EMERGENCY ROOM!”

- GEORGE W. BUSH, Cleveland, Ohio, August, 2007

The USA Ranks dead last (well,

O.K., virtually tied for last with

New Zealand) among

industrialized OECD

nations in the health and safety protections

for its children…

that’s BAD!

Election 2008: the Winners and Losers

Big Loser: Private FFS Medicare Advantage Plans

When President Bush vetoed the 2007 expansion in S-CHIP, he did so primarily because the then new Democratically-controlled 110th Congress proposed to finance the expansion by cutting some of the of the 12-19% in “bonus” payments that these new private Medicare Advantage plans were receiving. That was a no-no as far as Bush was concerned.

Congresscritter Pete Stark, chair of the House Ways and Means

health subcommittee; he hates Medicare Advantage plans

Loser: Medicare Participating PhysiciansLoser: Medicare Beneficiaries Trying to Find a Physician to Take Them as a Patient

Election 2008: the Winners and Losers

In 1997, Congress (then GOP-controlled) passed a law, the Balanced Budget Act of 1997, signed by a Democratic president (Bill Clinton) that established a complicated formula for future changes in Medicare reimbursement for Medicare providers – the Sustainable Growth Rate (SGR) formula. Every year since then, hospitals, nursing homes,

home health agencies and all other Medicare providers except for physicians have seen SGR-

mandated cuts in their Medicare payments.

Losers: Medicare Beneficiaries Trying to Find a Physician to Take Them as a Patient

Oh yes, the docs were supposed to be cut, but every year they successfully lobbied to have these cuts restored and with usually a small increase added on. Remember Paygo? Well, in order to give the docs more, other programs have had to be cut to keep the overall Medicare increases in check. But the SGR still applies and the cumulative cut that physicians may have to face has now risen to over 11% -- OUCH!The 110th Congress punted the issue to the 111th and by January 1, 2010, Congress will have to do something or Medicare physician reimbursement stands to be cut by as much as 13-15%

Election 2008: the Winners and Losers

Sustainable Growth Rate Cuts in Medicare Physician Reimbursement

Election 2008: the Winners and Losers

Winner: Health Care I.T. CompaniesAnother Obama “promise” was to finally begin to fund health care I.T. – to the tune of $10 billion a year over 5 years, $50 BILLION!

"I am committed to making the fundamental changes necessary to modernize the system to streamline medical

practice with the goal of improved patient outcomes. My plan calls for investing $10 billion per year over 5 year in health

information technology. This commitment is not just financial: we will ensure that physicians have the technical support they

need to implement new systems for patient records and billing. By reducing medical errors and unnecessary

duplication of tests, this investment will lead to a long-term reduction in our health care system's overall cost."

Efforts to Implement Health Information Technology in Six Countries

  U.S. Australia Canada Germany Norway U.K.

Initial year of national IT effort

2006 2000 1997 1993 1997 2002

Expected year of complete implementation

2016 Undefined 50% by 2009

2006 2007 2014

Estimate of total investment (as of 2008)*

$125M $97.9M $1.0B $1.8B $52M $11.5B

Total investment per capita (as of 2005)**

$0.43 $4.93 $31.85 $21.20 $11.43 $192.79

*In U.S. dollars. Exchange rates as of September 2005: $1 U.S. = $1.31 AUS; $1.19 CAN; $0.80 EURO; $6.21 NOR; $0.54 U.K.** In U.S. dollars. Per capita is based on 2003 population numbers from the Organization for Economic Cooperation and Development (OECD).Source: Adapted from G. F. Anderson et al, "Health Care Spending and Use of Information Technology in OECD Countries," Health Affairs, May/June 2006 25(3):819–31.

Only 28% of U.S. primary care physicians have electronic medical records (EMRs), only 19% have

advanced IT capacity

9289

79

42

2823

98

0

25

50

75

100

NET NZ UK AUS GER US CAN

8783

72

59

32

19

8

0

25

50

75

100

NZ UK AUS NET GER US CAN

Percent reporting seven or moreof 14 IT functions*

* The 14 functions are: EMR, EMR access other doctors, outside office, patient; routine use electronic ordering tests,prescriptions, access test results, access hospital records; computer for reminders, Rx alerts, prompt test results;easy to list diagnosis, medications, patients due for care.Source: Commonwealth Fund 2006 International Health Policy Survey of Primary Care Physicians.

Percent reporting EMR

Election 2008: the Winners and Losers

Winner: Health Care I.T. CompaniesObama proposes that the $50 billion would be “seed” money with grants to health care

organizations, hospitals and physician groups

Under the Obama plan, an advisory committee of government and private health experts would be charged with developing by 2011 final interoperability, privacy and security standards governing clinical use of health I.T.

• He would set up a matching grant program to encourage not-for-profit groups and health care providers in rural, low-income and underserved regions to adopt health I.T.

• He would direct that open-source technology be developed and made available to health care providers at "a nominal cost."

Election 2008: the Winners and Losers

Winner: Health Care I.T. CompaniesObama proposes establishing new privacy protections that ban the sale of patient health data and require pre-authorization before any data is used for marketing purposes. Fines of up to $1.5 million would be charged incrementally for privacy violations. • The incentive measures in his proposal would be similar

to an electronic prescribing incentive program scheduled to begin next year.

• Physicians who meet the federal \ standards will be eligible for payments of up to $40,000 over five years.

• Hospitals also could receive additional payments of up to several million dollars over five years if they meet the standards. The payments would decrease over time before being phased out completely.

• Penalties would then be levied on providers that have yet to meet the federal standards.

Obama Inherits Bush Executive Order 13410—Adoption of HITSP

Standards

Applies to federal Employees Health Benefit Program, Medicare Advantage (maybe Part D), Indian Health Service, TRICARE, Department of Veterans Affairs but excludes Medicaid and S-

CHIP

Standards are voluntary for private sector, mandatory for federal health programs – and their

contractors

Each agency shall require in contracts or agreements with health care providers, health plans, or health insurance issuers that as each provider, plan, or issuer implements, acquires, or upgrades

health information technology systems, it shall utilize, where available, health information technology systems and products

that meet recognized interoperability standards.

President-Elect Obama’s transition staff is currently reviewing all Bush EOs

HITSP: Healthcare Information Technology Standards Panel

HHS Process to Implement Standards

• Legal obligations flow from Secretary’s recognition of HITSP standards– Triggers requirement for federal agencies– Certification Commission on HIT must use

recognized standards

• Once HITSP selects standards and develops Interoperability Specifications (IS), Secretary “Accepts”

• Allow time (6-9 months) for minor technical/changes

• Then, Secretary “Recognizes” IS(Federal Register, 3/1/2007)

Executive Order 13410—Adoption of HITSP Standards

Industry concerns about the EO

• Insufficient time to adopt

• No time for real-world pilot testing

• New standards for every upgrade will be costly

• Requirements may apply only to health plans, not to providers

Congress: Major Health IT Legislation in 110th

CongressComprehensive HIT bills• Senate

– “Wired for Health Care Quality Act” (S. 1693), modified by Senator Leahy’s Privacy Amendment

• House– E&C: Protecting Records, Optimizing

Treatment, and Easing Communication through Healthcare Technology (PRO(TECH)T) Act of 2008” (H.R. 6357)

– W&M: The Health-e Information Technology Act (H.R. 6898)

Electronic Prescribing• Enacted as part of Medicare

Improvements for Patients and Providers Act

Main Parts:

1. Standards

2. Funding

3. Privacy

H.R. 6357 (E&C)

H.R. 6898 (W&M) S. 1693

Status Passed by full committee 7/23/2008

Introduced 9/15/2008

“Hotlined” to floor 7/31/08Blocked by objections, largely due to Privacy

Comprehensive Health IT Bills in 2008

H.R. 6357 (E&C) H.R. 6898 (W&M) S. 1693

Policy Codify ONCHITHIT Policy CommitteeRecommend priorities for privacy, NHIN, technology

Codify ONCHITHIT Advisory CommitteeRecommend priorities for privacy, NHIN, technologyRecommend standards and certification criteriaConsistent with HIPAA

HIT Policy CommitteeRecommend priorities for privacy, NHIN, technology

Standards HIT Standards Comm.Recommend standards and certification criteriaConsistent with HIPAA

HIT Standards EntityRecommend standards (may recognize a HITSP)Certification process

Testing NIST must provide testing

Same as E&C Pilot testing discretionary

Federal adoption Agencies adopt (per EO) after HHS rulemakingWhen implementing, acquiring, upgrading HIT, where available.

Same as E&C Federal agencies adopt within two years of President accepting HIT Standards Entity recommendation

Comprehensive Health IT Bills: Standards

H.R. 6357 (E&C) H.R. 6898 (W&M) S. 1693Competitive grants

For not-for-profit hospitals, individual/group providers to buy certified EHRs$1 to $3 match

Same as E&C Same as E&C, but must serve medically underserved communities

Grants to States

For States to establish Loan Funds for certified EHRsProviders must link to HIEs

Same as E&C Largely the samePreference to States adopting VBP programs

Grants for HIEs To implement local or regional HIEsStakeholders: physician, hospitals, pharmacies, consumers, employers, health plans$1 for $2 match

Same as E&C, but heath plans not included among required stakeholders

Same as E&C

Authorized $575 million$115 m per year, 2009-2013

Same as E&C $278 million$139 m per year, 2009-2010

Medicare Incentives

N/A Combination of bonuses for “meaningful HIT users” and penalties for non-users

N/A

Comprehensive Health IT Bills: Funding

27

Proposed Medicare Incentives in Ways and

Means Bill• Combination of bonuses and penalties to encourage

providers to use certified HIT systems

– HHS: develop clinical measures of meaningful use

– In lieu of PQRI payments• To begin when ONCHIT makes available open source HIT

system (e.g., VistA) or, if sooner, 2013

Significant hardship exception

Medicare payments 2013 2014 2015

2016

2017 2018 2019 2020+

Bonus: Maximum $15k $12k $8k $4k $2k 0 0 0

Penalty: Reduction in fee schedule

0 0 0 -1% -1.5% -2% -2.5% -3%

28

Comprehensive Health IT Bills: Privacy

• 2008: Despite major push by employers to move health IT bill, privacy was major sticking point– House and Senate bills include

problematic privacy provisions

• 2009: Larger privacy debate expected– Key issue: Individual control of

information in “interoperable” world

Major Privacy Issue in 2009

• 2008: problematic bills by Leahy (D-VT) Markey (D-MA) – Allowed individuals to hide any health info

and limit provider access

• 2/08: NCVHS “middle ground” recommendation – Allow individuals to hide categories of

information (e.g., mental health)– Notify physicians when information is

hidden– Recognizes considerable work needed to

implement

Individual control of information in an “interoperable” world

Medicare E-Prescribing

Medicare payments 2009 2010 2011 2012 2013 2014+

Bonus: % of allowed charges 2% 2% 1% 1% 1% 0

Penalty: Reduction in fee schedule 0 0 0 -1% -1.5% -2%

– Enacted 7/08 as part of MIPPA; final rule posted 10/31/2008

• Incentives for “successful e-prescribers” begin 2009

– Must use a “qualified e-prescribing system”: (1) medication list; (2) safety checks; (3) lower-cost therapeutic alternatives; (4) formulary information

– Must e-prescribe 50% of the time when appropriate for certain CPT codes

– Penalties for not e-prescribing begin 2012

Forecast for 2009?

• First: pass economic stimulus package and appropriations before CR ends in March

• Congress will address health care reform, despite key challenges:– Finding $ for subsidies/government expansions– Developing consensus on individual/employer

mandates• Unclear if HIT will be a free-standing

measure or part of a health care reform omnibus– House leadership working on combining E&C

and W&M– Privacy will be major focus

• HHS pulling out all the stops to release 5010 and ICD-10 rules before January

Winners and Losers in Health Care I.T.

John Halamka, M.D., Asst. Prof. of Medicine at Harvard University and Chief Information Officer at the Harvard Clinical Research institute named his winners and losers on November 13…Winners1.  Electronic Health Record vendors, especially web-based applications developing Obama’s promised EMR.2. Software as a Service Providers – Dr. Halamka says SaaS providers may offer lower cost of ownership and faster implementation than traditional software installation approaches.3. Open Source – Obama seems ready to embrace Open source operating systems, databases, and applications as long as they can provide the reliability and supportability that is needed.4. Green I.T. – The Obama administration will reward innovative techniques to adjust power draw, such as idle drive management, CPU voltage adjustments, and high efficiency power supplies.5. Cloud Computing Offerings - These are remote infrastructure utilities such as storage and high performance computing. According to Dr. Halamka, last week’s Cool Technology of the Week described a new technology called Cloud Optimized Storage.

Winners and Losers in Health Care I.T.

Dr Halamka’s Losers

1. Client Server applications - the cost of deploying, supporting, and maintaining client server applications will no longer be affordable.2.  Proprietary operating systems, he is eliminating such systems from his data centers.    3. High-end SAN storage – He found find 90% of his storage needs are met with lower-end SAN, NAS, and appliances which use low cost, high density drives, (SAS, SATA).4.  Devices that do not offer energy efficient operations.5. Applications that require a specific operating system or a specific browser on the client side. To be successful under the Obama health care I.T. plan, says Dr. Halamka, applications should be operating system neutral, browser neutral, and easily hosted as a service accessible via the web.

Election 2008: the Winners and Losers

Winner: Competition Between Government and Private Sectors;

Under Obama’s National Health Insurance Exchange, private health plans and insurers would have to accept all applicants

regardless of pre-existing health care conditions and could not cancel or qualify coverages. They could charge differential rates

but only within narrow ranges.

In effect, Obama suggests a version of the John Edwards “fair competition” model, under which a new government health plan (

“Medicare for All”) would be created offering a standard set of benefits and coverages. Private health plans would have to offer at least a comparable level of benefits and coverage, but with no

12-19% advantage and so …

Let the Games BeginThe two programs would then compete on a level playing field

and, according to the Edwards proposal, a winner would be determined down the road. If private health care insurance is as

good as he claims to be, it will prevail; if not, the people will choose

Election 2008: the Winners and Losers

Former Senator and majority leader Tom Daschle (D-S.D.) is the

new Secretary of Health and Human Services, charged with

getting Obama’s health care plan passed in Congress.

He is the author of a February 2008 study on health care reform

which suddenly has become a “must read” for everyone in health

care.

The Centers for Medicare and Medicaid Services may go back to being the Health Care Financing

Administration, with its authority expanded effectively to all health

care financing and not just Medicare and Medicaid

Come Back Winner: Tom Daschle

The Daschle Plan (as described in his book)

- Expand the Federal Employee Health Benefits Program (FEHBP), or create a group purchasing pool like it: Participants could choose their own provider and would have the security of knowing they could never lose their coverage. Employers could let their employees get coverage through a FEHBP plan, but only if they enrolled all of their workers, not just ones with health problems. The FEHBP pool would also include a government-run insurance program modeled after Medicare.

- Subsidize coverage for those who need it: The government would provide financial help on a sliding scale so nobody would pay more than a set percentage of their income for health insurance. Administered as a refundable tax credit, this protection would apply to employer-based health insurance as well as private insurance obtained through the pool.

- Strengthen Medicaid: Simplify and extend Medicaid to cover everyone below a set income level. The federal government should pick up the tab for this expansion, and ensure that states don’t cut off people when the budget gets tight.

- Concentrate on the value of care: Strive to get more for our health care money by promoting research that compares drugs and treatments to determine which ones deliver the best bang for the buck. Daschle also proposes promoting prevention that would reduce the number of chronic conditions.

- Improve health care infrastructure: Adopt health information technology to lower expenses and allows rural residents to connect electronically with medical providers. Increase the number of community health centers and government-funded clinics that provide basic care for the poor and uninsured.

- Daschle also proposes a Federal Health Board that “would resemble our current Federal Reserve Board for the banking industry.”

Daschle, Enzi and Kennedy

Obama, Dealing with AHIP (“America’s Health Insurance Plans”)

Hillary Clinton would have “reformed” the private insurance market by prohibiting insurers from declining coverage based on pre-existing conditions (“guaranteed issue”)• Obama would create a National Health Insurance Exchange to monitor insurance companies in offering the coverage. In essence, Obama's plan retains the private insurance system but injects additional money into the system to pay for the expanded coverage

Obama’s National Health Insurance

• Designed to help individuals seeking to purchase private health insurance • Exchange to act as a watchdog group to reform the private insurance market by creating rules and standards for participating insurance plans to ensure fairness and to make individual coverage more affordable and accessible• Insurers would have to issue every applicant a policy, and charge fair and stable premiums that will not depend upon health status • All plans would be required to offer are at least as generous coverage as the new government plan and have the same standards for quality and efficiency• Exchange would evaluate plans and make the differences, including cost of services, public… complete transparency

Private Health Insurers Can Still Be Winners

• While Obama’s plan does not include an individual mandate, it does envision wider coverage availability both through his proposed government plan and from “competing” private plans and insurers• If private plans and insurers rise to the challenge, they may be able to reach many of the 47 or so million currently uninsured, who will now be able to afford -- through various subsidies and tax incentives proposed by Obama -- to buy health insurance• Question: will the private insurance industry be able to meet the challenge?

We Interrupt This Power Point Show

BREAKING NEWS!“Insurance works best when everyone is in the pool. You need healthy people in the

insurance pool to help pay for sicker individuals who are much

more motivated to buy coverage.”

-- Alissa Fox, Vice President of the Blue Cross-Blue Shield Association, November 19, 2008

Private Insurers Capitulate

On November 19, 2008, after long opposing all such efforts, both the industry’s two major trade groups,

America’s Health Insurance Plans (AHIP) and the Blue Cross-Blue Shield Association (BCBSA), announced they

would support guaranteed coverage for all Americans regardless of age, health, or pre-

existing conditions … BUT ONLY if the law had an ENFORCEABLE MANDATE requiring ALL

AMERICANS to have insurance.

This is a major breakthrough which dramatically re-shapes the universal health insurance debate.

Presumptive President-Elect Obama has not advocated such an individual mandate, although it was part of former Massachusetts Governor Mitt Romney’s plan

already being implemented in that state and was a key component in California Gubernator Arnold

Schwarzenegger’s plan, and everyone of his Democratic primary opponent plans, including that of Hillary Clinton.

Election 2008: the Winners and Losers

Loser: Pharmaceutical Manufacturers

Both John McCain and Barack Obama called for major new regulations and controls over the Rx

Manufacturing industry

During the Republican primary campaign, John McCain once referred to the pharmaceutical

industry as “the bad guys.” and he called for new limits on patent reformulations, drug reimportation

and generic mandates

Oops, he said all the same things as Barack Obama

The Rx industry is in a state of panic

Democrats May Make Dramatic Changes in the Medicare and Medicaid Rx Program

Democrats Will Try to Pass a Law to Directly Negotiate the Price of Drugs Under Part D

The 2003 Medicare Modernization Act, which gave us the Medicare Drug Part D, was passed without a single Democratic vote. Democrats opposed the provision saying that prohibited the government from negotiating directly on the price of drugs.

In 2007, when the Democrats took over-control of the 110th Congress, the first bill passed by the House would have allowed for such price negotiation. The bill failed in the Senate where the Democrats had only a marginal majority and the GOP threatened a filibuster. Now with perhaps 58-59 votes in the Senate, the prospects for passage have increased dramatically

McCain Quote of the Year

“Well, they are.”Senatecritter John McCain

responding to former Massachusetts Governor Mitt Romney, after Romney told

McCain, "Don't turn the pharmaceuticals into the big, bad

guys." McCain had called for reimportation of drugs from

Canada and for more competition in the Rx marketplace.

New Hampshire GOP Debate, January 5, 2008

Congress and the Drug Industry

The Rx manufacturing industry has enjoyed a “robust” 14 years with either a GOP Congress and/or a GOP president in charge with almost 80% of their political contributions going to the GOP -- but now facing a new era, they have upped their contributions to Democrats, and will expect a return on their investment

Afghanistan and Iraq have Universal Health Care, paid for by the U.S. Taxpayer

Countries Without Universal Coverage

Countries With Universal Coverage

Countries Currently Developing Universal Health Plans

The World of Universal Health Care

Election 2008: the Winners and Losers

Loser (for now): the Uninsured and the Underinsured

Neither Obama’s plan nor John McCain’s would have covered many of today’s uninsured; to be sure Obama’s would have done better but at a higher cost… the cost of

which may be unsustainable given current economic conditionsThe non-partisan Tax Policy Center estimates that under Obama’s

Plan, while almost all children would be covered, the number of uninsured would be reduced by 18 million by the end of 2009 but by only 34 million by 2018. Even under the Obama plan, an additional 24 million would remain uninsured in 2018. The Obama plan would cost and estimated $1.6 trillion over the next 10 years. Obama’s overall tax plan, unadjusted for any tax increases and including his health proposals, would increase the federal deficit by $3.5 trillion over the next 10 years.

http://www.taxpolicycenter.org/publications/url.cfm?ID=411750

The Uninsured,

Tilting South and

West

Estimated 116 Million Adults Were Uninsured,Underinsured, Reported a Medical Bill Problem,

and/orDid Not Access Needed Health Care Because of Cost,

2007Medical bill/ debt problem17.7 million

10%

Cost-related access problem

25.9 million15%

Note: Percentages may not sum to 100 percent because of rounding.Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

Adequate coverage and

no bill or access problem

61.4 million35%

Uninsured any time during the year or

underinsured17.6 million

10%

Medical bill/debt and cost-related access problem

54.4 million31%

177 million adults, ages 19–64

Losers (for now) -- the Un-insured and the Under-insured

Election 2008: the Winners and Losers

Losers: High Deductible Health Plans and Health Savings AccountsThe growing concern over the issue of the UNDERINSURED is recognized by the Democrats and, besides, they HATE HSAs!

45.7 Million “officially” uninsured in 2007(9.5M children)

2007 Consumers Union Report Estimate: 60+ Million Underinsured

2008 Commonwealth Fund, 25% of U.S. Underinsured (78M)

Add 45.7 million uninsured and almost 45% of all Americans have either no or in adequate health insurance…

Still Undecided

:Prospects

for Universal

Health Care

The Promise or the Impossible Dream Circumstances Create the Hope;

Election 2008: the Winners and Losers

Undecided: Prospects for Universal Health Care

The money crunch and the nation’s economic woes may mean that any real movement toward universal health care

may be delayed for some time. Obama from the git-go offered a far less ambitious plan than did his Democratic

primary opponents, particularly Hillary Clinton.

But something has to give, already the U.S. is spending almost twice as much per capita on health care as any of its industrial competitors, and getting far less in return,

some really crappy care.

Expanding S-CHIP to cover almost all U.S. children takes universal coverage to both ends of the life cycle… filling in the in-between may take a little longer, but expect to see programs for pre-natal and maternal care and for chronic

disease management expanded.

WINNER: The States and Medicaid

In this bail-out crazed world of post apocalyptic Bush years, one big potential loser up to now have been state governors and state budgets. But never fear, a bail-out may be here.

During the December 3, 2008 National Governors Association (NGA) meeting, the Governors plead their case to President-elect Obama:

23 states have already reduced their fiscal year 2009 budgets by a combined $7.6 billion, and 30 more states expect additional deficits of more than $30 billion, according to the NGAThe Governors want a $40 billion Medicaid bail-out and … well, why not AIG, CITI, and Wall Street have been getting theirs.One proposal: The federal government would take over ALL Medicaid payments for newly displaced workers losing their jobs because of the recession/depression.

Enter Louisiana Governor Bobby Jindal with his plan to develop a Medicaid model based on “coordinated care” with an “at risk” capitation model with negotiated hospital, physician and provider fees. Does anyone hear “2012?” Sarah Palin, would you care to chime in?

POTENTIAL WINNER: Health Care Quality

The USA Spends

More and Gets Less

Bang for its Buck, When it Comes to

Health Care…

we ain’t #1

1

10

100

1,000

10,000

100,000

1,000,000

IRS Phone-in Tax Advice

Overall healthcare Quality in U.S.

(Rand Study 2003)

Sources: Courtesy A. Milstein modified from C. Buck, GE; Dr. Sam Nussbaum, Wellpoint; & Mark Sollek, Premera

∑ level (% Defects)

Def

ects

per

mil

lio

n

Fair Reliability High Reliability

1(69%

)

2(31%

)

3(7%)

4(.6%)

5(.002%

)

6(.00003%

)

Phil Mickelson putting from 6 feet

Airline baggage handling

US Airline flight fatalities/

US Industry Best of Class

Shaq Free-throws

Quality of Care Today: We are Worse than Shaq from the Line

Election 2008: the Winners and Losers

Potential Big Winner: Agency for Healthcare Research and Quality

The little agency that could. Buried in the backwater reaches of the U.S. Public Health Service is the Agency for Healthcare Research and Quality (AHRQ), charged with developing the future “cookbook of health care.”

CM2 has already embarked on an effort to define many of the elements of effective health care, that is what works

and what doesn’t, using much of the work product of AHRQ.

John McCain made this a keystone of much of his health care program:

“In the future, we will only pay for what works and not for what doesn’t work.”

Election 2008: the Winners and Losers

Arizona Senator John McCain

“We are approaching a perfect storm of problems that if not addressed by the next president, will cause our health system to

implode.”•Pay providers for diagnosis, prevention and care coordination but not for preventable medical errors or mismanagement • Require transparency by

providers regarding medical outcomes, quality of care, costs, and prices•Provide a safe harbor for doctors that follow clinical guidelines and adhere to patient safety protocols• Development national standards for measuring and recording treatments and outcomes

Trust me on this, I’m a lawyer… just like his somewhat successful at reaching across the aisle

Democratic predecessor in the presidency, Bill Clinton, Barack Obama will not hesitate to “steal” a good

Republican ideal and turn it to good (political) use.

HIPAA’s dirty little secret is that it was always designed, from the beginning, to be expanded to enable planners to better define the parameters of quality and effective

health care. Democrats as well as Republicans have known this.

But because the implication is no less than eventual ability to “ration” health care… nobody, least of all a “politician” will ever want to say that word out loud.

Election 2008: the Winners and Losers

Winner: Health Care Rationing

“Outcomes Research” and (gasp) Health Care “Rationing”

The 2003 Medicare Modernization Act (better known for establishing the Part D drug program) had lots of buried secrets, not the least of which was new funding for AHRQ and a plan to begin several demonstration projects with a goal of better identifying…

theJeanneScottletter

• “the appropriate use of best practice guidelines by providers and services by beneficiaries”

• The “reduced scientific uncertainty” in the delivery of care through the examination of variations in the utilization and *allocation of services,and outcomes measurement and research”

• achieving the “*efficient allocation of resources”• “the financial effects on the health care marketplace of

altering the incentives for care delivery and changing the *allocation of resources”HIPAA facilitates the collection of data and thus

the ability of planners and payers to ration health care intelligently.

(* Trust me on this, I’m a lawyer, “allocation of resources” = “rationing”)

Election 2008: the Winners and Losers

Both President Obama and Senator John McCain promised that they would address

the issues of better managing chronic health care disease and thereby reducing

the costs.Wow, that’s a mouthful!

It remains to be seen if anything meaningful can be delivered on these promises, but an awful lot is at stake.

Obama said he could reduce the cost of an average family’s health insurance by

$2,500 annually. A big chunk of that projected savings came from savings

from better disease management systems and care.

Possible Winner: Medical Managers, Disease Management, Evidence-Based Medicine and Preventive

Health care

Richard Simmons to be named personal health secretary to the nation, helping

all Americans to better health

through preventive health care, exercise

and diet

Election 2008: the Winners and Losers

Massachusetts has been the first, and so far at least, only state to undertake a serious effort at universal

health care.In 2004, under then Governor Mitt Romney (R-MA), and with the approval of the Democratically-controlled state legislature, the state adopted an “individual mandate”

requirement: every resident of Massachusetts must purchase health insurance, either directly or through one of two state programs for low and middle income

residents.

The Massachusetts “experiment” began in earnest in 2005 and since then has been steadily growing so that the number of uninsured Massachusetts residents has fallen below 8% -- well below the national average and

among the lowest in the country.

Aah, but therein lies the rub. With so many people now insured, the state’s health care infrastructure can’t

handle the demand.

Winner: Nurse Practitioners and PA’s

Election 2008: the Winners and Losers

Faced with shortages in primary care, Massachusetts has rewritten its “Nurse

Practice Act” and made it one of the most expanded and permissive such

laws in the country.

Already more than 800,000 Massachusetts residents are seeing nurse practitioners for their primary

care and the number is growing.

35 other states are now looking at the Massachusetts model and several,

including rapidly growing states like Arizona, Nevada and New Mexico have

amended their nurse practice and physician assistance licensing laws.

Winner: Nurse Practitioners and PA’s

Election 2008: the Winners and Losers

Many of the Republican candidates said they would promote the sale of health insurance across state lines

exempt from state insurance laws. John McCain said “across-state” health insurance sales would increase competition and drive down health insurance costs.

Others saw it as just another way for the flim-flam artists to make a buck. Already, out-of-state health insurance

sales are considered major fraud problems in many states. Texas has over 360 open investigations going. Witness “Mega Health,” the model for a John Grisham novel and

movie.

Winner: State Insurance Commissioners

Election 2008: More Winners and Losers

Winners: Food Safety: The Food and Drug Administration, bedeviled by a salmonella outbreak and tainted medicine from China, is likely to monitor imports and fresh produce more closely under an Obama administration. Only a fraction of imported food is inspected now. Foreign drug manufacturing plants can go years without an FDA visit. Democrats had considered fees on industry to pay for more FDA inspectors, but could not persuade the Bush administration to go along. They expect Obama to be receptive.

Winner: Ted Kennedy, any final Universal Health Care law will bear his name

Losers: Halliburton and other war profiteers… some of whom may go to jail

Winner: U.S. Auto Industry, if they can hold it together long enough for Obama to take office

Loser: Osama Bin Laden. Now that raising the terror fear factor is no longer a political wedge tool, maybe we really try to catch him

George W. Bush’s Top Ten Parting Words of Advice to Barack Obama

10. "Use the TV in the Lincoln Bedroom: it's hotwired for free HBO.“

9. "The Marine who holds the door? I tip a quarter.“

8. "Other than the economy, Iraq, Afghanistan, Iran, the deficit, the crumbling infrastructure,

our energy policy, Gitmo and global warming, is there anything else I need to fix before you

move in?“7. "From here, the Press Room's on the right

and the rest room's on the left. I hate it when I get those messed up.“

6. "When there's a big crisis, you might be here as late as 4pm"

George W. Bush’s Top Ten Parting Words of Advice to Barack Obama

5. "Anything you need, Cheney's extension is 11."

4. "Those stains in the oval office carpet? They were there when I got here."

3. "When they come brief you about Area 51, just smile and nod.

There's plenty of time for hyper-ventilating later."

2. "I'm not sayin' I condone it, y'know, but, remember all the W’s were missing from our keyboards. Well, we had to type 2 V's for a

month when we first got here… so your folks better get used to using zeroes.“ ***

1. "See that red phone? I thought it was for pizza. It's not."