For the past several years in our conferences, we have been talking about the need for change in health care. The new administration and Congress have begun to examine the changes they feel are necessary. Estes Park Institute has determined to participate in the discussions of what should be done. As part of this, we have been making our views on the changes needed in the delivery of care known to the policymakers in Washington, taking positions on what we believe should be done and on things we believe will not work. Some of the positions we are taking are summarized in the short paper that follows.

Needless to say, not all of the Fellows of the Estes Park Institute would agree with all of the details in this position and other positions we take.

We all do agree that change is necessary and that it is time that those in this country who are not covered should have the medical and hospital care they require. It is time that the American people take responsibility for their own health and that health care when needed became a right of the American people.

John Horty
Chair, Estes Park Institute

Audio Conference - 2/25/10

One of these can be found in Section 9007 of the Senate Bill.  This section would impose new obligations on hospitals that are tax exempt under Section 501(c)(3).  These include:

·                     Performing a community needs assessment every three years

·                     Adopting a written financial assistance policy

·                     Limits on charges for emergency and other “medically necessary” services

·                     New billing and collection practice rules

We’re all in favor of hospitals performing community needs assessments.  Any hospital, whether nonprofit or for profit, would be foolish not to keep in touch with what the market wants and needs.  Likewise, in these tough economic times, it makes sense for all institutions to clearly spell out who will and who will not qualify for financial assistance.

However, like so many other laws, the Devil is in the details.  For instance, the charge limitation provision limits amounts charged for emergency or other medically necessary care to “the amounts generally billed” to individuals who have insurance covering such care but, in the next sentence, prohibits the use of “gross charges.”  Maybe we missed something, but aren’t “gross charges” the “amounts generally billed” to patients?  Lawyers in collection actions will have a field day with this one.

Likewise, the collection practice section prohibits the hospital from engaging in “extraordinary collection actions” before making “reasonable efforts” to determine whether the individual is eligible for assistance under the financial assistance policy.  To someone with a big bill, an ordinary collection call could be “extraordinary” and no matter what is done, someone who doesn’t qualify for assistance will complain that reasonable efforts were not made to determine eligibility before he or she was denied.

Regardless of what you think of the health care reform proposals currently under consideration, you’ll probably agree that Congress could do a better job of being more precise in their language, rather than creating “Attorneys Right-to-Work Laws” through sloppy drafting.

Three provisions could derail the process:

(1)        The public plan is in the House bill, but not the Senate version of the bill.  I think the House will accede to the Senate and no public plan will appear in the final bill. 

(2)        There are provisions in the House bill about abortion that are not in the Senate. Bill.  Although this issue could derail the bill, I think compromise language will be found. 

(3)        “The rich” are taxed in the House bill; “Cadillac” health plans in the Senate.  Whatever happens, it is not a deal-breaker. 

Once the Health Reform Bill is law, the Democrats will claim credit for a historic event.  The Republicans will talk about the deficit, taxes and loss of Medicare benefits.  Both sides will be looking at the 2010 Congressional election.

Our interest is in how the final bill will affect providers.  Some effects are known and some will be a surprise.  Many ideas to change payment and delivery of care are seeded in the bill.  Some will grow to large changes in the near future.  We’ll comment on these in this column as we find them and we will analyze the new directions in payment and delivery the bill will take.

Stay tuned…

Nothing is decided as yet.

What is very likely is that the final reform bill, if it passes, will not hit its cost targets.  And, even before this actually happens, there is likely to be very strong predictions in the media and in Congress that it won’t.

This will result in an immediate push by CMS, the Administration and some in Congress to try to reduce Medicare payment to doctors and hospitals. 

The Dean of the Harvard Medical School, Dr. Jeffery Flier, put it well in a recent Wall Street Journal article:  “this can only be the first step in a multiyear process to now drastically change the organization and funding of health care in America.  I have met many people for whom this strategy is conscious and explicit.”

Reduction in payment may not happen directly, say, by a 5% or 10% cut in fees, but it will begin to happen in other ways.

We can see the beginning already.  On October 30, CMS announced cuts of up to 38% in the amount doctors will get when they use disease-screening equipment such as  MRIs and CT Scans.  It is predicted one million physicians are affected.

In November, Pete Orszag said Medicare and Medicaid paid out $54.2 billion in fiscal 2009 improperly, much of it in fee-for-service errors.

And, Robert Kelly, Vice President of Healthcare Analytics at Thompson-Reuters, said America’s health care system wastes between $505 billion and $850 billion every year, $300 billion in unnecessary care, $200 billion in fraudulent Medicare claims, kickbacks for referrals for unnecessary care and other scams, and $100 billion in inefficient administration.

And, the media and government drum beat won’t stop.

The quicker we can change from fee-for-service payment, the quicker the target will shift away from physicians and hospitals to other things.

The Senate is calling the tune.  By the Senate rules, they have unlimited debate and the ability to offer almost unlimited amendments which slows down the process.  And, of course, other business is taking place in the Senate at the same time.  So, it is very difficult to predict the timing of a bill coming out of the Senate.  Yet, the Senate is talking about passing a bill before Christmas.

My feeling is the opposite.  I predict a Senate bill won’t be approved before January.  And a final bill will not go to the President for his signature until just before the State of the Union Address. 

But, contrary to most experts, particularly Republicans, I believe that the later the date slips for the vote on the final bill, the more likely it is that a bill will get passed and sent to the President.

The longer the process in Congress takes, the greater the stakes of the President and for all the Democrats are raised.  My prediction is that compromises will happen on the political issues such as abortion and the “public plan” sufficient to pass a bill with most of its insurance reforms and other parts intact.  And the stakes get higher and higher as time goes on.  Democrats and the President have too much to lose.  But, in the end, the reform of the delivery system and handling the cost of the enactment will wait for another time.

• The effect of the President’s speech to Congress
• What is likely to happen between now and Thanksgiving?
• Analysis & effect of the Baucus Bill
• How much can the White House affect events?
• What should hospitals prepare to do to protect their ability to serve their community?
• What will happen after 2009?
• Has health care reform become continuous?
• Community hospitals in the post-reform era

Audio Conference 7/15/09

President’s Plan in Brief.

The speech given by President Obama to Joint Session of Congress last night begins the second phase of Health Reform 2009.  Click here to see the President’s Plan in brief, which was given to every member of Congress during the President’s speech.  It’s apparent from what the President said and how he said it that the likely bill that will go through the legislative process in the next month will be more modest than either the pending House bill or the bill from the Senate Health Education and Labor Committee.

The bill presently under consideration in the Senate Finance Committee is likely to be the bill to which ultimate changes will be made.  That bill is likely to be available in some form by the end of the month.

Although the President’s speech gave some specifics of the proposed slimmed-down bill, a lot is still indefinite, and many changes will occur.  What is plain is that the final bill will be the start of a reform effort that will last for years – not the end.

John Kitzhaber and I will discuss the situation of the reform effort and the effect of reform on hospitals no matter what form the ultimate law takes in an audio conference at 1pm, Eastern Time on September 29.  You should receive an e-mail announcement with registration information soon.  If you do not, the details will be posted in the Newsroom on Tuesday, September 15 or you may e-mail bgraham@estespark.org.

John Horty

September 10, 2009