Turning Up the Heat

The conversation over health reform heated up this week, with Cover the Uninsured Week sparking a great deal of the activity. Unlike past years, there was a refreshing focus on a cluster of ideas promoting consumer choice in health care.

Some highlights:

? The 12-member Senate Republican Task Force on Health Care Costs and the Uninsured offered a package they say ?would result in annual savings of $137 billion in health costs, expand health coverage to 17-25 million more Americans, and provide access to safety net care for 5 million more uninsured individuals.? (See the section below for a link.) Don?t expect passage this year, but the plan will certainly focus this year?s campaign debates.

? Health care also was the central message of Sen. John Kerry?s campaign this week, calling for expanding public health insurance programs such as SCHIP and Medicaid, tax credits for small businesses, and having the federal government assume 75% of the cost of employee health costs that exceed $50,000 a year.

In an article on Thursday, Wall Street Journal columnist David Wessel questioned the wisdom of the government, and therefore the taxpayers, serving as the nation?s reinsurance agency. He suggests this could lead to centralized decision making over ?how much care is enough? with politicians, not doctors and patients, making the ultimate choices.

? The House of Representatives passed three bills this week to underscore its support for making health care more affordable, including: 1) A bill to allow employees to roll over up to $500 a year in unused Flexible Spending Account funds into a Health Savings Account (garnering 50 Democratic votes); 2) a bill to cap medical malpractice lawsuits; and 3) a bill that would change health insurance regulations to allow small businesses to form association health plans across state lines. The legislation faces huge hurdles in the Senate, but the House has set down its marker.

? Ways to help the uninsured was the theme also of a wide-ranging discussion with journalists that the Galen Institute and the Council for Affordable Health Coverage hosted on Thursday, featuring Gary Claxton of the Kaiser Family Foundation, Joe Antos of AEI, Merrill Matthews of CAHI, and Greg Scandlen and myself of Galen.

? The Coalition for Affordable Health Coverage sponsored a briefing on Capitol Hill on Tuesday around the theme of providing direct financial assistance to the uninsured to help them purchase the health coverage of their choice. Four health LAs, Healthcare Leadership Council president Mary Grealy, and I spoke about refundable tax credits, also a central recommendation of the Senate Task Force.

Drug importation: Allowing citizens to import price-controlled drugs from other countries ? an issue that is so highly charged with political rhetoric ? also continues to demand attention in Washington and in the states. It is bewildering that the safety issues are so blatantly disregarded by those who want to open our borders to drug imports, not only from Canada but the world.

Former New York Mayor Rudy Giuliani submitted a report on the safety issue before the HHS Task Force on Drug Importation this week, reporting on a first-hand visit to the US Mail facility at JFK Airport in New York.

He saw packages containing controlled substances and many others that were inappropriately packaged, expired, or otherwise didn?t meet FDA specifications. He said that inspectors can visually examine only 500-700 of the 40,000 packages of ?suspected drug shipments? entering the facility each day.

One paragraph in his detailed report nails it: ?The terrorist attacks of September 11, 2001, demonstrated how vulnerable this country is to those who have a total disregard for human life?Since that time, the United States has invested billions of dollars to protect our borders.

?It seems counter-intuitive to contemplate opening our borders with regard to our medicine supply when in all other aspects of border security and protection, we as a country are looking for ways to tighten security?.Any further removal of controls, much less the total opening of our borders to foreign drugs, would create a situation that terrorists, drug dealers and organized criminals might well use to their advantage.?

Do you think that the politicians finally might listen to Rudy?s warning?

Grace-Marie Turner

RECENT NEWS, ARTICLES, AND STUDIES FROM THE HEALTH POLICY WORLD:

? The healthy Florida report: A blueprint for action

? Only in America

? Senate republicans propose plan for health insurance

? The complex challenge of the uninsured

? Treasury clarifies interaction of health savings accounts with other employer-provided health reimbursement plans

? Variations in healthcare: Implications for quality improvement

THE HEALTHY FLORIDA REPORT: A BLUEPRINT FOR ACTION

Source: Healthy Florida Foundation, 05/03/04

Nearly 100 Florida citizens and health care leaders met throughout 2003 to find ?long-term solutions that address the fundamental challenges of the health care delivery system.? They produced the Healthy Florida Report that offers a 14-point blueprint for action. It recommends, for example, ways to provide financial incentives to create electronic medical records, equalize the tax treatment of health insurance, provide more benefit options, including reducing state coverage mandates, and promote fitness and wellness programs. The group also recommends engaging HHS to help Florida establish a state-level ?Center for Consumer Health Care Information? that includes provider profiles, hospital surveys, and home health agency profiles. Each of the recommendations explains the benefits and risks as well as paths to implementation.

Full text: http://www.healthyfloridafoundation.org/

ONLY IN AMERICA

Author: Marc Hujer

Source: The Washington Post, 05/11/04

Marc Hujer, a German raised with universal health care, describes the ups and downs of his family?s encounters with the U.S. health care system. His wife?s search for the cause of tingling in her hands led to 33 doctors? visits, and numerous medical massages, X-rays, and EMG and MRI tests. Hujer writes that his family?s experience with U.S. health care was ?more intense, probably more upsetting and far more expensive? than it would have been in Germany, but also notes several ways the U.S. system was superior. He praises the U.S. doctors for their concern and the quality time they spent with his wife. In Germany ?patients are not considered customers? and ?no doctor ever calls to remind you of an appointment, nor do you get a call after the visit to find out if you are doing better,? he writes. Hujer also observes that wait times for appointments and tests are significantly shorter in the U.S.

Full text: http://www.washingtonpost.com/wp-dyn/articles/A15772-2004May10.html

SENATE REPUBLICANS PROPOSE PLAN FOR HEALTH INSURANCE

Author: Robert Pear

Source: The New York Times, 05/12/04

The health plan proposed earlier this week by the Senate Republican Task Force on Health Care Costs and the Uninsured includes ?a wide range of tax credits, subsidies and discounts to provide health insurance to millions of Americans and to improve health care for those who remain uninsured,? writes correspondent Robert Pear in The New York Times. According to Senator Judd Gregg, chairman of the task force, the proposals would result in access to the safety net for 5 million more uninsured Americans, insurance coverage for 17-25 million more individuals, and annual savings to the nation?s health care system of $137 billion. ?The proposals ? suggest that Republican leaders have heard the cries of many families and small businesses alarmed at the soaring costs of health insurance and health care,? writes Pear.

Full text: http://www.nytimes.com/2004/05/12/politics/12health.html

Senate Republicans? proposals: http://republican.senate.gov/costcoveragecare/index.cfm

Jeff Lemieux?s analysis of the proposal: http://www.centrists.org/pages/2004/05/8_lemieux_health.html

THE COMPLEX CHALLENGE OF THE UNINSURED

Author: Leah Uhlmann

Source: Joint Economic Committee, 05/13/04

This new study from the Joint Economic Committee finds that there is no ?typical? uninsured American and provides numerous statistics on the uninsured, including their numbers, who they are, and how they become uninsured. The study concludes that steps could be taken to make health care more affordable by ?reducing regulatory costs, which would reduce the costs of health care for all Americans, and implementing tax parity for nonworkers, which would level the playing-field for Americans who do not have access to employer provided insurance.? Health Savings Accounts are cited as an example of an insurance plan which could be a good alternative for the uninsured.

Full text (pdf): http://jec.senate.gov/_files/Uninsured.pdf

TREASURY CLARIFIES INTERACTION OF HEALTH SAVINGS ACCOUNTS WITH OTHER EMPLOYER-PROVIDED HEALTH REIMBURSEMENT PLANS

Source: U.S. Department of the Treasury, 05/11/04

The Treasury Department issued additional guidance this week (Revenue Ruling 2004-45) to clarify the relationship between Flexible Spending Arrangements (FSAs), Health Reimbursement Arrangements (HRAs), and Health Savings Accounts (HSAs). The ruling outlines the four types of employer-provided plans an individual may have while also contributing to an HSA: 1) Limited purpose FSAs and HRAs; 2) Suspended HRAs; 3) Post-deductible FSAs or HRAs; and 4) Retirement HRAs. ?The guidance also provides that combinations of these arrangements may also be provided without disqualifying an individual from contributing to an HSA. In addition, the ruling clarifies that individuals with coverage by an FSA and an HRA, as well as an HSA, may reimburse expenses through the FSA or HRA prior to taking distributions from the HSA, as long as the individual does not seek multiple tax-favored reimbursements for the same expense.? This guidance was awaited by middle-sized and large employers who are deciding what options they could offer employees in their 2005 health plans.

Full text: http://www.ustreas.gov/press/releases/js1548.htm

VARIATIONS IN HEALTHCARE: IMPLICATIONS FOR QUALITY IMPROVEMENT

Source: Alliance of Community Health Plans, 04/04

Recent studies ?on the amount and consequences of variation in health care and the implications for quality? are highlighted in this report issued by the Alliance of Community Health Plans (ACHP). Among the key findings in the report: Americans receive, on average, recommended care only about half the time; there is substantial variation in health care among medical conditions, geographic areas, and physician practices; and variation exists in the quality of medical care provided by the nation?s health plans. The report also references earlier data that shows ?57,000 lives, $1.6 billion, and nearly 41 million sick-days each year would be saved if all Americans received the level of care provided to enrollees in the top 10% of health plans.? Federal policymakers should ?hold health plans accountable by publicly reporting their performance, increasing patient participation in health care decision-making and establishing payment systems that reward efficiency, quality, and value,? the report concludes.

Full text (pdf): http://www.achp.org/media/variations.pdf

UPCOMING EVENTS:

Consumer Driven Health Care: Physicians Respond

Galen Institute Briefing

Friday, June 18, 2004, 2:00 – 4:00 p.m.

Barbara Jordan Conference Center

Washington, DC

RSVP to Jena Persico at jena@galen.org or call (703) 299-9204. For additional details go to http://www.galen.org/eventrpts.asp?docID=643.

SAVE THE DATE

Winning the War Against AIDS, Tuberculosis and Malaria: Obstacles and Opportunities

Manhattan Institute?s Center for Medical Progress

Thursday, June 10, 2004, 9 a.m. – 2:30 p.m.

New York City

Invited speakers include: program leaders of two HIV treatment programs in Africa, Jerry Norris from the Hudson Institute, Dr. Gail Cassell of Eli Lilly, and Global AIDS Coordinator Ambassador Randall Tobias. Speakers will discuss the scientific and financial challenges of dealing with these important global health concerns. Additional information and registration information will soon be available.

Health Policy Matters is a weekly newsletter containing commentary on health policy developments, summaries of timely and informative studies and articles on free-market health reform, and notices of upcoming events. It features research and writings by participants in the Health Policy Consensus Group. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about this newsletter and our organization, please visit our website at http://www.galen.org/.

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.

Elizabeth Lamirand

Editor, Health Policy Matters

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