In the frenzy of activity before Congress leaves town today, there are several events and developments to report:
? Conference on fresh ideas. Thinking ?Beyond the Election? was the focus of a conference (I moderated) in Washington on Wednesday sponsored by the Alliance for Aging Research and the American Pharmacists Association Foundation.
A vice president of Pitney-Bowes and an official from the city of Asheville, N.C., described separate programs they have initiated to provide better care for those with chronic conditions, like diabetes, asthma, and heart disease, while saving money.
The bottom line: Providing easy access to the right medications and hands-on health coaching saves money and improves outcomes. If we can move away from the political sound-bites in health care, we’d be able to learn from these proven programs about better ways to improve care today and advance innovation tomorrow.
? Health Affairs studies on variations in hospital care and outcomes for chronically ill Medicare patients: Dartmouth researchers have provided further evidence that “more” doesn?t mean better and that overuse of health care services can be as harmful as underuse. Several studies released by Health Affairs yesterday show that ?a higher intensity of care and higher level of spending are not associated with better quality or longer survival times even in the most renowned teaching hospitals?In fact, there is evidence that a very high intensity of care for people with certain terminal medical conditions might hasten death?? Smarter spending on health care should be the goal.
? New data on Health Savings Accounts: Assurant Health released new data this week showing, once again, that HSAs are popular across the board, not just with the young, healthy, and wealthy. Some highlights:
o 29% of HSA purchasers have household incomes of less than $50,000
o 27% have a net worth of less than $25,000
o 77% of HSA purchasers are families with children
o 70% are over age 40
o 43% of HSA applicants did not indicate any prior health insurance coverage.
Assurant has received applications for more than 97,000 HSAs since January 1 and has been able to offer coverage to 93% of applicants.
? New tax credit bill: Sen. Lisa Murkowski (R-Alaska) this week introduced legislation built around refundable tax credits, with those earning up to 350% of poverty ($82,000 for a family of four) eligible for the $1,000/$3,000 credits.
Laura Trueman of the Coalition for Affordable Health Coverage says that brings to nine the number of tax credit bills introduced this session. Rep. Kay Granger (R-Texas), who is sponsoring her own tax credit bill in the House, joined Sen. Murkowski in a news conference on Tuesday to boost the new legislation.
One novel idea in Sen. Murkowski’s bill: She would allow an additional 50% credit for insurance above the basic credit to help high-risk and older citizens. I’m a little worried about the incentives this sets up for people to over-insure, but we can have a good debate about this when Congress returns next year.
The bill also allows premium deductions for HSA-qualifying insurance, provides a credit to small business owners who make contributions to employees’ HSAs, establishes voluntary choice cooperatives, and provides added funds for state high-risk pools – all good ideas which are also part of the president’s health care package.
I write this from San Diego, overlooking a charming harbor on Coronado Island before giving a couple of speeches on Health Savings Accounts. This certainly has been the dominant activity for both Greg Scandlen and myself this year. The level of interest in consumer-directed health care continues to accelerate.
RECENT NEWS ARTICLES AND STUDIES:
? Health care regulation a $169 billion hidden tax
? Solutions for debt crisis go far beyond tinkering
? Texas Medicaid Enhanced Care Program
? 2004 voters’ guide to affordable health insurance
? Health coverage tax credit: Simplified and more timely enrollment process
? Merck’s pain is medicine’s gain
HEALTH CARE REGULATION A $169 BILLION HIDDEN TAX
Author: Christopher J. Conover
Source: The Cato Institute, 10/04/04
Christopher Conover, assistant research professor at Duke University, calculates that the net burden of health services regulation in the United States is $169.1 billion annually — which costs the average household more than $1,500 a year. ?The high cost of health services regulation is responsible for more than seven million Americans lacking health insurance? writes Conover. ?Moreover, 4,000 more Americans die every year from costs associated with health services regulation (22,000) than from lack of health insurance (18,000).? Conover calculates the costs of regulation of health facilities, health professionals, health insurance, pharmaceuticals and medical devices, and the medical tort system. He concludes that policymakers should make it an ?urgent priority? to reduce or eliminate these costs.
Full text: www.cato.org/pubs/pas/pa-527es.html
SOLUTIONS FOR DEBT CRISIS GO FAR BEYOND TINKERING
Authors: Dennis Cauchon and John Waggoner
Source: USA Today, 10/04/04
The Medicare and Social Security systems are ?on a collision course with financial reality that threatens the nation’s prosperity and the well-being of the next generation of elderly,? write Dennis Cauchon and John Waggoner for USA Today. The newspaper reports that U.S. taxpayers have a hidden debt of at least $53 trillion, which equals $473,456 per household. ?The federal government would have to double taxation or cut benefits in half immediately to make good on its promises of providing health care and pension benefits for retirees in the coming decades,? write the authors. The article also includes a personal retirement benefits calculator created by Eugene Steuerle and Adam Carasso of the Urban Institute. “It’s a game of chicken, and nobody’s moving even though we have a crash coming,” says Steuerle.
TEXAS MEDICAID ENHANCED CARE PROGRAM
Source: Texas Health and Human Services Commission, 10/05/04
?More than 55,000 Texas Medicaid clients with chronic illness soon will be eligible for a new program designed to improve their health and quality of life while reducing health care costs for the state,? according to a news release by the Texas Health and Human Services Commission. The new Texas Medicaid Enhanced Care Program, created by a bill authored by State Rep. Dianne White Delisi, will provide patients with personalized treatment plans and access to a 24-hour nursing hotline. The disease management program will focus on five chronic conditions: asthma, diabetes, congestive heart failure, coronary artery disease, and chronic obstructive pulmonary disease.
2004 VOTERS’ GUIDE TO AFFORDABLE HEALTH INSURANCE
Authors: Merrill Matthews, Jr., Ph.D. and Angela M. Hunter
Source: Council for Affordable Health Insurance, 10/06/04
The Council for Affordable Health Insurance has released its 2004 Voters’ Guide to Affordable Health Insurance to provide information on how elected officials voted on key health insurance issues. The votes chosen for the guide, five from the House of Representatives and another five from the Senate, were included because they would either impose more government regulations and controls on health care, therefore increasing health insurance costs and reducing access and should be opposed, or, reduce regulations, increase options, expand Health Savings Accounts and promote high-risk pools as a safety net for the uninsurable and so should be supported.
HEALTH COVERAGE TAX CREDIT: SIMPLIFIED AND MORE TIMELY ENROLLMENT PROCESS COULD INCREASE PARTICIPATION
Source: U.S. Government Accountability Office, September 2004
?For 2003, 19,410 individuals received about $37 million in benefits from IRS for the HCTC [health care tax credit] for themselves and dependents,? according to this report from the Government Accountability Office. But the number of people receiving the credit ?remains a small portion of the workers and retirees identified as potentially eligible.? Factors contributing to limited participation include a fragmented and complex enrollment process and the fact that health coverage may not be affordable. The report also examines the type and cost of coverage and finds that, as of April 2004, the average monthly premiums for individuals receiving the advance credit were $480 for Trade Adjustment Assistance (TAA) recipients and $661 for retirees receiving pensions from the Pension Benefit Guaranty Corporation (PBGC). Average monthly individual shares from the tax credit amounted to $168 for TAA recipients and $231 for PBGC beneficiaries.
Full text: www.gao.gov/new.items/d041029.pdf
MERCK’S PAIN IS MEDICINE’S GAIN
Author: Scott Gottlieb, M.D.
Source: American Enterprise Institute, 10/04/04
Competition between Pfizer and Merck over their two popular painkillers led to Merck’s decision to withdraw Vioxx ?after studies revealed a small but persistent increase in the risk of heart attack for people using the drug rather than its close competitors, especially Pfizer’s Celebrex,? writes Scott Gottlieb of the American Enterprise Institute. Gottlieb explains that the value of ?me too? drugs like Vioxx — which was particularly helpful to people because it inhibited pain but did not cause serious stomach upset – is ?worth every penny for the patients who need them.? Gottlieb also argues that competition and marketing serve as the ?impetus for companies to continue studying drugs after they are approved,? which often leads to the discovery of new uses for existing drugs. Viagra, for example, is currently being tested in trials for treatment of high blood pressure in the lungs of newborns.
In a related article, Holman Jenkins of The Wall Street Journal writes that Merck’s withdrawal of Vioxx ?illustrates how bollixed up our health-care financing system is.? Jenkins argues, ?Had a value-smart consumer been enlisted long ago to sort out who should really be taking Vioxx, [Merck] would have had an unimpeachable case for leaving the drug on the market, albeit with an expanded warning label.?
Full text of Gottlieb article: www.aei.org/news/newsID.21324/news_detail.asp
Full text of Jenkins article: online.wsj.com/article/0,,SB109702036791037365,00.html?mod=opinion%5Fcolumns%5Ffeatured%5Flsc
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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