Editor's Notes: The PPI "Health Policy Wire" is an email newsletter published by PPI's Health Priorities Project. To sign up for a free subscription, click here. (Just make sure to check the box next to "Health Care.") Original links are included though some may have expired.
1.) Computerized Health Records: Is President Bush Helping or Hurting?
2.) Stealth Medicaid Block Grants
3.) How Much Savings from Prescription Drug Discount Cards?
4.) Age Discrimination or Worker Discrimination?
5.) Unpreparedness: More Alarms on Bioterrorism
The push for computerized patient records seems to have received a boost from President Bush's call to ensure that nearly all Americans have their own computerized record within 10 years. While PPI welcomes the president's endorsement of an objective we've advocated for nearly a decade, it is unfortunate that he has missed a prime opportunity to leverage current efforts that will likely produce computerized records without federal action. In fact, his call for a lengthy standard-setting process may actually slow the adoption of information technology already underway in health care.
As Health Policy Wire has noted previously, an increasing flurry of private investment is broadening the use of IT in the health care sector, albeit at a slower rate than in most other sectors of the economy. A great deal of medical information about patients is already computerized in accordance with national standards. This information includes patients' prescriptions, diagnoses, lab tests, vaccinations and allergies. Insurance companies, pharmacies, labs, and public health agencies have computerized this data for reasons of administrative efficiency. But it is not currently available for doctors when they care for patients.
President Bush and Congress could rapidly accelerate doctors' use of electronic health records if they gave doctors, with patients' permission, access to information that is already computerized. Doctors who have received such information in beta tests don't want to practice without it ever again. They immediately see the value of using computers in clinical practice and thus are more likely to adopt additional systems to expand their use.
Instead, the president proposes to set standards for how medical information can be shared. This approach is tantamount to making soup without a pot. The creation of networks can accelerate the drive to share information, while standard-setting can slow down data sharing as doctors and hospitals push back software purchases until the standards are set.
Fortunately, states like Delaware are pushing ahead with the creation of a health information network. Under the leadership of Sen. Tom Carper and Lt. Gov. John C. Carney, Jr., the state has contracted with the Patient Safety Institute, a non-profit partnership between doctors, hospitals and patients, to create a statewide network. The state medical association, hospitals, insurance companies and employers are also supporting the effort. Replicating such efforts throughout the country would be the best way for the federal government to leverage private sector efforts.
"Health Information on Demand,"
By Sen. Tom Carper
Blueprint Magazine, March/April 2003:
www.ndol.org/ndol_ci.cfm?contentid=251495
&kaid=137&subid=900014
Patient Safety Institute
http://www.ptsafety.org
In a follow-up to President Bush's go-nowhere Medicaid reform effort last year, Florida Gov. Jeb Bush's administration is pursuing what Congress refused to approve. Florida Republicans advanced Gov. Bush's proposal to negotiate a "superwaiver" for its Medicaid program -- relying on a federal spending cap similar to one that that languished in Congress last year.
According to the Miami Herald, lawmakers postponed additional cuts to the Medicaid program to see if the feds "will allow Florida to waive Medicaid's 'antiquated,' complex and myriad guidelines governing how poor, old or sick people are before they're entitled to taxpayer-supplied healthcare."
While Gov. Bush has not officially proposed specific waiver details, the Herald reports that state officials have discussed restrictive new limits including hard caps on overall spending, or time limits for Medicaid recipients. Officials are exploring federal block grants to the state, under which Florida would be granted increased flexibility to administer the program.
Federal caps were the basis of President Bush's Medicaid reform proposal last year. The president was unable to secure the support of governors for the proposal, which then went nowhere in Congress. States were concerned about their financial liability should Medicaid rolls increase. Under current law, Medicaid is financed through a federal-state matching system. These reforms would cap federal funding, leaving states to fill potential gaps or cut eligibility and services.
Florida's outgoing Medicaid head acknowledged these possible risks to the state if federal allotments were to be capped, but believes that some reform proposals could save money. Advocates, however, are worried that savings will result from pushing people off the Medicaid rolls or sharply reducing provider reimbursements.
While most supporters of the current Medicaid system -- at both the national and state levels -- concede that some program reforms would be helpful to the efficient administration of the program, they are concerned that ending the guarantee of coverage will unfairly deny many people access to necessary health care. After all, timely care saves money in the long run by preventing larger health care problems in the future.
Reforms can and should combine the best of both worlds. PPI has advocated mainstreaming low-income health programs by allowing states to use Medicaid funds to purchase job-based coverage for workers when it is available. Currently, workers apply for Medicaid only if they are aware of their eligibility and if they take the time to deal with the welfare bureaucracy. Moreover, many workers feel there is a stigma to public programs like Medicaid. Buy-in to private programs would remove these barriers to Medicaid access, thereby increasing health care coverage.
Health care coverage and costs are intertwined. Increasing coverage (through both the public and private sectors) may increase costs to certain programs, but it will alleviate other cost pressures borne by the public stemming from uncompensated care for the uninsured as well productivity losses due to sickness. Simply imposing caps on Medicaid spending is a simplistic answer to the challenge of cost control. Health care cost increases are not unique to Medicaid, and are in fact endemic to the industry today. However, fiscal problems in Medicaid generally seem particularly acute because the program is counter-cyclical. That is, costs rise when the economy sours and the government has less money to fund the program, and fall when the economy booms and government revenues increase. Block grants risk unintended consequences such as cost shifts to other sectors or uncompensated care, while mainstreaming Medicaid would lead to a seamless system of pubic and private coverage.
"Medicaid Proposals Criticized,"
By Marc Caputo, Miami Herald, April 25, 2004:
http://www.miami.com/mld/miamiherald/
news/8513060.htm
"Mainstreaming Low-Income Health Insurance Programs,"
DLC Playbook, August 2, 2003
http://www.ndol.org/ndol_ci.cfm?kaid=139&subid=275&contentid=251945
With much fanfare and several glitches, Medicare has launched the first phase of the new prescription drug benefit law enacted last year. Medicare beneficiaries have begun choosing discount cards based on information about the price of drugs offered by each card. Although that information has been somewhat inaccurate at the start, the vast amount of price information available on Medicare's website will undoubtedly stimulate competition. The card also includes a $600 annual drug benefit for low-income beneficiaries.
To be sure, the bulk purchasing through discount cards will be much better than paying full retail price for drugs. But that's not where the real savings can be had in purchasing prescription drugs.
As with any other product, low prices depend on intense competition, but many new drugs do not have much competition until a "me-too" drug comes on the market. The real value of bulk purchasing comes when a pharmacy manager can play the manufacturers of two similar drugs against each other. That requires patients to give up some of the opportunity to choose among similar drugs so the pharmacy manager can negotiate on their behalf.
The Veterans' Administration uses a highly regimented version of a pharmacy manager, which many lawmakers see as a model to lower drug prices for Medicare. Veterans must give up all control of their drug choices when they use the VA system. They must either use the drug offered by the VA pharmacist (regardless of what their doctor ordered) or pay for all of it on their own. In contrast, workers in job-based health plans typically have the option of using the pre-selected drug (from what's known as the formulary) or paying a somewhat higher amount for the more expensive drug.
PPI believes the best approach is to let seniors themselves choose plans they trust to save them money, while still providing them the degree of choice they would prefer. That's essentially what the new prescription drug benefit will offer when it is launched in 2006. Unfortunately, the new benefit is poorly designed and may discourage seniors from enrolling because it costs too much. Congress should consider changes to reduce costs such as combining existing supplemental Medicare coverage with the new drug coverage. That would encourage more seniors to acquire drug coverage and lower the costs for all.
Medicare
U.S. Department of Health and Human Services
http://www.medicare.gov/
"Medicare Follow-Up?" by Jeff Lemieux
Centrist Policy Network, January 4, 2004
http://www.centristpolicynetwork.org/
archives/000047.html
The Equal Employment Opportunity Commission (EEOC) caused a small uproar with its recent decision regarding age discrimination regulations. It issued regulations to permit companies providing retiree health care benefits to reduce those benefits once a retiree turns 65 and becomes eligible for Medicare benefits. The AARP says the new regulation discriminates against older retirees, but in fact, it prevents workers from being denied the Medicare benefits to which they are entitled.
The problem is that employers don't have unlimited funds for health benefits. Moreover, it's not the employers who would have to spend more to cover Medicare benefits -- it's the workers. Worker benefits ultimately come out of workers' pockets. So if employers cannot lower their benefits to take advantage of Medicare, then they will take more money out of workers' paychecks. That's why several labor unions joined many businesses in support of the EEOC's action. Indeed, most union contracts and employer benefits already adjust to Medicare's benefits at age 65.
The AARP does raise a valid issue, however, about new opportunities for employers to reduce benefits for older retirees (those over age 65) under the EEOC ruling. The ruling allows employers to have a much lower level of benefits for retirees over 65 even after accounting for the Medicare benefits. Equitable treatment between younger and older retirees should be fully debated on the facts, but not at the expense of denying workers the Medicare benefits to which they're entitled.
Such equitable treatment is a cornerstone in PPI's Medicare policy, which would provide equal subsidies for the new prescription drug benefit to workers both with and without retiree coverage in order to prevent employers from dropping or shrinking workers' coverage. Fortunately, the EEOC didn't make a bad situation worse. Now Congress should reconsider its failure to fully and fairly subsidize retiree health benefits, and also consider the possibility of new rules to protect older workers from true discrimination.
"EEOC Approves Proposal to Exempt Retiree Health Plans from Age Discrimination in Employment Act,"
The U.S. Equal Employment Opportunity Commission, April 22, 2004
http://www.eeoc.gov/press/4-22-04a.html
"Fix the Medicare Compromise,"
By David B. Kendall and Jeff Lemieux
PPI Backgrounder, June 19, 2003:
http://www.ppionline.org/ppi_ci.cfm?contentid=251778
&knlgAreaID=111&subsecid=141
The president issued a directive last week creating "a common surveillance system to collect and analyze information about bioterrorist threats." The administration's plan also charges the Department of Homeland Security with conducting new biological risk assessments. The plan does not, however, provide any new money for defense against biological threats.
The plan preempted a new study published in the May/June issue of Health Affairs, which outlines both progress and vulnerabilities in cases studies of several communities' emergency preparedness. The report highlights communications and workforce education as particular gaps in the advancement of preparedness, and cites "important challenges" such as "a shortage of funding, delay in the receipt of federal funding, and staffing shortages."
The president's directive is a positive initial step in supporting the nation's defense against bioterror, but it is insufficient. It is critical that communities have access to a comprehensive system for tracking threats, and the administration should be commended for that effort. However, additional funding is also crucial in order for communities to hire and train necessary staff, increase lab capacity, obtain appropriate equipment, and improve communications.
As the Wire has discussed previously, too many issues surrounding bioterrorism defense policy and funding have become mired in political wrangling. The nation must assert the priority of a common defense against biological and chemical threats, and federal leadership is essential to this effort. Emergency preparedness should be a top national priority matched by assertive policy and the funding to see it through.
"Bush Issues Directive to Bolster Defense Against Terrorism,"
By Judith Miller, New York Times, April 28, 2004:
http://www.nytimes.com/2004/04/28/politics/
28BIO.html
"Bioterrorism Procedures are Outlined,"
By John Mintz, Washington Post, April 29, 2004:
http://www.washingtonpost.com/wp-dyn/articles/
A51413-2004Apr28.html
"How Prepared Are Americans For Public Health Emergencies? Twelve Communities Weigh In,"
By Megan McHugh, Andrea B. Staiti, and Laurie E. Felland, Health Affairs, May/June 2004:
http://content.healthaffairs.org/cgi/content/
full/23/3/201
"Health Affairs: Challenges Remain for U.S. Emergency Preparedness,"
iHealthBeat, May 5, 2004:
http://www.ihealthbeat.org/index.cfm?
Action=dspItem&itemID=102545
