Down payment sets stage for reform

March 1, 2009

Key provisions include funding for Mediciad, COBRA subsidies, health records, NIH research, health centers, effectiveness research, and wellness programs.

When coupled with the recently reauthorized State Children's Health Insurance Program (SCHIP), the new legislation shows the "down payment" the Obama administration has made toward expanding coverage and setting the stage for future health reform.

Key health provisions include:

Most of the money in the stimulus bill devoted to healthcare aims to expand coverage for the uninsured. The funds will bolster state Medicaid programs, support hospitals that provide emergency care, continue Medicaid for low-income workers shifting from welfare to work, and help newly unemployed workers retain previous group insurance. The final compromise dropped an earlier proposal that would have expanded Medicaid to cover more higher-income individuals who lost their jobs. Instead, the legislators agreed to increase federal payments to Medicaid programs and let states determine how to provide needed coverage.

The package also bolsters Medicare by killing proposed reductions in reimbursement to teaching hospitals and hospice providers. There's an adjustment in payments for nursing homes, too.

COMPARATIVE EFFECTIVENESS

Although comparative effectiveness (CE) research and health IT provisions are not likely to create many new jobs or expand the healthcare safety net, their potential for reducing healthcare costs justified a place in the economic stimulus package. The legislation provides $19 billion to bolster IT operations and encourage physicians and hospitals to install and use EMRs. As part of a lengthy section that details how the government can promote electronic health information in order to modernize healthcare delivery, the bill officially establishes a national health IT coordinator in HHS to head up these efforts, sets deadlines for establishing interoperability standards and provides a format for doling out subsidies to IT adopters.

Insurers, payers and providers are concerned, however, that the push to strengthen privacy protections for individual medical records will stymie efficient dissemination of health information and erect roadblocks to providing effective care. Privacy advocates won the legislative battle and gained authority for patients to review personal records; now insurers are looking to HHS to develop workable regulations that support an interoperable health IT system.

Even more controversy surrounded the debate over establishing a federal program to fund comparative effectiveness research to gather data on which treatments and medical procedures are most effective in patient care. There is broad support from plans and payers for developing such unbiased expert evidence, which would ideally prompt doctors to order appropriate treatments and would reduce spending on ineffective procedures and products in the process.

However, pharmaceutical and medical device companies objected, saying that the CE program would condemn high-tech, high-cost products and ignore differences in individual response to any treatment. Initial language accompanying the House bill promised payoffs of CE research, citing that less-effective and more-expensive products "will no longer be prescribed," thus stoking fears of government rationing.

In the end, the CE research provision carried language specifying that there is no intent to use research data to mandate coverage, reimbursement or other payer policies, or to establish one-size-fits-all treatment protocols. The same provisions apply to the new Federal Coordinating Council for CE Research, which is supposed to set the CE research agenda.

It's generally understood that CE assessments funded by AHRQ and NIH will carry considerable weight and support coverage and reimbursement decisions by Medicare and insurers. Payers want CE research to consider costs, which is not prohibited in the bill.