PPACA Impact and Opportunities : Health Care Lawyer & Attorney : Epstein Becker Green Law Firm : Insurance & Costs : Health Reform Musings Blog

In yesterday’s post on The Health Care Blog, Bill Kramer remarks upon a key difference in the health reform discourse this go-round. Simply put, “the Obama Administration is changing the debate in a fundamental way.” As President Obama stated in his opening remarks to last week’s White House Forum on Health Reform, “[h]ealthcare reform is no longer just a moral imperative, it is a fiscal imperative.”

Kramer explains that past attempts at reform suffered from political sticker shock over concerns that health reform would dramatically enlarge the federal deficit. However, this time, the Obama Administration is emphasizing that reform will not pose an additional burden to the already laden deficit. Indeed, health reform is a necessary tool to “tame” the deficit over the long term.

And framing health reform as an economic necessity is already having an effect. As Nancy-Ann DeParle, director of the White House Office for Health Reform, pointed out in her Wednesday op-ed in The Boston Globe: there are no defenders of the status quo. Two happenings from yesterday, both involving key stakeholders, echo this sentiment:

Regional White House Forum on Health Reform - Dearborn Michigan
Underscoring the link between long-term economic prosperity and health reform, the White House chose Michigan, the state with the highest unemployment rate in the nation, as the site for the first of five Regional White House Forum on Health Reform. In his announcement of the Regional White House Forum series, President Obama called on participants of these forums to “put forward their best ideas about how we bring down costs and expand coverage for American families."

Among the 250 attendees were doctors, patients, insurers, policy experts and health care advocates. The forum was hosted by Governors Jennifer Granholm of Michigan and Jim Doyle of Wisconsin. Notable politicos in attendance included Congressmen John Dingell and John Conyers, Jr., as well as White House Domestic Policy Director Melody Barnes, who helped to moderate the event. Reports of the town hall-style event indicate that “guests in the room uniformly supported broad and sweeping reform focused on expanding access to the uninsured, improving medical records and emphasizing preventative care.”

The remaining four regional forums will take place in Burlington, VT (March 17th), Des Moines, IA (March 23rd), Greensboro, NC (March 31st), and Los Angeles, CA (April 6th).

Business Roundtable urges lawmakers to act quickly on health reform
Yesterday heard from another key stakeholder group, Business Roundtable. The association released a study showing that American companies were losing out to other countries with cheaper healthcare and healthier workers. As reported by Reuters, Business Roundtable “wants changes that would reduce costs through greater use of technology and other efficiencies and require everyone to obtain health coverage. The group also supports plans to provide government aid to help those who cannot afford insurance, but said they do not want to see a government insurance plan that dominates the market.”

Members of the Business Roundtable also heard from President Obama yesterday on the critical need for health reform. A transcript of the President’s speech is posted on the Wall Street Journal’s Washington Wire blog.

If yesterdays goings-on are any indication, Kramer and DeParle are right: the landscape has changed and the health form battle will be fought on different grounds. Everyone is in favor of change. The devil, of course, will be in the details.

Thursday's White House Forum on Health Reform brought together people who have a stake in our health care system with people who have the ability to change it. Prior to his inauguration, President Obama called on Americans to hold community discussions about health care. More than 9,000 Americans signed up to host discussions in all 50 states and more than 30,000 Americans attended these discussions. These community groups submitted reports to the White House that detailed their concerns about the health care system and their suggestions for reform. At the Forum, several of these community participants joined health care experts to participate in the Forum discussions.

Did these community representatives have any meaningful impact on Thursday’s discussion? Let’s hope so – engaging members of our nation’s communities adds a necessary human element to these debates as they begin to take shape and hopefully will demonstrate to those who can effect change that every ordinary person must be involved in this important national discussion. The President expressed his desire see change by the end of this year. We should harness the energy generated by yesterday's discussions to promote actions that result in health reform efforts and engage all Americans - all "stakeholders" - in these efforts. 

On Tuesday, President Obama announced Kansas Governor Kathleen Sebelius as his nominee for Secretary of Health and Human Services. She is known for her bipartisan approach to politics and her efforts as a governor in the health care arena. If confirmed, Governor Sebelius has a once in a lifetime opportunity to execute health care reform – a President enjoying positive public opinion, a national sense of urgency, and resources to get the job done.

The President also announced his choice for Director of the White House Office of Health Reform, Nancy-Ann DeParle, a former Administrator of HCFA (now CMS) during the Clinton administration who also has extensive experience in the private health care sector. Although this private sector experience has prompted criticism from some, Ms. DeParle’s appointment has drawn praise from both sides of the aisle because, despite her career-long identification with Democrats, DeParle has credibility with Republicans as well. Ms. DeParle is comfortably familiar with Washington and, drawing upon her previous White House, HCFA and Hill experiences, should be able to integrate herself within the White House policy operation easily while also serving as a powerful ally to Governor Sebelius. When it comes to crafting a health reform plan and then actually enacting it, Ms. DeParle’s role is likely to be unique and pivotal.

The President’s choices of Governor Sebelius and Ms. DeParle reflect a commitment to change that is likely to move us forward in our health reform efforts!

For health care facilities, and those who invest in them or lend to them, the President’s budget underscored the emerging “shape of things to come” in the delivery system. In short, the Administration intends to compel delivery system modifications through aggressive payment policy changes.

What industry segments are immediately concerned? -- home health agencies, skilled nursing facilities, IRFs, LTCHs, and rehab facilities. In the name of “efficiency and accountability” the President proposes to bleed (Bleeding Edge redux?) $950M over 5 years and $17.8B over ten years from payments that would otherwise have gone to these facilities. We know this because the budget is echoing Director Orszag’s work at the CBO, finding savings from putting into the hands of hospitals financial responsibility, on an MS-DRG by MS-DRG basis, for the care Medicare otherwise would have paid these facilities for within 30 days after inpatient discharge.

In the CBO formulation, bundled payments would have been applied to 1/3 of discharges by 2013 and all discharges by 2015. The budget scores this proposal somewhat higher than CBO did so one might speculate that more rapid application is now on the Director’s mind. Somewhat comforting to investors in the affected facilities is that savings begin in 2013 and that over half of the ten year savings are not realized until 2018 and 2019.

Does this “reform” propel acquisitions of post-acute facilities by acute facilities? Alternatively, will acute facilities have the market power to negotiate favorable terms in purchasing post-acute services from such facilities? Does this require additional hospital and physician integration to produce the admission patterns that will allow hospitals not to lose their shirts in paying for the new care?

Will any state insurance departments want to see hospitals establish reserves against the possibility of the cost of their post-acute care payment responsibilities exceeding their financial wherewithal? The CBO write-up of this program also included take backs so that hospitals would only realize 20% of the savings that Medicare expects that they would produce. Of course there could be a big negative for acute care hospitals if Medicare’s take backs make the margins small and expected savings do not materialize because of case mix, physician ordering patterns, or a dozen other variables. What upheaval do you predict?