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Daschle Departure Dims Prospects For Jump-Start On Health Reform

February 3rd, 2009

We’ll never know what would have happened if Tom Daschle had kept his books in order and become Health and Human Services secretary. He was widely regarded as a promising choice for the secretary’s job and a role as point man on health reform for the Obama administration. What is clearer is the likelihood that Daschle’s tax peccadilloes will throw a monkey wrench into the timing of the administration’s health reform initiatives.

In a keynote presentation Monday at the AcademyHealth/Health Affairs National Health Policy Conference, Daschle’s lieutenant Jeanne Lambrew, deputy director of the White House Office of Health Reform, outlined health provisions in the pending stimulus package. But Lambrew cautioned that it would be “a few weeks” before further details about the administration’s overall health reform strategy would be announced, due to the urgent priority of working through the first steps of its economic recovery program.

Meanwhile, congressional leaders are not yet on the same page with the timing question. House Majority Leader Steny Hoyer (D-MD) said cagily last week that he is committed to enacting broad health reform legislation during the 111th Congress, but not necessarily this year. But Senate Finance Chairman told the AcademyHealth conference Tuesday morning that fast action is imperative. “We have to get momentum,” he said, and “seize the opportunity.” Baucus reiterated the need for speed after the news of Daschle’s withdrawal. “The committee’s moving full speed ahead.”

There is momentum. Democratic leaders are hoping that long-delayed reauthorization of the State Children’s Health Insurance Program (SCHIP) will come this week. The health provisions in the stimulus package have the wind at their backs, although Republican staffers offered an assortment of criticisms of proposed Medicaid, COBRA, comparative effectiveness, and health information technology (IT) measures at an AcademyHealth panel Tuesday morning. But the administration can hold up its end of the stimulus negotiations without a confirmed HHS secretary on board.

Perfecting the design and political strategy for the next phase of the health agenda, though, will require a full-strength leadership cadre. Office of Management and Budget Director Peter Orszag was quoted by Lambrew and others at the AcademyHealth conference as saying that the cost problem is rooted not in Medicare and Medicaid but in the health system as a whole. The need to change the delivery system, and not just insurance payment, is increasingly recognized as the foundation for cost control. So while Congress will have to address Medicare physician payment again this year, the need for an array of Medicare changes that will foster delivery-system change needs to be thought through in the context of future private-sector coverage expansions. That implies that the Centers for Medicare and Medicaid Services (CMS) should be involved in reform strategy. But a new CMS administrator can’t be appointed until there is an HHS secretary. The same logic applies for other key HHS positions. Democratic staffers also said on Tuesday that congressional leaders will want to hear from the Obama administration before proceeding with details of legislation now on their plates. So in the short term, at least, Daschle’s withdrawal means that the administration will have trouble storming out of the gate with health reform as soon as the stimulus package is launched.

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9 Responses to “Daschle Departure Dims Prospects For Jump-Start On Health Reform”

  1. acavale Says:

    ICD-9 is much more than a pain. In the name of “standardization” it forces doctors to document things that may have no relevance to the type of services they provide, due to fear of not getting paid. It creates artificial documentation requirement that only serves to “dress up” notes to satisfy arbitrary billing requirements. ICD-9 is similar to asking a plumber to give you documentation that he also checked the wiring and electrical while he fixed your toilet, and only then you would pay him. In this context we would all agree that it is absurd to expect a plumber to do that; yet it is completely logical when providing medical care. Those doctors that don’t have to deal with insurance and govt. can actually focus on spending time with the patient and taking care of what is actually needed.

    As far as “best practices” research is concerned, I am not a fan of such processes. The reason again is in the details, and who provides such evidence. Because the practice of medicine is an art and science, as well as very individualized, it would be highly arbitrary for someone in Washington, and for that matter even at the NIH to say that one particular process is “the best way” to manage a certain illness or condition. At the same time, practice of medicine has to have sound scientific basis. A simple example is treatment of diabetes. Most “experts” that advocate for “best practices” would set up algorithms for use of medications in the management of diabetes. However, any clinician who has worked in the community with a wide ethnic mix will tell you that no such algorithm will will work for such a population. Therefore there cannot be a “best practice” for management of diabetes. However, a certain standardization can be required for management of all diabetics based on available evidence, such as every diabetic must be offered adequate situation-specific nutrition and lifestyle education, training in self monitoring of blood glucose, and adequate self-management skills to identify and treat very low and high blood glucose, and so on. Adequate monetary value must be placed for such services so that these services can be used appropriately. Simply mandating that a particular choice of drug as first-line, second-line, etc. constitutes “best practice” would be counter-productive because payers will start refusing appropriate treatment when it does not meet preset criteria. This will lead to cookbook medicine, that will neither be cost-effective nor clinically effective.

    Having seen previous attempts at creating “best practice” criteria, I would have to say that it will be a failure; it would be best for patients and their doctors to create individual-specific “best practice” rather than some unconnected agency telling them what to do. However, I am sure the economists will very likely disagree with me.

  2. bett martinez Says:

    Doctor, I am very appreciative that Health Affairs allows us to have this conversation, which is/has been very informative for me.

    I agree that ICD-codes are a pain. Now we are going to have ICD-10. Oy!

    What do you think of the funding for “best practices” research that passed in the Stimulus Bill?


  3. acavale Says:

    Dear Bett:

    I totally understand your frustration, because like you I am in the trenches of community-based medicine. Unfortunately, I don’t expect other contributors to this blog to chime in because unlike you and I, most of these folks have hardly ever ventured out into the reality of delivering health care. Most unfortunate is that public policy is often influenced by such ivory tower academics who are very eloquent in making speeches and providing policy papers, but cannot answer commonplace problems like you mention. I have struggled to find answers for a long time.

    To answer your question about what an office visit will cost, the reason why you cannot find a simple answer is due to government-mandated price-fixing in the form of CPT codes and the like. This process makes the actual cost of a simple thing like an office visit very opaque. If physicians could only work in an open market system where they could directly offer simple payment structure for their paitents with an option for discounting based on a patient’s socio-economic situation, more people will be able to afford access to routine care and overall costs would be significantly lower. This is where an HSA plan would be very cost-effective and specific. In the hands of an educated consumer (patient) it would be a great tool to allow patients to decide how and when to spend their healthcare dollars, so they can identify where their dollar could get them the best value. It will also provide an opportunity for patients (bypassing the resistence of insurance companies or govt.) to utilize unconventional methods such as e-visits, phone consultations, etc. which can be cost-effective as well as prevent loss of productive time currently being wasted in making office visits. Innovation is being stifled by the current third party payer system because of self-preservation. If patients have control over their healthcare dollar, they will spend it most effectively. Of course those who have no financial resources can always have government-sponsored coverage, which can also be structured in such a way as to to maximize the effectiveness of each health care dollar. Those doctors who do not participate in insurance networks are the only ones that can you a speciifc answer to your question of how much an office visit will cost, because they don’t have to worry about the legal implications of satisfying insurance and goverment mandates.

    I cannot speak for hospital charges, however. Honestly I have never understood the basis for hospital charges, and don’t expect to fully understand it. In the end an educated patient will always make out better than an ignorant one. The job of you as an insurance agent will be to educate your clients, specify the fine print in the policies you sell and teach consumers to ask the right questions at the right time.

    We must be appreciative of Health Affairs for allowing those of us in the trenches to speak our mind. Perhaps the academics are listening…..

  4. bett martinez Says:

    Dear Doctor,

    I’ve been on national panels re: Consumer Directed Health Care. Yes, HSAs are a great idea for folks who have the income to make use of the tax write-off, and if you think it would be a good idea for individuals to be able to write off premiums same way as companies do, I think I’m with you.

    Beyond that, the difficulty with consumer directed care is that there are no controls over costs — there is not even transparency about what the cost is going to be.

    I challenge you to have a stranger call your office and ask the person who answers your phone “what is the cost of an office visit?” If they are given a clearcut answer, “short visit costs $x, longer visit $y, except if z”, then congratulations! YOu are one of three docs in America that provides that info.

    Beyond the doctor’s office, which I’m sure we’ll agree is really a minor issue, there’s the fact that, even if there were a way to compare the cost of care in hospital A with that of hospital B, which there is NOT, you wouldn’t want to be making that decision in the ambulance on the way to the hospital. That’s assuming you even had any choice.

    So here’s a note from an aggrieved woman trying to advocate for her husband, age 67, recently diagnosed with Stage IV cancer:
    Ready for sticker shock? From Alta Bates Summit – period of 1-6-09 to 1-31-09 ONLY..$139,244.08… I was speechless when opening the statement so am demanding an itemized account. These kind of inflated outrageous charges go way beyond anything I have yet seen.
    This woman was shocked that I wasn’t. All I do is help make sure she has a health plan, in this case MedSupp F plan with a company that will pay the charges…and then there’s choosing a D plan that will cover the outpatient drugs.

    Is anybody out there listening…looking at this? Are you all aware of these charges, and can you weigh in? When the stimulus plan includes a small amount of money to actually measure best practices there’s a chorus of screams that this is going to mean “Rationing”!

    And what do you all think of the Fertility doctor debate sparked by octuplets – and playing itself out on the talk shows?

    Come on, come on, this is a forum – I know you folks who speak at Conferences and take 10 min for questions are reading this. Would someone besides me, the nasty insurance broker with a wonky side, and the anonymous doctor, jump in here and at least attempt to deal with the bits & pieces I see??!

  5. acavale Says:

    Dear Bett:

    I will look to find the book this weekend. The main point of my reply was that going forward each individual must be aware of actual cost of health care services, so that people can make intelligent use of services. Further, owning one’s health care plan is far better than depending on employer-sponsored coverage. Adding tax advantages to purchase of such plans will make it more attractive.

    It is still not too late for the new administration to take a more open view. We can only hope.

  6. bett martinez Says:

    Dear Doctor (your name only came through as “Avacale”)

    This is what I get for writing so quickly. We are actually pretty much in agreement; it’s I who wrote in a fuzzy manner.
    In the COBRA situation with the 3 mos. “Golden Parachute”, I am talking about what is, not what could be. What is, is that the Obama admin has proposed us, the taxpayer, subsidizing the COBRA – that is a continuation of the Employer Based insurance, by paying 65% of the cost on behalf of the “worker”…read below, this was just announced today:
    The Sacramento Bee –

    Feb. 10: Sacramento, Calif. – By law, losing a job usually cannot mean losing COMPANY* health insurance. But the unemployed often find that coverage too expensive, leading them to gamble with their health and finances.

    Now, health care advocates are urging the federal government to act on a proposal to provide subsidies that would pay for at least half of COBRA premiums for those who have lost jobs since September.

    The House has approved $40 BILLION IN SUBSIDIES*, while the Senate is considering $21 BILLION* and negotiators in the coming days will have to reconcile their differences as part of the sweeping federal stimulus package.
    *emphasis mine
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~All I said about the first case is that if the two companies want to pay the health insurance for these people (they are still working, and the wife is the HR person, very much in favor of providing the best company coverage to their staff who are essentially low wage) they should be allowed to, even if COBRA laws would need to be eased…better than then that we, the public, all doctors and patients, should be on the hook to make it more advantageous for this couple to keep the better coverage by us subsidizing it.

    In the second case, and this applies to most people who are calling me, people WANT to purchase their own private coverage, many WANT to buy HSAs, but simply BECAUSE they have used the coverage they had while at work, in a way that makes them seem actuarially like EXPENSIVE RISKS to insurers (keeping in mind that these decisions are made by a combination of statisticians and medical directors), they cannot QUALIFY for any sort of individual coverage, including a high deductible HSA plan.

    I am suggesting that the government, instead of subsidizing COBRA, which may end before the person finds another job with health coverage (we’re now down to about 61-63% depending on whose stats you believe), instead subsidize the “risk” allowing the person to obtain individual coverage.

    As to more future-looking proposals that bring doctors and patients more in line with creating the full picture, you may be interested (know you are very busy and thank you for taking a moment to read, digest and respond to my quick take) in picking up a copy of Hal Luft’s book TOTAL CURE. He is looking at doctors and best practices. A health policy fellow, currently residing at Stanford.

    If you do have a chance to pick it up, hope you will let me know what you think. Went to see his presentation a few weeks ago, and he says he’d like to meet with myself and another long time broker to get some input.

    Frankly, I know we need deep change, and am not clear how we’ll get from here to there.

    Kind regards,

    bett l. martinez, MEd., broker/consultant Nsurance Solutions CA Lic. #0794317 510-526-0312;

  7. acavale Says:

    Dear Bett:

    Being a physician in solo practice, who is also a small businessman, employer, and patient, I can appreciate your examples. However, there are two things that bother me about your argument for change in regs.

    First, you plead for the government to allow people to “have their cake and eat it too”. If one is fortunate enough to receive a golden parachute, there should be specific choice such folks should make not dip into the benefits afforded on both sides. It just seems unfair to me – perhaps I just don’t understand the economic argument here.

    Second, none of your clients would be in the situation they are in now, if they “owned” their health insurance policies, and did not depend on employer-sponsored plans. Which is why a system of HSA-type plans seems the best options for many individuals and families, because they can be portable.

    I find it very interesting that you describe so smoothly the financial transactions between employers and insurance plans as though patients and physicians don’t even exist (again it is my naive nature showing). This type of disconnect (in my opinion) is the fundamental cause for such disparities in health care financing. If all those folks that got laid off had their own plans, they would not be (or at least though twice before) taking advantage of their “rich benefits” and used up PT and chiropractic benefits and rendered themselves “ineligible” for another policy. It is human nature to use anything more freely when it is perceived as someone else’s than one’s own, like how we drive/care for a rental car compared to our own car.

    So, it would be far better to educate average folks as to actual costs of health care and how best to utilize resources, rather than ask government to change regulations to allow sloppy behavior. The current economic meltdown should teach us all that the days of thoughtless wasting of resources are over, and those of frugality and responsibility are in.

  8. bett martinez Says:

    I liked Obama’s promise in one of the debates to go line by line through the regulations…and here’s a good opportunity…realizing that everyone’s crying out for leadership, the health care debate is so complex that it could use more “micromanagement” especially partnering between open-minded policymakers & planners, with insurance industry counterparts.

    As one who has worked (or wonked) on both sides, government and private industry, I know this can be possible, but it will require some patience to unravel individual issues, rather than going for the big changes.

    Here’s are two examples:
    Currently, I’m an independent agent/broker and consultant, largely working with individuals and small groups in California.
    On the group side, the manager of a small group called with an issue the other day. Her company is small enough that she handles HR and other admin duties.
    Last year she married a man who works for a larger company with better benefits, so she took herself off the group to go on his coverage. Now he is being offered a sort of “golden parachute” arrangement, part of which includes the firm’s paying their COBRA for three months.They’d like to keep this coverage for that time, and then go back on her coverage. Current COBRA regulations do not permit this. They have thirty (30) days from the date of his termination, which is viewed as a “qualifying event”, to make the switch back to her plan (not as rich coverage). If they don’t switch within that time period, they have to pay the COBRA until the renewal date comes up on her company’s plan.

    The administrative arm of the insurance carrier recognizes this is making a problem for this couple but their hands are tied by regulations.

    If the stimulus plan as currently written were to go into effect before his job ends, then the couple would receive a subsidy of 65%, so they would doubtless choose to remain on COBRA, since his benefit package is richer than hers.
    This will cost the taxpayer!

    It would cost the taxpayer $0 if the regs were loosened to allow the couple to accept the 3 mos. and then move to her plan, which they can afford to do.
    There are many spouses in this situation.

    Second: I am speaking daily with folks being downsized who can’t afford to pay their COBRA, but could afford to pay premiums for an individual policy. A good % have already begun doing some kind of contract work in the field in which they were employed or have made another skill into a business.

    Unfortunately, because they had a rich benefit package, many took advantage and used chiropractic and physical therapy benefits, for example, that will now make them “uninsurable risks” by current standards.

    If the Insurance carriers could be induced and subsidized to accept these individuals, rather than paying for their COBRA, it would be more economic and would make more sense in the long run, especially for those who will remain uninsurable as individuals, and who may not (quickly or ever) go back to work for a large company that provides health care.

    It would be great to hear some feedback…what does anyone think?

    bett martinez, M.Ed. broker/consultant
    Insurance Solutions CA Lic #0794317
    Albany CA

  9. acavale Says:

    While sharing your expectations about substantial and meaningful reform in the health care arena, I would like to express a sense of relief (from a physician’s point of view) that we will have a different individual to head the HHS. Having read several versions of Mr. Daschle’s problems, it becomes clear to me that apart from failure to pay taxes, he was part of the lobby culture, which President Obama promised not allow in his administration.

    We can all hope that any incoming HHS secretary will bring fresh ideas that are inclusive of all participants in the health care system (which Mr. Daschle did not) and actually does not carry the unnecessary baggage that Mr. Daschle did. It was quite refreshing to listen to President Obama admitting that his adminsitration does not have separate rules for common people and those who are highly connected. Perhaps, today’s occurance will actally improve the prospects for real reform.

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