Public and private investments in community health centers – institutions that provide care to approximately 15 million of the nation’s poor and medically underserved – have led to greatly expanded services and care for people who are uninsured, says a study published in the February 2010 edition of Health Affairs. Based on their study, the authors predict that a $500,000 increase in grant support for all centers would provide treatment for an additional 500,000 uninsured patients.

The authors say that these findings bode well for effective use of the more than $2 billion in funds provided to community health centers under the American Recovery and Reinvestment Act. The stimulus funding was the largest one-time investment in the centers in their history – and this study shows that in previous years, the centers used such investments to increase the care provided to low-income or underserved patients.

“Community health centers play a vital role in providing primary care and other services to those who cannot afford it or cannot access care. They are an investment that pays off for patients and the nation as a whole,” said lead author Anthony Lo Sasso, a researcher at the University of Illinois at Chicago School of Public Health. The work by Lo Sasso and colleagues was discussed in media outlets such as Reuters, Modern Heatlhcare, and NPR’s Marketplace. 

Researchers examined effects on care of investments in 1996-2006 from federal, state and local or private sources to so-called federally qualified community health centers. These are “safety net” providers such as community health centers, public housing centers, outpatient health programs funded by the Indian Health Service, and programs serving migrants and the homeless that meet federal criteria for receiving funding. Federal grants to federally qualified community health centers, for example, have grown from roughly $550 million in 1990 to nearly $2 billion in 2007.

The study authors found that these and other public dollars helped increase virtually all services, especially mental health and substance abuse treatment and counseling.

Highlights of what these investments yielded are as follows:

• Expanded Mental Health Care. Federal grants helped increase mental health services in community health centers at a time when many psychiatric hospitals have closed. Each additional $1 million in federal grants increased the probability of centers offering round-the-clock, on-site mental health treatment and counseling services to patients.

• Increased Staffing. Increased grant support boosted staffing throughout community health centers. For example, the average number of physicians at centers increased from 5.5 in 1996 to 6.8 in 2001, while the average number of total full-time employees increased from 66.3 to 83.4. Each additional $1 million of federal grant support led to roughly eight more full-time employees, five of whom were medical care providers. Each additional $1 million in state grants led to close to five full-time employees, while private grant dollars led to nine new employees.

• Additional Centers. Public and private funds helped grow the number of community health centers from 729 in 1996 to more than 1,000 in 2006. The funding also allowed health centers to operate more sites so that they could serve more patients.

• Expanded Services. Federal and private investments allowed more health centers to provide on-site 24-hour services.

• Providing More Care. Public and private grants also led health centers to provide more free or discounted care to uninsured and underinsured patients. The average amount of free or discounted care that health centers provided increased from roughly $781,000 in 1996 to nearly $1.25 million in 2001.

The authors predict that an additional $500,000 in federal grants to federally qualified health clinics would help provide $135,000 worth of free or discounted care and could translate into 540 more uninsured patients who receive treatment. If federally qualified health centers leveraged their federal grant support to gain additional state, local, and private grant dollars, this could lead to higher levels of service and more care for the uninsured, the researchers conclude.

In an interview in the February issue of Health Affairs, California HealthCare Foundation (CHCF) President and CEO Mark Smith reflects on successes and failures in areas where market interest and public interest converge in health care. Smith told Health Affairs Editor-in-Chief Susan Dentzer:

The policy world has built enrollment barriers for people in an incremental fashion. Every time a new program is created, there’s a new set of eligibility rules and enrollment processes and procedures. Before you know whether you’re eligible for program number seven, you have to prove that you’re not eligible for programs six, five, four, three, two, or one. That’s the kind of insanity that we place on the backs of working families, and the Medicaid and social service systems. We said, “There’s got to be a better way.”

To get at this issue, CHCF brought together software developers and public policy experts. The result? The development of Health-e-App and One-e-App, web-based applications that guide low-income families through the complex process of applying for a full range of health and social service programs.  Because these systems have built-in error checks, applicants are prompted to make on-the-spot corrections, reducing errors by 40 percent and consequently speeding up the paperwork process and subsequent enrollment. 

In the interview, Smith also contemplates health system challenges facing both the nation and California during a time of economic instability.  He sees the next several years as “a period of great uncertainty and, hopefully, great experimentation,” with health care providers and policymakers working together “to examine an alternative to our current path.”

Here in DC we’re bracing for the storm of the century — snow storm, that is.  What better time to catch up on some health policy reading? We list here the top 10 most-read posts from January on Health Affairs Blog. Topics cover health reform, health care costs, the mammography guidelines controversy, and more. And don’t forget the Top 20 most-read Health Affairs articles from 2009. They’re still free access for one more week.

Here’s the list from Health Affairs Blog for January:

1. Health Care Reform: State Winners And Losers
   by Claudia Schur and Marc Berk
2. Would Reform Bills Control Costs? A Response To Atul Gawande
   by Alain C. Enthoven
3. An Inconvenient Truth: The Health Care Cost Curve Is Already Bent
   by Jeff Goldsmith
4. The Grandparents Corps: A New Primary Care Model
   by Arthur Garson, Arthur, Margaret Whitehead, Tracy Buni, Catherine Sommers, and Karen Rheuban
5. Recession Slowed Health Spending Growth, CMS Analysts Say In Health Affairs
   by Chris Fleming
6. The Revised Senate Health Reform Bill: Cost Control And Other Aspects
   by Timothy Jost
7. Health Affairs Examines Long-Term Services And Supports
   by Chris Fleming
8. Don’t Handicap The Reform: Protecting Integrated Care Systems
   by David Balto
9. The Mammography Guidelines And Evidence-Based Medicine
   by Gail R. Wilensky
10. Senate Approves Health Reform Bill; What’s Next?
    by Jane Hiebert-White 

So what now for health reform? That’s the focus of today’s edition of the Health Wonk Review, a biweekly roundup of the best of health policy blogging. Joe Paduda, one of the founders of the Health Wonk Review, hosts this edition on his Managed Care Matters blog. He cites the post-State of the Union blogs by Joe Antos and Henry Aaron from Health Affairs Blog, links to other bloggers taking exception to Antos, and welcomes the Robert Wood Johnson Foundation’s blog to the HWR fold.

According to annual government projections published today in Health Affairs, U.S. health care spending is expected to have reached $2.5 trillion in 2009—up an estimated 5.7 percent since 2008 despite a projected decline in the gross domestic product (GDP) in the same period. As a result, health care’s share of the economy grew 1.1 percentage points in 2009, to a projected 17.3 percent. This represents the largest one-year increase in GDP share since the federal government began keeping track in 1960, federal analysts report on the journal Health Affairs‘ Web site.

The 11-year health care spending projections, prepared annually by economists at the Centers for Medicare and Medicaid Services (CMS), reflect the substantial influence of the economic recession on both public and private health care spending as more Americans lose their private health insurance and as federal and state governments face projected increases in Medicaid enrollment and spending.

According to the report, health spending by public payers is expected to have grown much faster in 2009 (8.7 percent growth, to $1.2 trillion) than that of private payers (3.0 percent growth, to $1.3 trillion). The CMS analysts attribute this predicted growth in public spending in 2009 to projected growth in Medicaid enrollment (6.5 percent) and spending (9.9 percent) as a result of increasing unemployment related to the recession. Conversely, enrollment in private insurance is expected to have declined 1.2 percent in 2009, despite federal subsidies for Americans who have lost their jobs to extend their private insurance coverage via the Consolidated Omnibus Budget Reconciliation Act (COBRA) that increased participation in these plans.

The CMS projections are discussed in various media outlets, including the Wall Street Journal, the Associated Press, the Los Angeles Times, the New York Times and the Times‘ health blog Prescriptions, and Reuters. The projections do not consider major health care reform legislation currently being discussed in Congress. Should reform come to pass, a second paper presenting projections based on the new law will be forthcoming in Health Affairs. (The journal recently published the CMS health spending report for 2008.)

For 2009 through 2019, health spending is expected to grow at an average annual rate of 6.1 percent—1.7 percentage points faster than GDP, the CMS analysts say. During that time, public spending (7.0 percent average annual growth) is projected to continue increasing faster than private spending (5.2 percent average annual growth).

The CMS projections predict that public payers will be paying for slightly more than half of the health care purchased in the U.S. by 2012, compared to 47 percent in 2008. However, at a February 3 Washington D.C. briefing, lead author Christopher Truffer noted that public spending is actually likely to surpass 50 percent of total spending a year earlier, in 2011. Truffer explained that, while the CMS projections are based on current law, Congress is likely to block impending cuts in Medicare physician payments, as it has repeatedly in the past.

The CMS report projects that despite anticipated growth in the overall economy in 2010, total health spending growth will slow down this year but will begin to accelerate again in 2011, with public spending continuing to grow faster than private spending. By 2019, national health spending is projected to nearly double, reaching $4.5 trillion and consuming 19.3 percent of the GDP.

With regard to the problems of the uninsured and health care cost growth, the two key issues leading to interest in health reform, the new CMS projections indicate that “nothing much has changed,” said Richard Foster, CMS’ Chief Actuary, at the February 3 briefing. “All that is still there, all that argues that some form of health care reform is a good idea,” said Foster.

Medicare and Medicaid

Medicare spending is expected to have reached $507.1 billion in 2009, an increase of 8.1 percent from 2008. This is less than the 8.6 percent growth seen in 2008 and is related to slower projected growth in prescription drug and hospital spending. If a mandated 21.3 percent physician payment rate cut goes into effect in 2010, total Medicare spending growth is projected to slow dramatically to 1.5 percent in that year (and growth in total health spending would be expected to slow to 3.9 percent). Between 2011 and 2019, Medicare spending growth is expected to average 7.4 percent annually as increasing numbers of baby boomers become eligible to enroll.

Medicaid expenditures are projected to have grown 9.9 percent, to $378.3 billion, in 2009—the fastest annual growth rate since 2002. Analysts attribute the growth to rapidly increasing Medicaid enrollment among nondisabled children and adults as a result of many losing employment. Comparatively high growth rates in Medicaid spending and enrollment are expected to continue in 2010, and then average 7.5 percent per year between 2013 and 2019. Total Medicaid expenditures are projected to reach $794.3 billion in 2019.

Private Health Insurance

As effects of the economic recession continue, spending on private health insurance premiums is expected to have risen slightly to $808.7 billion in 2009, climbing 3.3 percent compared to 3.1 percent in 2008. This steady rate of growth is the net result of the number of people who have lost private health insurance coverage along with their jobs offset by an increase in the number of people able to continue private coverage through expanded COBRA. With those subsidies set to expire in 2010, private health insurance premium spending is projected to decrease slightly in 2010 and begin increasing more quickly in subsequent years as the economy recovers. On a per enrollee basis, private health insurance premium spending is expected to have grown 4.6 percent in 2009, up from 3.6 in 2008.

Out-Of-Pocket Spending

The economic recession is also expected to slow growth in out-of-pocket spending, from 2.8 percent in 2008 to 2.1 percent in 2009. Out-of-pocket spending is expected to have reached $283.5 billion in 2009. The slower growth is attributable to several reasons, including lower personal incomes due to the recession and less out-of-pocket spending by new Medicaid enrollees. While spending on out-of-pocket expenses historically has grown more slowly than spending on private health insurance premiums, the two are projected to grow at roughly 6.0 percent annually between 2014 and 2019 because cost-sharing requirements are expected to continue to increase.

Other Highlights From The Report:

Hospitals. Total hospital spending is expected to have grown from 4.5 percent in 2008 to 5.9 percent in 2009, reaching $760.6 billion in 2009. This reflects a projected acceleration in hospital spending by public payers—up from 6.2 percent in 2008 to 8.0 percent in 2009—due to increased enrollment. It also reflects growth in private hospital spending, which is projected to have increased to 3.1 percent in 2009, up from a 12-year-low of 2.3 percent in 2008. By 2019, total hospital spending is expected to reach nearly $1.4 trillion.

Physician and clinical services. Growth in spending on physician and clinical services is expected to have accelerated to 6.3 percent in 2009, up from 5.0 percent in 2008. Total expenditures are expected to have reached $527.6 billion in 2009. The expected increase is driven primarily by Medicaid spending in this category, which is projected to have grown 10.3 percent in 2009, compared to 8.9 percent in 2008. Projected private spending in this category also accelerated, to 4.7 percent in 2009, up from 3.6 percent in 2008, due in part to care associated with the H1N1 virus.

Prescription drugs. Prescription drug spending growth is expected to have grown 5.2 percent in 2009, reaching $246.3 billion. This 2.0 percentage point acceleration from 2008 is due to an increase in per person use of drugs, driven by the need for antiviral drugs to treat H1N1, and by higher price growth in brand-name drugs. By 2019, prescription spending is projected to reach $457.8 billion, with spending growth expected to accelerate over the projection period due primarily to increases in drug prices.

President Obama has committed to continue the health reform discussion. Attend the National Health Policy Conference, sponsored by AcademyHealth and Health Affairs,  to hear first hand from administration officials, congressional representatives, state officials and other policy experts about where we go from here.

The conference takes place Monday February 8 and Tuesday February 9 in Washington, D.C. A full conference agenda is available online. Highlights of the conference include:

Priorities for the Administration

Secretary Kathleen Sebelius, U.S. Department of Health and Human Services

State Strategies

Governor James Doyle (D-Wis.)

The Congressional Agenda

• Charles Clapton, Senate Committee on Health, Education, Labor and Pensions
• Daniel Elling, House Committee on Ways and Means
• Elizabeth Fowler, Senate Committee on Finance
• Emily Porter, Office of the House Minority Leader

And Thoughts From

• Uwe Reinhardt, Princeton University
• Atul Gawande, Brigham and Women’s Hospital, the Dana Farber Cancer Institute, and New Yorker magazine

Nine breakout sessions at the NHPC analyze key issues in health care reform including provider payment, HIT, benefit design, and workforce with perspectives from leading researchers, policymakers, clinicians, and advocates.

The NHPC also offers an array of adjunct meetings providing even more discussion of the details of reform such as financing long-term care and the public health system, as well as skills training for using cost-effectiveness analysis and submitting public comments. Additional registration is required for all adjunct meetings.

Register online for the NHPC and any adjunct meetings by Saturday, February 7 to save $50, or register on-site at the conference. Registration opens at 8:00 a.m. on Monday, February 8 at the J.W. Marriott, Washington, D.C. On-site pricing applies.

The promise of modern information and communications technologies, often dubbed e-health, to transform health care in developing nations is a central focus of the February 2010 edition of Health Affairs, published today. As these nations struggle to address seemingly intractable health care issues, global experts discuss the potential role of e-health, covering urgent issues such as the need for long-term investment strategies to fund effective e-health implementations, interoperability standards so that various information systems can work together both within and among developing countries, and trained health informatics workforces with competencies tailored to various nations or regions. 

The articles constitute a broad review of the multiple e-health applications already in use in Asia, sub-Saharan Africa, and Latin America, known collectively as the Global South, as well as the challenges facing their widespread use. Highlights include:

The Next Steps For E-Health. A report on a 2008 conference sponsored by the Rockefeller Foundation, Making the eHealth Connection: Global Partnerships, Local Solutions, describes next steps for using e-health to improve health in developing countries.  Ariel Pablos-Mendez, Ticia Gerber and colleagues summarize conference participants’ recommendations for global partnerships, health technology solutions based on local needs, cross-border interoperability, leveraging current open source networks and shared informatics systems, and developing a shared understanding or convention on e-health.

The Best Uses Of E-Health Technologies. How can e-health technologies best support health and health care in developing countries?  According to a systematic review of evaluations of e-health implementations by Joaquin A. Blaya and colleagues, the greatest potential for e-health may lie in systems that improve communication between health care institutions, support medication ordering and management, and help monitor and improve patient compliance with care regimens. In addition, evaluations of personal digital assistants and mobile devices demonstrate high effectiveness in improving data collection time and quality.  Future implementations should include funding for rigorous evaluations, the authors say.

Lessons From Social Entrepeneurs. What can proponents of global e-health learn from the field of social entrepreneurship as they work to create viable business models for expansion? Kevin W. Crean writes that a combination of specialized financing techniques and sustained investor support that has benefited various social entrepreneurial initiatives can also accelerate the global impacts of e-health. E-health investments could benefit substantially from a number of other lessons, including frank, strategic risk reassessment by funders; a long-term investment horizon; greater support for developing integrated systems that can deliver care to large numbers of people; and increased focus on systems-level learning.

Exploring M-Health Technologies. Mobile health or m-health – the use of cell phone technologies to improve health – is the subject of three papers. Because m-health is relatively cheap and accessible – even to many poor people in developing countries – it holds huge potential for communicating important health information to patients, including reminders to take their medications and keep their doctors’ appointments. Lester Feder describes how the Carso Health Institute is testing m-health approaches in Mexico to combat a variety of conditions, including HIV/AIDS and diabetes.

Despite the great promise of m-health, there is a need for solid evaluation of its use in developing countries, according to a review from James G. Kahn and colleagues at the University of California, San Francisco. The authors call for ongoing evaluation of specific initiatives to guide m-health growth, including a mix of randomized controlled trials, natural experiments, and other study designs.

In addition, Walter H. Curioso and Patricia N. Mechael recommend expanding m-health collaborations in the Global South.  Most South-South collaborations have not gone beyond the pilot stage and have not been properly evaluated.  Funded primarily by private philanthropies and bi-lateral donors, such initiatives need to be reviewed and evaluated to identify those that show promise and provide the evidence to attract investment, the authors contend.

Getting Rid Of E-Health Silos. The current state of global e-health policy is parochial and nation-centric, and threatens to create permanent and counterproductive e-health silos, according to a review by Maurice Mars of the University of KwaZulu-Natal in South Africa and Richard E. Scott of the University of Calgary in Canada. They argue for a “global” e-health policy approach that engages the experience of stakeholders at both the global and local levels, is tailored to the needs of a given locality and population, and designed to overcome problems such as health care worker shortages.  William M. Tierney of Indiana University and co-authors advocate partnerships between academic and government institutions in high- and low-income countries to help establish health informatics programs in developing countries. Such programs, they say, can in turn capture and manage data that are useful to all countries.

Communication Among E-Health Systems. How can e-health systems in developing nations exchange data and work together effectively?  W. Ed Hammond and colleagues highlight issues in implementing interoperability standards – what is needed, who needs to do it, and how the work might be sustained.  It’s important, they note, to recognize the e-health priorities of the Global South:  first, to create national databases on the prevalence of disease, regionalization of disease, and outcomes; and second, to build demographic databases of local environments.  New interoperability systems need to be flexible and loosely organized to accommodate the needs of different audiences in different countries, while using shared terminology throughout.

E-Health Workforce Needs. In the developed world, it is estimated that tens of thousands of trained health informatics professionals are needed to use and deploy e-health technologies effectively.  But in the developing world, questions about health informatics workforce needs haven’t been asked, let alone addressed. William Hersh of Oregon Health and Science University in Portland and co-authors present a framework for developing estimates of the size and scope of the workforce that may be needed.  It will be important, they note, to develop in each country a workforce with the skills, training and competencies that are needed to fully realize the benefits of e-health and that are consistent with local culture, languages and heath systems.

The cluster of e-health articles grew out of a Rockefeller Foundation conference, Making the eHealth Connection: Global Partnerships, Local Solutions, held in the summer of 2008 that convened some of the world’s leading thinkers in e-health.

Editor’s Note: In the aftermath of President Obama’s State of the Union address, what is the state of health reform? Where do we go from here? In the post below, Timothy Jost addresses these questions. In other posts, Henry Aaron of the Brookings Institution and Joseph Antos of the American Enterprise Institute examine the same issues.

Although President Obama’s State of the Union address made it clear that he has a long list of  urgent priorities for the coming year, the President certainly did not signal retreat on the signature initiative of his first year—health care reform.  His words were “do not walk away from reform, not now, not when we are so close,” “finish the job” and “let’s get it done.”  Indeed, he repeated “let’s get it done” twice.

So how do we “get it done?”

The smartest approach procedurally would be for the House and Senate to pass a reconciliation bill—a budget bill that requires only a simple majority to pass—that makes the requisite fixes to the Senate bill agreed upon by House and Senate leaders in their informal conference last month.  With this, the House should have the votes to pass the reconciliation bill along with the Senate bill.

With the loss of the Massachusetts Senate seat, the Democrats lack a filibuster-proof majority to adopt amendments to the current legislation.  But Democrats in the House do not have the votes to pass the Senate bill without a reconciliation bill fix.  Sections of the Senate bill, such as the excise tax on high-cost health plans, the allocation of the premium subsidies, and the state exchanges are objectionable to progressive House members; the abortion provisions are objectionable to conservative House Democrats; and no one likes the “Cornhusker kickback.”  Although Democrats still hold a substantial majority in the House, few members would vote to pass the Senate bill unchanged.

What about a scaled-back bill?

Republicans have suggested that Congress begin anew with a scaled back, “bipartisan,” incremental bill.  First, a few comments on bipartisanship.  One could argue that bi-partisanship is the reason we still don’t have health reform.  The Democrats lost precious months over the summer, when public support for the legislation was still strong, courting Republican senators.  Had the Democrats moved forward forcefully on their own at that point, reform would already be done. 

Second, as President Obama said in his January 29 conversation with the Republican congressional delegation, the reform legislation is built on bipartisan ideas.  It takes fundamentally a traditional Republican approach—managed competition, tax credits for private insurance premiums, public coverage limited to the poor.  Further, a host of specific Republican proposals were incorporated into the final bill, such as interstate sales of insurance and high risk pools, and even malpractice reform. 

Third, there is simply not enough in the proposals the Republican have put forward to build meaningful reform.  The Congressional Budget Office analysis of the Republican proposal found that it would only cover 3 million of the uninsured, leaving 52 million Americans uninsured by 2019, and that it would reduce the deficit by only half as much as the Senate bill.

But, leaving aside which party writes the bill, is incrementalism even a good idea?  As many have said in the past few days, it is not possible to unravel the reform legislation and still come up with a plan that guarantees Americans that they can keep the coverage they have if they like it and offers them coverage if they need it.  It is possible to write very short health reform bills only if you create a public insurance system.  The Canada Health Act is 13 pages long, including the French translation (although there is more law implementing the bill at the provincial level).  The current English National Health Services Act is 272 pages long. But if you want to build a health care system based on private rather than public insurance, things get much more complicated. 

So long as we maintain a private insurance system, you can’t require health insurers to accept all comers, with their preexisting conditions, unless you require all to purchase insurance.  You can’t require everyone to purchase insurance unless you offer premium and cost-sharing subsidies to those who cannot afford the full price of health insurance and expand Medicaid to cover those who cannot afford to pay anything for premiums.  If we have an individual mandate and offer premium subsidies, we must have carrots and sticks to keep employers from dumping their employees into the publicly-subsidized nongroup market.  And, of course, once you offer public funding for health insurance, those who oppose abortion will insist that you make sure no public funding goes for abortion, those who are concerned about immigration will insist none goes to undocumented aliens, language clarifying that Congress is not in favor of rationing or euthanasia will be needed to address the fear-mongers, and those who hold out the longest will get a little pork added for their constituents.  Before you know it, you have a 500 page bill just for insurance reform.

One can question whether the back 1500 pages of each bill were really necessary. As one of the few Americans who have slogged through them, I can say that there are a lot of good ideas in there.  Some of the provisions, such as payment cuts to Medicare Advantage plans and adjustments in Medicare fee-for-service payments were necessary to pay for reform.  Some, such as a host of Medicare payment pilot and demonstration projects and patient-centered outcomes research, are likely to pay an important role in bending the health care cost curve, which is essential if reform is to succeed. They may improve the quality of health care as well, which, frankly, needs improvement.  But perhaps all of the new programs for wellness, prevention, public health, workforce reform, fraud and abuse control, Indian Health Service reform, and the CLASS program could have been handled through separate legislation, making the bill a smaller target.  Some legislators saw this as the one chance to get health reform done in our generation, and perhaps shot a little too high.  In any event, if a thousand pages were lopped from the Senate bill at this point, it still could not get 60 votes again in the Senate or 218 in the House.

We tried incremental reform after the Clinton health reform failure.  It did get us the Children’s Health Insurance Program, which has covered millions of children, the one segment of the uninsured population that is decreasing (although reauthorization of the bill had to await a Democratic president).  But the primary incremental reform effort of the 1990s, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), also called the Kennedy-Kassebaum Act because of its bipartisan sponsors, did little to fix the private health insurance market.  It ended health status underwriting and restricted pre-existing conditions clauses within group plans, but continued to allow  insurance premiums to grow far faster than inflation and insurers to operate with little accountability. HIPAA did almost nothing to improve the nongroup market.  Band-aids didn’t work then and won’t work now.

Getting it done through reconciliation

So the only option really left is to fix the Senate bill through the budget-reconciliation process to make it more acceptable to House Democrats, and then get it adopted into law.  This course of action has been urged in separate letters to the House and Senate leadership by fifty of the top health policy experts in the country, representing a range of political and policy perspectives, including David Cutler, Henry Aaron, Ted Marmor, Theda Skopcol, Jon Gruber, Jon Oberlander, Jacob Hacker, Harold Pollack, Karen Pollitz, Sara Rosenbaum, and many others. 

There is nothing underhanded, overbearing, or even particularly unusual about budget reconciliation.  Republicans passed both the 2001 and 2003 Bush tax cuts and the 1996 legislation ending the Aid to Families with Dependent Children program through budget reconciliation.  In health care, the CHIP program, Medicare Advantage, COBRA continuation coverage, and the EMTALA emergency treatment mandate were adopted through reconciliation.  Most years have reconciliation legislation.

Budget reconciliation is technically complex, and because of Senate rules, Congress is limited in what it can accomplish through it.  The process is described in an interview with former Senate Parliamentarian Robert Dove and a post by me on January 26 at the O’Neill Institute’s blog, a post by Jeff Davis at the Treatment, and a paper by Paul van de Water and James Horney (who between them have years of experience with the CBO and Senate Budget Committee) on the Center on Budget and Policy Priorities site. 

The reconciliation process is in fact already underway.  Congress passed a concurrent budget resolution last spring laying the groundwork for reconciliation and two of the House committees passed health reform as budget reconciliation legislation.  The House could pass a budget reconciliation bill in a matter of days, if it could agree on legislation with the Senate. 

The Senate would take longer, since Senate committee action may (this is not clear) still be necessary.  But the Senate also considers reconciliation under expedited rules (only 20 hours of debate are permitted), and could pass reconciliation in weeks rather than months.  Senate rules of relevancy, and in particular the Byrd rule, limit the issues that can be addressed through reconciliation to those that affect the revenues and outlays of the federal government.   Many of the issues that divide the House and Senate fall into this category.  Reconciliation could clearly be used, for example, to revise or eliminate the tax on high-cost health plans, alter the premium subsidies, increase cuts in the Medicare Advantage program, address state subsidies for the Medicaid program, and eliminate the “cornhusker kickback.” .  Reconciliation could not, on the other hand, change the Senate abortion language, since both the House and Senate bills prohibit federal expenditures for abortion.  Whether or not it could be used to create a national exchange is unclear.  A national exchange would eliminate the start-up money for the state exchanges found in the Senate bill and could reduce the cost of federal premium subsidies, but the Parliamentarian would need to be convinced.

The primary question at this point is whether a reconciliation bill can pass the Senate without the House first adopting the Senate bill, and if not, whether the House trusts the Senate enough for it to pass the Senate bill along with a “sidecar” reconciliation bill in faith that the Senate will accept the reconciliation bill unchanged.  This problem remains to be worked out, but if an acceptable resolution can be reached, we could still have comprehensive health care reform this spring.

Failure is not an alternative

The most likely other alternative at this point is to not get it done, to walk away from reform and accept failure.  From a policy standpoint this would be a disaster—fifty million Americans would remain uninsured, millions more would probably join them before the recession is over, providers would bear an ever higher burden of uncompensated care, employers would continue to drop health coverage or shift the cost of care to workers, and health insurance premiums would continue to grow. 

From a political standpoint it would seem to be a disaster as well for the Democrats.  Although the caricature of health reform that many Americans seem to have accepted is unpopular, Democrats have already voted for reform and are unlikely to become heroes at the polls simply because they could not get it done.  Failing to adopt reform would simply be proof that the Democrats cannot govern, even with overwhelming majorities, and does not seem like their best strategy for 2010.  Plus many of the activists who got Obama and the Democrats elected in 2008 have already indicated that Democrats cannot count on their help if Congress now abandons reform.  Once reform was in place, many Americans might realize that it is not the hobgoblin they have been led to believe it is.

To return to Obama’s words, “do not walk away from reform, not now, not when we are so close,” “finish the job,” “let’s get it done.”  Of course, Obama and his staff need to put their muscle behind his words.  But if they do, and if Democrats can stick together, we can “get it done.”

Editor’s Note: In the aftermath of President Obama’s State of the Union address, what is the state of health reform? Where do we go from here? In the post below, Henry Aaron of the Brookings Institution addresses these questions. See also other posts on the same issues from Joseph Antos of the American Enterprise Institute and Timothy Jost of Washington & Lee University.

Last Wednesday night, president Obama answered the question raised by the ‘Massachusetts surprise’—the startling election of a Republican to replace health reform stalwart, Edward M. Kennedy.  That question was simple: did that election require the abandonment of efforts to reform U.S. health care? 

Conflicting recommendations abounded. Some said yes, the process should stop.  Others suggested that reform should proceed, but only incrementally or where bi-partisan agreement could be found. 

I believe that the only viable strategy is to move ahead despite the loss of a filibuster-proof majority in the U.S. Senate to enact the Senate bill with modifications.

In his State of the Union address, the president did not explicitly embrace this strategy, but his words point in that direction.  Without doubt, the president made clear that he supports continued Congressional efforts to enact his health reform agenda.  This clarity came after some confused remarks released immediately after the Massachusetts election by the White House and Congressional leaders.  The president seemed in those early hours to support efforts to enact reform legislation on a piece-by-piece basis.  Speaker Pelosi declared that she lacked votes in the House to simply pass the Senate’s bill.

The State of the Union speech, coming eight days after the Bay-State electoral shock, reflected a sober and considered reaction.  Although he was not explicit, the president indicated that he would press for enactment of legislation like that passed by both houses of Congress.  I believe that there is only one strategy for achieving this goal that has any realistic chance of success.  It requires negotiations between the House Representatives and the Senate on changes in the Senate bill that both houses of Congress could enact by simple majorities under so-called ‘reconciliation’ procedures.  Actual passage of the modifications would follow House approval of the bill already passed by the Senate.  Speaker Pelosi indicated earlier this week that she, after all, she believed that she is close to having a majority to implement this strategy.

This strategy will not be wholly to the liking of members of either house of Congress.  Not all provisions of the Senate bill that are objectionable to the health reform supporters in the House can be fixed through reconciliation.  Not all of the changes on which House members will insist are to the liking of some Senators who supported initial passage.  But, as noted later, no other option for moving ahead offers any plausible chance for success.

Using Reconciliation Is In Accord With Congressional Rules And Precedents

This course also carries non-trivial risks.  The first is that Republicans will try to persuade the public that use of reconciliation to pass a bill is somehow contrary to agreed Congressional procedures.  I believe that this criticism is without merit.  Under Congressional rules, reconciliation exists to deal with exactly this sort of situation—the failure of Congress to implement provisions of the prior budget resolution.  The 2009 budget resolution called for action on health reform.  Congress has not yet acted.  Using reconciliation to effect the intended outcome is just what reconciliation is intended to do.  And enactment by a simple majority in the House of a bill previously passed by a super-majority in the Senate follows established Congressional procedure.

Furthermore, Republicans are poorly positioned to object to the use of reconciliation to pass important and controversial legislation.  It was a Republican president and a Republican Congress that in 2001 used reconciliation procedures to enact tax cuts that could not have passed had supporters been forced to amass 60 Senate votes.  Furthermore, reconciliation could be used at that time only because tax cut advocates framed as temporary tax cuts that everyone with more than a room temperature IQ understood were intended to be permanent.  But permanent tax cuts would have required 60 votes.  And, so, in that battle, truth, as in other wars, became a casualty.

The Polls And What They Mean

The more serious risk of using the strategy I have outlined comes from the fact that public opinion polls now indicate that more respondents oppose what they think is in the health reform bill than support it.  Polls indicate that support for health reform has been waning for some time, but the shift to ‘more against than for’ occurred comparatively recently.  At the same time, focus groups indicate that when people are exposed to the provisions the bills actually contain, views shift from negative to positive.

I believe that the polling results carry a dual message.  The first is that public querulousness is real.  People care about their health coverage.  Most are insured and most are more or less satisfied with the coverage they have.  They don’t want to lose it. They understand that millions are uninsured.  But they are afraid that large scale reform — and the House and Senate bills are both unquestionably large-scale reforms — threatens to upset their current arrangements in some fashion.  Hence the worry.

The second message is that Democrats, in general, and the administration, in particular, have done an execrable job of communicating with the public about health reform.  Democrats have spent the past year arguing with each other, rather than combating allegations and misrepresentations of opponents about what the proposed legislation would do.  They debated endlessly among themselves on whether to include a public option in the reform legislation, without realizing that the debate was a waste of time: There was never any chance that Congress would include a public option strong enough to enroll tens of millions of enrollees, and without large numbers of enrollees a public option would have little consequence for insurance competition. 

Democrats fought over whether to have a single national insurance exchange or separate state exchanges.  They hashed out aid formulas, penalties on non-compliant employers, and how to make sure that an individual mandate really worked.  The worked hard on scores of other technical provisions, many of which were important, but all of which were dull and utterly bewildering to anyone other than the few specialists interested in them.

Meanwhile, reform opponents talked to the public.  They successfully framed the proposed health reforms.  In my view, they did so through a distorting lens.  In a feat of rhetorical legerdemain, they cast plans that would cause tens of millions of people to buy private insurance coverage as a ‘government takeover.’  It surpasses understanding why advocates of health reform did not promptly and forcefully label this allegation as the fantasy and distortion that it is. 

Opponents of health reform told people that a plan scored as reducing deficits was a budget-buster.  Some reform opponents actively abetted the mendacious mischaracterization of end-of-life counseling as ‘death panels’ (labeled ‘the lie of the year’ by Politifact).  Opponents of reform succeeded in persuading Americans that their insurance arrangements were in jeopardy, when, in fact, the plans covering most would not be touched by the proposed legislation.  These largely unaffected groups included most people covered through employment-based coverage, current Medicaid beneficiaries, and most Medicare beneficiaries.  And, of course, millions more would have had their insurance costs reduced by newly-available subsidies to make insurance affordable.

Reform Advocates Must Make Their Case To The Public

The challenge for health reform supporters in the administration and in Congress is to resume talking to American voters.  They have a very good case to make.  The legislation has many genuinely appealing features.  Americans are rightly angry that insurance companies now can charge high premiums or deny coverage altogether to those with serious illnesses.  Advocates of reform should make sure that every American understands that reform will prevent insurance companies from cancelling coverage or jacking up premiums for the sick. 

Advocates should remind the public that the reform legislation will not only bring insurance coverage to tens of millions who are currently uninsured, but will also relieve scores of millions of others from the fear that they will lose coverage in the future.  Reform advocates should strive to make understandable to all the legitimate promise of cost control and the tangible steps to improve quality of care that will result from health reform.

There Are No Other Workable Options

Other strategies hold out no prospect of success.  Abandoning the reform effort is the most dangerous strategy of all.  Reform advocates have taken the hard votes.  Voters opposed to reform will not forget those votes come November.  And supporters of reform will find little reason to support members who refused to use the leverage of a large political majority to implement their principles.

The start-over, do-it-in-pieces strategy is an invitation to time-wasting failure.  Sixty-vote majorities would have to be assembled for each component of reform.  To be sure, it is technically possible to craft a bill that extends coverage to fewer people than the Senate or House bills do.  But it is not possible to institute serious insurance market reforms without assuring a balanced pool of enrollees.  It is not possible to assure balanced pooling without mandating coverage.  It is not politically or ethically possible to mandate coverage without providing subsidies to make insurance affordable to low- and moderate income people.  And it is not possible to prevent subsidies from boosting deficits unless one is prepared to boost taxes or cut other spending, which reform opponents have consistently refused to do and which would certainly require sixty Senate votes. 

At best, the call for starting anew is naïve.  At worst it is a dishonest siren-call, summoning health reformers into a political swamp.

So, the best option for health reformers is to take democracy seriously and set out to persuade voters that the reform is in the national interest.  Reformers have ten months before the mid-term elections to do the job.  It will be a hard slog, It will be far harder to dislodge misconceptions now than it would have been to have prevented them from being implanted six months ago. 

An effective campaign to sell health reform will take patience, money, and energy.  It will demand the involvement of the president of and members of Congress.  The reasons why health reform is in the national interest will not explain themselves.  Opponents of the Senate and House bills will certainly not do the job for them.

If health reform supporters cower before current public opinion polls, they will surely lose heavily come November—and, arguably, they will deserve to lose.  If they stand up for the genuinely constructive legislation they have crafted, they can prevail and they will deserve to win.

We are pleased to announce the “most-read” Health Affairs journal articles published in 2009. The number 1 article published in 2009 was on “Annual Medical Spending Attributable To Obesity” by Eric Finkelstein and colleagues.  All articles below are open to all readers for the next 2 weeks—through February 12, 2010.

Top-viewed articles published in 2009

1. Annual Medical Spending Attributable To Obesity: Payer-And Service-Specific Estimates
   by Eric A. Finkelstein, Justin G. Trogdon, Joel W. Cohen, and William Dietz
2. Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook
   by Andrea Sisko, Christopher Truffer, Sheila Smith, Sean Keehan, Jonathan Cylus, John A. Poisal, M. Kent Clemens, and Joseph Lizonitz
3. National Health Spending In 2007: Slower Drug Spending Contributes To Lowest Rate Of Overall Growth Since 1998
   by Micah Hartman, Anne Martin, Patricia McDonnell, Aaron Catlin, and the National Health Expenditure Accounts Team
4. What ‘Patient-Centered’ Should Mean: Confessions Of An Extremist
   by Donald M. Berwick
5. The Recent Surge In Nurse Employment: Causes And Implications
   by Peter I. Buerhaus, David I. Auerbach, and Douglas O. Staiger
6. Building Organizational Capacity: A Cornerstone Of Health System Reform
   by Janet Corrigan and Dwight McNeill
7. Take Two Aspirin And Tweet Me In The Morning: How Twitter, Facebook, And Other Social Media Are Reshaping Health Care
   by Carleen Hawn
8. Fostering Accountable Health Care: Moving Forward In Medicare
   by Elliott S. Fisher, Mark B. McClellan, John Bertko, Steven M. Lieberman, Julie J. Lee, Julie L. Lewis, and Jonathan S. Skinner
9. Health Reform: A Bipartisan View
   by Jim Cooper and Michael Castle
10. Meeting Enrollees’ Needs: How Do Medicare And Employer Coverage Stack Up?
    by Karen Davis, Stuart Guterman, Michelle M. Doty, and Kristof M. Stremikis
11. What Does It Cost Physician Practices To Interact With Health Insurance Plans?
    by Lawrence P. Casalino, Sean Nicholson, David N. Gans, Terry Hammons, Dante Morra, Theodore Karrison, and Wendy Levinson
12. Evidence On The Chronic Care Model In The New Millennium
    by Katie Coleman, Brian T. Austin, Cindy Brach, and Edward H. Wagner
13. Preventing Chronic Disease: An Important Investment, But Don’t Count On Cost Savings
    by Louise B. Russell
14. Do Prevention Or Treatment Services Save Money? The Wrong Debate
    by Ron Z. Goetzel
15. Obesity And The Workplace: Current Programs And Attitudes Among Employers And Employees
    by Jon R. Gabel, Heidi Whitmore, Jeremy Pickreign, Christine C. Ferguson, Anjali Jain, Shova KC, and Hilary Scherer
16. The Kaiser Permanente Electronic Health Record: Transforming And Streamlining Modalities Of Care
    by Catherine Chen, Terhilda Garrido, Don Chock, Grant Okawa, and Louise Liang
17. Hospital Quality And Intensity Of Spending: Is There An Association?
    by Laura Yasaitis, Elliott S. Fisher, Jonathan S. Skinner, and Amitabh Chandra
18. Rising Out-Of-Pocket Spending For Chronic Conditions: A Ten-Year Trend
    by Kathryn Anne Paez, Lan Zhao, and Wenke Hwang
19. Is Health Spending Excessive? If So, What Can We Do About It?
    by Henry J. Aaron and Paul B. Ginsburg
20. Increased Spending On Health Care: Long-Term Implications For The Nation
    by Michael E. Chernew, Richard A. Hirth, and David M. Cutler

Most-Viewed Articles Overall in 2009

We also list here the top 10 articles from the entire Health Affairs archive that were most frequently viewed in 2009. Richard Hillestad and colleagues’ article on electronic medical records from 2005 was the most-read online of all Health Affairs articles in 2009 with over 61,000 pageviews.  If you’ve missed any of these classic articles, here’s your chance to catch up with your reading.

1. Can Electronic Medical Record Systems Transform Health Care? Potential Health Benefits, Savings, And Costs  (September/October 2005)
   by Richard Hillestad, James Bigelow, Anthony Bower, Federico Girosi, Robin Meili, Richard Scoville, and Roger Taylor
2. MarketWatch: Illness And Injury As Contributors To Bankruptcy  (Web Exclusive, February 2, 2005)
   by David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler
3. Annual Medical Spending Attributable To Obesity: Payer-And Service-Specific Estimates  (Web Exclusive, July 27, 2009)
   by Eric A. Finkelstein, Justin G. Trogdon, Joel W. Cohen, and William Dietz
4. U.S. Health Care Spending In An International Context  (May/June 2004)
   by Uwe E. Reinhardt, Peter S. Hussey, and Gerard F. Anderson
5. Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook  (Web Exclusive, February 24, 2009)
   by Andrea Sisko, Christopher Truffer, Sheila Smith, Sean Keehan, Jonathan Cylus, John A. Poisal, M. Kent Clemens, and Joseph Lizonitz
6. National Health Spending In 2007: Slower Drug Spending Contributes To Lowest Rate Of Overall Growth Since 1998  (January/February 2009)
   by Micah Hartman, Anne Martin, Patricia McDonnell, Aaron Catlin the National Health Expenditure Accounts Team
7. What ‘Patient-Centered’ Should Mean: Confessions Of An Extremist (Web Exclusive, May 19, 2009)
   by Donald M. Berwick
8. The History Of Vaccines And Immunization: Familiar Patterns, New Challenges (May/June 2005)
   by Alexandra Minna Stern and Howard Markel
9. Measuring The Health Of Nations: Updating An Earlier Analysis (January/February 2008)
   by Ellen Nolte and C. Martin McKee
10. The Working Hours Of Hospital Staff Nurses And Patient Safety (July/August 2004)
    by Ann E. Rogers, Wei-Ting Hwang, Linda D. Scott, Linda H. Aiken, and David F. Dinges

Rankings are based on Web traffic at www.healthaffairs.org from January 1, 2009 to December 31, 2009 and do not take into account print readership or online readership from article aggregators, such as Lexis-Nexis. Health Affairs subscribers have complete access to the online journal content, plus online research tools. All readers have free access to all Health Affairs Blog content; selected journal articles at time of posting (Web First for 2 weeks); all journal articles three years old or older; and all article abstracts. Readers may link to free access articles and abstracts, but may not repost articles on other Websites. The full 28-year article archive is online.

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