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									               President Obama,
                   the 111th
                 Congress… and
                 Health Care I.T.
                 and Changing US
                   Health Care

Jeanne Scott
                       Economic Strom Clouds
                       May Prevent Any Real

U.S. Economy: An Even Shakier Future
              ―With the economy likely to be weak for
             several quarters, and with some risk of a
           protracted slowdown, consideration of a fiscal
             package by the Congress at this juncture
                        seems appropriate.‖
                                Ben Bernanke, October 20, 2008

―It will take at least 18 months to turn
  around the U.S., even if President-
  elect Barack Obama does everything
Nobel Prize-winning economist
Joseph Stiglitz, November 9, 2008
18 Months? We Want it NOW!
  … Barack Promised It To Us
                With a $10 TRILLION national
                debt …
                With financial sector bailouts
                planned that will cost $1.8
                trillion …
                With wars in Afghanistan and
                Iraq and costing $10+billion a
                month …
                With Americans continuing to
                balk at almost any form of
                increased taxes …

   How can any meaningful health care
     reform even be on the table?
     Answer: It Really Can’t…
But let’s talk about it any way,
after all we did just elect a man who said:
           ―Americans... still believe in
           an America where anything's
            possible - they just don't
             think their leaders do.‖

"Once you choose hope, anything's possible." ~ …
             … Christopher Reeve
  And, Paradoxically… Rahm Emanuel Says
  In speaking to the Wall Street Journal’s
  Economic Council on November 18:
          ―When it gets rough out there, a lot of
       business leaders get out of the car and say,
            'We're OK with minor reform.' I'm
       challenging you today, we're going to have to
                   do big, serious things.‖
  And Senate Finance Committee chaircritter,
  Max Baucus added:
 "Health care reform is very much linked to
the broader economic issues that the country
   is facing. Our view is that there is the
  energy now to make this a top priority."
So, Who Won? Who Lost, Election 2008?
           Election 2008:
       the Winners and Losers
Big Winner: CHILDREN
Democrats in the House have already
passed an expansion of the 1997
S-CHIP, originally sponsored by a
GOP-controlled Congress and signed
into law by a Democratic president.
The Senate is expected to concur.
Mandating coverage for ALL U.S. children was a critical component
in Obama’s 2008 health care campaign. Unlike Hillary Clinton and
nearly every other Democratic candidate, (and Republicans Romney
and Schwarzenegger) Obama did not propose an individual mandate
for all Americans. But he did say every child would have to be
   S-CHIP and the Bush Veto

               - GEORGE W. BUSH, Cleveland, Ohio, August, 2007
     The USA
   Ranks dead
    last (well,
O.K., virtually
  tied for last
     with New
 OECD nations
 in the health
   and safety
protections for
 its children…
   that’s BAD!
Election 2008:
the Winners and Losers
Big Loser: Private FFS
Medicare Advantage Plans
                                      Congresscritter Pete Stark,
                                  chair of the House Ways and Means

When President Bush vetoed the
                                health subcommittee; he hates Medicare
                                            Advantage plans

2007 expansion in S-CHIP, he did so primarily
because the then new Democratically-controlled
110th Congress proposed to finance the expansion
by cutting some of the of the 12-19% in ―bonus‖
payments that these new private Medicare
Advantage plans were receiving. That was a no-
no as far as Bush was concerned.
               Election 2008:
           the Winners and Losers
Loser: Medicare Participating Physicians
Loser: Medicare Beneficiaries Trying to Find a
Physician to Take Them as a Patient
In 1997, Congress (then GOP-controlled) passed a law, the
Balanced Budget Act of 1997, signed by a Democratic
president (Bill Clinton) that established a complicated
formula for future changes in Medicare reimbursement for
Medicare providers – the Sustainable Growth Rate (SGR)
formula. Every year since then, hospitals, nursing homes,
                             home health agencies and all other
                              Medicare providers except for
                              physicians have seen SGR-
                              mandated cuts in their Medicare
Trying to
Find a
Physician to
Take Them
as a Patient
                Election 2008:
            the Winners and Losers
Sustainable Growth Rate Cuts in Medicare
Physician Reimbursement
Oh yes, the docs were supposed to be cut, but
every year they successfully lobbied to have
these cuts restored and with usually a small
increase added on. Remember Paygo? Well, in
order to give the docs more, other programs
have had to be cut to keep the overall Medicare
increases in check. But the SGR still applies and
the cumulative cut that physicians may have to
face has now risen to over 11% -- OUCH!
The 110th Congress punted the issue to the
111th and by January 1, 2010, Congress will
have to do something or Medicare physician
reimbursement stands to be cut by as much as
            Election 2008:
        the Winners and Losers
Winner: Health Care I.T. Companies
Another Obama ―promise‖ was to finally begin to
fund health care I.T. – to the tune of $10
billion a year over 5 years, $50 BILLION!
    "I am committed to making the fundamental changes necessary to
 modernize the system to streamline medical practice with the goal of
 improved patient outcomes. My plan calls for investing $10 billion per
 year over 5 year in health information technology. This commitment is
   not just financial: we will ensure that physicians have the technical
  support they need to implement new systems for patient records and
billing. By reducing medical errors and unnecessary duplication of tests,
  this investment will lead to a long-term reduction in our health care
                          system's overall cost."
Efforts to Implement Health Information
       Technology in Six Countries
                          U.S.        Australia       Canada       Germany       Norway            U.K.

Initial year of           2006           2000           1997          1993          1997           2002
national IT effort

Expected year of          2016        Undefined       50% by          2006          2007           2014
complete                                               2009

Estimate of total        $125M         $97.9M          $1.0B         $1.8B          $52M          $11.5B
investment (as of

Total investment per     $0.43          $4.93          $31.85        $21.20        $11.43        $192.79
capita (as of

*In U.S. dollars. Exchange rates as of September 2005: $1 U.S. = $1.31 AUS; $1.19 CAN; $0.80 EURO; $6.21
NOR; $0.54 U.K.
** In U.S. dollars. Per capita is based on 2003 population numbers from the Organization for Economic
Cooperation and Development (OECD).
Source: Adapted from G. F. Anderson et al, "Health Care Spending and Use of Information Technology in OECD
Countries," Health Affairs, May/June 2006 25(3):819–31.
 Only 28% of U.S. primary care physicians have electronic
   medical records (EMRs), only 19% have advanced IT
                                                                  Percent reporting seven or more
        reporting EMR                                             of 14 IT functions*
                          89                                      100
                                  79                                             83


                                                  28                                                    32
                                                                   25                                           19

         NET      NZ      UK     AUS     GER      US     CAN
                                                                         NZ      UK     AUS    NET     GER     US        CAN

* The 14 functions are: EMR, EMR access other doctors, outside office, patient; routine use electronic ordering tests,
prescriptions, access test results, access hospital records; computer for reminders, Rx alerts, prompt test results;
easy to list diagnosis, medications, patients due for care.
Source: Commonwealth Fund 2006 International Health Policy Survey of Primary Care Physicians.
             Election 2008:
         the Winners and Losers
               Winner: Health Care I.T. Companies
                  Obama proposes that the $50 billion would be
                     ―seed‖ money with grants to health care
                   organizations, hospitals and physician groups
              Under the Obama plan, an advisory committee of
               government and private health experts would be
charged with developing by 2011 final interoperability, privacy and
security standards governing clinical use of health I.T.
• He would set up a matching grant program to encourage not-for-
profit groups and health care providers in rural, low-income and
underserved regions to adopt health I.T.
• He would direct that open-source technology
be developed and made available to health care
providers at "a nominal cost."
                Election 2008:
            the Winners and Losers
Winner: Health Care I.T. Companies
Obama proposes establishing new privacy protections that ban the
sale of patient health data and require pre-authorization before
any data is used for marketing purposes. Fines of up to $1.5
million would be charged incrementally for privacy violations.
• The incentive measures in his proposal would be similar to an
electronic prescribing incentive program scheduled to begin next
• Physicians who meet the federal                   \
standards will be eligible for payments                of up to
$40,000 over five years.
• Hospitals also could receive
additional payments of up to several
million dollars over five years if they
meet the standards. The payments                        would
decrease over time before being phased out completely.
•Penalties would then be levied on providers that have yet to
meet the federal standards.
Obama Inherits Bush Executive Order
13410—Adoption of HITSP Standards
Standards are voluntary for private sector, mandatory for
     federal health programs – and their contractors
   Applies to federal Employees Health Benefit Program,
    Medicare Advantage (maybe Part D), Indian Health
    Service, TRICARE, Department of Veterans Affairs
             but excludes Medicaid and S-CHIP

   Each agency shall require in contracts or agreements with health
   care providers, health plans, or health insurance issuers that as
   each provider, plan, or issuer implements, acquires, or upgrades
     health information technology systems, it shall utilize, where
    available, health information technology systems and products
            that meet recognized interoperability standards.
  President-Elect Obama’s transition staff is currently
  reviewing all Bush EOs
                   HITSP: Healthcare Information Technology Standards Panel
HHS Process to Implement Standards
• Legal obligations flow from Secretary’s
  recognition of HITSP standards
  – Triggers requirement for federal agencies
  – Certification Commission on HIT must use
    recognized standards
• Once HITSP selects standards and develops
  Interoperability Specifications (IS),
  Secretary ―Accepts‖
• Allow time (6-9 months) for minor
• Then, Secretary ―Recognizes‖ IS
                  (Federal Register, 3/1/2007)
Executive Order 13410—Adoption of
         HITSP Standards
Industry concerns about the EO

• Insufficient time to adopt

• No time for real-world pilot testing

• New standards for every upgrade will
  be costly

• Requirements may apply only to
  health plans, not to providers
   Congress: Major Health IT
  Legislation in 110th Congress
Comprehensive HIT bills
• Senate
  –   ―Wired  for Health Care Quality Act‖ (S. 1693),
      modified by Senator Leahy’s Privacy Amendment
                                                        Main Parts:
• House
                                                        1. Standards
  – E&C: Protecting Records, Optimizing Treatment,
    and Easing Communication through Healthcare         2. Funding
    Technology (PRO(TECH)T) Act of 2008‖ (H.R.          3. Privacy
  – W&M: The Health-e Information Technology Act
    (H.R. 6898)

Electronic Prescribing
• Enacted as part of Medicare Improvements
  for Patients and Providers Act
Comprehensive Health IT Bills in 2008

           H.R. 6357     H.R. 6898
              (E&C)        (W&M)        S. 1693
Status   Passed by     Introduced    ―Hotlined‖ to
         full          9/15/2008     floor 7/31/08
         committee                   Blocked by
         7/23/2008                   objections,
                                     largely due to
Comprehensive Health IT Bills: Standards

                      H.R. 6357 (E&C)              H.R. 6898 (W&M)                  S. 1693
 Policy             Codify ONCHIT                Codify ONCHIT                HIT Policy Committee
                    HIT Policy Committee         HIT Advisory Committee       Recommend priorities
                    Recommend priorities for     Recommend priorities for     for privacy, NHIN,
                    privacy, NHIN, technology    privacy, NHIN, technology    technology
                                                 Recommend standards
                                                 and certification criteria
                                                 Consistent with HIPAA

 Standards          HIT Standards Comm.                                       HIT Standards Entity
                    Recommend standards                                       Recommend standards
                    and certification criteria                                (may recognize a
                    Consistent with HIPAA                                     HITSP)
                                                                              Certification process
 Testing            NIST must provide            Same as E&C                  Pilot testing
                    testing                                                   discretionary
 Federal adoption   Agencies adopt (per EO) Same as E&C                       Federal agencies
                    after HHS rulemaking                                      adopt within two years
                    When implementing,                                        of President accepting
                    acquiring, upgrading HIT,                                 HIT Standards Entity
                    where available.                                          recommendation
 Comprehensive Health IT Bills: Funding

                        H.R. 6357 (E&C)              H.R. 6898 (W&M)                    S. 1693
Competitive       For not-for-profit hospitals,    Same as E&C                  Same as E&C, but must
grants            individual/group providers to                                 serve medically
                  buy certified EHRs                                            underserved communities
                  $1 to $3 match
Grants to         For States to establish Loan     Same as E&C                  Largely the same
States            Funds for certified EHRs                                      Preference to States
                  Providers must link to HIEs                                   adopting VBP programs
Grants for HIEs   To implement local or regional   Same as E&C, but heath       Same as E&C
                  HIEs                             plans not included among
                  Stakeholders: physician,         required stakeholders
                  hospitals, pharmacies,
                  consumers, employers, health
                  $1 for $2 match
Authorized        $575 million                     Same as E&C                  $278 million
                  $115 m per year, 2009-2013                                    $139 m per year, 2009-
Medicare          N/A                              Combination of bonuses       N/A
Incentives                                         for “meaningful HIT users”
                                                   and penalties for non-
Proposed Medicare Incentives in
     Ways and Means Bill
 • Combination of bonuses and penalties to encourage providers to
   use certified HIT systems
      – HHS: develop clinical measures of
        meaningful use
      – In lieu of PQRI payments
 • To begin when ONCHIT makes available open source HIT system
   (e.g., VistA) or, if sooner, 2013
Medicare payments           2013   2014   2015   2016   2017    2018   2019    2020+

Bonus: Maximum              $15k   $12k   $8k    $4k     $2k     0      0       0

Penalty: Reduction in fee    0      0      0     -1%    -1.5%   -2%    -2.5%   -3%

 Significant hardship exception
Comprehensive Health IT Bills: Privacy

 • 2008: Despite major push by
   employers to move health IT bill,
   privacy was major sticking point
      – House and Senate bills include
        problematic privacy provisions

 • 2009: Larger privacy debate expected
      – Key issue: Individual control of
        information in ―interoperable‖ world

 Major Privacy Issue in 2009
    Individual control of information in an
             ―interoperable‖ world
• 2008: problematic bills by Leahy (D-VT)
  Markey (D-MA)
  – Allowed individuals to hide any health info and
    limit provider access
• 2/08: NCVHS ―middle ground‖
  – Allow individuals to hide categories of information
    (e.g., mental health)
  – Notify physicians when information is hidden
  – Recognizes considerable work needed to implement
                  Medicare E-Prescribing
– Enacted 7/08 as part of MIPPA; final rule posted
• Incentives for ―successful e-prescribers‖
  begin 2009
   – Must use a ―qualified e-prescribing system‖: (1)
     medication list; (2) safety checks; (3) lower-cost
     therapeutic alternatives; (4) formulary information
   – Must e-prescribe 50% of the time when
     appropriate for certain CPT codes
   – Penalties for not e-prescribing begin 2012
Medicare payments                    2009   2010   2011   2012   2013    2014+

Bonus: % of allowed charges          2%     2%     1%     1%      1%       0

Penalty: Reduction in fee schedule    0      0      0     -1%    -1.5%   -2%
          Forecast for 2009?
• First: pass economic stimulus package and
  appropriations before CR ends in March
• Congress will address health care reform,
  despite key challenges:
  – Finding $ for subsidies/government expansions
  – Developing consensus on individual/employer mandates
• Unclear if HIT will be a free-standing measure
  or part of a health care reform omnibus
  – House leadership working on combining E&C and W&M
  – Privacy will be major focus
• HHS pulling out all the stops to release 5010
  and ICD-10 rules before January
Winners and Losers in Health Care I.T.
John Halamka, M.D., Asst. Prof. of Medicine at Harvard
University and Chief Information Officer at the Harvard Clinical
Research institute named his winners and losers on November 13…
1. Electronic Health Record vendors, especially web-based
applications developing Obama’s promised EMR.
2. Software as a Service Providers – Dr. Halamka says SaaS
providers may offer lower cost of ownership and faster
implementation than traditional software installation approaches.
3. Open Source – Obama seems ready to embrace Open source
operating systems, databases, and applications as long as they can
provide the reliability and supportability that is needed.
4. Green I.T. – The Obama administration will reward innovative
techniques to adjust power draw, such as idle drive management,
CPU voltage adjustments, and high efficiency power supplies.
5. Cloud Computing Offerings - These are remote infrastructure
utilities such as storage and high performance computing. According
to Dr. Halamka, last week’s Cool Technology of the Week described
a new technology called Cloud Optimized Storage.
Winners and Losers in Health Care I.T.
Dr Halamka’s Losers
1. Client Server applications - the cost of
deploying, supporting, and maintaining client
server applications will no longer be affordable.
2. Proprietary operating systems, he is
eliminating such systems from his data centers.
3. High-end SAN storage – He found find 90% of his
storage needs are met with lower-end SAN, NAS, and
appliances which use low cost, high density drives, (SAS,
4. Devices that do not offer energy efficient operations.
5. Applications that require a specific operating system or a
specific browser on the client side. To be successful under the
Obama health care I.T. plan, says Dr. Halamka, applications
should be operating system neutral, browser neutral, and easily
hosted as a service accessible via the web.
                  Election 2008:
              the Winners and Losers
Winner: Competition Between Government
and Private Sectors;
  Under Obama’s National Health Insurance Exchange, private health plans
 and insurers would have to accept all applicants regardless of pre-existing
health care conditions and could not cancel or qualify coverages. They could
          charge differential rates but only within narrow ranges.
     In effect, Obama suggests a version of the John Edwards ―fair
competition‖ model, under which a new government health plan ( ―Medicare
    for All‖) would be created offering a standard set of benefits and
coverages. Private health plans would have to offer at least a comparable
 level of benefits and coverage, but with no 12-19% advantage and so …
                          Let the Games Begin
    The two programs would then compete on a level playing field and,
according to the Edwards proposal, a winner would be determined down the
road. If private health care insurance is as good as he claims to be, it will
                   prevail; if not, the people will choose
                  Election 2008:
              the Winners and Losers
Come Back Winner: Tom Daschle
  Former Senator and majority leader
    Tom Daschle (D-S.D.) is the new
     Secretary of Health and Human
Services, charged with getting Obama’s
 health care plan passed in Congress.
 He is the author of a February 2008
   study on health care reform which
suddenly has become a ―must read‖ for
        everyone in health care.
The Centers for Medicare and Medicaid
   Services may go back to being the
 Health Care Financing Administration,
with its authority expanded effectively
to all health care financing and not just
         Medicare and Medicaid
The Daschle Plan                                   (as described in his book)

- Expand the Federal Employee Health Benefits Program (FEHBP), or create a group
purchasing pool like it: Participants could choose their own provider and would have the
security of knowing they could never lose their coverage. Employers could let their
employees get coverage through a FEHBP plan, but only if they enrolled all of their
workers, not just ones with health problems. The FEHBP pool would also include a
government-run insurance program modeled after Medicare.
- Subsidize coverage for those who need it: The government would provide financial help
on a sliding scale so nobody would pay more than a set percentage of their income for
health insurance. Administered as a refundable tax credit, this protection would apply to
employer-based health insurance as well as private insurance obtained through the pool.
- Strengthen Medicaid: Simplify and extend Medicaid to cover everyone below a set
income level. The federal government should pick up the tab for this expansion, and ensure
that states don’t cut off people when the budget gets tight.
- Concentrate on the value of care: Strive to get more for our health care money by
promoting research that compares drugs and treatments to determine which ones deliver
the best bang for the buck. Daschle also proposes promoting prevention that would reduce
the number of chronic conditions.
- Improve health care infrastructure: Adopt health information technology to lower
expenses and allows rural residents to connect electronically with medical providers.
Increase the number of community health centers and government-funded clinics that
provide basic care for the poor and uninsured.
- Daschle also proposes a Federal Health Board that ―would resemble our current Federal
Reserve Board for the banking industry.‖
Daschle, Enzi and Kennedy
               Obama, Dealing with AHIP
             (―America’s Health Insurance Plans‖)

Hillary Clinton would have ―reformed‖ the
private insurance market by prohibiting insurers
from declining coverage based on pre-existing
conditions (―guaranteed issue‖)
• Obama would create a National Health
Insurance Exchange to monitor insurance
companies in offering the coverage. In essence,
Obama's plan retains the private insurance
system but injects additional money into the
system to pay for the expanded coverage
Obama’s National Health Insurance

      • Designed to help individuals seeking to purchase
      private health insurance
      • Exchange to act as a watchdog group to reform
      the private insurance market by creating rules and
      standards for participating insurance plans to
      ensure fairness and to make individual coverage
      more affordable and accessible
      • Insurers would have to issue every applicant a
      policy, and charge fair and stable premiums that
      will not depend upon health status
      • All plans would be required to offer are at least
      as generous coverage as the new government plan
      and have the same standards for quality and
      • Exchange would evaluate plans and make the
      differences, including cost of services, public…
      complete transparency
Private Health Insurers Can Still Be Winners

           • While Obama’s plan does not include an
           individual mandate, it does envision wider
           coverage availability both through his
           proposed government plan and from
           ―competing‖ private plans and insurers
           • If private plans and insurers rise to the
           challenge, they may be able to reach
           many of the 47 or so million currently
           uninsured, who will now be able to afford
           -- through various subsidies and tax
           incentives proposed by Obama -- to buy
           health insurance
           • Question: will the private insurance
           industry be able to meet the challenge?
We Interrupt This Power Point Show
          BREAKING NEWS!
 ―Insurance works best when everyone
    is in the pool. You need healthy
  people in the insurance pool to help
   pay for sicker individuals who are
      much more motivated to buy

 -- Alissa Fox, Vice President of the Blue Cross-Blue Shield
                            Association, November 19, 2008
           Private Insurers Capitulate

On November 19, 2008, after long opposing all such efforts, both
the industry’s two major trade groups, America’s Health Insurance
Plans (AHIP) and the Blue Cross-Blue Shield Association (BCBSA),
  announced they would support guaranteed coverage for all
Americans regardless of age, health, or pre-existing
     conditions … BUT ONLY if the law had an
                 to have insurance.
 This is a major breakthrough which dramatically re-shapes the
  universal health insurance debate. Presumptive President-Elect
Obama has not advocated such an individual mandate, although it
 was part of former Massachusetts Governor Mitt Romney’s plan
already being implemented in that state and was a key component
    in California Gubernator Arnold Schwarzenegger’s plan, and
everyone of his Democratic primary opponent plans, including that
                         of Hillary Clinton.
           Election 2008:
       the Winners and Losers
Loser: Pharmaceutical Manufacturers
Both John McCain and Barack Obama called for major new
   regulations and controls over the Rx Manufacturing
During the Republican primary campaign, John McCain once
referred to the pharmaceutical industry as ―the bad guys.‖
and he called for new limits on patent reformulations, drug
            reimportation and generic mandates
   Oops, he said all the same things as Barack Obama

          The Rx industry is in a state of panic
Democrats May Make Dramatic Changes in the Medicare
             and Medicaid Rx Program
 Democrats Will Try to Pass a Law to Directly
  Negotiate the Price of Drugs Under Part D
                The 2003 Medicare Modernization Act,
                which gave us the Medicare Drug Part D,
                was passed without a single Democratic
                vote. Democrats opposed the provision
                saying that prohibited the government
                from negotiating directly on the price of

In 2007, when the Democrats took over-control of the
110th Congress, the first bill passed by the House would
have allowed for such price negotiation. The bill failed
in the Senate where the Democrats had only a marginal
majority and the GOP threatened a filibuster. Now with
perhaps 58-59 votes in the Senate, the prospects for
passage have increased dramatically
  McCain Quote of the Year
        ―Well, they are.‖
Senatecritter John McCain responding to
  former Massachusetts Governor Mitt
   Romney, after Romney told McCain,
   "Don't turn the pharmaceuticals into
  the big, bad guys." McCain had called
 for reimportation of drugs from Canada
   and for more competition in the Rx
               New Hampshire GOP Debate, January 5, 2008
Congress and the Drug Industry
                The Rx manufacturing
                industry has enjoyed a
                ―robust‖ 14 years with
                either a GOP Congress
                and/or a GOP president in
                charge with almost 80%
                of their political
                contributions going to the
                GOP -- but now facing a
                new era, they have upped
                their contributions to
                Democrats, and will
                expect a return on their
   The World of Universal Health Care

Afghanistan and Iraq have Universal Health Care, paid for by the U.S. Taxpayer

Countries Without Universal Coverage

Countries With Universal Coverage

Countries Currently Developing Universal Health Plans
                 Election 2008:
             the Winners and Losers
Loser (for now): the Uninsured and
the Underinsured
Neither Obama’s plan nor John McCain’s would have covered many of
 today’s uninsured; to be sure Obama’s would have done better but
   at a higher cost… the cost of which may be unsustainable given
                     current economic conditions
The non-partisan Tax Policy Center estimates that under Obama’s Plan,
while almost all children would be covered, the number of uninsured would
be reduced by 18 million by the end of 2009 but by only 34 million by
2018. Even under the Obama plan, an additional 24 million would remain
uninsured in 2018. The Obama plan would cost and estimated $1.6 trillion
over the next 10 years. Obama’s overall tax plan, unadjusted for any tax
increases and including his health proposals, would increase the federal
deficit by $3.5 trillion over the next 10 years.

South and
                  Estimated 116 Million Adults Were Uninsured,
               Underinsured, Reported a Medical Bill Problem, and/or
            Did Not Access Needed Health Care Because of Cost, 2007
                                                     Medical bill/
Losers                                               debt problem
                                                      17.7 million
(for now)           Adequate
                 coverage and no

-- the            bill or access
Un-                61.4 million
                        35%                                           Medical bill/debt and
insured                                                               cost-related access
and the                                                                   54.4 million
insured           Uninsured any time
                  during the year or
                     underinsured                Cost-related
                      17.6 million              access problem
                         10%                      25.9 million

                               177 million adults, ages 19–64

             Note: Percentages may not sum to 100 percent because of rounding.
             Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).
               Election 2008:
           the Winners and Losers
Losers: High Deductible Health Plans and
Health Savings Accounts
The growing concern over the issue of the UNDERINSURED is
recognized by the Democrats and, besides,
they HATE HSAs!
45.7 Million ―officially‖ uninsured in 2007
(9.5M children)
2007 Consumers Union Report Estimate:
60+ Million Underinsured
2008 Commonwealth Fund, 25% of U.S.
Underinsured (78M)
Add 45.7 million uninsured and almost 45%
of all Americans have either no or in
adequate health insurance…
                                      Health Care

The Promise or the Impossible Dream
  Circumstances Create the Hope;
            Election 2008:
        the Winners and Losers
Undecided: Prospects for Universal Health Care
  The money crunch and the nation’s economic woes may mean that
any real movement toward universal health care may be delayed for
some time. Obama from the git-go offered a far less ambitious plan
   than did his Democratic primary opponents, particularly Hillary
  But something has to give, already the U.S. is spending almost
  twice as much per capita on health care as any of its industrial
competitors, and getting far less in return, some really crappy care.

Expanding S-CHIP to cover almost all U.S. children takes universal
 coverage to both ends of the life cycle… filling in the in-between
may take a little longer, but expect to see programs for pre-natal
 and maternal care and for chronic disease management expanded.
  WINNER: The States and Medicaid
In this bail-out crazed world of post apocalyptic Bush years, one big potential
loser up to now have been state governors and state budgets. But never
fear, a bail-out may be here.

During the December 3, 2008 National Governors Association (NGA) meeting,
the Governors plead their case to President-elect Obama:

    23 states have already reduced their fiscal year 2009 budgets by a
    combined $7.6 billion, and 30 more states expect additional deficits of
    more than $30 billion, according to the NGA
    The Governors want a $40 billion Medicaid bail-out and … well, why not
    AIG, CITI, and Wall Street have been getting theirs.
    One proposal: The federal government would take over ALL Medicaid
    payments for newly displaced workers losing their jobs because of the

Enter Louisiana Governor Bobby Jindal with his plan to develop a Medicaid
model based on ―coordinated care‖ with an ―at risk‖ capitation model with
negotiated hospital, physician and provider fees. Does anyone hear ―2012?‖
Sarah Palin, would you care to chime in?
POTENTIAL WINNER: Health Care Quality
  The USA
Spends More
  and Gets
Less Bang for
  its Buck,
   When it
  Comes to
Health Care…

 we ain’t #1
    Quality of Care Today:
    We are Worse than Shaq from the Line

                                                                                IRS Phone-in Tax Advice

                                                                                                   Phil Mickelson putting from 6 feet
Defects per million

                       10,000   Overall healthcare
                                 Quality in U.S.                                                               Airline baggage handling
                                 (Rand Study 2003)
                                                                                                                                US Airline
                                                                                                                             flight fatalities/
                                     Shaq Free-throws                                                                       US Industry Best
                                                                                                                                 of Class
                                                       Fair Reliability                                  High Reliability


Sources: Courtesy A. Milstein modified from C. Buck, GE; Dr. Sam Nussbaum, Wellpoint; & Mark Sollek, Premera
            Election              2008:
        the Winners
       the Winners                and Losers
                                  and Losers

Potential Big Winner: Agency for Healthcare
Research and Quality
 The little agency that could. Buried in the backwater reaches of
   the U.S. Public Health Service is the Agency for Healthcare
Research and Quality (AHRQ), charged with developing the future
                     ―cookbook of health care.‖
  CM2 has already embarked on an effort to define many of the
 elements of effective health care, that is what works and what
        doesn’t, using much of the work product of AHRQ.
  John McCain made this a keystone of much of his health care
―In the future, we will only pay for what works and not
                for what doesn’t work.‖
 Arizona Senator John McCain
―We are approaching a perfect storm of problems that if not addressed by
      the next president, will cause our health system to implode.‖
•Pay providers for diagnosis, prevention and care
coordination but not for preventable medical errors
or mismanagement
                  • Require transparency by
                  providers regarding medical
                  outcomes, quality of care, costs,
                  and prices
                  •Provide a safe harbor for
                  doctors that follow clinical
                  guidelines and adhere to patient
                  safety protocols
                  • Development national standards
                  for measuring and recording
                  treatments and outcomes
               Election 2008:
           the Winners and Losers
          Winner: Health Care Rationing
          Trust me on this, I’m a lawyer… just like his somewhat
successful at reaching across the aisle Democratic predecessor in
 the presidency, Bill Clinton, Barack Obama will not hesitate to
―steal‖ a good Republican ideal and turn it to good (political) use.
 HIPAA’s dirty little secret is that it was always designed, from
the beginning, to be expanded to enable planners to better define
 the parameters of quality and effective health care. Democrats
              as well as Republicans have known this.
  But because the implication is no less than eventual ability to
 ―ration‖ health care… nobody, least of all a ―politician‖ will ever
                  want to say that word out loud.
        ―Outcomes Research‖ and (gasp)
            Health Care ―Rationing‖
 The 2003 Medicare Modernization Act (better known for
 establishing the Part D drug program) had lots of buried secrets,
 not the least of which was new funding for AHRQ and a plan to
 begin several demonstration projects with a goal of better
  •―the appropriate use of best practice guidelines by providers and services
  by beneficiaries‖
  •The ―reduced scientific uncertainty‖ in the delivery of care through the
  examination of variations in the utilization and *allocation of services,and
  outcomes measurement and research‖
  •achieving the ―*efficient allocation of resources‖
  •―the financial effects on the health care marketplace of altering the
  incentives for care delivery and changing the *allocation of resources‖
    HIPAA facilitates the collection of data and thus the
     ability of planners and payers to ration health care
          (* Trust me on this, I’m a lawyer, ―allocation of
theJeanneScottletter resources‖ = ―rationing‖)
                     Election 2008:
                 the Winners and Losers
      Possible Winner: Medical Managers,
     Disease Management, Evidence-Based
     Medicine and Preventive Health care
                           Both President Obama and Senator John McCain
                            promised that they would address the issues of
                           better managing chronic health care disease and
                                      thereby reducing the costs.
                                        Wow, that’s a mouthful!
                           It remains to be seen if anything meaningful can
 Richard Simmons to be
 named personal health     be delivered on these promises, but an awful lot
secretary to the nation,
helping all Americans to
                             is at stake. Obama said he could reduce the
 better health through
 preventive health care,
                            cost of an average family’s health insurance by
    exercise and diet      $2,500 annually. A big chunk of that projected
                            savings came from savings from better disease
                                    management systems and care.
         Election 2008:
     the Winners and Losers
Winner: Nurse Practitioners and PA’s
   Massachusetts has been the first, and so far at least, only
  state to undertake a serious effort at universal health care.
  In 2004, under then Governor Mitt Romney (R-MA), and with
 the approval of the Democratically-controlled state legislature,
  the state adopted an ―individual mandate‖ requirement: every
   resident of Massachusetts must purchase health insurance,
either directly or through one of two state programs for low and
                     middle income residents.
 The Massachusetts ―experiment‖ began in earnest in 2005 and
   since then has been steadily growing so that the number of
 uninsured Massachusetts residents has fallen below 8% -- well
below the national average and among the lowest in the country.
Aah, but therein lies the rub. With so many people now insured,
the state’s health care infrastructure can’t handle the demand.
       Election 2008:
   the Winners and Losers
Winner: Nurse Practitioners and PA’s
             Faced with shortages in primary care,
             Massachusetts has rewritten its ―Nurse
           Practice Act‖ and made it one of the most
            expanded and permissive such laws in the
            Already more than 800,000 Massachusetts
           residents are seeing nurse practitioners for
          their primary care and the number is growing.
             35 other states are now looking at the
           Massachusetts model and several, including
           rapidly growing states like Arizona, Nevada
           and New Mexico have amended their nurse
            practice and physician assistance licensing
             Election 2008:
         the Winners and Losers
Winner: State Insurance Commissioners
 Many of the Republican candidates said they would promote the
  sale of health insurance across state lines exempt from state
insurance laws. John McCain said ―across-state‖ health insurance
 sales would increase competition and drive down health insurance

 Others saw it as just another way for the flim-flam artists to
 make a buck. Already, out-of-state health insurance sales are
considered major fraud problems in many states. Texas has over
360 open investigations going. Witness ―Mega Health,‖ the model
              for a John Grisham novel and movie.
                   Election 2008:
               More Winners and Losers
Winner: Ted Kennedy, any final Universal Health Care law will bear his name
Losers: Halliburton and other war profiteers… some of whom may go to jail
Winner: U.S. Auto Industry, if they can hold it together long enough for
Obama to take office
Loser: Osama Bin Laden. Now that raising the terror fear factor is no
longer a political wedge tool, maybe we really try to catch him

Winners: Food Safety: The Food and Drug
Administration, bedeviled by a salmonella
outbreak and tainted medicine from China, is
likely to monitor imports and fresh produce
more closely under an Obama administration.
Only a fraction of imported food is inspected
now. Foreign drug manufacturing plants can go
years without an FDA visit. Democrats had
considered fees on industry to pay for more
FDA inspectors, but could not persuade the
Bush administration to go along. They expect
Obama to be receptive.
         George W. Bush’s Top Ten
 Parting Words of Advice to Barack Obama
10. "Use the TV in the Lincoln Bedroom: it's hotwired
                     for free HBO.―
          9. "The Marine who holds the door?
                    I tip a quarter.―
8. "Other than the economy, Iraq, Afghanistan, Iran,
 the deficit, the crumbling infrastructure, our energy
  policy, Gitmo and global warming, is there anything
        else I need to fix before you move in?―
7. "From here, the Press Room's on the right and the
                rest room's on the left.
        I hate it when I get those messed up.―
 6. "When there's a big crisis, you might be here as
                      late as 4pm"
        George W. Bush’s Top Ten
Parting Words of Advice to Barack Obama
 5. "Anything you need, Cheney's extension is 11."
     4. "Those stains in the oval office carpet?
         They were there when I got here."
3. "When they come brief you about Area 51, just
                   smile and nod.
There's plenty of time for hyper-ventilating later."
   2. "I'm not sayin' I condone it, y'know, but,
    remember all the W’s were missing from our
keyboards. Well, we had to type 2 V's for a month
              when we first got here…
   so your folks better get used to using zeroes.―

             1. "See that red phone?
       I thought it was for pizza. It's not."

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