I have perhaps too often emphasized the negative side of politics and economics of health care this past year. I feel justified in this. Congress is certainly not heroic; and the looming consequences of health care’s overwhelming contribution to the growing national debt are very concerning. But there are some very positive trends and issues to take into consideration as well.

Medicare cost trends have been considerably lower than CBO projections over 2011 -- of course, the overall costs of Medicare are growing as 10,000 baby boomers a day become eligible, and new diagnostics and therapeutics are being introduced -- but the slowing of the cost curve projections is a positive and unexpected phenomenon.

Science is clearly advancing rapidly, despite the economic downturn. New therapeutic frontiers in cardiovascular care alone are impressive. For example, the promise of much-heralded CETP (cholesteryl ester transfer protein) inhibitor drugs; rapidly evolving genomic, cell therapy, and electrophysiological and imaging advances; and new procedures including transcatheter valve therapy (TVT) are all examples of the stunning pace of scientific evolution.

Despite the controversy surrounding the Affordable Care Act, publicly funded programs have enabled 1.2 million children to gain health insurance since 2008, and according to Obama administration officials, this is in part due to the efforts by many states to sign up eligible children. In addition, millions of previously uninsurable people with high risk conditions now have affordable coverage.

Further, despite the growing political and economic strains on the profession and medicine in general, the best and the brightest physicians and nurses and other clinicians-in-training still aspire to cardiovascular careers and participate with the ACC on the ongoing and stunning reduction of morbidity and mortality in cardiovascular disease.  The ACC itself has been able to grow by about 5 percent year-over-year since the recession of 2008 to better serve the CV community and CV patients.

2012 will host the all-important November elections, the Supreme Court ruling on the Affordable Care Act, and the need for deficit limit and reduction action -- it won’t be a boring year. In fact this year will call all of us in medicine to seek ways to help the entire nation deal with all of these critical issues.

There’s still a lot to be optimistic about, folks, but it’s certainly not all rosy.

The Medicare physician payment un-Sustainable Growth Rate formula (SGR, or SGRrrr expressed as a growl) is once again heading for a train wreck of 29.5% Medicare cuts for all physicians on Jan. 1, 2012, unless Congress once again acts in their budget discussions to postpone the next chapter of this seemingly endless doomsday timetable. To his credit, President Obama requested in his budget an additional two-year moratorium on SGR cuts to extend through January of 2014, but the cut-crazy Congress isn’t crazy about the $55 billion price tag for this SGR-cut extension it seems.

BTW, imagine if leaders of Congress were even more progressive in their thinking and were willing to fund less than 1% of that cost -- only around $500 million (budget dust) -- which could create an interoperable NCDR-like registry system across all specialties to systematically reduce costs by improving quality of care. Ironically, at last week’s meeting in DC of the Physicians Consortium for Performance Improvement (PCPI), the quality measure and QI consortium convened by the AMA, ACC attendees participated in a discussion with many other specialties in which we suggested just that. We did so after seeing a terrific presentation underscoring the advantages of such a system that is up and running and funded by the government in Sweden. It’s fantastic. 

But I digress. Back to the SGRrrr.  The Trustees of the American Medical Association and other medical societies have warned that such a huge pay cut would force physicians to turn away not only seniors but also military families whose TRICARE coverage is based on Medicare rates.

We all signed an AMA-created letter to House and Senate leaders last week outlining the problems mounting as the SGR threat looms once again. The letter asks Congress to replace the SGR formula.  Of course that would cost about $380 billion, so I’m not holding my breath on that one, welcome as it would be. After all, Congress has been postponing SGR-required cuts every year since 2003, causing them to balloon in size in successive years. It’s a national tradition now.

Last December, the previous (lame duck) Congress spared doctors a 25% cut which would have hit January 1, 2011, by postponing it for 1 year. This Congress seems kinda frozen at the moment, on this and all issues.

President Obama made a strong push for support of the Affordable Care Act (ACA) at the National Governors’ Association (NGA) conference in Washington last week. I was on a call with some other health care leaders arranged by the White House before Obama visited the NGA to test out the recommendations he planned to make there. Obama had decided to suggest that the 50 states consider applying for HHS-certified state “waivers” from the ACA, as the law is currently to be implemented nationally. This is kind of a radical change in the administration’s position.

Most states are moving ahead with ACA implementation as provided in the Act. But the President’s unexpected push at NGA for “state model ACA waivers,” in accordance with the Wyden-Brown “Empowering States to Innovate Act,” might make some Republican critics a little more hopeful about the ACA; while annoying the left-leaning Democrats. The President's push for the waivers is another sign that he is moving toward the political middle, where most Americans are more comfortable (me included).

In addition, Obama is recommending that the Wyden-Brown act be amended to be effective in 2014, instead of the current version, effective in 2017. This will make Wyden and Brown ecstatic; and may swing some Republican-leaning states to get more involved. Some left-leaning states as well it seems.

Any state model must meet the basic standards of the ACA—meet the access and affordability standards without adding to the national deficit. A proposed set of regulations on how states can comply will be issued in the next few months.

Meanwhile, Florida Judge Vinson, who found the ACA unconstitutional, was pressed by Obama to interpret his decision -- did he want an injunction to halt implementation or not? He surprisingly said the act could be implemented until the appeal of his decision is completed. Some media sources hailed that as a huge victory for the Administration……. It wasn’t. Vinson expects the appeal process to be expedited at the next level (Federal Circuit Court of Appeals) in as short a time as a week. He still wants the law stopped (of course, the appeal may not happen that fast, and it will likely go to the Supreme Court no matter what).

Of course, the Republicans in Congress also hope to use the budget impasses to prevent the ACA from incrementally going forward by de-funding HHS. But most states are still moving ahead anyway, assuming the law will eventually prevail.

Health and Human Services Secretary Kathleen Sebelius chatted recently with MedPage Today about President Obama’s proposed 2012 budget and the provisions of interest to physicians. As Jack wrote last week, the proposed budget contains enough funding to freeze physician payment under the sustainable growth rate at current 2011 levels for two years. While this certainly is an improvement over having to fight off the massive draconian cuts that the SGR full enactment would entail every year (or every few months, as has happened the last couple of times), this is hardly the permanent fix that the ACC has been pushing for. Sec. Sebelius explains what she feels is the rationale for this limited freeze: pass the 2-year freeze to “start a conversation with Congress,” and then immediately work on a permanent solution. Sebelius notes that there is nothing more important than having doctors in Medicare, and acknowledges that physicians are getting weary of going year-to-year having their pay jeopardized.

She’s right there. There have been several reports in the media of physicians dropping out of Medicare as a result of cuts present in the Physician Fee Schedule and the constant uncertainty of the SGR. However, it’s a little unclear if passing a two-year fix will actually give Congress two years to work on an innovative payment system that rewards high-quality care (what the ACC and other medical societies would like) ... or two years to avoid dealing with the massive cost this type of effort would likely require. I hope that Congress steps up to the plate to truly solve the SGR dilemma for us physicians over the next two years.

Check out the video on the KevinMD blog for Sec. Sebelius’ take on other health care issues, including health IT, the Affordable Care Act, fraud and abuse and the medical loss ratio.

Last week was a two-ring circus over budget issues. First, the 2011 budget for government for THIS year is not approved, and the entire federal government will be devoid of funding March 1 if they don’t get that done. Then, they are also of necessity now reviewing the 2012 budget, which was released last week. For 2012, the newly elected members of Congress obviously plan to make HUGE cuts in federal programs. 

Here are some of the highlights (or should I say ‘lowlights?) of the proposed 2012 budget:

• Medicare and Medicaid: Proposes $62 billion in savings over 10 years to Medicare and Medicaid, while Medicare costs increase by an estimated $54 billion. This will be done by saving in Quality Improvement Organizations and dedicating penalties for failing to enact electronic health records into the Medicare trust fund. This all seems kinda nebulous to me.
  
  
• SGR: The 2012 Budget provides $54 billion to temporarily freeze physician payments at current levels for 2 years. This 2-year fix is paid for by squeezing payments to hospitals and physicians (kind of ironic?) as well as increased usage of generic drugs. The specific offsets include:
  • Reducing the Medicaid provider tax threshold starting in 2015
  • Strengthening Medicaid third-party liability 
  • Tracking high prescribers and high prescription drug users in the Medicaid program to reduce waste, fraud, and abuse
  • Recovery of inappropriate payments to Medicare Advantage plans
  • Creating a system to validate high-risk services ordered by physicians and practitioners

• Tort Reform: The ACA included grants to states for implementing medical malpractice reform initiatives beginning in FY 2011, although Congress has yet to allocate funding for the full year.  The President’s budget proposes $100 million for these grants in FY 2012, followed by $50 million each year through FY 2015.  
  
  
• Medical Research and Public Health: Increasing NIH funding by $1 billion (from $30.8 billion to $31.8 billion); cutting CDC funding by 9% (from $6.5 billion to $5.9 billion); cutting AHRQ by 8% (from $397 million to $366 million), but transferring $24 million from Patient-Centered Outcomes Research Institute to bring AHRQ to $390.4 million.

HHS Secretary Kathleen Sebelius has been busy testifying to the various committees about the proposed budget. Last Tuesday, she testified before the Senate Finance Committee and on Wednesday before the House Ways and Means Committee. At both committee hearings, the SGR came up multiple times. Chair Max Baucus (D-MT) opened the Senate Finance Committee hearing by emphasizing the importance of enacting permanent repeal of the SGR and noted the negative effects uncertainty in physician payment has on physician practices and Medicare beneficiaries’ access to quality health care. Senator Orrin Hatch (R-UT) echoed the Chairman’s remarks, clarifying the need to find responsible ways to pay for a permanent solution.

Medical liability reform was also a heavily discussed topic at both hearings. Senator Tom Carper (D-DE) discussed during the Senate Finance Committee hearing the importance of reducing instances of defensive medicine and the impact medical liability reform can have on reducing overall health care costs. Sec. Sebelius referred to the provision in the budget that would establish cost saving measures within medical liability programs. When asked her position on medical liability reform in the Ways and Means hearing, the Secretary said she does not support caps but supports the President’s goal of exploring other reforms.

Sec. Sebelius at the Ways and Means hearing said the budget reflects the point that you “cannot build prosperity on a mountain of debt.” Duh.  

I loved President Obama’s challenge to the nation and the Congress in his State of the Union last week that we invest in science, innovation, and education to effectively take on the competition of China, India, Brazil, and EU to remain on the cutting edge of leading the future -- e.g. to rise to address our ‘Sputnik moment.' That was leadership and creative thinking.

But what was weird to me was his failure to apparently embrace any of the advice of his Deficit Commission or to suggest how to reduce the national debt before it chokes us out of global competition. He did promise on his part to hold government (civil service) spending flat for 5 years, other than funding his ‘innovation’ challenge.  

I heard between the lines a general indication from both sides of the aisle that increasing reimbursements and fixing the SGR are not likely to be high on the Senate’s or the President’s real list of priorities. It’s hard to paint fixing the SGR as a way to promote innovation -- but indirectly it is in that the profession and the Congress remain hypnotized and constantly preoccupied on the SGR albatross around our necks, rather than on designing new quality-incentivized payment reforms to innovate health care delivery. 

Obama was strong on keeping the Affordable Care Act (ACA) moving (his potential for re-election looking better now than in 2010 means he might have 6 years left to make it work), but he expressed openness to amending the ACA in partnership with Repubs.  He emphasized expanded access, drug funding, insurance reform, and $250 billion in savings. And, he unexpectedly promoted tort reform! That’s great, even though he won’t support caps on non-economic damages. But, we must jump on the opportunity of proposing significant tort reform.

David Cameron is “streamlining” the UK National Health Service budget, and colleagues there know reimbursement will be flat or down; and the Netherlands, Ireland, Spain, and other EU countries are slashing physician payments by over 30%. FFS payment here will be in jeopardy here -- only payment reforms that go after bundled and global population based payment gainshare options seem to be possible routes to ongoing viability.

So, what does this all mean? Well, in summary, my final advice on the implications of the State of the Union and Congress’ current plans is: Gird your loins.

Sixty House seats and six Senate seats changed parties this week, along with a number of elected state governors. What does it all mean, and why should you care what I think when you have so many other pundits to read? Well, maybe because most of the pundits aren’t thinking about health care, much less cardiovascular medicine.

The ACC guessed pretty accurately on the vast majority of these races. We took a big chance, for example, supporting John Dingell when a fellow physician was running against him. But Dingell prevailed, and he will be in a position to help us in various ways, I guarantee. It is similar with many of the other races we bet on with our PAC and our advocacy efforts.

That said, I don’t think this election contains much good news for physicians and medicine. There’s a lot of rhetoric about how the Affordable Care Act (ACA) was a big negative for Democrats in their races, but it seems more apparent to me that the sluggish economy, the persistent unemployment, and fears in general about the growing national deficit and government spending (in tough times) were the culprit issues. All the recent polls indicate that the public is gradually warming up to some of the provisions in the ACA that they actually like.

For example, Brandeis health care guru Stuart Altman, Ph.D., has recently pointed out that persons over 65 express the most angst about the ACA, based on fears about adverse effects on Medicare, while these concerns had absolutely no basis in fact. Two-thirds of seniors polled leading up to the election had no idea that the ACA relieves them of prescription costs by filling up the donut hole or that physical exams and preventive services are covered with no copay. Eighty percent have no awareness that the law provides an additional decade of stability to Medicare where it was headed to bankruptcy in 2017 with the status quo. Many of these folks and many younger voters voted out incumbents who have committed in their campaigns to cut federal spending. And, guess what? The most available places to cut will be Medicare and Medicaid!

Despite all the banter about repealing the ACA, that will be a heck of a difficult thing to do. It will be impossible as long as Obama is president and the current Senate, even with six more Republicans, will certainly not be able to muster a 60-vote plurality on much of anything. So the repeal of the health care law banter is more hyperbole and political positioning. The incoming Speaker of the House, Mr. Boehner, has very circumspect about the possibility of “repeal.” What’s going to happen is that most voters (who by the way support many of the provisions of the ACA when asked about them) will start to become more informed about things they like in the bill and be much more hesitant about repealing it.

But the bad news for doctors, patients and medicine relate to the fact that the new Congress has promised America it will not increase federal spending. So, the SGR is not going to get fixed at a price tag of $350 billion, and instead fee-for-service Medicare and Medicaid will continue to be devalued and flat, reducing access to physicians and the viability of private practice. Patients who can’t afford a concierge physician will be hard pressed to find Medicare and Medicaid providers increasingly as time passes – unless some of these new members of Congress wake up to the fact that some federal spending is a positive investment in our future. I’m talking health care, including prevention, chronic disease management and expanded access.

The good news for ACC and cardiology practices is that we do know how to bend the cost curve by systematically improving quality and evidence-based care. We know how to reduce disparities and unnecessary expenditures through application of our clinical tools and the use of our registries. Is anybody listening? I hope so, because we can move beyond the “faith based” provision in the ACA to offer real ways to improve quality, improve heart health, and reduce unnecessary cardiovascular spending, which just happens to be 43% of Medicare spending cost. And, we can provide similar value for kids and adults with congenital heart disease as well.

Bottom line for me: While everybody’s grousing or cheering or staring like deer in the headlights, I hope we roll up our sleeves and get busy on doing the things we know we can do to help get us out the dead-end scenario of rising health care costs that outstrip a reasonable return on investment.

 

A Washington Examiner editorial last week looked at the special influence that trial lawyers have on President Obama. According to the editorial, the president may grant trial lawyers a $1.6 billion special interest tax break without congressional approval. The tax break would allow plaintiffs’ attorneys to deduct litigation costs the same year they file contingency lawsuits. Typicially, these deductions have only been allowed if and when a case is lost. According to the editorial:

“It is unconscionable that ‘spread-the-wealth’ Obama should force taxpaying plumbers, waiters and bus drivers across America to shoulder up to 40 percent of the cost of wealthy trial lawyers’ litigation with this tax break. Worse, the tax break provides an effective reduction in lawsuit expenses, freeing up lawyers to file more suits that have less probability of success.”

Physicians and medical professionals see first-hand the overwhelming influence that trial lawyers can have over politicians in the back-and-forth struggle to pass tort reform. There are proven strategies that work to reduce the burden that unnecessary malpractice suits have on the legal and medical systems, but we are unable to implement them because of politics. Of course, the lawyers invest more in their PACs than we do, folks! If we were a bit more willing to defend ourselves, we could prevent this $1.6 billion tax break, which arguably would be better spent on health care.

And get this: About nine in 10 physicians said doctors order more tests and procedures than patients need so they can protect themselves against lawsuits, according to a study in the June 28 Archives of Internal Medicine. A story by American Medical News examines the study, which noted that the cost of defensive medicine is estimated to be $60 billion annually. What a waste. Let’s get some tort reform in a cleanup bill in 2011. The ACC is building a coalition to do just that!

Unless you were in a cave, you saw that the reform process has had numerous bumps in the road, and I suspect there will be lots of glitches and challenges for the next three years until it is fully implemented. The Republicans could succeed in repealing it, which is their declared No. 1 interest, but the odds are against it. And the Democrats still want to amend elements of the bill they couldn’t fix in the last week’s shenanigans.

Most of the pundits in Washington think that Mr. Obama’s commitment to be very persuasive in educating the public about things in the bill he thinks the public will like (but as yet do not understand) will have a positive effect over time. Let’s face it; most Americans know only the sound bytes about the reform bill that have emanated from both the Democratic or Republican leadership.

Senate Republicans found a few glitches in the House version of the “reconciliation” bill (that amends the original Senate bill), and sent it back to the House Tuesday to amend and re-ratify. The House fixed the issues quickly, and the reconciliation bill passed just two days after the Senate bill. The process is done from the Democrats’ point of view. 

From the ACC point of view, given that we did not blanket-endorse nor overtly oppose either bill, we are free and able to start working on amendments we’d like to see change. We will wait for sponsors for such amendments to emerge in the Congress. We believe there will be an opportunity to significantly modify the Independent Payment Advisory Board (IPAB) piece to fairly include other constituencies (besides just doctors) for cost control measures; and we believe a growing constituency to promote more significant tort reform than is contained in the legislation is going to manifest. The bill will be implemented sequentially. 

Chronology of the Health Reform & Reconciliation Bill

Immediately

• Health insurance reform implementation fund of $1 billion is available in HHS for moving forward with insurance reform regulations
• Preservation of the right to maintain existing coverage is protected
• National efforts to combat health care fraud (not focused on physicians) will be funded and launched

Retroactive to Jan. 1 

• Small business tax credit for covered employees becomes available (this will be popular)

June 2010

• High-risk pools for individuals with pre-existing conditions will be formed
• A re-insurance program to cover early retirees is created

July 2010 

• Immediate information will be available to consumers from HHS to identify most affordable coverage within a geography

More...

Regardless of how we individually see the vote by Congress yesterday to approve HR 3590, it was truly a major punctuation point in US history. I mean, WOW.

President Brindis put out his first ACC Advocate statement about it earlier today, which I've included in this post. It is a very sweeping piece of legislation for sure. But is it the ‘done-deal’ and ‘now we’re done’ moment? No way. There will be (I prophecy) hundreds of ‘amendment’ bills proposed by R’s and Dems over the next 2 years, and the ACC will (I promise) be engaged in a large number of them. For those of you who are angry or alarmed about this evening’s historic event, there will be many avenues through which to vent your frustration. This is not over.

Here's the text of Ralph's Advocate:

March 22, 2010

Health reform bill passes. That's the headline in newspapers across the country today. Congress last night narrowly passed monumental legislation that sets the nation on a new health care course and extends true health care access for more of our patients. Your ACC over the last several years has been actively advocating for Congress to fix the current health care system to focus on quality and improve access to care. The bill passed yesterday makes significant headway in making coverage more affordable for the millions of uninsured Americans -- including those with heart disease. It extends Medicaid qualifications, increases the age limit for young adults on family plans and eliminates pre-existing condition exclusions for health insurance. The legislation also addresses congenital heart disease, chronic disease management, prevention and wellness and includes funding for innovative Medicare and Medicaid pilot programs that could improve care coordination across sources and sites.

While the bill is a start, it includes several onerous initiatives, including the creation of an "independent payment advisory board" and prohibitions on physician-owned hospitals. It also fails to address several of the principles that your ACC has deemed essential for real reform. It does not include delivery and payment system reforms that provide incentives for improvement of quality and outcomes, nor does it repeal the flawed sustainable growth rate (SGR) formula used to calculate Medicare physician payment. It also fails to implement medical liability reforms that reduce legal and defensive medicine costs.

Now the real work begins. The Senate this week is expected to vote on a separate package of amendments that was also passed by the House yesterday that could alter portions of the health care reform bill. Your ACC is now poised to lobby for changes and lead the process of implementation. In fact, we are already working across multiple areas to ensure appropriate use of diagnostic equipment; promote adherence to clinical guidelines and appropriate use criteria; improve care coordination through the use of clinical registries; and reduce hospital readmissions and racial and geographic disparities in care. The ACC firmly believes that carefully crafted partnerships are critical to enacting real reforms and expediting the progress needed. The College looks forward to working with you, Congress and other key stakeholders to develop a health care system that puts patients first and rewards -- not penalizes -- physicians and other medical professionals for their commitment to quality and evidence-based care.

Bottom line: I predict that yesterday’s historic accomplishment for the Dems will prove to be an overall positive for all Americans, because it provides the nation with a needed sense of direction. The status quo is the worst option before us. Change is needed. We now have three years to get tort reforms, better solutions to cost containment, real improvement in quality, and a means to protect the profession of medicine built into the ultimate reform scenario.

From ACC’s point of view, we have to stay focused on making sure that we ARE going to get all Americans covered; we ARE committed to fix the unsustainable inflation in health care costs without stifling innovation or the practice of medicine; and we ARE going to need to work over the next the three years to fix the stupid stuff in the 3000 pages to make these needed changes happen in a smart fashion.

History is messy. Yesterday only underscores that. But now we know we are moving toward needed change, not stuck in some very real muck.