Kaiser Daily Health Policy Report
New York Times Profiles FDA Commissioner Mark McClellan
House Democrats To Meet To Discuss Health Care Agenda
Few Maine Residents Enroll in Together Rx Program
Wall Street Journal Looks at Small Business Owners' Difficulty Purchasing Health Insurance for Employees
Cost of Malpractice Insurance Affects Hospital Recruitment, Services, Study Says
Massachusetts House Committee Approves Medicaid, Drug Program Cuts
New York Times Examines Cuts to Connecticut's Medicaid Program and Related Legal Challenge
One-Third of Disabled People Over 50 Have Postponed Care Because of Cost, Study Says
Federally Sponsored Study Suggests Guidelines for Assisted Living
Pfizer Threatening To Lay Off Workers in States Considering Limits on Medicaid Prescription Drugs, Columnist Writes
Medicare
Medicare Bill Likely To Reach Senate Floor by July, Frist Says
[Apr 29, 2003]
Senate Majority Leader Bill Frist (R-Tenn.) on April 28 said that "the political environment is right" for passage of a bill that would reform Medicare and include a prescription drug benefit, and he predicted that such legislation would reach the Senate floor by July, CongressDaily reports. In a speech to the American Hospital Association in Washington, D.C., Frist offered "broad outlines" of the Senate measure, saying it will consist of an "assimilation of proposals from the past," including the so-called tripartisan bill from the last session, previous House bills and the Bush administration's Medicare reform framework. Frist said Republicans on the Senate Finance Committee are working on the details of the plan, and he predicted that the plan will pass the committee by the July 4 recess. He said he expected the House to pass similar legislation before or at the same time as the Senate. He said potential obstacles to the bill's passage include the politics of the 2004 presidential campaign and objections by some Senate Democrats (Heil, CongressDaily, 4/28). Kennedy Ties Drug Benefit to Tax Cuts
Also speaking at the AHA convention, Sen. Edward Kennedy (D-Mass.) said the Bush administration is pushing "excessive" tax cuts rather than using the money for a Medicare drug benefit. "It is time to say to the administration and every member of Congress that the issue isn't cost," Kennedy said, adding, "The issue is priorities. Health care for the American people is more important than large new tax breaks for millionaires" (Straub, Boston Herald, 4/29). Kennedy said last week that Senate Democrats would offer a proposal to replace Bush's proposed tax cuts with a Medicare prescription drug benefit (Kaiser Daily Health Policy Report, 4/24). While Kennedy prefers a plan that would cost about $700 billion over 10 years, he would consider a plan closer to $400 million, the Boston Herald reports (Boston Herald, 4/29).
Administration News
New York Times Profiles FDA Commissioner Mark McClellan
[Apr 29, 2003]
The New York Times on April 29 profiled FDA Commissioner Dr. Mark McClellan, whose decisions at the agency can "save lives or ruin them, and can make or break a company's fortunes." McClellan has served as FDA commissioner for six months, and in that time, the agency has proposed a rule that would require new labels on products that contain the dietary supplement ephedra to warn consumers about the health risks and a regulation that would require pharmaceutical companies to place bar codes on prescription drugs to help prevent medication errors. In addition, McClellan, an economist as well as a physician, hopes to reduce the cost of prescription drugs through reforms in the FDA approval process (Kolata, New York Times, 4/29). He has proposed that the FDA reduce the number of new prescription drugs that agency officials must review more than one time through improved communication with pharmaceutical companies; emphasize to agency officials that delays in approvals for some new prescription drugs, such as those for diseases with no available treatments, could have the same effect as approvals of unsafe medications; conduct an independent, external review of the prescription drug review process at the agency; ensure that agency officials who review new cancer treatments have the latest medical information; hire more staff to review generic medications and finalize rules that would allow more generic treatments to reach the market; and hire more economists to study the costs and advantages of agency regulations (Kaiser Daily Health Policy Report, 4/16). McClellan "is moving rapidly forward" with his proposals, but according to the Times, as he "rattles through the day with plan after plan, the question now is what will be the end results" (New York Times, 4/29).
Capitol Hill Watch
House Democrats To Meet To Discuss Health Care Agenda
[Apr 29, 2003]
House Democrats are scheduled to meet April 29 at a health care forum to discuss how the party can "move ... beyond" its focus on prescription drugs to an agenda that includes limiting health care cost increases, CongressDaily/AM reports. Rep. George Miller (D-Calif.) said the intent of the three-hour forum is to promote communication on the effects of a slow economy on health care (Wegner, CongressDaily/AM, 4/29). Meanwhile, Roll Call reports that House Democrats are expected to "rally around key aspects" of the near-universal health care coverage proposal put forth by presidential candidate Rep. Richard Gephardt (D-Mo.) last week (Billings, Roll Call, 4/28). Under the proposal, Gephardt would expand access to coverage by roughly doubling the federal subsidy to businesses to pay for insurance premiums to 60% and require employers to provide coverage; expand Medicare to allow individuals ages 55 to 64 to pay to enroll in the program; provide federal subsidies to help the unemployed purchase health coverage through COBRA; expand the CHIP program to cover parents of eligible children; and provide $172 billion to state and local governments over the next three years to reimburse them for the cost of health insurance for their employees. Gephardt said that the proposal would provide health insurance to 97% of the estimated 41 million U.S. residents who lack coverage. According to the Gephardt campaign, the program would cost $214 billion in 2005 and $247 billion by 2007. To fund the plan, Gephardt would repeal tax cuts enacted by President Bush (Kaiser Daily Health Policy Report, 4/25). Although Democrats have not yet developed a comprehensive health care plan, several party leaders say the Gephardt plan achieves two of the party's major goals: providing affordable health insurance for almost all U.S. residents and reducing the Bush administration's tax cuts. Still, several Democrats said it is "highly unlikely" that the Democratic Caucus will adopt the Gephardt proposal in its entirety. A House Democratic leadership aide said Gephardt's plan has a "decent chance" of contributing to a comprehensive Democratic Caucus plan but that it would have to be "scaled back" to gain support from all Democrats (Roll Call, 4/28). Democratic pollster Celinda Lake, Blue Shield of California CEO Bruce Bodaken and Chris Jennings, former Clinton administration health care policy adviser, are expected to attend the forum; former U.S. Surgeon General David Satcher also has been invited, CongressDaily/AM reports (CongressDaily/AM, 4/29).
Prescription Drugs
Few Maine Residents Enroll in Together Rx Program
[Apr 29, 2003]
Maine residents have "virtually ignored" Together Rx, a pharmacy discount card program established by seven pharmaceutical companies, since the program began last year, the Portland Press Herald reports (Huang, Portland Press Herald, 4/28). Under Together Rx, Medicare beneficiaries who do not have prescription drug coverage and have annual incomes less than $28,000 for an individual and less than $38,000 for a couple receive 20% to 40% discounts on their prescription drug purchases. Abbott Laboratories, AstraZeneca, Aventis Pharmaceuticals, Bristol-Myers Squibb, GlaxoSmithKline, Johnson & Johnson and Novartis Pharmaceuticals established the program in April 2002 (Kaiser Daily Health Policy Report, 11/15/02). About 1,410 Maine residents have enrolled in Together Rx, although about 54,000 qualify for the program. Healthy Maine, Maine Rx Impact
Maine House Speaker Patrick Colwell (D) said that Together Rx would "never replace legislative solutions for lowering drug costs" such as Healthy Maine and Maine Rx, the Press-Herald reports (Portland Press Herald, 4/28). Last December, the U.S. Circuit Court of Appeals for the District of Columbia struck down Healthy Maine, which uses a federal Medicaid waiver to provide discounts of as much as 25% on prescription drugs for about 108,000 Maine residents with incomes less than 300% of the federal poverty level who do not qualify for Medicaid. The court ruled that Healthy Maine was an illegal expansion of Medicaid because HHS never approved the state's contribution to the program (Kaiser Daily Health Policy Report, 1/2). Maine Rx, a proposed prescription drug discount program under which the state would negotiate with pharmaceutical companies for rebates on medications equal to or larger than those established by federal law for Medicaid, faces a Supreme Court challenge (Kaiser Daily Health Policy Report, 1/23). Colwell last month met with Together Rx Executive Director Bob Perkins to discuss promotion of the program in Maine. "Never mind the lawsuits and other issues that are ongoing in Maine. Our challenge is how to put (the card) in people's hands," Perkins said (Portland Press Herald, 4/28).
Health Care Marketplace
Wall Street Journal Looks at Small Business Owners' Difficulty Purchasing Health Insurance for Employees
[Apr 29, 2003]
The Wall Street Journal on April 29 looks at how small businesses are dealing with recent double-digit increases in the cost of health insurance. According to the Journal, small businesses are managing the increasing costs by looking for new carriers, cutting benefits, shifting more costs to employees or a combination of the three. Changing carriers, however, often entails joining a new network of doctors, which can be disruptive to employees. Further, small businesses that switch to a new carrier are often subject to detailed "underwriting," the examination of eligible employees' health histories, which can lead to higher premiums. About 62% of businesses employing 10 to 49 people offered health insurance in 2002, compared with 66% in 2001, according to a recent poll by Mercer Human Resource Consulting (Carrns, Wall Street Journal, 4/29).
Cost of Malpractice Insurance Affects Hospital Recruitment, Services, Study Says
[Apr 29, 2003]
The high cost of medical liability insurance has affected the ability of hospitals to recruit physicians and to provide services, according to a study released April 28 by the American Hospital Association, CongressDaily reports. In the study, the AHA compared 18 states with a medical liability "crisis" to four states that have passed limits on malpractice lawsuits. The study found that 50% of hospitals in crisis states have problems with the recruitment of physicians and that medical liability costs have doubled for nearly half the hospitals in those states; liability costs per staffed hospital bed totaled $11,435 in crisis states, compared to $4,228 in states with caps, according to the study. In addition, the study found that 40% of hospitals in crisis states reduced the number of physicians in their emergency departments, one of the departments most affected by high medical liability costs (Heil, CongressDaily, 4/28). Medical Groups Discuss Malpractice Bill
In related news, officials from the American Medical Association and the American College of Emergency Physicians, as well as the immediate past president of the American College of Obstetricians and Gynecologists, on April 28 at a news conference asked Congress to approve legislation to cap damages in medical malpractice lawsuits, the New Orleans Times-Picayune reports. AMA Chair-elect William Plested raised concerns that the number of physicians who enter high-risk specialties would decrease as a result of high malpractice insurance premiums and high damage awards in malpractice lawsuits. The three groups support a bill approved by the House earlier this year (Pope, New Orleans Times-Picayune, 4/29). The bill (HR 5), sponsored by Rep. Jim Greenwood (R-Pa.), would cap noneconomic damages in malpractice lawsuits at $250,000 and would allow punitive damages of $250,000 or twice the amount of economic damages, whichever is higher. The legislation covers lawsuits filed against physicians, HMOs, pharmaceutical companies and medical device companies. The bill also would allow state governments to increase or decrease the cap; the legislation would not cap economic damages, which include medical costs and lost wages (Kaiser Daily Health Policy Report, 4/22).
State Watch
Massachusetts House Committee Approves Medicaid, Drug Program Cuts
[Apr 29, 2003]
The Massachusetts House Ways and Means Committee on April 23 approved a $22.5 billion budget plan for fiscal year 2004, including Gov. Mitt Romney's (R) proposed cuts to the state Medicaid program and the elimination of the state's discount prescription drug program for seniors and people with disabilities, the Boston Globe reports. Under the proposed budget plan, the state would cut $550 million from the $6 billion Medicaid program; eliminate Medicaid coverage of methadone treatment for drug users to save $21 million; restrict care for approximately 60,000 people with disabilities; and implement Romney's proposed copayments, eligibility restrictions and limits on prescription drug coverage. The budget proposal also would eliminate the Prescription Advantage insurance program, which provides discounted medications to seniors and people with disabilities, to save about $98 million. The proposal would eliminate the $11 million Family Health Services program, which provides primary care, family planning and high-risk infant care to tens of thousands of families, and would cut $7.2 million from AIDS services, $3.4 million from teen pregnancy prevention and $21 million from smoking cessation programs. In addition, the budget plan proposes saving $128 million this year by capping spending on approximately one-third of people with disabilities under Medicaid and making additional cuts in Department of Public Health programs, which according to the Globe have already been "reduced significantly" in the last several years. The budget plan does not include Romney's proposed closure of the Worcester State psychiatric hospital or the Fernald Center for the developmentally disabled. (Dembner, Boston Globe, 4/24).
New York Times Examines Cuts to Connecticut's Medicaid Program and Related Legal Challenge
[Apr 29, 2003]
The New York Times on April 28 examined cuts in Connecticut's HUSKY program, the state's Medicaid program, including a legal challenge to the planned elimination of benefits for beneficiaries with incomes of between 100% and 150% of the federal poverty level. To save the state about $26 million this fiscal year and $73 million in FY 2004, the program has adopted a number of changes, including:
- Requiring beneficiaries to receive prior authorization for some prescription drugs;
- Eliminating some coverage, including for podiatry, optometry, chiropractic and physical therapy services;
- Eliminating a 50-cent payment to pharmacists every time they convince beneficiaries to take a lower-cost generic prescription;
- Creating $1 copayments for outpatient care and prescription drugs; and
- Eliminating benefits for about 30,000 state residents.
The last change -- the "most controversial" -- has been challenged in court by beneficiaries who said eliminating coverage is "cruel and unnecessary," according to the Times (von Zielbauer, New York Times, 4/28). U.S. District Court Judge Robert Chatigny on March 31 issued a temporary restraining order blocking the elimination of coverage ( Kaiser Daily Health Policy Report, 4/2). The Times reports that state lawmakers are considering further cuts to Medicaid, including reduced reimbursements for adaptive equipment and services ( New York Times, 4/28).
Coverage & Access
One-Third of Disabled People Over 50 Have Postponed Care Because of Cost, Study Says
[Apr 29, 2003]
One-third of people with disabilities over age 50 postponed receiving health care over the past year because they could not pay for services, up from 21% five years ago, according to an AARP survey released April 29, the Wall Street Journal reports. The survey -- conducted by Harris Interactive in September 2002 as part of a larger AARP report on disabilities and independent living to be released today -- polled 1,102 people with disabilities who were at least 50 years old. Of the respondents, 68% had a disability limiting physical mobility, 21% had a disability involving hearing or vision and 18% had a cognitive or emotional disability (Greene, Wall Street Journal, 4/29). The survey found that "inadequate" health insurance coverage posed a "major problem" among those surveyed, the AP/Fort Worth Star-Telegram reports. One-third of participants said specific medical needs such as medical equipment are not covered by their health plan. Forty-nine percent of respondents said they receive regular assistance with daily activities, and 53% said they had been unable to do an activity they needed or wanted to do in the past month (AP/Fort Worth Star-Telegram, 4/29). Nearly half of those surveyed said "more control" over care decisions would improve their quality of life, the Journal reports. Recommendations
Mary Jo Gibson, senior policy adviser for AARP, said the survey "points to major gaps in coverage," especially among people who are not eligible for Medicare. In addition, people with disabilities who do receive Medicare coverage still often lack "access to medicines they need, or possibly to some assistive technologies," Gibson said (Wall Street Journal, 4/29). In response to the findings, AARP has recommended more "consumer direction and services" in government-sponsored programs such as Medicaid, more home modifications for people with physical disabilities, more public funding for in-home or community-based care and better community accessibility for people with disabilities (Fort Worth Star-Telegram, 4/29). The AARP survey results will be available online today.
Federally Sponsored Study Suggests Guidelines for Assisted Living
[Apr 29, 2003]
A federally sponsored study on assisted living has produced the first recommendations for ensuring quality of care in U.S. assisted living facilities, USA Today reports (McCoy, USA Today, 4/29). The Assisted Living Workgroup report -- conducted by almost 50 groups of health care professionals, providers, consumer advocates and representatives of the disability community -- was commissioned two years ago by the Senate Special Committee on Aging and will be presented on April 29 to the committee, the AP/Raleigh News & Observer reports. (AP/Raleigh News & Observer, 4/28). The guidelines are not binding on states, which have complete authority over assisted living. The recommendations include the following:
- Creation of a national Center of Excellence in Assisted Living to analyze and suggest regulations to states and Congress;
- Written disclosure of all assisted-living facility costs, services and policies, including a minimum notice for any changes or terminations;
- Regulations to make sure that "trained and awake staff are on duty" at all times and that medicines are kept and administered safely; and
- Increased federal and state funding for the Long-Term Care Ombudsman Program, which resolves complaints and represents the residents' interests.
Some of the recommendations in the report are "non-specific" because the groups working on the report had to compromise on many issues, USA Today reports. Nearly 1 million U.S. residents live in the nation's 36,399 assisted-living facilities, the number of which has increased 48% since 1998, according to the National Academy for State Health Policy ( USA Today, 4/29). Although two-thirds of states have passed legislation or issued regulations to license or monitor assisted living, there have been concerns over the treatment of residents at some facilities, which are not subject to the same regulations as nursing homes, the AP/News & Observer reports (AP/Raleigh News & Observer, 4/28). Sen. John Breaux (D-La.), ranking minority member of the Senate Aging Committee, said that hoped the report would "motivate states to ensure quality of care" ( USA Today, 4/29).
Opinion
Pfizer Threatening To Lay Off Workers in States Considering Limits on Medicaid Prescription Drugs, Columnist Writes
[Apr 29, 2003]
Pfizer is threatening to reduce or freeze the number of its employees in states that are considering measures to reduce Medicaid beneficiaries' access to brand-name prescription drugs, Hartford Courant columnist Dan Haar writes. Preparing "mass layoffs" as a result of its $57 billion purchase of drug maker Pharmacia, Pfizer has confirmed the strategy, according to Haar. Company spokesperson Andy McCormick said, "[T]he most important thing for us is to have a state where our medicines can get to the people who need them," adding, "We'll be looking for states that have policies that encourage us to do that." However, Haar writes, "holding out the threat of jobs is crossing a new line in this and other industries" (Haar, Hartford Courant, 4/25).
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