John E. McDonough, Author at ºÚÁϳԹÏÍø News ºÚÁϳԹÏÍø News produces in-depth journalism on health issues and is a core operating program of KFF. Thu, 16 Apr 2026 05:55:54 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.5 /wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=32 John E. McDonough, Author at ºÚÁϳԹÏÍø News 32 32 161476233 Medicaid’s Moment (Guest Opinion) /insurance/071311mcdonough/ /insurance/071311mcdonough/#respond Wed, 13 Jul 2011 19:00:19 +0000 http://khn.wp.alley.ws/news/071311mcdonough/ If there is a piñata in American health care politics, it is Medicaid, the essential coverage program for more than 52 million low-income and vulnerable Americans, with 16 million more scheduled to enroll beginning in 2014.

In recent years, Medicaid has been the target of unrelenting attacks from Republicans and conservative think tanks. During the Senate debate on the Affordable Care Act, Sen. Robert Corker, R-Tenn., called Medicaid “probably the worst health care program in America.” Sen. Richard Burr, R-N.C., said it was “the most dysfunctional delivery system that exists in the American health care system.” Sen. John Cornyn, R-Texas, labeled it a “health care gulag.” And, back in March, American Enterprise Institute Fellow Scott Gottlieb, a physician, penned a Wall Street Journal op-ed entitled “Medicaid Is Worse Than No Coverage At All.”

Disappointingly, while Democrats are effusive in their praise of Medicare, their silence in response to public attacks on Medicaid has been deafening — during the fight over health reform legislation and since.

All the more important, then, is the  released this month by the National Bureau of Economic Research, “The Oregon Health Insurance Experiment: Evidence From The First Year,” written by a distinguished panel of health care economists.

I remember learning in 2008 that the state of Oregon had decided to hold a lottery to determine which uninsured Oregonians would be permitted to enroll in a limited expansion of their state’s Medicaid program. A total of 89,824 persons applied for 10,000 slots.

Although at the time I rolled my eyes at the sad and ludicrous spectacle of a lottery for health security, my colleague at the Harvard School of Public Health, Kate Baicker, and MIT economist Amy Finkelstein, had a different reaction. They saw this as a fleeting and historic opportunity to conduct the gold-standard of empirical research, a randomized controlled trial, to evaluate the benefits of Medicaid coverage versus no coverage at all.

In the U.S. (Europeans, of course, have no reason to study uninsurance), only one significant randomized controlled trial has been done — ever — to study health insurance. It was the 1970s , which examined consumer behavior under varied insurance designs (the lead investigator in that effort, Harvard’s Joseph Newhouse, also was involved in the Oregon study). Lack of health insurance was not part of the RAND study design. Now, the Oregon health insurance experiment will join RAND in the pantheon of essential health services research.

There will be many more results, reports and studies to come, but the first report already includes vital findings. The lucky Oregonians newly enrolled in Medicaid experienced:

? A 30 percent increase in the probability of a hospital admission.
? A 15 percent increase in the probability of taking a prescription drug.
? A 35 percent increase in the probability of having an outpatient visit.
? A 25 percent decline in the probability of having an unpaid medical bill sent to a collection agency.
? A 35 percent decline in having any out-of-pocket medical expenditures.
? Across-the-board improvements in self-reported physical and mental health, including “a general sense of improved well-being.”

The study population — new Medicaid enrollees and their unlucky uninsured counterparts — was not healthy: 18 percent had diabetes compared with 7 percent of the general population; 28 percent had asthma compared with 14 percent of the general population; 56 percent had been screened for depression versus 28 percent of the general population. Happily, researchers found a significant increase among the new enrollees in seeking basic recommended preventive care tests. For instance, data showed a 20 percent increase in cholesterol screening, a 15 percent increase in diabetes testing, a 60 percent jump in mammograms and a 45 percent hike in pap tests.

All four measures of financial strain — out-of-pocket medical costs, medical debts, refusal of treatment because of the cost of care or skipping payment of other bills to pay medical expenses — showed significant declines for these new enrollees. No wonder, then, that researchers found “an overwhelming sense from the survey outcomes that individuals feel better about their health and their interactions with the health care system. The evidence suggests that people feel better off due to insurance.”

Naysayers are already out in force charging that the study results fail to identify actual improvements in enrollees’ health status. Those kinds of results are down the road. Though in this case, their beef is not with Medicaid or the Oregon study, it is with health insurance generally. Critics should try to convince non-poor Americans these services are unnecessary and unhelpful before foisting this straw-man on the poor.

The authors are careful not to predict from their research the likely outcomes of the 2014 Medicaid expansion built into the health reform law. They did not need to. From now on, those who allege that Medicaid is “worse than no coverage at all,” or who refer to it as a “health care gulag,” face a higher burden of proof. No one denies that Medicaid is full of flaws and deficiencies, and needs improvement — but its greatest detractors never propose improvements, only abandonment.

This new study is the second piece of solidly good news this year for Medicaid’s legions of supporters. According to the May 2011 Kaiser Health Tracking , Americans oppose Republican proposals to block grant Medicaid to the states by a 60 to 35 percent margin — even 39 percent of Republicans oppose the idea. Americans increasingly recognize the importance of Medicaid, not just for the poor, for everyone.

All the more perplexing, then, is the near total silence of the Obama administration and congressional Democrats in talking publicly in support of America’s most vital health care safety net. And all the more discouraging are the reports of Medicaid on the chopping block for deficit-related cuts.

We can improve Medicaid and we should be bold in defending it. Thanks to the Oregon Health Study Group for making the job easier.

John E. McDonough is a professor at the Harvard School of Public Health (jmcdonough@hsph.harvard.edu).

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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A Health Policy Reality Check (Guest Opinion) /insurance/061311mcdonough/ /insurance/061311mcdonough/#respond Sun, 12 Jun 2011 21:00:19 +0000 http://khn.wp.alley.ws/news/061311mcdonough/ Let’s face it, this is a strange time in U.S. health policy. Over the past two years, beliefs and policies that united liberals and conservatives have been blown apart. Repair work is needed, and one place to start is by exploring blown assumptions. From a liberal perspective I offer these.

First, Medicare: Before the health reform debate, broad bipartisan agreement prevailed that the health system in general and Medicare in particular were loaded with waste and inefficiency, and that eliminating waste could help finance universal coverage. Then, during and after the brawl leading to passage of the Affordable Care Act, Republicans relentlessly attacked Democrats for cutting Medicare by $450 billion between 2010 and 2019 to help pay for the health overhaul. Never were the attacks more pitched than during the 2010 Congressional campaigns.

Democrats’ defense was that most reductions had been negotiated with affected industries — $155 billion in hospital reductions as Exhibit A — to finance coverage expansions. The defense did not stick with the public, and the effectiveness of the Republican assault is credited as a key driver that helped them score huge gains in last November’s House and Senate elections.

Now, the budget plan advanced by Rep. Paul Ryan, R-Wis., and supported by all but nine Senate and House Republicans, proposes complete repeal of the health law with one exception, the $450 billion in Medicare savings. Ryan’s plan even maintains the measure’s cuts to their beloved Medicare Advantage private plans. It now seems Republicans did not mind cutting Medicare. They just objected to how the saved funds would be used — to cover the uninsured. This key element of the Ryan blueprint has been obscured by the raucous debate over his proposal for Medicare vouchers/premium support, though it demands explanation.

How do Republicans explain their current support for Medicare cuts to which they so strenuously and publicly objected in last fall’s elections and before?

Second, the individual mandate: Since its conception in the 1980s by conservative Wharton School economist Mark Pauly, the individual mandate has been associated with Republicans and conservatives, including the Heritage Foundation; Newt Gingrich; and Republican former and current senators including Bob Dole from Kansas, John Chafee of Rhode Island, Iowa’s Chuck Grassley and Utah’s Orrin Hatch. Heck, even Sen. Jim DeMint, R-S.C., embraced it in 2007 when he backed former Massachusetts Gov. Mitt Romney’s presidential bid. The mandate has a long pedigree in Republican circles, and a very limited constituency among Democrats.

No wonder Romney thought he was on solid ground advancing it in Massachusetts in 2006. Well into 2009, there was little indication the mandate would be a divisive part of the health reform debate. The breaking point came during the town meetings held in August of that year as angry Tea Partiers transformed the political landscape. If there were an emblematic moment then, it was DeMint’s comment that defeat of health reform would be President Barack Obama’s “Waterloo.”

It prompts another question: What happened in conservative circles to the concept of individual responsibility?

Third, health insurance exchanges: Recently, speaking with state legislators, I took them to the of the Massachusetts Health Insurance Connector Authority , and walked them through the process of signing up online for individual health insurance in about seven and a half minutes — about the time it takes to fill a car with gas, I suggested. And that is the point worth noting, because I remember when it was illegal for me to gas up my car (still is, by the way, in New Jersey and Oregon). That is the essence of the exchange — to allow individuals and small businesses to pump their own insurance.

The exchange is a conservative, free-market idea — Stuart Butler from Heritage deserves most credit. Heritage gave the idea to Romney who loved it, as did Massachusetts Democrats, who changed the name to “Connector” to deny Romney naming rights. In the federal health reform process, Republicans insisted on state-based exchanges. House Democrats and the White House wanted one big federal exchange. The Senate sided with Republicans and, under the health law, states have right of first refusal with feds as back up.

Now, Republicans criticize exchanges as a federal takeover. Yet the real federal takeover happens only if a state refuses to act — precisely what some conservative governors, such as Louisiana’s Gov. Bobby Jindal, and some right-leaning legislatures want.

Why is this conservative, free-market idea now so anathema to Republicans?

Fourth, comparative effectiveness research and end-of-life counseling: I first read about the idea to establish a national CER entity in a Health Affairs article in 2005 by widely respected Republican health policy thinker Gail Wilensky. In the June 2008 health reform summit organized by Sens. Max Baucus, D-Mont., AND Chuck Grassley, Grassley highlighted areas where he already saw consensus. CER was among them. When Republicans later demanded that CER efforts not examine costs, they got their wish.

During the Senate HELP Committee’s health reform markup in June and July 2009, Sen. Johnny Isaakson, R-Ga., first proposed adding end-of-life counseling to the legislation by proposing that people shouldn’t be able to enroll in Medicare without an advance directive. Sen. Barbara Mikulski, D-Md., convinced him to just pay physicians to counsel enrollees. Both issues morphed into the accusation that health reform would create “death panels” to decide, as Grassley later put it, “whether to pull the plug on granny.”

Where does the Republican/conservative health policy world stand on comparative effectiveness research (now led by the Patient Centered Outcomes Research Institute) and voluntary end-of-life counseling? What happened to delivery system improvement?

Finally, universal coverage: Sen. Kay Bailey Hutchinson, R-Texas, often remarked: “Of course, we all want universal health care … we all want everyone to have health insurance.” And, “We all agree, doing nothing is not an option.” Having been part of this strange health policy world since 1985, I always believed most Republicans wanted to improve the system and expand coverage, just along other pathways.

Part of the aftershock on the liberal/Democratic side is that this idea is no longer easy to believe. When the Republican House voted earlier this year to repeal the health law, their slogan was “repeal and replace.” Last month, House Ways and Means Chairman Dave Camp, R-Mich., admitted the House would offer no replacement.

Two final questions: Do any Republicans still believe in the goal of universal coverage? What is the basis for moving forward together from here?

John E. McDonough is a professor at the Harvard School of Public Health.

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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A New Cost Control Idea /medicaid/050911mcdonough/ /medicaid/050911mcdonough/#respond Mon, 09 May 2011 00:30:00 +0000 http://khn.wp.alley.ws/news/050911mcdonough/ When it comes to reducing or controlling rising health care costs, we face a problem called “the fierce urgency of NOW.”

We have learned from the Medicare and Medicaid budget proposals by Rep. Paul Ryan, R-Wis., that Republicans have no substantive ideas on how to address these costs beyond shifting the bill to consumers and states. We also know that Democrats embedded a lot of promising ideas to generate savings into the health law — concepts ranging from medical homes and accountable care organizations to payment bundling and value-based insurance design. But these ideas will take time before we know if and how well they work.

But time is something we don’t have.

The federal government, states, employers and consumers are all struggling under the pressure of rising health care costs. For them, solutions can’t come soon enough.

State governments are facing a “Medicaid desert” between the end this year of the stimulus package’s enhanced federal matching rate and the 2014 implementation of the health overhaul’s Medicaid expansions. Some worry the sorry choices to address the funding shortfall will come down to cutting benefits, shrinking provider payments, hiking cost sharing and shredding eligibility. Proposals to control spending within Medicare have put that program equally in peril.

It leads to a simple question: Is there a smart cost-control idea that can help N-O-W?

Yes.

It is called “Paying for Outcomes” or “P-4-O.” And it has already been road tested.

Paying for Outcomes means encouraging hospitals, physicians and other provider groups to reduce potentially preventable events — PPEs — that harm patients and add costs. In other words, the approach rewards health care organizations that provide high-quality, effective care, and dings providers that deliver lower quality, less effective care.

There are five major types of PPEs – readmissions, admissions, complications such as infections, ER visits that lead to an inpatient admission, and outpatient procedures such as unnecessary imaging tests. The health law moves in the P-4-O direction by targeting hospitals with high rates of potentially preventable hospital readmissions. Beginning in 2012, these hospitals will need to adjust the quality of medical care they provide to match that of their peer hospitals or face financial penalties.

This approach has been pioneered and refined over many years by two researchers from 3M Health Information Systems, Dr. Norbert Goldfield and Richard Averill. Neither are Johnny-come-latelies and both were involved in establishing the Medicare hospital payment system in the mid-1980s, by far America’s most successful health care cost containment initiative ever.

Working with states such as New York and Maryland, as well as some private payers, Goldfield and Averill have shown that their approach is ready for prime time with predicted short-term savings as high as 3 percent from reducing preventable readmissions, 2 percent from reducing preventable complications, 8 percent from preventing unnecessary readmissions, 2 percent from preventing unneeded ER visits and 3 percent from deterring unnecessary outpatient procedures and ancillary treatments. One estimate projects that 9 percent of hospital costs are attributable to potentially preventable conditions, and even more to preventable readmissions.

Public or private payers — if they are ready to commit to the approach — can be up and running quickly. Maryland, for instance, implemented payment reforms based on rates of hospital inpatient complications in 2009, and saw the statewide rate of inpatient complications drop by 11.9 percent, eliminating $62.5 million in costs associated with these preventable complications in one year. New York estimates $47 million in first year savings using a similar approach.

Some disclosure is needed here. Goldfield and Averill’s company, 3M Health Information Systems, licenses and sells software to make this system work — and some dismiss their approach because of this commercial connection. Others recognize that they are not just talking theory, and they have tools and wherewithal to make theory a reality and enable payers to begin paying for outcomes quickly.

Because Goldfield is a practicing primary care physician — in a community health center in Springfield, Mass. — he has credibility with medical providers and speaks their language. He emphasizes that not all PPEs are preventable, hence the essential adverb, “potentially.” Under P-4-O, health care organizations are not penalized for specific cases, rather they are held accountable for their overall performance on each measure. How they fix their clinical issues is not mandated either — they figure out how to get to an acceptable level already achieved by their peers. And all performance measures are transparent, risk adjusted and uniform.
Some in the trenches are paying attention. Deborah Bachrach, former New York State Medicaid Commissioner, currently at the law firm Manatt, Phelps & Phillips, says that “payment policies may be the most important lever available to public and private payers to improve quality and contain costs. Sufficient data is available to pay for good outcomes and less for poor ones.” Robert Murray, head of Maryland’s Health Services Cost Review Commission, calls P-4-O a “data-driven approach which gives providers the right incentives to improve quality and efficiency.” They both emphasize that P-4-O is not a panacea and is only a first step toward broader payment bundling schemes.

Nonetheless, here is the real choice facing states and other payers today — cut eligibility, cut benefits, raise cost sharing, cut provider payments or fix medical care. Policy makers, consumers, providers and others should ask the question — before harming beneficiaries or cutting payments — shouldn’t we fix quality first? If the answer is “no” because “nobody knows how to do that,” here’s a suggested response:

“Why not pay for outcomes?”

John E. McDonough is a professor at the Harvard School of Public Health

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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10 Reasons To Feel Good About Health Reform Implementation /news/033111mcdonough/ /news/033111mcdonough/#respond Thu, 31 Mar 2011 08:14:54 +0000 http://khn.wp.alley.ws/news/033111mcdonough/ Supporters of the Affordable Care Act tend to get gloomy about the threats haunting every step along its path to implementation, seeing the negatives more clearly than they perceive the positives. As an antidote, I offer 10 reasons to be optimistic about health reform’s progress and prospects.

1. A lot of Americans are being helped by reform every day. Who? Four and a half million early retirees, 3.2 million seniors protected from the doughnut hole and 2 million more kids in Medicaid and CHIP; plus the uncounted millions who now have coverage of clinical preventive services, the many families that can keep adult children up to age 26 on their health plans, the consumers now protected by the prohibition of rescissions and many, many more. If these benefits are not recognized adequately by those receiving them, just wait until there is a genuine threat to eliminate them.

2. Because of the health law, a wave of innovation is now energizing the U.S. health system — driving the most vibrant reform atmosphere ever. Affordable care organizations; medical homes; disease prevention and wellness initiatives; anti-fraud and abuse efforts, insurance exchanges — these are all part of the series of dynamic change processes triggered by the overhaul. Even in terms of health care workforce reform, despite a congressional stalemate that is stalling the launch of the new Workforce Commission, the field is exploding with activity, according to George Thibault, president of the Josiah Macy Foundation, which focuses on workforce innovation. Contrast this dynamism with the funk following the 1994 collapse of the Clinton Health Plan.

3. The Obama administration has managed successfully the development of a lengthy list of complex and politically charged regulations to implement the law. Each process faced a chorus of critics predicting negative outcomes. Instead, skilled professionals at the Departments of Health and Human Services, Treasury and Labor, as well as the White House, mastered each controversy, worked through the minefields and established the parameters of a new health care marketplace that puts consumers and patients first.

4. The administration has demonstrated how flexibility can show strength, not weakness. Waiver approvals involving medical loss ratios and annual limits have been dissed by critics. Yet one can easily imagine their opposite complaints of rigidity had the administration denied any waivers. The key date is 2014, not 2011, and the Obama team has kept its eyes on that goal. President Barack Obama’s embrace of state experimentation is another welcome sign that strengthens rather than undermines the measure’s future.

5. As the dust settles, the constitutional challenges seem a lot less scary. The scorecard of major decisions is 3-2 in favor of the individual mandate. Charles Fried, Ronald Reagan’s solicitor general, told a Senate panel: “The health care law’s enemies have no ally in the Constitution.” Increasingly it is clear that a decision based on the law will uphold the ACA’s most controversial provision, and a ruling based on politics will go the other way. And if the mandate goes down, there are other approaches at hand.

6. All key stakeholders are all sticking with the law. No observable erosion in support has occurred among hospitals, physicians, pharmaceutical/biotech/medical device companies, labor groups or consumers. In January, House Republicans predicted substantial desertions by House Democrats, and wound up with only three Democratic votes for their repeal effort. The only visible chink is on the other side of the debate — the business community’s evident non-interest in hyping repeal. In state after state, the hard work of implementation is moving forward.

7. An improving economy will help. In 1988, Massachusetts passed a major health reform law, which preceded a major economic downturn by months. The ensuing collapse destroyed any chance for implementation. Conversely, had the Clinton health reform plan passed in 1994 while the national economy was still crawling out of a downturn, implementation in the mid-to late-1990s would have been much easier than that early Massachusetts experience because the nation was experiencing an economic boom. The best time to pass major health reform legislation is near the bottom of an economic downturn, with implementation happening when the economy is back on track. And that is how it will play out this time around for the health law.

8. The federal deficit is a growing advantage. When the overhaul was signed in 2010, the Congressional Budget Office estimated$143 billion in 10-year deficit reduction — from 2010 to 2019 — because of the law. In February, the CBO updated its 10-year deficit reduction estimate — spanning 2012 to 2021 — to $210 billion. That number will grow year by year as the measure’s savings and revenues take full effect, making repeal harder and harder.

9. Public opinion is sharply against total repeal, with only 21 percent support according to the March Kaiser Family Foundation tracking poll. (Kaiser Health News is a program of the Foundation.) Overall numbers in public support are still sharply divided — 46 percent unfavorable to 42 percent favorable. Yet on all key elements of reform, except for the mandate, the public supports the law and opposes repeal.

10. The single most devastating blow for implementation would be election of a president who supports the health law’s repeal. Though it is a long way to November 2012, the odds-on favorite now (see Intrade at 64.0 percent — 3/21/11) is the one candidate who supports full and effective implementation of the reform measure.

Can we get through the most challenging implementation of a federal law since the civil rights laws of the 1960s? Yes we can.

John E McDonough is a professor at the Harvard School of Public Health and a former staff member at the U.S. Senate Committee on Health, Education, Labor and Pensions.

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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Wyden-Brown And The Health Law: A Match Made In Heaven Or Limbo? /insurance/030911mcdonough/ /insurance/030911mcdonough/#respond Tue, 08 Mar 2011 21:00:00 +0000 http://khn.wp.alley.ws/news/030911mcdonough/ There is one certainty in the era of the new federal health law — nothing in U.S. health policy will ever be the same.

Every week events take place — regulations are issued, grants are awarded and provisions, such as the 1099 reporting requirement that raised revenue to pay for the measure, face congressional challenges. Each development marks one more step in the continuing transformation of the health system — changes now put in motion by the sweeping overhaul. In this vein, President Barack Obama’s surprise signal last week to governors that he was willing to give states some extra flexibility in implementing the law is particularly noteworthy because it offers a useful window into the health law’s evolving politics and the future bargaining that will likely take place.

Specifically, Obama announced his support for legislation introduced by Sen. Ron Wyden, D-Ore., and Sen. Scott Brown, R-Mass., to allow states to devise their own insurance coverage systems as early as 2014, instead of the 2017 date specified in the law. The president’s endorsement elevated a previously obscure side issue and opened a door for negotiations with Republicans when the time becomes ripe.

The “waiver for state innovation” provision permits states to seek a federal waiver from the individual mandate and other key requirements as long as the state’s replacement plan meets four conditions. States must provide “coverage that is at least as comprehensive,” “cost sharing protections that are least as affordable,” and “coverage to at least a comparable number of residents” as would have occurred under the Affordable Care Act. In addition, a state waiver must “not increase the federal deficit.”

But why 2017 in the first place?

It all started in late 2009 when Wyden and Sen. Bernie Sanders, I-Vt., were the Senate’s main advocates for these waivers. They wanted a 2014 start date. The Congressional Budget Office told Senate staff that it could not provide a realistic spending projection for any such dispensations in the 2014-2016 years because financial benchmarks didn’t exist to make sure states were not overpaid. In political terms, had the Senate set 2014 as the date, the CBO would have marked that section as adding to the bill’s total cost at a time when senators were under pressure to keep its price tag down.

In January 2010, when Senate and House Democrats were negotiating a final health reform bill, and right before the Massachusetts special election for the Senate seat held by the late Sen. Edward Kennedy, the CBO had agreed that allowing early waivers for two states each year through 2017 would have minimal adverse budget impact. That scheme fell off the table when (guess who?) Scott Brown won the Senate race. So 2017 kept its place in the final legislation.

When the Wyden-Brown legislation was first introduced last November, the reaction was muted. Since then, only Sen. Mary Landrieu, D-La., has joined Wyden as a Democratic co-sponsor, and Brown has attracted zero of his Republican colleagues. Sanders, who also supports moving up the date to 2014 to help Vermont set up its own single-payer plan, has filed a bill to accomplish the same objective. Now they have President Obama on board. What’s behind the bipartisan reticence of the rest?

Democrats tend to dislike giving states too much discretion because they fear that Republican governors would use flexibility to reduce the number of people eligible for coverage and scale back their benefits. This worry grows when a Republican president occupies the White House. Further, Wyden did not endear himself to his Democratic Senate colleagues during the health reform debate when he kept pushing his own alternative universal coverage legislation co-sponsored by the recently defeated Sen. Bob Bennett, R-Utah.

Republicans are more respectful of state flexibility, though the Wyden-Brown bill does not provide the kind they most appreciate — thinner benefits, higher cost sharing, fewer covered lives. Further, Republicans are not likely to support a provision that makes the health law more acceptable when their base is expecting and demanding a clean repeal. Also, it can’t help motivate them that the state most likely to claim a waiver would be Vermont, which would use it to create the Republicans’ worst health care nightmare — a single-payer health-financing scheme.

The bipartisan unease makes it unlikely Brown-Wyden will move in this session of Congress despite the president’s embrace. The time and place of the president’s endorsement — the annual winter meeting of the National Governors Association — shows a chief executive more focused on states than on Congress. His endorsement also shows a president thinking longer term about the measure’s prospects than the current congressional session.

So if the U.S. Supreme Court decides one day to toss out the individual mandate; if tensions do not cool down with the governors and states; or if Congress gets nostalgic for the kind of bipartisan deal making they did in 1997 leading to that year’s Balanced Budget Act, then Wyden-Brown in its current or altered form will be in play. Just not before 2013 — when a new Congress comes to town. 

John E. McDonough is a professor at the Harvard School of Public Health and a former staff member of the U.S. Senate Committee on Health, Education, Labor and Pensions.

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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John E. McDonough, Author at ºÚÁϳԹÏÍø News ºÚÁϳԹÏÍø News produces in-depth journalism on health issues and is a core operating program of KFF. Thu, 16 Apr 2026 05:55:54 +0000 en-US hourly 1 https://wordpress.org/?v=6.8.5 /wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=32 John E. McDonough, Author at ºÚÁϳԹÏÍø News 32 32 161476233 Medicaid’s Moment (Guest Opinion) /insurance/071311mcdonough/ /insurance/071311mcdonough/#respond Wed, 13 Jul 2011 19:00:19 +0000 http://khn.wp.alley.ws/news/071311mcdonough/ If there is a piñata in American health care politics, it is Medicaid, the essential coverage program for more than 52 million low-income and vulnerable Americans, with 16 million more scheduled to enroll beginning in 2014.

In recent years, Medicaid has been the target of unrelenting attacks from Republicans and conservative think tanks. During the Senate debate on the Affordable Care Act, Sen. Robert Corker, R-Tenn., called Medicaid “probably the worst health care program in America.” Sen. Richard Burr, R-N.C., said it was “the most dysfunctional delivery system that exists in the American health care system.” Sen. John Cornyn, R-Texas, labeled it a “health care gulag.” And, back in March, American Enterprise Institute Fellow Scott Gottlieb, a physician, penned a Wall Street Journal op-ed entitled “Medicaid Is Worse Than No Coverage At All.”

Disappointingly, while Democrats are effusive in their praise of Medicare, their silence in response to public attacks on Medicaid has been deafening — during the fight over health reform legislation and since.

All the more important, then, is the  released this month by the National Bureau of Economic Research, “The Oregon Health Insurance Experiment: Evidence From The First Year,” written by a distinguished panel of health care economists.

I remember learning in 2008 that the state of Oregon had decided to hold a lottery to determine which uninsured Oregonians would be permitted to enroll in a limited expansion of their state’s Medicaid program. A total of 89,824 persons applied for 10,000 slots.

Although at the time I rolled my eyes at the sad and ludicrous spectacle of a lottery for health security, my colleague at the Harvard School of Public Health, Kate Baicker, and MIT economist Amy Finkelstein, had a different reaction. They saw this as a fleeting and historic opportunity to conduct the gold-standard of empirical research, a randomized controlled trial, to evaluate the benefits of Medicaid coverage versus no coverage at all.

In the U.S. (Europeans, of course, have no reason to study uninsurance), only one significant randomized controlled trial has been done — ever — to study health insurance. It was the 1970s , which examined consumer behavior under varied insurance designs (the lead investigator in that effort, Harvard’s Joseph Newhouse, also was involved in the Oregon study). Lack of health insurance was not part of the RAND study design. Now, the Oregon health insurance experiment will join RAND in the pantheon of essential health services research.

There will be many more results, reports and studies to come, but the first report already includes vital findings. The lucky Oregonians newly enrolled in Medicaid experienced:

? A 30 percent increase in the probability of a hospital admission.
? A 15 percent increase in the probability of taking a prescription drug.
? A 35 percent increase in the probability of having an outpatient visit.
? A 25 percent decline in the probability of having an unpaid medical bill sent to a collection agency.
? A 35 percent decline in having any out-of-pocket medical expenditures.
? Across-the-board improvements in self-reported physical and mental health, including “a general sense of improved well-being.”

The study population — new Medicaid enrollees and their unlucky uninsured counterparts — was not healthy: 18 percent had diabetes compared with 7 percent of the general population; 28 percent had asthma compared with 14 percent of the general population; 56 percent had been screened for depression versus 28 percent of the general population. Happily, researchers found a significant increase among the new enrollees in seeking basic recommended preventive care tests. For instance, data showed a 20 percent increase in cholesterol screening, a 15 percent increase in diabetes testing, a 60 percent jump in mammograms and a 45 percent hike in pap tests.

All four measures of financial strain — out-of-pocket medical costs, medical debts, refusal of treatment because of the cost of care or skipping payment of other bills to pay medical expenses — showed significant declines for these new enrollees. No wonder, then, that researchers found “an overwhelming sense from the survey outcomes that individuals feel better about their health and their interactions with the health care system. The evidence suggests that people feel better off due to insurance.”

Naysayers are already out in force charging that the study results fail to identify actual improvements in enrollees’ health status. Those kinds of results are down the road. Though in this case, their beef is not with Medicaid or the Oregon study, it is with health insurance generally. Critics should try to convince non-poor Americans these services are unnecessary and unhelpful before foisting this straw-man on the poor.

The authors are careful not to predict from their research the likely outcomes of the 2014 Medicaid expansion built into the health reform law. They did not need to. From now on, those who allege that Medicaid is “worse than no coverage at all,” or who refer to it as a “health care gulag,” face a higher burden of proof. No one denies that Medicaid is full of flaws and deficiencies, and needs improvement — but its greatest detractors never propose improvements, only abandonment.

This new study is the second piece of solidly good news this year for Medicaid’s legions of supporters. According to the May 2011 Kaiser Health Tracking , Americans oppose Republican proposals to block grant Medicaid to the states by a 60 to 35 percent margin — even 39 percent of Republicans oppose the idea. Americans increasingly recognize the importance of Medicaid, not just for the poor, for everyone.

All the more perplexing, then, is the near total silence of the Obama administration and congressional Democrats in talking publicly in support of America’s most vital health care safety net. And all the more discouraging are the reports of Medicaid on the chopping block for deficit-related cuts.

We can improve Medicaid and we should be bold in defending it. Thanks to the Oregon Health Study Group for making the job easier.

John E. McDonough is a professor at the Harvard School of Public Health (jmcdonough@hsph.harvard.edu).

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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A Health Policy Reality Check (Guest Opinion) /insurance/061311mcdonough/ /insurance/061311mcdonough/#respond Sun, 12 Jun 2011 21:00:19 +0000 http://khn.wp.alley.ws/news/061311mcdonough/ Let’s face it, this is a strange time in U.S. health policy. Over the past two years, beliefs and policies that united liberals and conservatives have been blown apart. Repair work is needed, and one place to start is by exploring blown assumptions. From a liberal perspective I offer these.

First, Medicare: Before the health reform debate, broad bipartisan agreement prevailed that the health system in general and Medicare in particular were loaded with waste and inefficiency, and that eliminating waste could help finance universal coverage. Then, during and after the brawl leading to passage of the Affordable Care Act, Republicans relentlessly attacked Democrats for cutting Medicare by $450 billion between 2010 and 2019 to help pay for the health overhaul. Never were the attacks more pitched than during the 2010 Congressional campaigns.

Democrats’ defense was that most reductions had been negotiated with affected industries — $155 billion in hospital reductions as Exhibit A — to finance coverage expansions. The defense did not stick with the public, and the effectiveness of the Republican assault is credited as a key driver that helped them score huge gains in last November’s House and Senate elections.

Now, the budget plan advanced by Rep. Paul Ryan, R-Wis., and supported by all but nine Senate and House Republicans, proposes complete repeal of the health law with one exception, the $450 billion in Medicare savings. Ryan’s plan even maintains the measure’s cuts to their beloved Medicare Advantage private plans. It now seems Republicans did not mind cutting Medicare. They just objected to how the saved funds would be used — to cover the uninsured. This key element of the Ryan blueprint has been obscured by the raucous debate over his proposal for Medicare vouchers/premium support, though it demands explanation.

How do Republicans explain their current support for Medicare cuts to which they so strenuously and publicly objected in last fall’s elections and before?

Second, the individual mandate: Since its conception in the 1980s by conservative Wharton School economist Mark Pauly, the individual mandate has been associated with Republicans and conservatives, including the Heritage Foundation; Newt Gingrich; and Republican former and current senators including Bob Dole from Kansas, John Chafee of Rhode Island, Iowa’s Chuck Grassley and Utah’s Orrin Hatch. Heck, even Sen. Jim DeMint, R-S.C., embraced it in 2007 when he backed former Massachusetts Gov. Mitt Romney’s presidential bid. The mandate has a long pedigree in Republican circles, and a very limited constituency among Democrats.

No wonder Romney thought he was on solid ground advancing it in Massachusetts in 2006. Well into 2009, there was little indication the mandate would be a divisive part of the health reform debate. The breaking point came during the town meetings held in August of that year as angry Tea Partiers transformed the political landscape. If there were an emblematic moment then, it was DeMint’s comment that defeat of health reform would be President Barack Obama’s “Waterloo.”

It prompts another question: What happened in conservative circles to the concept of individual responsibility?

Third, health insurance exchanges: Recently, speaking with state legislators, I took them to the of the Massachusetts Health Insurance Connector Authority , and walked them through the process of signing up online for individual health insurance in about seven and a half minutes — about the time it takes to fill a car with gas, I suggested. And that is the point worth noting, because I remember when it was illegal for me to gas up my car (still is, by the way, in New Jersey and Oregon). That is the essence of the exchange — to allow individuals and small businesses to pump their own insurance.

The exchange is a conservative, free-market idea — Stuart Butler from Heritage deserves most credit. Heritage gave the idea to Romney who loved it, as did Massachusetts Democrats, who changed the name to “Connector” to deny Romney naming rights. In the federal health reform process, Republicans insisted on state-based exchanges. House Democrats and the White House wanted one big federal exchange. The Senate sided with Republicans and, under the health law, states have right of first refusal with feds as back up.

Now, Republicans criticize exchanges as a federal takeover. Yet the real federal takeover happens only if a state refuses to act — precisely what some conservative governors, such as Louisiana’s Gov. Bobby Jindal, and some right-leaning legislatures want.

Why is this conservative, free-market idea now so anathema to Republicans?

Fourth, comparative effectiveness research and end-of-life counseling: I first read about the idea to establish a national CER entity in a Health Affairs article in 2005 by widely respected Republican health policy thinker Gail Wilensky. In the June 2008 health reform summit organized by Sens. Max Baucus, D-Mont., AND Chuck Grassley, Grassley highlighted areas where he already saw consensus. CER was among them. When Republicans later demanded that CER efforts not examine costs, they got their wish.

During the Senate HELP Committee’s health reform markup in June and July 2009, Sen. Johnny Isaakson, R-Ga., first proposed adding end-of-life counseling to the legislation by proposing that people shouldn’t be able to enroll in Medicare without an advance directive. Sen. Barbara Mikulski, D-Md., convinced him to just pay physicians to counsel enrollees. Both issues morphed into the accusation that health reform would create “death panels” to decide, as Grassley later put it, “whether to pull the plug on granny.”

Where does the Republican/conservative health policy world stand on comparative effectiveness research (now led by the Patient Centered Outcomes Research Institute) and voluntary end-of-life counseling? What happened to delivery system improvement?

Finally, universal coverage: Sen. Kay Bailey Hutchinson, R-Texas, often remarked: “Of course, we all want universal health care … we all want everyone to have health insurance.” And, “We all agree, doing nothing is not an option.” Having been part of this strange health policy world since 1985, I always believed most Republicans wanted to improve the system and expand coverage, just along other pathways.

Part of the aftershock on the liberal/Democratic side is that this idea is no longer easy to believe. When the Republican House voted earlier this year to repeal the health law, their slogan was “repeal and replace.” Last month, House Ways and Means Chairman Dave Camp, R-Mich., admitted the House would offer no replacement.

Two final questions: Do any Republicans still believe in the goal of universal coverage? What is the basis for moving forward together from here?

John E. McDonough is a professor at the Harvard School of Public Health.

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

This <a target="_blank" href="/insurance/061311mcdonough/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

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A New Cost Control Idea /medicaid/050911mcdonough/ /medicaid/050911mcdonough/#respond Mon, 09 May 2011 00:30:00 +0000 http://khn.wp.alley.ws/news/050911mcdonough/ When it comes to reducing or controlling rising health care costs, we face a problem called “the fierce urgency of NOW.”

We have learned from the Medicare and Medicaid budget proposals by Rep. Paul Ryan, R-Wis., that Republicans have no substantive ideas on how to address these costs beyond shifting the bill to consumers and states. We also know that Democrats embedded a lot of promising ideas to generate savings into the health law — concepts ranging from medical homes and accountable care organizations to payment bundling and value-based insurance design. But these ideas will take time before we know if and how well they work.

But time is something we don’t have.

The federal government, states, employers and consumers are all struggling under the pressure of rising health care costs. For them, solutions can’t come soon enough.

State governments are facing a “Medicaid desert” between the end this year of the stimulus package’s enhanced federal matching rate and the 2014 implementation of the health overhaul’s Medicaid expansions. Some worry the sorry choices to address the funding shortfall will come down to cutting benefits, shrinking provider payments, hiking cost sharing and shredding eligibility. Proposals to control spending within Medicare have put that program equally in peril.

It leads to a simple question: Is there a smart cost-control idea that can help N-O-W?

Yes.

It is called “Paying for Outcomes” or “P-4-O.” And it has already been road tested.

Paying for Outcomes means encouraging hospitals, physicians and other provider groups to reduce potentially preventable events — PPEs — that harm patients and add costs. In other words, the approach rewards health care organizations that provide high-quality, effective care, and dings providers that deliver lower quality, less effective care.

There are five major types of PPEs – readmissions, admissions, complications such as infections, ER visits that lead to an inpatient admission, and outpatient procedures such as unnecessary imaging tests. The health law moves in the P-4-O direction by targeting hospitals with high rates of potentially preventable hospital readmissions. Beginning in 2012, these hospitals will need to adjust the quality of medical care they provide to match that of their peer hospitals or face financial penalties.

This approach has been pioneered and refined over many years by two researchers from 3M Health Information Systems, Dr. Norbert Goldfield and Richard Averill. Neither are Johnny-come-latelies and both were involved in establishing the Medicare hospital payment system in the mid-1980s, by far America’s most successful health care cost containment initiative ever.

Working with states such as New York and Maryland, as well as some private payers, Goldfield and Averill have shown that their approach is ready for prime time with predicted short-term savings as high as 3 percent from reducing preventable readmissions, 2 percent from reducing preventable complications, 8 percent from preventing unnecessary readmissions, 2 percent from preventing unneeded ER visits and 3 percent from deterring unnecessary outpatient procedures and ancillary treatments. One estimate projects that 9 percent of hospital costs are attributable to potentially preventable conditions, and even more to preventable readmissions.

Public or private payers — if they are ready to commit to the approach — can be up and running quickly. Maryland, for instance, implemented payment reforms based on rates of hospital inpatient complications in 2009, and saw the statewide rate of inpatient complications drop by 11.9 percent, eliminating $62.5 million in costs associated with these preventable complications in one year. New York estimates $47 million in first year savings using a similar approach.

Some disclosure is needed here. Goldfield and Averill’s company, 3M Health Information Systems, licenses and sells software to make this system work — and some dismiss their approach because of this commercial connection. Others recognize that they are not just talking theory, and they have tools and wherewithal to make theory a reality and enable payers to begin paying for outcomes quickly.

Because Goldfield is a practicing primary care physician — in a community health center in Springfield, Mass. — he has credibility with medical providers and speaks their language. He emphasizes that not all PPEs are preventable, hence the essential adverb, “potentially.” Under P-4-O, health care organizations are not penalized for specific cases, rather they are held accountable for their overall performance on each measure. How they fix their clinical issues is not mandated either — they figure out how to get to an acceptable level already achieved by their peers. And all performance measures are transparent, risk adjusted and uniform.
Some in the trenches are paying attention. Deborah Bachrach, former New York State Medicaid Commissioner, currently at the law firm Manatt, Phelps & Phillips, says that “payment policies may be the most important lever available to public and private payers to improve quality and contain costs. Sufficient data is available to pay for good outcomes and less for poor ones.” Robert Murray, head of Maryland’s Health Services Cost Review Commission, calls P-4-O a “data-driven approach which gives providers the right incentives to improve quality and efficiency.” They both emphasize that P-4-O is not a panacea and is only a first step toward broader payment bundling schemes.

Nonetheless, here is the real choice facing states and other payers today — cut eligibility, cut benefits, raise cost sharing, cut provider payments or fix medical care. Policy makers, consumers, providers and others should ask the question — before harming beneficiaries or cutting payments — shouldn’t we fix quality first? If the answer is “no” because “nobody knows how to do that,” here’s a suggested response:

“Why not pay for outcomes?”

John E. McDonough is a professor at the Harvard School of Public Health

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

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10 Reasons To Feel Good About Health Reform Implementation /news/033111mcdonough/ /news/033111mcdonough/#respond Thu, 31 Mar 2011 08:14:54 +0000 http://khn.wp.alley.ws/news/033111mcdonough/ Supporters of the Affordable Care Act tend to get gloomy about the threats haunting every step along its path to implementation, seeing the negatives more clearly than they perceive the positives. As an antidote, I offer 10 reasons to be optimistic about health reform’s progress and prospects.

1. A lot of Americans are being helped by reform every day. Who? Four and a half million early retirees, 3.2 million seniors protected from the doughnut hole and 2 million more kids in Medicaid and CHIP; plus the uncounted millions who now have coverage of clinical preventive services, the many families that can keep adult children up to age 26 on their health plans, the consumers now protected by the prohibition of rescissions and many, many more. If these benefits are not recognized adequately by those receiving them, just wait until there is a genuine threat to eliminate them.

2. Because of the health law, a wave of innovation is now energizing the U.S. health system — driving the most vibrant reform atmosphere ever. Affordable care organizations; medical homes; disease prevention and wellness initiatives; anti-fraud and abuse efforts, insurance exchanges — these are all part of the series of dynamic change processes triggered by the overhaul. Even in terms of health care workforce reform, despite a congressional stalemate that is stalling the launch of the new Workforce Commission, the field is exploding with activity, according to George Thibault, president of the Josiah Macy Foundation, which focuses on workforce innovation. Contrast this dynamism with the funk following the 1994 collapse of the Clinton Health Plan.

3. The Obama administration has managed successfully the development of a lengthy list of complex and politically charged regulations to implement the law. Each process faced a chorus of critics predicting negative outcomes. Instead, skilled professionals at the Departments of Health and Human Services, Treasury and Labor, as well as the White House, mastered each controversy, worked through the minefields and established the parameters of a new health care marketplace that puts consumers and patients first.

4. The administration has demonstrated how flexibility can show strength, not weakness. Waiver approvals involving medical loss ratios and annual limits have been dissed by critics. Yet one can easily imagine their opposite complaints of rigidity had the administration denied any waivers. The key date is 2014, not 2011, and the Obama team has kept its eyes on that goal. President Barack Obama’s embrace of state experimentation is another welcome sign that strengthens rather than undermines the measure’s future.

5. As the dust settles, the constitutional challenges seem a lot less scary. The scorecard of major decisions is 3-2 in favor of the individual mandate. Charles Fried, Ronald Reagan’s solicitor general, told a Senate panel: “The health care law’s enemies have no ally in the Constitution.” Increasingly it is clear that a decision based on the law will uphold the ACA’s most controversial provision, and a ruling based on politics will go the other way. And if the mandate goes down, there are other approaches at hand.

6. All key stakeholders are all sticking with the law. No observable erosion in support has occurred among hospitals, physicians, pharmaceutical/biotech/medical device companies, labor groups or consumers. In January, House Republicans predicted substantial desertions by House Democrats, and wound up with only three Democratic votes for their repeal effort. The only visible chink is on the other side of the debate — the business community’s evident non-interest in hyping repeal. In state after state, the hard work of implementation is moving forward.

7. An improving economy will help. In 1988, Massachusetts passed a major health reform law, which preceded a major economic downturn by months. The ensuing collapse destroyed any chance for implementation. Conversely, had the Clinton health reform plan passed in 1994 while the national economy was still crawling out of a downturn, implementation in the mid-to late-1990s would have been much easier than that early Massachusetts experience because the nation was experiencing an economic boom. The best time to pass major health reform legislation is near the bottom of an economic downturn, with implementation happening when the economy is back on track. And that is how it will play out this time around for the health law.

8. The federal deficit is a growing advantage. When the overhaul was signed in 2010, the Congressional Budget Office estimated$143 billion in 10-year deficit reduction — from 2010 to 2019 — because of the law. In February, the CBO updated its 10-year deficit reduction estimate — spanning 2012 to 2021 — to $210 billion. That number will grow year by year as the measure’s savings and revenues take full effect, making repeal harder and harder.

9. Public opinion is sharply against total repeal, with only 21 percent support according to the March Kaiser Family Foundation tracking poll. (Kaiser Health News is a program of the Foundation.) Overall numbers in public support are still sharply divided — 46 percent unfavorable to 42 percent favorable. Yet on all key elements of reform, except for the mandate, the public supports the law and opposes repeal.

10. The single most devastating blow for implementation would be election of a president who supports the health law’s repeal. Though it is a long way to November 2012, the odds-on favorite now (see Intrade at 64.0 percent — 3/21/11) is the one candidate who supports full and effective implementation of the reform measure.

Can we get through the most challenging implementation of a federal law since the civil rights laws of the 1960s? Yes we can.

John E McDonough is a professor at the Harvard School of Public Health and a former staff member at the U.S. Senate Committee on Health, Education, Labor and Pensions.

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

This <a target="_blank" href="/news/033111mcdonough/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

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Wyden-Brown And The Health Law: A Match Made In Heaven Or Limbo? /insurance/030911mcdonough/ /insurance/030911mcdonough/#respond Tue, 08 Mar 2011 21:00:00 +0000 http://khn.wp.alley.ws/news/030911mcdonough/ There is one certainty in the era of the new federal health law — nothing in U.S. health policy will ever be the same.

Every week events take place — regulations are issued, grants are awarded and provisions, such as the 1099 reporting requirement that raised revenue to pay for the measure, face congressional challenges. Each development marks one more step in the continuing transformation of the health system — changes now put in motion by the sweeping overhaul. In this vein, President Barack Obama’s surprise signal last week to governors that he was willing to give states some extra flexibility in implementing the law is particularly noteworthy because it offers a useful window into the health law’s evolving politics and the future bargaining that will likely take place.

Specifically, Obama announced his support for legislation introduced by Sen. Ron Wyden, D-Ore., and Sen. Scott Brown, R-Mass., to allow states to devise their own insurance coverage systems as early as 2014, instead of the 2017 date specified in the law. The president’s endorsement elevated a previously obscure side issue and opened a door for negotiations with Republicans when the time becomes ripe.

The “waiver for state innovation” provision permits states to seek a federal waiver from the individual mandate and other key requirements as long as the state’s replacement plan meets four conditions. States must provide “coverage that is at least as comprehensive,” “cost sharing protections that are least as affordable,” and “coverage to at least a comparable number of residents” as would have occurred under the Affordable Care Act. In addition, a state waiver must “not increase the federal deficit.”

But why 2017 in the first place?

It all started in late 2009 when Wyden and Sen. Bernie Sanders, I-Vt., were the Senate’s main advocates for these waivers. They wanted a 2014 start date. The Congressional Budget Office told Senate staff that it could not provide a realistic spending projection for any such dispensations in the 2014-2016 years because financial benchmarks didn’t exist to make sure states were not overpaid. In political terms, had the Senate set 2014 as the date, the CBO would have marked that section as adding to the bill’s total cost at a time when senators were under pressure to keep its price tag down.

In January 2010, when Senate and House Democrats were negotiating a final health reform bill, and right before the Massachusetts special election for the Senate seat held by the late Sen. Edward Kennedy, the CBO had agreed that allowing early waivers for two states each year through 2017 would have minimal adverse budget impact. That scheme fell off the table when (guess who?) Scott Brown won the Senate race. So 2017 kept its place in the final legislation.

When the Wyden-Brown legislation was first introduced last November, the reaction was muted. Since then, only Sen. Mary Landrieu, D-La., has joined Wyden as a Democratic co-sponsor, and Brown has attracted zero of his Republican colleagues. Sanders, who also supports moving up the date to 2014 to help Vermont set up its own single-payer plan, has filed a bill to accomplish the same objective. Now they have President Obama on board. What’s behind the bipartisan reticence of the rest?

Democrats tend to dislike giving states too much discretion because they fear that Republican governors would use flexibility to reduce the number of people eligible for coverage and scale back their benefits. This worry grows when a Republican president occupies the White House. Further, Wyden did not endear himself to his Democratic Senate colleagues during the health reform debate when he kept pushing his own alternative universal coverage legislation co-sponsored by the recently defeated Sen. Bob Bennett, R-Utah.

Republicans are more respectful of state flexibility, though the Wyden-Brown bill does not provide the kind they most appreciate — thinner benefits, higher cost sharing, fewer covered lives. Further, Republicans are not likely to support a provision that makes the health law more acceptable when their base is expecting and demanding a clean repeal. Also, it can’t help motivate them that the state most likely to claim a waiver would be Vermont, which would use it to create the Republicans’ worst health care nightmare — a single-payer health-financing scheme.

The bipartisan unease makes it unlikely Brown-Wyden will move in this session of Congress despite the president’s embrace. The time and place of the president’s endorsement — the annual winter meeting of the National Governors Association — shows a chief executive more focused on states than on Congress. His endorsement also shows a president thinking longer term about the measure’s prospects than the current congressional session.

So if the U.S. Supreme Court decides one day to toss out the individual mandate; if tensions do not cool down with the governors and states; or if Congress gets nostalgic for the kind of bipartisan deal making they did in 1997 leading to that year’s Balanced Budget Act, then Wyden-Brown in its current or altered form will be in play. Just not before 2013 — when a new Congress comes to town. 

John E. McDonough is a professor at the Harvard School of Public Health and a former staff member of the U.S. Senate Committee on Health, Education, Labor and Pensions.

ºÚÁϳԹÏÍø News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about .

This <a target="_blank" href="/insurance/030911mcdonough/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

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