Healthcare providers applauded efforts last week by both Republicans and Democrats to push access to healthcare services for the uninsured higher on the national agenda. But they debated over which camp's plans would do more for the nation's nearly 44 million uninsured Americans.
The debate may be moot, as election-year politics and the government's $400 billion obligation under the new Medicare law may put a damper on any bold new healthcare policies before November. While major legislation can pass in an election year-the Health Insurance Portability and Accountability Act became law in 1996-politicians seeking a substantial new entitlement may find their prospects limited.
"A government-run healthcare system is the wrong prescription," President Bush said to applause in Congress Jan. 20, mostly from the Republican side of the aisle. "By keeping costs under control, expanding access and helping more Americans afford coverage, we will preserve the system of private medicine that makes America's healthcare the best in the world."
After Bush's address to a joint session of Congress, prominent Democrats attempted to capitalize on the president's remarks about how the federal government should reduce the number of uninsured, which the U.S. Census Bureau has pegged at 43.6 million in 2002, up 5.8% from 41.2 million in 2001.
Arguing last week that the Bush administration's medicine for the uninsured isn't nearly potent enough, Sen. Edward Kennedy (D-Mass.) unveiled a sweeping but politically uncertain plan to spend $70 billion annually to expand coverage and improve healthcare quality.
For firms of 50 or more
Kennedy's proposal, which he outlined at a healthcare conference sponsored by consumer advocacy group Families USA last week in Washington, would require all employers with more than 50 workers to provide health coverage, capping the contribution at 12% of payroll to keep insurance premiums from crowding out profits.
California passed a similar law last year that will require companies with 50 or more employees to provide healthcare benefits directly to workers or pay fees into a state-run insurance pool to cover them, although it may be revisited this year (Sept. 22, 2003, p. 22).
Speaking at the same conference in support of Kennedy's proposal, Sen. Debbie Stabenow (D-Mich.) said the problem of the uninsured "literally affects everyone."
Kennedy's proposal mirrors what was espoused by U.S. Rep. Richard Gephardt, the Missouri Democrat who abandoned his presidential bid last week (See related story, p. 5).
It would be bad policy, Kennedy said, to take money from hospitals and doctors to finance the new expenditures his plan would require.
Not everyone agreed with Kennedy that Bush didn't go far enough with his plans for the uninsured. "I personally believe the president is very committed to healthcare," said Thomas Corder, president and chief executive officer of 343-bed Camden-Clark Memorial Hospital in Parkersburg, W.Va.
Despite criticism from Democrats and others who say the president's game plan is insufficient, Bush's initiatives to expand coverage are "right on target," Corder said.
Few hospital officials had reviewed the details of Kennedy's plan last week, but they were glad to hear he wouldn't cut provider payments to finance his coverage and access plan.
"Arbitrary cutbacks for hard-pressed hospitals and physicians are the wrong remedy," Kennedy told attendees at the Families USA conference two days after Bush delivered his 54-minute address to the nation.
Profit margins are up
Kennedy's plan may seek to relieve more financial distress than the industry is actually suffering. The aggregate hospital profit margin increased to 4.4% in 2002, compared with 4.2% in 2001, according to recent figures from the American Hospital Association, marking the first time since 1996 that the profit margin increased from the previous year. The recently enacted Medicare reform bill, meanwhile, includes more than $25 billion in new money for providers over the coming 10 years.
Bush spent roughly four minutes of his address on the topic of healthcare, prompting critics to say it is symbolic of the administration's lack of commitment to problems facing patients and providers alike. Bush defenders, meanwhile, said the president navigated Medicare reform to a successful conclusion last year and is now taking appropriate, incremental steps to fill a coverage gap that no single policy can address.
As is true with all State of the Union messages, Bush's speech did not provide much detail but did convey his intention to address problems affecting access and coverage, said Kim Russel, president and CEO of 206-bed Mary Greely Medical Center in Ames, Iowa, and chair of the Iowa Hospital Association's board of directors.
"There's no single silver bullet to fix (the uninsured) problem," Russel said, adding that she's "very hopeful" the political climate in Washington will permit lawmakers to take action this year.
But the Rev. Michael Place, president and CEO of the Catholic Health Association, issued a statement after the State of the Union speech arguing that Bush's coverage plan "falls short of addressing the dire circumstances surrounding more than 43 million individuals who are uninsured."
Place called on the White House to convene a summit on healthcare this spring that would bring together industry stakeholders "to achieve a new national policy that ensures quality, affordable healthcare services across the continuum for all individuals." Bush's State of the Union proposals, which include tax credits to help individuals and families buy coverage, are largely a repeat of last year's initiatives, critics said, and would do little to expand access or stem premium and cost growth.
"We've gone backwards since the last State of the Union message," said Ron Pollack, executive director of Families USA, citing the largest increase in the uninsured in a decade and a 43% uptick in the cost of employer-sponsored health coverage since 2000.
Bush, Pollack said, "offers a rehash of proposals that are very ideological or partisan and that he clearly knows aren't going to go anywhere."
Neither is Kennedy's proposal, according to some Republicans and industry observers. The Kennedy plan would allow the federal government to negotiate lower drug prices for seniors and to insure all Americans not eligible for employment-based coverage or government assistance. The proposal, however, is little more than political posturing by the Democrats, skeptics said.
Kennedy's legislation, which would also expand on current efforts to reward healthcare providers for delivering higher quality care, is "DOA and not going anywhere," said one hospital lobbyist who asked not to be identified.
One point on which Bush and Kennedy agreed is the need to better use information technology to prevent medical errors and reduce the high cost of administration in the industry. Bush mentioned in his address how computerizing health records can improve quality and strip out costs, but it is unclear whether his 2005 budget blueprint-expected by Congress on Feb. 2-will set aside funds to accomplish such goals.
Where's the money?
Bush, Kennedy told reporters last week, talked about the importance of information technology but "that doesn't necessarily mean he's going to fund it." Lobbyists echoed that view, saying that the budget will be a sure sign of how serious the president is.
"Many in healthcare have been clamoring for a higher level of leadership on IT, and we're thrilled to see it get this kind of attention," said Herb Kuhn, vice president of advocacy for the Premier hospital alliance.
Hospital officials were enthusiastic about other priorities Bush highlighted in his address last week. Bush proposed, for instance, that people who buy catastrophic coverage as part of newly created health savings accounts be allowed to deduct 100% of the premiums from their taxes.
Bush also reiterated his long-standing call for medical liability reform, and he urged Congress to pass association health plans, which enable small businesses to band together for more favorable insurance rates but have been met with major opposition from the managed-care sector (See related story, p. 8).
Calls to the Bush administration were not returned by deadline. Capitol Hill staffers and Washington lobbyists expressed guarded optimism that lawmakers would tackle the healthcare issues left untouched during last year's bruising Medicare battle.
"When you're dealing with problems of the magnitude of the uninsured, it's tough to fix if you don't have a blank check to start creating new insurance programs," a Republican Senate aide said. "There was nothing earth-shattering in (Bush's) speech, but some possibilities that are more reachable because they're already out there."
After passage of a bill that will add $400 billion to Medicare spending over the coming 10 years, Congress' appetite for major new healthcare initiatives this year "may be a problem," the aide said.
Not everyone wanted to see the glass as half empty though.
With the exception of association health plans, "the timing is right for all these proposals," said Allisa Fox, executive director of policy at the Blue Cross and Blue Shield Association. The uninsured require a series of initiatives, Fox said, and Bush's address last week may help get things rolling.
If it were up to Kennedy and other critics of the president, Bush's Medicare reform effort would not have succeeded, and his latest proposals for the uninsured and medical liability reform would be scrapped.
"The most important single step we can take to strengthen Medicare is to privatize George Bush," Kennedy said last week. "The healthcare section of the president's State of the Union message was eight paragraphs-18 sentences-and not a single meaningful proposal."
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