National Health Care Reform: The Odds, the Players and the Issues

1. National Health Care Reform: The Odds, the Players and the Issues Peter V. Lee, Executive Director for National Health Policy Pacific Business Group on Health Consumer-Purchaser Disclosure Project Policy Briefing January 12, 2009

2. The Odds – Will “Big Reform” Occur? Over ($) 2 trillion reasons say no… but: • Health care IS a core economic issue • President-elect Obama said so  • More than Congressional interest -- we have thoughtful Congressional leadership.   • Reform interest is bipartisan.  • Proposals have low “fright factor” for existing insureds • Coverage expansion is framed as BOTH about the “right thing to do” and addressing cost.  • Bigger is often more doable than smaller.  • Special interests recognize the need for reform.

3. National Reform Opportunities: The Process and the Players

4. Health Reform Elements • Coverage expansion and Financing • Affordable coverage/Universal access • Expanding public programs (Medicaid, SCHIP, Medicare) • Connector/Exchange • Subsidies for low-income • Public plan option • Small business tax credits • Shared Responsibility • Individual mandate • Employer mandate (play or pay) • Insurance market reforms • Guaranteed issue • Rating reforms • Tax code changes (eliminating or modifying tax exclusion for ESI) • Individual out-of-pocket contributions • Benefits • Minimum, standard benefit package • Specified in statue or delegated to outside entity? • Value based insurance design • Long term care

5. Health Reform Elements • System Reforms • Quality improvement • Measurement and Reporting (transparency) • Address disparities • Promote primary care and chronic care management • Wellness/Prevention • Payment reform • Promote primary care, collaboration/integration and paying for “Value” • Medical home • Revised RBRVS • Episodes, bundles • Gain-sharing, accountable entities • Payment/non-payment based on quality/outcomes • Infrastructure • Oversight: Health Fed/Independent Health Coverage Council • Health Information Technology • Comparative effectiveness research • Workforce • Medical malpractice reform

6. Legislation may begin in either chamber or proposed by the committee. Similar proposals are often introduced by both chambers Measure introduced in the Senate Measure introduced into the House Senate Committee on Finance House Committee on Ways and Means Measure referred to committee Measure referred to committee Senate Health, Education, Labor and Pension (HELP) Committee House Committee on Energy and Commerce House passes measure Senate passes measure Measures must pass both the House and the Senate in identical form before being presented to the President. House and Senate exchange amendments and agree One Chamber agrees to the other’s version Conference Committee Or Or House approves conference report Senate approves conference report Legislation presented to the President Signs or Vetoes President/Executive Branch Administers Laws; Adopts Regulations The Legislative Process: Clean & Simple

7. The Senators The Political Players Senator Baucus Chair, Finance Committee Senator Kennedy Chair, HELP Timothy Geithner Treasury Secretary The Obama All-Stars Senator Hatch Ranking Min., Sen. HELP Senator Grassley Ranking Min., Sen. Fin. The House Reps Peter Orszag Dir. Office Management and Budget Rahm Emanuel White House Chief of Staff Nancy Pelosi House Majority Leader John Dingell Jr., Chair Emeritus, Committee on Energy and Commerce Tom Daschle: Sec. HHS Director, White House Office of Health Reform Pete Stark Chair, Ways & Means Comm., Subcommittee on Health Henry Waxman Chair, Committee on Energy and Commerce

8. The Obama All-Stars Barak Obama Position: Team Owner of the Obama All-Stars Factoid: Spent over $100 million in campaign saying he’d change health care and 77% of Americans said health care was a “decisive concern” in their vote In his words: “The time has come this year in this new administration to modernize our health care system for the 21st century, to reduce costs for families and businesses, and to finally provide affordable, accessible health care for every single American.” (“The market will work only where it has good information…If you can compare quality and price of an automobile, you should be able to compare quality and price of a heart surgery.” (in 2003 as chair of Illinois Senate Health and Human Services Committee) Tom Daschle Position: Team Captain --Secretary HHS and Director of White House Office on Health Reform Factoid: Co-authored “Critical” (with Jeanne Lambrew), calls for Health Fed In his words: “We have the most expensive health care system in the world, but are not the healthiest nation in the world. Our growing costs are unsustainable, and the plight of the uninsured is unconscionable. Addressing our health care challenges will not only mean healthier and longer lives for millions; it will also make American companies more competitive, address the cause of half of all of our personal bankruptcies and foreclosures, and help pull our economy out of its current tailspin.”

9. The Obama All-Stars: The Money Guys Peter Orszag Position: The Banker -- Director of Office of Management and Budget (“OMB”) Factoid: Former head of Congressional Budget Office In his words: “Two complementary approaches to reducing total health care spending involve generating more information about the relative effectiveness of medical treatments and changing incentives for providers and consumers of health care…. [The] relatively small investment in research focused on the mechanics of restructuring the delivery of and payments for health care to reduce inefficiency [is striking].” Timothy Geithner Position: Treasury Secretary In his words: “[W]e’re seeing a welcome wave of attention in the business community to the broader economic imperative of health care reform. The U.S. system has compelling strengths in the quality of care and the choices available to much of the population. But our system is also remarkable for the magnitude of the costs, the incidence of those costs across the economy, the number of uninsured, and our poor performance on health outcomes even compared with less wealthy economies.”

10. The Obama All-Stars: Key Players Rahm Emanuel Position: Enforcer -- White House Chief of Staff Factoids: Knows health care, served on Ways & Means Health Subcommittee, brother Ezekiel Emanuel, bioethicist at NIH, authored “Healthcare, Guaranteed” Additional Key Positions: • Administrator of CMS (oversees Medicare and Medicaid) • Administrator of FDA • Director Centers for Disease Control • Director Agency for Healthcare Research and Quality • Surgeon General • Director National Institutes of Health • Senior Staff: White House Office of Health Reform, HHS, etc

11. The SenatorsLeadership & Key Committees Senator Baucus Chair, Finance Committee Senator Kennedy Chair, HELP Senator Harry Reid Majority Leader, 111TH Congress Senator McConnell Min. Leader, 111TH Congress Senator Hatch Ranking Min., Sen. HELP Senator Grassley Ranking Min., Sen. Fin.

12. The House of Reps: Leadership & Key Committees Henry Waxman Chair, Committee on Energy and Commerce Pete Stark Chair, Ways & Means Subcommittee on Health Nancy Pelosi House Majority Leader John Boehner House Min. Leader Joe Barton (R-TX) Ranking Minority, Committee on Energy and Commerce Dave Lee Camp (R-MI) Ranking Minority, Ways & Means Subcommittee on Health John Dingell Jr. Chair Emeritus, Committee on Energy and Commerce

13. Legislative Process – The Reality: Chutes and Ladders with Trillions at Play Why have we failed to do health care reform: “…the power of the interest groups – doctors, hospitals, insurers, drug companies, researchers, and even patient advocates – that have a direct stake.” Tom Daschle, 2008 • Chutes or Ladders – those who can move reform forward or back (and their ten year lobbying + federal contributions to Congress): • Clinicians -- $980 million • Hospitals -- $752 million • Pharma -- $1.6 BILLION • Insurers -- $555 million • AND…if we play our cards right: • Labor • Consumers • Employers The Players: Senate House of Reps White House

14. First Rule of Politics: Follow the Money Funds Flow 2006: $2,105.5 Billion

15. Chute or Ladder: Clinicians Major Players: AMA, specialty societies, medical colleges, nurses, physical therapists, chiropractors Pro: DEPENDS – differing issues if specialists “versus” primary care; support for primary care generally strong and cross-cutting Concerns: rapid change to status quo Lobbying 2007: $71.8 million Federal Contributions: $86.6 million

16. Chute or Ladder: Hospitals Major Players: AHA, FHA, Premier Pro: Incremental reform; increasing Medicaid payments Concerns: Rapid and disruptive change Lobbying 2007: $91.7 million Federal Contributions: $19.7 million

17. Chute or Ladder: Pharma and Devices Major Players: PHARMA, AdvaMed, Individual RX companies, specialty developers, generic makers Pro: generally “reality based” advocacy – recognize future of lower margins Concerns: importation, Medicare negotiating, comparative effectiveness (especially with cost) Lobbying 2007: $226 million Federal Contributions: $30.6 million

18. Chute or Ladder: Insurers Major Players: AHIP, BC/BS, individual plans Pro: expansion of coverage, maintaining and expanding private plan options Concerns: MLR cap, Medicare Advantage payment reform, public plan expansion Lobbying 2007: $70 million Federal Contributions: $31.2 million

19. Chutes or Ladders: Other Wild Cards Lawyers IT Vendors Banks Pharmacies (on-line or old-school) States Ideologues …

20. Chute or Ladder: Labor Major Players: AFL-CIO, SEIU, many others Pro: patient-centered reform Concerns: mix of protecting benefits and/or expanding coverage to low income Lobbying 2007: $44 million Federal Contributions: $31.2 million BUT…relatively little contributions focused specifically on health care

21. Chute or Ladder: Consumer Groups Major Players: AARP, Consumers Union, NPWF, disease groups, access/coverage groups Pro: coverage expansion; patient-centered care; “their” condition Concerns: group/issue specific

22. Chute or Ladder: Employers Major Players: US Chamber, BRT, NFIB, individual employers that “step up” Pro: malpractice reform, increasingly for value and reform (but historically, relatively little Concerns: protecting national consistency (hence, protective of ERISA) Lobbying 2007: $87 million (but tiny on health care)

23. Health Reform Elements • Coverage expansion and Financing • Affordable coverage/Universal access • Expanding public programs (Medicaid, SCHIP, Medicare) • Connector/Exchange • Subsidies for low-income • Public plan option • Small business tax credits • Shared Responsibility • Individual mandate • Employer mandate (play or pay) • Insurance market reforms • Guaranteed issue • Rating reforms • Tax code changes (eliminating or modifying tax exclusion for ESI) • Individual out-of-pocket contributions • Benefits • Minimum, standard benefit package • Specified in statue or delegated to outside entity? • Value based insurance design • Long term care

24. Health Reform Elements • System Reforms • Quality improvement • Measurement and Reporting (transparency) • Address disparities • Promote primary care and chronic care management • Wellness/Prevention • Payment reform • Promote primary care, collaboration/integration and paying for “Value” • Medical home • Revised RBRVS • Episodes, bundles • Gain-sharing, accountable entities • Payment/non-payment based on quality/outcomes • Infrastructure • Oversight: Health Fed/Independent Health Coverage Council • Health Information Technology • Comparative effectiveness research • Workforce • Medical malpractice reform

25. About The Disclosure Project The Consumer-Purchaser Disclosure Project is an initiative that is improving health care quality and affordability by advancing public reporting of provider performance information so it can be used for improvement, consumer choice, and as part of payment reform. The Project is a collaboration of leading national and local employer, consumer, and labor organizations whose shared vision is for Americans to be able to select hospitals, physicians, and treatments based on nationally standardized measures for clinical quality, consumer experience, equity, and efficiency. The Project is funded by the Robert Wood Johnson Foundation along with support from participating organizations. For more information http://healthcaredisclosure.org/ For the most current information on the Patient Charter http://healthcaredisclosure.org/activities/charter/ Jennifer Eames, MPH Tanya Alteras, MPP Associate Director Associate Director Consumer-Purchaser Disclosure Project Consumer-Purchaser Disclosure Project jeames@healthcaredisclosure.orgtalteras@nationalpartnership.org 415-281-8660 202-238-4820 Information on lobbying rules for non-profits is available at the Alliance for Justice, www.afj.org.