Wayne County Medical Society of Southeast Michigan

December 1, 2008

Editor's Column: BCBS To Improve Health Care And Limit Costs
President's Column: Medical Staff Self Governance
Give Input About MedAssurant December 18
Obama, Congress Expected To Reduce Medicare Advantage Payments
Smoke-free Bill Conference Call, Vote This Week
Office Of Management And Budget To Play Greater Health Care Role
New HHS Secretary Considers Appointees
Medicare Value-Based Purchasing Report Published

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Editor's Column: BCBS To Improve Health Care And Limit Costs

By JOSEPH WEISS, MD
So says Scott Serota, the BCBS national president, chief executive officer and the spokesman for a network that insures 102 million people nationwide. In an interview with Elizabeth Olson of the New York Times published Oct. 18, Serota stated that BCBS will undertake the following:

1) 1)Cut the prevalence of diabetes in half;

2) 2) provide affordable health care and;

3) 3) ensure that everyone has health care.

Dr. Serota said that “there are tangible things we can do in the areas of obesity, weight management, nutrition, fitness and health risk assessment to reduce the incidence of diabetes.” He didn’t give any specific example of how BCBS could or would intervene to enable individuals to control weight, improve nutrition, attain fitness or better understand their risk of developing diabetes.

He did not provide clear strategies because BCBS is not set up to achieve such goals.

As for developing health policies that are affordable, Mr. Serota qualified his position immediately by noting: “We’re not saying the cost of health care will go down.” What he then stated was that he wanted to reduce care “that is unnecessary, redundant , and in some cases, even harmful.” His innovation was to create a “comparative effectiveness institute to study what treatments really work.”

Likely, few readers of this column believe another voice in the Babel of guidelines is likely to receive much of a hearing, let alone become a call for change.

As regards BCBS efforts to have everyone covered by health insurance, Serota stated that “we need to work with people eligible for government programs, but not enrolling.” He made no mention of BCBS developing policies that would cover peoples’ needs at a cost people could afford.

If BCBS wanted to contribute to lowering diabetes, ending waste, and making coverage possible for everyone, the organization should reimburse doctors for the preventive services physicians undertake. Next, BCBS should support initiatives that make communication easier for physicians, not just an electronic medical record, but a connection that allows sharing information online by all physicians as soon as that information became available to any one physician.

BCBS should end its romance with high minded philosophies. Instead, the organization should take practical steps to assist physicians in day-to-day care of patients. Recognizing work by better reimbursements, is where BCBS should start. The immediate goal for BCBS should be to help physicians gather data, leaving it to the profession to interpret and act on the findings.

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President's Column: Medical Staff Self Governance

By E. CHRIS BUSH, MD
Most physicians have admitting privileges at local hospitals and systems. Many manage inpatients on a medical-surgical service, deliver babies and do operative procedures. The development of hospitalists has enabled many physicians to concentrate on their office practices. Nevertheless, those physicians often remain on the hospital medical staff for a variety of reasons. The mission of the medical staff is to assist the administration and the Board of Directors in the provision of competent and safe care. This is accomplished through credentialing, Peer Review and Departmental activities. Medical staffs are self-governing organizations under the ultimate authority of the Board of Directors. Unfortunately, at times the lines of communication are strained, leading to disputes and misunderstandings. Some of these contentious issues can only be settled in a court of law.

There is a section of the AMA committed to the self-governance and medical staff autonomy. This is the Organized Medical Staff Section. Our state Chair is Robert Jackson, MD. Other leaders from Wayne County past and present include Drs. N. Sherma, K. Sawhney and H. Amirikia. Most issues involve the relationship between the Hospital Board, administration and the Medical Staff. These parties often look to JCAHO for guidance and opinions. Over the last several years the OMSS and AMA have promoted the approval of MS 1.20, a standard that gives more recognition to Medical Staff self-governance. Originally JCAHO approved an implementation date of July, 2009. Unfortunately the Commission yielded to pressure from the American Hospital Association (AHA) and now implementation is indefinitely delayed. The decision was made to establish yet another Task Force to study the ramifications of MS 1.20. The key point of this proposed standard is to reaffirm that the power of the hospital physicians reside in the General Medical Staff. The authority of the elected leadership and the Medical Executive Committee (MEC) is derived by delegation from the General Medical Staff.

Currently, at many hospitals there is an inherent bias in favor of the administration as many of the members of the MEC are either employed or under a contract with the hospital. Important decisions that affect Medical Staff self-governance are in peril due to this shift in the balance of power. MS 1.20 suggests an approach that emphasizes a spirit of cooperation between the Medical Staff, Administration and the Governing Board. Those MEC decisions that seem improper can be challenged and reversed by a majority of the Medical Staff.

In conclusion, those physicians that are active in the hospital should be familiar with the Bylaws, attend meetings and ask questions. For those that are interested, many of these topics are discussed on the AMA-OMSS website (ama-assn.org). Even better, please contact Dr. Jackson or myself to become an OMSS representative.

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Give Input About MedAssurant December 18

Blue Cross Blue Shield of Michigan (BCBSM) is assembling a focus group to discuss the MedAssurant review process. They are inviting physicians, office managers, and other health care professionals to review the process and provide input about improvements or changes that would make the review process easier.

MedAssurant provides health care quality, care management, and financial performance improvement for health insurance plans, employers, government regulators and other organizations. It offers turnkey services addressing disease management, clinical outcomes, quality of care, cost improvement, revenue enhancement, risk adjustment, and health care data verification.

With the passing of the Medicare Modernization Act (MMA) of 2003, the Centers for Medicare & Medicaid Services (CMS) initiated the formal implementation of a fully risk-adjusted capitation reimbursement model. As a result, all Medicare Advantage (MA) Plans are ultimately financially dependent upon the specific documentation of each individual patient’s diagnoses as classified within the highly specific CMS Hierarchical Condition Category (HCC) system. Failure to do so has both significant quality of care implications and financial ramifications. As a result, MedAssurant undertook an evaluation of more that 1,000,000 Medicare Advantage unique member/date-of-service period cases from its client base in an effort to identify primary causes and methods of efficiently correcting for incomplete claims and claims-related diagnostic documentation.

There are many payers in Michigan who are conducting the medical reviews mentioned in the paragraph above. Blue Cross Blue Shield of Michigan (BCBSM), Blue Care Network (BCN), Aetna, Humana and Molina currently asked for medical records through MedAssurant for review. MedAssurant is a data collection company that is contracted by the individual payers.

The first meeting will be held from 10:00 a.m. to 12:00 p.m. at the BCBSM Lyon Meadow facility auditorium on Thursday, December 18, 2008. The address is 53200 Grand River Avenue, New Hudson, MI 48165.

MSMS encourages your participation in this focus group. This is your chance to share your experience with the review process and provide input on trying to simplify the process for future reviews.

If you are interested in participating in the focus group, email Stacie Saylor at ssaylor@msms.org. Please be sure to include any issues you wish to address at the meeting. If you have any questions regarding this focus group, call Stacie at 517-336-5722.

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Obama, Congress Expected To Reduce Medicare Advantage Payments

Efforts To Reduce Payments to Medicare Advantage Plans Expected From Obama Administration, Congress

The incoming Obama administration and Democratic-led Congress likely will cut payments to private Medicare Advantage plans in 2009, an aide to Senate Democrats said Monday during a briefing sponsored by the journal Health Affairs, CQ HealthBeat reports (Weyl, CQ HealthBeat, 11/24). According to The Hill, a "longstanding ideological battle between liberals and conservatives over the propriety of turning over a growing portion of the Medicare entitlement to private companies is meeting head-on with the need for Congress to make cuts to certain programs in order to finance other priorities."

Federal payments to MA plans cost the government $94 billion annually. Democrats say $15 billion of that amount is excessive and the so-called overpayments could be used for other things, such as overhauling the U.S. health care system, The Hill reports (Young, The Hill, 11/24). Private MA plans on average are paid an estimated 13% more per beneficiary than what the same beneficiaries would cost in traditional Medicare, according to the Medicare Payment Advisory Commission (CQ HealthBeat, 11/24). The Democratic aide said, "Further cuts are coming to the program. The payments are so high that they really don't make any sense right now. There really is no rationale for the level of payments" (The Hill, 11/24). Democratic staffers already are rethinking the payment system "quite extensively," the aide said (CQ HealthBeat, 11/24).

A Republican aide at the meeting defended MA and private fee-for-service plans, saying, "Choice in plans matters." The aide added that MA plans particularly have benefited rural areas by expanding private insurers' ability to provide services. Robert Zirkelbach, a spokesperson for America's Health Insurance Plans, also defended MA plans, saying, "Beneficiaries have received additional benefits and services and have lower out-of-pocket costs than the traditional fee-for-service program" (CQ HealthBeat, 11/24).

Marsha Gold, a senior fellow at Mathematica Policy Research and author of a study published on Monday about private MA plans, said, "Assuming that Congress decides to continue MA in some form, a better system to promote oversight and encourage transparency and accountability would be valuable" (CQ HealthBeat, 11/24). Gold said that private plans play an important role in Medicare, particularly in helping to coordinate beneficiaries' care, but Congress needs "to decide first when private plans are valuable and at what cost" (The Hill, 11/24).

A separate study by University of Minnesota School of Public Health professor Brian Dowd and Robert Berenson, a senior fellow at the Urban Institute's Health Policy Center, provided a detailed history of private MA plans and found that both private plans and traditional Medicare are beneficial. At the briefing, Dowd said, "It would not just be bad politics, it would be bad economic policy ... to eliminate either one" (CQ HealthBeat, 11/24).

An abstract of the study is available online.

Reprinted from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at www.kaisernetwork.org/dailyreports/healthpolicy . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved."

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Smoke-free Bill Conference Call, Vote This Week

Proponents of smoke-free air are encouraged to participate in the Michigan Department of Community Health conference call Tuesday, December 2 at 10:00am to urge the House to pass House Bill 4163 (“Smoke-free Air Bill”), which is the Senate-passed, comprehensive bill that would ban smoking in all workplaces with no exemptions. Speakers: Janet Olszewski, MDCH Director; Gregory S. Holzman, MD, MDCH Chief Medical Executive; Dean G. Sienko, MD, Medical Director, Ingham County Health Department; and Michelle Debbink, University of Michigan medical student.

Conference Call Details:
--Location: Capitol View Building, Conference Room C, 201 Townsend Street, Lansing
--Participants may begin calling in at 9:55am. The call will begin officially at 10:00am, and will last until 10:45am.
--Participant toll-free line: 877-810-9415
--Participant passcode: 3291295
--RSVP by 5:00pm Monday to Jocelyn Krueger at 517-241-2112 or kruegerj2@michigan.gov

HB 4163 Details:
Some contention on HB 4163 comes from House members who want to carve out cigar bars, non-Indian casino gaming areas, tobacco specialty shops, bingo games/millionaire parties, and any bar or restaurant that has a certificate to allow smoking (which they could apply for). Because the Senate already acted on this legislation and has not supported the idea of exemptions, supporting any exemptions to this bill would be tantamount to killing it.

VOTE COULD HAPPEN WEDNESDAY - Use the MSMS Action Center to send an electronic message to your representative, urging him/her to vote “YES” in concurrence with the Senate-passed, comprehensive HB 4163 with no exemptions.

MSMS, a Campaign for Smokefree Air member through its Future of Medicine Wellness Workgroup, supports this bill, which includes a comprehensive smoking ban in all workplaces.

For more information about legislative advocacy, contact Colin Ford at MSMS at 517-336-5737 or cford@msms.org.

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Office Of Management And Budget To Play Greater Health Care Role

Obama Chooses Orszag as OMB Director; Position Will Have Broader Role in Developing Approaches to Health Care, Other Issues

President-elect Barack Obama on Tuesday announced the nomination of Congressional Budget Office Director Peter Orszag as the new director of the White House Office of Management and Budget and indicated that Orszag will have a role in health care reform efforts, the Washington Post reports (Connolly, Washington Post, 11/26). After the announcement, Orszag resigned his position at CBO (Eggen/Fletcher, Washington Post, 11/26).

In the past, Orszag has served as an economic policy adviser in the Clinton administration (McKinnon, Wall Street Journal, 11/25). He also has worked in the private sector and at the University of California-Berkeley, Georgetown University and the London School of Economics. In addition, Orszag co-founded the Hamilton Project at the Brookings Institution (Connolly, Washington Post, 11/26).

Obama on Tuesday also nominated Rob Nabors, staff director of the House Appropriations Committee, as the new deputy director of OMB (Eggen/Fletcher, Washington Post, 11/26). Nabors previously has served as a senior aide to Jack Lew, the last OMB director in the Clinton administration (McKinnon, Wall Street Journal, 11/25).

Larger Role
According to the Post, the nomination of Orszag as the new OMB director indicates that "the job will have a more expansive portfolio in his administration," with Orszag likely to help shape new approaches on health care, education and the environment in addition to the "traditional duties of overseeing the federal budget and weighing in on economic policy" (Connolly, Washington Post, 11/26). "Unlike many of his predecessors, who hewed closely to pure number-crunching, Orszag has carved out a niche as a leading thinker on health care policy," the Post reports (Eggen/Fletcher, Washington Post, 11/26).

"People close to him said Mr. Orszag, if confirmed, hopes to focus on one of the country's biggest problems: soaring health care costs," according to the Wall Street Journal (Bendavid/McKinnon, Wall Street Journal, 11/26). Orszag has said that increased health care costs represent the "central fiscal challenge facing the country" (Connolly, Washington Post, 11/26). On his CBO blog, Orszag "has written frequently about the pitfalls of an over-complicated bureaucracy and the benefits of simple, common-sense approaches to reducing health care costs, such as getting people to take their medicine and exercise," the Journal reports (Bendavid/McKinnon, Wall Street Journal, 11/26). In one post written earlier this year, Orszag cited the need for programs "that are more in tune with the realities of human behavior in such diverse settings as doctors' offices and federal nutrition programs [that] might help to improve a range of health outcomes" (McKinnon, Wall Street Journal, 11/25).

CBO next month plans to release a two-volume report produced during his tenure that examines proposals to expand health insurance, modernize the health care system and reduce inefficiencies in the system that cost as much as $700 billion annually (Connolly, Washington Post, 11/26).

Budget Issues
Obama said that Orszag as one his first duties will examine the federal budget and make recommendations on which programs to eliminate based on their effectiveness. Obama said that the effort will complement an economic stimulus package that he plans to propose after he takes office (Eggen/Fletcher, Washington Post, 11/26). According to the Journal, although "Obama didn't provide many specifics" and "gave little sense of how he would tackle entitlement programs like Medicare and Social Security," few "experts believe the budget deficit can be brought under control without trimming spending on these programs" (Bendavid/McKinnon, Wall Street Journal, 11/26).

Obama also said that he would find savings for consumers and the federal government through increased efficiency in the health care system (Thomma, McClatchy/Hartford Courant, 11/26). Obama said that health information technology offers a "twofer" -- an area "where we're getting both a short-term stimulus and we're also laying the groundwork for long-term economic growth" (Reichard/Nylen, CQ HealthBeat, 11/25).

Health Care Reform a Priority
Obama will continue to focus on health care reform during his efforts to address the current economic downturn, Obama aide Neera Tanden said on Tuesday during a health care policy conference at the University of Minnesota, the St. Paul Pioneer Press reports. The conference focused on proposals to improve the efficiency of the health care system, such as increased focus on preventive care and disease management programs.

Tanden said, "We can't really afford not to do health care," adding, "Costs are spiraling out of control." In addition, she said, "We will not get out of the hole we are digging if we are spending 16% of GDP (gross domestic product) on a system which doesn't provide better quality."

Other participants at the conference included John Wennberg of Dartmouth Medical School, Denis Cortese of the Mayo Clinic, George Isham of HealthPartners, Sen. Amy Klobuchar (D-Minn.) and former Sen. David Durenberger (R-Minn.) (Olson, St. Paul Pioneer Press, 11/25).

Reform at FDA?
FDA "desperately needs an infusion of strong leadership, money, technology and personnel -- and perhaps a major restructuring," according to former agency officials, lawmakers, consumer advocacy groups and a number of government reports, the Post reports. According to the Post, the Obama administration will have to address an FDA "widely seen as struggling to protect Americans from unsafe medication, contaminated food and a flood of questionable imports from China and other countries."

William Hubbard, a former FDA official, said, "FDA is close to being at a tipping point -- the agency is hanging on by its fingertips in protecting us," adding, "If something is not done, they could become a failed institution, and no one wants that. The FDA is not only important to protecting the public health but also to the industries it regulates."

David Ross, a former medication reviewer at FDA, said, "I'm afraid we're going to see more horrible things happen if we don't get our act together on this."

FDA also needs to focus on food safety, according to Christopher Waldrop of the Consumer Federation of America. He said, "The drug side tends to get much more attention than the food side. Food is equally important and needs to get the attention it deserves" (Stein, Washington Post, 11/26).

The Post examined possible nominees for FDA commissioner. According to the Post, possible nominees include Robert Califf, vice chancellor for clinical research and director of the Translational Medicine Institute and professor of medicine in the division of cardiology at the Duke University School of Medicine; Steven Nissen, chair of the Department of Cardiovascular Medicine at the Cleveland Clinic Foundation; Joshua Sharfstein, health commissioner for Baltimore; and Susan Wood, a research professor at the George Washington University School of Public Health and Health Services (Washington Post, 11/26).

Broadcast Coverage

· ABC's "World News Tonight" on Tuesday reported on the Orszag nomination (Tapper, "World News Tonight," ABC, 11/25).

· American Public Media's "Marketplace" on Tuesday examined the continued importance of health care as an issue during the current economic downturn. The segment includes comments from Stanford University economist and health care expert Victor Fuchs (Ryssdal, "Marketplace," American Public Media, 11/25).

· CNN's "Newsroom" on Tuesday reported on the Orszag nomination (Phillips, "Newsroom," CNN, 11/25). A transcript of the show is available online.

· NPR's "All Things Considered" on Tuesday reported on the Orszag nomination (Horsley, "All Things Considered," NPR, 11/25).

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New HHS Secretary Considers Appointees

Former Senate Majority Leader Tom Daschle (D-S.D.), President-elect Barack Obama's nominee for the next HHS secretary, is "busy assembling a team to run" the agency, Washington Post "In the Loop" columnist Al Kamen reports. Kamen examined several potential appointees, based on reporting by the Post's Ceci Connolly.

Jeanne Lambrew, a University of Texas professor who co-wrote Daschle's book on health policy and worked with him at the Center for American Progress, is "[c]ertain to be given a top post," such as HHS deputy secretary or assistant secretary for Planning and Evaluation, according to the column. CDC Director Julie Gerberding is "unlikely" to remain in her position, the column states. Kenneth Thorpe, a professor at Emory University, or Judith Feder, a former House candidate from Virginia, have spoken with members of Obama's transition team and "would be well-suited to run" CMS. Dora Hughes, a physician who has worked with Sen. Edward Kennedy (D-Mass.) and for Obama, also is "poised for a leading role," according to the Post.

In addition, Carolyn Clancy, appointed by President Bush as director of the Agency for Healthcare Research and Quality, could remain in that post. Kamen added that AHRQ "has been at the forefront of 'comparative effectiveness' research" and is "expected to take on a higher profile as Obama searches for cost-effective ways to provide health care to more Americans." Harvard University's David Blumenthal and David Cutler, top health care advisers to the Obama campaign, also could be considered for positions in the administration (Kamen, Washington Post, 11/27).

Business Groups 'Vying To Be Heard'
Business groups and lobbyists are "vying to be heard" as Obama "puts together his administration's economic team," Roll Call reports. Bruce Josten, of the U.S. Chamber of Commerce, said, "Now that they have a transition team they are reaching out to us," adding, "We have already scheduled for Dec. 4 a meeting with Obama staff on health care." Josten said, "What we don't know is what they'll do with the information we're giving them," but there is "a huge difference between primary rhetoric, general election rhetoric and ultimately governing rhetoric" (Ackley, Roll Call, 12/1).

Senate Could Address Rx Proposals
Senate Democrats expect to "have a working filibuster-proof majority on a variety of legislative issues that could provide early victories" for Obama on several health care related bills that stalled last year in Congress, the Washington Post reports (Kane, Washington Post, 12/1). The Obama administration could push numerous initiatives that would lower the price of prescription drugs in the U.S., according to the Chicago Tribune. Such proposals include the legalization of imported drugs; allowing Medicare to directly negotiate drug prices with drug companies; and opening the pathway for biotech drug competition by establishing a gateway for FDA approval of generic versions of the drugs.

Many of these proposals have been blocked or stalled by the Bush administration and the pharmaceutical industry, which contends that such pricing interference would threaten companies' research budgets (Japsen, Chicago Tribune, 11/30). A bill that would grant HHS authority to negotiate with drugmakers for lower prescription drug prices under the Medicare prescription drug benefit was approved by House Democrats last year, but the plan failed in the Senate.

If the issue is raised next year, it will have additional support from Sen. Tim Johnson (D-S.D.), who missed most of the 2007 session while recovering from an aneurysm, and six Democrats replacing Republicans who voted against the measure (Washington Post, 12/1).

Editorial
As Obama and the incoming Congress "mull a variety of fixes for the nation's ailing health care system," they should "give states the power to enable lower and middle-income families to buy prescription drugs at the same prices paid by the Medicaid program," a Baltimore Sun editorial states. According to the editorial, "It wouldn't cost taxpayers a dime but would make prescription drugs 40% to 45% more affordable for participants." The editorial encourages Obama to support legislation by Rep. Chris Van Hollen (D-Md.) that would give states the ability to create discount drug plans for residents with incomes at or up to 300% of the federal poverty level -- which "translates to cheaper drugs for as many as 50 million Americans."

According to the editorial, "For those who are struggling to pay for housing and food, such an opportunity could make the difference between being able to treat common medical ailments such as high blood pressure or leaving them unchecked." The editorial concludes, "This is one aspect of the nation's health care crisis that can be resolved affordably. And it's the kind of pragmatic, centrist approach with bipartisan support that seems to have broadening appeal in Washington these days" (Baltimore Sun, 11/26).

Opinion Pieces

§ Michael Boskin, New York Times: "The most important issues facing the country right now are income, jobs and wealth -- not energy, health care, the environment or the distribution of income," Boskin, a Stanford University economics professor and Hoover Institution senior fellow, writes in a Times opinion piece. "Obama needs to think about everything his administration does through the prism of how it will affect the economy in the next two years," which means "postponing, scaling back or slowly phasing in proposals that impose significant costs on the economy," such as energy and health care. Boskin writes that "the government should set general goals for the environment, energy and health care -- and then let entrepreneurs, investors, venture capitalists and consumers decide how best to achieve them" (Boskin, New York Times, 11/30).

§ Lawrence Lindsey, New York Times: One of the "microeconomic policies" that will require Obama's attention after he takes office is the "expansion of the federal role in health care," Lindsey, former director of the National Economic Council under President Clinton, writes in a Times opinion piece. Lindsey writes that health care reform "is not really an effective economic stimulus because it moves resources into an area that already has excess demand and rising prices, not into the weak areas of the economy." He continues, "At some point, perhaps a year or two from now, health care reform might place strains on the federal budget and push up interest rates, weakening the [economic] recovery" (Lindsey, New York Times, 11/30).

§ Joseph Stiglitz, New York Times: Obama first "must stop the economy from going deeper into recession," then "he needs to bring about a robust recovery, preferably in ways that support the long-term needs of the United States," such as "fixing our health care problems," according to a Times opinion piece by Stiglitz, a Columbia University economics professor who chaired the White House Council of Economic Advisers from 1995 to 1997 and received the Nobel prize in economics in 2001. "Americans are rightly afraid of losing their jobs, and with that, their health insurance and their homes," he writes, adding, "We need to provide health insurance to the unemployed and to the uninsured, and we need to do it quickly, possibly through an expanded and more efficient Medicare" (Stiglitz, New York Times, 11/30).

§ Norman Ornstein, Roll Call: Health "reform" should "not wait until we have settled, or even simply stabilized, the financial system," Ornstein, a resident scholar at the American Enterprise Institute, writes in a Roll Call opinion piece, adding that "some elements of change in health policy will come in the initial stimulus package, or in discrete bills," but "[t]hen comes the hard part." He continues that "a key area that needs to be front and center in the debate and in the solution" is addressing "stupid or counter-productive" Medicare regulations. He writes experts have said there are many Medicare regulations "that may bring short-term savings but involve huge long-term costs." He concludes, "I have been skeptical of magical savings in the health care system; one person's savings is another person's lost income," but "a focus on misguided and counterproductive regulations might actually produce real savings while improving people's lives" (Ornstein, Roll Call, 12/1).

§ David Broder, Washington Post: If "declining tax revenue and increasing Medicaid and welfare payments force state and local governments to cut back, that will work against the stimulus," Broder writes in a Post opinion piece in advance of Tuesday's meeting between Obama and state governors to discuss an economic stimulus package. Broder says, "The forced cutbacks in state and local spending hit the most vulnerable of our citizens" and "damage the prospects for a strong and swift economic recovery." Broder concludes, "Obama and the governors are in this together. It is good that they are meeting now and important that their dialogue continues when he takes office" (Broder, Washington Post, 11/30).

§ Robert Samuelson, Washington Post: Obama's "allies clamor for speedy action to provide universal health insurance, combat global warming and support trade unions," but "Obama -- and the nation -- would be better served if he concentrated for his first year on stabilizing the economy while patiently laying the groundwork for more far-reaching proposals," Post columnist Samuelson writes. "Superficially," he writes, Obama can "tout a more efficient health care system as a way to control health costs," but such "rhetorical debating points obscure as much as they reveal." Samuelson also states that any program "to refashion the energy and health care sectors ... would be complicated and contentious." He continues that moving "ahead with a 'bold' legislative agenda ... would be a mistake," as the "country does need to face its health and energy problems as well as deficit-ridden federal budgets," but "trying to do too much too soon risks doing none of it well." In "the long run, we need to discipline our appetite for health care," our "desire for government benefits and our willingness to be taxed," he writes (Samuelson, Washington Post, 12/1).

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Medicare Value-Based Purchasing Report Published

The Secretary of Health and Human Services has delivered to Congress a Report on the Medicare Hospital Value-Based Purchasing Program (VBP), suggesting ways to continue transforming Medicare into a prudent purchaser of higher quality health care for Medicare beneficiaries.

“For Medicare beneficiaries to get higher quality health care, our payment system needs to encourage better care,” said HHS Secretary Mike Leavitt. “Paying hospitals for the quality of care they provide takes us closer to that goal.”

“Value-based purchasing would benefit Medicare beneficiaries and other health care consumers by encouraging higher quality hospital care,” said Kerry Weems, acting administrator of the Centers for Medicare & Medicaid Services (CMS). “Under the plan, additional information would be collected and publicly disseminated to patients and health care providers so that they can make better health care decisions.”

The Report to Congress contains a plan for all facets of the proposed Medicare Hospital VBP program and provides associated supporting materials.

This plan provides that quality of care information will be available to patients on the CMS Hospital Compare site at www.medicare.gov. Examples of hospital quality of care measures that are currently reported by some hospitals include how soon heart attack patients are given aspirin after arriving at a hospital and how soon pneumonia patients are given an antibiotic. Inclusion of a broad range of such measures in value-based purchasing will enable Medicare beneficiaries and other consumers to compare hospitals and make informed decisions about where to seek care.

In addition the plan to implement the Medicare Hospital VBP program builds on the foundation of the current pay-for-reporting program, Reporting Hospital Quality Data for Annual Payment Update, which ties a portion of the Annual Payment Update under the Medicare Inpatient Prospective Payment System (IPPS) to a hospital’s reporting on a defined set of inpatient quality measures.

Under VBP, a percentage of the hospital’s base operating payment for each discharge (the diagnosis related group or DRG payment) would be contingent on the hospital’s actual performance on a specific set of measures. The transition from pay-for-reporting to an incentive based completely on performance would occur over a three-year period. Public reporting of quality measures on Medicare’s Hospital Compare site, a key component of the Reporting Hospital Quality program, would remain an essential component of VBP.

“Getting hospitals to report their quality measures was an important first step,” Weems said. “Now, building on that experience, we are taking the next step of actually rewarding hospitals for the quality of care they provide Medicare beneficiaries.”

The proposed VBP program strengthens CMS’ recently announced policy on hospital-acquired conditions, including infections like methicillin-resistant Staphylococcus aureus (MRSA). By tying a portion of hospital payments to actual performance on quality measures, VBP would provide additional incentives for hospitals to prevent infections.

The proposed VBP program also ties directly to two of the four cornerstones of the Secretary’s initiative to build a value-driven health care system: measuring and publishing quality information, and promoting the quality and efficiency of care.

The proposed VBP program contains the following key components:

A measure development and selection process, including selection criteria for choosing performance measures for the VBP financial incentive and candidate measures to support ongoing expansion of the measure set.
A Performance Assessment Model that incorporates quality measures, including clinical process of care, patient perspectives of care, and clinical outcomes, to calculate a hospital’s Total Performance Score. The proposed model scores a hospital’s performance on each measure during a 12-month measurement period based on the higher of “attainment” compared with national thresholds and benchmarks or “improvement” compared with the hospital’s own performance in the preceding 12-month baseline period
The incentive is created by making a specified percentage of the base operating payment amount for all discharges contingent on performance. The percentage of incentive earned would be determined by the hospital’s Total Performance Score.
Enhancements to the Hospital Compare site to support expanded and more user-friendly public reporting.
Ongoing evaluation and monitoring efforts to assess experiences early in VBP implementation, allowing for timely corrective action and building the evidence base for future VBP programs in other settings.

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