The White House has been working diligently on healthcare reform efforts, as promised during President Obama’s campaign. Around the country, healthcare providers and their attorneys (such as myself) are following and/or participating in the developments. Here is a summary of some activity in the past week:
- Last week (on June 16, 2009), Peter R. Orszag, Director of the Office of Management and Budget,, posted an entry on the OMB Blog June 16th stating that in addition to the White House’s commitment to ensuring healthcare reform is “deficit neutral”, the healthcare system as a whole needs to adopt best practices that achieve higher quality and lower cost throughout the country. I heard Mr. Orszag give a speech last year in which he made the same pitch for higher quality and efficiency as a necessary part of the effort to lower healthcare costs. This has become a theme of the White House’s health care reform efforts.
- On the same day (June 16), Douglas W. Elmendorf, Director of the Congressional Budget Office (“CBO”), issued letters to the Chairs of the Senate Budget Committee and the House Ways and Means Committee. The upshot of the letters, as I read them, is that fundamental changes in healthcare delivery and financing are believed to be needed for significant reductions in federal healthcare spending to occur. This is consistent with Mr. Orszag’s message (see above). (I wonder if they coordinated their efforts.) Mr. Elmendorf says: “In the absence of significant changes to policy, rising costs for health care will cause federal spending to grow much faster than the economy, putting the federal budget on an unsustainable path.” Citing an interest by some in policy changes combined with “a mechanism or framework to impose ongoing pressure for achieving efficiencies in the delivery of health care”, he concludes that, absent “meaningful reforms”, “the substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it.”
- The CBO’s review of pending reform proposals as described above seems to have put reform effort on a path longer than what the White House had hoped for.
- Yesterday (June 22), President Obama reported that, over the weekend, an “understanding” about upcoming reform was reached that would close Medicare Part D’s “doughnut hole.” The hole is a gap in prescription drug coverage that requires seniors to pay out-of-pocket for costs between $2,700 and $6,100. The President reports: “So as part of the health care reform I expect Congress to enact this year, Medicare beneficiaries whose spending falls within this gap will now receive a discount on prescription drugs of at least 50 percent from the negotiated price their plan pays.” AARP supports this reform effort. The change reportedly will cost drug manufacturers $80 billion over the next ten years.
- Yesterday, President Obama also signed into law the Family Smoking Prevention and Tobacco Control Act of 2009 that gives the FDA, for the first time, the power to regulate the tobacco industry.
- Potential cuts in Medicaid payments to states, as part of healthcare reform, have been a hot topic over the past couple of days. Senator Dianne Feinstein, from California, stated on CNN’s State of the Union that changing the rate would have a huge impact on her state that would “take down her state.” Not surprisingly, then, she questioned her ability to support such a change. The White House responded by pointing out that California has received billions of dollars in Medicaid assistance as a result of this year’s stimulus bill.