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The Inside Scoop on the Healthcare Reform

“There is No Obamacare”

– Cecil Wilson, MD, President-Elect of the American Medical Association

Members of the Marion County, Florida, Medical Society and their guests were treated to a special treat.  The guest speaker was Cecil Wilson M. D., the President-elect of the AMA.  And the quotation above is how he describes the current healthcare aesculapius.jpg reform proposal. On counsel from his team of advisers, some of whom were present during the Clinton healthcare reform debacle (remember ‘Hillary-care’?), President Obama has opted to take a more hands-off approach.  So far, he has been no more than a cheerleader during the entire process of the formulation of HR 3200, also known as America’s Affordable Health Choices Act of 2009.

At the risk of sounding cliché, there was palpable tension in the audience.  Had the AMA sold-out to the White House?  Were physicians once again facing higher taxes only to see lower compensation in return?  Was this, in fact, government takeover of health care with the AMA as a willing ally?

Dr. Wilson stated that, unfortunately, most physicians are misinformed when it comes to the specifics of health care reform.  And part of that may be due to a disconnect between what the AMA is trying to achieve and the vociferous public debate which appears to have taken control of the issue.  His job, he feels, is to set the record straight. [ed. note: what follows are notes I took from his lecture, including questions from physicians in the audience (in italics)]

Did You Know…

  • There are approximately 40.5 million uninsured persons in the US
  • 75% of these people are employed
  • In the past 2 years, 85 million people have been uninsured at some point (1 out of 4 Americans)
  • 1% rise in unemployment = 1.1 million additional people Medicaid eligible + 1 million more uninsured

‘Why do we need health reform?’

  • We have the finest health care but it is not universally available
  • It costs more than in any other country
  • Increasing costs are outstripping inflation
  • It is having an adverse effect on business
  • Employers are discontinuing employer-sponsored insurance
  • Employees are forced into job lock (cannot leave their job for fear of losing coverage)

The AMA’s policy is “to support health system reform alternatives that are consistent with the principles of pluralism, freedom of choice, freedom of practice and universal access for patients.”

Therefore, the AMA has set the following criteria for health system reform:

  • expand affordable coverage
  • permanent repeal of the sustainable growth rate
  • seek quality improvement versus profiling
  • ensure adequate physician payments
  • seek administrative simplification
  • push for medical liability reforms
  • empower physician practices with antitrust relief

In a July 16 letter to leaders of the United States House of Representatives, the AMA announced support for HR 3200. According to the Congressional Budget Office (CBO), it would provide health insurance coverage for nearly 97% of legal residents.  It would also include market reforms such as eliminating denial of coverage for pre-existing conditions, provide choice of plans to uninsured, self-assured and small business employees, improve coverage for preventive services, and expand Medicaid eligibility to those up to 133% of the federal poverty level, as well as increasing payments for primary care services.

The AMA decided it would support HR 3200 for the following two reasons:

  1. Much of what was already in the bill was consistent with AMA policy
  2. The AMA felt that it was important to give support to help move the bill through the House of Delegates (without which there would be no reform this year, or many years to come), and also to lock in the gains that have been made thus far.

Some of the key components of HR 3200 include:

  • erasing the SGR (sustainable growth rate) debt and raising targets for Medicare physician updates
  • increasing Medicare primary care payments without cutting other physician services
  • investing in primary care training
  • providing bonuses for physicians in low cost localities, and
  • reducing red tape for physicians and patients.

‘Why Did the AMA Sell Out and Go Along with a Public Option?’

The AMA, in fact, has had reservations about this specific issue, because it sees this as another possible entitlement. It has said from the start that it does not feel that we need a public plan for health system reformed to be successful.  The AMA believes that insurance reforms, along with the increased numbers of people having the ability to purchase insurance and the ability to make the choice which insurance to purchase, will stimulate a market, resulting in lower cost, quality health insurance. Dr. Wilson believes that a truly public option will probably not pass, although there is a small possibility of some sort of a co-op, nonprofit hybrid.  However, there is still some doubt as to whether this will be a part of the final legislation.

Nevertheless, if health care reform legislation ultimately includes a public plan, the AMA has criteria which it believes are essential for that plan:

  • physician participation should be voluntary
  • patients enrolled in a public plan should be able to receive care from any physician, regardless of participation status
  • physician payment rates should be based on fairly negotiated levels
  • the public plan should be subject to the same regulatory requirements as private plans in order to have a level playing field
  • the public plan should be self-sustaining; i.e., not rely on federal subsidies

‘Why Not Let Free Market Principles Promote Competition in the Insurance Arena?’

Because this hasn’t happened over decades now, according to Dr. Wilson. Familiar with Medicare Advantage plans?   Although these were supposed to save money, they are paid a 12%  administrative premium and usually pay physicians less than Medicare reimbursement rates.  Dr. Wilson also stated that there is something inherently unfair about more Medicare dollars going to some Medicare recipients than others.  Several founders of these companies, some of them physicians, have had quite lucrative payouts when these companies have sold. Under the new legislation, Medicare Advantage plans are slated for a gradual phase-out.

‘I Don’t See a Hard Line Being Taken on Tort Reform’

Initially there was no tort reform in the legislation.  However, the AMA has worked hard to have tort reform be the part of the major components that they have expressed to legislators should be included if the AMA is going to support it.  As such, there is language in the bill that provides incentives to states to explore alternatives such as certificate of merit, early offer programs, and medical courts.  There is no specific thing as a tort reform ‘law’, and he said that drawing a line in the sand over a single issue would be naive; otherwise, there is a distinct possibility that physicians could walk away with nothing.

Perhaps the most important component in the legislation is the SGR fix. This would result in substantial funding for physicians at a time when other healthcare stakeholders are facing steep cuts.  This includes about $230 billion in investments for physicians, specifically:

  • $228.5 billion to eliminate the accumulated SGR cuts
  • $1.6 billion for PQRI quality reporting changes
  • $5 billion for the primary care bonus
  • $1.8 billion for the medical home pilot
  • $1.3 billion to extend the floor on Medicare’s geographic adjustment

“Making Laws Gives Making Sausage a Bad Name”

– Cecil Wilson, MD

Dr. Wilson also gave the audience a lesson in the legislative process, which he says at times can be so distasteful that it gives making sausage a bad name.  Negotiations occur between committees and subcommittees with multiple amendments and renegotiations.  A bill is likely to be sent to the House for debate sometime in September, and there will be a separate vote on a single-payer alternative.  The bill will then go to conference committee with the Senate. Meanwhile on the Senate side its HELP committee (Health, Education, Labor and Pensions) has yet to insert about 180 amendments.  The Finance committee is still working and has set a goal of September for September 15.  After that the two Senate bills will be merged into one for action by the Senate, but there could possibly be a separate Finance bill.

If there is no action by October 15, there is possible consideration of the reconciliation process.  This is also sometimes referred to as the ‘nuclear option’.  This occurs when the majority party can pass a bill with a simple majority, while avoiding a filibuster.

The AMA’s focus is maximum influence for the endgame negotiations.  What this means is that the health system reform is still in the early stages and we will see provisions that we don’t like at various stages of the legislative process.  However, the AMA is working with key members of Congress and administration to try to influence what’s most important: the critical negotiations at the point when the different approaches and ideas are reconciled.

‘Why Won’t President Obama Take a Bipartisan Approach? What Specifically are House Republicans for in Order to Support HR 3200?’

The House Republicans do not want health care reform, says Dr. Wilson. Even those legislators who are physicians have stated that they have their marching orders: not a single one will vote for any bill coming out of Congress. The goal is to bring down the President over this issue. Contentious issues such as the public option, which probably won’t pass anyway, are a bit of a smokescreen.  On the other hand, there is a genuine bipartisan attempt in the Senate to come up with a health-care reform deal which both sides can stomach.

“Grow Up and Quit Squabbling”

Meanwhile, Dr. Wilson admonished the audience, which obviously consisted mostly of physicians, to quit arguing with each other and stop the infighting.  Nobody doubts that within certain groups such as attorneys or insurance company executives there are both Democrats and Republicans, yet you do not see any public squabbling among the constituents of those groups.  Physicians, on the other hand, have historically resorted to fighting over minor issues.  The result, then, is that there is no united front on the major issues.  This, along with the position of putting all their eggs in one political basket, has resulted in little progress for any substantial health-care reform gains for the medical community.

Fair compensation and tort reform received little support under the previous administration, and the AMA feels that this is the best chance for righting the wrongs in health care. Dr. Wilson feels that the AMA’s  current strategy of sticking to key principles, willingness to negotiate, and not drawing a line in the sand will ultimately lead to legislation that will improve access to care.

4 Comments

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  1. This speech is great demonstration of the disconnect between physicians and health legislation. Most docs I know are aware that the proverbial water is slowly being heated to a boil but have little understanding of the machine behind the dial. I don’t think but one or two people colleagues I have spoken to even know what “SGR” stands for.

    Yet Medicare’s sustainable growth rate (SGR) is one of the principal drivers of our continued erosion in reimbursements. The legislation behind it is archaic and mandates an automatic decrease in reimbursements every year. Stopping the annual crisis of Medicare reimbursement decline soaks up all our lobbying energy and leaves little to address the more fundamental problems in our profession.

    I didn’t hear the speech but this report is encouraging. It looks like the AMA is engaging its membership instead of pandering. Let’s hope this is the beginning of the long climb out.

    Medicine is one of the most regulated industries. It is clear we as docs need a more nuanced view of the political process and even more active engagement. Unless we are sincere participants in the drive for fundamental cost containment and address the dire loss of primary care physicians, I’m afraid we will not have any important role in reform.

  2. Excellent summary. Thanks for posting. It will be interesting to review these positions if it passes to see where the AMA had the most influence. Was the “palpable tension” before or after the speech – or both? What drew the most reaction, positive or negative?

    • The tension was definitely more pronounced before the speech. Bear in mind that most of the physicians there are members of the AMA but even still were not completely up to speed on the AMA’s position on the legislation. And only about one-third of doctors are members of that organization. So, as a group, doctors are not any more informed about what is going on behind the scenes than the average American citizen. Generally speaking, they seemed to be satisfied with what they heard. Thanks for the comments.

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