Perspectives on Health Care Reform Health Care in the New Administration

1. Perspectives on Health Care Reform Health Care in the New Administration February 2009

2. This Presentation Includes • Major details of the Obama Plan • Major Concerns • Congressional healthcare proposals • Analysis of the political landscape • Health Care in the Stimulus • Who heads up health reform? • Possible Alternatives • Recent and Future response activities

3. Obama Plan Details Key Points: • Accountability: All providers will be expected to exhibit a higher form of accountability • Evidence based treatments: Reimbursement will be fast-tracked through the quality lens

4. Obama Plan Details • Reduction of 26+ million of uninsured from current 49 million when fully implemented (Estimates by Lewin Group) • Net federal spending increase of $1.17 trillion over 2010-2019 timeframe (Lewin estimates, assumes plan is implemented 2010)

5. Plan Details • Plan builds on current Employer Based Insurance (EBI) system • Medium and large employers “play or pay” (Provide coverage that meets a specified federal standard, or pay a new payroll tax) • Actual stated requirement is for firms to provide a “meaningful” contribution for the above coverage, but what constitutes “meaningful” is not defined

6. Plan Details Cont’d • Definition of “medium and large” businesses not precisely clear – perhaps a business with 25 or more employees would be considered medium-sized • A new tax credit for “small employers” that offer coverage (Up to 50% of premiums paid…?) • States can continue to “experiment” – but any state plans must meet a federal standard

7. Plan Details Cont’d • Mandate that parents provide coverage for their children (Enforcement mechanism not specified) • Expands Medicare and SCHIP (Eligibility not clear, State Government cost portion not clear) • Subsidies for those whose incomes are too high to qualify for Medicaid, but too low to afford private insurance on their own • Insurers must accept all, regardless of health status (Guaranteed Issue)

8. Plan Details Cont’d • Insurers prohibited from setting premiums based on health status • Coverage to be “portable” • Establishes a new national “public plan” available to those without employer coverage, the self-employed, and small business employees • Benefit structure not specified (Some observers believe it will be equivalent to the FEHBP Blue Cross/Blue Shield “standard” option)

9. Plan Details Cont’d • Establishes a “national exchange” through which consumers access the new “national plan” or a selection of competitive private plans meeting the minimum requirements of the “national plan” (plus information, options, etc.) • “National Exchange” is intended as a key mechanism intended to spur competition and lower costs to consumers

10. Other Plan Details • Establishes a new independent “institute” to “guide reviews and research” on comparative effectiveness (addressed in stimulus) • Seeks to “accelerate” efforts to develop and disseminate “best practices” and align reimbursement to the provisioning of high quality care (May be included in above) • New requirements for hospitals and providers to collect and report cost and quality data, including data on preventable medical errors

11. Other Plan Details • Health Plans required to disclose the percentage of premiums that actually goes to paying for patient care • Some revisions to anti-trust statutes “to prevent insurance plans from overcharging providers for medical malpractice costs” • Eliminate insurance plan subsidies for Medicare Advantage plans • Increased focus on prevention and wellness (chronic diseases account for 75% of all health care dollars spent)

12. Other Plan Details • New requirements that plans participating in the new “public plan,” Medicare or FEHBP utilize proven disease management programs • $50 billion (over five years) in federal funding to advance health IT and standards (addressed in stimulus) • Young adults (up to age 25) can continue to access coverage through their parents

13. Major Concerns • To many, the Obama plan seemed “simple” in concept during the campaign, but a close look reveals that it is complex and includes controversial and political elements (our opinion) • Much of the detail remains missing – and usually “the devil is in the details” • True scope and level of controversy probably can’t be fully measured until his proposal is turned into precise legislative language • It is clear that providers will be subjected to a range of new expectations (quality and cost reporting, etc.)

14. Major Concerns • The extent to which the new national plan or federal standard does or does not specifically cover chiropractic care (will it be spelled out in a minimum plan?) • As it lacks much detail, Obama’s plan must be considered a “work in progress” • As a practical matter the Obama plan (regardless of much detail is eventually fleshed out) can only be considered a “starting point” for congressional debate

15. Congressional Proposals • Baucus • Wyden • Conyers • Kennedy

16. Congressional Proposals Baucus Plan Overview • 89 page plan released November 12, 2008 • “Devil is in the details” – (i.e. no legislative language, plan is in prose form) • Plan is potentially important because 1) Baucus is Chair of Senate Finance; 2) Baucus is not considered a “far left” Member of Congress • Baucus plan is one of many expected to be introduced in the next Congress

17. Congressional Proposals Baucus Plan Overview • Baucus would create a national “Health Insurance Exchange” through which insurance could be obtained, along with comparative data regarding benefits, costs, etc. (This appears similar to Obama) • Also creates a new national plan “similar to Medicare” (Similar feature also in Obama, but Obama plan suggests the national plan would be more similar to FEHBP)

18. Congressional Proposals Baucus Plan Overview • IMPORTANT: Baucus would create a new “Independent Health Coverage Council” that would make major decisions and fill in much of the detail of his plan • Council would define such basics as what is meant by “coverage” and “affordability” – and would define what is to be included in the new national “public” plan • Council would be comprised of presidential appointees, with advice and consent of the Senate

19. Congressional Proposals Baucus Plan Overview • Again, like Obama (and other plans that will be introduced) it is hard to imagine that the legislative language form of any substantive proposal will be any thing but complex. Complexity in some respects is likely to equate with “controversy” – as groups begin to focus on the “devil in the details” as the reform issue unfolds. • CAUTION: We believe virtually all major proposals will create some new nationally available plan or mechanism that may preempt state laws

20. Congressional Proposals Wyden Overview, S. 391 • Interesting blend of R’s (Bennett, Specter, L. Graham) and D’s (Cantwell, Stabenow, Landrieu) behind the bill • Universal coverage - Under the proposal, all citizens are enrolled in a basic minimum benefits package within the Healthy Americans Private Insurance System (HAPI) • Any enhanced coverage is purchased separately by direct payment by the individual to the insurer (or direct payment to a newly created “Health Help Agency” (HHA)

21. Congressional Proposals Wyden Overview, S. 391 • A HAPI plan is required to provide at least a minimum benefits package benchmarked to the actuarial value of the Federal Employees Health Benefits (FEHB) Program standard benefit option BlueCross/Blue Shield plan • Universal coverage is partially enforced through the requirement that payment for the lowest-cost premium is part of an individual’s tax liability, and withholding tables are adjusted to reflect this liability, except that certain low-income individuals are eligible for premium assistance. Source: CBO

22. Congressional Proposals Conyers Overview, HR 676 • Single-Payer system, currently has 59 Cosponsors • Single-Payer not holding any currency in the Administration • Under Conyers, doctors have private practices, hospitals may be owned by nonprofits or by government. • Chiropractic listed as a “covered benefit” • Reimbursement would be set by fee structures negotiated with health care providers; “the Program shall negotiate a simplified fee schedule that is fair and optimal…”

23. Congressional Proposals Kennedy Overview • Ailing chair of Senate HELP committee looking at health reform as a last contribution of an almost 50 year Senate tenure • Negotiations have been secretive; however latest intel is that focus of the plan may compose of a mandate on individuals to have coverage • Several workgroups chaired by chiropractic champions: Harkin (prevention); Mikulski (quality); Bingaman (private insurance) • All have pledged support for chiropractic in meetings (2009)

24. Our Analysis • Current economic crisis could easily cause Obama to delay efforts to advance his health plan • HHS void may impede any early momentum • The mandate on medium and large businesses (and individuals to provide coverage for their children) may prove to be controversial and potential major obstacles to enactment • Savings attributed to the plan may eventually be judged to have been overestimated – likewise, costs may be judged to have been low-balled

25. Our Analysis • Obama Administration could easily decide to send an “outline” of the proposed plan to Congress and not specific legislative language • Lack of specifics will continue as a problem if the above takes place • Congress (under pressure from various special interests) will modify the plan, perhaps in major ways

26. Our Analysis • Specific inclusion of chiropractic services in the new minimum benefits package remains (at this time) an unlikely prospect – because chiropractic care won’t be seen as “essential” • A great deal of work remains to be done in order to change the above perception and to create the political impetus to “deliver” for the chiropractic profession – and there is no guarantee of victory

27. Stimulus • Health Information Technology • Provides $19 billion to accelerate adoption of HIT systems by doctors and hospitals, to “modernize the health care system, save billions of dollars, reduce medical errors and improve quality.” • ACA-led coalition fought for non- MD/DO inclusion.

28. Stimulus • Medicaid • Provides $87 billion over the next two years in additional federal matching funds to help states maintain their Medicaid programs. • Helps states avoid cutting eligibility for Medicaid and scaling back the health care services covered.

29. Stimulus • Prevention & Comparative Effectiveness Research • Provides $1 billion for a new Prevention and Wellness Fund. • Provides $1.1 billion for comparative effectiveness research, to help patients and doctors determine the effectiveness of different treatments. • ACA will be working to guarantee chiropractic inclusion in these two initiatives.

30. Myths and Facts on the Stimulus • Myth: One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure doctors are doing what the federal government deems appropriate and cost effective. • Fact: It is true that the bill creates a National Coordinator of Health Information Technology. However, there is not one piece of language that authorizes, empowers or even so much as addresses the Coordinator’s role as being one that will monitor treatments to ensure that a health provider is “doing what the federal government deems appropriate and cost effective.” The section speaks solely to the development of an EHR system and how it can be most effectively used to share patient and clinical information to improve the quality of medical care.

31. Myths and Facts on the Stimulus • Myth: The goal of the Federal Coordinating Council for Comparative Effectiveness Research is to slow the development and use of new treatments and technologies because they are driving up costs. • Fact: The goal of the Council is to create (from the bill) “opportunities to assure optimum coordination of comparative effectiveness and related health services research conducted or supported by relevant Federal departments and agencies, with the goal of reducing duplicative efforts and encouraging coordinated and complementary use of resources.”

32. After Daschle… • Early February withdrawal of former Sen. Tom Daschle leaves White House scrambling for successor • According to many sources, Daschle was the “only choice” to head HHS and become newly created “Health Czar” at the White House • Daschle decision a serious blow to chiropractic given his track record in the Senate • Does the health care reform momentum suffer? • Sen. Ted Kennedy’s health status may also slow action in the Senate

33. Possible Alternatives • If the economy collapses into a depression, then an effort to advance a government run single-payer system will gain traction (We think this scenario is unlikely) • As noted previously, economic issues could force Obama to delay or scale back his health reform plan (A very real possibility we think)

34. Possible Alternatives • Rather than full scale reform, a series of smaller legislative steps are taken • With reference to the above, we consider the following likely: 1.) Medicaid expansion (in stimulus) 2.) S-CHIP expansion (passed earlier this year, 11 million now covered, up from 7m) 3.) Elimination of Medicare Advantage subsidies (component of several plans; Stark)

35. Possible Alternatives 4.) Initiatives to fund/promote Health IT (in stimulus) 5.) Additional measures to try and link reimbursement to quality and reporting (on going through regulatory efforts and PQRI) 6.) Some small business relief measure that would preempt state laws (unlikely return of Enzi given majorities in both chambers)

36. Recent Response Activity • Creating patient advocacy network key to winning chiropractic inclusion in reform; expansion in Medicare • ACA Leadership Approves Plan to Involve Patients in Coming ‘Perfect Storm’ of Federal Initiatives • In October, the ACA Board of Governors approved a plan based on a multi-layered strategy that will ultimately create a patients’ advocacy network, the primary component being the development of ChiroVoice.org, a website devoted to patients and supporters • ChiroVoice.org will help rally public support for chiropractic coverage in federal initiatives that will be considered by Congress and the new Administration

37. Recent Response Activity ACA-inspired Summit process continues with 4th national meeting (January 2009) Summit maintains high emphasis on ensuring “common” messages to Capitol Hill and coordination of grassroots activities Interim conference call coordination and subcommittee work continues

38. Recent Response Activity Regarding Medicare: ACA Medicare “Webinar” available on ACA website (Seeks reduction in claims errors) ACA heavily involved in CMS Physicians’ Quality Reporting Initiative (PQRI); through ACA efforts, DCs eligible to report and receive bonus payment for reporting quality measures ACA working with researchers to further investigate effects of demo project in various areas, including beneficiary access On going: Coordinating CCAC Issuing regulatory alerts to profession Monitoring SGR reimbursement policies

39. Recent Response Activity ACA continues to help steer activities of PARCA coalition of non-MD provider groups in anticipation of national reform battle. Seeks agreement on common issues such as “anti-discrimination” provisions and patient/provider protections ACA reached out to national campaigns and secured chiropractic support letters from most candidates (Three from Obama) ACA present at ACA-PAC sponsored major fundraising events for candidates in Washington and around the country ($300K+ to candidates in 2007-08; 93% success rate)

40. Future Response ACA will work with the Summit participants to promote a “National Mobilization Campaign” to members and non-members Major goal: Educate the profession/patients as to the true dimension of the threats posed by the “Perfect Storm” and to instill sense of urgency tosupport efforts by the ACA and Summit allies to address the situation ACA profession-wide publications will continue to educate the profession with regular updates for the foreseeable future 40

41. Future Response ACA to place a major priority on growing patient database (2009 and beyond) so that it can be used as a permanent grassroots resource to help “level the playing field” in terms of competing with other more well-funded interest groups (insurance industry, competitor providers, etc.) 41

42. Questions? Contact info: ACA Department of Government Relations 703-812-0224 gr@acatoday.org