Big“I” Weekly Health Care Reform Update Report

WEEK OF JANUARY 4-8, 2010

The wish list. The White House – House – Senate bartering game began to take shape this past week as House Speaker Nancy Pelosi (D-CA) circulated her wish list to negotiators. Using the more moderate Senate bill as a benchmark, Pelosi’s document outlined a number of provisions that she would like amended in order to score a couple of victories for the liberal wing of her caucus. As arbiters of negotiations, President Obama and his chief of staff Rahm Emanuel are faced with the difficult task of threading a needle between the liberal and moderate factions of their Party. They must find a way to appease House Democrats on a couple of issues while maintaining the fragile 60 vote Democratic coalition in the Senate. Below is an overview of the issues included in Speaker Pelosi’s list:

Subsidies

The House negotiators would like to increase the subsidy amounts for those in lower income brackets.

Both the House and Senate bills establish subsidies for individuals and families with incomes between 133-400 percent of the federal poverty level. However, the House bill distributes more generous subsidies to individuals/families at the lower end of the subsidy spectrum.

Last week, President Obama stated that he supports expanding subsides.

The subsidy expansion would add significant costs to the bill, which are likely to be offset with additional tax increases.

Implementation Date

The House negotiators would like all health care reform provisions to be fully implemented by 2013.

The Senate bill staggers the implementation of health care reform provisions over the next five years with most of the core provisions taking effect in 2014.

The White House has not taken a formal position.

The one year acceleration is very costly – somewhere in the neighborhood of $100 billion.

Employer Mandate

The House negotiators would like to impose an employer mandate, similar to the version included in the House-passed bill.

The House bill would require employers to pay 72.5% of the premium for individual policies and 65% for family policies or pay a fee equal to 8% of payroll. Small businesses with payrolls less than $500,000 per year would be exempt. In the Senate bill, employers with more than 50 full-time employees who do not offer health insurance and have at least one employee who qualifies for a tax credit would have to pay a fee of $750 for each full-time employee.

The White House has not taken a formal position.

National Exchange vs. State Exchanges

The House negotiators would like to implement a one-size-fits-all national exchange, as included in the House-passed bill, rather than create state-based exchanges.

The Senate bill instructs each state to create and design an exchange.

The White House has not taken a formal position.

Cadillac Tax

The House negotiators would like to exempt middle-income individuals and families from the Cadillac tax. The exemption would likely come in the form of increased thresholds for the tax.

The Senate bill would impose a 40% excise tax on insurance companies who sell an employer-sponsored health insurance plan that has an aggregate value of $8,500/individuals and $23,000/families. The excise tax is imposed on the amount above the stated threshold. The House bill includes no such tax.

The White House has stated that they want the Cadillac tax included in the final bill. It is unclear whether or not they are willing to budge on the threshold amounts.

If the threshold amounts are increased, it is likely that policymakers will look to increase the Medicare payroll tax on wealthy Americans to offset the loss in tax revenue.

What to watch for this week:

1. President Obama is scheduled to address the House Democrats at their annual retreat this week as is former President Bill Clinton. What will President Obama’s message be on health care reform?

2. The White House has yet to announce the date of the State of the Union address. They are delaying the announcement in hopes of scheduling it in coordination with the passage of health care reform. Watch for an announcement of the date – it will indicate that a deal is imminent.

2010: A Tale of Two Bills

It was the best of times and the worst of times… An appropriate intro for a blog about Health Care Reform! Obviously, it depends on what side of the debate you favor. Regardless, the heavily publicized and much debated process of Healthcare Reform is now down to two bills: Senate vs. House.

The current favorite is the Senate bill. The Kaiser Foundation provides a very succinct side-by-side comparison of these two bills (Senate’s Patient Protection and Affordable Care Act and House’s Affordable Health Care for America Act). While both bills are geared towards expanding the number of insureds either through subsidy or due to individual mandate – neither bill actually addresses how to manage the costs associated to adding on about 50 million uninsured individuals. It’s the quintessential 900lb Gorilla in the room… Where is the money coming from?

Logically, most employers have to be wondering how or if this will affect their bottom line. At this time, it’s difficult to predict how these changes will affect employers. As the Senate bill is currently written, some components start in 2010 while others will be implemented over the next 4 to 6 years and will vary on the size of the business.

Over the next several weeks, I intend on keeping my blog up to date in order to keep my readers informed. As well as including the most innovative strategies that will make adopting these mandates a smooth process. In the meantime, there is one strategy that will hold true no matter the new mandates… Market innovation that includes consumerism, wellness, safety and benefit education combined with proactive planning will still prevail in cost control.

Southland hospital execs in accord on critical issues

Southland hospital execs in accord on critical issues

While Congress struggles to craft a health care reform bill acceptable to constituents and President Barack Obama, regional providers are not sitting back.

Nearly 200 business people recently heard a panel discussion packed the Holiday Inn Tinley Park Convention Center for a Chicago Southland Chamber of Commerce event focused on present and future health care coverage.

Michael Wojcik, Chamber health care vice chairman and senior vice president of The Horton Group, moderated the discussion, featuring panelists Arnold Kimmel, CEO of Metro South Medical Center (formerly St. Francis) in Blue Island; Michael Holmes, executive vice president and COO of St. James Hospital and Health Centers in Chicago Heights and Olympia Fields; Eileen Gillespie, vice president and chief nurse executive at Advocate South Suburban Hospital in Hazel Crest; and Vince Pryor, CEO of Ingalls Health System in Harvey.

“We’re in the midst of history-making health care reform that will affect all of us,” said Wojcik, who participated in health care transition meetings for the Obama administration.

Panel members echoed each other on critical issues. These include the rising number of under- and uninsured patients, the dramatic increase in emergency room visits, lengthy delays in Medicaid and Medicare payments and the need to streamline services while raising safety procedures and customer satisfaction.

Both Metro South and Ingalls have invested millions of dollars in information technology with the goal of having all patient records centralized in each hospital’s internal network; this saves time, money and facilitates patient care.

“We’ve evolved (in the last year) from a Catholic not-for-profit hospital to a for profit, tax-paying hospital,” Kimmel said.

While maintaining the excellence in cardiology established under St. Francis, Metro South has added “enhanced services for women and infants.”

Community outreach includes free blood pressure and diabetes screenings at area businesses.

“This is not only good medicine but good business too,” Kimmel said.

St. James has operated in the red for the last nine of 10 years, Holmes said. Fortunately, the 98-year-old provider is under the wing of the Sisters of St. Francis of Mishawaka, Ind.

As St. James continues to work toward profitability, it has streamlined services; cardiology and oncology departments are at Olympia Fields while women’s care, pediatrics, rehabilitation and hospice are centered in Chicago Heights.

“We also are working on patient satisfaction and making certain we have the right employees in the right places,” Holmes noted.

Gillespie said that “educating, empowering and partnership with patients” are critical to preventive care.

South Suburban has positioned itself as a leader in caring for victims of violent crimes.

“We have nurses 24/7 who are uniquely qualified (to work with) victims of sexual abuse,” she said.

Gillespie also emphasized the increasing shortage of primary care physicians can be addressed by highly trained nurse practitioners.

Meanwhile, mental health is an area that remains underserved and one in which hospitals need to partner.

“We also need tort reform. It’s easy for doctors to move across to Indiana where there has happened,” Gillespie added.

“I could say ‘ditto’ (to everyone),” Pryor noted. “What’s different about Ingalls is we are a not-for-profit independent health system. We have only our board and the community to answer to.”

The system is profitable as family care centers in Tinley Park, Calumet City and Flossmoor have dramatically increased Ingalls’ outpatient volume.

“This will be another huge challenge as we go forward,” he said.

Health Care CO-Ops

Mike Wojcik, Vice President of Horton Benefit Solutions, explains the history of Co-Ops and it turns out there are more failures of health insurance cooperatives than there are success stories.
Click here for the video.