Medical loss ratios (MLRs), those metrics used by insurance companies to gauge medical costs as a percentage revenues from premiums, will be attracting some attention this week thanks to a provision in the recently passed reform bill that will allow a third party to be instrumental in determining how much insurers can ultimately spend on those admin costs — influencing profits in the process. That third party — the National Assn. of Insurance Commissioners (NAIC) — could have far-reaching authority in determining Insurance’s role in final implementation of the healthcare reform law come 2014.

HHS Sec’y Kathleen Sebelius could be at the mercy of the NAIC with respect to these new rules, creating disquietude among top Dems who favored reform with as little corporate influence as possible. Although the federal government has final say over where MLRs begin and end, states’ insurance commissioners actions will give lobbyists and insurers alike time to affect ultimate MLR regulations under reform law. Expect a mildly bumpy road at the hands of Insurance — which desires as little distance as possible between administrative quotas and earnings. | LINK

President Obama had yet to deal with sinking approval ratings; had yet to encounter such outrage over Arizona’s lukewarm SB1070 law; and had yet to consider how his actions over the previous 18 months of his presidency may impact midterms. Nope. This time last year, the most powerful 48 year-old in the world had to contend with the initial inklings of voter discontent with the looming vote on reform. Late summer 2009 — in the span of the healthcare debate/debacle — represented the germination of alternative voices to his heretofore mostly respected push for guaranteed access to heatlhcare.

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It’s official. The FDA will convene this Tuesday (13) to discuss and come to a decision on the fate of GSK’s Avandia. I guess you could literally call this agent a wonder drug — as its continued availability in the Pharma marketplace in spite of hundreds of class action lawsuits, multiple studies stretching back to at least 2005 documenting a clear association with an increase in heart attack risk, and copious physician calls for its withdrawal — continues to amaze healthcare policy watchers.

For the first time it appears that the handwringing on both sides of this hotly debated drug (Pharma/GSK vs. medical critics) appears to be taking on an overtly political tone, as even within the government agency itself, there is a deep devision over just how this entire case should be handled. The hoopla surrounding the removal of Vioxx and Bextra (anti-inflammatories with similarly documented cardiac risks) was never this contentious. Even U.S. senators have weighed in on the issue.^[1] What will the fate of this drug be? Tighter restrictions on its use, or complete removal from the pharma marketplace? Perhaps the answer says as much about the FDA as it does about GSK. | LINK

1. Sens. Baucus and Grassley published a report questioning the FDA’s rationale for keeping the drug available while GSK knew about the drug’s risks. [↩]

• It’s on. The mega union only needed 66%. They got over 80% ‘yea’. [LINK]
• At ninety days into the new reform law, Obama makes public safeguards inherent within. [LINK]
• FDA approves new diagnostic test that more rapidly detects antibodies and antigens. Excellent. [LINK]
• More controversy than there needs to be? The president’s pick to be new CMS chief engenders strong feelings on both sides [LINK]

Hospital executives who have worked with Dr. Berwick describe him as a visionary, inspiring leader. [..] Republicans are using the nomination to revive their arguments against the new health care law, which they see as a potent issue in this fall’s elections, and Dr. Berwick has given them plenty of ammunition. In two decades as a professor of health policy and as a prolific writer, he has spoken of the need to ration health care and cap spending and has confessed to a love affair with the British health care system.

No sooner had the Senate’s stonewalling led to the expectation of the approval of deep cuts to Medicare reimbursements to physicians, a reversal of fortunes now has both Dems and the GOP agreeing on the so-called “doc-fix” compromise for which Finance chair Max Baucus has been advocating.

The $6.4 billion measure would reverse a 21 percent cut in physician payments that was to kick in Friday, raising the possibility that some doctors might begin to turn away those covered by Medicare.

To the GOP, this action means implementing yet another interim budget-neutral respite on the road toward Medicare payment . To the Democrats, it means saving face among healthcare reform advocates for another six months — just in time for the midterms. | LINK

If anyone needs any proof of how irrelevant the American Medical Association has become in its advocacy of the physicians the organization is supposed to represent, one needs look no further than in the last minute unexpected rejection of the postponing of cuts (21%) to Medicare reimbursement schedules. So much for being in the physicians’ corner on this issue. Senate Republicans essentially killed the measure via a vote along party lines. Initially, there was hope for a compromise fashioned at the eleventh hour by Max Baucus (D-MT) — one of the key figures in the establishment of many of the provisions set forth in the reform bill’s passage earlier this year.

The Senate had rejected a Finance Committee compromise^[1] that would have delayed the cut in Medicare payments to physicians until 2012, along with measures to extend unemployment benefits and provide $24 billion to states to cope with their Medicaid programs. Senate Republicans have apparently had enough — as CMS now has the greenlight to move forward on the cuts which were to have initially been implemented on June 1. This entire episode is a reminder of how serious matters are for primary care to sustain itself in a slowly recovering economy and increasingly prudent healthcare marketplace — which now, in a new reform-minded environment, has to manage to do more with less. The calling for innovation for the recruitment of primary care physicians has never been greater this century than as a result of this moment.

1. The compromise would have decreased the total cost to $118 billion and the overall deficit impact by some $20B;  it would have delayed the planned Medicare cuts and provided a 2% raise for physicians through November 30, rather than for the 19 months as part of the original bill. Essentially, the compromise would have amounted to a short term “fix” of the SGR — the method by which the cuts are computed in the face of increasing healthcare expenses by the government. [↩]

A year ago, Doctor Pundit highlighted the perennially contentious matter of Medicare payments to physicians. At that time, President Obama was about to realize the full-fledged partisan war to be waged on his ideas of healthcare reform. So far, in 2010, most of the president’s posturing on the issue has been to delay — on an apparent month by month basis — the presumptive rate in cuts in physician reimbursements that now stands at 21 percent. Obama’s rhetoric has largely been one of terming any Congressional effort to block reform in this area as “obstructionist” and “preventing any action” on payment “reform”.

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Ordinarily, the nomination by the president of a candidate to the post of CMS chief is a rather staid and mundane affair. The ability to steer the agency responsible for guaranteeing care for the poor, childless, and elderly in this country is a daunting task usually handled without much controversy by the chief executive’s chosen one — an appointee who usually does the job and moves on.

But these aren’t ordinary times, and in this age of close political scrutiny — the politics of healthcare is as ponderous as any other issue dominating the president’s “to-do” list.  That’s why Obama’s choice to head Medicare and Medicaid Services will prove to be an involved and interesting one with respect to Senate confirmation. Those on the right say that Don Berwick’s presumptive appointment smacks of socialized healthcare leanings, as they point to his praise of European systems of healthcare — in particular, the British model.

Liberals praise Berwick’s championing preventive care methods which promote efficient, cost-effective care.^[1] They say he’s the right man for the job. Republicans say he’s all for rationing.

The confirmation process will, as usual, be handled by the Senate Finance Cmte. | LINK

UPDATE: Congress has until 6/21 to reverse yet another looming chance at a Medicare pay cut to physicians. | LINK

1. Berwick has created special teams to promote such initiatives as cutting hospital infection rates and implementing better asthma care and coronary surgery improvements characterized by smaller additional costs in healthcare systems. [↩]

Is the President waging an apparent one-man war as he still continues to gauge support for his nascent reform overhaul? As recently as a couple of days ago — as part of his weekly address — he renewed attacks on Insurance, noting that “For too long, we have been held hostage to an insurance industry that jacks up premiums and drops coverage as they please. But those days are finally coming to an end.”

Naturally, this message was directed to WellPoint, the California insurer which came under fire during the latter stages of the reform bill fight in Congress; it was accused of raising premiums to astronomical levels, establishing a fighting target and kicking off a newfound confidence in the President in getting his plan passed into law.

WellPoint’s CEO specifically responded to Obama and essentially told him to stop the attacks.

WellPoint Chief Executive Angela Braly fired back. In a letter Sunday addressed directly to Obama, she noted that policy changes were underway nationwide, and she called on him to stop his attacks on the industry. It will take cooperation between the industry and government to implement the new healthcare reform law, she said.

WellPoint also backed down and pledged its own internal investigations when recently accused of rescinding coverage to previously covered policyholders obtaining breast cancer treatments. HHS Secretary Sebelius and, now, Senator Diane Feinstein (D-CA), are urging for more discussions with the CEO and others to address this issue. Of course, this all begs the question — as insurance companies are supposed to be working with the President before the law requires them to specifically do so — can’t they all just get along? | LINK

An independent panel of sorts meant to develop payment, spending, and reimbursement policy with regard to Medicare is quickly getting roundly criticized by some members of Congress while getting pushed by the executive branch. While the potential for an outside private commission to make sweeping Medicare spending policy changes in a time of immense budgetary problems is troublesome on its face, it hasn’t stopped some parties from investigating the possibility, however.

The board, a priority of White House Budget Director Peter Orszag, is designed to force spending cuts in the medical insurance program for the elderly, which serves more than 45 million Americans and is among the main drivers of the federal deficit. Orszag called the board’s creation Congress’s “single- biggest yielding of power to an independent entity since the creation of the Federal Reserve.”

Of course, Hill lawmakers are against this plan as it takes their say out of the equation. Perhaps discussion of this move is needed to pressure Congress to act on solving the crisis of Medicare spending instead of constantly rubber stamping the problem. It will be interesting to get the opinion of Pres. Obama’s newly appointed CMS head on the matter. | LINK

As President Obama begins to road to securing the cooperation of major corporate players in his ambitious healthcare reform package, on the legislative side of things, the Senate is laying out its proposals for the president — namely the introduction of a government-run system (the infamous “option”) to compete with the private healthcare sector.

The bipartisanship on this legislation is unprecedented, as senate Republicans are gladly working with the Dems to ensure, at least on the surface, a kinder market-driven approach to the “skin-in-the-game” strategy that may be palatable to both sides. Says Republican Sen. Charles Grassley,

“Congress has an obligation to make insurance more available and more affordable and still give people the option to keep what they have if they like it,” Grassley, of Iowa, said in the joint statement.

LINK

Two-thousand nine is being dubbed “the year of the generic”. Two senators are trying to keep it that way, citing the potential for Pharma (and its branded, patent-extending reformulations) to simply pay off the manufacturers of generics in an effort to halt their production. It is the aim of the Preserve Access to Affordable Generics Act to abolish the so-called “pay-to-delay” actions of drug manufacturers in which massive financial buyouts are given to generic drugmakers while they wait to market their product, guaranteeing patent extensions. But is this legislation really necessary? Not according to some critics who say that it is in the best  interest of Pharma to invest in next-generation research and development, as such buyouts targeted by the legislature in this case are “last-ditch” efforts by some manufacturers to stifle generic competition. | LINK

Freshly laid off and unemployed? Have no fear. It will become cheaper for most people to keep health insurance after losing a job if the government’s stimulus plan becomes law. The purpose of the American Recovery and Reinvestment Act is to stimulate the economy by preserving and creating jobs, helping the unemployed and uninsured, and assisting states with budget relief measures. The U.S. House of Representatives has just approved measures to expand access to affordable health care coverage for workers who become jobless because of the recession. It is estimated that this package will help 8.2 million people keep their healthcare coverage. Briefly, this legislation would:

• Give a 65 percent subsidy for COBRA premiums for up to one year for workers who have lost their jobs between September 1, 2008 and December 1, 2009;
• Make funding available to states that agree to provide Medicaid coverage to these unemployed and uninsured workers and their families; and
• Extend the COBRA benefits for older and long-term employees until they are able to find new health insurance coverage through future employment or they become eligible for Medicare.

LINK