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May 19, 2011

General Updates

Program to Focus on Improving Quality of Health Care to Wayne County Children

Program to Focus on Improving Quality of Health Care to Wayne County Children

Wayne Children’s Healthcare Access Program Launches

DETROIT, MICH Wayne Childrens Healthcare Access Program (WCHAP) is a private-public collaborative that was recently awarded a two-year demonstration grant from The Kresge Foundation to improve the quality of care to Wayne County children while simultaneously lowering associated health care costs.

WCHAP is part of a national movement to increase the quality of healthcare by increasing the medical homeness of primary care practices. The medical home is an approach that transforms primary care practices to be more accessible, continuous, comprehensive, family-centered, coordinated, compassionate, and culturally effective.

The Childrens Healthcare Access Program, CHAP is a proven medical home model that will impact 25,000 Medicaid Children in Detroit-Wayne County. Working in Collaboration with the Pilot Primary Care Practices, Health Plans, State and Local Health and Mental Health, Education, Families and Community Based Organizations, WCHAP will serve 2,500 to 3,000 children with direct services designed to:

1. Increase quality, well child visits, and care coordination;

2. Decrease costs by lowering unnecessary emergency services and hospitalizations;

3. Support primary care practices and school health clinics to improve medical homeness;

4. Specialty collaboration: asthma, obesity, integrated behavioral health and physical health, and maternal-child-teen health.

We are excited about working with our pilot primary care practices as they strive to improve childrens healthcare, says, says Jametta Lilly, WCHAP project director. WCHAP will provide support and technical assistance including developing practice based and project wide quality indicators such as, increasing clinic hours to improve access to implementing asthma initiatives and exploring best practices to reduce childhood obesity.

Modeled after the KentCHAP program in Grand Rapids, Wayne CHAP is the second pilot to go ‘live’ in Michigan. The Wayne CHAP pilot was originally supported through the Early Childhood Investment Corporation and the Great Start Collaborative-Wayne.

The launch of Wayne CHAP is a vital step in the continued improvement of the well being of Wayne County children, says Toni Hartke, director of the Great Start Collaborative in Wayne County. Good health and the access of quality care are core building blocks for school readiness. Success in school is influenced by a myriad of factors. Certainly, access to affordable and responsive medical assistance when needed is one of them.

Two states in the U.S., where the CHAP model originated, have experienced significant Medicare cost savings. Currently, four counties in Michigan support the medical home model at varying levels. If successful, WCHAP and KentCHAP could be models for the state.

“Children can’t learn if they aren’t healthy,” said Judy Y. Samelson, CEO of the Early Childhood Investment Corporation, which provided a planning grant to Wayne CHAP. Medical homes are one of the simplest yet most profound ways in which we can improve the health of children in Michigan and help them arrive at kindergarten ready, willing and able to learn.

WCHAP makes the child physical-mental health-education connection. WCHAP has strategic partnerships with the Detroit Public Schools and Wayne RESA, MI Dept of Community Health, The Detroit-Wayne County Community Mental Health Agency and the Wayne County Dept of Human Services as well as the Detroit Department of Health and Wellness Promotion.

We are particularly committed to strengthening care coordination between primary care providers and mental health, education, human services, faith based and early care and learning providers, adds Lilly. By working together to improve the quality of care and reducing ER and unnecessary hospitalizations we will see a return on investment. Through meaningful partnerships with families, providers and community organizations, we can positively impact the health and wellness of our children

Working with these strategic partners and preferred referral agencies, WCHAP will help connect the pilot primary care practices to their services and vice versa. WCHAP direct services include behavioral health triage and coordination, asthma case management, and family support services such as transportation and translation. WCHAP will also serve as a connector and provide regular collaborative meetings to increase quality and care coordination using data dashboards to help drive change.

The Detroi8t Wayne County Health Authority is a partner and the WCHAP fiduciary. Were extremely pleased to be a strategic partner with WCHAP. This relationship helps us achieve our goals of providing access to a medical home for all, says Chris Allen, executive director and CEO of the Detroit Wayne County Health Authority. The WCHAP organization is passionate about their mission, and the Health Authority will lend as much support as we can to maximize their success.

The effort to deliver a high-quality, patient-centered medical home will be met with some challenges. But, the models two-fold approach of direct service and collaboration will attempt to fill gaps by working with primary care practices, health plans, state and local health and mental health agencies, educators, families, and community-based organizations.

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The Wayne Childrens Healthcare Access Program (WCHAP) believes every child deserves a medical home. To learn more about WCHAP, visit www.dwchap.org

Great Start Collaborative-Wayne builds collaboration through parents, service providers and professionals to assure a coordinated system of services and resources to assist all Wayne County families with children from pre-birth through age eight. Visit www.greatstartcollaborativewayne.org.

The Early Childhood Investment Corporation is a public/private initiative working to restructure Michigans investment in children from birth to five through state and local community efforts. For more information on ECIC and its efforts, visit http://greatstartforkids.org.

September 30, 2010

General Updates In the News

Movie Explains Health Care

KAISER FAMILY FOUNDATION LAUNCHES ONLINE HEALTH REFORM SOURCE TO EXPLAIN, ANALYZE AND TRACK THE NEW LAWS IMPLEMENTATION

New Initial Features Include Animated Movie Explaining the Law, Policy and Public Opinion Monitoring, and State-Specific Data

CONTACTS

Rakesh Singh
(650) 234-9232
rsingh@kff.orgCraig Palosky
(202) 347-5270
cpalosky@kff.org

MENLO PARK, Calif. — Nearly six months since the signing of the Patient Protection and Affordable Care Act and as some key provisions are due to be implemented, the Kaiser Family Foundation today launched an online gateway providing easy access to new and comprehensive resources on the health reform law. Recognizing the transition from the debate about passage to the realities of implementing a law, the Health Reform Source, http://healthreform.kff.org, has many new features that provide explanations of the basics of the law, in-depth analysis of policy issues in implementation, and quick and easy access to relevant data, studies and developments.

The Source features the premiere of “Health Reform Hits Main Street,” a new animated short movie designed to explain the health reform law to an American public still confused by how it works. Written and produced by the Foundation, the animated movie features narration by Cokie Roberts, ABC News and NPR news commentator and a member of the Foundations Board of Trustees. The movie has three major sections: explaining problems in the current health care system, short-term changes that will take place between now and 2014, and major provisions that will take effect in 2014.

Another new feature, The Scan, provides a daily feed of easily-digestible summaries of the latest research and studies from the Foundation and others, as well as official actions and other developments related to the health law. The site also features the Foundations Twitter entries on health care reform and links to Kaiser Health News stories to provide U.S. policymakers, journalists, the health care policy community and the general public easy access to timely information about the law.

“We will continue to update and expand the information we provide through the Health Reform Source as implementation ramps up over the next several years,” Kaiser Family Foundation President and CEO Drew Altman. “The Source will be the place where people can go to understand how the new health law really works, and for the latest policy information from us and others.”

The Health Reform Source will also feature ongoing and future research and analysis on the health law conducted by Foundation experts, with a special area of emphasis on the 50 states as they proceed with the implementation of the law with varying approaches and results. As more provisions of the law are implemented, the Foundation will add explanatory, basic information, summaries of the changes and new analyses.

Other new elements available on the Source include:

A customizable Implementation Timeline which presents a detailed list of major provisions that can be viewed by year or by topic.
A series of Video Explainer clips of Foundation experts answering specific questions about the law on a variety of health policy topics.
An interactive state map of the U.S. that features pop-up boxes of key state-specific information related to health coverage and the health law, and links to new health reform pages on the Foundations statehealthfacts.org featuring key data, reports, and news for each state.
The Public Opinion: Poll Watch featuring a weekly round-up of surveys from the Foundation and others assessing public attitudes and experiences over time related to the health reform law.
The Foundations updated Health Reform Subsidy Calculator to illustrate premiums, government subsidies and out-of-pocket costs for people eligible for health coverage in exchanges due to be established in 2014.
An Official Document Finder that provides quick access to federal regulations and studies related the health law.
A Frequently Asked Questions (FAQ) database addressing questions about the health law.
Government Resources provide links to federal government websites that provide information to consumers and regulatory guidance about the provisions of the law.

Kaisers Health Reform Source can be viewed online at http://healthreform.kff.org and you can subscribe to alerts via email and RSS feeds. Additionally, the Foundation has established a Facebook page for the Health Reform Source which will feature additional related material.

Content on the site will be continually updated, and new features will be added in the coming weeks and months, including an interactive tool that will illustrate how reform affects different groups of people, video profiles showing the experiences of real people and businesses, and a primer on the health reform law.

The Kaiser Family Foundation is a non-profit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible analysis and information on health issues.

December 4, 2009

Press Releases General Updates

Health Systems, Health Authority Announce Safety Net Initiatives

DETROIT — The leaders of health systems serving Wayne County have agreed to pursue initiatives that will help contain uncompensated care which has been an increasing fiscal burden and create systems that will more appropriately and cost-effectively meet the health and social needs of uninsured and underinsured people.

Chaired by Nancy Schlichting, president and CEO of Henry Ford Health System, the Uncompensated Care Committee of the Detroit Wayne County Health Authority focused its work in three areas:

Federally Qualified Health Center (FQHC)-Hospital Workgroup: Chaired by Jesse Thomas, president of Molina Healthcare of Michigan, this workgroup was specifically charged with creating more appropriate emergency department use and promote referrals to urgent care centers and community health centers. The workgroup was inclusive of emergency department physicians. A primary goal of the workgroup was to co-locate an FQHC and a hospital emergency department. The group also recognized that existing relationships between hospitals and FQHCs must be strengthened before this can occur.
Physician Workgroup: Chaired by Ken Matzick, president and CEO of Beaumont Hospitals, this workgroup was charged with examining ways of working with physicians to improve quality, cost, and access for safety net services. The primary goal of the workgroup was to improve access to specialty care for uninsured and underinsured patients. Essentially, under this model, several specialty physicians agree to treat uninsured patients on a limited basis throughout the year.
Finance Workgroup: Chaired by Jay Rising, executive vice president, Detroit Medical Center, this group was charged with estimating the uncompensated care burden experienced by health systems, assess coverage expansion options and alternate methods of leveraging federal matching funds; assess opportunities and current limitations on funding; and review federal requirements for funding and coverage expansion.

I am pleased to have had an opportunity to chair this effort, primarily because the problem of uncompensated care is so acute in our community, said Schlichting. Health systems in Southeast Michigan provided more than $600 million in uncompensated care in 2008. Clearly, there is a responsibility for providers to innovate in this area to think differently about the challenges we all have for providing care for the uninsured and under insured. This has created a sense of urgency to really make a difference.

Health systems represent a major component of the safety net. This initiative has shown how creativity and commitment by the provider community can result in innovative solutions, said Chris Allen, CEO of the Detroit Wayne County Health Authority. Under the leadership of Nancy Schlichting and the collaboration of regional health systems, we have forged a plan that will ensure that many uninsured and underinsured people with urgent health problems have a medical home to treat them in a timely, appropriate manner. At the same time, emergency department volume will decrease, allowing providers to care for truly emergent patients and reduce uncompensated care costs for hospitals.

The Uncompensated Care Committee will be reorganized to implement these recommendations during 2010. Members of the committee include Dennis Herrick, senior vice-president & CEO, Beaumont Hospitals; Kevin Seitz, executive vice-president, Health Care Value Enhancement, Blue Cross Blue Shield of Michigan; Dr. Paul LaCasse, president & CEO, Botsford Hospital; Michael Duggan, president & CEO, Detroit Medical Center; Jay Rising, executive vice president & CFO, Detroit Medical Center; Gary Ley, president & CEO, Garden City Hospital; James Connelly, senior vice president & CFO, Henry Ford Health System; Spencer Johnson, president, Michigan Health and Hospital Association; David Seaman, executive vice president, Michigan Health and Hospital Association; Peter Schonfeld, senior vice president, Policy & Data Services, Michigan Health and Hospital Association; Denise Holmes, associate dean for Government Relations and Outreach, Michigan State University Institute of Health Studies; Brian Connolly, president & CEO, Oakwood Health; Doug Welday, chief financial officer, Oakwood Health; Bob Hobin, chief strategy officer, St. John Health; Patrick McGuire, chief financial officer, St. John Health; Stephen Fitton, acting bureau director, State of Michigan Medicaid Services Administration; Garry Faja, president of St. Joseph Health System, Trinity Health; Adam Jablonowski, executive director, Wayne County Medical Society; Robert Frank, M.D., executive vice dean, Wayne State University School of Medicine. Chris Allen, executive director & CEO, Detroit Wayne County Health Authority; Janette Davis, chief financial officer, Detroit Wayne County Health Authority; Dick Bohrer, co-chair of the Health Authoritys primary Care Network Council and former U.S. Assistant Surgeon General; Neal Colburn, consultant, Michigan Primary Care Association; Joslyn Pettway, director of Primary Care Initiatives, Detroit Wayne County Health Authority.

Specific recommendations of the Uncompensated Committee include:

Hospital-FQHC Workgroup: Develop and distribute a contact list and access information about all FQHCs to appropriate hospital staff; integrate point of care counseling in emergency departments to support referrals; collaborate with existing FQHCs to help address existing capacity and system issues; and create a pilot co-location of a hospital emergency department and FQHC.
Physician Workgroup: Create a voluntary network of specialty physicians who agree to serve the uninsured; coordinate specialty outpatient clinics to provide physicians with an alternate practice site; create a network of physician consultants to help in the secondary care of the uninsured.
Finance Workgroup: Pursue approach to Medicaid coverage expansion in compliance with any early adopter providers in federal health reform; substantiate the rationale of private employers benefit from Medicaid coverage expansion; and refine benefit costs and develop funding and management systems to support Medicaid coverage expansion.

For more information on the Uncompensated Care Committee and other initiatives of the Health Authority, contact Chris Allen, executive director & CEO, at 313-871-3751.

October 27, 2009

Press Releases Events

Community Health Reform Forum Hears Voice of Minority Residents

DETROIT The voice of minority communities has been largely absent in this years health reform debate. On Saturday, Nov. 7, Second Ebenezer Church and Molina Healthcare of Michigan will host a free community forum on national health care reform, together with several community organizations.

FOR RELEASE October 23, 2009

Contact:
Dennis Archambault
313-477-7239

Community Health Reform Forum Hears Voice of Minority Residents at Second Ebenezer Church, Nov. 7
Forum offers opportunity for people to ask questions and learn more about national health reform

The forum, Health Reform: REAL TALK What is it? What does it mean? will take place at Second Ebenezer Church, 14601 Dequindre St., Detroit, from noon to 5 p.m. Health information, flu shots and refreshments will be available.

The program will begin at 1 p.m. with a forum on health reform featuring a panel of medical and health policy experts, with specific reference to issues pertaining to minority communities. To assure adequate input from minority communities, a question and answer period will comprise much of the forum. Participants will learn about health insurance programs such as Medicaid and MIChild, as well as receive other health information.

We have a moral imperative to create a health care system with the inclusion of all people, including all minority communities in America, said Bishop Edgar L. Vann, II senior pastor of Second Ebenezer Church. We have created a forum that will ensure that the voice of all minorities is heard and that our community will learn how health reform will affect them. Additionally, we want our elected officials to hear this voice clearly and act upon it.
Molina Healthcares goal is to be a joint organizer alongside the faith-based community to provide a much-needed forum and conference to facilitate community building and partnership, promote healthcare reform principles through an educational outreach initiative to a more diverse demographic and socio-economic constituency, according to Jesse Thomas, president of Molina Healthcare of Michigan. Most importantly, we want to be able to bridge the healthcare entitlement gap. This is especially relevant during these challenging economic times where stakeholder collaboration and leveraging of mutually beneficial resources are crucial.
In addition to Second Ebenezer Church and Molina Healthcare of Michigan, the forum is co-hosted by the Detroit Wayne County Health Authority, Greater Detroit Area Health Council, Blue Cross Blue Shield, and United Health Organization/Project Healthy Living.

For more information on the conference, visit www.secondebenezer.org

September 8, 2009

Backgrounders

How Will Health Reform Affect You?

The passage of the Patient Protection and Affordable Care Act means that there may be new coverage options available to you or your loved ones. While most of the health care reforms don’t go into effect for a couple years, a few provisions are immediate.

For a good overview of the new legislation, including a benefit cost calculator and timeline for implementation, visit the Kaiser Family Foundation’s Health Reform Gateway.

August 30, 2009

Backgrounders

Factsheet on the Medically Uninsured and Underinsured

Health insurance

• Health insurance premiums are rising and unavailable to many people with pre-existing conditions. Blue Cross Blue Shield of Michigan is mandated to all people who need health insurance.

• Between 2000 and 2007, workers earnings increased 22 percent, while health insurance premiums increased 72 percent.

• Nationally, health insurance premiums increased by 6.1 percent during 2007.

A growing uninsured population

• More than 55 million Americans were uninsured in 2006.

• In 2006, 18.6 percent of non-elderly Americans did not have health coverage.

• Eight out of 10 uninsured Americans are working families.

• Michigan’s uninsured population grew from 10 percent in 1990 to 12.7 percent in 2005.

• Over 280,000 Wayne County residents are uninsured.

Lack of primary care for people with low income

• Detroit remains the most under-funded urban area in terms of federal primary care grants, despite the fact that it has many areas designed underserved and Health Professions Primary Care Shortage areas.

Declining reimbursement for uncompensated care

• As more people become uninsured and underinsured, health care providers are asked to provide ever-increasing amounts of uncompensated care.

• In 2007, $1.6 billion worth of uncompensated care was provided in Michigan. More than 50 percent of this care was provided within Detroit.

(Source: Greater Detroit Area Health Council)

August 17, 2009

General Updates

Health Authority Establishes Fund to Help Pay for Uninsured Care

DETROIT – The Detroit Wayne County Health Authority has established a fund to help offset the cost of providing primary care for the uninsured in community health centers, announced Chris Allen, Executive Director and CEO. Health centers will submit vouchers to the Health Authority valued at $20 to help offset the cost of a patient’s initial primary care visit.

The fund is formally known as “Access for all…Health Care Fund” and will be part of the Health Authority’s Primary Care Development Corporation, Allen said.

“I’m pleased to announce that today we are initiating a pilot voucher program that will help pay for the initial patient visit to a community health center,” he said. “We hope that we’re able to grow this fund one day to ensure that all of the uninsured have access to care in a community health center.”

The pilot program was established by the Health Authority with a $25,000 grant. Philanthropic organizations and other donors will be asked to help build the fund to eventually provide a major source of financing that will allow more uninsured people to receive care in community health centers.

The Detroit Wayne County Health Authority is a public body corporate, established in 2004 by the State of Michigan , City of Detroit and Wayne County . Its mission is to coordinate efforts to meet the health needs of the uninsured and underinsured residents in the City of Detroit and Wayne County by assuring access and improving the health status of all people.

July 10, 2009

Backgrounders

A Hot Summer with Little Progress on Health Reform: Policy Brief # 5

The summer months leading up to September have seen the debate on health reform become more heated as it moves beyond the Washington DC beltway into town hall meeting around the country. One clear result of this activity is that both the media and the public are now engaged. Looking beyond the attention grabbing protesters, there are people asking questions about how proposed changes will affect their cost and access to health services. At its core health care is both personal and local. Nothing could demonstrate that more clearly than the outpouring of concerns at town hall meetings.

By James D. Chesney, Policy Initiatives Consulting Group
August 26, 2006

The two major concerns that have dominated town hall meetings are access and cost. People are worried that the current system is not sustainable because costs are rising too fast AND that the only way to correct for increasing costs is to restrict access. People with pre-existing conditions worry that they will be dropped or excluded if they change jobs. One town hall participant reported that his family health insurance premiums had increased 15% a year for the past several years and that his deductibles had quadrupled during that time. Since his wife is a breast cancer survivor, he worries that his family would lose his health insurance if he changed jobs.

Fears about restricted access and increased costs are exacerbated by the goal of covering the 47 million people who are uninsured. These concerns are based on a simple equation: cost equals price times volume (C=PxV). In order to build public support, and a sustainable program, health reform proposals should both control cost and improve access. Lets consider price and volume proposals separately.

Price can be controlled three ways: regulation, competition and payment reform. Regulation allows the government to set a price for specific services and mandate that all providers accept the price. None of the current health reform proposals suggest this approach. A second approach is to reduce price by creating more competition in the health insurance market. Most states have a dominant insurer that controls most of the market. Health reform efforts focus on building more competitive environment by creating health insurance purchasing exchanges modeled after the Federal Employees Health Benefits Program. The exchange mechanism allows covered individuals to choose among health insurers that agree to provide an array of services at a specific cost. An insurance exchange would operate like managed Medicaid in Michigan, where people are qualified for the program and then choose among health plans that have negotiated rates with the state. In the national proposals individual payments would be subsidized for families that cannot afford coverage. One aspect of the exchange has received attention is whether it should include a public option. The public option would allow a government run health plan to compete with the private plans in the insurance exchange. Another variation is to allow insurance cooperatives (non-profit, member-owned organizations) into the exchange. Since many states already have Blue Cross/Blue Shield plans that are non-profit, it is not clear how this proposal would change insurance markets enough to reduce price. Health reform plans also differ in who would be eligible to participate in the exchange. This issue is critical since a larger exchange will be more effective.

A third approach to reducing price is payment reform. This is the heart of the health reform effort. Without payment reform families businesses and governments (state, local and national) become economically insecure. A starting point for payment reform is reducing payments for uncompensated care as the pool of uninsured people shrinks. This reform can save $264 Billion over ten years. Another reform is to establish a competitive bidding program for the Medicare Advantage program (in contrast to the current system of setting area rates), which would save $133 Billion over ten years. Reducing payments for overpriced services and reducing annual update payment factors that compensate for inflation could save another $225 Billion over ten years. Many analysts believe that past update factors have been too generous thereby contributing to medical care inflation. All together these three efforts could save more that $600 billion in ten years. Payment reforms should also aim at making health care more cost-effective. The Urban Institute estimates that reforms such as chronic disease management for dual eligibles, improved preventive services and improvements in end of life care could save another $624.8 Billion over ten years.

The volume part of the equation is going to grow. Reform proposals seek to cover 47 million people who are currently uninsured. Reform proposals have not clarified how many of these people will be covered by government programs and how many will be covered by employer mandates. Regulatory proposals seek to limit insurance exclusions based on pre-existing conditions and make insurance more portable with changes in employment. Subsidy programs are aimed at those who cannot afford health insurance.

One clear point of consensus in the health reform discussions is that covering more people will require a more cost-effective system of care.

June 30, 2009

Backgrounders

A Steeper Path to Health Reform: Policy Brief #4

The path toward health reform became much steeper during mid June. The conflicting goals of cost containment and increasing access to health insurance came sharply into focus in Washington. This focus has slowed progress toward health reform as legislators debate how to construct a program that will improve insurance access and not increase the federal budget deficit.

The focus on the cost of health care reform comes from the Congressional Budget Office (CBO), a non- partisan body that estimates the cost of major legislative proposals and the revenue produced by tax changes. The cost of the Senate’s HELP Committee (Chaired by Sen. Kennedy) is estimated by CBO to be one trillion dollars over the next ten years. The cost of the Senate finance bill, which covers Medicare and Medicaid, is estimated at $1.6 trillion. Finance Committee Chair Senator Max Baucus has said that his committee’s bill must be cut by one-third to be politically viable. Since the content of these bills is not public, one can only speculate where the cuts will be made or taxes increased. Several reports have circulated that eligibility for insurance subsidies for people below 400 percent of the federal poverty level will be tightened; as well as requiring businesses that do not offer health insurance benefits to pay higher fees and taxes.

The CBO cost estimates have significantly slowed progress on health reform in the Senate. Bills which were expected in May will likely not be public until late summer or early fall. Meanwhile, the House of Representatives has drafted legislation and is trying to move ahead on a more aggressive schedule than the Senate.

The trade-offs in health reform are clearly evident in the proposal by former Senate Majority Leaders Baker, Daschle and Dole. The full report is available from the Bipartisan Policy Institute. The Baker, Daschle, Dole report estimates that covering 46 million uninsured people will cost $1.2 trillion over 10 years and that half of that cost would have to be paid for in new taxes. Anticipated savings come largely from slowing the growth in Medicare and Medicaid spending through payment and delivery reforms. New revenue sources are expected primarily from capping tax credits for high cost health insurance plans and fees from companies that don’t offer health insurance benefits. Conspicuously, the Baker, Daschle, Dole plan does not include a public insurance option open to all citizens.

The creation of a public insurance option is seen by many as critical to containing private sector health care costs. President Obama on June 23 called a strong federal presence in the health insurance market place the only way to ensure that all American’s have access to affordable coverage and that spiraling health care costs can be controlled. Private insurers and providers are being asked to produce savings of at least one trillion dollars during the next ten years. There has been little realistic discussion about how these savings might occur.

The policy debate on insurance coverage hinges on how cost, savings and new revenue estimates are calculated. The Congressional Budget Office estimates contain an expense for preventive services but do not have a methodology for calculating savings due to expanded preventive services. The same is true for primary care services and medical homes. One widely discussed and easily measurable policy option is to reduce the disproportionate share and graduate medical education payments as insurance coverage expansion decreases the sots of uncompensated care to hospitals.

Although progress has slowed, Congressional leaders and President Obama are optimistic that health reform will occur in 2009. The contours of the path to reform are becoming clearer even though the pace has slowed.

May 12, 2009

Backgrounders

Health Care Priorities in the Obama Administration

By James Chesney, Ph.D.

The Obama Administration’s health care agenda emphasizes funding for primary care, health information technology and comparative effectiveness research. The health care blueprint for the new administration is contained in the American Reinvestment and Recovery Act (ARRA), the Consolidated FY 2009 Appropriations legislation and the outline of President Obama’s spending plan for FY 2010. Each of these documents contains opportunities for expanded federal funding for primary care, health information technology and comparative effectiveness research. These three initiatives are the three legs of the stool for President Obama’s health reforms, which are key steps toward reducing the long term federal budget deficit.

Expanding primary care is a principal component of ARRA, which increases the federal match for Michigan’s Medicaid program and sets funds aside for community health centers. ARRA funds will increase Michigan Medicaid funds by $2.27 billion in the nine quarters from October 1, 2008 to December 31, 2010. The Medicaid program is also strengthened by increases in disproportionate share funds and extension of Transitional Medical Assistance. This increase in Medicaid funding is vital for community health centers because they receive enhanced payments for services provided to Medicaid beneficiaries. The ARRA also contains $2 billion specifically for Federally Qualified Health Centers (FQHC). $1.5 billion is for infrastructure, construction and information technology and $500,000 is set aside for additional operational funding. The additional operating funds have already been distributed. Detroit FQHCs received about $3 million in additional operational funding. The Capital funds will be distributed based on a process the Health Resources and Services Administration (HRSA) is required to announce within 90 days of ARRA’s becoming law. AARA also contains $500 million to strengthen the primary care work force.

The Consolidated FY 2009 Appropriations bill supports primary care by including an additional $125 million for FQHCs bringing their total funding to $2.2 billion. The bill also includes $75 million for state access grants that fund programs to expand coverage for targeted groups. Detailed allocation for Federally Qualified Health Centers is not included in the President’s budget proposal, but administration reports indicate that those funds could increase to $8 billion.

The Obama administration is clearly willing to invest in health information technology. The ARRA includes $19 billion for health information technology and provides $33 billion for incentive payments to Medicare and Medicaid providers who use electronic medical records. The AARA investment in health information technology is amplified in the FY 2010 budget proposal, which calls for continued incentive payments for providers that can demonstrate use of a certified electronic medical record. The electronic medical record incentive becomes a penalty in 2015.

“Comparative effectiveness research” is the Obama Administration’s phrase for determining which medical treatments work for a given condition. President Obama’s budget chief, Peter Orszag, has been a consistent voice for reducing health care costs by providing incentives to providers that use effective, scientifically based treatments. The ARRA contained $1.1 billion for research on the comparative effectiveness of medical and surgical treatments. For 2010 and beyond the work of organizations like the Agency for Health Care Quality and Research and the U.S. Preventive Services Task Force will be expanded and rolled into public insurance programs. President Obama’s FY 2010 budget clearly states that in addition to clinical effectiveness research, the Department of Health and Human Services will begin to build clinical decision support tools that can make information available to providers as they meet with patients.