Evidence-Based Medicine and the Patient-Centered Outcomes Research Institute: An Update of an Interview with Alfred O. Berg, MD, MPH


Alfred O. Berg, MD, MPH; University of Washington

William H. Burnett, Coastal Research Group: In my last interview with you, conducted on behalf of the Student Doctor Network [see Evidence-Based Medicine: Is American medical care based on science or politics?], you described the role of the US Public Health Services advisory committees, and also the role of the Institute of Medicine in recommending national policy. Would you describe how you see the differences in the roles of the policy advisory committees, the “think tanks” that are associated with a particular political philosophy, and the legislative committees that draft legislation?

Alfred O. Berg, MD, MPH: The advisory committees vary tremendously. Some advise on policy. Some have other purposes and audiences, and it is not always easy for the public to track the nuances. For example, one of the things the recent “mammography controversy” revealed to us is that almost everyone misunderstands what the purpose of the task force is that made the recommendation.

WHB: The “mammography controversy” related to a November 2009 recommendation of the U. S. Preventive Services Task Force, which was met by such headline’s as CNN’s “Task Force opposes routine mammograms for women age 40-49”. What is your perspective on the controversy?

AB: The task force’s recommendation simply restated a finding that has been in the literature for two decades – that women in the age category of 40-49 obtain a relatively small benefit from an annual mammography, and that small benefit is offset by some degree of risk. The NIH came to much the same conclusion back in 1997.

The task force making the recommendation was established to recommend to primary care physicians what should be discussed with their patients.  It was not intended to directly advise patients, insurance companies, or policy makers.

WHB: This is a case of a scientific body making a nuanced statement about the evidence they have examined, that the press reported without any of their qualifiers, is it not?

AB: Yes. The language of the recommendation was carefully constructed, but the qualifying statements were not reported by much of the press.

WHB: How should one evaluate health care recommendations from the various bodies that make such pronouncements?

AB: One should ask what is the entity making the statement, and what is the entity tasked to do? What is their charter? To whom do they report? Are they advisory or are they a regulatory body?

I would ask the same questions of any “think tank” or any other such entity: who funded them, what is their charter, and what is the process for them to develop their recommendations?

Often, the body making the recommendation turns out to be constituted by a politically “conservative” or “liberal” entity. It may not be transparent that there is a particular bias to the process by which the recommendation was developed.

This becomes a challenge. Unless you are really into a topic, most students, residents, and practicing physicians do not have the time or resources to find those things out. Fortunately, some organizations obtain reputations for doing things well, such as the United States Public Health Services’ Preventive Task Forces (UDPDTF), the “Bright Futures” initiative, the Advisory Committee on Immunization Practices, and some Institute of Medicine committees. But I think the connections of some entities are so non-transparent that they baffle everybody.

WHB:  Since our last interview a year and a half ago, there have been major developments, including the passage of PPACA, the Patient Protection and Affordable Care Act. One of the entities created by that act is the Patient Centered Outcomes Research Institute (PCORI). You are one of 15 appointees to that entity’s Methodology Committee. How does PCORI work?

AB: The Patient-Centered Research Institute is a very interesting new entity that is a legislatively enacted non-government organization set up by the Affordable Care Act. There is a board of governors that includes the Directors of the National Institutes of Health (NIH) and the Agency for Healthcare Research and Quality (AHRQ). This new organization is supposed to get hundreds of millions of dollars for research through a per person assessment from Medicare and private insurance plans.

PCORI is formally  outside of goverment, but most of its income is from federal dollars and it reports annually to the Secretary of DHHS and Congress. The entity “sunsets” in 2019. There will be several years to see how it works before it has to be reauthorized.

WHB: What is PCORI supposed to do?

PCORI was envisioned to compare treatments in terms that patients understand – patient-centered research. Most medical research studies whether a therapeutic intervention such as a drug is better than a placebo. But comparative studies, such as whether it’s preferable to use a particular drug among several alternatives, or to do something else entirely, are not often supported. There is no incentive for a drug company, for example, to compare its drug in a head-to-head comparison with a competing drug. What if their drug proves inferior?

WHB: What has PCORI done so far?

AB: The initial members of the board and its methodology commitee have been appointed by the General Accounting Office (GAO), as required by the legislation. It had to incorporate, find a location, hire staff, and set up processes and procedures. Substantively it has been working on some reports and priorities due in mid-2012, including definitions, grant programs, and other early deliverables. It has not yet begun to announce grant programs directly funding research. There are still many unknowns.

WHB:  A surprisingly robust movement, from both sides of the political spectrum, has arisen to bring about PPACA’s repeal or its substantial modification, and the PCORI is controversial in some circles. What do you see as the outcome of this controversy?

AB: My expertise in this area is narrow, and focuses on the science and what the legislation may add to an evidence-based system.

I don’t think that patient-centered research should be a partisan issue. Support for some of the principles of PCORI is shared on both sides of the aisle – everyone wants high quality information about what works for patients. Regardless of whether health care reform is implemented or repealed, it makes sense to support this type of research. Many other countries do something like this.

WHB: Some have expressed the idea that public funds should be spent only on therapies and procedures that have been proven to work and more specifically on therapies and procedures that have been defined as cost-effective by scientific bodies free of conflicts of interest. The current national debates have clearly juxtaposed this position with the argument that the government should not be in the business of “rationing care”. How would you respond to this debate?

AB: I am not a health economist, but it seems to me that we can’t have it both ways. We can’t cut costs if everyone can demand anything that they or their physician wants all the time. We already ration care by controlling access.  In the long run we will need to pay attention to costs and cost-effectiveness as one of the important factors to be considered for public funding.

WHB: Returning to the recommendations of the Preventive Task Forces regarding mammographies for women age 40 through 49, did they characterize the intervention as not cost-effective?

AB: The USPSTF up until now has not made its decisions based on cost or cost-effectiveness. And contrary to most media reports, it did not say that women in the 40-49 age range shouldn’t order mammograms. It said that there are small benefits and some risks; therefore, a physician should not routinely order it, but rather talk to the patient to decide together whether mammography is right for her.

Does that mean it should not be paid for? No, only that the the benefit to risk ratio is closely balanced. If the clinician and patient decide to go for it, the USPSTF would probably say it ought to be covered (although insurance coverage is not their issue). I would say that if a woman has to pay for it out of pocket, it might be useful for her to know what the benefits and risks are for her. When you are making a decision, science and economics should be part of it, but there are also ethical issues, feasibilty, preferences and other concerns as well.

WHB: And your final thoughts on PPACA?

AB: I don’t think anyone is happy about everything in the Act. There is something for everyone to like and dislike. Even many of those critics who oppose the bill in its entirety find a few things to like. However, the section on PCORI is the only place in the vast bill that talks about research and evidence reporting. There are still politically-driven constraints, such as prohibiting cost-effectiveness recommendations and recommendations to withhold funding for particular therapies. But in the long run PCORI could be highly influential in reforming the way we use evidence in clinical practice.

WHB: Thank you, Dr Berg.

Judge Roger Vinson's January 2011 Declaration of PPACA as Unconstitutional

[The Question and Answer session of the first plenary session of the Twenty-Second National Conference on Primary Health Care Access included the question that if a part of PPACA (such as the health insurance mandate) is declared unconstitutional, whether the entire act would be set aside. Because of the relevance of Judge Roger Vinson’s January 2011, the following excerpt, comprising the conclusion of Judge Vinson’s findings, is included as a supplement to the plenary discussion.]

Case No.: 3:10-cv-91-RV/EMT


Senior United States Judge Roger Vinson

The existing problems in our national health care system are recognized by everyone in this case. There is widespread sentiment for positive improvements that will reduce costs, improve the quality of care, and expand availability in a way that the nation can afford. This is obviously a very difficult task. Regardless of how laudable its attempts may have been to accomplish these goals in passing the Act, Congress must operate within the bounds established by the Constitution. Again, this case is not about whether the Act is wise or unwise legislation. It is about the Constitutional role of the federal government.

For the reasons stated, I must reluctantly conclude that Congress exceededthe bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market. That has not been disputed in this case.

The principal dispute has been about how Congress chose to exercise that power here [See footnote 30, below].

Because the individual mandate is unconstitutional and not severable, the entire Act must be declared void. This has been a difficult decision to reach, and I am aware that it will have indeterminable implications. At a time when there is virtually unanimous agreement that health care reform is needed in this country, it is hard to invalidate and strike down a statute titled “The Patient Protection and Affordable Care Act.” As Judge Luttig wrote for an en banc Fourth Circuit in striking down the “Violence Against Women Act” (before the case was appealed and the Supreme Court did the same):

No less for judges than for politicians is the temptation to affirm any statute so decorously titled. We live in a time when the lines between law and politics have been purposefully blurred to serve the ends of the latter. And, when we, as courts, have not participated in this most perniciously machiavellian of enterprises ourselves, we have acquiesced in it by others, allowing opinions of law to be dismissed as but pronouncements of personal agreement or disagreement. The judicial decision making contemplated by the Constitution, however, unlike at least the politics of the moment, emphatically is not a function of labels. If it were, the Supreme Court assuredly would not have struck down the “Gun-Free School Zones Act,” the “Religious Freedom Restoration Act,” the “Civil Rights Act of 1871,” or the “Civil Rights Act of 1875.” And if it ever becomes such, we will have ceased to be a society of law, and all the codification of freedom in the world will be to little avail. (Brzonkala, supra, 169 F.3d at 889. )

In closing, I will simply observe, once again, that my conclusion in this case is based on an application of the Commerce Clause law as it exists pursuant to the Supreme Court’s current interpretation and definition. Only the Supreme Court (or a Constitutional amendment) can expand that.

For all the reasons stated above and pursuant to Rule 56 of the Federal Rules of Civil Procedure, the plaintiffs’ motion for summary judgment (doc. 80) is hereby GRANTED as to its request for declaratory relief on Count I of the Second Amended Complaint, and DENIED as to its request for injunctive relief; and the defendants’ motion for summary judgment (doc. 82) is hereby GRANTED on Count IV of the Second Amended Complaint. The respective cross-motions are each DENIED.

In accordance with Rule 57 of the Federal Rules of Civil Procedure and Title 28, United States Code, Section 2201(a), a Declaratory Judgment shall be entered separately, declaring “The Patient Protection and Affordable Care Act” unconstitutional.

DONE and ORDERED this 31st day of January, 2011.

Case No.: 3:10-cv-91-RV/EMT

/s/ Roger Vinson

ROGER VINSON Senior United States District Judge

[Footnote 30] On this point, it should be emphasized that while the individual mandate was clearly “necessary and essential” to the Act as drafted, it is not “necessary and essential” to health care reform in general. It is undisputed that there are various other (Constitutional) ways to accomplish what Congress wanted to do. Indeed, I note that in 2008, then-Senator Obama supported a health care reform proposal that did not include an individual mandate because he was at that time strongly opposed to the idea, stating that “if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house.”

See Interview on CNN’s American Morning, Feb. 5, 2008, transcript available at: http://transcripts.cnn.com/TRANSCRIPTS/0802/05/ltm.02.html. In fact, he pointed to the similar individual mandate in Massachusetts — which was imposed under the state’s police power, a power the federal government does not have — and opined that the mandate there left some residents “worse off” than they had been before. See Christopher Lee, Simple Question Defines Complex Health Debate, Washington Post, Feb. 24, 2008, at A10 (quoting Senator Obama as saying: “In some cases, there are people [in Massachusetts] who are paying fines and still can’t afford [health insurance], so now they’re worse off than they were . . . They don’t have health insurance, and they’re paying a fine . . .”).

Health Care Reform: How Will it Work? – The 22nd National Conference Revisits 2010's Landmark Legislation (April 18-20, 2011 in San Francisco)

Richard Clover, MD; Dean, University of Louisville School of Public Health

On Monday, April 18, 2011, the 22nd convening of the invitational National Conferences on Primary Health Care Access will take place at the Hyatt Regency San Francisco. Throughout the next three mornings, plenary sessions will be held to examine the impact of 2010’s health insurance reform legislation on the United States primary health care system.

An overview of PPACA, the health insurance reform legislation, and the processes by which plans for its implementation (and the parallel development of strategies to reopen the legislative process) will be presented by the morning’s first panel.

Doctor Richard Clover, Dean of the University of Louisville’s School of Public Health and Information Sciences, will lead the first panel’s discussion.

Later that morning, three dissenting voices will be raised by three physicians who discern fundamental flaws in the legislation,  and will argue, each with a separate approach, to change the direction of health care reform.

Doctors John Geyman, an author and emeritus professor of the University of Washington, whose critiques of PPACA have appeared on this website will lead off the first of three “thought provocateur” sessions on Monday morning. (For access to Doctor Geyman’s arguments  in opposition to PPACA, see: Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 1: Cost Containment).)

Doctor Jonathan Weisbuch, emeritus public health officer for Phoenix’ Maricopa County, Arizona, will propose the repeal of PPACA and Medi-Cal both, replacing them with a simpler expansion of the federal Medicare program.

Doctor John Zweifler, whose article on the subject of health care reform has recently been published by the Journal of Health Care for the Poor and Underserved will provide additional reasons to repeal PPACA.

Later in the morning, Dr Joshua Freeman, Chair of the Department of Family Medicine at the Kansas University Medical Center will present the Twenty-First G. Gayle Stephens Lecture.

The day will conclude by presentation of specific issues in primary health care by Doctor John Boltri of Mercer University and Tim Henderson, MPH of George Mason University.

Scheduled to open the second conference day, Tuesday, April 19, 2011, is a plenary panel entitled “How Will it Work? – PPACA, the Physician Workforce and Medical Education”, which will include Doctors Norman Kahn of the Council of Medical Specialties, Perry A. Pugno of the American Academy of Family Physicians and Thomas Hansen of Creighton University (See 22nd National Conference: Doctors Norman Kahn, Perry A. Pugno and Thomas Hansen to Discuss Physician Workforce in Era of Health Insurance Reform.)

A second plenary panel whose subject is “PPACA and the Community-Based Teaching Hospital will be comprised of Doctors Hector Flores of White Memorial Medical Center in Los Angeles, Sandral Hullett of Cooper Green Hospital in Birmingham, Alabama, and Stephen Cobb, of Exempla Health Systems’ Saint Joseph Health Center in Denver.

The National Conference’s fourth Thought Provocateur will be Kevin Haughton, MD of Providence Health Systems of Olympia, Washington. His talk is “How Might it Work? – The Career of the Primary Care Physician in the Age of Health Care Reform”.

A less controversial section of 2010’s health insurance reform leglslation is the support and funding for the “teaching health center”. A panel entitled “How Will it Work? – A New Era for the Teaching Health Center” will be comprised of Doctors Peter Broderick of Valley Family Medicine Residency of Modesto (California) and Marianne McKennett, Scripps Chula Vista (California); and Kiki Nocella, Ph.D., the CEO of Believe Healh LLC (Valencia, California).

Doctor Michael Prislin, Associate Dean of the University of California, Irvine School of Medicine, will present the 17th J. Jerry Rodos Lecture.

The third day, Wednesday, April 20, 2011, will continue to explore the themes of community-based medical education and primary health care, with a progress report on the Oklahoma University’s innovative medical school campus in Tulsa. A panel entitled “Decentralizing to Where – Issues in and Technical tools for defining Underserved Communities” will be comprised by Marc E. Babitz, MD of the Utah Department of Public Health, Scott Christman of the California Department of Health Services, and William H. Burnett of the Coastal Research Group.

Virginia Fowkes of Stanford University and Doctor Thomas C. Hines of Boston Medical College will lead a discussion entitled “Partnerships in Decentralizing Medical Education: Past Experience and Future Strategies”. It will be followed by a plenary roundtable entitled “Decentralizing Medical Eduation to Promote Primary Health Care Access”, which will include Doctor James Herman of the Penn State University/Milton Hershey School of Medicine.

Doctor Charles North of the University of New Mexico will present the 18th Charles E. Odegaard Lecture.

In the final “Thought Provocateur” session of the National Conference Doctor J. Jerry Rodos will present his observations on health care reform attempts from Franklin Delano Roosevelt to Bill Clinton.

The plenary sessions will be concluded by a summary of themes by Doctor Jay W. Lee of the Memorial Hospital Medical Center of Long Beach, California.

For information on the invitational conference, contact us at [email protected].

Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 5: Summary of Concerns)

As the process of implementing 2010’s federal health care legislation proceeds (see The Implementation Plan for the Patient Protection and Affordable Care and Education Reconciliation Act), debate on the wisdom of the legislation itself continues.

One of the most articulate of the dissenters, whose analytical work has been widely quoted in the press, on television, and on various Internet sites, is that of the Coastal Research Group’s Fellow, Doctor John Geyman. With permission of Dr Geyman, we will publish, each Tuesday in August, 2010 a chapter of a five part series on the problems Dr Geyman predicts will materialize as the Act is implemented.

Each chapter is distilled from Dr Geyman’s newest book, which will be available in both print and e-book formats at commoncouragepress.com.

[Below: the five parts of the series of essays by Dr John Geyman are excerpted from his latest book, published by the Common Courage Press.]

Our last four posts have examined the PPACA from the perspectives of the four main goals of health care reform — cost containment, affordability, improved access and quality of care. Here we draw these goals together in asking whether this legislation delivers enough to be worth the $1 trillion investment over the next 10 years and whether it will really work.

On the positive side of the ledger, the PPACA brings some welcome changes:

• Will extend health insurance to 32 million more people by 2019.

• Provides subsidies to help many lower-income Americans afford health insurance.

• Starting in 2014, expands Medicaid to cover 16 million more lower-income people.

• Provides new funding for community health centers that could enable them to double their current capacity.

• Eliminates cost-sharing for many preventive services.

• Phases out the “doughnut hole” coverage gap for the Medicare prescription drug benefit.

• Will create a new national insurance plan for long-term services: Community Living Assistance Services and Supports (CLASS) program.

• Will establish a nonprofit Patient-Centered Outcomes Research Institute to assess the relative outcomes, effectiveness and appropriateness of different treatments.

• Initiates some limited reforms of the insurance industry, such as prohibiting exclusions based on pre-existing conditions and banning of annual and lifetime limits.

• Contains some provisions to improve reimbursement for primary care physicians and expand the primary care workforce.

On the negative side of the ledger, however, these are some of the reasons that the PPACA will fall so far short of needed health care reform that it is not much better than nothing:

• Surging health care costs will not be contained as cost-sharing increases for patients and their families.

• Uncontrolled costs of health care and insurance will make them unaffordable for a large and growing part of the population.

• At least 23 million Americans will still be uninsured in 2019, with tens of millions more underinsured.

• Quality of care for the U. S. population is not likely to improve.

• Insurance “reforms” are so incomplete that the industry can easily continue to game the system.

• New layers of waste and bureaucracy, without added value, will further fragment the system.

• With its lack of price controls, the PPACA will prove to be a bonanza for corporate stakeholders in the medical-industrial complex.

• Perverse incentives within a minimally-regulated market-based system will still lead to overtreatment with inappropriate and unnecessary care even as millions of Americans forego necessary care because of cost.

• The “reformed” system is not sustainable and will require more fundamental reform sooner than later to rein in the excesses of the market.

How did this latest reform effort get so far off track? Here are three of the major reasons:

• The issues and policy options were framed as the political process was hijacked by the very interests that are largely responsible for today’s cost, access and quality problems in health care. As examples, the drug industry lobbied successfully to avoid any price controls of drugs, as the VA does so well; the insurance industry avoided real rate controls over their premiums and ended up with other loopholes to game the new system; and all of the corporate stakeholders will gain subsidized new markets without significant regulation of the market.

• The quest for bipartisanship was futile as reform got run over in the middle of the road. The big questions cannot be answered in the political center, such as whether health care should be a right or a privilege, or whether health care resources should be allocated based on ability to pay or medical need.

• Market failure was not recognized as the wellspring of our system problems. When it was agreed to “build on the strengths of the present system” instead of more fundamental reform, corporate stakeholders and their lobbyists found willing legislators to craft centrist “remedies” which could be sold to the public as  reform. But the various incremental tweaks of our existing system, such as employer and individual mandates, have failed over the last 20 or 30 years to remedy cost, access and quality problems.  In the absence of real health care reform, we can now expect these kinds of unfavorable outcomes in coming years:

• Soaring costs without effective price controls throughout the system.

• Managed care fails to control costs or improve quality.

• Persistent financial and other access barriers for many millions of Americans.

• Growing backlash by physicians and consumers.

• Gaming of private plans and adverse selection in public plans.

• Consolidation among hospitals sustaining high prices.

• Increased cost-sharing for employees as employers cut back benefits.

• Continued high levels of inappropriate and unnecessary care.

• Added bureaucracy and waste in an even more fragmented and dysfunctional system.

We have yet to learn that an unfettered health care marketplace can only perpetuate our problems, not fix them. Most industrialized nations have learned this many years ago, and are able to achieve better quality of care with improved outcomes for their populations even as they spend much less on health care than we do. We have to conclude that a larger role of government will be required to assure real and sustainable health care reform.

There is a fix in plain sight for our problems — single-payer financing coupled with a private delivery system. The private insurance industry has outlived its usefulness, and is only being kept alive by government subsidies, whether by overpayments of private Medicare plans or this latest provision in the PPACA to pay out nearly half of a trillion dollars in subsidized premiums for their inadequate coverage.

When will we have the political will to face up to our real problems in health care and show that the democratic process can still work?

Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 4: Quality of Care)

As the process of implementing 2010’s federal health care legislation proceeds (see The Implementation Plan for the Patient Protection and Affordable Care and Education Reconciliation Act), debate on the wisdom of the legislation itself continues.

One of the most articulate of the dissenters, whose analytical work has been widely quoted in the press, on television, and on various Internet sites, is that of the Coastal Research Group’s Fellow, Doctor John Geyman. With permission of Dr Geyman, we will publish, each Tuesday in August, 2010 a chapter of a five part series on the problems Dr Geyman predicts will materialize as the Act is implemented.

Each chapter is distilled from Dr Geyman’s newest book, which will be available in both print and e-book formats at commoncouragepress.com.

In our last three posts, we examined how the Patient Protection and Affordable Care Act of 2010 (PPACA) stacks up against the goals of reform for cost containment, affordability and access to care. Here we consider what its likely impact will be on the quality of care, the fourth major goal of the reform effort.

For starters, quality of care in the U.S. is highly variable, and is unsatisfactory for many millions of Americans, as these cross-national comparisons against other nations with one or another form of universal access clearly show:

• The U.S. ranks last among 19 industrialized countries in “amenable mortality rates,” deaths that could have been prevented by timely and effective health care; that translates to about 101,000 excessive deaths per year in this country. (U. S. has most preventable deaths among 19 nations. Health Affairs 27 (1):58-71, 2008)

• The U.S. ranks last among 23 industrialized nations on infant mortality, with rates double those of Iceland, Japan and France. (U.S. health care system performance: A national scorecard. Health Affairs Web Exclusive, W457-475, 2006)

• Lower-income people in this country receive worse care than their higher- income counterparts on 21 of 30 primary care quality measures, four to five times higher rates of disparity compared to Australia and Canada. (The U.S. health care divide. Commonwealth Fund, April 2006)

On the plus side, the PPACA does make some attempts to improve the quality of care through such provisions as these: expanded access to care; elimination of cost-sharing for preventive services; establishing a comparative effectiveness research initiative; expansion of health information technology (HIT); and modification of payment mechanisms (e.g. accountable care organizations, or ACOs and “value modifiers” for physician reimbursement)

But these are important ways that will largely cancel out the impact of these efforts to improve the quality of care:

• We can expect an increase in cost-sharing (with reduced affordability) as employers downgrade the actuarial value of their coverage and as insurers market their underinsurance products in the individual market and through exchanges. A recent study of Medicare Advantage plans found that increased co-payments resulted in fewer outpatient visits, more hospital admissions and longer hospital stays for patients with hypertension, diabetes and a history of acute myocardial infarction. (Increased ambulatory care copayments and hospitalizations among the elderly. N Engl J Med 363 (4):320-8, 2010)

• The critical shortage of primary care physicians and an underfunded primary care infrastructure persist as our specialist-dominated workforce continues to provide more care than is appropriate or necessary, with less coordination and worse outcomes. For optimal quality of care, patients need both primary care and appropriate specialist care. (Closing the divide: How medical homes promote equality in health care: results from the Commonwealth Fund 2006 Health Care Quality Survey)

• The new Patient-Centered Outcomes Research Institute lacks the authority to mandate or even endorse coverage and reimbursement rules for any particular test or treatment. (True or false: Seven concerns about the new health care law. March 31, 2010)

• Perverse incentives will still permeate the system because of largely unchanged reimbursement policies (mostly fee-for-service) and coverage decisions influenced more by politics and lobbying by industry than hard scientific evidence of efficacy and cost-effectiveness. Procedures will continue to be over-reimbursed, primary and cognitive care services will remain under-reimbursed, and there will be little restraint over excess volume of services in most practice settings. These are examples of how big this problem is:

• One-third of U.S. births today are by Caesarian section (compared to a national average of just 5 percent in the 1960s). (Overtreated: More medical care isn’t always better. Associated Press, June 7, 2010)

• About one-third of tests and treatments are inappropriate or unnecessary and often harmful. (Georgraphy and the debate over Medicare reform, Health Affairs Web Exclusive W-103, February 13, 2001)

• Investor-owned hospitals, HMOs, nursing homes and mental health centers provide more expensive care of lower quality than not-for-profit facilities. (The Corrosion of Medicine: Can the Profession Reclaim its Moral Legacy? Monroe, ME. Common Courage Press, 2008, p 37)

• Well-reimbursed imaging procedures are greatly overused, thereby increasing risk of cancer; as an example, a recent report found that Illinois hospitals are using twice as many double CT scans (one with dye, the other without) than the national average, believed by many experts to be unwarranted. (New government report raised questions about CT scans at Illinois hospitals. Chicago Tribune, July 12, 2010)

• Wider adoption of health information technology has not been demonstrated to improve outcomes of care in most non-integrated parts of our health care “system”; most of the increase in medical computing has been driven by financial and billing reasons, not quality of care. And most quality improvement efforts have been based on process measures, such as use of beta blockers after a heart attack or use of hemoglobin A1C in diabetes, without good correlation with actual outcomes. (Hospital computing and the costs and quality of care. A national study.)

• The long-delayed experiments with accountable care organizations and bundled payments are likely to be ineffective in improving quality of care in non-integrated practice settings which involve non-salaried physicians. So despite what we are being asked to believe by supporters of PPACA, we cannot really expect much, if any, improvement in the quality of care for the U.S. population as a result of this legislation.

Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 3: Access to Care)

As the process of implementing 2010’s federal health care legislation proceeds (see The Implementation Plan for the Patient Protection and Affordable Care and Education Reconciliation Act), debate on the wisdom of the legislation itself continues.

One of the most articulate of the dissenters, whose analytical work has been widely quoted in the press, on television, and on various Internet sites, is that of the Coastal Research Group’s Fellow, Doctor John Geyman. With permission of Dr Geyman, we will publish, each Tuesday in August, 2010 a chapter of a five part series on the problems Dr Geyman predicts will materialize as the Act is implemented.

Each chapter is distilled from Dr Geyman’s newest book, which will be available in both print and e-book formats at commoncouragepress.com.

The Patient Protection and Affordable Care Act of 2010 (PPACA) is being touted by its proponents as moving the country to near-universal coverage and a great step ahead in U.S. health care. But what does this really mean? Are the many barriers to care almost a thing of the past?

John Geyman, MD (left), who presented the 12th G. Gayle Stephens Lecture in 2002, with Dr Stephens

On the plus side, the PPACA does offer these welcome provisions:

• Extending health insurance to 32 million more people by 2019.

• Allowing parents to keep their children on their policies until age 26.

• Expansion of Medicaid to cover 16 million more lower-income Americans.

• New funding for community health centers that could allow them to double their patient volume.

However, on the other side of the ledger, there are many problems that will render restricted access to care for tens of millions of Americans, an ongoing and even increasing problem. These examples show how far short of the mark the PPACA falls on access to care:

  1. There will still be 23 million people without any kind of health insurance in 2019.
  2. Federal support for Medicaid expansion will not kick in until 2014.

More than 32 million other Americans will be under-insured in 2019, as a result of these kinds of circumstances:

  • Many younger healthier people, the “Young Invincibles,” will opt out of coverage until they have an accident or get sick.
  • Many people will not be able to afford coverage through either exchanges (which won’t be operational until 2014) or high-risk pools.
  • The new federal temporary high-risk pool is already underfunded and plagued with many problems; at best, it will be available for up to 7 million uninsured people, but more likely for only about 200,000 or 3 percent of the target population. (Merlis, M. Health coverage for the high-risk uninsured: Policy options for design of the temporary high-risk pool. National Institute for Health Care Reform. May 27, 2010.)
  • The actuarial value of insurance plans for most of the newly “insured” will be as low as 60 to 70 percent (i.e. insurers leave 30 percent to 40 percent of the bill with patients and their families).
  • Even those fortunate enough to have employer-sponsored (ESI) coverage will find their plans costing more, covering less, and more difficult to afford; the Congressional Budge Office projects that the average family premium in the ESI market in 2016 will cost more than $20,000, not including deductibles and other out-of-pocket expenses. (Congressional Budget Office. An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act. Nov. 30, 2009.)
  • Access to care will further deteriorate as a result of 36 billion in Medicare and Medicaid cuts to safety-net hospitals. We can expect closure of some of these critical facilities that provide a wide range of services that other hospitals find too unprofitable to provide, including kidney dialysis, cancer treatment and mental health care.
  • Although the PPACA does call for an increase in reimbursement for primary care physicians, that won’t happen until 2013, and will then last only two years — just a small gesture toward the nation’s growing crisis in primary care.
  • The U.S. is facing a shortage of 35,000 to 44,000 primary care physicians for adults by 2025 (Colwill, J, Cultice, JM, Kruse, RL. Will generalist physician supply meet demands of an increasing and aging population? Health Affairs [Millwood] 27: w232-41, 2008.) An increasing number of people with insurance coverage cannot find a primary care physician to take care of them, especially those on Medicare or Medicaid, due to low reimbursement in those programs.
  • Since the PPACA calls for phased cuts in overpayments to private Medicare Advantage plans over the next few years, enrollees will face cuts in benefits and rising premiums.
  • As they confront deficits of 127 billion over the next two fiscal years, states are making draconian cuts in Medicaid across the country that will only aggravate current barriers to care. State appeals to the federal government for relief of Medicaid costs are now caught in a political crossfire threatening further unraveling of Medicaid funding. (Solomon, D. States face new pinch as stimulus ebbs. Wall Street Journal, June 23, 2010: A5.)
  • A majority of states outsource their Medicaid programs to private insurers that frequently create profits by cutting services. A recent report found that 2.7 million children on Medicaid in nine states were not receiving required screenings and immunizations. In Florida, the insurer WellCare paid 40 million in restitution to the state after it acknowledged that it had set up a subsidiary to make it appear that it was spending more on health care than it actually was. (MacGillis, A. Some states say they’re not receiving the Medicaid services they’re paying for. The Washington Post on line, July 8, 2010.)
  • Despite the hype we hear about “near-universal” access just down the road with PPACA, the above leads us to believe that access to care will remain inadequate for much of the population. In our next post, we will look at what this year’s health care “reform” legislation means for the quality of care Americans receive.

Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 2: Affordability)

As the process of implementing 2010’s federal health care legislation proceeds (see The Implementation Plan for the Patient Protection and Affordable Care and Education Reconciliation Act), debate on the wisdom of the legislation itself continues.

One of the most articulate of the dissenters, whose analytical work has been widely quoted in the press, on television, and on various Internet sites, is that of the Coastal Research Group’s Fellow, Doctor John Geyman. With permission of Dr Geyman, we will publish, each Tuesday in August, 2010 a chapter of a five part series on the problems Dr Geyman predicts will materialize as the Act is implemented.

Each chapter is distilled from Dr Geyman’s newest book, which will be available in both print and e-book formats at commoncouragepress.com.

In our last post (Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 1: Cost Containment)), we looked at some of the uncontrolled drivers of rapidly rising health care costs despite all the assurances of our politicians supporting the new health care law, the Patient Protection and Affordability Care Act of 2010 (PPACA).

During the long run-up to this bill, President Obama told us that it would save the average American family $2,500 a year on insurance premiums (a claim that the Congressional Budget Office later dispelled as untrue (1), instead projecting a $2,300 increase in premium costs for the average family).

The inconvenient fact (2) is that premiums for families enrolled in employer-sponsored health plans from 2000 to 2008 increased by 97 percent, while those enrolled in individual plans increased by 90 percent; during this period, insurers’ payments to providers rose by 72 percent, medical inflation increased by 39 percent, wages grew by 29 percent and overall inflation went up by 21 percent.

According to a recent survey (3) by the Council of Insurance Agents and Brokers, more than one-half of smaller employers with 50 or fewer employees will face premium hikes for group policies in the 11 percent to 20 percent range for 2011.

So how in the world can we expect the new health care “reform” legislation to actually make health care and health insurance more affordable?

The new law promised not only cost savings but also provided for $476 billion (almost one-half of the total $1 trillion cost of the law in its first 10 years) in new federal subsidies to help lower- and middle-income Americans to pay for health insurance. We need to ask whether the promised cost savings are likely to materialize and whether the subsidies will help that much.

For openers, cost savings are an illusion. Supporters of PPACA assure us that several approaches will contain health care costs – such as an increase in wellness and prevention programs, wider application of health information technology, and experimentation with such initiatives as “accountable care organizations” and tweaks to the fee-for-service reimbursement system. Most are delayed for years into the future and none have yet been demonstrated to save money for patients and their families.

The cost of health care is certain to rise exponentially as far as we can see, since the market controls prices and the volume of services in a deregulated non-system. And insurance premiums are also certain to rise rapidly at rates way above the cost of living and median household income based on various industry-friendly loopholes in the law and gaming by the industry. These examples show how easy it will be for the industry to continue to exploit the public through both private and public programs:

• Under the new law, insurers can raise premiums based on age (by a 3:1 ratio), by geographic area, by the number of family members, and by tobacco use (by a 1.5 to 1 ratio).

• Many insurers are now aggressively marketing “wellness plans” in both private and public plans. One example is the Healthways SilverSneaker’s membership “fitness plan” (4) for seniors enrolled in Medicare Advantage plans. This is a clever strategy for insurers in two ways – they cherry-pick healthier seniors without infirmities that prevent their participation in such programs and then they charge 20 percent higher premiums (5) to those seniors not enrolled in fitness programs.

• Many healthier younger people will gamble with being uninsured until they get sick, in order to avoid paying fines for noncompliance with the individual mandate. This has already happened in Massachusetts over the four years since the “Massachusetts Miracle” was adopted in 2006. Since then, the number of short-term insurance buyers has increased by four-fold (6), getting insurance only after they have health care problems, then dumping coverage after they get care. This has increased the cost of insurance for other people and costs the state’s program an additional $300 million a year.

People with employer-sponsored group coverage will also take hits. As employers confront hikes in the costs of group coverage, they will pass along these costs (7) to their employees in the form of increased co-payments and deductibles, often with other restrictions in coverage. Middle-income families will be especially hard-hit if they have so-called Cadillac plans – those with annual premiums in excess of $8,500 for individuals and $23,000 for families. Employers will be faced with a tax on such plans beginning in 2013, when we can expect them to avoid the tax by limiting coverage and forcing more cost-sharing on their employees.

But won’t the nearly half a trillion dollars in federal subsidies over 10 years make health care affordable for lower- and middle-income Americans? Here too the story is not what we are being led to believe by pundits and supporting politicians. Subsidies will not start until 2014, and then are not available to people already covered by employer-sponsored insurance, those qualifying for Medicaid (incomes less than 133 percent of the federal poverty level, or FPL) and those earning more than 400 percent of FPL. Subsidies can only be obtained by those purchasing coverage on their own on an Exchange.

The Commonwealth Fund has established useful criteria to assess affordability of health care vs. other costs of living. When put up against other basic necessities of life, such as food, housing, and one car to get to work, health care costs above 10 percent of family income become a hardship level (8), as are medical expenses above 5 percent of family income for lower-income adults below 200 percent of the federal poverty level and those with health plan deductibles above 5 percent of income.

The Kaiser Family Foundation has developed a useful Health Reform Subsidy Calculator, by which people can readily determine their own health care costs. As an example, a family of four in with an income of $60,000 in 2014 can expect to be responsible for an insurance premium of $16,858 as well as $6,250 in out-of-pocket costs, which together would account for 18.6 percent of their household income. And those costs may well be higher due to restricted coverage of their own plan and changes in cost-sharing requirements. By comparison, seniors were paying an average of 15 percent of their annual income on premiums and out-of-pocket health care costs in 1965 when Medicare was enacted. (Blumenthal, D., et al. “Renewing the Promise: Medicare & its Reform.” New York, Oxford University Press, 1988.)

So far we have found little evidence that health care “reform” circa 2010 will contain health care costs or make health care more affordable. In our next post we will consider how much we can believe about claims of improved access to care.

(1) (Hemingway, M. Obama promised $2,500 health care savings; CBO says plan is $2,300 price increase. Washington Examiner on line, March 10, 2010)

(2) (Health Care for America Now! (HCAN). Insurance industry inflates rates while falsely blaming new health care law. June 2010)

(3) (Wojcik, J. Group health insurance rates on the rise: Survey. Business Insurance, June 3, 2010)

(4) (Blue Shield of California. Blue Shield of California to offer award-winning fitness program to Medicare beneficiaries in San Bernardino. January 18, 2010)

(5) (Britt, R. Experts: Critical loophole in Senate health bill. Market Watch. January 7, 2010)

(6) (Lazar, K. Short-term insurance buyers drive up cost in Mass. The Boston Globe, June 30, 2010)

(7) (Herbert, B. Op-Ed. A less than honest policy. New York Times, December 29, 2009)

(8) (Schoen, C, Doty, M, Collins, SR, Holmgren, AL. Commonwealth Fund. Insured but not protected: How many adults are underinsured, the experiences of adults with inadequate coverage mirror those of their uninsured peers, especially among the chronically ill. Health Affairs Web Exclusive, June 14, 2005)

Activities of the Fellows and Senior Fellows of the Coastal Research Group: Dr John Geyman Leads Forces of Dissent Against PPACA (Chapter 1: Cost Containment)

As the process of implementing 2010’s federal health care legislation proceeds (see The Implementation Plan for the Patient Protection and Affordable Care and Education Reconciliation Act), debate on the wisdom of the legislation itself continues.

One of the most articulate of the dissenters, whose analytical work has been widely quoted in the press, on television, and on various Internet sites, is that of the Coastal Research Group’s Fellow, Doctor John Geyman. With permission of Dr Geyman, we will publish, each Tuesday in August, 2010 a chapter of a five part series on the problems Dr Geyman predicts will materialize as the Act is implemented.

Each chapter is distilled from Dr Geyman’s newest book, which will be available in both print and e-book formats at commoncouragepress.com.

Dr John Geyman

The passage of the Patient Protection and Affordable Care Act of 2010 (PPACA), our new health care legislation, in March was hailed by its supporters as an historic event of the magnitude of Social Security and Medicare. But four months later, it remains controversial, with repeated polls showing three large groups of divisive opinion, including those who would work to repeal it and others who believe that it will make no difference. The Democrats have launched a $125 million PR campaign to defend the new law amidst growing signs that many Democrats facing re-election are failing to get political traction on the issue. (1)

We are being advised by many to “wait and see” how this complex new bill plays out over the next five to ten years, but we can already know what its outcomes will be. More than 30 years of health policy science, including documentation of the repeated failures of incremental changes built into the new law, together with well-entrenched trends in our market-based system, allow us to project its outcomes with confidence. For this legislation has been molded and crafted by the political power and money of corporate stakeholders in the medical-industrial complex.

Five previous posts [published elsewhere] in 2009 described the uneasy “alliance” of the five biggest players — the insurance industry, the drug industry, the hospital industry, business and organized medicine. They will do just fine with the new law at the expense of patients, families and Main Street.

Health care “reform” this time around was intended to address these four basic system problems: (1) containing health care costs, (2) making health care more affordable, (3) increasing access to care, and (4) improving the quality of care. This post introduces a series of five that will examine how well the PPACA will do on each of these four goals, followed by an overall assessment of the law. These posts will draw in part from my new book Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform, soon to be released by Common Courage Press in both print and eBook format.

Continued Unrestrained Drivers of Health Care Costs

These are some of the many reasons that we can already conclude that health care costs will continue to run out of control at rates far exceeding the costs of living and median household incomes.

• No price controls. Wall Street has already factored in rapid expansion of markets for drugs, medical devices and other services in a system of expanded access. There is also a long line forming of providers of information technology and administrative services that will exploit the complex implementation of this law.

• Lack of control over perverse incentives that drive increased volume of services. These in turn are driven by retention of fee-for-service (FFS) reimbursement that encourages physicians and other providers to offer more services than are medically appropriate or necessary.

• No effective mechanism to rein in marginal or ineffective technologies. Coverage policies for new drugs and medical devices are still lax and not subject to rigorous evidence-based criteria for either efficacy or cost-effectiveness.

Although the PPACA does call for a Patient-Centered Outcomes Research Institute, its role is already neutered by not having the power to mandate or even endorse coverage or reimbursement rules for any particular treatment. (2)

The dominant business model of health care prevails, with many facilities and services remaining for-profit and investor-owned and with an ongoing trend for increasing consolidation within industries.

The PPACA has grandfathered-in specialty hospitals, typically physician-owned facilities that focus on well-reimbursed procedures in such areas as cardiology and orthopedics, whereby physicians can “triple dip,” earning high incomes as providers, owners and investors.

More preventive services will further fuel health care inflation. While the PPACA does provide new coverage for many preventive services, this will lead to increased costs due to additional diagnostic and treatment services engendered. (3)

Private insurers can’t contain health care costs, even where they have dominant market power. A 2009 report by the Congressional Research Service, “The Market Structure of the Health Insurance Industry,” concludes that:

The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. (4)

There are no controls over premium rate increases by insurers. Despite the outcry by government officials, annual premium rates are escalating at rates up to 56 percent (5), and there is no end in sight for continued exorbitant rate increases. Insurers will continue to game the system by extracting maximal profits and offering reduced coverage with actuarial values (the amounts insurers actually pay in coverage) as low as 60 or 70 percent.

National health care spending will grow unabated despite the passage of PPACA. The Centers for Medicare and Medicaid Services (CMS) projects that overall national health expenditures (NHE) will increase from its present 17 percent of GDP to 21 percent in 2019, a total of $4.470 trillion. (6) (Foster, RS. Office of the Actuary. Estimated financial effects of the “Patient Protection and Affordable Care Act,” as Amended. Centers for Medicare and Medicaid Services, April 22, 2010)

These well-documented trends leave no room to think that health care “reform” will have any chance to contain health care costs. Instead, health care inflation will be exacerbated by all the new incentives and inefficiencies in the new “system.” In our next post we will examine the impact of these trends on affordability of health care.

(1) Allen, M. Dems launch $125 M health campaign. Politico, June 7, 2010

(2) Kaiser Health News staff. True or false: Seven concerns about the new health law, March 31, 2010

(3) Russell, L. Preventing chronic disease: An important investment, but don’t count on cost savings. Health Affairs 28 (1): 42-5, 2009

(4) Austin, DA, Hungerford, TL. The Market Structure of the Health Insurance Industry. Washington, D.C. Congressional Research Service, November 17, 2009

(5) Johnson, A. Fight over health-care premiums heats up. Wall Street Journal, February 19, 2010: A6

(6) Foster, RS. Office of the Actuary. Estimated financial effects of the “Patient Protection and Affordable Care Act,” as Amended. Centers for Medicare and Medicaid Services, April 22, 2010

Issues in Implementation of Health Care Reform Legislation: Part One – Student Indebtedness

Resized image from www.pbs.org
Resized image from www.pbs.org

Over the past 21 years, the National Conferences on Primary Health Care Access have identified many factors that have resulted in observable imbalances between primary and subspecialty medical care and imbalances between public health needs and the resources applied to them.

The most recent National Conference (April 2010) examined some of the consequences of the recent legislation passed by Congress and signed by President Barack Obama.

The legislation enacted is the most comprehensive in more than a generation, and provisions of it should bring about important improvements in primary health care access. Even so, a significant percentage of the American population is skeptical that the legislation will be effective, and a large number doubt that what the legislation contained is what should have been enacted. Like Medicare and Medicaid, both enacted 45 years ago, it is quite likely that many of its consequences will be unintended and unexpected.

Over the next several months, in preparation for the 22nd National Conference on Primary Health Care Access in San Francisco (April 18-20, 2011), we will study some of the provisions that seem particularly hopeful for improving primary health care access. Likewise, we plan to propose several issues for discussion that perhaps were inadequately discussed during the recent legislative process.

The first of these inadequately addressed issues is the matter of student indebtedness (particularly the amount of loans that have been amassed by students pursuing medical degrees) and its potential impact on physician supply and the processes by which medical school graduates select their specialties.

As an introduction to the subject, we will examine a case study of the combined student debt of a married professional couple – one a physician and one a lawyer. (See Drowning in Student Debt: Young Professionals at the End of Graduate School.)

The Implementation Plan for the Patient Protection and Affordable Care and Education Reconciliation Act

The following timeline was presented as part of the First Plenary Roundtable at the Twenty-First National Conference on Primary Health Care Access. It was developed by the American Academy of Family Physicians and is reprinted, courtesy of the AAFP and its Director Of Education, Perry A. Pugno, MD, MPH. Non-substantive stylistic modifications have been made.

Implementation Timeline

Reflecting the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act


U. S. President Barack Obama signs the Patient Protection and Affordable Care Ac
U. S. President Barack Obama signs the Patient Protection and Affordable Care Ac

Immediate Access to Insurance for Uninsured Individuals with a Pre-Existing Condition. Provides eligible individuals access to coverage that does not impose any coverage exclusions for pre-existing health conditions. This provision ends when Exchanges are operational. Effective 90 days after enactment.

Small Business Tax Credit. Initiates the first phase of the small business tax credit for qualified small employers for contributions to purchase health insurance for employees. The credit is up to 35 percent of the employer?s contribution to provide health insurance for employees. There is also up to a 25 percent credit for small nonprofit organizations. Effective calendar year 2010. (Later, when Exchanges are operational, tax credits will be up to 50 percent of premiums.)

Eliminating Pre-Existing Condition Exclusions for Children. Bars health insurance companies from imposing pre-existing condition exclusions on children?s coverage. Effective six months after enactment and applying to all employer plans and new plans in the individual market. (This provision will apply to all people in 2014).

Rebates for the Medicare Part D ‘Donut Hole.’ Provides a $250 rebate check for all Part D enrollees who enter the “doughnut hole”. Currently, the coverage gap falls between $2,830 and $6,440 in total drug spending. Effective calendar year 2010. (Beginning in 2011, institutes a 50 percent discount on brand-name drugs and begins generic coverage in the doughnut hole; fills the doughnut hole by 2020.)

Prohibiting Rescissions. Prohibits abusive practices whereby health insurance companies rescind existing health insurance policies when a person gets sick as a way of avoiding covering the costs of enrollees? health care needs. Effective six months after enactment and applying to all new and existing plans.

Eliminating Lifetime Limits. Prohibits insurers from imposing lifetime limits on benefits. Effective six months after enactment and applying to all plans.

Regulating Use of Annual Limits. Tightly regulates plans’ use of annual limits to ensure access to needed care in all group plans and all new individual plans. These tight restrictions will be defined by the Secretary of Health and Human Services. Effective six month after enactment and applying to new plans in the individual market and all employer plans. (When the Exchanges are operational in 2014, the use of annual limits will be banned for new plans in the individual market and all employer plans.)

Covering Preventive Health Services. All new group health plans and plans in the individual market must provide first dollar coverage for preventive services. Effective six months after enactment.

Improving Prevention Health Coverage. Requires State Medicaid programs to cover tobacco cessation services for pregnant women. Effective Fiscal Year 2011.

Extending Coverage for Young Adults. Requires any group health plan or plan in the individual market that provides dependent coverage for children to continue to make that coverage available until the child turns 26 years of age. Effective six months after enactment.

Bringing Down the Cost of Health Care Coverage. Health plans, including grandfathered plans, must annually report on the share of premium dollars spent on medical care and provide consumer rebates for excessive medical loss ratios. Effective January 1, 2011

Reducing the Cost of Covering Early Retirees. Creates a new temporary reinsurance program to help companies that provide early retiree health benefits for those ages 55-64 offset the expensive cost of that coverage. Effective 90 days after enactment.

Strengthening Community Health Centers. Provides funds to build new and expand existing community health centers. Effective Fiscal Year 2011.

Strengthening the Primary Care Workforce. Expands funding for scholarships and loan repayments for primary care practitioners working in underserved areas participating in the National Health Service Corps. Effective Fiscal Year 2011.

Improving Consumer Assistance. Requires that any new group health plan or new plan in the individual market implement an effective appeals process for coverage determinations and claims. Effective six months after enactment.

Improving Consumer Information through the Web. Requires the Secretary of HHS to establish an Internet website through which residents of any State may identify affordable health insurance coverage options in that State. The website will also include information for small businesses about available coverage options, reinsurance for early retirees, small business tax credits, and other information of interest to small businesses. So-called “mini-med” or limited-benefit plans will be precluded from listing their policies on this website. Effective not later than July 1, 2010.

Improving Consumer Assistance. Requires the Secretary of Health and Human Services (HHS) to award grants to States to establish health insurance consumer assistance or ombudsman programs to receive and respond to inquiries and complaints concerning health insurance coverage. Effective upon enactment.

Cracking Down on Health Care Fraud. Requires enhanced screening procedures for health care providers to eliminate fraud and waste in the health care system. Many provisions are effective on the date of enactment.

Improving Public Health Prevention Efforts. Creates an interagency council to promote healthy policies at the federal level and establishes a prevention and public health investment fund to provide an expanded and sustained national investment in prevention and public health programs. Effective not later than July 1, 2010.

Strengthening the Quality Infrastructure. Additional resources provided to HHS to develop a national quality strategy and support quality measure development and endorsement for the Medicare, Medicaid and CHIP quality improvement programs. Strategy submitted not later than January 1, 2011.

Extending Payment Protections for Rural Providers. Extends Medicare payment protections for small rural hospitals, including hospital outpatient services, lab services, and facilities that have a low-volume of Medicare patients, but play a vital role in their communities. Effective calendar year 2010.

Establishing a Patient-Centered Outcomes Research Institute. Establish a private, non-profit institute to identify national priorities and provide for research to compare the effectiveness of health treatments and strategies. Effective date of enactment.

Ensuring Medicaid Flexibility for States. A new option allowing States to cover parents and childless adults up to 133 percent of the Federal Poverty Level (FPL) and receive current law Federal Medical Assistance Percentage (FMAP) will take effect. Effective April 1, 2010.

Non-Profit Hospitals. Establishes new requirements applicable to nonprofit hospitals beginning in 2010, including periodic community needs assessments. Effective on the date of enactment.

Expanding the Adoption Credit and Adoption Assistance Program. Increases the adoption tax credit and adoption assistance exclusion by $1,000, makes the credit refundable, and extends the credit through 2011. Effective for tax years beginning after December 31, 2009.

Encouraging Investment in New Therapies. A two-year temporary credit subject to an overall cap of $1 billion to encourage investments in new therapies to prevent, diagnose, and treat acute and chronic diseases. Available for qualifying investments made in 2009 and 2010.

Tax Relief for Health Professionals with State Loan Repayment. Excludes from gross income payments made under any State loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas. Effective for amounts received by an individual in taxable years beginning after December 31, 2008.

Excluding from Income Health Benefits Provided by Indian Tribal Governments. Excludes from gross income the value of specified Indian tribal health benefits. Effective for benefits and coverage provided after the date of enactment.

Establishing a National Health Care Workforce Commission. Establishes an independent National Commission to provide comprehensive, nonbiased information and recommendations to Congress and the Administration for aligning federal health care workforce resources with national needs. Effective not later than September 30, 2010.

Strengthening the Health Care Workforce. Expands and improves low-interest student loan programs, scholarships, and loan repayments for health students and professionals to increase and enhance the capacity of the workforce to meet the range of patients? health care needs. Effective calendar year 2010.

Special Deduction for Blue Cross Blue Shield (BCBS). Requires that non-profit BCBS organizations have a medical loss ratio of 85 percent or higher in order to take advantage of the special tax benefits provided to them under Internal Revenue Code (IRC) Section 833, including the deduction for 25 percent of claims and expenses and the 100 percent deduction for unearned premium reserves. Effective for tax years beginning after December 31, 2009.

Indoor Tanning Services Tax. Imposes a ten percent tax on amounts paid for indoor tanning services. Indoor tanning services are services that use an electronic product with one or more ultraviolet lamps to induce skin tanning. Effective for services on or after July 1, 2010.


Discounts in the Part D ‘Doughnut Hole.’ Provides a 50 percent discount on all brand-name drugs and biologics in the donut hole and begins phasing in additional discounts on brand-name and generic drugs to completely fill the donut hole by 2020 for all Part D enrollees. Effective January 1, 2011.

Improving Preventive Health Coverage. Provides a free, annual wellness visit and personalized prevention plan services for Medicare beneficiaries and eliminates cost-sharing for preventive services. Effective January 1, 2011.

Increasing Reimbursement for Primary Care. Provides a 10 percent Medicare bonus payment for primary care physicians and general surgeons. Effective January 1, 2011.

Improving Health Care Quality and Efficiency. Establishes a new Center for Medicare & Medicaid Innovation to test innovative payment and service delivery models to reduce health care costs and enhance the quality of care provided to individuals. Effective January 1, 2011.

Providing New, Voluntary Options for Long-Term Care Insurance. Creates a long-term care insurance programs to be financed by voluntary payroll deductions to provide benefits to adults who become disabled. Effective January 1, 2011.

Improving Transitional Care for Medicare Beneficiaries. Establishes the Community Care Transitions Program to provide transition services to high-risk Medicare beneficiaries. Effective January 1, 2011

Transitioning to Reformed Payments in Medicare Advantage. Freezes 2011 Medicare Advantage payment benchmarks at 2010 levels to begin transition. Continues to reduce Medicare Advantage benchmarks in subsequent years relative to current levels. Benchmarks will vary from 95 percent of Medicare spending in high-cost areas to 115 percent of Medicare spending in low-cost areas with higher benchmarks for high-quality plans. Changes are phased-in over three, five or seven years, depending on the level of payment reductions. Effective January 1, 2011.

Increasing Training Support for Primary Care. Establishes a Graduate Medical Education policy allowing unused training slots to be re-distributed for purposes of increasing primary care training at other sites. Effective July 1, 2011.

Expanding Primary Care, Nursing, and Public Health Workforce. Increases access to primary care by adjusting the Medicare Graduate Medical Education program. Primary care and nurse training programs are also expanded to increase the size of the primary care and nursing workforce. Ensures that public health challenges are adequately addressed. Effective July 2011.

Increasing Access to Home and Community Based Services. The new Community First Choice Option, which allows States to offer home and community based services to disabled individuals through Medicaid rather than institutional care. Effective October 1, 2011.

Reporting Health Coverage Costs on Form W-2: Requires employers to disclose the value of the benefit provided by the employer for each employee?s health insurance coverage on the employee?s annual Form W-2. Effective for tax years beginning after December 31, 2010.

Standardizing the Definition of Qualified Medical Expenses. Conforms the definition of qualified medical expenses for HSAs, FSAs, and HRAs to the definition used for the itemized deduction. An exception to this rule is included so that amounts paid for over-the-counter medicine with a prescription still qualify as medical expenses. Effective for tax years beginning after December 31, 2010.

Increased Additional Tax for Withdrawals from Health Savings Accounts and Archer Medical Savings Account Funds for Non-Qualified Medical Expenses. Increases the additional tax for HSA withdrawals prior to age 65 that are not used for qualified medical expenses from 10 to 20 percent. The additional tax for Archer MSA withdrawals not used for qualified medical expenses would increase from 15 to 20 percent. Effective for tax years beginning after December 31, 2010.

Cafeteria Plan Changes. Creates a Simple Cafeteria Plan to provide a vehicle through which small businesses can provide tax?free benefits to their employees. This would ease the small employer?s administrative burden of sponsoring a cafeteria plan. The provision also exempts employers who make contributions for employees under a simple cafeteria plan from pension plan nondiscrimination requirements applicable to highly compensated and key employees. Effective for tax years beginning after December 31, 2010.

Pharmaceutical Manufacturers Fee. Imposes an annual, non-deductible fee on the pharmaceutical manufacturing industry allocated according to market share and not applying to companies with sales of branded pharmaceuticals of $5 million or less. Effective for tax years beginning after December 31, 2010.


Encouraging Integrated Health Systems. Implements physician payment reforms that enhance payment for primary care services and encourage physicians to join together to form “accountable care organizations” to gain efficiencies and improve quality.

Linking Payment to Quality Outcomes. Establishes a hospital value-based purchasing program to incentivize enhanced quality outcomes for acute care hospitals. Also, requires the Secretary to submit a plan to Congress by 2012 on how to move home health and nursing home providers into a value-based purchasing payment system.

Reducing Avoidable Hospital Readmissions. Directs CMS to track hospital readmission rates for certain high-cost conditions and implements a payment penalty for hospitals with the highest readmission rates.


Improving Preventive Health Coverage. Creates incentives for State Medicaid programs to cover evidence-based preventive services with no cost-sharing.

Administrative Simplification. Health plans must adopt and implement uniform standards and business rules for the electronic exchange of health information to reduce paperwork and administrative burdens and costs.

Encouraging Provider Collaboration. Establishes a national pilot program on payment bundling to encourage hospitals, doctors, and post-acute care providers to work together to achieve savings for Medicare through increased collaboration and improved coordination of patient care.

Increasing Medicaid Payment for Primary Care. Requires states to pay primary care physicians the same rate Medicare pays, and fully federally funds any additional state costs.

Limiting Health Flexible Savings Account Contributions. Limits the amount of contributions to health FSAs to $2,500 per year, indexed by CPI for subsequent years.

Eliminating Deduction for Employer Part D Subsidy. Eliminates the deduction for the subsidy for employers who maintain prescription drug plans for their Medicare Part D eligible retirees.

Increased Threshold for Claiming Itemized Deduction for Medical Expenses. Increases the income threshold for claiming the itemized deduction for medical expenses from 7.5 to 10 percent. Individuals over 65 would be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.

Additional Hospital Insurance Tax for High Wage Workers. Increases the hospital insurance tax rate by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). Expands the tax to include a 3.8 percent tax on net investment income in the case of taxpayers earning over $200,000 ($250,000 for joint returns).

Medical Device Excise Tax. Establishes a 2.3 percent excise tax on the first sale for use of a medical device. Excepted from the tax are eye glasses, contact lenses, hearing aids, and any device of a type that is generally purchased by the public at retail for individual use.

Limiting Executive Compensation. Limits the deductibility of executive compensation under Section 162(m) for insurance providers if at least 25 percent of the insurance provider?s gross premium income from health business is derived from health insurance plans that meet the minimum creditable coverage requirements. The deduction is limited to $500,000 per taxable year and applies to all officers, employees, directors, and other workers or service providers performing services, for or on behalf of, a covered health insurance provider. This provision is effective beginning in 2013 with respect to services performed after 2009.

Fee for patient-centered outcomes research. Annual fee becomes effective on insured and self- insured plans to fund the patient centered outcomes research trust fund.


Reforming Health Insurance Regulations. Implements strong health insurance reforms that prohibit insurance companies from engaging in discriminatory practices that enable them to refuse to sell or renew policies due to an individual?s health status. Insurers can no longer exclude coverage for treatments based on pre-existing health conditions. It also limits the ability of insurance companies to charge higher rates due to heath status, gender, or other factors. Premiums can vary only on age (no more than 3:1), geography, family size, and tobacco use.

Eliminating Annual Limits. Prohibits insurers from imposing annual limits on the amount of coverage an individual may receive.

Ensuring Coverage for Individuals Participating in Clinical Trials. Prohibits insurers from dropping coverage because an individual chooses to participate in a clinical trial and from denying coverage for routine care that they would otherwise provide just because an individual is enrolled in a clinical trial. Applies to all clinical trials that treat cancer or other life-threatening diseases.

Establishing Health Insurance Exchanges. Opens health insurance Exchanges in each State to the individual and small group markets. This new venue will enable people to comparison shop for standardized health packages. It facilitates enrollment and administers tax credits so that people of all incomes can obtain affordable coverage.

Ensuring Choice through a Multi-State Option. Provides a choice of coverage through a multi- State plan, available nationwide, and offered by private insurance carriers under the supervision of the Office of Personnel Management.

Providing Health Care Tax Credits. Makes premium tax credits available through the Exchange to ensure people can obtain affordable coverage. Credits are available for people with incomes above Medicaid eligibility and below 400 percent of poverty who are not eligible for or offered other acceptable coverage. They apply to both premiums and cost-sharing to ensure that no family faces bankruptcy due to medical expenses again.

Ensuring Choice through Free Choice Vouchers. Workers who qualify for an affordability exemption to the individual responsibility policy but do not qualify for tax credits can take their employer contribution and join an Exchange plan.

Promoting Individual Responsibility. Requires most individuals to obtain acceptable health insurance coverage or pay a penalty of $95 for 2014, $325 for 2015, $695 for 2016 (or, up to 2.5 percent of income in 2016), up to a cap of the national average bronze plan premium. Families will pay half the amount for children, up to a cap of up to a cap of $2,250 per family. After 2016, dollar amounts are indexed. If affordable coverage is not available to an individual, they will not be penalized.

Promoting Employer Responsibility. Requires employers with 50 or more employees who do not offer coverage to their employees to pay $2,000 annually for each full-time employee over the first 30 as long as one of their employees receives a tax credit. Precludes waiting periods over 90 days. Requires employers who offer coverage but whose employees receive tax credits to pay $3,000 for each worker receiving a tax credit up to an aggregate cap of $2,000 per full-time employee.

Increasing Access to Medicaid. Medicaid eligibility will increase to 133 percent of poverty for all non-elderly individuals to ensure that people obtain affordable health care in the most efficient and appropriate manner. States will receive 100 percent federal funding for the first three years of this coverage expansion.

Small Business Tax Credit. Implements the second phase of the small business tax credit for qualified small employers.

Quality Reporting for Certain Providers. Places certain providers – including ambulatory surgical centers, long-term care hospitals, inpatient rehabilitation facilities, inpatient psychiatric facilities, PPS-exempt cancer hospitals and hospice providers – on a path toward value-based purchasing by requiring the Secretary to implement quality measure reporting programs in these areas and also pilot test value-based purchasing for each of these providers in subsequent years.

Health Insurance Provider Fee. Imposes an annual, non-deductible fee on the health insurance sector allocated across the industry according to market share. The fee does not apply to companies whose net premiums written are $25 million or less.


Continuing Innovation and Lower Health Costs. Establishes an Independent Payment Advisory Board to develop and submit proposals to Congress and the private sector aimed at extending the solvency of Medicare, lowering health care costs, improving health outcomes for patients, promoting quality and efficiency, and expanding access to evidence-based care.

Paying Physicians Based on Value Not Volume. Creates a physician value-based payment program to promote increased quality of care for Medicare beneficiaries.


High-Cost Plan Excise Tax. Imposes an excise tax of 40 percent on insurance companies and plan administrators for any health insurance plan that is above the threshold of $10,200 for self-only coverage and $27,500 for family plans. The tax would apply to the amount of the premium in excess of the threshold. The threshold would be indexed at CPI-U plus one percentage point for 2019 and CPI for years thereafter. An additional threshold amount of $1,650 for singles and $3,450 for families is available for retired individuals over the age of 55 and for plans that cover employees engaged in high risk professions. Employers with higher costs on account of the age or gender demographics of their employees when compared to the age and gender demographics nationally my adjust their thresholds even higher.