HBA Industry Outlook Panel Provides Insights on the Impact of Obama Administration Reform Agenda

The Healthcare Businesswomen’s Association (HBA) Chapter Chicago hosted a dynamic forum on the Impact of the Obama Administration on Healthcare at its March 19, 2009 meeting at the Hyatt in Deerfield. The outstanding panel of speakers included:

  • Suzanne McDonald - Program Chairperson, Vice President, Government and External Affairs, Takeda Pharmaceuticals America, Inc.
  • Jim Anfield - Senior Director, EHM Strategic Opportunities, Health Care Service Corporation, Blue Cross and Blue Shield of Illinois, Texas, New Mexico, and Oklahoma
  • Jan Anderson – Attorney, Healthcare Practice, Foley & Lardner LLP

The program was moderated by Chicago Chapter President and Siren Interactive Founder, Wendy White.

The healthcare reform agenda and funding initiatives
Suzanne McDonald of Takeda led the program with an overview of healthcare reform funding initiatives. $1.1 billion has been budgeted for comparative effectiveness trials as a way to understand most effective, efficient, and cost-effective ways to deliver therapy.  This will include not just drug and device comparisons, but comparisons of different services and treatments.  The goal is to develop comparative effectiveness measures.   A committee is charged with making decisions on what to measure.  This will be difficult to accomplish, as it assumes all people will respond similarly to a given treatment approach and presents the risk of moving to ‘cookbook’ medicine.  There is also a significant lag between new and improved approaches and full adoption of best practices - possibly up to 17 years.

McDonald revealed that the administration anticipates funding the budget with $634 billion in healthcare reform initiatives.  Money will be collected from:

  • Reducing payments to Medicare Advantage plans
  • Speeding up development of follow-on biologics and bio-similars
  • Increasing pharmaceutical Medicare mandatory rebates from 15 to 22%
  • Funding the State Children's Health Insurance Program (SCHIP) through increased taxes from tobacco and cigarette sales

She also gave updates on a wide range of regulatory and legislative initiatives. Globalization challenges loom on the horizon, including importation issues like how to inspect foreign plants to maintain supply chain integrity. There is forward momentum on the Sunshine Act that will set national requirements for disclosure of payments to physicians of amounts in excess of $100 annually by drug manufacturers and group purchasing organizations. Government-run programs for Medicare Part D will increase negotiation leverage with pharmaceutical companies. McDonald posited that the administration will advance its healthcare agenda as quickly as possible because, in their view, the solution to the financial crisis is linked to healthcare and environmental reforms.

The role of health information technology
Next up, Jim Anfield of BCBS spoke to the increasing role of Healthcare Information Technology (HIT) in healthcare reform.  Increased transparency of medical records is expected to reduce needs for repeat testing, resulting in cost savings. The healthcare reform agenda includes:

  • National insurance exchanges
  • Premium assistance, potentially through tax credits
  • Medicare buy-in for people aged 55-64
  • Underwriting reform, relaxing restrictions on pre-existing conditions
  • “Guaranteed issue” providing broader insurance access
  • Reauthorization of SCHIP funded through a government sponsored health plan

The government stimulus package includes assistance for healthcare such as COBRA assistance that subsidizes 65% of the cost for eligible patients and a $19 billion commitment for Healthcare Information Technology development. Anfield also explained the various electronic medical records technology models which are sometimes confused with each other. Electronic Health Record (EHR) refers to an individual patient's medical record in digital format. Electronic Medical Record (EMR) is the application environments that hospitals and healthcare practices must adopt in order to implement EHRs. Personal Health Record (PHR) is web-based technology developed by Google and Microsoft that enable individual patients to store and maintain their own health histories online.

Provider quality improvement, error reduction and financial incentives
Jan Anderson of Foley & Lardner provided her perspective on the government’s agenda focusing on quality enhancements and improved efficiency and aligning healthcare provider financial incentives to accomplish these goals.  One reason for this is that medical errors are one of the leading causes of death – approximately 100,000 per year. 

CMS’s strategic direction for quality improvement and error reduction is to:

  • Incentivize quality care through payment reform, penalizing payment for lower quality performance on defined metrics
  • Drive quality care through public reports of providers based on quality metrics
  • Enforce quality care through the False Claims Act also known as the ‘Whistleblower Act”
  • Create value based panels to implement
  • Payment for reporting, performance, value and increased use of quality approaches
  • Measure and reimburse based on efficient resource use
  • Transparent reporting of results
  • Electronic health records and increased interdependency between payments and quality data

Anderson explained that CMS is also initiating a Value Based Purchasing Plan (VBPP). Under the stimulus bill, penalties would be enforced for failure to report quality. Hospitals will not be paid for hospital-acquired conditions that are considered “never events”—or events that should never occur. These may include improper surgery, urinary tract infection due to poor catheterization, and central line infections. CMS will expand this to the outpatient setting. The Office of Inspector General (OIG) website will become a repository for reporting of adverse events.

The meeting closed with a lively Q&A session with the audience of close to one hundred attendees.

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