By Drew Armstrong, CQ Staff

April 24, 2009 -- House Sen. Max Baucus, D-Mont., said Friday that while he has not written off the idea of a government-run insurance plan for his health care overhaul proposal, it probably won't be his first line of attack, preferring to focus instead on the system for self-insured companies.

At a breakfast with reporters hosted by the journal Health Affairs, Baucus laid out details of his health care overhaul plans, many of which he will share in greater depth in a closed-door session April 29 with Finance Committee members.

While a government-run insurance plan was still on the table, Baucus said "it might be a bit on the side of the table." Instead, he said, he would focus on preserving the insurance system for self-insured companies while expanding private insurance and public programs such as Medicaid, the insurance program for the poor. "We'll end up with more private insurance and more public insurance," he said.

He later backed off that statement slightly, saying he might return to the government-run idea later on. Baucus has previously backed the idea of a government-run plan to compete with private insurers and drive down costs, but the political difficulty of the idea has put pressure on him to drop it. Many Republicans vehemently oppose any idea of a government-run insurance plan, while many of the left are demanding its inclusion.

His vision would make substantial changes to the insurance market, but with the goal of letting those who have insurance that they like keep it.

For many uninsured looking to buy coverage, Baucus would like to "set up a system similar to Massachusetts," where people can buy insurance through a "connector" that offers standard minimum benefit plans with subsidies for those who cannot afford it.

It would be a national marketplace, Baucus said, or at least with a common national standard. "I think the whole system should be more national, and the benefits have to be more national. You can't have benefits be one level in one state, and another level in other states."

But he would try to make sure that it did not deeply impact companies that buy insurance already. Health care experts have theorized that any large change to the insurance market, especially with a government-run plan option, would result in some companies and people shifting from company-provided insurance to the independent or government market.

"The system I envision is where self-insured companies, ERISA companies, can keep their own plans and manage health insurance in the way that they have. We're not going to change the ways self-insured companies handle health care for employees," Baucus said.

Many large companies are self-insured. Instead of buying coverage directly from a health insurer, they take on the risk themselves and pay an insurer to administer the plan. To the employee, there is little difference, but the company can lower costs by taking on the risk itself. Companies that self-insure are governed by the Employee Retirement Income Security Act (PL 93-406), better known as ERISA.

Many smaller businesses, however, are not self-insured. For those companies and for people buying insurance on their own Baucus said, "we'll set up a system similar to Massachusetts, where an individual looking for health insurance can go to the exchange and get health insurance from a health care company authoring insurance on the exchange, somewhat similar to the [Federal Employee Health Benefit Plan]," the system under which federal employees buy insurance, Baucus said.

"We have to reform the health care insurance market," he continued, by eliminating insurance companies' ability to deny coverage based on pre-existing conditions, along with other changes like guaranteeing people's ability to buy coverage.

Baucus' November "white paper" will serve as the foundation for the bill, he told reporters. Baucus is writing his own bill out of the Finance Committee, while Health, Education, Labor and Pensions Committee Chairman Edward M. Kennedy, D-Mass., is drafting a related but separate bill that will be combined with Baucus' on the floor.

In his white paper, Baucus included the idea of a government-run insurance option that would compete, with some limits, with private insurers. He also proposed temporarily opening up Medicare enrollment for people between the ages of 55 and 65, and expanding Medicaid to cover 7.1 million more people.

The private session with Finance Committee members will focus on how care is delivered and paid for, with future sessions on other topics.

"We're working on that," Baucus said. "My problem is getting numbers from [the Congressional Budget Office]. That's slowing us down a little bit."

It will likely be the first time members have a chance to see details of what Baucus and the committee's ranking Republican, Charles E. Grassley of Iowa, have planned.

Baucus wants to revamp health care payment systems like Medicare so they foster more efficient payment trends. Some areas of the country with efficient health systems spend far less to get the same quality of care as other, far more costly regions.'

Experts like former Congressional Budget Office director Peter R. Orszag, now the director of the White House Office of Management and Budget, have predicted that getting high-cost areas more in line with the country's more efficient regions could save hundreds of billions of dollars.

"Our job is to transfer that more broadly to the rest of the country, mostly through Medicare," Baucus said of the low-cost, efficient areas. "We're really trying to get internal savings in the system."

By Drew Armstrong, CQ Staff

April 23, 2009 -- Senate Republicans objected Thursday to a confirmation vote on the nomination of Kansas Gov. Kathleen Sebelius to head the Department of Health and Human Services, prompting Democrats to threaten a cloture vote to force the issue.

"We are still hopeful that we will get an agreement to consider the nomination, but if we cannot, Senator Reid expects to file cloture," said Regan Lachapelle, spokeswoman for Senate Majority Leader Harry Reid, D-Nev. "We are confident that we will have the 60 votes needed for confirmation."

Minority Leader Mitch McConnell, R-Ky., objected to Reid's unanimous consent request to set a floor vote, saying Republican senators had not had the time they needed to review her nomination, according to his spokesman Don Stewart.

In a meeting with reporters later Thursday, Reid said he was "confident that the Republicans will let us move forward on that quickly." He added that he was "concerned" about how long it was taking to get Sebelius and other nominees in place. "I think they should allow us to have a vote on that today," he said.

"We're going to move forward on her as quickly as we can, but that's not going to hold up anything we do on health care," Reid added.

The delays will likely push Sebelius' confirmation until next week at the earliest. If Democrats do have to file cloture to limit debate on the nomination, it could take several days to run out the clock on the procedural motions and votes.

"I expect we'll ... vote on her nomination next week," said Finance Committee Chairman Max Baucus, D-Mont.

Obama nominated Sebelius, governor of Kansas, on March 2. The Finance Committee approved the nomination April 21 by 15–8.

It was unclear how many Republican senators objected to scheduling a vote on Sebelius. When Democrats tried to get a committee vote on Sebelius before the spring recess, Sen. Jim Bunning, R-Ky., objected.

Bunning would not say if he was one of those objecting to the floor vote, but said that he thought several senators had.

Anti-abortion groups have urged Republicans to oppose Sebelius, a Democrat who supports abortion rights. They cite her acceptance of campaign funds years ago from George Tiller, one of the few doctors in the country who has performed abortions late in a pregnancy. If Republicans filibuster, Sebelius would need 60 votes to be confirmed.

Two GOP senators voted for Sebelius in the Finance Committee—Pat Roberts of Kansas and Olympia J. Snowe of Maine.

By David Clarke and Chuck Conlon, CQ Staff

April 24, 2009 -- House and Senate negotiators have struck a tentative deal on major elements of the fiscal 2010 budget resolution that includes fast-track procedures for a health care overhaul and for legislation to curtail the role of private lenders in the federal student loan program.

The compromise also would trim $10 billion from President Obama's discretionary spending request, while allowing some additional spending for household energy assistance.

The negotiators plan to hold a formal conference committee meeting April 27. Behind-the-scenes negotiations will continue Friday and through the weekend—and until all details are finalized the initial agreements could fall apart.

Democratic leaders would like to have the final budget adopted next week as Obama marks his first 100 days in office.

"There is still work to be done, people to be checked with," said Senate Budget Chairman Kent Conrad, D-N.D. "Hopefully we can move forward next week."

The Senate voted on several motions to instruct conferees on Thursday. Meanwhile, White House negotiators—including Chief of Staff Rahm Emanuel and Office of Management and Budget Director Peter R. Orszag—were in the office of Senate Majority Leader Harry Reid, D-Nev., along with House Budget Chairman John M. Spratt Jr., D-S.C., Conrad said.

The inclusion of reconciliation instructions for the health care and student loan initiatives will be a sore spot for Republicans. The fast-track procedure will make the resulting bills immune to filibuster in the Senate, significantly reducing the GOP's leverage.

Democrats contend they only want to use reconciliation as a fallback option and would prefer to move health care through the regular order. Republicans are highly skeptical the fast-track process won't be used if available.

Technically, the budget measure simply instructs committees to find a certain amount of deficit savings. Any policies can be pursued to meet the target, but Democrats plan to focus on health care and education.

The budget is expected to instruct several committees—Finance and Health, Education, Labor and Pensions in the Senate and Ways and Means, Energy and Commerce, and Education and Labor in the House—to produce legislation later this year that would save $1 billion.

This would allow health care and student loan legislation to be moved later in the year through reconciliation.

The use of reconciliation and the amount of money to allocate to the annual appropriations bills have been the two biggest issues for negotiators to resolve. The House budget measure (H Con Res 85) contains reconciliation instructions, while the Senate budget (S Con Res 13) does not.

Negotiators also have a tentative agreement on how much to dedicate to the 12 annual appropriations bills. It would allow for a spending cap that is $10 billion less than the president requested for these bills, while retaining a House provision that would allow an additional $1.9 billion to be spent on a low-income energy assistance program (LIHEAP).

The Senate resolution included $15 billion less than the $1.096 trillion requested by the Obama administration, while the House resolution allocated about $7 billion less than Obama's proposal.

Conrad is against using the reconciliation process for policies other than deficit reduction bills. But congressional leaders and the White House at least want the option of using it to move a health care overhaul bill. Such legislation is a priority for Obama, and Democrats fear congressional Republicans will not cooperate with efforts to move it through the regular legislative process.

One outstanding question is what Conrad may get in exchange for not standing in the way of reconciliation provisions.

"Would I want things? Yeah," Conrad said.

Conrad and Judd Gregg of New Hampshire, the ranking Republican on the Senate Budget Committee, have long pushed for creating a task force that would write policy prescriptions for the government's long-term budget problems that Congress would have to vote on.

When asked if this proposal could in some way be part of a potential deal on the budget resolution, Conrad only would say that many things have been discussed.

Conrad said negotiators have an agreement to assume the Alternative Minimum Tax will be "patched" for three years without being offset by revenue-raisers or spending cuts. This would help negotiators show a deficit that weighs in at 3 percent of Gross Domestic Product by the end of the five years covered by the resolution.

Also as part of the tentative agreement, the budget would assume that preventing a cut in Medicare payments to physicians would not have to be offset over the first two years of the resolution.

The final resolution also is expected to include a provision requiring the House to pass a bill that would enact the pay-as-you-go rule into law before it could pass legislation to extend certain tax policies without offsets.

The House's budget conferees are Spratt, Rosa DeLauro, D-Conn., Allen Boyd, D-Fla., Paul D. Ryan, R-Wis., and Jeb Hensarling, R-Texas. The Senate will send Conrad, Gregg and Patty Murray, D-Wash., to the conference.

By John Reichard, CQ HealthBeat Editor

April 20, 2009 -- The chairmen of the two key committees that will lead Senate efforts to craft health overhaul legislation announced Monday that they plan early June markups of very similar legislation that "can be quickly merged into a single bill for consideration on the Senate floor."

"We have a moral duty to ensure that every American can get quality health care," Sens. Edward M. Kennedy, D-Mass, and Max Baucus, D-Mont., said in a letter to President Obama announcing the late spring markup schedule. "We must act to contain the growth of health care costs to ensure our economic stability; to help American businesses deal with the health care challenge; and to make sure that we are getting our money's worth." Kennedy chairs the Senate Health, Education, Labor and Pension Committee and Baucus the Senate Finance Committee.

The timetable suggests that the committees won't hold hearings on the measures prior to a markup. A Baucus aide said the actual legislation, which is still being drafted, would be unveiled when it goes to markup.

In other overhaul-related developments, the Pharmaceutical Research and Manufacturers of America (PhRMA) and the left-leaning advocacy group Families USA said they will team up to push for expansion of the Medicaid program, subsidies to fund the purchase of health insurance by individuals, and a cap on out-of-pocket costs to protect families hit by big health bills.

"One of our goals in the proposal is to establish a nationwide Medicaid eligibility at 133 percent of the federal poverty limit," a PhRMA source said. "Several million uninsured Americans can get coverage through this." A second goal is "to provide subsidies for moderate-income individuals and families in a reformed market," the source said. The two lobbying organizations won't specify subsidy levels, but the source noted that "of the 47 million uninsured Americans, about 30 million uninsured Americans have incomes 200 percent of the federal poverty level or below. So overall, about 65 percent of uninsured Americans could be eligible for a subsidy if it were set at 200 percent."

The organizations plan an afternoon press briefing Tuesday to announce the details of what they said would be a multimillion-dollar campaign to promote the changes. Other elements of the proposal call for revamping the insurance market to prevent companies from denying coverage based on health status and allowing the use of Medicaid funds to buy private coverage if doing so saves Medicaid money. Insurers have said they would agree to stop denying coverage based on health status if individuals were required to buy coverage, a mandate that would assure a mix of good and bad risks to allow them to absorb the cost of claims for people with costly medical conditions.

Meanwhile Finance Committee staff prepared Monday for the first of three "roundtables" that will serve as a form of hearing on health overhaul approaches under consideration by the panel. The committee plans private meetings in which members will be asked to react to legislative proposals it is considering.

Baucus and Sen. Charles E. Grassley of Iowa, the top Republican on the Finance Committee, prepared questions they plan to ask participants at the first roundtable session, scheduled for Tuesday. For example, they plan to ask Glenn Steele, the head of the Danville, Pa.–based Geisinger Health Clinic, whether the system's model of "integrated care" in which doctors and hospitals collaborate to control casts can be widely applied elsewhere in the United States. Another likely question is "what tools does Geisinger provide to its staff to empower them to provide high-quality and efficient care?"

They plan to ask Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission, what role a stronger primary care role, "bundled" payments covering both hospital and doctor care and payment systems rewarding quality and efficiency could play in controlling costs. They plan to query Mark McClellan of the Brookings Institution about the feasibility of setting up "Accountable Care Organizations to combine unaffiliated providers into health care teams to boost efficiency and quality."

Questions also are planned for American Hospital Association President Rich Umbdenstock about industry concerns about payment systems that reward quality and efficiency; Aetna Executive Ron Williams on the feasibility of competitive bidding in the Medicare Advantage program; Debra Ness of the National Partnership for Women and Families on the impact on patients of revised payment systems; Alan Korn of the Blue Cross–Blue Shield Association on incentives to improve coordination of care by providers; and Peter Lee of the California Business Group on Health about the employer perspective on revised payment systems.

By Melissa Attias, CQ Staff

April 21, 2009 -- Many hospitals have not implemented standards that would improve the quality of patient care and save lives, according to the 2008 Leapfrog Hospital Survey.

"Progress on patient safety is moving too slowly," said Leapfrog CEO Leah Binder in a news release. "Consumers and purchasers of health care want hospitals to implement safety standards and procedures known to improve quality and reduce unnecessary injury and death."

The survey was voluntarily completed by 1,282 acute care hospitals in 44 states.

According to the report, only 7 percent of hospitals fully met Leapfrog's medication error prevention standard that requires hospitals to enter 75 percent of inpatient medication orders through a Computerized Prescriber Order-Entry (CPOE) system and use a Leapfrog evaluation tool to test the system. With CPOE, physicians enter medication orders into a computer rather than on paper so that they can be integrated with patient information and automatically checked for potential problems or errors. These systems can reduce the number of adverse drug events by up to 88 percent, according to the Leapfrog report.

The report also shows that 65 percent of hospitals do not have all the recommended policies in place to prevent common hospital-acquired infections, which affect two million patients in American hospitals each year. Of those two million, Leapfrog says 90,000 of them die from the infection acquired during care, which is almost twice the amount of deaths caused by breast cancer and AIDS combined. At the same time, only 30 percent and 25 percent of hospitals are fully meeting standards to avoid hospital-acquired pressure ulcers or hospital-acquired injuries, respectively.

In addition, the report says that efficiency standards were only met by 24 percent of hospitals for heart bypass surgery, 21 percent for heart angioplasty, and 14 percent for both heart attacks and pneumonia. Twenty-six percent of hospitals fully met quality standards for treating heart attacks, the report says, while 34 percent met standards for treating another common acute condition, pneumonia. The report also shows that 32 percent of hospitals adhere to at least 90 percent of safety practices endorsed by the National Quality Forum, from competency of nursing staff to hand washing.

Nevertheless, the survey showed hospitals have improved in some areas of patient care. Thirty-one percent of hospitals met the Leapfrog Intensive Care Unit staffing standard according to the 2008 report, for example, compared with just 10 percent in 2002. The standard requires that intensivists (physicians trained in critical medical care) manage "general medical, surgical and neuro ICUs for at least seven days a week, eight hours per day, with additional availably by pager within five minutes," according to the report. Leapfrog says that standard could avoid more than 54,000 deaths and up to $4.3 billion in costs each year.

In addition, though only 35 percent of hospitals have all the recommended policies in place to prevent hospital-acquired infections, that number is up from just 13 percent in the 2007 survey. The report also says that 60 percent of hospitals have agreed to implement Leapfrog's "Never Events" policy to prevent hospitals from repeating serious medical errors.

Yet a recent report in the New England Journal of Medicine shows that the majority of hospitals in the United States have not adopted electronic health records, despite majority consensus the technology will contribute to more efficient, safer and higher-quality care.

The study surveyed all acute care hospitals with membership in the American Hospital Association and received responses from 63.1 percent of those surveyed. Based on these responses, only 1.5 percent of hospitals in the United States have a comprehensive electronic medical records system implemented across all major clinical units. Less than 8 percent have a basic system in place that included "functionalities for physicians notes and nursing assessments in at least one clinical unit," the report said.

The study also showed that larger institutions, major teaching hospitals, and hospitals part of larger hospital systems or located in urban areas were more likely to have electronic records systems. Among those hospitals that did not have electronic systems, 74 percent cited inadequate capital as barrier to purchase. Other barriers hospitals cited included concerns about maintenance costs (44 percent), resistance from physicians (36 percent), unclear return on investment (32 percent) and lack of availability of staff with sufficient expertise in information technology (30 percent), the report said.

To encourage more hospitals to adopt electronic-records systems, researchers recommended financially rewarding hospitals that use health information technology. Researchers also said a policy strategy should focus on interoperability of electronic systems and training technical support staff.

"Modernizing health care systems with electronic health records is a critical piece of any health reform effort," said John Lumpkin, senior vice president of the Health Care Group at the Robert Wood Johnson Foundation, in a news release. "While the adopted rates are discouraging, this report helps us understand the key barriers we need to overcome to achieve higher rates of HIT adoption and better health and health care for all Americans."

By Daniela Feldman, CQ Staff

April 22, 2009 -- A majority of Americans support a "shared-responsibility" plan for health coverage that couples an individual mandate with expanded employer, government, and insurer roles, according to a study published this week on the Health Affairs Web site.

The study, which is based on a survey conducted in February 2008, also notes that the most popular choice for a health insurance mandate is one that would require health care for all children by obligating parents to provide coverage for their children or request aid from the government. Sixty-five percent of survey respondents indicated they wanted to see all children granted insurance.

Overall, fifty-nine percent of those asked about a shared-responsibility mandate supported it, compared with 48 percent of people overall who support an individual mandate, according to the report. The 1,704-person telephone survey was split into two groups; one half of respondents was asked about the individual mandate proposal and the other half was asked about the shared-responsibility proposal.

"The administration and key congressional Democrats, such as Senate Finance Committee Chair Max Baucus, D-Mont., have put forward shared-responsibility approaches to expanding coverage," Bob Blendon, one of the study's authors and a professor of health policy and political analysis at Harvard School of Public Health, said in a news release. "The individual mandate provides the vehicle for universal coverage, but public support for mandate-based reform increases markedly, particularly among African Americans and upper-income people, if requirements for government, employers, and insurers are also included."

The Senate Finance Committee has scheduled three roundtables, including one held Tuesday, on ways to overhaul health care. The committee plans private meetings in which members will be asked to react to legislative proposals it is considering.

According to the study, the most significant comparison between supporters for shared mandates and individual mandates comes from respondents who earn between $80,000–$100,000 and respondents who are African American. Seventy percent of respondents within that income bracket supported a shared responsibility approach, versus 27 percent who supported a stand-alone mandate, according to the survey results. Eighty percent of African American respondents said they support a shared-responsibility mandate, compared with 56 percent who said they support an individual mandate approach, the survey said.

Fifty-six percent of self-identified Democrats and 36 percent of self-described Republicans supported the individual mandate, the survey said.

The survey, designed by researchers at National Public Radio, the Kaiser Family Foundation, and the Harvard School of Public Health, also asked participants to indicate reasons why they support a national mandated health care program. The three top reasons were: "making sure everyone has health insurance is the right thing to do"; "people with health insurance will get preventive and more continuous care"; and "by requiring the uninsured to get insurance, people won't face higher health care costs to cover the unpaid medical bills of those who don't have insurance."