Eye On Health

Monthly commentary from the Executive Director - February 13th, 1996

Clinton's Limited Health Priorities

Many saw President Clinton's recent State of the Union address as the opening of his '96 campaign. The stated health goals were modest: improving access to health insurance, not "abandoning" Medicare and Medicaid and standing up to those who would weaken health related environmental enforcement.

"...if our working families are going to succeed in the new economy, they must be able to buy health insurance policies that they do not lose when they change jobs or when someone in their family gets sick. We have to do more to make health care available to every American. And Congress should start by passing the bipartisan bill sponsored by Senator Kennedy and Senator Kassebaum that would require insurance companies to stop dropping people when they switch jobs, stop denying coverage for pre-existing conditions."

"...we must have a common commitment to preserve the basic protections Medicare and Medicaid give, not just to the poor, but people in working families, including children, people with disabilities, people with AIDS, senior citizens in nursing homes. We have all agreed to save much more. We have all agreed to stabilize the Medicare trust fund. But we must not abandon our fundamental obligations to the people who need Medicare and Medicaid. America cannot become stronger if they become weaker."

"...A third of us breathe air that endangers our health. And in too many communities, water is not safe to drink. We still have much to do. Yet Congress has voted to cut environmental enforcement by 25 percent. That means more toxic chemicals in our water, more smog in our air, more pesticides in our food. Lobbyists for the polluters have been allowed to write their own loopholes into bills to weaken laws that protect the health and safety of our children."

Shalala - Clinton Split?

Observant cheeseheads noted Secretary Shalala's absence from the State of the Union address. I thought she just decided not to wear red this year and thus didn't stand out. In fact she drew the short straw to be the one cabinet member that tradition dictates stays away in order to be able to carry on the administration in case the speech is not well received.

Steve Gunderson Rare Voice Of Optimism

Congressman Gunderson spoke with unusual optimism about Washington, D.C. before the National Rural Health Association annual policy forum. This may have been an issue not only of partisan perspective but also of timing. He spoke the day after all fifty state governors agreed to a Medicaid reform package and the New York Times reported the balance in the Medicare trust fund fell for the first time since 1972, supporting the Republican position on its fragility. (A $35.7 million deficit versus an expected $4.7 billion increase).

We will see the passage of major Medicare reforms before November, either as part of a budget bill or on its own... The chapter on this Congress "shouldn't be closed until its over."

Back home, I don't have any inside information about the rumors circulating that his western Wisconsin Congressional district refuses to accept his 1994 statement that he would not seek re-election--that a serious Draft Gunderson movement is underway. But my own preference would clearly be that one of rural health's most effective voices stays in Washington.

Senate To Consider Insurance Reform

The Senate has finally agreed to consider in late April Republican Senator Nancy Kassenbaum's health insurance reform bill (Senate Bill 1028). It was introduced last July, unanimously approved last summer by the Senate Health and Human Resources Committee but stalled through the exercise of an archaic tradition in the Senate that allows any Senator to anonymously place an indefinite hold on a bill to "allow time to for study." If this bill becomes law, it would constitute a major piece of long sought after health reform over the self-serving objections of many insurance companies. Highlights of the bill as amended on October 12th are from Thomas Legislative Information On The Internet:

Health Insurance Reform Act of 1995 - Title I: Health Care Access, Portability, and Renewability -"A bill to provide increased access to health care benefits, to provide increased portability of health care benefits, to provide increased security of health care benefits, to increase the purchasing power of individuals and small employers, and for other purposes."

Group Market Rules:

"Prohibits insurers from declining to offer whole group coverage to a group purchaser. Allows plans to establish eligibility, continuation, enrollment, or premium requirements, provided the requirements are not based on health status, medical condition, or similar factors."

"Mandates plan renewability, except for premium nonpayment, material misrepresentation, plan termination, or other specified reasons."

"Regulates the circumstances in which a plan may impose a benefit limitation or exclusion because of a preexisting condition."

"Mandates special enrollment periods for individuals who have certain types of changes in family composition or employment status."

Individual Market Rules:

"Prohibits an insurer (for an individual in a period of previous qualifying coverage) from declining to offer coverage or denying enrollment based on health status, medical condition, or similar factors."

"Mandates renewability of coverage for individuals, except for nonpayment of premiums, material misrepresentation, or plan termination."

"A Picture Of The Political State"

Primary Colors by Anonymous, a thinly disguised, little to much fictionalized insider's account of Bill Clinton's 1992 primary campaign, is every bit as good a read as the hype. From the book jacket:

"...rich reward as a savvy insider's look at life on the stump. This story spans the novelistic spectrum from bedroom farce to high moral drama and it paints a picture of the political state of the nation so vivid and authentic that one finds in it the deepest kind of truth­p;the kind of truth only fiction can tell."

Rural Wisconsin Hits Capitol Hill

I've been going to the Hill as part of the National Rural Health Association annual policy forum for years but no often with a Wisconsin team of such depth: Harold Brown, Wendy Cooper, Bruce Kraus, Fred Moskol and Jackie Pavelski. In just five hours we met with Steve Gunderson, and senior staff for Kohl, Klug, Feingold and Obey. We carried a comprehensive NRHA policy agenda that included positions on Medicare equity, telemedicine, antitrust, rural health clinics/federally qualified health centers, and federal discretionary spending. We stressed Wisconsin specific issues such as our need to be designated a Medicare Part B single payment locality. I also took the opportunity to suggest that our two Senators note that Wisconsin's Rural Health Development Council has asked our two medical schools what opportunities they have for collaboration next time they come to Washington.

Policy Priorities If Elected To NRHA Post

As a part of running for President-Elect of the National Rural Health Association, I've submitted my current policy priorities to the Members:

In USA: Same Ailment, Different Remedies

From Susan Milius, UPI Science Writer, Jan. 29:

"Americans with the same ailment get different remedies based simply on where they live, said a new health care atlas released Monday. Dr. John Wennberg, the epidemiologist at Dartmouth Medical School in Hanover, N.H., who guided the atlas effort sees a patchwork of arbitrary differences in treatment that do not follow any pattern in patient needs."

Some of the atlas's comparisons:

Bypass surgery per thousand Medicare patients:

Birmingham, Ala. 7.7
Albuquerque, N.M. 2.7

Proportion of breast-sparing cancer treatments versus mastectomies:

Paterson, N.J., 37.8%
Ogden, Utah, 1.9%

Radical prostate surgery per thousand male Medicare enrollees:

Salt Lake City, 5.6
Manhattan 1.2

Back surgery per thousand Medicare enrollees:

Fort Myers, Fla., 5.5
Honolulu, 1.4

HMO Premiums Flat or Declining

Excerpts from the Wisconsin State Journal, 1/29/95:

"The soaring costs for health benefits that plagued companies and their employees into the early 1990s are continuing to moderate largely because of restrictive managed health care plans according to two surveys."

"One survey, by the benefits consultant Foster Higgins, showed total spending for health benefits provided by U.S. employers rose 2.1 percent in 1995 to an average of $3,821 per worker. The survey covered 2,764 employers with 10 or more workers. Another survey, by the management consultant Towers Perrin, said health care costs for 120 large employers will increase at an average rate of 3 percent during 1996."

"While the growth of health maintenance organizations and other managed care programs has prompted a backlash against their restrictions, sponsors of the surveys said more employers are now focusing on improving care as they worry less about the rising costs. The two surveys found that costs for patients in HMOs were either flat or declining, while traditional insurance continued to rise."

"Managed care covered 71 percent of American workers who had health benefits in 1995, up from 52 percent in 1993, said the Foster Higgins survey. As the number of managed care organizations operating in each city increases, competition has forced them to curb their annual increases in the premiums they charge employers.

Brief Quiz From A Health Economist

Victor Fuchs, one of the nation's leading health economists recently offered the following quiz to a group of economists and doctors. They (and I) didn't get 100% but you may still want to see what you know or don't on these issues, vital to any health reform debate. Wording of the questions and answers is as reported by Jonathan Marshall in the San Francisco Chronicle, 1/15/96: Answers are at the end of the newsletter.

1. ''The high cost of health care in the United States makes U.S. firms substantially less competitive in the global economy.''

True or False?

2. ''In the long run, employers bear the primary burden of their contributions to employees' health insurance.''

True or False?

3. "The health sector's share of GDP has risen over the past 30 years mainly because of the technological change in medicine."

True or False?

4 "Widespread use of available screening and other diagnostic techniques would reduce health expenditures significantly five years from now."

True or False?

5. "Socioeconomic groups have different health status because they have different access to medical care."

True or False?

Headlines Dangerous To Your Health

Two major national studies have declared that there is a surplus of physicians and nurses and that school closures are needed. The classic Paul Harvey rest of the story story is coming from Wisconsin's Work Force Forum. The Forum's findings are expected to show the ongoing shortage or distribution problem of primary care providers in Wisconsin's rural and inner city communities. The Work Force Forum is sponsored by the Consortium for Primary Care in Wisconsin, underwritten by Aurora Health Care and RWHC.

MD. Loan Program Revamp Advanced

Governor Thompson's Rural Health Development Council continued its proactive tradition in several key actions at its last meeting. In response to a request from Council staff, Jane Thomas, and from the Director of the Wisconsin Office of Rural Health, Fred Moskol, it approved recommending to the Legislature a major redesign of the WI Physician Loan Assistance Program.

The major adjustment would take the maximum payout of $50,000 over five years (roughly 5/ 6/ 7/ 10/ 21) to $50,000 over three years (20/ 20/ 10). This and other changes are being proposed to improve the effectiveness of the program as a recruitment tool for underserved communities. Legislation will be needed for these changes to be made effective.

After hearing a report on recent initiatives by the Medical College of Wisconsin (MCW) to increase the number of generalist physicians practicing in Wisconsin, the Council decided to ask the Medical School Deans from MCW and the University of Wisconsin to meet with it to describe the opportunities that they see for increased collaboration between the schools.

On a separate action, the Council asked for feedback from the Department of Development, its host agency, on how the Council's presence in the Department has effected Department sensitivity to the effect of rural health on economic development. The Council also agreed to spend its next meeting focusing on the subject of antitrust effecting rural health care in Wisconsin.

Rural Employment Increases Hurts State?

"The movement of manufacturing jobs from high wage urban areas to low wage suburban and rural areas has stifled income growth for Wisconsin workers and their families, according to a report released today."

"Real hourly wages for Wisconsin workers from 1979 to 1993 declined 8.6 percent, compared to a 3.2 percent decline for the rest of the country, a study by the Center on Wisconsin Strategy at UW-Madison found." So began the lead article in the Sunday February 4th Wisconsin State Journal. Presumably the Journal also supports the movement of health care jobs out of rural areas to bring state wages back up?

Antitrust Launches Town-Gown Series

The Wisconsin Network for Health Policy Research and RWHC demonstrated last month the synergy possible by bringing together diverse academic, public and private sector representatives to grapple with complex public policy issues. From the comments I received, the January 30th meeting on the potentially eye-glazing-over subject of antitrust, state action immunity and rural health left many of the over forty participants pleasantly surprised at their engagement.

The Wisconsin Legislature passed several years ago a bill intending to give our state government the ability to forestall antitrust actions by selectively granting Certificates of Public Advantage (CPA). The legal doctrine embodied in this statute­p;state action immunity­p;is a mechanism to encourage cooperation among rural health providers as an alternative to "pure free market competition." However for the current statute to be usable; it needs to be amended and have rules written.

Unresolved Issues:

The day's presentations and accompanying debate was well informed, energized (if not occasionally raucous) and should facilitate legislative consideration of a variety of policy alternatives. This was the second of an inaugural pair of such events by the Network, hopefully the beginning of a long series.

RWHC & Federal Justice Still Talking

Last summer, RWHC initiated a request to the Federal Department of Justice to review a proposal for us to negotiate with large managed care systems on behalf of our hospital members, without being accused of violating antitrust law. We had received some guidance in this regard, in the Statements of Enforcement Policy and Analytical Principles Relating to Health Care and Antitrust issued by the U.S. Department of Justice and the Federal Trade Commission on September 27, 1994.

The agencies' statement however, pointed up the existing ambiguities in applying these principles to health care systems and networks: "Because multiprovider networks are relatively new to the healthcare industry, the Agencies do not yet have sufficient experience evaluating them to issue a formal statement of antitrust enforcement policy or to set out a safety zone. The Agencies recognize, however, that guidance on antitrust issues raised by multiprovider networks is of vital importance to the health care industry."

Our original application asked for us to be able to negotiate as a group of 21 hospitals; this month the Department representatives told us that they did not agree that all of these hospitals were in different markets, i.e. not competitors. We have since amended our request to propose several clusters, designed to separate those RWHC hospitals that are "actual or potential competitors." We expect a decision shortly.

Sharp Increase In Teen Smoking

From University of Michigan Survey Research Center:

"Despite the fact that smoking has fallen considerably among adults, teenage cigarette smoking is rising. This is extremely bad news for the health and longevity of the next generation. The proportional increase in smoking is greatest among eight graders, who are 13 to 14-years old. Their rate of current smoking (any cigarette in past 30 days) rose by 30 percent between 1991 and 1994, from 14.3 percent to 18.6 percent."

Zones Of Collaboration Update

A southern/central Wisconsin exploration of whether competing HMOs and insurers can agree to carve out rural zones of collaboration got off to an energetic start with all invitees attending. The discussion is based on the reality of multiple vertically integrated plans working in many instances with the same local providers.

From meeting notes: "Community providers have a strong interest in the vertically integrated plans cooperating on issues directly effecting local care and health. For one health plan to make a significant investment in any community or system wide issue on its own just doesn't make sense­p;makes you non-competitive in short run and even in the long run, the benefit won't accrue to you alone."

"This is the reverse of a 'tragedy of the commons' where all fail if all participate; in this case all fail if all don't participate."

"We need some global agreements but any success will be at the local level; this task force is working at a space between statewide and local; hopefully some agreement among regional plans will eliminate duplicative problem solving and resource searching on same issues, community after community. Getting regional understanding can facilitate more cost effective community assessment and development initiatives."

The Zones Task Force is meeting again in March to begin to discuss possible joint activities. No commitments have been made except to keep talking, in and of itself a very good beginning.

Major, Upcoming Telemedicine Seminar

Seminar: Telemedicine, Teleconferencing, Image & Information Networking for Biomedical Research, Clinical Care & Education, Tuesday, March 26 and Wednesday, March 27 at Medical College of WI Auditorium; Registration fee $75, students $25.

Go to http://www.mcw.edu/iaims/telemedicine.html

or contact
Michele F. DeYoe, Office of Research, Technology & Information, MCW
at 414-456-4382
or <mdeyoe@post.its.mcw.edu>.

Answers To Health Economics Quiz

1. False. Foreign exchange markets adjust the value of dollars, yen and other currencies to wash out the effect of such domestic costs.

2. False. Employees, not employers, pay most of the cost. Employers' demand for labor depends on the total cost of compensation, not the value of any one component.

3. True. Costs have risen mainly because technology has created more expensive procedures, treatments, drugs and devices­p;not because people are seeing doctors more often or staying longer in the hospital.

4. False. More checkups often pay off in better health, which can improve the quality of life but won't necessarily lower medical bills.

5. False. In countries with universal health coverage, the poor remain the unhealthiest group because the effects of diet, drug use and neighborhood safety overwhelm medical interventions."

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