SZD Health Law Scan : Health Care Lawyers & Attorneys : Schottenstein Zox & Dunn Law Firm : Strategic Planning, Managed Care, Insurance : Columbus, Cleveland, Cincinnati, Central Ohio

On October 27, SZD held its Symposium on Health Care Policy Reform in Columbus, Ohio. Guest speakers from across the health care industry confronted today’s toughest reform questions and concerns, including those issues specific to employers, payors, providers and consumers. During the event, we asked panel members to weigh in on those aspects of reform that are the most critical to their particular workplace.

SZD: What elements of health care reform are most important to your company/organization?

Dennis Hicks
Director of Compensation and Benefits
Chiquita Brands International Inc.

A: A big benefit to our company will be the shift to electronic health records and exchange of information. Because we employ so many people in different parts of the globe, there is a tremendous amount of staffing involved in simply having people filling out health insurance forms.

Another important aspect is wellness. The government can play a big role in promoting wellness by paying for vaccines, preventive and more pediatric treatments. Government should also be more involved in financial support of medical education. Doctors need to make so much in order to pay off expensive school loans and get out of debt.

I’d also like to see costs reduced. Historically, government involvement typically doesn’t lead to lower costs and greater efficiency. Take Medicare for instance. For 40 years the government has been talking about Medicare’s waste, fraud and abuse. They’ve had 40 years and they haven’t been able to fix it yet. And I see nothing in the bill right now that breaks the cost curve.

John Popa
President & CEO
Marlite Inc.

A: I’d like to see incentives for doctors that will encourage quality of care, not just for how many procedures or tests are done, as is the case now. One idea would be to have physicians become salaried employees of hospitals with strict quality controls in place enabling patients to get only the care they need and not unnecessary tests and other procedures. What I want for my employees is that they be allowed to go to the provider who can give them the best care, not someone they are seeing under a mandate.

Whatever ultimately happens with health care reform, it should not place an unfair burden on businesses. We feel we have an obligation to provide insurance to our employees. As an American I also feel strongly that I want to do my share to help the uninsured. But I have an issue with other employers who do not feel the same obligation.

I also doubt that increased government involvement will help solve the problems we have in health care; it may just lead to more inefficiency which leads to greater costs. It seems that only 20 percent of the system needs work and the government is trying to get involved in 100 percent.

Steven Gabbe
Senior Vice President for Health Services & CEO
Ohio State University Medical Center

A: Physician reimbursement is a huge issue. Doctors are needed throughout the country in primary care, and unless they are reimbursed enough to repay their school loans, fewer of them will go into primary care medicine. If you cut back on Medicaid and Medicare reimbursements, doctors may be forced to drop those patients and they will be left with fewer choices for care.

For OSU, the residency positions at the medical center are funded through Medicare, and every year we’re faced with uncertainty over whether the residency program will continue to be funded. Doctors should be paid for what they do and paid well. We need to move toward a reimbursement system based on outcomes, but we must define those outcomes clearly or you will have doctors denying service to potentially very sick people who by the very nature of their illness may not have ideal outcomes.

Electronic medical records will certainly go a long way to increase efficiency, reduce waste and improve patient care. At OSU patients can access their records; they can see outcomes of tests and see all the medications they are taking. The response from patients has been very positive. 

Erin Hoeflinger
President
Anthem Blue Cross and Blue Shield in Ohio

A: The ultimate goal of health care reform must be to build a sustainable health care system. At Anthem Blue Cross and Blue Shield, we provide health insurance to 3.3 million Ohioans. Along with our members, providers, customers and employees, we have a significant stake in the outcome of this process. It’s not enough to just implement insurance reform; we have to get it right. And getting health care reform right means addressing the underlying problems of quality and cost so that more people can be covered.

Perhaps the most central issue in the health care debate is access to coverage. Establishing an effective, enforceable mandate to have everyone covered is one significant way to reform the system. Anthem supports health care reform – but without threatening those who already have quality medical benefits through the employer-based, private sector model that right now covers 170 million Americans – 7 million in Ohio.

George Stadtlander
Executive Vice President & Chief Managed Care officer
Medical Mutual of Ohio

A: All citizens should have access to a core set of health care benefits, in other words, guaranteed access. Everyone should participate according to their means in the healthcare benefits system. This eliminates the need for pre-existing condition exclusions.

The cost of the core set of health care benefits needs to be controlled such that the annual increase of such benefits equals the overall inflation rate. Quality improvements in the health care delivery system will result in greater value and in time reduced total cost. Administrative simplification and efficiency will lower overall costs.

The role of the government should be as the regulator, not the regulated. The regulators can not regulate themselves. 

Martin Hauser
President
SummaCare Inc.

A: Although there is still a fair amount of uncertainty about the final design of health care reform, it appears as if several key elements are emerging. Of the components that we are assuming will make it into the final reform bill, we support things such as the desire to ensure that all Americans have access to health insurance coverage and the elimination of pre-existing conditions.

However, these changes cannot occur without a corresponding commitment that there will be some type of requirement that employers offer and individuals acquire health insurance. In addition, we have significant concerns about the lack of details surrounding the proposed Public Option and whether it can be funded and administered in a way that creates an equitable, level playing field.

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From running real-time texting polls, to coordinating a live video feed from Washington, the Symposium on Health Care Policy Reform made an impression on the 400 people in attendance.

The results are in from the texting polls during the Symposium on Health Care Policy Reform. Surprisingly, the media has influenced over 30 percent of attendees view’s of health reform, while only 18 percent are very optimistic on the likelihood of health care reform legislation to be enacted.

In addition, we have also made the symposium’s presentations available. Participants have been emailed the password to download files. In the coming weeks, we will also release podcasts of each presentation and panel discussion. Check back frequently or sign up via RSS feed for updates.

Click on slides or audio next to the presenter’s name to download their power point slides and audio recording of their presentation.

Mary Jo Hudson, slides, audio
Jeff Biehl, slides, audio
Panel discussion – Employer perspective, audio
Panel discussion – Provider perspective, audio
Panel discussion – Payor perspective, audio
Jennifer Chubinski, slides, audio

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The Senate Finance Committee has approved its health care reform legislation, entitled "America's Healthy Future Act." This legislation will now have to be merged with the version approved by the Senate Committee on Health, Education, Labor and Pensions (the "HELP Committee").

The two bills share many common concepts, such as penalties for individuals who fail to obtain health insurance, expansion of Medicare and requirements for insurance plans that, for example, include prohibitions on exclusions for pre-existing conditions.

However, the Finance Committee's version differs from the HELP Committee's in some significant ways. First, the Finance Committee's version does not establish a government-run health insurance plan, commonly referred to as a "public option," that would compete in the health insurance exchanges with private health insurance plans. Second, it does not mandate employers to provide health insurance. Third, it proposes different methods for financing the cost of the legislation. For example, the Finance Committee's version proposes assessing fees on pharmaceutical manufacturing companies ($2.3 billion), medical device manufacturers ($4 billion), health insurance providers ($6 billion), and clinical laboratories ($750 million).

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Senate Finance Committee Chairman Max Baucus has been reported as circulating to members of the committee a document entitled "Framework for Comprehensive Health Reform."

The Framework represents "many of the policies" discussed by the committee but is "not a final product . . . and does not include everything that might be in the [Chairman's Mark]." It most notably does not include a public insurance option. Rather, it proposes a Consumer Operated and Orientated Plan (CO-OP) program to create nonprofit, member-run health insurance companies that service individuals in one or more states.

Also, it does not propose an employer mandate. However, as discussed below, while there is no employer mandate, certain employers may be fined for not providing health insurance coverage.

Some other highlights of the document include:

• Penalizing US citizens and legal residents who fail to obtain health insurance coverage up to $3,800 per year.
• Fining employers with more than 50 full-time employees (30 hours and above) that do not offer health insurance coverage to their employees up to $400 annually for each employee who receives a tax credit for health insurance through an exchange.
• Establishing state-based exchanges to assist individuals and small groups to more easily compare health insurance plan benefits and premium costs for four benefit options that would be available.
• Permitting health insurance premiums to vary based on only four factors: tobacco use, age, family composition and geographic differences.
• Prohibiting health insurance plans in the individual market from excluding coverage for pre-existing health conditions or rescinding health coverage.
• Levying an excise tax of 35% on insurance companies and insurance administrators for any health insurance plan that is above $8,000 for singles and $21,000 for family plans.
• Assessing fees that would be generally allocated by market share on pharmaceutical manufacturing companies ($2.3 billion), medical device manufacturers ($4 billion), health insurance providers ($6 billion), and clinical laboratories ($750 million).
• Permitting states to form "health care choice compacts" between two or more states to allow the purchase of non-group health insurance across state lines.
• Expanding Medicaid coverage to include individuals who are not currently eligible (e.g., non-elderly individuals (childless adults) at or below 133% of poverty).
• Reducing a state's allotment for Medicaid Disproportionate Share Hospital Payments by 50% once the number of uninsured individuals in the state is reduced by 50%.

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On April 8, 2009, President Obama signed an executive order establishing a White House Office of Health Reform (OHR) that will spearhead the Obama Administration's policy agenda for health care. The principal functions of the OHR include providing leadership for and coordinating the development of the Administration's agenda; working with Congress, various executive departments and agencies, and State, local and community policymakers and public officials; and monitoring the implementation of the agenda.  If requested by the OHR Director, executive departments and agencies are required to designate a liaison to work with the OHR.

The executive order also requires the Secretary of Health and Human Services to establish its own Office of Health Reform within the Department of Health and Human Services to coordinate closely with its White House counterpart.

President Obama has appointed Nancy Ann Min DeParle as the first Director of the OHR. During the Clinton Administration, DeParle served as the Associate Director for Health and Personnel at the White House Office of Management and Budget and as the Administrator of the Health Care Financing Administration, which is now the Centers for Medicare and Medicaid. Before joining the Clinton Administration, she served as the Tennessee Commissioner of Human Services and worked as a lawyer for a law firm in Tennessee. Since leaving the Clinton Administration, DeParle is reported to have served on the board of directors of various medical device companies, such as Boston Scientific and MedCo.

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As the media warn about the possibility of trade wars and protectionism, the international healthcare consumer has already set the stage for the globalization of  what could become the world's largest industry.

The movement of goods, services and capital across international borders has been well-documented, and it is hard to dispute the impact this has had on the transfer of wealth and multinational interdependence.  What is less understood is how people who seek better, more cost-effective healthcare in foreign countries are re-shaping the market for medical treatment.  As the price of healthcare in the U.S. has skyrocketed, consumers have become more willing to travel great distances to obtain less expensive care.  At the same time, U.S. hospitals have addressed their staffing shortages by recruiting qualified doctors, nurses and other professionals from other countries.

The dynamic that is steering this revolution is quite simple.  In the absence of political or economic barriers, globalization shifts the production of goods and services to those locations that produce such offerings at the lowest possible cost.  In the past two decades, this trend has been greatly accelerated by the availability of information about alternative sources on the internet and by demographic forces such as the aging of  the American population including healthcare workers.

A recent study by the Society for Healthcare Strategy and Market Development and the American College of Healthcare Executives, entitled "Futurescan 2009 -Healthcare Trends and Implications 2009-2014" revealed that nearly two-thirds of survey respondents think it is likely that the number of persons traveling overseas for medical treatment will double by the year 2014; however, an equal percentage don't believe that health insurers will amend their policies to pay for such medical tourism.  An additional 82 percent of respondents agree that existing and new forms of telemedicine will enable even greater degrees of "virtual" medical tourism.  Apparently, the public is confident that technology will increasingly bridge the distances between patients and providers, even though the source of payment remains in doubt.

Which brings us to the crux of this commentary.  Is the American legal system ready for such a fundamental restructuring of the healthcare delivery system?  Will our current economic troubles and the Government's intense desire to put a lid on healthcare costs accelerate globalization beyond the ability of lawmakers, regulators and courts to figure out  what our  rights and responsibilities should be in this brave new world?  These and other questions must be addressed as part of the greater debate about health care reform if we are to build a sustainable model for the 21st Century.

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In the heat of a Presidential Campaign, especially one of this historical importance, it is not surprising that political commentators focus on the differences between the candidates' views.  But when it comes to health care reform, especially now that the economy will make it harder for the victor to fix the financial part of the problem, it might make sense to consider what Democratic candidate Barack Obama and Republican candidate John McCain can agree to.

At a recent  Washington, D.C. program, Peter Leibold, Executive Vice President/CEO of the American Health Lawyers Association, identified 10 areas of agreement among the candidates when seeking solutions to the problems of cost control and increased quality:

1.   Governmentally supported pooling mechanisms for catastrophic illness

2.   Payment mechanisms that encourage quality of care

3.   Support for information technology use by health care providers

4.   Promoting coordinated care and disease management

5.   Increased funding for research and public health

6.   Provider cost transparency

7.   Promoting healthy lifestyles

8.  Allowing re-importation of drugs and quicker release of generics

9.   Portable health insurance

10. Greater attention to treatment of cancer and autism

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