1. UK Health System Highlighted in Olympic Opening Ceremonies
Last Friday’s Opening Ceremonies to the 2012 Olympics in London featured a segment celebrating their National Health Service. The NHS was launched in 1948 during the post-WWII reconstruction effort with the ideal that “that good healthcare should be available to all, regardless of wealth”. Below is a comparison of health care cost, quality, medical student debt and physician compensation in the UK versus the US:
o In 2007, theaverage person paid $3,867 for their healthcare in the UK versus $7,285 in the US (in USD)
o Annual compensation for UK specialists was $150K versus $230K for US specialists (in USD)
Sources:
http://www.nhs.uk/NHSEngland/thenhs/about/Pages/overview.aspx
http://www.who.int/whosis/whostat/2010/en/index.html
http://www.ama-assn.org/ama/pub/about-ama/our-people/member-groups-sections/medical-student-section/advocacy-policy/medical-student-debt/background.page?
http://economix.blogs.nytimes.com/2009/07/15/how-much-do-doctors-in-other-countries-make/
2. Budget sequestration in 2013 projected to reduce health related funding
In August 2011, the Budget Control Act was passed at the end of a long heated debate over the “debt ceiling crisis”. This act committed lawmakers to budget spending cuts of $1.2 trillion in 2013. The programs that would be cut were to be determined either by the bi-partisan “super committee” or a simple across-the-board cut known as the “sequester”. With the super-committee unable to come to agreement last year, lawmakers are now facing the challenge of across the board, non-specific budget cuts schedule to hit most government programs beginning in January 2013. Below is a summary of how health care may be affected:
Sources:
https://www.aamc.org/advocacy/washhigh/highlights2012/299878/072712hearingfindsvamayfaceadministrativecutsundersequestration.htm
https://www.aamc.org/advocacy/washhigh/highlights2012/299872/072712senatereportestimatesconsequencesofsequestrationonhealthed.html
http://www.ama-assn.org/amednews/2012/07/30/gvsa0730.htm
3. Supreme Court Decision lowers cost estimates for Affordable Care Act
Although the Supreme Court recently upheld most aspects of the ACA, one exception was the decision to make the expansion of Medicaid optional for states. As a number of states are now projected to decline the Medicaid expansion, the CBO has nowrevised their estimates for the overall cost of the ACA:
Source:
https://www.aamc.org/advocacy/washhigh/highlights2012/299882/072712cbolowerscostestimatesforacatoreflectsupremecourtdecision.html
4. 3rd congressional hearing held to address Medicare Sustainable Growth Rate
The Sustainable Growth Rate formula, were it to be implemented, would reduce Medicare physician reimbursements by as much as 27%. Congress has repeatedly prevented the SGR from lowering pay dramatically and will likely do so again this year (see HC 101 below for more on the SGR). As an alternative to the SGR, the House Ways and Means committee held the third of a series of hearings on July 24th to discuss potential reforms that “explore new models for Medicare physician reimbursement that move away from traditional fee-for-service.” Highlights from the discussion include:
Source:
https://www.aamc.org/advocacy/washhigh/highlights2012/299884/072712waysandmeansholdsthirdhearingonreformstomedicarephysicianp.html
5. Health Policy 101: What is the Medicare Sustainable Growth Rate (SGR)?
The sustainable growth rate (SGR) is a formula that came out of the Balanced Budget Act of 1997 as a mechanism to determine how much physicians should be compensated for services to Medicare patients. The formula is largely based on GDP, which is a gross measure of the economy. Initially the formula worked as health care costs in the late 90’s increased commensurately with the economy. However, as healthcare costs began to outpace inflation, the SGR began to fall short of the actual cost of health care services.
Since 2003, both Republicans and Democrats in Congress have passed short term “doc fixes” to prevent any actual decrease in physician reimbursement from the SGR. Over time this has accumulated to a deficit of over $300 billion. The next “doc fix” is set to expire at the end of 2012, and if unaddressed the 10 year deferred effect of the SGR would abruptly lower Medicare physician compensation by as much as 27%.
It is likely that Congress will discuss another “doc fix”, however in light of budget constraints already posed by the $1.2 trillion across-the-board cuts from the sequester (Budget Control Act of 2011), lawmakers may find this difficult.
The House Ways and Means committee has been exploring an alternative reform that could replace the SGR (see above), however a solution has not yet been reached.
Sources:
http://www.washingtonpost.com/blogs/ezra-klein/post/faq-the-doc-fix/2011/11/22/gIQAnv6wkN_blog.html
http://www.ama-assn.org/resources/doc/mss/cola_medicare_pres.pdf
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
William Teeter – National Delegate
-------------------------------------------------------------------
To access previous updates see our blog at:
https://www.aamc.org/members/osr/communications/legislative_affairs/
For more Health Care Policy news go to:
https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html
Last Friday’s Opening Ceremonies to the 2012 Olympics in London featured a segment celebrating their National Health Service. The NHS was launched in 1948 during the post-WWII reconstruction effort with the ideal that “that good healthcare should be available to all, regardless of wealth”. Below is a comparison of health care cost, quality, medical student debt and physician compensation in the UK versus the US:
- The NHS is atrue “socialized” health care system, funded by tax revenue and completely government run. This is distinctly different from the US Affordable Care Act, which through a mandate requirescitizens to purchase private insurance and receive healthcare through a largely privatized system.
- UK citizens receive statistically comparable care to US citizens at about 50% the cost. According to the World Health Organization (WHO):
o In 2007, theaverage person paid $3,867 for their healthcare in the UK versus $7,285 in the US (in USD)
- UK physicians receive free medical education. US physicians graduate with an average of $157K in student debt according to 2010 data from the AMA.
- UK physicians make less money than US physicians. According to a Congressional Research Service Study in 2004 (CRS):
o Annual compensation for UK specialists was $150K versus $230K for US specialists (in USD)
Sources:
http://www.nhs.uk/NHSEngland/thenhs/about/Pages/overview.aspx
http://www.who.int/whosis/whostat/2010/en/index.html
http://www.ama-assn.org/ama/pub/about-ama/our-people/member-groups-sections/medical-student-section/advocacy-policy/medical-student-debt/background.page?
http://economix.blogs.nytimes.com/2009/07/15/how-much-do-doctors-in-other-countries-make/
2. Budget sequestration in 2013 projected to reduce health related funding
In August 2011, the Budget Control Act was passed at the end of a long heated debate over the “debt ceiling crisis”. This act committed lawmakers to budget spending cuts of $1.2 trillion in 2013. The programs that would be cut were to be determined either by the bi-partisan “super committee” or a simple across-the-board cut known as the “sequester”. With the super-committee unable to come to agreement last year, lawmakers are now facing the challenge of across the board, non-specific budget cuts schedule to hit most government programs beginning in January 2013. Below is a summary of how health care may be affected:
- A decrease of 7.8% is expected to hit 15 Health & Human Services programs according to a study done by the Senate Labor-HHS-Education Appropriations Subcommittee. NIH sponsored medical research is included with an expected 700 fewer grants, disproportionately affecting first-time investigators
- Benefits to Medicare beneficiaries are safe. However reimbursements to physicians could be cut by up to 2%. This is independent of further cuts that could come as a result of the sustainable growth rate (SGR).
- Veterans Administration (VA) benefits and services are exempt from the sequester. However VA administrative costs could be decreased by up to 2%.
Sources:
https://www.aamc.org/advocacy/washhigh/highlights2012/299878/072712hearingfindsvamayfaceadministrativecutsundersequestration.htm
https://www.aamc.org/advocacy/washhigh/highlights2012/299872/072712senatereportestimatesconsequencesofsequestrationonhealthed.html
http://www.ama-assn.org/amednews/2012/07/30/gvsa0730.htm
3. Supreme Court Decision lowers cost estimates for Affordable Care Act
Although the Supreme Court recently upheld most aspects of the ACA, one exception was the decision to make the expansion of Medicaid optional for states. As a number of states are now projected to decline the Medicaid expansion, the CBO has nowrevised their estimates for the overall cost of the ACA:
- The CBO now projects that by 2022, 6 million fewer people will enroll in Medicaid and 3 million more people will enroll in federally subsidized health insurance exchanges – a net increase of 3 million uninsured people
- As a result the CBO projects a net decrease of $84 billion over this ten-year period
Source:
https://www.aamc.org/advocacy/washhigh/highlights2012/299882/072712cbolowerscostestimatesforacatoreflectsupremecourtdecision.html
4. 3rd congressional hearing held to address Medicare Sustainable Growth Rate
The Sustainable Growth Rate formula, were it to be implemented, would reduce Medicare physician reimbursements by as much as 27%. Congress has repeatedly prevented the SGR from lowering pay dramatically and will likely do so again this year (see HC 101 below for more on the SGR). As an alternative to the SGR, the House Ways and Means committee held the third of a series of hearings on July 24th to discuss potential reforms that “explore new models for Medicare physician reimbursement that move away from traditional fee-for-service.” Highlights from the discussion include:
- Any new payment model must “promote the physician-patient relationship and reward physicians who provide high-quality and efficient care”
- Existing incentives such as e-prescribing, meaningful use for electronic medical records and the value-based modifier were not designed with sufficient input from practioners. Future reforms must have a strong collaboration between lawmakers and practioners.
- Any “outcomes” based re-imbursement measures must be risk adjusted for the patient population being served
- Transition planning is critical to ensure consistent payments and stability for physicians from the status quo to a future reformed model
Source:
https://www.aamc.org/advocacy/washhigh/highlights2012/299884/072712waysandmeansholdsthirdhearingonreformstomedicarephysicianp.html
5. Health Policy 101: What is the Medicare Sustainable Growth Rate (SGR)?
The sustainable growth rate (SGR) is a formula that came out of the Balanced Budget Act of 1997 as a mechanism to determine how much physicians should be compensated for services to Medicare patients. The formula is largely based on GDP, which is a gross measure of the economy. Initially the formula worked as health care costs in the late 90’s increased commensurately with the economy. However, as healthcare costs began to outpace inflation, the SGR began to fall short of the actual cost of health care services.
Since 2003, both Republicans and Democrats in Congress have passed short term “doc fixes” to prevent any actual decrease in physician reimbursement from the SGR. Over time this has accumulated to a deficit of over $300 billion. The next “doc fix” is set to expire at the end of 2012, and if unaddressed the 10 year deferred effect of the SGR would abruptly lower Medicare physician compensation by as much as 27%.
It is likely that Congress will discuss another “doc fix”, however in light of budget constraints already posed by the $1.2 trillion across-the-board cuts from the sequester (Budget Control Act of 2011), lawmakers may find this difficult.
The House Ways and Means committee has been exploring an alternative reform that could replace the SGR (see above), however a solution has not yet been reached.
Sources:
http://www.washingtonpost.com/blogs/ezra-klein/post/faq-the-doc-fix/2011/11/22/gIQAnv6wkN_blog.html
http://www.ama-assn.org/resources/doc/mss/cola_medicare_pres.pdf
Your loyal Legislative Affairs team,
Brad Hunter – Northeast Region
Robert Sanchez – Central Region
Sean Vanlandingham – Southern Region
Claire Sadler – Western Region
William Teeter – National Delegate
-------------------------------------------------------------------
To access previous updates see our blog at:
https://www.aamc.org/members/osr/communications/legislative_affairs/
For more Health Care Policy news go to:
https://www.aamc.org/members/osr/communications/legislative_affairs/49198/legislative_affairs_resources.html