The effort to accomplish comprehensive health reform this year took several steps forward last week, even as significant barriers remain.

Reform advocates point to two bits of personnel news as important to the cause: Kathleen Sebelius was sworn in as secretary of Health and Human Services April 28 and Pennsylvania Senator Arlen Specter switched his party affiliation from Republican to Democrat the same day. Specter's move puts Democrats on the cusp of a 60-vote, filibuster-proof majority in the Senate.

Also on April 28, the Senate Finance Committee leadership issued its most detailed policy proposals yet for reducing cost and improving quality in health care delivery, which will be the subject of one of three major sections in expected reform legislation.

Sebelius: Flu Out Front, But Reform Still In Focus

The Senate confirmed Sebelius by a 65-31 vote and President Obama swore her into office later that day. During the debate leading up to the Senate vote, Republicans drew attention to views held by the former Democratic governor of Kansas on comparative effectiveness and abortion-related issues, but they were unable to derail her nomination.

Calls to install official HHS leadership in light of the swine flu (H1N1) epidemic may have helped propel the vote. The spread of the virus, and not health reform, is likely to be at the top of Sebelius' priority list in the first weeks and, perhaps months, of her tenure.

Nevertheless, Sebelius expressed unequivocal support for passing health reform this year during her confirmation hearings. She is expected to play a significant role, along with White House Office of Health Reform Director Nancy-Ann DeParle, in working out an agreement between the administration and Congress.

Even as the flu outbreak moved closer to being declared a bona fide pandemic, some Senators took tangible steps forward on the health care reform effort.

Finance Panel Weighs Health Care Delivery Options

During the eventful day on Capitol Hill, Finance Chair Max Baucus, D-Mont., and Iowa Republican and Finance Ranking Member Chuck Grassley issued a health delivery reform "policy options" ¹ paper. The committee then met in a closed-door session on April 29 to "walk through" the options as a preliminary step to a public mark-up session Baucus hopes to convene in June.

Among the topics at hand were value-based purchasing, comparative effectiveness, medical imaging and improving transparency in the health care system. There were few surprises in the options paper, which is essentially a more detailed and focused follow-up to a health-reform ² white paper issued by Sen. Baucus in November.

The new document is meant to put "some meat on the bones" of health delivery reform ideas that have been discussed over the past year, Baucus said. "But nothing is set in stone," he stressed.

Comparative effectiveness research is perhaps the highest-profile issue in the paper that has attracted the attention and lobby of the medical technology industry. Device reps have teamed up with drug companies and patient groups to push for restrictions to ensure comparative effectiveness results are not used to support the rationing of care.

The options paper takes care to address this concern, noting the need to limit use of the research by the federal government.

"For example, Medicare could be allowed to use the findings only in circumstances where the process ... is transparent, relies on all available evidence ..., considers the potential for effects on subpopulations of beneficiaries, and allows for public comment," it states. "This would prohibit HHS agencies from creating a fast-track process for automatically linking the research findings to coverage or reimbursement decisions in public programs."

Value-based purchasing is another major component of the policy document. It essentially proposes to move beyond current demonstration programs where payments to hospitals depend in part on reporting to CMS on certain quality measures, to programs where payment depends on the actual performance on those measures.

What gets some in industry nervous is the potential for poorly chosen measures or an exceedingly slow process for updating measures, which they say could encourage outdated treatments or diagnostics.

The options document doesn't provide details on how measures will be chosen or used to generate payment levels, but it does suggest an open process. "The selection of measures, the development of the methodology for assigning scores and the development of the methodology for calculating payments would be transparent and public through rulemaking," it notes.

Medical imaging is one of the few specific classes of medical technology to get its own section in the Finance report.

To slow down the current rate of Medicare spending growth on imaging scans, Baucus and Grassley propose a two-pronged approach: forcing doctors to disclose when they are referring a patient to an imaging service in which they have a financial stake (and to offer alternative referral sites) and tying Medicare physician payments to compliance with imaging "appropriateness criteria" that is developed by the government in concert with national standards organizations.

The Finance Committee also briefly notes that it is "exploring" a technique that has gotten a lot of push-back from equipment makers and radiologists: the use by Medicare of radiology benefit managers to pre-authorize imaging scans, case-by-case (³ Also see "Obama Budget Seeks Prior Authorization For Medicare Imaging" - Medtech Insight, 2 March, 2009., p. 3).

Another item in the 52-page document includes provisions of the pending Physician Payment Sunshine Act, championed by Grassley and Sen. Herb Kohl, D-Wisc., which would require device and drug manufacturers to disclose financial relationships with doctors on a public, government-run Web site (⁴ Also see "New Physician Payments Sunshine Bill Lowers Reporting Triggers, Ups Fines" - Medtech Insight, 26 January, 2009., p. 8).

Specter: Will He Help Avoid Budget Reconciliation?

Before introducing legislation this summer, Baucus and Grassley plan to release "options" papers on the two other components of health reform: expanding coverage and paying for the reforms.

Once legislation is on the table, the next step will be getting the votes. Reform advocates say Specter's defection from the GOP will help the cause, though it is not a guarantee. Democratic lawmakers put into place on April 29 an insurance policy on health reform passage by including so-called reconciliation instructions for health reform in a House-Senate budget resolution. Legislation written as part of a budget reconciliation process can not be filibustered, and therefore only needs a simple majority to pass.

This would allow Democratic leaders to push through a bill without any Republican support, but the strategy comes with pitfalls.

For one, reconciliation is viewed as extremely contentious and it could ruin attempts at bipartisan agreements on any other issue for some time. Also, procedural challenges remain. Senate budget rules allow a single member to strip individual provisions out of the bill if they can make the case to 40 or more colleagues that the provisions are "extraneous" to the federal deficit.

With Specter installed on the opposite side of the aisle, the likelihood of needing reconciliation appears somewhat reduced. The Pennsylvanian gives Democrats 59 seats. Seating Minnesota Senate candidate Al Franken, ahead by 312 votes but awaiting the results of a court appeal from incumbent Norm Coleman, would give Democrats the 60 members needed to break a filibuster.

It is by no means certain, however, that Specter and all of the other Senate Democrats would vote for a health reform bill authored by Baucus and Ted Kennedy, D-Mass. "I will not be an automatic 60th vote," Specter assured reporters April 28.

"It's not at all clear how many Democratic votes we would get right now," said an individual familiar with the health reform negotiations on Capitol Hill.

Democrats leading the effort, and Sen. Baucus in particular, stress they are first and foremost seeking a bipartisan bill. That is the purpose of the Finance Committee options papers, which offer members from both sides of the aisle the chance to provide input. But the next two topics to be addressed by the committee - expanding coverage and financing - could expose new fissures.

"If they are going to actually finance it [under pay-go rules], you are looking at some unattractive combination of provider cuts and revenues," according to one lobbyist close to the negotiations. "Certainly, there is going to be a lot more controversial stuff that is going to be put on the table later in the process."

- David Filmore (d.filmore@elsevier.com) and Ramsey Baghdadi (r.baghdadi@elsevier.com)

Health Reform Options Are Floated In Congress As Sebelius Takes HHS Helm

More from Archive

More from Medtech Insight