Medical Device Daily Washington Editor

WASHINGTON – The 2009 edition of the National Health Policy Conference, hosted by Academy Health (Washington) and the healthcare policy journal Health Affairs, was perhaps more festive than was the case in previous years (Medical Device Daily, Feb. 5, 2008) for proponents of an expanded role for the federal government in healthcare, but the optimism was somewhat tempered by the widespread recognition – even by a representative of the Obama administration – that cost issues will continue to dog healthcare in the U.S.

However, Jeanne Lambrew, deputy director at the White House Office of Health Reform, indicated that the administration is pinning its cost-containment hopes on the widespread deployment of healthcare information technology (HIT) despite the fact that the Congressional Budget Office is of the position that HIT "by itself typically does not produce a reduction in costs," according to the CBO blog of May 20, 2008. Adding further irony to the situation is the fact that the then-director of the CBO, Peter Orszag, now is the director of the White House's Office of Management and Budget.

Susan Dentzer, editor-in-chief of Health Affairs, said, "It is not often that the stars align in such a way," referring to the holding of the conference when healthcare reform is favored by both the White House and a dominant majority party in Congress. However, Dentzer offered a cautionary note on the fiscal impact of public-sector healthcare spending. "Dealing with the rapidly rising outlays . . . will obviously be critical to sustainability," she cautioned.

Lambrew, the featured speaker for the plenary session, earned an enthusiastic round of applause when she noted that this is the first year in the nine-year history of the event that it took place "when George W. Bush was not in the White House."

"We know we had about 45 million uninsured Americans in 2007" and that the economic downturn will likely expand those numbers, she said. "Being uninsured is only part of the problem," Lambrew asserted, stating that "about 57 million Americans report problems paying medical bills."

She also said she is aware of a study that indicates "that about half the people facing [mortgage] foreclosure cited medical costs as a contributing factor. "With unemployment rising, we'll see a significant jump in the uninsured," Lambrew said, which is part of the impetus behind a greater interest in continued post-employment health insurance provided under the Continued Omnibus Budget Reconciliation Act (COBRA) of 1986. "We know we've seen small employer-based coverage drop precipitously since 2000," a trend she said will likely accelerate.

Lambrew stated that the economic recovery proposals making the rounds on Capitol Hill include a 65% subsidy for COBRA extensions for up to two years, adding, "I think we're really excited that the House and Senate" have addressed the COBRA program in their economic stimulus programs.

She said the economic recovery proposal that passed the House of Representatives and the version currently going through the Senate would both increase the federal medical assistance percentage (FMAP), for Medicaid by about $87 billion over two years. "About 38% of families that are unemployed don't have access to COBRA, so the House bill would [offer] a Medicaid option" for a year.

"When we think through the recovery act," Lambrew said, "we also have a chance in this bill to do other things," such as job creation. She cited a need for more primary care doctors. "In this package, there is a doubling of the healthcare workforce training program" run by the Health Resources and Services Administration by $600 million to boost the primary care workforce, she said. However, she added "one of our long-run challenges is cost containment.

"If we can't get at healthcare costs, we can't get a sustainable system," Lambrew acknowledged. "Medicare is a leader in the system," so making the program more of a value-based purchasing system and hence driving down costs "would allow us to bring more people in the system," she noted. "We're beginning to get information on cost as well as clinical effectiveness," she said, but she acknowledged that the bills in Congress do nothing to reverse the ban on CMS's use of comparative effectiveness data to inform national coverage determinations.

A question came from a member of the audience who said he was the first chief information officer at CMS. "I didn't see enough about fraud waste and abuse" in the bill, he said, asking what the administration intends to do about an annual fraud-and-waste tab that runs at least $40 million to 50 billion.

Lambrew addressed "an effort running parallel to the economic recovery act," which seeks to account for this problem. "We're very cognizant about fairly, efficiently and accountably," using tax dollars to expand health coverage. She said the administration is "looking hard . . . at whether we can make this a 21st Century system so that we're not paying, then chasing the money."

After Lambrew addressed several questions from the audience, Dentzer commented that "you have quite a friendly audience" and remarked that there are some who see the just-passed increase in spending for the Children's Health Insurance Plan (CHIP) as a stealth approach to nationalizing healthcare. "You don't have to be an ideologue to worry about crowd-out" of private insurance, citing increased taxpayer liability if coverage is expanded without effective cost controls.

Lambrew made the case that the current CHIP bill "is bipartisan legislation," given the sign-off by several members of the GOP. She said "Obama has been so firm in saying that he wants to do things" in a bipartisan fashion. However, she also noted that the administration will move promptly "given the absolute urgency of the economy, so if it's a delay" that opponents of CHIP are seeking, the White House will move around them.