Medical Device Daily Washington Editor

WASHINGTON — Newly installed as chairman of the Senate Finance Committee, Max Baucas (D-Montana) has an ambitious healthcare agenda and is making no bones about what he intends to do.

Speaking at the 2007 edition of the National Health Policy Conference here yesterday, he said: "The season is changing — it is inexorable," referring to "a new season in our nation's healthcare debate."

And he suggested that he is armed for a crusade, saying that his job as Finance Committee chair is "to prepare Congress for this season of reform."

Baucus said that American doctors and American medical technology have no peer in the world, but he insisted that "this best-in-the-world medical system is still out of reach for 47 million Americans," an obvious reference to the country's healthcare uninsured. And he decried spending money for poorer outcomes, estimating about a quarter of the nation's healthcare outlays going to paperwork.

Baucus said that his "new ideas" are embodied by several principals, starting with universal coverage which he said can be provided by healthcare insurance pooling.

"Individuals should have a responsibility to get that coverage," he said, adding that society should help those who cannot "get it for themselves."

And in a nod to the Children's Health Insurance Program (CHIP), he argued that "[g]uaranteeing all Americans a healthy start" is vital to the nation's well being.

His second principle was that of "sharing the burden," by creating healthcare insurance pools for the uninsured and employees of small companies, their features being premiums that are affordable and "stable and cohesive [enough] to attract insurers." He noted that such pools should not be "a magnet only for those who lack coverage" by other means.

Baucus' third principle was cost controls. "America cannot sustain the growth in healthcare spending," he said, noting that the dilemmas facing Medicare and Medicaid are paralleled in the private insurance market.

The most vexing part of the cost control equation, he said, is that "health costs grow faster than the growth in population and prices combined," and he fingered "new technology and the intensity of care provided" as the underlying culprits.

He also took a swipe at the White House, accusing President Bush of a "fixation with consumer-driven care [that] only serves to polarize the dialogue."

Healthcare information technology is part of the solution to ever-increasing costs, he said, promising to "work to get the Senate to pass meaningful health IT legislation again this year."

He said that a key rung on the cost-containment ladder is comparative effectiveness research. "Last year, our nation spent more than $2 trillion on healthcare," but spent "less than one-10th of one percent" on comparative effectiveness studies.

He cited disease prevention as key to his plan to attack, arguing: "[w]e should not relegate prevention to the fringe" and that all insurers should cover evidence-based treatments, including immunization.

Here, he took aim at U.S. obesity, calling the condition a reliable precursor to diabetes and noting the increase in childhood obesity. This, he said will make "this generation of American children the first in modern history with a shorter life span than their parents."

He stated his final principle as shared responsibility. He asked, "who will pay?" and made the case that "all should contribute."

"Conventional beltway wisdom has been that the politics of healthcare dictate that only incremental changes are possible. I disagree. For healthcare, the season of incremental change is coming to an end," Baucus said.

He said that he intends to push forward with "a series of hearings, roundtables and forums to highlight the complex issues," cautioning that until a comprehensive plan is worked out, "we have the responsibility to make the current system work as well as we can."

Specialty hospitals in Congressional crosshairs

Physician-owned specialty hospitals are on Congress's radar screen yet again after the Jan. 23 death of a patient at West Texas Hospital (Abilene), brought a fresh round of scrutiny to a business model already in deep water with elected officials.

Steve Spivey, a 44-year-old truck driver from Gorman, Texas, went into respiratory arrest after elective spinal surgery, and West Texas, lacking an emergency department, called 911. Spivey subsequently died at a hospital in the same town, Abilene Regional Medical Center.

The incident has provoked a fresh round of outrage on Capitol Hill, in part because West Texas has garnered substantial reimbursement from the Centers for Medicare & Medicaid Services, despite a moratorium Congress slapped on Medicare payments to physician-owned specialty hospitals as part of the Medicare Prescription Drug Improvement and Modernization Act of 2003. That moratorium expired in 2005, but Congress extended it to August 2006 as part of 2005's Deficit Reduction Act.

Three legislators have sent a letter to CMS administrator Leslie Norwalk, asking how West Texas managed to snare payments from CMS during the moratorium. Senators Baucus (D-Montana), Chuck Grassley (R-Iowa) and Rep. Pete Stark (D-California) want a response by Feb. 21.

CMS, the letter noted, had reimbursed the Texas hospital more than $4 million while the moratorium was in effect.

Grassley authored and Baucus co-sponsored a bill in 2005, the Hospital Fair Competition Act, to deal with the practice of cherry-picking on the parts of physician-owned specialty hospitals. Stark is now the chair of the House Ways & Means health subcommittee and has staked out some fairly controversial positions on a number of issues.

"I am deeply saddened and completely outraged" by Spivey's death, Baucus said in a statement, hinting at Congressional action. He called the incident "a strong reminder that doctors' financial stakes in a hospital can cloud judgment and blur priorities, and we can't let that happen."

And Grassley said that "doctors shouldn't be allowed to refer patients to hospitals where those same doctors have an ownership interest."

The Congressional letter makes note of a similar situation that took place in Oregon in July 2005, when a woman, age 88, went into cardiac arrest after receiving an injection of an opioid analgesic following elective back surgery. The hospital, a specialty orthopedic facility, had no ED, and the patient died four days later, despite the efforts of the staff at a nearby hospital.

The three legislators said they "are even more troubled today after learning of this same scenario playing out again at another physician-owned specialty hospital."