Clinton Believes Physicians Deserve Higher Medicare Fees

By Mark Crane

WASHINGTON, March 24 — Physicians deserve higher Medicare fees, but they may have to keep enduring annual statutory pay cuts restored at the last second by congressional action, said the chief policy director for Sen. Hillary Clinton’s presidential campaign.

The cuts are mandated by Medicare’s sustainable growth rate pay formula that leads to the annual rescue ritual. That pattern won’t end, said Neera Tanden, a long-time aide to Sen. Clinton who served as her policy director when she was First Lady, until universal coverage is achieved.

“Hillary has supported the annual increases in pay when they come before Congress and is a strong advocate of better reimbursement for providers.”

“She hasn’t proposed any specific steps to deal with the sustainable growth rate, but believes that universal health coverage will relieve some of the pressure on Medicare and physicians.”

Clinton’s plan, which she estimated would cost $110 billion a year, would require all Americans to have health insurance. She would pay for the plan by eliminating waste and inefficiencies and rolling back the Bush tax cuts on the wealthy.

Clinton would phase out “excessive Medicare overpayments to HMOs and other managed care plans that threaten the program’s solvency and raise premiums for beneficiaries” at a savings of $10 billion, she said.

Advisers to Clinton, Barack Obama and John McCain have all condemned the sustainable growth rate rescue ritual and vow to reform it. None has offered a detailed plan on how to do it.

Tanden, 38, spoke to MedPage Today on Clinton’s view of a variety of health issues including electronic medical records, tort reform, and pay for performance. Tanden was a senior vice- president at the Center for American Progress, a Washington think tank, and was Clinton’s legislative director. She also served as issues director for the Democratic Congressional Campaign Committee. She graduated from UCLA and, like Sen. Clinton and her husband, has a law degree from Yale.

Clinton rejects the finding made in recent polls that Democrats are focused on expanding coverage while Republicans are more concerned about controlling health costs. “There’s no either-or,” said Tanden. “Both have to be done and Hillary has an ambitious agenda to reduce costs.”

In addition to cutting pay to Medicare HMOs, Clinton pledges to control prescription drug costs by promoting generic drugs and allowing Medicare to negotiate prices. She also advocates the reimportation of cheaper drugs from other countries.

The biggest savings would come from modernizing the health system through implementing information technology, chronic disease management, and comparative effectiveness, where expert panels help set best practices, Tanden said. The rest of her $110 billion plan would be paid for by eliminating the tax cuts for the wealthy.

In Congress, Clinton has promoted expansion of electronic health records and worked with former Republican House Speaker Newt Gingrich on a proposal. She would give doctors financial incentives to adopt health IT. The details of how that would happen are not yet worked out, but no penalties are anticipated for physicians and hospitals that opt out.

“We’ve said that we must invest a few billion dollars a year to ensure that there’s a system in place,” said Tanden. “There’s no detailed plan as yet on funding. We expect to work with Congress on the specifics. But the bottom line is that after the system is up and running, it will dramatically lower costs for all Americans.

“The plan estimates saving $35 billion a year for the federal government alone,” she continued. “If we make the right level of investment, we could recoup those costs in short order.” She cited studies from the RAND Corporation and a business-labor coalition including AARP that estimate net savings from the widespread adoption of IT as between $77 billion and $165 billion a year.

Clinton’s ideas on pay-for-performance are similar — and just as sketchy — as those expressed by McCain and Obama. “It can’t be a pure outcome system where the doctor gets reimbursed only if the patient gets better,” said Tanden. “Hillary understands that some patients are sicker than others and some don’t comply with physician advice. Any plan has to be a balance. The goal is to encourage doctors to use best practices and move to a system where we can make determinations on quality.”

Her plan would fund a Best Practices Institute that would work as a partnership between the Agency for Healthcare Research and Quality and the private sector to fund research on what treatments work best and to disseminate this information to patients and doctors to increase quality and reduce costs. “The model has to come from working with professional groups, not having someone in the government unilaterally deciding these issues,” said Tanden.

On tort reform, Clinton and Obama see practically eye to eye. Before they became presidential candidates, the two senators co-authored an article in the New England Journal of Medicine and co-sponsored legislation to fund programs for the disclosure of medical errors and compensation to patients. The bill would have created an office of public safety. Physicians would be given some protection from liability under a system that encourages greater disclosure.

Like Obama, Clinton strongly opposes caps on awards for pain and suffering. “There are instances where injured patients would be disadvantaged by a cap,” said Tanden. “Malpractice premiums have gotten out of control and Hillary is focusing on reforming the insurance system so that physicians won’t have to pay as much.”

McCain, who has voted in favor of caps, says tort reform is a top priority. He favors eliminating liability for physicians who follow clinical guidelines and adhere to patient safety protocols.

The biggest debate on the Democratic side has been over universal coverage. Clinton favors a mandate requiring all Americans to obtain insurance. Those who can’t afford it would receive tax credits or the option to join a government-run Medicaid-style plan. She alleged that Obama’s plan would leave 15 million Americans uninsured. McCain has stressed controlling costs over universal coverage and opposes mandates as coercive.

Tanden rejected the Obama charge that Clinton has been vague about what penalties those who don’t buy insurance might face. “There are a variety of ways to enforce a mandate, including automatic enrollment when a patient has contact with the health system and working with employers to make sure they cover their workers,” she said. “She wants to work with Congress on the details.”

Tanden says a crisis is looming in Medicare funding, but achieving universal coverage will reduce pressure on the system. “We don’t know how much. We’ll pass universal health care and see the impact, and take steps as necessary,” she says. “Hillary will establish a bipartisan process to deal with Medicare solvency.”

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