What the Stimulus Package Holds for Health Care

The devil indeed lurks in the details

It’s not often that the media pay much attention to different versions of a bill when they emerge from the House and Senate and head toward a conference committee. But given the intense interest in health care this year, and the talk coming from the administration and others about the health care provisions embedded deep in the stimulus package, the press could do itself proud by keeping track of the changes and telling their audiences what the differences between the Senate and House versions mean.

The Washington Post and The Wall Street Journal are starting to expose some of the differences relating to health information technology and stimulus spending for research that will tell which medical tests and treatments really work. The president wants every American to have an electronic medical record by 2014, and has said that science will again be the prime determinant of which medical treatments really work. Of course, all this is easier said than done. In the Post’s illuminating story, we learn that special interest lobbyists and their coalitions are at it again. What a surprise!

At issue is whether doctors, hospitals, and pharmacies will be allowed to profit from marketing patients’ medical records to drug companies without having to notify the patients. Also at issue is whether providers must obtain patient consent before using medical information for fundraising purposes. Suppose you had heart bypass surgery at Hospital A, and had a good outcome. The hospital development office just might want to know about that, in order to hit you up for donations down the road. The House bill would mandate such consent; the Senate bill would not. “The Senate really did address many of our concerns,” said Mary Grealy, president of the influential Healthcare Leadership Council, a group of hospitals, health plans, drug companies, and device makers.

The Wall Street Journal took aim at the bills’ differing stances on medical effectiveness reviews. Limiting tests and treatments to those that are effective and relatively inexpensive is crucial to controlling the country’s health care spending—and, in a sense, is the key to successful reform. The House bill assigns $700 million for health care “comparative effectiveness research.” The Senate version uses the words “comparative, clinical effectiveness.” Experts say there’s a big difference.

Comparative effectiveness means looking at the costs and benefits, so that if two drugs are equally effective, but one costs less, the cheaper drug should be recommended. The Journal reports that the industry “won a battle to add the word ‘clinical’ in describing the research” that the stimulus spending will fund. Comparative, clinical effectiveness implies that only efficacy should be considered, not the price of the treatment. So you can see why the language of the bills is contentious. It directly impacts the profits made by sellers of these technologies.

Although the differences that deal with privacy and which drugs doctors can use are sexier to write about, and perhaps pack more of an outrage factor, there are important differences when it comes to getting more people covered. Remember—increasing coverage was one of the president’s goals during the campaign. The House was more obliging to the president. By providing 100 percent matching funds, the House bill would encourage states to add people who have lost their jobs in the recession to their Medicaid rolls. Those who are out of work could have Medicaid coverage until 2011, without being subjected to the typical rules that require very low incomes and very few assets. This provision was stripped from the Senate version.

Over the last few weeks there’s been a lot of Washington chatter about using COBRA extensions to keep more people insured. It all sounded so logical—until the special interests weighed in. When employees leave a job, they are usually entitled to 18 months worth of COBRA benefits: they can stay on their employer’s policy, but must pay all the premiums themselves, plus a two percent administrative fee. The House bill also called for the government to subsidize people’s COBRA coverage during the first year of their unemployment. The subsidy would pay 65 percent of the premium costs. Whether a 65 percent subsidy is large enough to encourage out-of-work people who have no income to continue with COBRA may be problematic in the first place, as Campaign Desk pointed out recently. A trade bill in 2002 called for a 65 percent subsidy for those displaced from their jobs. But, even at that level, only 12 to 15 percent of those eligible took it. Nevertheless, the Senate bill calls for a mere 50 percent subsidy. The advocacy group Families USA found (pdf) that with a 50 percent subsidy, COBRA coverage would cost about 42 percent of the average family’s unemployment income.

The House bill allows people age 55 or older, or people who have been at the same job for ten years or more, to continue on COBRA at their own expense until they became eligible for Medicare. Some health experts saw this as a way to begin extending guaranteed coverage to those older people who weren’t yet 65, with the eventual goal of moving to a Medicare for All solution for reform. (Sen. Max Baucus, for instance, has proposed letting people age 55 to 64 buy into Medicare.) Perhaps opponents of this solution saw that too.

Employers objected to expanding COBRA, for which they’ve never had much love, arguing that keeping track of former employees was an “administrative burden,” and that costs would increase as these ex-workers got older and sicker, causing the premiums these companies pay for both current and former workers to rise.

The changes in the Senate version of the stimulus package show that health reform may have a tough time making it to the finish line. Journalists need to keep a sharp eye on the race.

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Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for The Second Opinion, CJR's healthcare desk, which is part of our United States Project on the coverage of politics and policy. She also blogs for Health News Review. Follow her on Twitter @Trudy_Lieberman.