Government

Campaign case report: What Obama and McCain pledge to do about the health system

Both presidential candidates propose better pay for better quality care and broad health IT adoption but avoid difficult questions about the Medicare pay formula.

By Doug Trapp — Posted Sept. 1, 2008

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Presidential candidates Sens. John McCain (R, Ariz.) and Barack Obama (D, Ill.) both have started to write prescriptions for health system reform with an eye toward tackling many of the nation's most serious conditions. But because these orders are incomplete, the effects they will have on doctors and their patients are difficult to predict.

The two leading candidates are "proposing some broad outlines of what they would intend to do and waiting to fill the details in later," said Sara Collins, PhD, assistant vice president for the Commonwealth Fund's Program on the Future of Health Insurance.

McCain and Obama both support better pay for doctors who meet quality standards and who coordinate care. They want more transparency in the system and widespread adoption of health information technology, and would consider allowing importation of prescription drugs to reduce prices.

But they part ways on their visions to reform the market for health insurance and to expand coverage. McCain would end the employee tax exclusion for health insurance spending, instead offering refundable tax credits to help people buy health insurance. He also would work with states to create guaranteed access plans for Americans with expensive chronic conditions and those denied health insurance coverage. Health plans could sell policies across state lines under his plan to increase insurance portability and competition.

Obama would cover all uninsured kids and more uninsured adults by expanding eligibility for Medicaid and the State Children's Health Insurance Program. He also would create a national health insurance exchange that would offer benefits similar to those in federal employee health plans, with guaranteed eligibility and subsidies for lower-income people. The exchange would take bids from private insurers to offer competing plans.

Covering more patients

The McCain and Obama plans both seek to expand health coverage to the uninsured -- potentially putting millions more paying patients in doctors' offices -- but would take different paths to get there.

McCain's guaranteed access plans would limit premiums and provide subsidies for lower-income people. Plans would likely be restricted to individual states at first, and talks with governors and legislatures might allow them to be expanded into regions, said Tom Miller, an unpaid health care adviser to the McCain campaign and a resident fellow at the American Enterprise Institute. "But that's a little bit up in the air."

The McCain plan to allow insurers to sell their plans nationwide instead of only on a state-by-state basis doesn't specify how these interstate plans would be regulated. Miller said an agreement might be reached to allow the insurer's home state to take the lead on handling consumer complaints, with the enrollee's home state as a backup. In any case, consumers will be the ultimate judges of such plans, he said. "If [health plans] don't carry out their promises they're not going to succeed."

One concern about the McCain plan is that it won't significantly reduce the number of uninsured people, according to an analysis released July 23 by the Tax Policy Center, a collaboration between the Urban Institute and Brookings Institution. The report assumes the number of uninsured Americans will increase to 59.2 million by 2013 and 66.8 million by 2018, absent any policy changes.

That analysis paints this picture: McCain's plan would decrease the uninsured number by 4.6 million by 2013. By 2018, McCain's plan would cover only 2 million people who would otherwise be uninsured because increases in health spending would outpace the value of the plan's tax credits. In contrast, the Obama plan would shrink the uninsured population by 29.6 million by 2013 and 33.9 million by 2018.

Miller disagreed with the estimate on the McCain plan, saying that the analysis overestimates the number of employers that would drop coverage. "That's not what's going to happen in the real world."

The Tax Policy Center analysts acknowledged that their estimate is "very preliminary" because it includes a number of assumptions about the funding and structure of the McCain plan that the campaign has not detailed.

Obama's national health insurance exchange would be modeled partly on Massachusetts' Commonwealth Connector Authority. The connector, in an effort to offer affordable coverage to the uninsured, defines minimum levels of benefits and sets affordability standards for participating private plans. In return, the connector subsidizes coverage based on income. Obama's exchange would take that model nationwide by creating one public, national plan with benefits similar to those offered to federal employees, said unpaid Obama campaign adviser David Cutler, PhD, a professor of economics at Harvard University. The public plan would then serve as a benchmark for private plans participating in the exchange.

Obama would fund the expansion in part by requiring employers who don't make a high enough contribution to their employees' health care to pay into the national plan. But the higher the contribution, the more likely it will increase employment costs, which could lower wages without improving coverage, according to the Tax Policy Center's analysis.

Small businesses would be exempt from the payroll contribution and would receive tax credits of up to 50% of what they spend on employees' premiums. That could make coverage more affordable for employees in small physician practices, said Robert Doherty, the American College of Physicians' senior vice president for governmental affairs and public policy.

If Obama or McCain succeed in covering millions of the uninsured, they would also need to ensure that enough physicians will be available to see them, said E. Stephen Edwards, MD, a retired pediatrician and past president of the American Academy of Pediatrics. "We're going to need a lot more physician power than we currently have."

Neither candidate's plan addresses the physician work force issue.

Dodging the Medicare pay question

McCain and Obama both call for turning Medicare and other public programs into models for rewarding physicians and hospitals for higher quality care. But neither candidate offers a strategy for reforming the sustainable growth rate formula that for several years has called for annual cuts to Medicare physician pay.

Although Congress in July reversed the latest Medicare pay cut, the measure did not adjust the sustainable growth rate formula, which means doctors will be facing a projected 21% Medicare pay cut on Jan. 1, 2010. Obama voted to override the cut. McCain did not vote, but he issued a statement criticizing the bill for slashing private Medicare plan payments to help boost physician pay.

McCain would stop Medicare and Medicaid from paying for medical errors deemed preventable, and Obama suggests such errors should be reported publicly. But advisers to both campaigns indicated that reducing physician pay for failing to meet quality goals in Medicare and other public programs was a less attractive option.

A new pay system would be much easier to implement if it focuses more on rewards than penalties, McCain adviser Miller said. Likewise, Obama adviser Cutler said most policy analysts call for rewarding doctors who perform well, instead of penalizing those who don't.

Dr. Edwards said defining quality care in any type of pay-for-performance initiative would be difficult. The process must be more meaningful than simply making sure paperwork is filled out correctly, he said.

Both candidates have been largely silent on Medicaid and SCHIP physician pay, though both want at least to cover all children eligible for the programs. Dr. Edwards said he appreciates that commitment but that it's not enough. "That doesn't mean doctors are going to be compensated fairly for the work that they do."

Two-thirds of SCHIP plans pay the same as state Medicaid programs, which generally pay physicians less than Medicare does, he said.

Boosting health information technology

Both the McCain and Obama plans call for expanding use of standardized electronic records systems and health IT to reduce medical errors, improve efficiency and improve transparency.

"You can't find a politician who doesn't support the concept of health IT," said Joseph Antos, PhD, a health care scholar at the American Enterprise Institute.

Obama would spend $50 billion over five years to speed adoption of electronic records systems. The government would assist physicians and hospitals in paying for and implementing the systems, Cutler said.

McCain also calls for wider use of health IT, but he doesn't offer a dollar figure to spend on it. The candidate believes that widespread agreement on technology standards are needed before determining how much money is necessary, Miller said. McCain also proposes allowing physicians and other health professionals to use technology to practice across state lines. Miller said that might include services as simple as remote patient monitoring or as complex as patient-doctor consultations.

Both candidates call for more public reporting of medical outcomes, quality measures and costs, but Obama would go further by requiring physicians and hospitals to report medical errors, hospital-acquired infections and disparities in care.

McCain and Obama also don't share the same vision for medical liability reform. McCain proposes limiting liability for physicians who follow evidence-based standards. Obama supports alternative methods of resolving medical lawsuits, such as the model employed at the University of Michigan Health System. That program involves investigating, admitting to, apologizing for and compensating patients for undisputable medical errors, even if a lawsuit hasn't been filed.

Obama campaign adviser Kavita Patel, MD, said the Michigan model is promising. "That is exactly the kind of cultural shift that Senator Obama ... will bring to health care," she said.

Keeping an open mind

Policy experts didn't expect McCain and Obama to fill in all the details of their health system reform prescriptions before the election. Whoever becomes president will still need to seek congressional approval to advance his ideas, with McCain likely having a tough time selling his tax credit proposal to Democrats on Capitol Hill, said the American Enterprise Institute's Antos.

Obama's plan lacks detail because he doesn't want his plan to be too prescriptive, Cutler said. "The senator believes very strongly that we need to work with people, not impose upon people."

For Obama, that tactic means not offering a take-it-or-leave-it proposition, much as the way Sen. Hillary Rodham Clinton (D, N.Y.), then first lady, was perceived as presenting health system reform in the early 1990s, Cutler said. "We're very sensitive about not wanting to give that impression."

Antos offered an alternative explanation. "They're smart. These are politicians running for office, so the last thing they want to do is to tell you want they really want to do."

Back to top


ADDITIONAL INFORMATION

The candidates' plans

[download pdf]

Sens. Barack Obama (D, Ill.) and John McCain (R, Ariz.) have offered significantly different health system reform proposals. Here's a point-by-point comparison.

Health insurance reform

Obama: Create a national insurance exchange to cover individuals through participating private health plans. Set rules and standards for insurers, inform consumers about the plans' differences and offer subsidies for low-income people who enroll. Require insurers to justify above-average premium increases.
McCain: End the tax exclusion for employer-sponsored health insurance spending. Offer refundable tax credits of $2,500 for individuals and $5,000 for families to buy health insurance. Allow unspent tax credits to be deposited in health savings accounts.

Covering the uninsured

Obama: Offer a national plan with subsidies for lower-income people. Allow private insurers to offer the plan but prohibit denying applicants based on preexisting conditions.
McCain: Work with governors to create a private guaranteed access plan to those without prior group health coverage and those with preexisting conditions. Offer subsidies to lower-income people and put a "reasonable" limit on the cost of the plans' premiums.

Health care costs

Obama: Require plans participating in a new national health plan, Medicare or federal employee plans to use proven disease management programs. Support care coordination and medical home programs. Reimburse employer plans for part of catastrophic costs if employers use the savings to reduce premiums. Offer a small business tax credit of up to 50% of the premiums paid for employees.
McCain: Change Medicaid and Medicare reimbursement to pay for diagnosis, prevention and care coordination, but not for errors deemed preventable. Allow Medicaid to pay physicians and hospitals per episode of care instead of per treatment. Support access to walk-in clinics at retail outlets. Eliminate lawsuits against physicians who follow clinical guidelines and safety protocols.

Health care quality

Obama: Require doctors and hospitals to collect and report measures of health costs and quality, including errors deemed preventable, hospital-acquired infections and disparities in care. Create an institute to guide reviews and research on comparative effectiveness.
McCain: Increase federal research on chronic disease treatments. Facilitate the development of national standards for measuring and recording diseases and outcomes.

Health IT

Obama: Spend $50 billion over the next five years to foster widespread adoption of standards-based electronic health IT.
McCain: Support the implementation of health information systems to allow physicians to practice electronically across state lines and deliver care less expensively.

Health coverage mandates

Obama: Require all children to have health insurance and require employers who don't make a "meaningful" contribution to their workers' health coverage to pay into a national health plan. Exempt small businesses and provide a tax credit.
McCain: Not addressed.

Prescription drugs

Obama: Allow imported medicines from other developed countries if the drugs are deemed safe and are less expensive than in the U.S. Allow the federal government to negotiate prices directly with drug companies for Medicare Part D. Encourage greater use of generic drugs in federal health programs.
McCain: Consider allowing drug importation and faster introduction of generic drugs.

Source: Official campaign Web sites

Back to top


How they voted

Sens. McCain and Obama have missed Senate votes because of campaign schedules, but they've taken opposing positions on several key health care bills.

Medicare Improvements for Patients and Providers Act of 2008

Reversed a 10.6% cut in Medicare physician pay that took effect on July 1. Implements a 1.1% raise in January 2009.
Senate vote: Adopted 69-30 on July 9. Overrode President Bush's veto 70-26 on July 15.
McCain: Not voting on both dates. Released a statement opposing the bill.
Obama: Yea on July 9. Not voting on July 15.

Children's Health Insurance Program Reauthorization Act of 2007

Proposed a five-year, $60 billion SCHIP reauthorization that would have covered 3 million additional children and increased federal tobacco taxes.
Senate vote: Adopted 67-29 on Sept. 27, 2007. Bush's veto sustained by the House.
McCain: Not voting. Released a statement opposing the bill.
Obama: Not voting. Released a statement supporting the bill.

Tax Relief and Health Care Act of 2006

Prevented a 5% Medicare physician pay cut scheduled for Jan. 1, 2007, by freezing base Medicare pay at 2006 levels. Instituted a 1.5% bonus for physicians who report certain quality measures.
Senate vote: Adopted 79-9 on Dec. 9, 2006.
McCain: Not voting. No statement issued.
Obama: Yea.

Deficit Reduction Act of 2005

Cut federal health spending by $11.2 billion over five years by reducing Medicare pay for multiple imaging procedures and home health services and cutting Medicaid drug reimbursements to pharmacies, among other changes. Increased citizenship documentation rules for Medicaid enrollees and gave states more ability to restrict Medicaid benefits.
Senate vote: Adopted 52-47 on Nov. 3, 2005.
McCain: Yea.
Obama: Nay.

Source: Thomas, the federal legislative information service, August; Congressional Budget Office cost reports

Back to top


Speaking out on health care

Sen. Barack Obama (D, Ill.) released his health reform plan in Iowa in late May 2007. Sen. John McCain (R, Ariz.) unveiled his plan in late April in Florida. Both have repeatedly referenced health care in their campaign speeches, including these quotes taken from prepared remarks.

Obama

  • "We need to invest in biomedical research and stem cell research, so that we're at the leading edge of prevention and treatment. And we need to finally pass universal health care so that every American has access to health insurance that they can afford, and are getting the preventive services that are the key to cutting health care costs. That's what I pledge to do in my first term as president." -- Kettering University, Flint, Mich., June 16
  • "I think it's time to finally make health care affordable and accessible for every American. We need to stand up to the insurance companies and the drug companies. We need to bring Americans together. And we need to pass a plan that lowers every family's premiums and gives every uninsured American the same kind of coverage that members of Congress give themselves." -- Vernier Software & Technology, Beaverton, Ore., May 9
  • "I do not accept that in the richest nation on Earth we have to stand by while 47 million Americans have no health care and millions more are on the verge of bankruptcy because of their medical bills. My mother died of ovarian cancer in the prime of her life, and do you know what she was most worried about in those final months? She was between jobs when she was diagnosed and she wasn't sure whether insurance would cover her treatment." -- Veterans Memorial Park, Manchester, N.H., Sept. 3, 2007

McCain

  • "In addition to strengthening the VA, we should give veterans the option to use a simple plastic card to receive timely and accessible care at a convenient location through a provider of their choosing. I will not stand for requiring veterans to make an appointment to stand in line to make [another] appointment to stand in line for substandard care of the injuries you have suffered to keep our country safe." -- American GI Forum of the U. S. National Convention, Denver, July 25
  • "We're going to offer every individual and family in America a large tax credit to buy their health care, so that their health insurance is theirs to keep even when they move or change jobs. My plan would allow those who want to stick with employer-provided health insurance to do so. But I want to give individuals greater choice rather than give small business no choice at all." -- National Federation of Independent Businesses & eBay National Small Business Summit, Washington, D.C., June 10
  • "There are those who are convinced that the solution is to move closer to a nationalized health care system. They urge universal coverage, with all the tax increases, new mandates and government regulation that come along with that idea. But in the end, this will accomplish one thing only. We will replace the inefficiency, irrationality and uncontrolled costs of the current system with the inefficiency, irrationality and uncontrolled costs of a government monopoly." -- Lee Moffitt Cancer Center & Research Institute, University of South Florida, April 29

Source: Official campaign Web sites

Back to top


ADVERTISEMENT

ADVERTISE HERE


Featured
Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story


Read story

Goodbye

American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story


Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story


Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story


Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story


Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story


Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story


Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn