Government

AMA letter backs Obama's broad principles for health system reform

The Association outlines the next steps Congress and the White House should take to turn the tenets into policy changes.

By Chris Silva — Posted April 27, 2009

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The American Medical Association earlier this month further fleshed out what it will push for in this year's landmark health system reform debate, aligning itself with several core principles from President Obama and offering more specifics about how to achieve them.

In an April 13 letter to the White House, the AMA announced its strong support for eight guiding principles against which Obama has said he will gauge the health reform effort as he works with Congress. The AMA made the statement in an effort to show it is backing this "historic opportunity to improve the system," while also highlighting more specific issues the organization wants Congress to address this year, said AMA President Nancy H. Nielsen, MD, PhD. She co-signed the letter with AMA President-elect J. James Rohack, MD.

"We are committed to reform, and we want to expand access to care for all Americans," Dr. Nielsen said. "This is an important year, because more people may lose their jobs and their health insurance, and we have grave concerns about that and the loss of preventive services."

The eight basic principles -- including guaranteeing patient choice and aiming for universal health care coverage -- lack details, although Obama further outlined his long-term vision in his budget proposal released Feb. 26. The AMA letter indicates that the standards dovetail with more expansive policy changes for which the Association already is pushing.

But embracing the eight principles does not mean the AMA necessarily backs every idea on health reform that Obama has revealed so far. For instance, the president has called for creating a public health plan option linked with a national health insurance exchange to serve as competition for private plans. In its letter to the White House, the AMA says it supports a health insurance exchange to ensure coverage choice and portability, but it does not weigh in on the public plan option. To move toward universal coverage, Congress should build on the employer-based system and strengthen the safety net provided by publicly financed programs such as Medicare, Medicaid and the Children's Health Insurance Program, Dr. Nielsen and Dr. Rohack wrote.

Dr. Nielsen stressed that the organization is mindful of the need to watch the dollar signs as policymakers work toward the goal of universal coverage. "It's very important for us that all Americans have health care coverage that's affordable. But we do understand that we can't afford everything for everybody, so we need to have fiscally responsible conversations."

The letter proposes expanding on Obama's principles in a number of ways, including:

  • Reforming and improving the insurance market through the use of modified community rating, guaranteed renewability and fewer benefit mandates.
  • Assisting low-income individuals through premium subsidies and cost-sharing assistance.
  • Promoting medical home models to reduce system fragmentation and improve care coordination.
  • Establishing antitrust reforms that would allow groups of physicians to contract jointly with payers as long as the doctors certify they are collaborating on health information technology and quality improvement initiatives.
  • Easing the effect of liability pressure on the practice of defensive medicine through innovative approaches, such as health courts, early disclosure and compensation programs, and expert witness qualification standards.

Some signs of progress

Dr. Nielsen said she is encouraged by the progress already made in talks about Medicare physician payment reform, a key part of the AMA's broader health system reform agenda. Physicians soon may begin to see pilot programs testing various payment models in an attempt to find long-term alternatives to the current system, she said. "It's early, but there's no question that's on the table."

In his fiscal 2010 budget proposal, Obama said Medicare's physician pay cuts as mandated by law are not practical. He said Congress should plan on spending $330 billion over the next decade to repeal the current pay system instead of simply patching it year after year.

The next steps on the issue are up to lawmakers. The AMA was one of more than 70 medical organizations that signed an April 13 letter to the House Budget Committee asking Congress to retain a section in the House budget proposal that could make it easier for lawmakers to approve a payment overhaul. By suspending "pay as you go" rules for a large initial portion of a physician pay proposal, the House budget would obviate the need to find hundreds of billions of dollars in offsets otherwise needed to prevent the overhaul from running up deficit spending. At this article's deadline, lawmakers were still negotiating over the differences between the House budget blueprint and the Senate version, which does not include the pay-go exemption.

At least two key Senate leaders think Congress can move quickly, even though it is contemplating the largest health system overhaul proposed in 15 years. "We have jointly laid out an aggressive schedule to accomplish our goal" of enacting comprehensive health system reform, said an April 20 letter to Obama from Senate Finance Committee Chair Max Baucus (D, Mont.) and Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D, Mass.). Both committees plan to mark up legislation in early June.

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ADDITIONAL INFORMATION

Obama's 8 principles

The American Medical Association has aligned itself with President Obama's eight basic health system reform principles and provided ideas about how Congress and the administration can achieve them. Here are the original principles for a reform plan as the White House describes them:

Guarantee choice: The plan should provide Americans a choice of health plans and physicians. People will be allowed to keep their own doctor and their employer-based health plan.

Make health coverage affordable: The plan must reduce waste and fraud, high administrative costs, unnecessary tests and services, and other inefficiencies that drive up costs with no added health benefits.

Protect families' financial health: The plan must reduce the growing premiums and other costs American citizens and businesses pay for health care. People must be protected from bankruptcy due to catastrophic illness.

Invest in prevention and wellness: The plan must invest in public health measures proven to reduce cost drivers in our system -- such as obesity, sedentary lifestyles and smoking -- as well as guarantee access to proven preventive treatments.

Provide portability of coverage: People should not be locked into their jobs just to secure health coverage, and no American should be denied coverage because of preexisting conditions.

Aim for universality: The plan must put the United States on a clear path to cover all Americans.

Improve patient safety and quality care: The plan must ensure the implementation of proven patient safety measures and provide incentives for changes in the delivery system to reduce unnecessary variability in patient care. It must support the widespread use of health information technology with rigorous privacy protections and the development of data on the effectiveness of medical interventions to improve the quality of care delivered.

Maintain long-term fiscal sustainability: The plan must pay for itself by reducing the level of cost growth, improving productivity and dedicating additional sources of revenue.

Source: The White House, AMA letter (link)

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DeParle weighs in on health system reform

With the expectation of an eventful year ahead on health system reform, the new leader of the reform effort within the White House started working more than a month before her new office was officially created.

Nancy-Ann DeParle, the first head of the newly minted White House Office for Health Reform, said during an April 15 briefing with reporters in Washington, D.C., hosted by the Kaiser Family Foundation, that she has been plugging away since her appointment was announced March 2. Obama created the new office by executive order on April 8.

Most of her time has been spent meeting with various lawmakers and their staffs on the reform issue, DeParle said. But she reported that she also met with the American Medical Association, the American Hospital Assn. and "various groups who I have reached out to or who have reached out to me to talk about how we get this done this year."

The efforts have already borne fruit, DeParle said. Meetings with state leadership in rural areas of the country, for instance, have highlighted the need for policymakers to help small business owners and their workers, many of whom have been denied coverage or have seen steep increases in their premiums because of preexisting conditions.

"The stories are heartbreaking, and I think they're the reason why this president ... has made it clear that health reform must not wait, cannot wait and will not wait another year."

DeParle took reporters' questions, including several on Obama's plan to save $180 billion over 10 years by requiring private Medicare plans to bid competitively for contracts, with the federal government paying the average of all bids. Confronting payment disparities between Medicare Advantage and the traditional fee-for-service program allows the White House to set the stage for broader Medicare payment reforms, she said.

"Everyone acknowledges that the Medicare Advantage plans, particularly the private fee-for-service plans, nationwide have been paid something like a 12% to 14% premium above what traditional fee-for-service Medicare has been paid to provide the same services," DeParle said.

DeParle also discussed plans to promote the medical home model in an effort to reduce system fragmentation, comparative effectiveness research to determine the best treatments and incentives to help address the growing shortage of primary care physicians.

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