Obama's economic stimulus plan to pump $100 billion into health care sector
07 01 09 - 11:48
Health care could nab $100B payday
By CHRIS FRATES - Politico
The $775 billion economic stimulus plan being cobbled together by President-elect Barack Obama and congressional Democrats could pump more than $100 billion into the health care sector, modernizing its delivery system and providing care to those who lost their health insurance along with their jobs, according to sources close to the planning.
The bulk of the money, about $80 billion, would go to state Medicaid programs that are expected to grow with rising unemployment. Officials worry that without a cash infusion, state lawmakers facing already strained budgets would be forced to cut the safety-net health care program just as the need swells.
Roughly another $20 billion would be used as a down payment on Obama’s $50 billion campaign promise to update the nation’s antiquated health care delivery system. The streamlining effort is aimed at improving quality and saving money and could include digitizing patients’ medical records and pushing doctors to use e-prescribing.
Health spending in the developing economic stimulus package has been largely overshadowed by the public discussion over tax cuts and infrastructure improvements. But interviews with nearly a dozen Washington health care experts found the issue very much in play.
One of the keys to any stimulus plan is to spend the money quickly, and officials point to Medicaid as a prime opportunity to use an existing program to funnel more money into the sagging economy.
By increasing the federal portion of the state-federal partnership, officials want to discourage Medicaid cuts that would make it more difficult for people to qualify for coverage. In fact, the officials hope states will take the opportunity to expand Medicaid spending in order to cash in on the more generous federal matching funds, a senior Democratic Senate aide said.
Providing more of the nation’s jobless with health care helps them stay financially afloat and healthy as they look for work.
Lawmakers and Obama are also discussing using the $20 billion of the stimulus money to pay providers to begin modernizing the health care delivery system. Some of those funds would be funneled as incentive payments directly to doctors and hospitals that participate in Medicare, which provides health care to the nation’s seniors. The idea is similar to the payments used to coax doctors to make the upgrade from prescription pads to e-prescribing.
The money would also provide grants to states to help doctors, pharmacies and other Medicaid providers update their delivery methods. In addition, states would get funds to build a broadband infrastructure in areas lacking fast Internet connections, according to people familiar with the discussions.
Officials view the investment in health information technology not only as a means to connect more doctors to the Internet but also as a way to lay the groundwork for a broader Democratic reform agenda. A critical component of that is getting medical practitioners access to the Web, which would reduce paperwork, allow them to communicate more efficiently with each other, and track the care and history of patients even as they change doctors.
To that broader end, the stimulus package may also provide funding to train doctors and nurses on how to use technology to improve the quality of patient care with special assistance for those who treat low-income patients. Officials would also like to fund a coordinator who would help set national health IT standards to govern the emerging system. Uniform standards are key to creating a system under which a doctor in New York can access the medical records of a tourist from Oklahoma.
In addition to boosting Medicaid and health IT spending, lawmakers are likely to fund prevention programs, medical research, and the construction and maintenance of community health centers. Also likely is a federal subsidy to help defray the cost of COBRA, a federal program that allows workers to temporarily hold on to their health benefits after losing their jobs. It is, however, often too expensive for them to afford, a senior Democratic Senate aide said.
Less clear is whether Obama and lawmakers will include an expansion of children’s health care coverage in the stimulus bill — a debate that’s being driven by politics.
Last year, President George W. Bush vetoed a similar proposal. Including it in the stimulus could give Obama an early victory and allow Democrats to avoid the perennially divisive issue of how to pay for it.
But some lawmakers are pushing to leave it out. Last year, Democrats tried to pay for the expansion by cutting subsidies to insurance companies and raising tobacco taxes, but both proposals were successfully blocked by Republicans.
With an expanded majority in Congress and a Democrat entering the White House, Democratic leaders are re-examining their options.