Health care system will go through major changes, based on President's new budget
27 02 09 - 17:30
Obama Offers Broad Plan to Revamp Health Care
By ROBERT PEAR - The New York Times
WASHINGTON — President Obama’s budget would make a down payment toward his goal of covering the uninsured, and he would pay for it in part by cutting federal payments to hospitals, insurance companies and drug companies.
He would also increase premiums charged to Medicare beneficiaries with higher incomes for prescription drug coverage.
Mr. Obama requested more than $6 billion for cancer research at the National Institutes of Health, up from $5.6 billion last year, and he announced a “multiyear plan to double cancer research.”
In addition, Mr. Obama said he would speed the approval of low-cost generic versions of expensive biotechnology drugs by establishing “a new regulatory pathway” at the Food and Drug Administration.
And he said he would increase access to family planning services for low-income women by expanding eligibility under Medicaid. A similar proposal was dropped from the recent economic stimulus bill after it provoked an outcry from Republicans.
Mr. Obama asked Congress to set aside $634 billion in a “reserve fund for health care reform.”
He provided no new information about how to cover the uninsured, saying he would work out the details with Congress later this year. But he did propose specific changes to save money, and many of his ideas face opposition from Washington lobbyists and the interests they represent.
Mr. Obama would, for example, require drug companies to give bigger discounts, or rebates, to Medicaid, the health program for low-income people.
Drug makers now must provide Medicaid with a discount equal to at least 15.1 percent of the average manufacturer price for a brand-name product. Mr. Obama wants to require discounts of at least 22.1 percent. Pharmaceutical companies have resisted such proposals in the past.
Mr. Obama said he would save $176 billion over 10 years by cutting Medicare payments to health insurance companies that provide comprehensive care to more than 10 million of the 44 million Medicare beneficiaries.
Medicare pays private insurers an average of 14 percent more than it would cost to care for the same people in the traditional fee-for-service Medicare program. “It’s time to stop this waste,” the White House said.
Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, denounced the proposal. It would, she said, require people in private Medicare Advantage plans to bear “a disproportionate share of the costs to reform the health care system.”
The president also proposed cutting Medicare payments to hospitals that re-admit a large proportion of patients within 30 days after they are discharged. Such re-admissions sometimes indicate that hospitals provided poor care or did not properly coordinate care.
Under the proposal, hospitals would receive “bundled payments” that cover not only their own services, but also any care provided by nursing homes and home health agencies in the month after patients left the hospital.
The White House said this proposal would save $26 billion over 10 years.
Mr. Obama also proposed squeezing $37 billion out of the payments to home health agencies over the next decade.
William A. Dombi, vice president of the National Association for Home Care and Hospice, a trade group, said this proposal would directly affect frail, sick older people.
“Patients would lose access to care very quickly,” Mr. Dombi said. “Over 70 percent of all home health agencies would be operating in the red.” President George W. Bush made a similar proposal last year, but it died in Congress.
Doctors praised one aspect of Mr. Obama’s budget. He assumes that Congress will protect doctors from cuts in Medicare payments scheduled to occur under current law — cuts of 21 percent in 2010 and about 5 percent in each of the next few years.
“We are very pleased,” said Dr. Nancy H. Nielsen, president of the American Medical Association. “All previous budgets assumed cuts in doctor payments.”