February 18, 2009

The Honorable Fortney H. (Pete) Stark
Chairman, Subcommittee on Health
Committee on Ways and Means
Washington, DC 20515

Dear Mr. Chairman:

Once again, Consumers Union, the independent, non-profit publisher of Consumer Reports, is very pleased to endorse your legislation, HR 193, the AmeriCare Health Care Act of 2009.

Your proposal would provide health security for every American without disrupting the current employment based system. A high quality insurance plan, similar to that used by our nation’s elected officials, would always be available to every resident without equivalent coverage in the workplace. Your proposal would help control costs by greatly expanding the use of Medicare-proven reimbursement tools, and it would be funded by an honest, straightforward collection of premiums through the tax system.

Our readership consistently tells us that the high cost of health care is among the highest consumer concerns. Your bill’s provisions limiting health care costs for middle and lower income Americans to a certain percentage of their income would truly bring peace of mind and financial security to our most-hard-pressed citizens.

We are particularly pleased that your long work on health reform has contributed enormously to an emerging consensus on the way health reform could be accomplished without arousing the concerns of those who already have coverage with which they are satisfied. There are huge elements of your legislation in the President’s proposal and in leading Senate proposals. We hope that this emerging consensus in the key Committees of Congress can result—at long last—in the enactment of truly meaningful health care reform in this Congress.

Like every organization, we of course have suggestions for various refinements. Attached is a memo suggesting certain issues that we hope you could further consider. Regardless of these suggestions, we congratulate you for this truly excellent proposal. We look forward to working with you on the enactment of the type of legislation you have so skillfully outlined.

Sincerely,
DeAnn Frieholm
Director, Campaign for Health Reform
Consumers Union

William Vaughan
Health Policy Analyst
Consumers Union

As said, Consumers Union strongly supports your outline of a system of public and private plans that will ensure quality coverage of all Americans. But these different insurance options (Medicare, AmeriCare, and the many group plans) raise the fundamentally difficult question of how to obtain cost containment without creating cost shift, poor quality and access-destroying distortions between the different options.

We believe it is likely that once the current economic crisis has passed, there will be a major effort to bring Federal deficits down to more historic levels and even to reduce some of the huge increase in public debt that has occurred. In addition, of course, are long-range Medicare funding problems, and this year’s Trustees’ report may predict a dramatic reduction in the Part A Trust Fund.

Thus, there will be enormous pressures to make cuts in Medicare and presumably your bill’s new AmeriCare program. Those cuts could create severe long-term quality and access problems, as providers shift their attention to serving the group health plans and their enrollees while minimizing their contact with Medicare and AmeriCare enrollees. Already many physicians are unwilling to accept Medicaid patients. MedPAC has noted some increased difficulty in access to family physicians—a particularly acute problem right now in Northern Virginia. As CBO says in its December, 2008 options paper:

“Indeed, trends in both [public and private] sectors reflect many of the same underlying forces, so controlling federal outlays over the long term will be difficult without addressing the forces that are also causing private spending for health care to rise.” P. 20

We hope that you can consider and begin a long-term process of developing a common public-private cost containment system: a ‘single saver’ system, if you will. For example, it would be possible to reduce business expense tax deductions for private insurers who do not, by some future date, copy and use all or part of Medicare’s payment systems (PPS, RB-RVS, etc.), perhaps adjusted upwards to avoid concern in the provider community. If such a provision were included in any proposal, to start in five to ten years, it could put in place a framework that could minimize the harm to Medicare and AmeriCare when the inevitable budget cuts of the future finally arrive.

Unless we move to some sort of coordinated payment systems, it will be a constant battle to obtain savings without destroying the Medicare, AmeriCare, VA, and other public systems.

Emergency Medical Care needs emergency help

One of the few major issues missing from your bill, Senator Baucus’s Call to Action and President Obama’s proposals (as we understand them) is solving the crisis in the nation’s emergency health care system. The IOM has documented the problem and provided an excellent list of corrective actions. Our readers have shared ‘ER horror stories’ with us. These are not ‘funny’ stories; patients are dying from failures in our nation’s ER systems.

We hope that in any comprehensive reform, the ER system’s problems can be addressed. We believe that many of the IOM’s proposals can be achieved with little or no additional spending. Basically, as a condition for future Medicare PPS capital payments, after a date in the near future, no new project or expansion can be reimbursed unless the facility certifies that it has in place a plan to coordinate regional ER care and provide the type of modern ER services and facilities outlined in the IOM report. The other major ER issue is the failure/refusal of more and more specialists to ‘be on call.’ As you make amendments to the Direct and Indirect Medical Education program, we hope you will require that as a condition of billions of dollars in public financing of medical education, ‘on call services’ will be provided (and if not, the education value a physician has received through IME/DME will be reimbursed).

Clear Choices

Your legislation provides for up to 9 AmeriCare supplemental insurance policies.

We firmly believe that too many options of policies with minor coverage differences simply confuse and even paralyze consumer choices. While the standardization of Medigap policies has been a great success, many are still confused and unable to shop well for these policies. Further Medigap simplification would be useful. Once a choice is made in the difficult area of insurance coverage, most consumers drift with that choice year after year, even when it is in their interest to make a new choice (for example, the many Medicare beneficiaries who have stayed with Part D drug plans that clearly have dramatically increased the cost of the drugs they cover). Therefore, it is essential that the first occasion for choice presents clear, easy-to-see differences.

We hope that you ensure supplemental insurance competition based on efficiency and cost by limiting the options to fewer than 9 specific clearly defined choices. There will be enormous pressure on the Committee to allow many more choices in the name of the consumer. On behalf of an organization with a seventy-two year history of serving consumers, we hope you will resist those pressures. Simplicity and competition on the basis of price and quality is far preferable to small differences in benefit design.

Fighting Infection: An unnecessary 100,000 deaths per year

For several years, Consumers Union has conducted a national campaign to require public reporting of healthcare facility acquired infection rates (HAIs). About twenty-six States have adopted various forms of reporting, and from recent data out of Pennsylvania, we believe this information is helpful in encouraging facilities to reduce the rate of infections—infections which are estimated to cause the unnecessary and premature death of about 100,000 Americans per year.

We are disappointed that CMS has not been more aggressive in adding various types of infection to the list of ‘never events’ for which Medicare will not pay. We believe stronger action in this area is one of the fastest ways to reduce patient deaths and improve quality while saving money.

Therefore, as you refine your proposal and look for savings, we hope you could ensure that hospital readmissions due to infections acquired in the hospital are denied payment.