Quality-adjusted life-years (QALYs) are used in cost-effectiveness analyses to aid coverage and

reimbursement decisions worldwide. QALYs provide a flexible and convenient metric for measuring and comparing health outcomes across diverse diseases and treatments.

Every major private for-profit American health insurance company is a member and

financial supporter of ISPOR!They also fund many QALY researchers,

including: HEALTH UTILITIES, INC.

HEALTH-RELATED QUALITY-of-LIFE

ROADBLOCKS TO PPACA

IMPLEMENTATION

(1) EXPLAINING THE LAW TO THE AMERICAN PEOPLE

TWO MAJOR CHALLENGES For Obama in Implementing Healthcare Insurance Reform

Correcting and responding to the myriad of misrepresentations, fabrications and outright

lies about health reform

Attempting to have the American people focus on the benefits of the new law and not

its flaws & inadequacies.

The debate leading up the law’s passage has been intense, emotional, and heavily

politicized and has been as much about deeper issues and raw nerves in American

politics as it has been about the substance of health reform itself. 

The heavy political messaging will continue at least through the midterm elections and polls

will continue to elicit reactions from the public about the law (mixed), the

policymaking process (sharply negative) and the benefits the law provides (very positive). 

(2) DEALING WITH THE STATES

TWO MAJOR CHALLENGES For Obama in Implementing Healthcare Insurance Reform

The law gives the states a substantial role in implementation. Among the major responsibilities states have are:

•setting up the insurance exchanges for small business and individuals; •enforcing the new insurance reforms;•overseeing the new Medicaid expansion that for the first time provides coverage to all low income people whether or not they have children; • facing new administrative challenges such as outreach and enrollment of new populations, integrating Medicaid with the new exchanges, and applying new income eligibility standards established under the law. 

Every state legislature will need to act for states to move forward.

States, facing an estimated $375 billion in budget deficits over the next two years with 37 governorships up for election, will need to gear up for health reform at a time when they are cutting back and do it in a fluid political environment. There is financial assistance in the law to help in establishing exchanges, but none for other tasks other than the normal federal-state split for administrative costs under Medicaid.  Some states, mostly blue states, will be real pacesetters, others, mostly red states, will lag behind, and most will fall somewhere in the middle

• Not even the most optimistic Republicans expect to gain the two-thirds majorities that would be needed to overcome an Obama veto.

• The law responds to a genuine need. The Census Bureau reported this month that 50.7 million people were uninsured in 2009, an increase of 4.3 million or nearly 10% over the previous year. The numbers for 2010 will be higher yet.

• The health care law saves money, by the reckoning of the Congressional Budget Office, so Republicans would need to find ways to achieve equivalent savings if they repealed the law. (The CBO re-affirmed last month that the law would “produce $230 billion in net budgetary savings” over 10 years.)

• While trying to repeal the health care law, Republicans do not agree on what to replace it with.

• Popular and unpopular provisions of the law are intertwined and difficult to separate. People like the idea of being able to buy insurance regardless of any pre-existing condition. They dislike the idea of being compelled to do so. But without such a requirement, people could wait until they got sick and then buy coverage.

BUT REPUBLICANS HAVE THEIR OWN HURDLES AS THEY TRY TO REPEAL THE LAW

REPEAL PPACA ?????

vs.

50.7 million… & growing

vs.

On January 19, 2011, the U.S. House of Representatives approved a repeal measure that Republicans formally titled the "Repealing the Job-Killing Health Care Law Act." It was sponsored by House Republican leader Eric Cantor.

Two of the leading “fact-checking” political web sites, the well-respected the University of Pennsylvania’s non-partisan Annenberg Political Policy Center’s FactCheck.org and the St. Petersburg (FL) Press’ Pulitzer prize-winning politifact.com have concluded, in well-documented analyses, that this is simply not true.

“JOB-KILLING” PPACA ????

Question: Will PPACA actually “kill jobs?”

Budget-Cutting Plans Impact Medicare, Medicaid and PPACA

Bipartisan Policy Center Debt Reduction Task Force

(Domenici-Rivlin)

Nat’l Commission on Fiscal Responsibility and Reform

(Bowles-Simpson)

House Concurrent

Resolution 34“Vouchercare”

President’s Framework for Shared Prosperity and Shared

Fiscal Responsibility

Senate “Gang of Six”

Introduced November 17, 2010 December 1, 2010 April 5, 2011 April 15, 2011 July 10, 2011Medicare Cost

SharingUnify Cost-Sharing for Parts

A and BCombined Annual Deductible

of $500Single Coinsurance of 20%

Annual Out-of-Pocket Cap at $5650

Deductible and Out-of-Pocket Cap Indexed to Per

Capita Increases in Medicare Spending

Unify Cost-Sharing for Parts A and B

Combined Annual Deductible of $500

Single Coinsurance of 20%Set Coinsurance at 5% for Annual Spending $5650-

$7500Set Out-of-Pocket Cap at

$7500

No Provision No Provision Not Specified in Executive Summary

Medigap No Provision Prohibit Medigap plans from Covering the First $500 and

Set a 50% Limit on Next $5000

No Provision No Provision Not Specified in Executive Summary

Independent Payment

Advisory Board (IPAB)

Require IPAB to Review Medicare Payment Structure

Every 2 Years and Recommend Changes to

Parallel Developments in the Private Market … Require

Recommendations to Automatically Become Law,

Unless Congress Acts to Block Them

Allow IPAB to Make Recommendations for All

Providers (no exemptions) if Costs Grow Faster than

Targets … Submit/Consider Reforms to Lower Spending, Including Further Expanding the IPAB’s Authority to Make Recommendations for Cost-

Sharing and Benefit Design … and to Look Beyond Medicare

No Provision Set New Target of Medicare Growth at Per Capita GDP +0.5% (currently at GDP

+1.0%) … Allow IPAB to Make Recommendations to Make Value-Based Benefit Design Changes … Add Additional Enforcement Mechanisms,

Such as an Automatic Sequester as a Backstop to the

IPAB, Congress and/or DHHS

Not Specified in Executive Summary

Dual Eligibles Eliminate Barrier to Enrollment of Dual Eligibles in Managed Care Options … Provide fast-Track Process for Waiver Applications …

Maintain Medicaid Payments for Medicare Premiums for Low-Income Beneficiaries

and the Hold-Harmless Provision

Give Medicaid Full Responsibility for Providing

Health Coverage to Dual Eligibles with Medicare

Continuing to Cover its Share of Expenses … Require Medicaid to Place Dual

Eligibles into Managed Care Plans

No Provision No Provision Not Specified in Executive Summary

Prescription Drugs

Require rebates on Single-Source Drugs as a Condition of Participation in Medicare

Part D

Require Medicare Rebates for Dual-Eligibles Enrolled in

Medicare Part D

No Provision Limit Payments for Rx by “Leveraging Medicare’s

Purchasing Power” … Speed-Up Availability of Generics …

Prohibit “Pay-for-Delay” Agreements

Not Specified in Executive Summary

Budget-Cutting Plans Impact Medicare, Medicaid and PPACA

Bipartisan Policy Center Debt Reduction Task

Force (Domenici-Rivlin)

Nat’l Commission on Fiscal Responsibility and Reform

(Bowles-Simpson)

House Concurrent Resolution 34“Vouchercare”

President’s Framework for

Shared Prosperity and Shared Fiscal Responsibility

Senate “Gang of Six”

Introduced November 17, 2010 December 1, 2010 April 5, 2011 April 15, 2011 July 10, 2011Physician Payments

Sustainable Growth Rate

(SGR)

Accommodate a Permanent “Fix” to the Sustainable Growth rate

Formula … Eliminate Exemption for Physician Payments in

PAYGO and Require All Increase to

be Offset by Other Spending Cuts in

Medicare

Reform the Sustainable Growth Rate (SGR) …

Replace Cuts Required by SGR with a “Freeze” Until 2013 and

Then a 1% Cut in 2014 …Direct CMS to Develop a New

Payment Formula to Begin 2015 …Eliminate the Exemption in PAYGO

and Fully Offset Costs of Reforming SGR

No Provision No Provision Require the Senate Finance Committee to

Reform or Permanently Replace the SGR and to Fully

Offset the Cost ($20B) with Other Health

Care Savings

Other Medicare Provisions

Bundle Medicare Payments for Post-Acute

Care

Increase the Authority and Funding for CMS to Fight Fraud,

Waste and Abuse …Reduce Payments for Medicare

GME and IME and Phase-Out Medicare Bad Debt Payments …

Accelerate Home Health Payment Reductions in PPACA …

Expand Successful Cost-Reduction Demonstration Projects by 2015

No Provision Recover erroneous

Payments from Medicare

Advantage, Part C

Require the Senate Budget Committee to

Achieve Program Integrity Savings in

Entitlement Programs to Curb Fraud and

Abuse

Community Living

Assistance Services and

Support (“CLASS”)

No Provision Reform or Repeal the CLASS Act Privisions

No Provision No Provision Repeal the CLASS Act Provisions

Sources and Notes

The Debt Reduction Task Force, “Restoring America’s Future”

November 10, 2010

The National Commission on Fiscal Responsibility and Reform

“Moment of Truth” December 1, 2010

The report also suggests that its be applied to “TRICARE for Life,”

federal employee retirement policies and to all private employer-covered retirees

The House Budget Resolution Does

Not Include Detailed

Specifications for Medicare.

We are told to look to Paul Ryan’s “Vouchercare”

proposal for details

Senatecritters:Saxby Chambliss (T-

Ga.)Tom Coburn (T-Okla.)Kent Conrad D-N.D.)Mike Crapo (T-Ida.)Dick Durbin (D-Ill.)

Mark Warner (D-Va.)

Medicare

Starting in 2022, the proposal would convert the current Medicare system to a system of premium support payments and would increase the age of eligibility for Medicare (On the basis of the specifications provided by Chairman Ryan’s staff, these assume no change in the sustainable growth rate mechanism for payments to physicians under Medicare.):

The Republican “Vouchercare” Plan for Medicare & Plans to Dismantle Medicaid

• Starting in 2022, the age of eligibility for Medicare would increase by two months per year until it reached 67 in 2033.

• People who turn 65 in 2022 or later years and Disability Insurance beneficiaries who become eligible for Medicare in 2022 or later would not enroll in the current Medicare program but instead would be entitled to a premium support payment to help them purchase private health insurance.

• Beneficiaries of the premium support payments would choose among competing private insurance plans operating in a newly established Medicare exchange. Those plans would have to comply with a standard for benefits set by the Office of Personnel Management. Plans would have to issue insurance to all people eligible for Medicare who applied and would have to charge the same premiums for all enrollees of the same age. The premium support payments would go directly from the government to the plans that people selected.

The Republican “Vouchercare” Plan for Medicare

• People who become eligible for Medicare in 2023 and subsequent years would receive a payment that was larger than $8,000 by an amount that reflected the increase in the consumer price index for all urban consumers (CPI-U) & the age of the enrollee.

The Republican “Vouchercare” Plan for Medicare

The premium support payments would increase in each year after initial eligibility by an amount that reflected both the increase in the CPI-U & the fact that enrollees in Medicare tend to be less healthy and require more costly health care as they age. (For example, projected net federal spending per capita for all people age 65 & older in traditional Medicare would be about $15,000 in 2022, CBO estimates, in comparison with about $8,000 for 65-year-olds.)

The premium support payments would vary with the health status of the beneficiary. In addition, CM2 would collect fees from plans with healthier enrollees, on average, and convey the proceeds to plans with less healthy enrollees, on average, with the goal of appropriately compensating plans for the health risks of their insured population.

The Republican “Vouchercare” Plan for Medicare

This risk adjustment mechanism would be known as the risk review audit and would be budget-neutral. The payment for 65-year-olds in 2022 is specified to be $8,000, on average, which is approximately the same dollar amount as projected net federal spending per capita for 65-year-olds in traditional Medicare (that is, the program’s outlays minus receipts from the premiums enrollees pay for Part B & Part D, expressed on a per capita basis) under current law in that year.

• Means Testing: The premium support payments would also vary with the income of the beneficiary. People in the top 2 percent of the annual income distribution of the Medicare-eligible population would receive 30 percent of the premium support amount described above; people in the next 6 percent of the distribution would receive 50 percent of the amount described above; and people in the remaining 92 percent of the distribution would receive the full premium support amount described above.

The Republican “Vouchercare” Plan for Medicare

(An MSA is an account that holds deposits that can be used for medical expenses.) Eligibility for MSA payments would be determined annually by the federal government on the basis of income relative to the federal poverty thresholds. The amount of the contribution in 2022 would be $7,800, and the annual amounts in subsequent years would grow with the CPI-U.)

• Beneficiaries at Risk: Beginning in 2022, the federal government would establish a medical savings account (MSA) for certain beneficiaries with low income.

Because seniors would pay higher costs under the proposed system, the government's share of Medicare spending would be the same in 2022 under Ryan's Vouchercare plan as it would under current law. The nonpartisan CBO analysis said that out-of-pocket costs for Medicare beneficiaries would more than double in 2022 when compared with the current system.

Seniors Will Be at Risk and Pay More for Health Care

The average cost for Medicare enrollees would rise from $5,538 in 2022 under current law projections to $12,513 that year under Ryan's

plan.

… or for people who receive Medicare benefits through the Disability Insurance program prior to 2022. As a result, the average age and average costs of enrollees remaining in the traditional Medicare program would increase over time. However, enrollees’ premiums under traditional Medicare would be adjusted to equal what they would be under current law --a so-called hold harmless provision. People covered under traditional Medicare would, beginning in 2022, have the option of switching to the premium support system.

The Republican “Vouchercare” Plan for Medicare

Eligibility for the traditional Medicare program would not change for people who are age 55 or older by the end of 2011

Medicaid

The proposal would modify Medicaid as follows: • Starting in 2013, the federal share of all Medicaid payments would be converted into block grants to be allocated to the states. The total dollar amount of the block grants would increase annually with population growth and with growth in the CPI-U. • Starting in 2022, Medicaid block grant payments would be reduced to exclude projected spending for acute care services or Medicare premiums & cost sharing paid by Medicaid. • States would have additional flexibility in designing their programs.

Republican Plans for Medicaid

The proposal changes the Patient Protection and Affordable Care Act: It would repeal most of the private insurance industry reforms and requirements:

Republican Plans for PPACA

•the 80/85% “medical loss ratio” requirement• the “pre-existing condition” limitations• the requirement that most U.S. citizens have health insurance •the health insurance exchanges• the subsidies for low income families who purchase coverage through the exchanges