Eye on Washington

February 1, 2005

Uptick in Medicare payments, threat to cut Medicaid reimbursement, and a possible booster dose of varicella vaccine

It's February-time to start work on the nitty-gritty of governing. Inaugural galas are over, newly elected members of Congress have taken the oath of office and found their way around the Capitol, and the president has sketched out the big picture in his State of the Union address. For the Democratic minority, work means fighting a rear-guard action to stave off funding cuts in the education, health, and social welfare programs they hold dear.

The major health and welfare issues this Congress will grapple with are clear. Members must decide whether they will:

*Go along with Republican plans to privatize Social Security

*Legislate a cap on malpractice claims as an antidote to the skyrocketing cost of health care ($1.7 trillion in 2003, up 7.7% from 2002 and constituting more than 15% of the gross domestic product)-or craft more thoroughgoing reforms in health-care financing.

As always, for these initiatives and all the other domestic legislation the 109th Congress must deal with, the devil is lurking in the details. At this early point in the year, those details have yet to emerge. Until then:

*The Social Security Administration itself will proselytize for the president's privatization plan, despite a history of reprimands from the Government Accountability Office for engaging in such activity-when, for example, federal funds paid for "covert propaganda" touting Medicare drug cards and No Child Left Behind legislation.

*The Medicare Payment Advisory Commission has recommended a quality incentive payment policy for hospitals and doctors, increased payments to hospitals for inpatient and outpatient care, and a 2.7% increase in payments to physicians.

*A study by the University of Iowa and the Urban Institute has concluded that the root cause of the crisis in malpractice litigation is the failure of state medical boards to discipline incompetent physicians. The study was commissioned by the Bush administration.

*The National Governors Association, fearing that congressional leadership will cut Medicaid allocations to fulfill a campaign promise to cut the deficit in half, is mounting a bipartisan effort to hold on to, and even increase, state allocations.

*The Center for Medicare and Medicaid Services (CMS) has launched a major effort to improve the quality of health care. First, CMS now rates hospitals on whether they provide standard treatments for myocardial infarction, heart failure, and pneumonia, then posts results on the Web ( http://www.cms.hhs.gov/quality/hospital/). Ratings are based on hospitals' self-reports, divulged to CMS as the price for this year's cost-of-living payment increases. Next, Medicare will test a pilot program of incentive payments for hospitals that improve on such quality measures as mortality rate and readmission for hip or knee surgery.

*The CDC is considering the cost-effectiveness of a booster dose of chickenpox vaccine, part of an effort to eradicate the disease. Logistics will be simplified if a combined chickenpox/measles-mumps-rubella vaccine under development by Merck is licensed. The CDC has also made chickenpox a reportable disease.

*Improvements in reporting pediatric adverse events will be considered at a February meeting of the Food and Drug Administration's Pediatric Advisory Committee.

*The departments of Agriculture and Health and Human Services released the 2005 version of the Dietary Guidelines for Americans. Advice in the new version-exercise more, eat less, consume alcohol in moderation, and stay away from fats, salt, and sweets-is somewhat sterner than earlier recommendations. The guidelines (and a much more user-friendly summary brochure) are downloadable at http://www.healthierus.gov/dietaryguidelines/.

*A report of the Administration for Children and Families, "A Charge We Have to Keep: A Road Map to Personal and Economic Freedom for People with Intellectual Disabilities," recommends policies to provide these Americans with more opportunities to learn, work, and make choices about their daily life. The report is summarized in a booklet downloadable at http://www.acf.hhs.gov/programs.