Mobile Edition
Print
Get the Mag
Weekly UpdatesNow in its third year, the Public Sector HealthCare Roundtable (Roundtable) held its annual conference in Washington, D.C., in late October. The Roundtable, a nonprofit national organization established to advocate for public sector health care issues on Capitol Hill, brings together local governments, state governments, and pension systems, large and small, to represent their common interests as purchasers of health care benefits. By working closely with other national associations that advocate on behalf of public purchasers, such as the GFOA, the National League of Cities, and the National Conference of State Legislatures, the Roundtable's goal is to ensure that the interests and concerns of public sector purchasers are heard and considered as the President, members of Congress, and presidential contenders offer their proposals for reforming the health care system in the United States.
The public sector spends more than $12 billion annually on health benefits for millions of active and retired public employees and their families. Moreover, health care is now the fastest growing portion of state and local budgets and governments have cited rising health benefit costs as one of the main contributors to budgetary pressures. These costs limit spending on other important public needs such as education, infrastructure, and economic development. Further, the impact of the disclosure provisions required by the Governmental Accounting Standards Board (GASB) Statement 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, which mandates that state and local governments disclose their future health care obligations for retired employees and their families, will exacerbate these concerns. In light of this information, it is essential that public purchasers are actively involved in policy discussions to reform our national system of health care.
In 2006, the GFOA adopted a health care reform policy which "urges the administration and Congress to work together with state and local governments on initiatives to reform the nation's health care delivery system in order to contain the growth of health care costs and expand access to health care for all." Like the Roundtable, the GFOA policy encourages a federal approach that considers public purchasers as well as the private sector in any proposed legislation addressing quality, delivery, affordability, and accessibility to health care. (1) The two-day Roundtable conference provided an opportunity for public purchasers to hear congressional staff and policy experts offer an overview of current federal health care reform initiatives and their impact on public purchasers and state and local government employees.
CURRENT REFORM INITIATIVES
Biogenerics. One priority for the Roundtable over the past several months has been to raise awareness on Capitol Hill concerning the high cost of biopharmaceuticals and the need to establish a safe means for the approval of biogenerics.
Biopharmaceuticals, such as insulin, are highly advanced medicines derived from biological, rather than chemical, processes. They are among the most innovative of drug treatments and are also among the most expensive, potentially costing tens of thousands of dollars each year for a single patient. Given the increasing use and the high costs of this class of drugs, many health care purchasers, including public purchasers, are urging that generic versions of biopharmaceuticals--or biogenerics--be allowed to enter the market. However, the Food and Drug Administration (FDA) currently lacks the authority to approve biogenerics.
The Roundtable has expressed its support for measures that have been introduced in both the House and Senate to establish a mechanism for FDA approval of biogeneric drugs. In particular, the Access to Life-Saving Medicine Act (S. 623, H.R. 1038) introduced by Senator Charles Schumer (D-New York) and Rep. Henry Waxman (D-California) would give the FDA the authority it now lacks to approve generic versions of biologic drugs.
Roundtable members sent a letter to Senator Schumer expressing support for his legislation. In the letter, the Roundtable wrote, "Given the expense of biologics ... this class of medicines has the potential to be a huge cost to the purchasers that help to ensure the health of this nation's police officers, firefighters, teachers, and other public employees." (2)
In March 2007, the Roundtable brought a representative from one of its most high-profile members, CalPERS, to testify in support of the biogenerics legislation. CalPERS Board Member Priya Mathur told the House Committee on Government Oversight and Reform that CalPERS' spending for specialty drugs, a majority of which are biotech products, is "distressingly substantial and rising at a rate that is significantly higher than traditional pharmaceuticals. Total spending for specialty drugs was $83.7 million in 2006,up from $67.4 million in 2004. Spending on these prescriptions increased by 16.9 percent in 2005--compared to a 5.4 percent increase in traditional prescription drugs. On average, spending for biotech products was at least $55 per day--compared to traditional drugs at only $2 per day." (3)
In late June, the Senate Health, Education and Labor (HELP) Committee approved a revised version of the Access to Life-Saving Medicines Act. Introduced by the committee's Chairman Senator Ted Kennedy (D-Massachusetts), the Biologics Price Competition and Innovation Act of 2007 (S. 1695) also created a regulatory pathway for the introduction of generic biologic pharmaceuticals into the marketplace. Senator Kennedy had hoped to have his legislation included in a final measure authorizing the FDA's drug approval program. Unfortunately, disagreements between the generic and biotechnology industries kept the bill from moving forward. Despite the best efforts of the Roundtable and other groups supporting the measure, passage of biogenerics legislation this year seems unlikely.
Health Information Technology (IT). Conference participants also learned of the Roundtable's support of legislation to implement a system for health IT, which includes such things as electronic prescribing, paperless record keeping and billing, and integrated communications of health IT between insurers and health providers. In late June, the Senate HELP committee approved the Wired for Health Care Quality Act (S. 1693) introduced by Senator Ted Kennedy and the HELP committee's ranking Republican Michael Enzi (R-Wyoming). The measure would codify the role of the National Coordinator for Health IT in coordinating the policies of federal agencies regarding health IT. It also would promote the development of a nationwide interoperable health IT infrastructure, as well as provide grants to states to establish low-interest loan programs to help providers acquire health IT systems.
The Roundtable sent a letter to the Senate leadership expressing support for health IT legislation as a way to save more than "$81 billion a year in health care costs as well as greatly improve the overall quality for patient care? The letter notes that "without a system of data standardization among providers, the ability of participants in the system to effectively share data will continue to be difficult if not impossible to achieve. This fragmentation wastes time, money, and results in lives lost to treatment errors." (4)
Despite widespread support for health IT and evidence that the use of such technology would save billions of dollars, the measure has been unable to gain sufficient momentum to move forward in the 110th Congress, bogged down, instead, with concerns over patient privacy as well as issues related to interoperability,
The Healthy Americans Act. While many of the initiatives discussed at the Roundtable meeting were significant in their potential to address escalating health care costs in both the public and private sectors, only one presentation focused on comprehensive reform of the system. The Healthy Americans Act (S. 334) was introduced earlier this year by Senators Ron Wyden (D-Oregon) and Bob Bennett (R-Utah). This bipartisan proposal would eliminate employer provided health insurance. In its place, the measure would require employers who currently provide employee health benefits to convert their health care premiums into higher wages that employees would use to purchase their own private health insurance through a state-based Health Help Agency (HHA). The HHA would offer individuals several private insurance plans to choose from, all of which would provide coverage comparable to what members of Congress currently enjoy, Previous and existing health problems, occupation, genetic information, gender, and age would no longer be permitted to impact eligibility or the price paid for insurance. Employers who do not currently provide health benefits would be required to make "phased-in employer shared responsibility payments," that would be tiered to their size and revenue. These payments would be used to offset premiums paid by individuals. Subsidies would be offered to individuals who could not afford to purchase private coverage. Parents who enroll children in wellness programs would be eligible for discounts in their own premiums. The Lewin Group has estimated that the Healthy Americans Act would slow the rate of growth in health care spending by almost $1.5 trillion over the next 10 years. (5)
While The Healthy Americans Act focuses attention on many of the principles that have been discussed as a means to achieving comprehensive health care reform--moving away from an employer-based to a market-based system, offering universal coverage, providing financial assistance to low-income individuals, and focusing increased attention on incentives to stay healthy--such a drastic shift in the way a majority of individuals in this country receive their health benefits would require considerable public support before gaining any real momentum.
FEED