KHN: Kaiser Health News

Sen. Tom Harkin Tuesday removed the hold he had placed on the nomination of Marilyn Tavenner to head the Centers for Medicare and Medicaid Services and said he would no longer stand in the way of a Senate vote despite actions by the Obama administration that he said violate “both the letter and the spirit” of the 2010 health care law.

Sen. Harkin (Photo by Chip Somodevilla/Getty Images)

But after Harkin announced his decision on the Senate floor, Majority Leader Harry Reid said it was unclear when the Senate would vote on the nomination.

Tavenner was introduced at her confirmation hearing before the Senate Finance Committee by House Majority Leader Eric Cantor, R-Va., and has bipartisan support.  The committee approved her nomination with a unanimous voice vote before sending it to the full Senate.

Late last month, Harkin blocked Tavenner’s nomination to protest the White House’s decision to take $332 million from the health law’s prevention fund to help finance its online marketplaces, or exchanges, where eligible individuals and small businesses will be able to buy health insurance coverage. The administration took that step after Republicans denied a request in March for $949 million in additional funding for implementation efforts.

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Two new studies assert that the country’s unusual slowdown in health spending growth rates may be due more to structural changes in the health care system than to the lagging economy, and thus could continue even after business picks up.

National health spending grew by 3.9 percent a year between 2009 and 2011, the lowest rate of increase in half a century. There has been a vigorous debate about whether this slowdown portends a new era of lesser health care inflation or is merely a brief dip caused by the recession. The new studies, published Monday by the journal Health Affairs, are optimistic that the change is permanent, though neither study can pinpoint what factors exactly are responsible.

The first study examined to what degree job loss and insurance benefits were responsible for restraining health care spending. In examining claims of 10 million employees at 150 large companies between 2007 and 2011, the researchers determined that spending rates on medical services by the employed, which had been accelerating at 5 percent before the recession, plummeted in 2010 to less than 2 percent. That was a deeper decrease than appeared in previously released national statistics that included the unemployed and those receiving public insurance. The spending by employees of the big companies accelerated in 2011 to slightly more than 2 percent, but it has not rebounded to the level it was before the recession.

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Overuse of some medical treatments – and underuse of others, when patients fail to get recommended care — are two factors linked to high medical spending in the United States.

But efforts to set “best practice guidelines” have often drawn criticism from physicians and patients as “cookbook medicine” that could limit doctors’ autonomy or restrict care for patients whose conditions fall outside the norm.

Now, though, Boston Children’s Hospital says it has found a way to create guidelines that have reduced costs and variation in care while improving patient outcomes – all without angering doctors.

Called SCAMPS,  the program aims to standardize care for a variety of medical conditions – all while allowing its guidelines to evolve as new information is collected and analyzed, according to a paper published Monday in the journal Health Affairs.

“We’re creating living guidelines in a way that we can gather information and learn from every encounter,” said Dr. Michael Farias, a resident in pediatrics at the hospital and one of the program’s developers.

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The federal health law derided as a “job-killer” by critics will create an estimated 9,000 jobs in 14 states this summer to handle consumer inquiries about new online insurance marketplaces.

The jobs are through Vangent, a General Dynamics subsidiary, which was awarded a $530 million one-year contract by the federal government to set up call centers to answer inquriers related to the insurance marketplaces in 34 states where they will be run in whole or part by the federal government. Other states will run their own marketplaces with their own call centers.

The marketplaces open for enrollment Oct. 1, and are the key way the law expands health coverage to about 27 million people by 2016.

Health and Human Services Department officials did not specify which 14 states would get the jobs.

Vanget was initially awarded a $28.2 million contact –as KHN reported last week–but that was only for the first two months.

Under the federal contract awarded to Alexandria, Va.-based Vangent Inc.,  the company will also field inquiries about Medicare, Medicare Advantage and “other relevant programs,” the award announcement stated.

The call center for the new insurance marketplaces is expected to be in operation by June and will be able to field calls every day, 24 hours a day, according to the Centers for Medicare and Medicaid Services.

Vangent, which was bought by General Dynamics in 2011, does work for numerous federal agencies including the U.S. Departments of Health and Human Services, Commerce, Education, Justice Labor , State, Veterans Affairs and Military Health Systems.  A report which the company filed with the Securities & Exchange Commission in 2010 said that almost half its revenue came from HHS contracts.

Although expanding Medicaid coverage to some low-income Oregon residents substantially improved their mental health and reduced financial strains on them, it didn’t significantly boost their physical health, according to a study published Wednesday in the New England Journal of Medicine.

Image by Darwinek via Wikimedia Commons

The findings are less upbeat than a preliminary report by the same group, which had found that Medicaid made a “big difference” in people’s lives. In the latest effort, researchers dug deeper. They compared health status, finances and use of health services between two groups of residents: some of the 10,000 people who had been selected through a lottery drawing for health insurance coverage under a 2008 limited expansion to Oregon’s Medicaid program and those who had applied but did not get accepted.

Based on analyses of 12,229 people – 6,387 of whom gained coverage – the study’s results did not show any significant difference in the levels of high blood pressure, high cholesterol and diabetes between the two groups two years after the lottery.

The study did find improvements in other categories, including mental health. Gaining access to Medicaid, for example, reduced depression by 30 percent and also increased participants’ use of physician services, prescription drugs and preventive care. It also led to increased detection of diabetes and use of medication to control it.

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In a new sign that implementing the health law could take longer than expected, insurer Aetna said Tuesday it lowered the number of medical policies it expects to sell through online marketplaces that open for business in October.

“This is going to be a slow uptake,” Aetna CEO Mark Bertolini told investment analysts on a call to discuss financial results. “The process required to sign up, to get the subsidies, is going to take some time. And I think this is a two-year ramp to get the individual exchanges up to a level where customers are going to feel appropriate signing up. And so our estimates of what we believe … enrollment [will be] are dropping for the first year.”

He didn’t give a number, and insurers rarely disclose projections for specific business lines. But Aetna offered nothing to challenge perceptions that it will approach the Affordable Care Act’s subsidized marketplaces, also known as exchanges, with great deliberation.

Without naming specific states, the company cut from 15 to 14 the number of states in which it might sell exchange plans to individuals. Aetna might even withdraw at the last minute if exchanges aren’t ready or look unprofitable, Bertolini said. Under the ACA’s requirement that everybody buy health insurance or pay penalties, consumers without coverage from employers or government programs such as Medicare are supposed to start shopping for exchange plans on Oct. 1.

“We’re not going to go in for a land grab,” Bertolini said. “Obviously at the end of all this we have an opportunity to pull out in September. And we continue to hold that as an option should the exchanges not develop favorably or they ask for unreasonable rates.”

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President Barack Obama said Tuesday he expected some “glitches and bumps” in the road to full implementation of his health care law.

“That’s pretty much true of every government program that’s ever been set up,” Obama said. “We’ve got a great team in place, we are pushing very hard to make sure that we’re hitting all the deadlines and the benchmarks.”

Photo by Alex Wong/Getty Images

During the White House news conference, Obama also said the law is “pretty much already in place” for 85 percent to 90 percent of Americans who have health insurance. For those people, the law has made it possible for many adult children up to age 26 to stay on a parent’s health insurance plan and improved coverage of preventive health care services, he said.

“For the average American out there … who already [has] health insurance, this thing’s already happened,” Obama said.  ”Their insurance is stronger, better, more secure than it was before. Full stop. That’s it. They don’t have to worry about anything else.”

For the approximately 10 percent to 15 percent  of Americans who either do not have health insurance or purchase their coverage on the individual market — about 30 million people, the law creates exchanges, or online marketplaces, where, beginning in October, eligible individuals and small businesses will be able to purchase coverage, with some qualifying for federal subsidies.

If states do not set up an exchange, the federal market will do it for them. Seventeen states and the District of Columbia have decided to set up their own exchanges. Another seven states are partnering with the federal government to set up the marketplaces, and 26 have defaulted to the federal government to do all the work.

Earlier this month, Senate Finance Committee Chairman Max Baucus, D-Mont., who was one of the law’s key architects, said he anticipated a “train wreck” coming as the health law’s exchanges become operational, citing concerns from small businesses in Montana about how the law would work.

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