UW School of Law Transcript
Health Care Reform: What It Is… What It Should Be
April 7, 2010
Well, good morning everyone. That's a little bit like a class when the
professor walks in, all of a sudden it got a little quiet. It is so
good to see you all here this morning. I'm Kellye Testy, the Dean of UW
Law and it's a great pleasure to welcome you. We really appreciate you
joining us so early for this program on "Health Care Reform: What Is It
And What It Should Be."
I want to let you know as we begin this morning that it's just so good
to see so many of our alumni here today. So good to see both people
that have graduated recently, alums who have been working in Seattle
for quite some time. What a wonderful group.
want to thank you all, too, while I'm here today. I have so appreciated
the very warm welcome I received to the School of Law this year. We are
just having a terrific year, really gaining our momentum. I absolutely
love being at the University of Washington.
Even though I have
been here in Seattle for some time, I think I even underappreciated the
wonderful resource that this university is to the state and this
nation, and indeed, the world.
I know our Law School has so much
happening, not only in the State of Washington, but across the country
and in many other countries as much of our international work through
the faculty proceeds.
So I just wanted to take a minute this
morning to tell you that it's great to see you, to thank you for the
warm welcome, and let you know that things are going very well at the
Any time there's an area that we are working on that
you would like to know more about, or would like to talk to me about
any aspect of our program, as I often say, I am a little bit
embarrassingly easy to find these days as we do a lot of promotion of
the School of Law. I'm really always happy to connect with you. So,
great to see you today.
I want to introduce the moderator of
today's program and she'll then introduce our panelists. I want to
remind you as I do that, that CLE credit is available for our program
today at the registration table outside.
Our moderator today is
Professor Pat Kuszler from the Law School. I want to take just a minute
before I turn the program over to her, and just thank her for her
leadership. She is our leader in the Health and Global Health area for
the School of Law, both in the J.D. program and also in our graduate
program. We launched an LLM in Global Health this past year and that is
really doing exceptionally well.
We are fortunate to have
Professor Kuszler on our faculty. I have known of her and known her for
quite some years and admired her work very, very much. She is both a J.D.
and an MD, so if we were back in those formal days, I guess we would
have to have a Dr. Kuszler, Esquire kind of title for Pat.
received her medical training at Mayo, law training at Yale. Not too
bad of institutions if you can't go to UW, I always say.
So let me not take any more time, but just thank Pat for her
exceptional leadership in this area. She is a great scholar, a great
teacher, and really one of the finest institutional citizens this Law
School has the privilege to call its faculty member, so Pat, it's all
Well, thanks for the nice introduction, Kellye. Today we have the great
good fortune to be talking a little bit about Health Care Reform: What
It Is And What It Should Be. I don't think anybody in this room has to
be informed of the fact that this has become an incredibly
In the sense that we have had controversy, complications, compromise --
the President and Congress have tried to address some of the issues. As
we see it begin to be rolled out, we see that there is marked division
within the public in terms of this particular reform.
we have the great good fortune to have three wonderful panelists who
are going to provide us with three different perspectives. First of
all, we have Professor Frederick Chen. Dr. Chen works with our family
practice department where he does a lot of teaching, conducts health
policy research, and also sees patients, of course.
purposes, one of the reasons he is such an ideal panelist for us today
is that Dr. Chen is the guy who is the medical director for the
Washington State Uniform Medical Plan where most of us get our
insurance. He is the guy who decides on our claims and sees all of
those claims come through the system and has an idea of what the status
of cost, quality, and access are.
We have Taya Briley on the far
end here. Taya is both a nurse and a J.D. and one of our alumni. Taya is
the General Legal Counsel for the Washington State Hospital Association
where her practice focuses on legislative and regulatory issues related
to hospital and clinical operations, legal issues affecting non-profit
organizations, and a wide variety -- truly a wide variety of health law
and policy issues. As I mentioned, she's one of our alumni, she's also
an alumni of our nursing school.
And last, but not least, we have
Professor Sally Sanford. Professor Sanford teaches a broad array of
health law topics both at UW School of Law and at our School of Public
Health. Her research interests include the Health Care Delivery System,
Health Administration, Health Administration Law, Medicare, Medicaid,
Comparative Health Law, and Medical and Administrative Ethics.
to joining us at the Law School, Sally represented UW Medical Center,
Harborview Medical Center, and UW's Health Sciences School as an
So today, we're going to start with Professor Chen
and he is going to spend a few moments talking about what the status of
cost, quality, and access are that Congress was forced to deal with
when it finally began to settle down and do some kind of reform. So let
me turn it over to Freddy.
You can just sit there.
OK, super. Thanks very much for having me. Not an alumnus of the Law
School, but happy to be here. Let me give you the quick overview of
Health Policy. I teach Health Policy for the Medical School along with
Pat, and really we break down the Health Policy issues into three major
themes; cost, access, and quality.
I think those three major themes also are what drove much of the health
reform debate over the last year. Really, the one that was the biggest
driver was cost. I'll just review a couple of numbers with you. That
the United States, by far, spends more per capita, and more in total,
than any other country in the world on health care.
fact, we spent last year almost $2.5 trillion on our health care
system. That accounts for about a little over 17 percent of our GDP.
You do have a slide set in your packet, we didn't include a diagram
that showed the line or sort of the graph of it. Suffice it to say, it
looks like this for the US, and this for the rest of the country.
graph can actually be percent GDP, it can be per capita spending, it
can be the total amount of spending. It looks fairly similar regardless
of which of those measures you're talking about.
it can be argued that even though the cost was one of the biggest
drivers of the health reform debate, it's probably the one that's least
clear in terms of what exactly we got out of the health reform
legislation in terms of the impact on cost.
The other piece, of
course, with the cost is that those costs and that spending really did
translate into impacts on average Americans. We know that over the last
10 years there's been an increase in health insurance premiums of about
130 percent or so. The actual amount of worker contribution towards
their health care costs has also increased well over 100 percent,
That, as a very basic starting point, was one of
the main issues; the amount that we spend and the cost issues there. Of
course, there's some discussion there about how much of this is
actually about prices and what exactly are the true prices versus the
true cost of health care.
The second major theme in health policy
is around access. You could argue that access is probably the one area
where we actually made some progress on in this health reform
legislation. The biggest issue with access is that ours is the only
Western country that doesn't provide universal health insurance
coverage to all of its citizens so that has always been a sticking
point for our health care system.
In fact, leading up to this
debate, we're looking at numbers of about 46 million people in the
United States who did not have health insurance. There was a much
larger number of folks whose insurance was considered
inadequate--underinsured folks. For most health policy debates, the
bulk of the access discussion is around insurance, and it's a very
Not having health insurance can be related to
your risk of dying. It can be related to whether or not you get needed
health care in time or not, your overall health status.
outcomes are quite important when it comes to having or not having
health insurance. The other piece that I added, the debate about
access, is that having health insurance isn't the only piece of access
that's important to think about, especially for our region.
like being in rural areas, versus urban areas. Geographic disparities
are important when it comes to access. There are racial and ethnic
disparities that are important factors in access, too. General
inefficiencies with our healthcare system also impact access.
having said that, generally the biggest piece of access has been around
what are we going to do with these 46 million folks who are uninsured.
That seems to be one of the real areas of progress that we were able to
get to with this legislation.
Finally, a word about quality,
which has been another big sort of health policy watchword for the last
decade or so--I think where that comes in is, while we sure do spend a
lot of money on health care, what are we actually getting for it?
when some of these challenging numbers, like being ranked number 37 in
the WHO global health rankings, which include measures of not just
access to health care, but our actual health outcomes. The fact that
our infant mortality is quite poor compared to other countries. Our
life expectancy is not as you would expect, given the amount of money
that we spend on health care.
Those issues around quality have
actually come home to the healthcare system in a number of ways beyond
the access and cost issues, but really around what do we actually do on
a day-to-day basis, in our delivery of care?
What are the gaps in
quality of care delivery? Unnecessary treatments? Why is there such a
wide variation in treatments that happen, whether it's cancer or heart
disease, or even immunization rates? Why is there so much variation?
Why are there high-performing areas and low-performing areas?
three of these big areas--cost, access and quality--fed into this
health reform debate this year. As I said, we certainly seem to have
made some good progress in one of those areas, at least. And there's
some quality stuff in there, too.
I think the big question which
we'll also like to try to address this morning is around what are the
cost implications, and where are we really going to try to make some
progress in that moving forward?
OK. With those introductory comments on how we got to the issue of
health reform, the debate about cost, quality and access, we're now
going to turn to Professor Sanford, who's going to give us a little bit
of a capsule approach to what the actual health reform plan is.
A couple of you in this room have the great, good fortune to actually
have to read and dissect this plan, which is many hundreds of pages
long. Of course, we'll just be covering the high points today. Let me
turn it over to Sally.
Thank you. As Professor Kuszler said, I'll attempt here to cover some
of the high points of the new law. But I hope there'll be a lot of
questions about those aspects, and also other aspects of this new law.
In some ways, it seems like this reform debate has just been going on
and on and on and on. And that's because it really has. There have been
attempts by the Federal Government to deal with our healthcare systems
going back to the turn of the last century.
just on this past year, it's just been a busy year. The initial goals
of this health reform, as President Obama set them out about a year
ago, were as Dr. Chen said, to control, to bend the cost curve. To try
to do something about the rapidly escalating health care costs to try
to bend the cost curve to approach universal coverage.
That doesn't mean, and it didn't mean, a single-payer system, but that every citizen has some kind of health insurance coverage.
try to reach some universal coverage. To do it for less then a trillion
dollars became the magic number, over ten years, and to not radically
change the system.
There really wasn't a strong push for, say, a
Medicare for all, or a single-payer system. But from the very
beginning, there really was an idea to maintain the current,
employer-based, largely private system for those under 65.
would say that as the year progressed, the goal just became, "Enact
something. Anything. Get enough people to sign on." That partly
explains some of the way that the law actually ended up.
to summarize some of the key points of the Patient Protection and
Affordable Care Act: it's a couple of thousand pages long, and
cross-references a lot of other statutes.
As Dr. Chen pointed
out, the most immediately significant parts of the new law have to do
with access, with trying to achieve close to universal coverage. The
other aspects, to control quality and bring down costs, are less
immediately significant, although they may end up being significant.
the access front, one you've heard a lot about is the individual
mandate, the requirement that almost everybody will have to have some
kind of insurance coverage, starting in 2014.
All citizens and
legal residents will have to have coverage, either through Medicare,
Medicaid, an employer-provided insurance system, or individually
There are exceptions in the law for a
variety of things: financial hardship, and that will need to be
defined; religious objections; and a couple of others, including if the
least expensive policy available to you would cost more than eight
percent of your income. Then you don't have to purchase insurance, or
get it through your employer.
Also under the law--and this is a
significant part of the mandate--there'll be subsidies available for
many people who end up having to buy insurance on their own. People who
aren't eligible for Medicaid or Medicare, or employer provided
If they have to buy insurance on their own, there are
sliding-scale subsidies available for people whose incomes are between
133 percent and 400 percent of the federal poverty level.
now, and it changes, the federal poverty level for a family of four is
about $88,000. So, there'll be sliding-scale subsidies available, both
for the cost of the insurance, for the premiums, and also for cost
Most people know that if you end up being very sick or
very injured, the coinsurance and copays can add up pretty quickly.
There'll also be subsidies for those income levels for those kinds of
What if you are required to have insurance,
and you don't? You don't fall under the exceptions. There are tax
penalties for not having required insurance. I've heard this called the
slacker tax, that if you're required to do it and you can afford it,
and you don't.
Those tax penalties, they phase in over time.
Ultimately they'll be, starting in 2016, a yearly tax of $695 per
person, maximum of $2,000 per family, or 2.5 percent of income. That
would increase, based on cost-of-living adjustments.
whichever is greater: basically, $700 or 2.5 percent of income.
Whichever is higher, you'll have to pay that tax. These requirements to
purchase insurance, and subsidies for it, are really quite linked with
another big part of the statute that has to do with new restrictions on
health insurance industry practices.
They're quid pro quo and
quite connected, the variety of new restrictions on what health
insurance practices can be. Some of the key ones are, when it's fully
phased in, no more pre-existing condition limits, meaning insurance
companies will have to sell to people, even if they have had cancer, or
had a C-section, or high blood pressure, whatever.
decline to sell them a policy based on health status, also cannot
charge a different amount based on health status. So, the pre-existing
condition limits apply in both of those senses, and historically those
have mostly come up in the individual market. But anyway, no more
pre-existing condition limits when it is fully phased in. Also, no more
lifetime limits on coverage or annual limits, or what are called
"Essential Benefits," and that will be a big change.
There are a
variety of other insurance limitations, including for example
limitations on what is called "Rate Banding," how expensive the most
expensive policy can be compared to the least. So, basically rates can
vary depending on age. Older people can be charged up to three times as
much as younger people.
When I described this to students, they
were very concerned about the high costs. So, this group may have
different issues about the rate banding. Also, there can be adjustments
for if the person is a smoker or not. So, those are some of the
restrictions on insurance practices.
So, another big access issue
is where people who have to buy insurance on their own will go, and
that's the creation of these insurance exchanges. Under the final law
they are state-based, and the idea is this is a place where you will
have what is called "Managed Competition."
will go there to sell on the individual market, and will sell a
standardized product, up to four different types of insurance; bronze,
silver, gold, and platinum, and then also a catastrophic plan that will
be available to certain people under 30, and those who can't afford the
So, on this marketplace there will be these standardized,
theoretically, easily comparable plans that an individual could go and
buy a policy. There will also be a similar exchange for small
businesses, who now have a hard time finding affordable coverage.
the idea is that the states will setup and regulate these, much like
the Massachusetts Insurance Connector, but under the law if they don't,
then the Federal Government will do it. So, those are the state-based
health insurance exchanges.
The final significant access
provision is the expansion of Medicaid. So, under the Patient
Protection Affordable Care Act, Medicaid eligibility will be expanded
to include everybody under 133 percent of poverty. So, as you might
know right now, Medicaid has categorical eligibility, so you both have
to be both income, and it varies from state to state, and also in a
Typically, it's people over 65, people with qualifying
disabilities, pregnant women, and lots of kids. Very few childless,
non-disabled adults are on Medicaid, especially in some states like
Texas. I don't think you can qualify for Medicaid in Texas if you're a
childless adult without a disability, who's under 65. So, anyway, that
will really change eligibility for Medicaid, vastly expanding it.
one immediate problem that the state's are going to think of is,
"That's going to cost a fortune," because Medicaid is a joint
Federal-State Program where the Federal Government provides matching
dollars. So, our state is one of the wealthier states, so we have a
50/50 match. Every dollar we spend, the Federal Government gives us a
dollar. But still it is a dollar that the states spend, and it is one
of our biggest budget items.
So, under the new law, for the newly
eligible people, the Federal Government will pickup 100 percent of the
tab for the first years, and phasing down to 90 percent. So, that's the
Medicaid Expansion. As of now, you can't qualify for Medicaid unless
you're a citizen or a legal resident, or some very limited categories
So, all told, all these access provisions, the
Congressional Budget Office that they'll increase the numbers of
insured by 32 million people over ten years. So, it won't achieve fully
universal access, but pretty good.
It will cost close to a
trillion dollars. I don't know where that magic number came from, but
that was the 'can't get to a trillion' over ten years. Also, the
Congressional Budget Office estimated that over ten years it would
reduce the Federal deficit by more than $100 billion dollars.
don't know if I should talk in a minute about where the money comes
from, or we can leave that for questions, but just one quick thing, so
the law doesn't kick in all told immediately. Some aspects do, and that
was part of I think how the law got passed.
So, a couple of
things do kick in this year. Most aspects don't kick in until 2014. A
couple of the things that kick in this year are subsidies in the
Medicare Part D donut hole, letting kids up to age 26 stay on their
parent's insurance plans, and prohibiting the application of
pre-existing condition limits on children in the insurance market.
maybe I'll just end here, and then hopefully there will be some
questions about specifics or if you have any questions about how it is
paid for. I also included in the materials a nice summary from the
Kaiser Family Foundation of the law, for those of you who don't want to
read the whole law. Kaiser, it's www.KFF.org. They do a really nice job I think of summarizing different issues, and also now of summarizing provisions in the statute.
OK. Now, we move onto Taya. Taya is going to talk about now what? Some
of the legal issues that have appeared as a result of our Health Reform
passing, and some of the anticipated legal issues that will flow from
it in the months and years to come.
Thank you. I think speaking to the legal issues involved with the
Legislation, it is hard not to start with the question that has been
called about the "Constitutionality of the Legislation." At the law
school, a week or so ago, there was an excellent panel that spoke to
the Constitutional issues involved with the Legislation, and whether
there could potentially be a challenge brought related to the 10th
Amendment or potentially the Commerce Clause.
I heard Professor Sanford on NPR speaking to the Constitutional issues
not too long ago. So, I'm going to consider her the expert on this
issue. If she's been on the radio, she must be.
to get into one of the other issues related to medical liability, I
wanted to kind of take a little bit of a backdoor route. Professor
Kuszler talked about my nursing background, so I think that some of
that kind of comes into play here. So, I wanted to talk about some of
the provisions of the bill that get to the quality issues that Dr. Chen
discussed, and then I'll bring that back around to medical liability.
one of the things that is true about the Federal Government is that it
has a lot of purchasing power, when it comes to purchasing medical
services. The Medicare and Medicaid programs are able to drive change,
because they hold the purse strings on a lot of the money.
wanted to talk about how the Legislation potentially is going to drive
quality improvements. Right now, the Medicare program in particular, is
just taking some baby steps in holding hospitals and other healthcare
providers accountable for the quality of care that they provide.
I wanted to talk about how this could potentially lead to some more
significant inroads in this area. One of the things that is included in
the Legislation is a 4AN2, something that is called an "Accountable
Care Organization." What it allows is I think a really interesting
shift in focus from a system that is right now very focused on
providing payment for episodes of illness, to actually managing a
person's medical condition.
So, it allows physicians and
hospitals to work together, and that reimbursement structure will be to
pay those two components of the system together to actually manage
I wanted to talk a little bit about a recent example
that I heard about through reading some of the work of Dr. Atul
Gawande, who is a very respected health policy person. He's a surgeon
and I'd heard that some of his writing was required reading in the
White House during the health care reform push.
So he talks about
Children's Hospital in Boston and one of the things that Children's
Hospital in Boston was able to do in the last couple of years is make
some really important strides in reducing childhood asthma rates. And
they did it by some really low technology interventions.
used nurses to make sure that children were using their inhalers
properly. They made sure that children and their families had vacuum
cleaners in their homes if they couldn't purchase them to take care of
the debris that would trigger the asthmas attacks. And they were able
to reduce readmissions to their hospitals for asthmas attacks by 80
And that the current reimbursements structure, the
thanks that the hospital got for that was the lost of a major revenue
driver because for children's hospital, asthmas admits are really
significant revenue drivers. So with this type of accountable care
organization structure, there may be some way to better incentivize the
system to manage care in a way that will not just be better for cost
but better for patients and for quality.
Another example in the
legislation of a way that we'll hopefully see some quality improvements
has to do with readmissions and I want to emphasize this is just one
quality component of many that are included in legislation. So there
are a lot of different ways that the bill gets at driving quality
improvements. And so looking around the room, I'm curious, most people
know someone who has been to the hospital for a heart attack or has had
that unfortunate experience him or herself.
And one of the things
that we are learning and watching in Washington State and nationally is
that when you are admitted with certain conditions, certain things need
to happen in a hospital before you go home in order to make sure you
don't have a reappearance in the emergency department not too long
And so you can sort of imagine this scenario where a
patient has come into the hospital. They've been stabilized, they've
been prescribed medication that they're going to go home with, they
have their person there that's going to be taking them home, you have a
nurse who has the phone ringing from the emergency room with another
admission that wants the bed that the patient is currently in. There's
a lot of incentive to get that patient out of there quickly but if that
discharge teaching doesn't go right, that person like I said, could
make a reappearance.
So there are some certain things that we
have learned for a heart attack patient, for example, that need to
happen. Like if the patient cannot answer the question, what is your
water pill, the likelihood that they're going to make a repeated
appearance to the emergency room goes up quite significantly.
making sure for certain medical conditions that steps are taken to
prevent readmission is just one example of how quality improvements can
be driven. And the driver for the federal government is if you have
significant events of readmissions, you're not going to get paid for
them potentially in the future. You're going to get paid a lot less for
the care that you're provided.
So those are just two small
examples of how this can work and I want to wrap this back around to
the medical liability question because in the legislation, $50 million
was provided for medical liability demonstration projects. For those of
us that were following the health reform politics, it seemed pretty
evident that those provisions were included in the bill basically as a
nod to Republicans to provide Democrats political covers. They pushed
the legislation forward and so it doesn't seem likely that these
medical liability demonstration projects are necessarily going to lead
to huge change in the medical liability system.
And I have
watched the medical liability battles, quite frankly in this state, and
around the country, and at the national level. And personal I don't
hold out a lot of hope that we're going to see major changes in the
medical liability system any time soon. But what I do think could
potentially change the equation in the medical liability mix is
reductions in the number of injuries that happen in hospitals which
hopefully will then in turn reduce the number of claims for medical
liability. Those are my thoughts about what comes next.
OK, so we've managed to hit some of the high points but now we are
looking forward to your questions. And I'm sure there will be many
questions on our new health reform so if you would please stand if you
have a question so that Bev can get you a microphone. And if you have a
specific person you want to direct your question to, great. Otherwise
I'll direct it to who I think is appropriate. Questions? Oh, there has
got to be questions.
Well one of the things that we hear about a lot is that this is going
to save money over time. That was one of the big drivers, right? Was to
reduce cost but you've explained how a lot more people are covered and
you have to pay for preexisting conditions and all those things which
should drive up cost. What are the major things in here that actually
are going to drive down cost? I know there's 500 billion they say,
that's supposed to be coming out of Medicare but I don't know where
that comes from either so I'm just curious if there really is cost
savings in here.
Sally, you want to take that?
Sure, I'll be happy to start taking a stab.
There are a number of provisions in the law that are both meant to cut
cost, increase revenue, and generally save money by some of the changes
in reimbursement structures and medical practice. Specifically what you
asked about Medicare, which is a question that doesn't come up when
students ask. There are cuts in the Medicare advantage program.
This is the program that was basically created when Medicare Part D,
the drug benefits several years ago. And Medicare advantage programs
are private insurance that provides managed care within the Medicare
system. And originally the idea was that Medicare managed care would be
less expensive than traditional Medicare, tradition fee for service
Part A and Part B. And the reasoning was that when you're managing
care, by definition it should be less expensive.
to incentivize the creation of these Medicare advantage programs, when
Part D was created, there were lots of financial benefits to Medicare
advantage programs. So right now, Medicare spends 114 percent for
people who are in Medicare advantage which is 25 percent of the
Medicare population compared to 100 percent for someone in traditional
Medicare. So this bill changes that. It brings the reimbursement to
Medicare advantage programs back in line with traditional Medicare.
that may mean some benefit cuts to Medicare advantage plans which right
now can offer things like gym memberships and zero premium coverage, so
that's one big chunk of savings. There also will be savings in Medicare
in the Part D outpatient prescription drug program and partly that's
from give backs from the pharmaceutical industry, particularly for
non-generic medications. Some of the other savings have to do with
There are going to be taxes on, I mentioned the individual
tax penalty if you don't get insurance when you're supposed to. There
will also be taxes on Cadillac plans. Those are very generous plans
provided by private companies. There will be taxes on those. There will
be taxes on pharmaceutical companies and on medical device makers.
There will also be some increase taxes on high income earners so those
are some tax changes. There will be a variety of changes in how
Medicare and Medicaid pay for services and Tam mentioned some of those,
the accountable care.
Also, generally speaking, the idea of
paying for not just per procedure or per event but the totality. Like,
"Here's the payment to fix this knee and with this lump payment, figure
how much to give to therapy, to medications, to this, to that." And the
idea is that will help drive down costs. Probably some other things I'm
missing. Those are some of the main ones.
Yeah. No those are exactly right and I think it remains to be seen
whether or not things will actually balance out in the end because at
the same time, you have this rate of rise that's driven by our aging
population, not all of whom are law school alumni apparently.
I don't think they're all Medicare beneficiaries in here. I think that
the taxes and penalties are definitely there. I think the real unknown
question is whether all of these other pieces around accountable care
organizations or these demonstrations whether or not they have enough
behind them, or whether or not there are enough of them to actually do
anything to bend the cost curve.
It's really an open question. And just as an example, I think a lot of
people have pointed out that one of the primary offenders in cost is
the way we pay for health care. So if we talk about things like
capitation, or paying for episodic care, or paying for a patient's
total care, that works in certain places.
Group Health here in Seattle is a good example of a place where that
seems to work. Of course, that's also an example of a place that both a
cared delivery system and an insurance system combined. And so that
their incentives are much better matched than a place where those
incentives aren't matched that way.
And I just bring it up in
terms of, I think it's absolutely critical to the whole cost saving
piece, is rethinking how we pay for care, and yet that is also a huge
lift, and not something you can do overnight.
It would be like
going from billable hours to paying per case. Right? Or paying per
client, a single flat fee. It would be that sort of big of a change.
And I think while there are good examples of places where you can do
that--Mayo and here in Seattle for example--there are just as many
examples of places where you do something right, like at Boston
Children's, and you end up losing.
I think there are fair
opportunities in this legislation for us to start experimenting and to
really try to encourage these kinds of things, but wholesale change is
not in there.
I think the only thing I would mention that hasn't been mentioned yet
is the luster and the progression of the health reform legislation of
this idea of a public option. I think that if that had been included,
the prospects for using governmental purchasing power to drive down
costs would have been greater. And I think we are going to need to see
the government come at it in different ways.
OK. Other questions? OK. We're going to go with you first because you
kind of got up first, and then we'll go to this lady over here.
The dean also has a question.
Oh, the dean also has a question. OK.
I've always been curious where we pay today, or how we pay today for
the uninsured. If an uninsured person shows up in an emergency room,
gets care, doesn't pay for it, how does that get paid for today, and
how is that going to change?
We all pay for it.
That's one of the other intents of the law really is that by decreasing
the number of uninsured, and putting them under an insured umbrella,
that we can actually get a better handle on those costs. Have we just
shifted the costs over?
As I mentioned earlier, there are real health, and costs downsides to
being uninsured. You come in much sicker. You're not likely to get
there is a potential for cost savings there in that, OK now we've
insured this population, hopefully they'll be accessing care more
regularly, and while that could drive up some costs, in the end the
idea is that it will pan out because instead is subsidizing all that
care with your commercially insured patients, or through state and
federal grants, and other ways you actually have then put them all
under an insurance umbrella.
Just to get pretty specific about it, Washington State is one of the
only states in the nation actually that has what's called a charity
care law. And in our state people who are present in an emergency room
and don't have insurance coverage right now up to the 100 percent of
the federal poverty level are able to receive their care for free.
And basically the hospital picks up the tab, and then it goes on from a
sliding scale from there, and Washington state hospitals have actually
all taken a pledge to provide financial assistance up to 300 percent of
the federal poverty level.
think one of the things that will be really interesting with the advent
of this law, is how a much larger percentage of the population being
insured plays into the amount of charity care that hospitals provide.
I also want to point out Taya's right that Washington is very unusual
in having that law. There is a federal law that requires that anybody,
any individual, who comes to an emergency room be assessed to see if
they're in an emergency condition, and if they are, they need to be
There is a bit of a myth. I think most people think that they have to
treat you for free. They don't. Nothing in the law talks about payment.
So you could end up with a very hefty bill, which sometimes goes unpaid.
unpaid part can either be bad debt on the hospital's ledger or charity
care depending on how they set it out from the onset. And how the
hospital actually physically gets paid for that?
The short answer
is partly they don't. Partly it's from charging more to insured
patients. And partly there is federal reimbursement for
disproportionate share hospitals.
And those are your hospitals
that have a disproportionate share of uninsured or Medicaid patients.
And part of this statue reduces what are called dish payments, reduces
dish payments on the theory that there won't be so many of these
people. But there still will be some.
Of course it's going to be an interesting situation in the sense that
currently our emergency department serve as primary care physicians for
most of the population that doesn't have health care coverage.
So we see not only patients coming in for significant emergency
conditions who have let their condition deteriorate because they have
no insurance, but we also see cold, sore throats, baby-care, coming
through the E.D.
the question is going to be whether or not this law will actually allow
some of those patients to be off loaded from the emergency department
to primary care physicians. Now where the rubber hits the road is in
some cases these are not ideal patients.
Doctors may not want these patients. And so it may not save as much money as we would like it to save.
that's the idea that if we had more of our population covered, they
would access primary care physicians earlier in the course of their
illness, and not present to the emergency department either with
routine care issues.
Or a much worse medical profile that will
costs a great deal of money to fix, and essentially usually be absorbed
by the hospitals bad debt, and then passed on to all of us. OK. We had
a lady over here.
Mine is kind of a two pronged, and it's more a comment that I'd like
you to comment on. From a worldwide perspective, other countries that
do cover all of their populations, don't seem to have to get into all
kinds of convoluted payment schemes to cover it.
Most of them use fee-for-service and still provide adequate care for
their populations at less than half the costs of what we're paying in
the second is comparative effectiveness research or CER. Now there are
some pilot projects in this bill. But other countries make wonderful
use of this.
The most notable example is the NICE committee in
England which gets concessions from the pharmaceutical and device
industry when they come in with something that's not all that
effective, and costs a whole lot of money, and NICE says, "OK. We are
not going to OK it for the National Health Service."
And then the companies come back with a lower offer, something which we don't have in our country.
Other countries don't have the profit motive in health care that we do. Other countries are un-American that way.
think that really is, for me, the crux of the issue is sort of how much
money is sloshing around. How many people are making money off of it,
how many do--that's a huge driver. And it's part of the American way.
We've created as system that works like that for well over 50 years.
And it's about changing our expectations, and changing our culture, and
changing our history which seems to me like a big lift.
countries do it absolutely differently. Other countries have a
different social structure, a social mission. A different history and
culture around it that allow this sort of sense of shared
responsibility for the health care of their citizens.
something like NICE works in the UK because you have a single payer,
and you have a government backing you up in the exam room. And you can
sit there with a straight face with that patient in front of you, and
say that's not covered by the National Health Service.
not going to give it to you." Or not, "You don't need that." But
rather, "That's not covered by the National Health Service." And so
when we talk about NICE here it becomes a death panel discussion.
OK, Kelly first and then this gentleman here.
When we did the program at the law school on the constitutionality of
the bill, one of our students came to me and he actually was kind of
upset that we were focusing on the constitutionality. He thought that
was just clearly constitutional in his view. But he said, "You know,
what I really wish the law school would focus on is the question of
real poverty: the people in society, the least among us."
And so I promised him that I would ask the panel. What do you think
this bill is really doing in that sense of really addressing poverty?
There are a lot of exclusions, as you all noted. What effect do you
think it's going to have on those in society who are perhaps least able
to fend for themselves in the marketplace?
I can start. Well, sort of going back to the question that Dr. Chen was
just answering. One of the things that was going around in my head is
that we are still in this country having a very heated debate over
whether we can agree that health care is a fundamental right of our
population. We are not all on the same page on that question at all.
From a very practical standpoint, the thing that I see this piece of
legislation doing for those that are impoverished is this significant
expansion of the Medicaid program. There are a lot of individuals who
simply do not qualify. I think that this is less of an issue in
Washington state with our state's Medicaid program and the basic health
plan that we certainly do have uninsured folks. But in other areas of
the country, it is so much worse. Don't know.
Yeah. Yeah, I'll just add one concern about... But I think the bill
goes, the law goes a long way in trying to bring into some kind of
insurance coverage a lot of low income people who have simply been shut
out for many years. I think that's a good thing. A concern that I have
is a lot of them will be on Medicaid and our Medicaid program is
already struggling. A lot of positions don't take Medicaid. It tends to
be the lowest payer, so private insurance, then Medicare, then
Medicaid. They also often are more challenging patients because they
have more copy--you could speak to this more, Doctor Chen.
But compared to non-Medicaid patients can have more complicated
multi-medical conditions and also more complicated social circumstances
that may lead to, for example, more canceled appointments that are just
a hassle for a doctor. So there is a challenge with getting enough
physicians for the Medicaid population now. The law does a couple of
things to try to address this. One is it brings, for a couple of years
anyway, the rate of Medicaid payment up to Medicare rates for primary
care, which would be a significant financial increase for those who do
Medicaid primary care. And also as various provisions to try to
increase the supply of primary care physicians and nurse practitioners.
increasing more residency spots, more loan forgiveness, a variety of
things. Because you might know primary care positions under our current
reimbursement structure end up with a lot less money than specialists.
So while... My father's a physician and he's always said that when he
was in medical school years ago, the brightest and it was the hardest
sought residence positions were primary care. And now I think it's
dermatology is the toughest to get into because it's both the most
lucrative in terms of hours and maybe seen as the most stable. So there
are some real increases, but some challenges.
OK. And I think one of the issues I think with the poverty issue is
that there's a real question as to whether or not these, particularly
the most poverty bound, are going to have a significant difference
under this law. There will still be in that lower group a bunch of
folks who are not going to be able to access any kind of coverage, the
sort of remaining 12 million or so.
And that's a challenge for another day. And I think as we look at the
access issue, we will be revisiting this issue in future reform. And
some of it will be around the poverty ridden who are not even able to
access good health care despite the fact of this current iteration of
health reform. OK. And we have this gentleman here.
Thanks. And this gets back to the international theme a little bit.
Many of the most expensive sort of procedures done in the United States
can be done at a fraction of the cost at an equivalent level of quality
overseas. American trained doctors, brand new facilities. Does the
broader adoption or more penetration of medical tourism, for want of a
better term, hold any promise at all for mitigating cost increases in
the future? Or is that really kind of a just operating at the margins?
Who wants to take that? Sally?
I can start taking a stab at that. I think medical tourism, which has
come to be the phrase, it's an odd phrase, is a really interesting
phenomena. And that's where people from developed countries go to
developing countries for very high tech medical care. And the leaders
in the developing world in this are India, Singapore...
Thailand. And as you say, it's true. They often have very high tech
hospitals with often US trained physicians, English speakers. With, you
know, staff who provide the services at a fraction of what somebody
might pay, certainly out of pocket. And even with co-insurance in this
country. A couple years ago I went to a conference, it was a medical
conference, in Canada and they were talking about medical tourism.
And the person started speaking and saying, "Of course, many of our
patients will be going because," and I was thinking ahead, because they
don't have insurance. And the reason it was not that, it was in Canada
you go to jump the queue to get hip replacements and knee replacements
that you may have to wait for in Canada.
people who go tend to either not have insurance or they have very high
out of pocket cost. And it is a growing field. It raises some
interesting issues. One, if there's medical malpractice when it happens
abroad, you really don't have recourse, realistically.
there's some sort of global equity questions. If a lot of the really
good Indian surgeons are being siphoned off to these hospitals that
predominately serve foreigners, that's a little troubling. Well, maybe
it's not our business. I don't know that this health reform bill will
have an impact either way in this, given that there might be people who
want to get service more quickly and avoid out of pockets, out of
pocket costs. I'm also amazed that people will go for very major
surgery. Fly to India, have a hip replacement. And then fly back.
I don't know that I would do that.
Yeah, I don't think it's a big enough sort of volume right now to
really know whether it's going to have any kind of impact on the bigger
picture. I mean, it is less expensive to fly to Singapore and get a
nice suit as well. So you can take advantage of sort of global economy
that way in a number of different ways. But I think it will most likely
be reserved for a very small group of folks who are interested in doing
But the coverage issues are important, though, because we've seen cases
of folks going to Mexico to get their lap band surgery or their obesity
surgery. And that's not a covered--many times the complications from
those operations are not covered by American insurance companies. And
so they--anyway, so there's a number.
Yeah. We might keep seeing that with Mexico, forgot about that. Mexico
does a lot of US patients without obesity surgery and also dental
That's not part of standard insurance coverage.
And of course one of the big medical issues is these patients come back
to the US and if they get into trouble post-operatively, who's going to
be able to take care of their post-operative complication when the guy
who eventually ends up with them in the US. Doesn't really know exactly
what went on over there and is in a poor position to really adequately
address their post-operative complication.
Other questions? Yes, two and let's start with the gentleman here at
the second table and move onto our colleague in the back row there.
Could you stand up, please?
I've heard that Washington Medicare payments are discriminatory low
compared to other states. And that's why I pay my doctor an extra $50 a
month just because she can still cover Medicare patients. I'm not one
yet, but soon will be. Is that taken care of in this bill? Is there
some mechanism to try to get equality between the states now? And is
that a legal issue if in fact they don't do it?
OK. So I can take that one. Actually, this issue of geographic
variation is one thing that I was going to talk about and then ask,
because I decided you didn't want to hear me talk quite that long. So,
geographic variation is basically a fancy term that health policy folks
use for meaning that some areas of the country use, or provide a lot
more medical services than other areas of the country. And the federal
government breaks it down, actually by county, but overall Washington
State is one of the most efficient states in the country in terms of
delivery of services.
An interesting corollary to that is that the areas in the country that
deliver a lot of services per capita are also those areas of the
country that have some of the poorest quality outcomes. So if you're a
consumer of health care, the idea that you're receiving more health
care shouldn't make you too happy. What we have learned from this is
that less care is actually better for your health.
one of the ways that the legislation addresses this is it looks by
county at those areas that are most efficiently providing health care
services to its population and drives a portion of reimbursement to
those areas. And then it also is setting up a couple of national
studies to explore this scenario where you've got a high amount of
services being used in poor health outcomes and what that might
ultimately do for lowering costs nationally.
OK. Next question? Yes.
Quick question. I know it was part of the debate early on but I didn't
know if it actually made it into the bill, if there was anything on
changes to the physician referral law, Stark. Did they do anything with
that? It's one of the things I'm looking for buried in the 2,400
...that I haven't gotten through yet but it affects my practice quite a lot.
It would be highly unusual if there weren't some changes to Stark in this thing.
For those of you who don't do Stark, count your blessings. It's a very
complicated law that has changed every single year, and it has to do
with relationships between physicians and hospitals, which is obviously
significant to any kind of business arrangement. There must be some
changes in there because all of the accountable care and payment for
taking care of a condition, those all have Stark implications. So there
are a lot of little bits and pieces in there.
And I know the American Health Lawyers Association Conference is
actually in Seattle this year in June. And I'm speaking at it so I get
all these emails about it, and they just sent out one saying, "OK, can
you incorporate health reform into your thing?" And the Stark people
are like, "Of course."
there's going to be Stark after reform, advanced Stark after reform. I
don't know the exact changes but there are a variety of bits of pieces,
and there have to be or else a lot of these demonstration ideas won't
OK. Other questions? Yes, one there in the back.
Professor Chen, can you comment on what changes the University of
Washington medical school is contemplating in terms of either the types
of students that are admitted or the curriculum and training as a
result of this?
I don't know of a lot that's directly a consequence of the legislation
passing, although the fact that the debate was going on certainly had
an impact. The School of Medicine is the only medical school for the
five state WWAMI region, and so as a result primary care and especially
rural care has been a real priority for the School of Medicine
throughout its history really.
We have recently started a number of programs. There's a program called
TRUST which is a pipeline program which really aims to get out to rural
communities, help both high schools students and college students from
those communities think about medical profession for their careers,
encourage them. There's some loan repayment and scholarship provisions
to that and a separate admissions process for students committed to
rural and under served care. It's just gotten started. It's really in
its first, second year with some federal grant funding to get that
WWAMI program itself has always been committed to that. I think we've
recognized in the School of Medicine that it's a priority and continues
to be a priority even though we have this big research mission and this
also heavy patient care mission too. So the School of Medicine is well
aware of that.
The other piece of it which fits in with similar
discussions around the care organizations is that the School of
Medicine and Harborview specifically and some of the UW clinics have
engaged in the patient-centered medical home project. It's actually a
collaborative project run by the state's Department of Health. The
medical home is an idea that not do you need to fix reimbursement and
insurance access, but we actually need to fix some of our processes in
our health care delivery system, and especially in primary care.
no good to tell folks not to go to the emergency department when their
primary care office is closed at four o'clock in the afternoon. How do
you reach somebody after hours? Why do you have to wait for an hour and
a half in the waiting room? Who's actually helping you take care of
your diabetes when you only have 15 minutes every two months to see
your doctor? And are there other folks in that clinic who can contact
you in between and make sure that you're eating right or checking your
blood sugar? Those kinds of things.
That's really on the service
delivery side. There actually is a lot of language in the law around
medical home and demonstration project like this, some tied to
reimbursement and some just tied to the quality pieces. So UW is well
aware of that, as are the other health care systems here in town. So
there's actually a good bit of activity that's happening around that
practice redesign piece.
But it goes without saying that all of
these pieces in health care are quite interconnected and it's very hard
to do a practice redesign if you're not at least addressing some of the
payment inequities and reimbursement inequities, which we're starting
to do in the bill a little bit. So they all go together and it's very
hard to move one piece without recognizing that it's attached to the
And this points at one of the questions I think that's floated around a
little bit is the issue of reimbursement. There is a difference between
coverage and reimbursement. Just because a service is covered doesn't
necessarily mean the reimbursement level is going to be high enough to
make it easy to find a doctor who will see you.
And that's of course what happen with our Medicaid program and
increasingly with our Medicare program where there is a fairly
comprehensive level of coverage but the reimbursement level is so low
that many doctors are deciding that they don't want to take care of
one of the areas where we see this health reform bill stand back and
not do too much is on the issue of the reimbursement level. There has
been a lot of focus on coverage, not so much on reimbursement, and that
is unfortunately something that's going to come home to roost. As this
plan is implemented, doctors will either decide that reimbursement is
sufficient or that it's insufficient. And if it's insufficient, we'll
know pretty quickly that the patients may have coverage but they can't
get care. And so that remains to be seen.
As we heard health
reform talked about on TV a lot they kept highlighting some of the
really efficient systems - the Cleveland Clinic, the Mayo Clinic,
Marshfield Clinic in Wisconsin. And almost nobody focused on the fact
that there's one thing all those centers have in common: their doctors
are on salary. And that's not the way that most of medicine works.
Other questions? Yes.
I have one comment and one question just on that last issue about the
Medicaid program. There actually is a change in the bill that expands
how medical assistance is defined under Medicaid and it includes the
provision of services. So I think there are some nuggets in the
legislation increasing reimbursement because the state Medicaid
agencies will have the obligation not only to pay for the service but
actually to ensure that it is provided.
But my questions is, in terms of these consumer assistance programs and
ombudsmen programs, what are you hearing about how they're going to be
set up both here and nationally, and will they do more for people than
just, here are your rights? Will they actually provide advocacy and
That's a great question. I just saw on the news today that Kathleen
Sebelius said that her agency will be the national helpline. Are we
going to be calling her, asking what to do?
There is in the law requirements that these health exchanges have
ombudsmen, and have Internet presences, and have various technical
means to help consumers who are not conversant in health reform
language figure out what they should be doing. So the requirements are
it's mechanically, physically instituted will be interesting, although
we do have the Massachusetts model, which has been up and running for a
couple of years with an ombudsman, and Internet presence, and flyers,
and all those sorts of materials.
In terms of advocacy, some of
it's left to the states. The insurance commissioner's offices, and
there is a variation in how activist insurance commissioners are. Some
of it's delegated to the Federal government. So, it will be an
interesting interchange of balance.
OK, other questions? Yes.
Should opponents of federal reform worry about [indecipherable 1:07:28]
. Is there justification to take action [indecipherable 1:07:35]?
I'm going to turn this over to Sally, because this is one of her areas of expertise.
This has to do with pending lawsuits challenging the Constitutionality
of provisions of the law, although arguably, if those provisions are
out, the whole law's out.
The challenges come from--now, there are three main sources. There's
the Florida Attorney General lawsuit, to which 13 others have joined
in, and two governors now say they want to. And then, the Virginia
Attorney General lawsuit. And then also one by private individuals.
Thomas More Society has filed a lawsuit on behalf of several
individuals. These challenge the Constitutionality, mostly on the
individual mandate, arguing that it exceeds Congress' authority, either
under the commerce clause or the tax and spend authority.
are two other challenges to the Medicaid expansion and the health
insurance exchanges. Those, I really don't think--some states can opt
out. I think the weaker potential argument. The individual mandate
challenge is not frivolous, but it's an uphill battle.
of what people who disagree with the filing of the lawsuits and the
premise can do, or ought to do, that's, I know, currently being debated
by a lot of attorney generals and governors who disagree with their
counterpart in the state. Do you support amici who are going to be
filing briefs arguing that it is Constitutional?
The Oregon governor said he was going to file a lawsuit saying it is Constitutional. I'm not sure what that looks like.
then, certainly, the Federal government will be defending it. Some
governors and/or attorney generals, if the governors want to be part of
the lawsuit and the AGs don't, have wondered if they can be parties.
So, could you have, for example, the US government, CAP and
Sebelius--the US government, and Governor Gregoire versus Attorney
General McKenna and the others as the named parties? That would be very
I don't know. It will be interesting. It is going to be a
great, great law school exam for all sorts of law school professors.
You have procedure, Federal courts, Constitutional law, all sorts of
Just a follow up. What I want to--if you can answer this, maybe
[indecipherable 1:10:06. What does McKenna's participation in the
lawsuit add to the opponent's case? Is there a practical reason, from a
legal standpoint, to try and nullify [indecipherable 1:10:19] ? That's
I know that state legislators--the state legislature is still in
session, and there has been discussion amongst them on should the
legislature do anything--The Democratic leadership--to prevent his
participation. For example, cutting off funding, or changing the
statute that arguably authorizes him to do this. That, I think, some
people say is a two edged sword, because having an attorney general
with some independent power theoretically has some value.
But, I know there are discussions going on amongst the Democratic
leadership in the state legislature about what, if anything, ought to
be done by the state legislature about disagreement with his
participation in this. Certainly, they legally could do some things. I
don't know what will happen, if anything.
I think several states are struggling with this. There's a number of
states where you have a Democratic governor, Republican AG, a
Republican governor, a Democratic AG, and you have one party or the
other deciding to sign on to the Florida lawsuit and their compliment
saying, "No, no, no. We're not going to allow that," or "We're going to
sign on the other side."
I think it remains to be seen exactly how this dynamic between
governors and AGs is dealt with, because most states do have a fairly
independent AG. I just was in Minnesota for the Easter holiday, and
they have that exact same situation: A Republican governor, a
Democratic AG, and they way they settled it out was there was
independent power for the AG to at least file an amicus brief. It was
less clear that they could actually bring the entire state into the
suit. And, there was independent power for the governor to do an amicus
brief without the AG's consent, but it was less clear whether they
could actually sign on to the entire suit.
the upshot in the Minneapolis papers was that the AG said, "Hey, look.
You want to file an amicus brief, Governor Pawlenty? Go ahead. I'm
planning to file one on the other side. Neither of us can actually join
the suit, because we can't agree." Now, that may be a figment of
When is the next election?
And, of course, the wheels of justice move slowly. The next election may make a difference.
One other thing I would just add into the whole lawsuit mix that was
brought up at the law school panel on this that I thought was really
interesting is that there are actually questions about standing and
rightness that could suggest that maybe all of these lawsuits are
premature. No one has been injured yet.
And, questions about are the attorney generals the right people to be
bringing these lawsuits on behalf of states generally, or should it
more properly be individuals. I thought those were a couple of
We have time for one more question.
This might be a simple one. Will this have any impact on the Uniform Medical Plan?
We'll give that to Freddy.
A very good question. On the face of it, and from my understanding--not
really. We're not a Cadillac plan. We have already--there are no
preexisting condition exclusions for the Uniform Medical Plan that's
offered to all state employees. We've done away with lifetime benefits
limits for the Uniform Medical Plan several years ago.
There are always pieces of medical that we will look at, and need to
consider some of these things, like patients on medical home stuff,
accountable care organization, and how we pay organizations if they
fall into a demonstration, for example, I think may have some
implications for us.
in terms of coverages and benefits, I don't think there will be,
certainly, the Uniform Medical Plan, like many other insurers in this
state, have been in the thick of this, and really from the perspective
of insurers, they're really dealing with that cost slope, both for
their beneficiaries, as well as for their customers, the payers, the
state or large employers. That slope is going up quite significantly,
and that's why you saw some crazy things like premiums going up
I think plans are going to be looking at this in a
number of different ways. Certainly from a coverage standpoint, I don't
think there's going to be any major changes for Uniform.
OK, let me thank all of our presenters. I'm sure they'll be here for a
few minutes afterwards for taking any more of your questions. Thank you
all for your attention.
Let me join in thanking you for being here today. Pat, thank you for
your great leadership of the panel. Panelists, really terrific job.
What a great example of real interdisciplinary questions, you know? So
many questions of law, policy, public health, medicine, et cetera. It's
just wonderful to be able to bring people together to really get into
also want to let you know that some of you may want to learn more from
the panel. We did a whole that was specifically on the Constitutional
issue, and you can watch that program. The link is available from the
School of Law'shome page on the website. So, it's just www.law.washington.edu,
and you can find a link to that earlier program that we held on the
Constitutionality issue, if you care to watch that, and learn a little
bit more about it.
If you would, please join me again in thanking our moderator Pat Kuszler and also all the panelists, I'd appreciate it.