15 February 2009

Do not pray for easy lives

So said President Obama, quoting JFK, as he spoke yesterday on the passage of the economic stimulus bill.  

The politics are interesting: Obama got exactly what he asked for, and passed the largest tax cut, and largest spending bill in history within three weeks of his inauguration; progressives are unhappy with what they view as an insufficient stimulus; and the GOP casting itself as the Grand Obstructionist Party.   How's that working out?  Not too well: the approval of the congressional republicans is tanking. 

It's hard not to view this as a big win for the new administration; I guess they meant it when they said they wanted to hit the ground running.   But, politics aside, massive bills like this always boil down to the WIIFM principle: What's in it for me?

For health care, "our" fraction of the $787 million is substantial.   I have rounded up what I think to be all of the health-care related provisions:
  • $87 billion in additional federal Medicaid funds for states; under the provision, states will receive the funds over 27 months, during which time they cannot change their eligibility requirements for the program;
  • $24.7 billion for federal subsidies to cover 65% of the cost of health insurance premiums under COBRA for as long as nine months; the provision would apply to workers who were "involuntarily terminated" between Sept. 1, 2008, and Dec. 31, 2009, and whose annual incomes do not exceed $125,000 for individuals or $250,000 for families;
  • $10 billion in additional funds for NIH, with $8.5 billion allocated for research grants and $1.5 billion allocated to renovate research facilities;
  • $1 billion for prevention and wellness programs;
  • $1.1 billion for Comparative Effectiveness Research (CER) to generate data on the relative efficacy of various medications and medical devices. (Funds divided between the Agency for Healthcare Research and Quality, NIH and the HHS secretary);
  • $19 billion for Healthcare Information Technology (HIT), with $17 billion for investments and incentives through Medicare and Medicaid and $2 billion for a discretionary fund for grants and loans;
  • $191 million to eliminate proposed reductions in Medicare reimbursements to teaching hospitals;
  • $13 million in adjustments to Medicare reimbursements for long-term care hospitals;
  • $460 million temporary increase in Medicaid payments to hospitals that treat large numbers of uninsured or underinsured patients;
  • $680 million to accelerate Medicaid reimbursements to nursing homes and hospitals;
  • $1.3 billion to extend a program that provides Medicaid coverage to individuals who make the transition from welfare to work;
  • $550 million to extend the program that helps low-income Medicare beneficiaries cover the cost of Part B
The sum total works out to about $145 billion, or about 18% of the total cost of the bill (or an even higher fraction of the expenditure part of the bill).  A couple of notes:

Incentive payments are provided to Section 1861(r) providers (physicians) who adopt and utilize EHR technology that is certified as meeting appropriate standards for interoperability, security and clinical functionality.  To receive the incentives, providers must demonstrate that they are engaging in meaningful use of the EHR technology, including electronically exchanging clinical information with other providers and reporting on clinical quality measures.  Unfortunately, Hospital-based providers are not eligible for the program.

The HIT provision also requires the federal government "to take a leadership role" to develop interoperability standards for health care IT by 2010.

Some right-wing media outlets have claimed that the CER and HIT provisions represent a "new bureaucracy, [... to] monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective."  This is false; a product of the hyperbolic imaginations of those opposed to the bill in general, and by those makers of expensive yet marginally effective drugs and devices who stand to lose if data comes to light showing that existing/cheaper therapies are as effective.  The bill does not create any reporting or monitoring authority, and certainly no restrictions on how care may be provided, and, in fact, the office of the National Coordinator for HIT was established five years ago by George W Bush.

Overall, this is not a bad end-sum for health care, especially coming on the heels of the expansion for CHIP a couple of weeks ago.   We are already seeing an uptick in volumes and a decline in payor mix, as more people lose insurance and lose access to their primary care providers -- bolstering public assistance for health care and COBRA seems like a smart move as we dive into this recession, and the majority of the money goes to just this purpose.  The HIT and CER provisions are mostly icing on the cake.

More importantly, this bill showed that Obama has the capability to overcome the heels-in-the-dirt obstructionism of the rump republican caucus.   The dead-enders in the House are completely irrelevant, and with just a few collaborators in the Senate, the administration is going to be able to move major legislation.   This is significant, given that all signs remain that Obama will pursue more sweeping health care insurance reform this year.   The lessons learned from this fight will serve him well.   He has learned that the GOP has no good faith willingness to engage in any sort of bipartisan negotiations, and he has learned how to go outside the beltway and sell his agenda to the people who put him in office last November.  

"May you live in interesting times" is an old Chinese proverb -- both a curse and blessing.   It's going to be an interesting year in politics.


  1. Excellent article -- thank you for the cogent breakdown of healthcare's share of the stimulus bill. Looking through the bullet points, the one thing that sticks out noticeably is the allocation of 1.1 billion for "Comparative Effectiveness Research" -- judging by the scads of efficacy research that comes out every month in NEJM / Annals / JAMA, I wouldn't have thought that this area would need formal stimulus from the government.

    Nevertheless, I'm quite pleased at the fact that the stimulus bill passed. I'm not sure if you've seen this article, but the Washington Post has an article on how the GOP is actually *proud* of the fact that they tried to stop the stimulus bill. It is quite amazing how completely out of touch they are with reality.

  2. We must act fast
    We must act now
    The sky is falling
    Didn't think it through

    Are we talking about GW on Iraq and WMD or Obama's socialist package. Same thing. Obama and the democrats have their stamp all over this failure?

  3. Are we talking about GW on Iraq and WMD or Obama's socialist package.

    This is a really good point. When the Republicans push things through Congress it is illegal wars based on false intelligence. When Democrats push things through it is building infrastructure, tax cuts, and investing money on research.

    And, the Republicans had no part in this. That is also a good point.

  4. "When the Republicans push things through Congress it is illegal wars based on false intelligence."

    Not exactly forced on Congress. It was enthusiastically supported by the next pres nominee and the current Sec State.

    "When Democrats push things through it is building infrastructure, tax cuts, and investing money on research."

    Not nearly enough of this in there.

  5. "When Democrats push things through it is building infrastructure, tax cuts, and investing money on research."

    Not nearly enough of this in there.

    What fraction of the bill is not one of these three things?

  6. http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html

    Looks like:

    Science research: $3 B
    Infrastructure: $70 B
    Tax cuts: $80 B

    That adds up to $153 B. These numbers are eyeball estimates--I'm not working really hard on this, so I might miss something.

    Out of $819 B would be 19% of the money is what you said. The rest is "stimulus".

  7. "Out of $819 B would be 19% of the money is what you said. The rest is "stimulus"."

    Okay, you know what I mean. Sheesh...I type too fast.

    19% of the $819 B is what you were talking about. The rest--81%--isn't.


  8. Bill,

    So, the link is to the House Bill not the bill passed to the President. Also, the link you provided said that tax cuts were at least 22% of the package.

  9. Alright Bill. Here are a couple of lists for you to look at, if you really want to know.



    First, off transportation and infrastructure gets $98.325 billion. Science & Technology gets $13.142 billion. And what do you think is covered by the $41.4 billion in Energy?

    Of the 2/3 or roughly $500 billion of the package that is spending, something like $150 billion goes directly to research and infrastructure. That doesn't count the 58 billion to the states which will surely find its way into infrastructure, but will certainly save jobs. Does saving state jobs bother you?

    Maybe you are upset about the 48 billion for Education, or the 36 billion of economic aid to those affected by the down turn.

    Fair enough. But, there is about 250 billion in tax relief with much less going to businesses. Or, about 1/3 of the total cost of the bill, similar to the link you provided. (Although the lowest estimate show tax relief as 22 rather than 33 percent.)

    Can we please stop telling lies about this plan? It is impossible to have a serious discussion about these things if people refuse to look at actual facts.


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