Obama Budget Addresses Malpractice Reform

In his State of the Union address last month, President Barack Obama offered to work with Republicans on malpractice reform. That forum is not a place for details, so there’s been some question as to how far the President was willing to go on this issue. The budget the President introduced this week provides some of that meaningful detail.

Specifically, the Administration is proposing to provide federal funds to help states change their medical liability laws. The proposed budget would spend $100 million on these grants in 2012 with expenditures of $50 million in each of the next three years. The funds would be distributed by the Department of Justice in consultation with the Department of Health and Human Services.

The state reforms funded by the grants could not be used to put caps on jury awards. These caps are a top priority of most Republican and of the American Medical Association. They are an anathema to trial lawyers, most consumer groups and many Democrats.  GOP lawmakers will no doubt push for such caps, so that issue won’t go away. However, the Obama Administration’s proposal can be used by states to enact some interesting reforms that should appeal to Republican lawmakers.

One reform which the Associated Press cites as topping the Administration’s list is the creation of special health courts. Specially trained judges would hear and decide malpractice cases in these courts without the participation of juries. (It is not uncommon for juries, whether through outrage, a sense of justice or emotion, to award huge damages to plaintiffs — damages which are often reduced substantially on appeal). Further, these judges would make awards based on a set schedule.

Another reform states can use the grants to implement would establish a defense for providers who follow clinical guidelines and use electronic records. And another would allocate malpractice payments in proportion to responsibility for determined damages. This would replace the current practice of holding all providers responsible for the full award. Which means if one provider fails to pay damages, the other providers must step in and make up the difference.

 What’s significant is that these funds would not be used to study malpractice reform, but to actually implement it. Equally important, this approach leaves it to each state to fashion its own malpractice system. What can $250 million over four years actually accomplish? Quite a lot actually. For example, the Associated Press reports a source as claiming it “would cost $5 million to $7 million for a midsize state to set up health courts.”

The failure to allow for caps on damages will no doubt draw outrage from Republicans. While they’ll pursue legislation to impose limits on rewards, the likely defeat of that proposal in the Senate will probably not be enough to derail the ideas contained in the President’s proposal. At the same time, the Administration will need to fend off plaintiff attorneys who will vociferously oppose the creation of non-jury health courts.

Malpractice reform is a tough issue with powerful interests seeking incompatible ends. Finding solutions acceptable to Republicans, who control the House of Representatives, and to Democrats, who occupy the White House and have a majority in the Senate, will be no easy task. But the Obama Administration has made a start on the process.

Moving Beyond Health Care Reform Repeal to Revision

During the 2010 election Republicans promised to “Repeal and Replace” the Patient Protection and Affordable Care Act. Having gained a majority in the House of Representatives they quickly passed a bill to do just that (joined by three Democrats). Having failed to gain a majority in the Senate the repeal process is all but over.

Senate Majority Leader Harry Reid has said he would not bring the “Repealing the Job-Killing Health Care Law Act”to the Senate floor for a vote. In response Republican Senators have promised to offer amendments repealing what they see as unpopular provisions of the law. In both the House and Senate GOP lawmakers are targeting the PPACA’s requirement that all Americans obtain health insurance coverage, malpractice reform, taxes imposed on health insurance carriers and others, denying federal subsidies (including tax deductions) for health plans that cover abortions, and permit the sale of health insurance across state lines. While Republicans know these amendments will fail, forcing Democrats up for election in 2012 to cast several votes defending President Barack Obama’s health care legislation has significant potential political benefits.

But two can play this game. So if Republicans force a vote on their measures, Democrats will require GOP Senators to vote on legislation concerning more popular elements of the PPACA. These include closing the Medicare prescription benefit donut hole, eliminating pre-existing condition exclusions for children, and allowing children to remain on their parent’s health plan up to age 26.

Then there’s the coming Republican effort to defund the PPACA. (Which creates an enjoyably ironic situation. Many in both parties, but especially Republicans, argued Democrats were arrogant to pass health care reform in the face of polls showing the public opposed their legislation. How will they respond to a Kaiser Family Foundation and Harvard School of Public Health showing 62 percent of respondents opposed cutting off funds needed to implement the PPACA?)

What all this means is that we’re in for two years of political showmanship concerning health care reform. But that doesn’t mean meaningful changes to PPACA won’t be forthcoming. President Obama declared his willingness to sign a medical malpractice reform bill. Of course there’s tort reform and then there’s tort reform. Health and Human Services Secretary Kathleen Sebelius has committed to providing “what the parameters of medical malpractice reform might be” during a hearing of the Senate Health, Education, Labor and Pensions Committee Hearing. Whether there is enough common grounds with GOP proposals to deal with medical malpractice remains uncertain until then. Meanwhile, 60 Senators have signed onto a bill to repeal the the 1099 reporting provisions contained in the health care reform law. Down the road there will be efforts to gain bi-partisan support for changes to more difficult provisions of the new reform law, including medical loss ratio requirements and the exchanges.

Yes we’ll all be subjected to the sound and fury signifying only political posturing and one-upmanship. But there will also be acts of quiet negotiation aimed at what President Obama in his State of the Union speech called “improving” the Patient Protection and Affordable Care Act. And as Politico Post describes the reaction of this language by Julie Barnes, director of health policy at the Bipartisan Policy Center, this could well be “a signal that bipartisan cooperation on health reform tweaks is on the horizon.”

One can only hope.

Democrats Now More Likely to Move Health Care Reform Forward On Their Own

Well, so much for a breakthrough. The health care reform summit was fascinating political science. But it certainly does not seem to have generated a clear direction for anything close to bipartisan health care reform. Which means President Barack Obama and Democratic leaders will put forward a bill for an up-or-down vote, most Democrats will vote for it and no Republicans will. The only questions remaining are: 1) will Democrats invoke a rule that will allow them to move forward with a simple majority or will they permit the GOP to prevent the legislation from coming to a vote; and 2) will Democrats make any changes to the legislative proposal put forward by the President to reflect issues raised by Republicans during today’s health care reform summit. This post addresses the first question; the next one the second.

Reconciliation: My guess is that Democrats will use reconciliation as a means of bringing health care reform legislation to the floor of the Senate for a vote. As NPR has reported, it would not be the first time reconciliation led to substantial changes to America’s health care system. As Sara Rosenbaum, chair of the Department of Health Policy at George Washington University, notes in the NPR story, “In fact, the way in which virtually all of health reform, with very, very limited exceptions, has happened over the past 30 years has been the reconciliation process.”

She’s not just talking about arcane legislation, either. COBRA, the provision that allows workers to continue their coverage after leaving an employer, was passed through reconciliation. In fact, COBRA stands for the bill in which this health insurance extension was included, the Consolidated Omnibus Budget Reconciliation Act of 1985. Reconciliation is the “R” in “COBRA.” In 1997 the Children’s Health Insurance Program, which along with Medicaid now covers one in every three children in the United States, was passed as part of a budget reconciliation bill. As the NPR story reveals, the list literally goes on-and-on. It seems health care reform simply can’t wend its way through the Senate with a super majority. is this because, as the Center for Public Integrity reports, there are eight health care lobbyists for each member of Congress? Whatever the reason, reconciliation is commonly used to pass health care reform.

It’s likely Democrats will keep this streak going. Yes, Republicans will cry foul, but at the end of the day, it’s a perfectly legal process. And while not every provision of the President’s reform package is likely to be eligible for reconciliation, enough will be to enable Democrats to declare victory.

Assuming, of course, they can muster majorities for comprehensive health care reform legislation. The earlier House bill passed with two votes to spare – including one from a Republican who is now saying he’d vote against the bill. And while the Democratic caucus numbers 59 members, there are 18 members of a the Moderate Dems Working Group. Whatever bill comes before the Senate will need to hold onto nine of those moderates – and that’s assuming all other Democrats are willing to go this route. Some liberals, including Senator Jay Rockefeller, have expressed reluctance to to invoke reconciliation. In the end, the President is likely to muster enough support for a bill – he only needs 50 votes in the Senate as Vice President Joe Biden could cast the decisive vote there. The vote will be close in the House, but Speaker Nancy Pelosi has repeatedly demonstrated her ability to muster a majority when needed.

President Obama needs a vote on health care reform. Politically he needs to demonstrate to his base and moderate independents that his commitment to hang tough on the issue – even if it means he’s the captain going down with his ship. If Republicans (and some Democrats) defeat the legislation, he’ll have shown he’ tried. America doesn’t like quitters (former-Governor Sarah Palin being the most prominent exception). They do like fighters. Politically, moving forward on health care reform is a necessity.

It also makes public policy sense. The health care status quo is untenable. Change is needed. Even if his ambitious reforms fail, the effort will set the stage for more modest reforms – modest reforms that could be introduced and voted upon before the November elections.

In an upcoming post I’ll discuss whether the bipartisan health care reform summit makes it more likely the President will moderate his health care reform proposal.