Wyden on the Ryan-Wyden Plan and a Bold Medicaid Alternative

Eli Y. Adashi, MD, MS, CPE; Sen Ron Wyden (D, Oregon)

Disclosures

June 22, 2012

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Editor's Note:

In this episode of Medscape One-on-One, Sen Ron Wyden (D, Oregon) talks with host Eli Y. Adashi, MD, MS, CPE, about healthcare reform, the future of Medicare and Medicaid funding, and the possibility of a permanent "doc fix" and liability reform.

Introduction

Dr. Adashi: Hello. I am Eli Adashi, host of Medscape One-on-One. Joining me today is Sen Ron Wyden, a Democrat from the state of Oregon. Welcome.

Sen Wyden: Doctor, thank you for having me. I've been looking forward to this.</

Healthcare Reform and the Supreme Court

Dr. Adashi: As a seasoned legislator and attorney, what do you think about the constitutionality of the individual mandate of the Affordable Care Act (ACA) that is currently being reviewed by the Supreme Court?

Sen Wyden: Doctor, I am barely a lawyer in name only. My wife likes to say that one consideration in marrying me was that I wasn't a real lawyer. I have felt from the beginning that the court would uphold it, because if ever there was an issue where you really saw the commerce power in action, it's healthcare. This is clearly an industry with enormous expanse in terms of reach. If you go through some of the oral arguments, particularly with regard to questions asked by Justice Anthony Kennedy, there are some questions about whether the court will uphold it, but I'm very hopeful that they will.

I certainly don't want to go back to the days when insurance companies could discriminate against anyone with a preexisting condition. If you go back to that day, the health system is basically just there for the healthy and the wealthy, and that's completely unacceptable.

Working With Rep Paul Ryan

Dr. Adashi: Assuming for the moment that the ACA is overturned in part or in whole, what kind of scenarios do you envision?

Sen Wyden: First of all, I think that Medicare is going to be front and center on the health agenda under any circumstance, because clearly Medicare is the great challenge for the budget. I was not a supporter of the earlier legislation in the House of Representatives. I thought that in many respects, it was sort of a voucher or coupon care sort of approach, but I have been working with Rep Paul Ryan (R, Wisconsin), who's chairman of the House Budget Committee, in the hope that we could forge a bipartisan approach around something known as "premium support."

Premium support is different than vouchers. Vouchers are a fixed sum, and the sum has not kept up with the health costs of older people. Premium support, on the other hand, is variable. It's tied to the healthcare cost of a senior in a given area. It also would use a system of competitive bidding, which will ensure that every senior has affordable choices where they live, but it also can serve to help hold down costs.

A Reintroduction of the Healthy Americans Act?

Dr. Adashi: Can you see any constellation under which you might wish to reintroduce the Healthy Americans Act, which came to be known as the Wyden-Bennett plan and was named for you and former Sen Robert F. Bennett (R, Utah). I believe that bill has been introduced twice before. Can you see a circumstance whereby the bill could be relevant again?

Sen Wyden: I think the bill will always be relevant because a number of the features that we felt more strongly about were included in the ACA. For example, the legislation that Senator Bennett and I put together was the first bipartisan bill to really lay out a plan for the insurance exchanges. These are in effect almost a farmers' market, where people are able to hold down their insurance costs.

It also included what's called guaranteed issue, meaning that all people, even people with preexisting health conditions, are guaranteed health insurance coverage. And there is an approach in the Healthy Americans Act that is really similar to community rating, which is also included in the ACA, which requires insurance companies to offer all persons within a given territory health insurance without underwriting, regardless of health status. Much of what we proposed on state insurance exchanges made it into the final legislation.

There were a number of other features that I pushed very hard for that were included in in the ACA, particularly a waiver provision so that states could try their own approaches to healthcare reform. I also developed an approach for care at home for senior citizens. It's called the Independence at Home Program. This will be hugely important because about 75% of Medicare costs are in effect dealing with chronic disease of the heart, as well as stroke, diabetes, and cancer, and many of these patients can be cared for at home. When they are, the US Department of Veterans Affairs has found that they can save upward of 20% on the cost of care. Those were all features that I worked for vigorously as the Senate Finance Committee was moving ahead with the legislation for the ACA.

There was another Medicare proposal that was also part of the Healthy Americans Act in a slightly different form. Recently, Sen Rob Portman and I -- he's a Republican senator from Ohio -- introduced first-time legislation that would financially reward seniors for engaging in good preventive practices, such as smoking cessation, reducing body mass, lowering cholesterol, and other preventive steps. We came up with the plan after consulting with the Oregon Health & Science University and the Cleveland Clinic. Medicare has never done a program like this, and we have come up with a plan where seniors could be eligible for a savings of about $200 in the first few years of the program, and then as we move into the next period of the program, they would be eligible for savings of up to $400. In effect, what we're saying is that when they save Medicare money by engaging in these smart preventive steps, they should be able to share in the savings.

The Ryan-Wyden Medicare Proposal

Dr. Adashi: There are some other attractive features in the Wyden-Bennett proposal that I still hope could be incorporated into a future bill. But staying with Medicare for a moment, as you mentioned, you recently joined forces with Rep Ryan in a very creative proposal to reform Medicare. Can you share the highlights of that proposal and where you see it in terms of momentum, so to speak?

Sen Wyden: With respect to the legislation with Paul Ryan, it really starts from the proposition that no one would go out and buy a house without having some idea of what they're paying for. This was a thought offered up originally by Dr. David Cutler, an economist from Harvard University who is very well known in the Northeast and around the country.

Much of what we're going to have to do with Medicare is to ensure that traditional Medicare, with its purchasing power, is maintained, while at the same time offer private sector choices so that the 2 will strengthen each other. In that sense, we recognize that much of the Medicare debate is not at all ideological. Protecting the Medicare guarantee, and the needs of more than 40 million seniors in particular, involves such critical questions as, "What are we going to do to make sure that all seniors can get a doctor?"

What we see already in our state is that many seniors might have a heart problem, or they might have problems with blood pressure. They make 6, 8, or 10 calls to physicians, and the physician has essentially put up a sign saying, "no longer accepting Medicare patients," because they don't know what the reimbursement rate will be or it's too low. This is not an ideological question. In my state more than 40% of the seniors have chosen what's called Medicare Advantage, and to a great extent a lot of them are making that choice because they know they can get access to a talented physician and will not have to face this kind of Russian roulette of having to make calls all over town just in the hope of being able to see someone.

Fixing the Sustainable Growth Rate Formula

Dr. Adashi: Speaking of which, come January of next year, the sustainable growth rate formula will call for 32% reduction in the reimbursement of participating Medicare physicians, to say nothing of the 2% that the sequester process will superimpose on that. Drawing on your substantial background in this area, can we look forward to a so-called "doc fix" sometime in 2013, and if so, how would you suggest we go about it?

Sen Wyden: It's timed in this rollercoaster. I mean, we have seen Congress lurch from one short-term extension to another, and I think we ought to understand that this is not some sort of matter where the so-called fat-cat physician is going to be able to get some lavish reimbursement rate. What we're seeing is more and more physicians, particularly in my home state in both rural areas and urban areas, walking on an economic tightrope trying to keep their offices open, and it's critically important that a reasonable approach be put in place. I'm struck by how many physicians would almost like to see this abolished and start over.

Differing Opinions on Medicaid Funding

Dr. Adashi: We've mentioned your reaching out to Congressman Paul Ryan on the Medicare issue. Moving now for a moment to Medicaid, do the 2 of you agree on an approach to Medicaid? In other words, do you subscribe to the notion of block grants as proposed by Rep Ryan, or do you differ on this issue?

Sen Wyden: I do, and this is an area where clearly more work is going to be necessary to come up with a bipartisan approach. If you look at our white paper that we put out in December of last year, you will see a very strong and focused effort to protect the neediest seniors: the most vulnerable seniors, who are dual-eligible for Medicare and Medicaid. My concern is if you block-grant Medicaid, the fate of the most vulnerable, the most needy of seniors -- those who are of low income and need institutional care -- would be very, very uncertain, at best. If would be left to the sort of vagaries of the states. That's something I couldn't support.

Ironically, for the noninstitutional Medicaid population, I've taken an approach that's probably been too bold for either party. I've said that much of Medicaid really consists of apartheid. It's sort of a second-class system, and what I would really like is to see a poor child sitting next to a congressperson's child. I advocated in the Healthy Americans Act that poor people be eligible for the same benefits essentially as everybody else -- coverage much like that which their member of Congress gets.

Oregon's "Bold" Medicaid Alternative

Dr. Adashi: Speaking of Medicaid, last week the US Department of Health and Human Services granted the state of Oregon a waiver that would allow it to launch a bold demonstration project that would feature so-called coordinated care organizations. Could you expand on that effort and use this opportunity to say something about whether or not you think this experiment could serve as a model for other states?

Sen Wyden: There's a reason our state is known as "the Innovation State." This is another very good example. Enormous credit is earned here by Dr. John Kitzhaber, the governor of Oregon, who has been the leader of this effort for 2 decades, beginning with the Oregon Health Plan.

What this is in my view is the future of the Medicaid program. This is a model for Medicaid, and it really takes the principle that you see in the ACA and in effective programs, such as Group Health Cooperative in Washington State or the Mayo Clinic or the Geisinger Health System in Pennsylvania. A lot of these programs are all based on the idea of integrating services, integrating healthcare for the people. What we're seeking to do is focus on the Medicaid population.

Now, what's really gutsy about this is that historically, under Medicaid, states can make the decision with respect to opting out of the program as it evolves. Under the approach that Dr. Kitzhaber has advanced, if certain cost guidelines are not met, the federal government is empowered to say, we're going to take away the right to operate this waiver. It's a gutsy approach. It's a bipartisan approach.

I was very pleased to be in a position, as a member of the Senate Finance Committee, to work closely with the Obama administration -- particularly Health and Human Services Secretary Kathleen Sebelius -- on this program. We're very pleased to see this program approved. I think it's going to be a great success.

Dr. Adashi: I think most physicians would also appreciate that this program focuses on care coordination, which is finally addressing healthcare delivery -- not just cost, but the form of delivery, where undoubtedly we can use a lot of improvement in.

Sen Wyden: In effect, they're almost 2 sides of the same coin. I think Governor Kitzhaber is absolutely right to focus on the delivery system and put a focus on prevention. What House Budget Committee Chairman Ryan and I have looked at also is competitive bidding to put a new focus on cost containment. A journalist in Oregon recently compared, to some extent, purchasing healthcare with purchasing wine. He said that people, when they're talking about fine wines, don't want to purchase the least expensive. Usually, they like to purchase the second least expensive. All of the wines are going to be good quality, but the wine that is second least expensive is the one that in effect sets the bar for the price of fine wine.

That's the standard that is used in the Ryan-Wyden legislation. In effect, it is the second least expensive option for traditional Medicare that actually sets the cost structure in a given area. I think by taking those 2 approaches -- the coordination of care or the delivery system that Dr. Kitzhaber has laid out, and holding down costs through competitive bidding -- make a lot of sense for preserving Medicare in the future.

Shining Light: The Physician Payment Sunshine Act

Dr. Adashi: As you know the Physician Payment Sunshine Act is scheduled to go into effect in early next year. This section of the ACA is now coming to fruition. How do you view this development and its apparent resolution?

Sen Wyden: Clearly, there is going to be an effort to shine some light -- some sunshine, as you appropriately characterized -- on all the charges in the healthcare system. What I believe is important is that this information gets out, and that it gets out with a real effort to help put it into context.

For example, it's clear that in the medical profession, as in many other professions, the vast majority of physicians are acting in a professional fashion with great integrity, but there is not a profession on earth where you don't have a problem with 4% or 5% of those working in it. That includes the accounting profession and the legal profession. By the way, it includes the US Congress. The question is how you can ensure that such approaches as the Sunshine Act -- making information available about costs and patterns -- empower patients to have this kind of information and ensure that you don't just impose yet more expensive and punitive burdens on the 95% of the profession who act with integrity.

Medical Liability Reform

Dr. Adashi: Another area that our viewers are concerned about is medical liability reform. I know many of them would be very interested in finding out what your vision is or what your prescription might be for a long-term resolution of an issue that has to this date not been systematically addressed.

Sen Wyden: In the Healthy Americans Act, what we sought to do was create incentives for the states to, in effect, say that when a doctor practices in concert with their field's practice guidelines, this would create a presumption of reasonableness should someone then come to challenge their conduct in the legal system. I've always felt that you have to strike a balance between ensuring access to the courts for the consumer and being fair to both the physician and, frankly, to society. We know that because of the uncertainty surrounding the liability system, you're also going to have a fair amount of defensive medicine being practiced.

Protecting Seniors

Dr. Adashi: Finally, and more on a personal note, I couldn't help but note that you have displayed over a long period significant sensitivity and interest in the welfare of our seniors. I noted that as a younger man, you founded legal clinics that advised the elderly, as well as established the Oregon chapter of the Gray Panthers, an advocacy group for the elderly. Maybe you can say something about what led you onto this path of public service.

Sen Wyden: I always felt that healthcare was the most important issue. I went to school on a basketball scholarship. I was dreaming of playing in the NBA. It was a ridiculous notion because I was too small, and I made up for being small by being slow.

When I finally started cracking a book in college -- I started at the University of California, Santa Barbara, on a basketball scholarship, then transferred to Stanford University -- I got interested in community service, and I came to see that healthcare was the most immediate and personal concern. If you and your loved ones don't have health, then pretty much everything else goes by the board.

So, toward the end of my time in law school -- after graduating from Stanford, I went to Oregon University School of Law for law school -- I volunteered for a campaign by Wayne Morris, who was trying to regain his Senate seat. He was one of 2 senators who voted against the Vietnam War, and he was really a forward-thinking leader. Senior citizens would approach Sen Morris and ask about their Social Security or their Medicare, and Sen Morris would say, "Well, Ron is going to look it up for you," and I would just kind of walk away slack-jawed, because what did I know about any of those things?

I really got interested in it, though, because back then if a town had a lunch program for the elderly, that was considered a huge deal. There was not this enormous array of services for the elderly that you see in many communities today. It became more and more clear for seniors and others that if they didn't have their health, everything else was going to be an uphill climb. That's about as short of a summary I can give on how I made my way to the healthcare field.

Dr. Adashi: Thank you, and it's obvious that your continued attention to Medicare is in a way part of that trajectory. On that note, sincere thanks to Senator Wyden and to you, our viewers, for joining Medscape One-on-One. Until next time, I am Eli Adashi.

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