Jill Wechsler

Washington, D.C.-National healthcare spending rose 6.7% in 2006 to $2.1 trillion, just slightly faster than the previous year but still fairly stable. Overall, outlays for healthcare reflected a continued slowdown from the double-digit growth rates of the 1990s. Payments for most major health services-hospitals, physicians, nursing homes, home health services-experienced slower growth than 2005.

Medicare Advantage plans escaped threatened payment cuts last year, but the issue is at the top of the health policy legislative agenda for the coming months. Legislation enacted in late December postponed a scheduled reduction in Medicare payments to physicians-but only for six months. Congress paid for that short delay plus an extension of the State Children's Health Insurance Program (SCHIP) without cutting MA rates or raising taxes.

Washington, D.C.-Pressure to uncover potential adverse events before a new drug reaches patients seems to be taking a toll on drug development and marketing. The Food and Drug Administration (FDA) approved only 19 innovative new drugs in 2007, according to preliminary analyses. That's way down from the peak of 53 new drugs in 1996, but in line with a steady decline in new drug approvals since 2002.

Healthcare reform is on the lips of every 2008 Presidential hopeful. Take a look beyond the lip service and examine the platforms of Democratic and Republican front-runners.

Only a few months ago, efforts to build a national electronic health information system appeared dead in the water. Now there is growing support on Capitol Hill for legislative action, plus strong statements from the Bush administration backing health information technology (HIT).

Change was in the wind as the Medicare Part D open enrollment period began last month. Most seniors who belong to stand-alone prescription drug plans (PDPs) face premium increases.

Legislation encouraging more equitable coverage of mental illness is moving forward in Congress following important modification of previous requirements. The Senate Health, Education, Labor and Pensions (HELP) Committee recently approved a bill that requires health plans to offer similar benefits for mental and physical illness in terms of deductibles, copayments and treatment limitations. But the new measure no longer mandates that group health plans cover mental illness.

The Bush administration spending plan for 2008 proposes major funding curbs for Medicare, Medicaid, children's health and other government health programs.

Rising pressure to reduce federal spending for Medicare has put the spotlight on payments and policies governing the Medicare Advantage program. MA plans are "vastly overpaid," according to Rep. Pete Stark (D-Calif.), chairman of the House Ways & Means Health subcommittee, largely because they sign up more healthy beneficiaries. Senate Finance Committee chairman Max Baucus (D-Mont.) is looking closely at whether "funneling dollars into private plans gets us the most bang for our healthcare buck."

The campaign to provide healthcare to all Americans is making headlines once more as business, labor and consumer groups join with healthcare insurers and providers to urge major changes in the nation's healthcare system.

The new House leadership delivered on one of its prime campaign promises last month by pushing through legislation requiring the Health and Human Services (HHS) secretary to negotiate directly with pharmaceutical companies on prices for medications covered by the Medicare drug benefit. The bill (HR 4) repeals the so-called "non-interference" clause in the Medicare Modernization Act (MMA) and replaces it with a provision requiring the secretary to negotiate prices that manufacturers may charge prescription drug plans (PDPs) and Medicare Advantage drug plans (MA-PDs).

An annual government analysis of healthcare spending indicates that outlays for healthcare rose only 6.9% in 2005, continuing a three-year slow-growth trend. Total U.S. healthcare spending reached almost $2 trillion, or $6,697 per person, but this reflects the slowest growth in outlays since 1999, when "enrollment in more tightly managed care plans peaked," according to analysts at the Centers for Medicare and Medicaid Services (CMS).

Washington, D.C.-As members of Congress headed out of town for the holidays in December, they managed to push through legislation containing a number of important policy initiatives for health plans and payers. A major tax bill delivered a reprieve for doctors from planned Medicare rate cuts. The bill freezes Medicare fees to physicians for one year, which could lead to an even bigger cut in 2008. It also offers a small bonus to those doctors who comply with quality reporting requirements. And to further bolster pay-for-performance initiatives, the legislation calls for hospitals and clinics to report on quality measures.

Washington, D.C.-Medicare pays private plans too much, and the system needs to be fixed, according to a new report from the Commonwealth Fund. The study finds that the government paid Medicare Advantage plans 12.4% more in 2005 than if the same patients had been enrolled in the traditional fee-for-service program. The extra payments totaled more than $5.2 billion in 2005, or an extra $922 for each of the 5.6 million MA enrollees.

Washington, D.C.-Although campaigning Democrats promised to repeal the "non-interference" clause in the Medicare drug benefit, making such a change may not be all that easy. Democrats could push through a straight repeal of the current provision that prevents the federal government from directly negotiating drug prices with pharmaceutical companies. Such a move, however, would not necessarily alter the program under a Republican administration that believes private drug plans can negotiate prices better than bureaucrats.

The high-profile health policy issues for the new Congress are to reduce Medicare prescription drug prices and expand federal government funding for embryonic stem cell research. Congressional leaders want to enact legislation that will permit the federal government to negotiate drug prices (see Newswire), a move that eventually could alter the role of private plans in providing healthcare benefits to seniors.

Washington, D.C.-While global sales of pharmaceuticals are slowing, the generic drug market continues to grow. The latest report from IMS Health predicts generic drug sales will rise 13% to 14% to $65 billion next year, almost 10% of projected worldwide drug sales of $685 billion, compared with a 5% to 6% increase in the global pharmaceutical market.

Washington, D.C.-Medicare Part D claims data could be used to identify drug side effects, improve compliance with prescribed treatment and identify whether certain drugs reduce or increase the use of healthcare services, according to a proposed rule clarifying how researchers may access information from the new Medicare program. In one of his last official acts before departing the Centers for Medicare and Medicaid Services (CMS) in October, former administrator Mark McClellan, MD, unveiled this proposal for enlarging the scope of information on drug costs and effectiveness that could be useful to outside researchers. The ability to link Part D data to Medicare information on hospitalization and outpatient care would provide an "unprecedented resource" for health plans and payers to learn more about the impact of drug coverage on patients and on Medicare and other government health programs, according to CMS.

The Democrats are back on top in the House and Senate after more than a decade playing second fiddle to the GOP. Although health reform was not a prime issue moving votes this November, health policy is on the Democrats' "100 hours" to-do list.

Washington, D.C.-The anticipated shakeout in Part D plans is not occurring this year. In fact, insurers and pharmacy benefit managers (PBMs) are offering more drug coverage options at lower costs for seniors.

According to Senator Charles (Chuck) Grassley, the Medicare Modernization Act of 2003 (MMA) has worked out better than expected, but he still keeps a close watch to ensure healthcare dollars are well spent. As chairman of the Senate Finance Committee, Grassley has tremendous clout in Washington. His committee is responsible for tax policy, Social Security, Medicare and Medicaid, which made him a central player in developing and enacting MMA.

To no one's surprise, Mark McClellan, MD, announced last month that he would leave his job as administrator of the Centers for Medicare and Medicaid Services (CMS) after six years with the Bush Administration.

Washington, D.C.-More seniors are enrolling in Medicare Advantage plans, particularly in the expanding number of more flexible "private fee-for-service" (PFFS) plans.

Washington, D.C.-The campaign to expand healthcare coverage to all Americans took a big hit this summer. New data from the U.S. Census Bureau indicated that the population without healthcare coverage grew by more than 1 million people in 2005 compared with the previous year. Even though more individuals actually had insurance coverage in 2005 (247.3 million, up from 245.9 million in 2004), the percentage of uninsured rose from 15.6% in 2003 to 2004 to the current 15.9%.

Health and Human Services Secretary Tommy Thompson happily announced last month that Medicare beneficiaries will have more coverage choices in 2005.

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Scully, Grissom and Thompson move on from CMS.

As the pool of uninsured increases by 2.4 million, health plans look to offer more cost-management options

PBMs, retail pharmacists disagree over high-volume Medicare drug benefit

Compliance deadline is 2007