California Healthline Reviews the Year in Health Policy
Health policy issues received much media coverage in 2001, but by the end of the year little action had been taken in many of those areas. The year began with the arrival of a new administration and debate sparked by legislators' campaign pledges to attach a prescription drug benefit to Medicare. The summer's political news was dominated by the debate over a patients' bill of rights. In August, after months of anticipation, President Bush offered his proposal for stem cell research. Then came the Sept. 11 attacks on the World Trade Center and the Pentagon, whose effects on the health care landscape have yet to be comprehended fully. In the months since then, Congress has been occupied with legislation to combat bioterrorism and to provide health benefits to workers displaced by the attacks. Lawmakers in both parties say that in 2002 they will address a Medicare prescription drug benefit, patients' rights, Medicare reform and the uninsured, among other topics. The following is a summary of the major actions taken this year in those six areas.
Much of the first year of the Bush administration has been marked by its relationship with the Clinton administration's health care legacy. The day after President Bush was sworn into office, he signed an executive order reversing a Clinton administration policy that allowed the use of federal funds for family planning services abroad. On March 20, the EPA suspended Clinton administration rules that would have lowered the acceptable level of arsenic in drinking water from 50 parts per billion to 10 parts per billion; in November, Bush signed a law that requires the government to meet the Clinton standard by 2006. Also in March, Bush signed a law that repealed OSHA regulations issued at the end of Clinton's second term designed to protect workers from workplace ergonomic injuries. The Labor Department had planned to release a new version of the rule by the end of the year, but as of Dec. 21 has not done so. The ergonomics debate also impacted one of Bush's nominations, as Senate Majority Leader Tom Daschle (D-S.D.) in December predicted that Eugene Scalia, who has been nominated to be the Labor Department's solicitor general, will not be confirmed in part because of his opposition to the Clinton ergonomics rules. Senate Democrats are also watching the administration's handling of the Justice Department's lawsuit against the tobacco industry. While it was reported in June that the administration is seeking a settlement, the senior official handling the suit said the government will continue the suit. And in an effort to reshape the government's image, HHS in June changed the name of HCFA to the Centers for Medicare and Medicaid Services (CMS) in order to give the agency what Secretary Tommy Thompson called a "new direction" and "new spirit."
Several measures to provide a prescription drug benefit under Medicare were proposed this year, but little action on the matter was taken. In February, Sens. John Breaux (D-La.) and Bill Frist (R-Tenn.) introduced two bills to restructure Medicare and implement a prescription drug plan. Breaux-Frist I would allow seniors to choose from a number of competing health plans and would grant prescription drug coverage for all seniors eligible for Medicare. Breaux-Frist II called for a prescription drug benefit via the traditional Medicare system, while restructuring the program more gradually over time. President Bush in July introduced a prescription drug discount card plan that he called the first step in his plan for larger Medicare reform. Under the program, the federal government would approve discount cards issued by pharmacy benefit managers, which would use Medicare beneficiaries' group purchasing power to offer discounts of 15% to 25% off drugs' retail prices. PBMs would direct seniors to specific pharmacies, create preferred drug lists, fill prescriptions via mail and operate telephone support centers for beneficiaries with questions. Seniors would be required to pay a one-time enrollment fee of no more than $25. Bush's plan immediately encountered resistance; the National Association of Chain Drug Stores and the National Community Pharmacist Association filed suit in federal court to block implementation of the program, claiming that the Bush administration lacked the authority to implement such a plan without congressional approval and that the administration violated federal rules by failing to hold open meetings or a public comment period prior to drafting the plan. In September, U.S. District Court Judge Paul Friedman issued an injunction temporarily delaying implementation of the program. In early November, Friedman lifted the injunction against the proposal, but issued a clarifying memo stating that he lifted the injunction so that CMS could revise the plan. HHS Secretary Tommy Thompson in late November told Friedman the administration would withdraw its original plan and would soon offer a more detailed plan.
The debate over patients' rights to sue managed care organizations dominated the political scene during the summer. Sens. John McCain (R-Ariz.), Edward Kennedy (D-Mass.) and John Edwards (D-N.C.) introduced a patients' rights bill (S 1052), backed by the Democratic leadership, that would allow patients to sue their HMOs in state court for denial of benefits or quality of care issues and in federal court for non-quality of care issues; it would cap awards brought in federal court at $5 million, but would not limit monetary awards in state courts, which are generally considered more favorable to plaintiffs. In March, President Bush said he would veto McCain-Kennedy-Edwards and any other proposal whose right-to-sue provisions would "drive up" health care costs. That bill nevertheless passed the Senate by a 59-36 vote in late June. In the House, a group of Republicans led by Rep. Ernie Fletcher (R-Ky.) introduced a bill (HR 2315) supported by the House GOP leadership that offered a more limited right to sue than did the Senate-passed bill. The bill, which was supported by President Bush, would allow patients to sue health plans in state courts only after plans refused to accept the decision of an outside appeal panel and would cap state courts' economic damages at $500,000. It competed in the House with that chamber's version of McCain-Kennedy-Edwards (HR 2563), sponsored by Reps. Charlie Norwood (R-Ga.), Greg Ganske (R-Iowa) and John Dingell (D-Mich.). In early August, after a week of negotiations, Bush and Norwood announced that they had reached a compromise that limited patients' right to sue health plans. Their agreement, which was added as an amendment to the Norwood-Ganske-Dingell bill, would allow patients to sue health plans in state courts, capped non-economic damage awards at $1.5 million and allowed patients to receive up to $1.5 million in punitive damages. On August 2, the House passed Norwood-Ganske-Dingell with the Bush-Norwood compromise by a 226-203 vote. Since then, neither the House or the Senate has appointed conferees to work out a compromise between the rival bills.
After several months of anticipation, President Bush announced in August that he would allow federal funding for research on a limited number of embryonic stem cells, bringing an end to months of speculation about how he would address the controversial subject, but not ending the debate about the government's role in the research. Guidelines released in August 2000 by NIH with the backing of President Clinton had established NIH grants for research on embryonic stem cells -- pluripotent cells that are capable of becoming any type of tissue in the body. Although a congressional ban forbids taxpayer money from supporting research on human embryos, White House lawyers under Clinton had determined that scientists receiving federal funds would not be in violation of the ban if they obtained stem cells from private sources rather than deriving them themselves. Bush, who said during the campaign that he was opposed to such research, postponed implementation of Clinton's order allowing limited stem cell research upon taking office and commissioned an NIH review of the policy. On Aug. 9, he announced his decision to permit federal funding for research involving embryonic stem cells from approximately 60 pre-existing stem cell lines, saying that such research "allows us to explore the promise and potential of stem cell research without crossing a fundamental moral line by providing taxpayer funding that would sanction or encourage further destruction of human embryos." The decision was criticized from all sides. Scientists expressed skepticism about the number and quality of the approved stem cell lines. Some abortion-rights opponents, on the other hand, said that any decision funding the research sanctioned the destruction of human life. On Aug. 27, NIH announced the names of the 10 companies or institutions that owned 64 confirmed, approved stem cell lines. In February, Congress may consider legislation proposed by Sen. Arlen Specter (R-Pa.) to broaden federal funding of embryonic stem cell research to cells from lines derived after Aug. 9.
Since the Sept. 11 attacks on the World Trade Center and the Pentagon, Congress, the Bush administration and state and local health officials have debated what direction government should take to prepare for a possible biological or chemical weapons attack. In October, HHS Secretary Tommy Thompson asked Congress to appropriate $1.5 billion to prepare for bioterrorism, saying that the country is not fully prepared to handle such an attack. Thompson also began work to increase the supply of smallpox vaccine and publicly considered overriding Bayer AG's patent of the antibiotic Cipro. Under pressure, Bayer in late October agreed to provide 100 million tablets of the drug to the federal government at a nearly 50% discount. HHS in late November also signed a $428 million contract with Acambis for 155 million doses of the smallpox vaccine. Meanwhile, Congress began debate over increasing funding for bioterrorism prevention. The Senate in December failed to approve a Democratic plan to add $15 billion for bioterrorism prevention, homeland security and recovery efforts to a defense spending bill. The House on Dec. 12 passed by a 418-2 vote a $2.7 billion anti-bioterrorism measure (HR 3448) that would help the CDC and state and local health authorities prepare for a possible bioterrorist attack. The Senate on Dec. 20 passed its own bioterrorism bill, a $3.2 billion measure (S 1715) proposed by Sens. Bill Frist (R-Tenn.) and Edward Kennedy (D-Mass.); that bill would increase the vaccine stockpile, help states and localities prepare for bioterrorism, increase funding for the CDC and increase food inspections (see story #6). A conference committee is expected to meet when Congress reconvenes in January to hash out differences between the House and Senate bills.
In the final months of the year, lawmakers debated proposals to provide an economic stimulus in the wake of the Sept. 11 attacks on the World Trade Center and Pentagon, but could not resolve a dispute over provisions in the bills to help unemployed workers purchase health insurance. In late October, the House narrowly approved a $100 billion GOP-sponsored bill, which Democrats opposed, that included $3 billion to increase funds for the Social Services Block Grant program to allow states to provide health insurance to unemployed workers. In the Senate, Republicans in mid-November blocked a $73 billion bill sponsored by Democrats that would have granted $12.3 billion in subsidies to help unemployed workers purchase health insurance through COBRA, allowed states to extend Medicaid coverage to unemployed workers who do not qualify for COBRA and provided $1.4 billion to boost the federal match to states for Medicaid. After the Senate failed to pass a bill, a group of House and Senate lawmakers began negotiations in early December in the hope of reaching a compromise before the holiday recess. Negotiators met for several weeks but could not reach agreement on the health insurance provisions. In late December, a day before the holiday recess, the House passed a revised bill, proposed by House Republican leaders, that would have provided an individual tax credit to cover 60% of the cost of private health insurance for unemployed workers. Concerned that the GOP bill would weaken the link between employment and insurance, Democrats opposed the legislation, and the Democratic-controlled Senate adjourned on Dec. 20 without voting on the bill.
--Compiled by Darryl Drevna, Josh Kotzman, Heather Schomann and Anthony Wilson.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.