MEDICARE: White House, Congress Strike Givebacks Deal
Congressional negotiators and the White House finally struck a deal last night to restore $12 billion in Medicare funding over the next five years. The spending increase, which constitutes 7% to 10% of the total cuts made by 1997's Balanced Budget Act, will benefit "most hospitals, nursing homes, health maintenance organizations and home health care agencies," the New York Times reports. White House Health Policy Coordinator Chris Jennings called the tentative agreement an "honorable compromise," noting that it "lays a foundation for more significant Medicare reforms next year." Rep. Bill Thomas (R-CA), chair of the Ways and Means health subcommittee, also was pleased with the agreement. "We and the administration were partners in the Balanced Budget Act two years ago. Now we are partners in knocking the rough edges off that law," he said.
Disparity Relief for Teaching Hospitals
In addition to restoring cuts, the deal will "gradually reduce huge disparities in what Medicare pays to train doctors in different parts of the country." Currently, teaching hospitals receive payments based on their historic costs, but under the agreement, the "highest-paid hospitals -- those with payments more than 40% above the national average for each hospital resident -- will not get any allowance for inflation in 2001 or 2002." In addition, their payments over the next three years will increase by two percentage points behind the Consumer Price Index, as other teaching hospitals receive full inflation adjustments. The stipulation means that many New York teaching hospitals, which generally collect payments three to four times higher than those in cities like Los Angeles and Cleveland, will lose money, although the "losses would be smaller than under earlier proposals" (Pear, 11/11).
Mass Hospitals Benefit
Massachusetts teaching hospitals, set to receive $90 million in aid or reductions to previously planned cuts, and the state's other medical facilities viewed the arrangement as "a positive development," but officials maintained that "it is ... only a small down payment toward repairing the damage" caused by over $1.7 billion in payment cuts to Massachusetts hospitals. All told, the state's hospitals will get $200 million in restorative funds over the next five years. "This is a well-deserved commitment to our hard-pressed teaching hospitals and community hospitals hurt by excessive cutbacks in Medicare. It is welcome news for thousands of Massachusetts residents who rely on our teaching hospitals for their health care," Sen. Edward Kennedy (D-MA) said. Ronald Hollander, president of the Massachusetts Hospital Association, however, vowed that "the hospitals would return to Congress in two years to ask for more money" (Zitner, Boston Globe, 11/11). The Medicare compromise moves Congress one step closer to a final budget deal; many members are itching to "finish up and go home" by Friday, CongressDaily reports. But Senate Majority Leader Trent Lott (R-MS) said yesterday the possibility for a Friday adjournment is "looking pretty dim right now" (Earle, 11/10).
Meanwhile, an editorial in today's Baltimore Sun accuses Republicans and Democrats of preferring to "jockey for political advantage [rather] than hammer out fundamental reforms" to Medicare. Pointing to the debate over a prescription drug benefit as a symbol of the current gridlock, the editors write, "Every politician decries elderly constituents who must choose between paying for food or prescription drugs. But few in Congress want to take the heat for approving a drug subsidy plan. ... Even modest, first-step efforts to give seniors some help in paying these drug bills have gotten nowhere." The editorial concludes, "Congress is supposed to resolve such tough questions. Instead, Republicans try to make the Democrats look like big spenders out to crush free enterprise, and Democrats try to make Republicans look like heartless captives of the drug industry. ... will either party stop playing partisan politics long enough to find ways to fix the nation's health care system?" (11/11).