Original links are included though some may have expired.

In This Issue:

1.) The DLC State & Local Playbook: A Source of Proven Ideas
2.) Bush Administration Approach to Chronic Care Leaves out Doctors
3.) President Straddles Fence on Stem Cell Research
4.) Health Care Coverage for Part-Time Workers
5.) Rx Discount Cards: The Feds Should Look to Arizona

1.) The DLC State & Local Playbook: A Source of Proven Ideas

The Democratic Leadership Council has released an updated version of its State & Local Playbook. It is a "menu" of effective, field-tested New Democrat policy proposals for creating state, city, and community initiatives.

This year's playbook features new health care initiatives that capitalize on Medicaid's fight against chronic illness and on health information networks to improve safety and reduce costs. It also includes updates on how states like Maine are pursuing universal coverage step-by-step.

For more information:

DLC State & Local Playbook, Health Care Section: http://www.ndol.org/ndol_sub.cfm?kaid=139&subid=275

2.) Bush Administration Approach to Chronic Care Leaves out Doctors

Buried in the new Medicare prescription drug benefit are some promising chronic illness care provisions. The new law gives the Bush administration new opportunities and responsibilities to move health care from treating patients' crises caused by out-of-control chronic conditions to preventing them from occurring in the first place. For example, it lets Medicare shift the cost of treating heart attacks into preventing them by helping patients manage heart disease.

Unfortunately, the administration has failed to take full advantage of the opportunity. For chronic care to succeed, doctors and patients must focus on complex actions that fall outside the current realm of paid services. These services include: teaching patients how to care for themselves, communicating regularly with patients by phone and e-mail, coordinating care with other doctors, and using information technology to record, monitor, and improve the delivery of care.

Instead, the administration's strategy relies on disease management companies that typically provide services outside the doctor's office. These services include getting patients interested and enrolled in new programs, providing patients with support and education from nurses and other allied health professionals, and creating new systems to track patients' health. Such services can indeed be helpful, but they add another layer of bureaucracy rather than transforming the health care system that is already in place.

In recent testimony before the Ways and Means Health Subcommittee, health care researcher Robert Berenson called on the administration to end the health care system's current fixation on acute services and uncoordinated episodes of care. Berenson says that Medicare needs to be as bold as it was in the 1980s when it tackled the problem of lengthy hospitals stays. At that time, Medicare created a new way to pay hospitals that included an incentive to reduce the unnecessary days and nights that patients were spending there. Berenson assessed the administration's current efforts on chronic care as inadequate. It would be as if Medicare in the 1980s had hired medical consultants to cajole hospitals into reducing hospital stays, instead of giving hospitals an incentive to do so themselves.

Berenson believes -- as does PPI -- that Medicare can be a bold innovator in the development of state-of-the-art chronic care and care management services that strengthen patient-doctor relationships. But it will take more leadership than the administration has shown so far.

For more information:

"Statement of Robert A. Berenson, M.D., Senior Fellow, Urban Institute,"
Health Subcommittee of the Committee on Ways and Means,
House of Representatives, May 11, 2004:
http://waysandmeans.house.gov/
hearings.asp?formmode=view&id=1591

"An 'ABC' Proposal to Modernize Medicare,"
By Jeff Lemieux, David B. Kendall, Kerry Tremain, and S. Robert Levine, M.D.
PPI Policy Report, February 14, 2003:
www.ppionline.org/ppi_ci.cfm?knlgAreaID=111
&subsecID=141&contentID=251296

3.) President Straddles Fence on Stem Cell Research

The president's latest stance on stem cell research shows that once again he's trying to have it both ways. He's trying to please, or at least not anger, two competing constituencies -- those passionate about pursuing life-saving scientific advances, and those passionate in their anti-abortion stance. By doing so, he's put himself into a blatantly self-contradictory position.

Bolstered by public support and advocacy groups, 206 members of the House of Representatives sent a letter to President Bush in April asking him to change his policy. In resonse, this week Dr. Elias Zerhouni, director of the National Institutes of Health, reiterated the president's position on stem cell research but acknowledged that additional stem cell lines may be beneficial.

In August 2001, President Bush established a policy that only allows federal funding for research using the stem cell colonies already in existence at that time. Since then, scientists have complained that the promise of stem cell research is being compromised by the Bush policy. Many of the older lines in existence at the time of Bush's proclamation have proven either unavailable or unsuitable for research purposes.

In response, scientists and members of Congress have requested that funding restrictions be relaxed in order to access new lines using excess frozen embryos from fertility clinics. Adding conservative momentum to the cause, former first lady Nancy Reagan endorsed the research and "made an impassioned call for taking the controversial procedure out of the political arena." In doing so, she cited President Reagan's battle with Alzheimer's disease and the promise of stem cell research in curing such illnesses.

While Zerhouni's letter on behalf of the administration did not alter the Bush policy, it included a sentence that many research supporters are reading with hope:

"[A]lthough it is fair to say that from a purely scientific perspective more cell lines may well speed some areas of human embryonic stem cell research, the president's position is still predicated on his belief that taxpayer funds should not 'sanction or encourage further destruction of human embryos that have at least the potential for life.'"

Because the administration has generally maintained that existing lines are sufficient for research purposes, the phrase marks the first acknowledgement that more colonies may be beneficial. While the House letter and Bush's subsequent response show how sorely out of date the president's position on stem cells really is, he couldn't bring himself to actually take action and solve the problem.

The Bush administration's stem cell policy continues to be unduly influenced by anti-abortion advocates. The embryos that scientists want to access are embryos slated for destruction by fertility clinics anyway. Using them for research certainly isn't destroying lives, and it will eventually save lives.

The president can't have it both ways. Now that it is commonly accepted that the stem cell lines in 2001 are inadequate, the president must choose between pursuing scientific advancement and bowing to the wishes of anti-abortion advocates.

We hope the Zerhouni letter is an indication the president will do the right thing and open the door to future advances that could save the lives of millions of Americans. Right now though, it's a completely inadequate response. The president should stop equivocating and take the moral action necessary to move forward with life-saving research.

For more information:

"Bush Letter Sees Promise of Stem Cells,"
By Sheryl Gay Stolberg, The New York Times, May 16, 2004:
www.nytimes.com/2004/05/16/politics/16STEM.html

"Nancy Reagan Calls for Stem Cell Research,"
The Washington Post, May 10, 2004:
www.washingtonpost.com/wp-dyn/articles/
A12862-2004May9.html

"Stem Cell Research: The Case for Federal Funding,"
By Rebecca Dudzik Ham, Ph.D, PPI Policy Report, June 19, 2001:
www.ppionline.org/ppi_ci.cfm?contentid=3475
&knlgAreaID=140&subsecid=293

4.) Health Care Coverage for Part-Time Workers

Last week was "Cover the Uninsured Week," and several large companies introduced a plan to do just that. Employers such as General Electric, I.B.M., McDonald's, and Sears-Roebuck will offer health insurance coverage to part-time employees and other workers by pooling their purchase power in the marketplace. While it is likely many will still find this coverage unaffordable, this is a step in the right direction for part-time workers, who generally do not have access to any type of employer-based health benefits.

The companies plan to offer several coverage alternatives ranging from minimal, catastrophic plans costing a few hundred dollars a year to comprehensive coverage costing several thousands. Employers will not pay for the cost of benefits under the plans, but will use their market power to negotiate better plans than workers would be able to access individually.

While the companies hope to attract four million uninsured workers to the program, outside analysts are skeptical of that goal, maintaining that it's more likely a few hundred thousand will sign up.

In an effort to control costs, the employer group is taking a step long encouraged by PPI. The group wants to use its purchasing power "to require health insurers in the program to provide them with information on the costs and the medical effectiveness of particular hospitals and doctors." By doing so, it may be possible to save between 20 percent and 30 percent of costs. This attempt at quality disclosure also follows in the footsteps of other big employers who have paid bonuses to doctors who follow established treatment guidelines.

While welcomed, these actions by employers do raise some questions:

One reason that part-timers have been excluded from companies' existing insurance pools is the risk of adverse selection. Insurance underwriters fear that part-time employees would be more likely to move in and out of plans based on their current health status, resulting in sicker employees entering the risk pool. If the employers have not found it feasible to include part-time workers in their existing insurance pool for full-timers, it is difficult to see how they will negotiate reasonable rates for a pool consisting entirely of part-time workers. However, if employers were to partially contribute to premiums for part-timers, they may build a more stable pool by encouraging workers to buy-in and maintain their coverage even when healthy. PPI realizes that it may be prohibitively expensive to subsidize the health insurance premiums at the same rate for both full- and part-time employees, but employers could contribute a portion based on how many hours the employees work.

Even while they are encouraged by the attempt, most analysts acknowledge that tackling the problem of the uninsured cannot be solved by the private sector alone and will require additional federal action.

However, this plan illustrates what health policy researchers keep saying -- it makes financial sense to cover the uninsured. We hope that private sector actions such as these can serve as a basis for broader evolution into comprehensive health care coverage for all Americans. This is certainly an intriguing experiment that PPI will follow closely.

For more information:

"Companies Join to Offer Health Care to Part-Time Employees,"
By Milt Freudenheim, The New York Times, May 13, 2004:
www.nytimes.com/2004/05/13/business/13care.html

5.) Rx Discount Cards: The Feds Should Look to Arizona

As Medicare beneficiaries consider signing up for the new prescription drug discount cards, they may find some of the rules cumbersome. Thanks to a Medicare website, they can shop for a discount card by comparing each card's drug prices. But they have no guarantee that the prices will stay the same once they sign up for a card, and they cannot switch cards for one year.

To be fair, there is some logic behind these rules. One key way to lower drug prices is for large groups of patients to switch between similar drugs. Discount card companies can drive better bargains with drug manufacturers if they know that their customers will stick with them for a year or more. But it's not yet clear if the discount cards will operate that way.

Fortunately, Arizona has provided an excellent drug discount card of its own that seniors in the state are free to join and leave anytime. Governor Janet Napolitano (D) established the CoppeRx card as her first initiative upon taking office in 2003. CoppeRx offers its 40,000 members drug discounts similar to the federal discount cards, without restrictions on the drugs that can be purchased and without an enrollment fee. As Medicare administrators and Congress assess the federal discount card program, they would do well to compare it with Arizona's CoppeRx card.

For more information:

Medicare,
U.S. Department of Health and Human Services:
www.medicare.gov/

Arizona CoppeRx Card:
www.governor.state.az.us/copperxcard/default.htm

"Napolitano Gets Quick Start With Rx Drug Discount Plan,"
DLC, New Dem Daily, January 13, 2003:
www.ndol.org/ndol_ci.cfm?kaid=131
&subid=192&contentid=251152

Newsletter compiled and written by David B. Kendall, PPI's senior fellow for health policy and Traci Gleason, PPI's director of health and social policy.