Posts Tagged 'privatization'

It’s Our Community College

Early media reports espoused a victory for CCSF. But, a careful reading of the ACCJC policy statement issued after the commission’s June 11 clandestine meeting causes alarm not celebration. ACCJC does not listen to public demands, legislators’ requests, or even the Dept of Education. Their affront at being called out shows in the wording of their policy statement.

“…there have been increased calls for the Commission to rescind its decision. However, the commission has been, and will continue to be steadfast in its decision, which was clearly warranted” The Commission then describes “a path forward that maintains the termination decision and holds the college accountable for addressing the standards, but would enable the college reasonable but limited time to come into compliance with ACCJC standards.”

ACCJC proposes a new accreditation policy. It would permit intuitions notified of termination to apply for restoration of its accreditation. Under the policy, CCSF would be seeking “accreditation restoration” status, and must first be determined eligible and undergo intensive review by ACCJC. If approved, CCSF would have 2 years to come into compliance. If restoration status is not approved to begin with, or if ACCJC decides the college does not fully meet all standards within the 2-year restoration status, the prior termination order would be activated immediately without any opportunity for a review or an appeal!

CCSF must apply for this new status prior to July 31, the date of current termination set by ACCJC. ACCJC allowed only a 2-week period for comments ending June 25. How will this affect the Herrera lawsuit and court determination that termination cannot be made until the case is heard in October? Meanwhile, Tom Ammiano has introduced legislation to limit the ability of state officials to suspend the control of an elected College Board – the elected City College Board has been replaced with an appointed trustee. Mark Leno is pushing a bill that would amount to an end run around the ACCJC.

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More information:

48 Hills, June 12, 2014

(48 Hills a web log written by former SF Bay Guardian editor Tim Redmond.)

Hold the champagne – City College hasn’t exactly won yet.

JUNE 12, 2104 – The decision by the accrediting commission to allow City College a lifeline has much of the city’s political establishment applauding, and for good reason: The combined pressure for local, state, and national elected officials played a huge role in forcing the ACCJC to back off from an effort to shut the school down.

If the ACCJC had gone forward with revocation of accreditation, as it could have this month, the school would have stayed open – City Attorney Dennis Herrera has won an injunction preventing any final move to end accreditation until after a trial, which won’t happen until this fall.

But the furor over that move might have driven the political establishment to seek ways to shut down the entire commission. Among others, Reps. Nancy Pelosi and Jackie Speier have demanded that the ACCJC give City College more time – and members of Congress don’t like to be treated with the sort of disrespect the panel has shown for pretty much everyone else in this process.

Assemblymember Tom Ammiano has introduced legislation that would limit the ability of state officials to suspend the control of an elected college board – and he’s gotten support from many Republicans, who agree that the ACCJC is a nightmare. State Sen. Mark Leno is pushing a bill that would amount to an end run around the ACCJC.

So the ACCJC clearly had to do something to create the appearance of fairness, to get some of the pressure off. But if this move works, it will be a victory for an out-of-control agency: The accreditors haven’t admitted they were wrong, haven’t changed the rules for evaluating City College, haven’t offered to approve accreditation … in fact, all they’ve done is come up with a new process for the school to apply to stay open, under rules that aren’t terribly fair.

The new process, known as “accreditation restoration,” is outlined on the ACCJC website. Read it carefully; it’s not an “extension of time,” which is what City College supporters asked for. It’s not a good-faith effort to hold off on a final decision until the school completes its process of jumping through all of the hoops the ACCJC has demanded.

It’s an entirely new process – one that requires City College to give up all rights to appeal if the decision that comes down at the end is wrong:

“If, however, in the judgment of the Commission, the college does not fully meet all eligibility requirements and/or has not demonstrated the ability to fully meet all standards within the two-year restoration status period, the termination implementation will be reactivated and the effective date will be immediate. There will be no further right to request a review or appeal in this matter.”

“It seems to us that the new procedure would take away any ability to appeal,” Tim Killikelly, head of the City College teachers’ union, AFT Local 2121, told me. And that from an agency that just about everyone who has watched this procedure agrees is out of control.

In other words, the same crew of crazy people who caused this problem in the first place will now put City College through a new wringer, with the outcome uncertain and the school forced to give up its rights in the process.

“Instead of an extension, which is what the school asked for, we have this new term and policy,” Killikelly said. “Right now, we have a lot more questions than answers.”

Killikelly agrees that it’s good for students and the city (and, of course, teachers) to have confidence that City College will be open this fall – but it would have been open anyway: The lawsuit, which would force far more sweeping changes in the accreditation process and the ACCJC, guarantees that. It gives two more years for the school to get its house in order – but leaves the final decision up to the same panel.

“Anything that keeps the school open, we want,” Killikelly said. “But we’re not entirely comfortable with this new process they’re suggesting.”

In a message from AFT to its members, the union notes: “This latest move, made under extraordinary pressure, seems more designed to save ACCJC than City College.”

There’s a real danger that what appears to be good news for the moment could undermine long-term reform: If this new procedure takes the pressure off the ACCJC, and if the agency can use it to undermine the city’s lawsuit and say, hey, no problem: We’re listening, we’re fixing things … then an opportunity to overhaul and reform a disastrous accreditation commission and process could slip away – and City College won’t be the last victim.

So for the moment, let’s hold the champagne; it’s not over, by any means. City College has, at best, a reprieve, but only on very unfair and possible unacceptable grounds. With its back against the wall, the ACCJC is trying to slide away with a half-assed policy that never addresses the real problems, keeps City College in a terrible limbo, and leaves unelected, unaccountable people in charge.

Don’t mean to be throwing the turd in the punchbowl, but I’m not ready to party yet.

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Short link to this posting:  http://wp.me/p3xLR-v7

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Here’s Real History in the Making: Fighting to Save SF City College

Here’s Real “History in the Making”:
The People Fight Back to Save City College
Friday, January 11, 9–10:30 AM
SF City College, Ocean Campus
Between Diego Rivera Theater & Visual Arts Bldg.
MUNI # 9X, 9AX, 9BX, 29, 36, 43, 49, 54, and K
Balboa Park BART 3 blocks away on Geneva
See map of campus: http://tinyurl.com/aoq7yp6

Contact:
Allan Fisher, afisher800@gmail.com
Wendy Kaufmyn ,(510) 714-8687, kaufmyn@aol.com

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Students cross Phelan Avenue at the main campus of S.F. City College, which is under fire by the accrediting commission. Photo: Megan Farmer, The Chronicle / SF

City College of San Francisco students, staff, teachers and department chairs will picket and boycott the interim chancellor’s welcome address which traditionally kicks off the new semester. Instead of listening to Dr. Thelma Scott-Skillman’s speech, “History in the Making”, City College’s community will make its own history by conducting a press conference and rally addressing the people of San Francisco.

The people of San Francisco overwhelmingly showed a vote of confidence in CCSF by passing Proposition A, a parcel tax specifically dedicated to offset budget cuts, prevent worker layoffs, maintain essential classes, programs and student support services. However, the district is intending to use the funds for other purposes, namely paying high-priced consultants and bolstering reserves.

During this event people will be asked to sign a Pledge of Resistance stating their intention to take drastic action if the district doesn’t spend Proposition A funds (or reserves) as intended.

“San Francisco voters sent a clear message of affirmation for City College’s mission to serve the whole community,” said Leslie Simon, instructor in Women’s Studies and former department chair. “We denounce the district’s downsizing our mission, downsizing our college and limiting student accessibility.”

Allan Fisher, ESL instructor, insisted that, “The administration has failed to promote student enrollment, thereby creating a ‘budget crisis’. Meanwhile they are spending excessive amounts on administrative salaries, high paid consultants and lucrative interim administrative positions.”

Wendy Kaufmyn, Engineering instructor of 29 years, said, “ We need to remain steadfast in our commitment to the California Master Plan and its vision of free education for all and to AB1725, legislation which encourages an administrative role by department chairs elected by their peers.”

We accept the accreditation commission’s legitimate suggestions, we will not accept the Accrediting Commission for Community and Junior Colleges undermining of mission of our community college. We demand a commitment to the California Master Plan and its vision of free education for all, and to AB1725, encouraging an administrative role by peer-elected department chairs.

Speakers at the action will denounce:

* how Proposition A funds are not being used as the voters intended for classes, programs, and student services, and to prevent layoffs

* the limiting of student accessibility through the downsizing of CCSF

* the narrowing of CCSF’s mission to serve the whole community

* the failure of the administration to effectively promote student enrollment, thereby creating a “budget crisis”

* the administration efforts to limit democratic culture and institute an authoritarian, top-down business model for CCSF

* the dismantling of the Department Chair structure, and the negative impact on the “diversity departments”

* the excessive spending on administrative salaries and high paid consultants

* the unilateral take-backs (an additional 9% salary cut from employees on top 2.85%) after six years of employee pay freezes and concessions

* the district proposals to limit or terminate health benefits and pro-rata pay for part-time employees

* the use of CCSF funds for lucrative interim administrative hiring positions

* the mantra of productivity expressed by the administration under the name “enrollment management” that negatively impacts educational quality

* the chronic misrepresentation of CCSF in the media

* the taking away of power from the elected local Board of Trustees

Short Link to this posting:   http://wp.me/p3xLR-tW

Protest Pete Peterson Social Security Wrecking Crew in San Francisco

Pete Peterson Vulture

Pete Peterson’s Social Security and Medicare Wrecking Crew
is coming to San Francisco Thursday, Sept. 23 at 5 PM.
Let’s Give Them the Welcome They Deserve!

Thursday, September 23, 5 PM
595 Market St. (at 2nd St., Montgomery BART, see map)
More information: call CARA at 510-663-4086, or M. Lyon at 415-215-7575

Please join us for a rally outside the Commonwealth Club at 5 PM.  Bring signs and banners.  Those able to purchase a ticket to the presentation and go inside, please do so. The reception is at 5:30 PM, the program starts at 6 PM.

The Peter G. Peterson Foundation and the Concord Coalition, right-wing think tanks that have railed against Social Security, Medicare, and Medicaid for years, are beginning a national “Fiscal Solutions Tour” to push their story.  “After our financial and policy wizards have whisked away the temporary problems of unemployment, deflation, and war, there will be new, deep fiscal problems that will threaten America’s economy and even its national security. To solve these problems, seniors, people with disabilities, and the poor must give up Social Security, Medicare, and Medicaid.”  Lies! These are the country’s most successful, popular, and life-sustaining social programs. We’ve already paid into them.  They are not failing. We will not give them up!

Peterson tried to stampede us into demanding these cuts last June, with “America Speaks,”  nineteen razzle-dazzle Town Hall meetings held simultaneously across the country, and inter-connected by closed-circuit TV.  It completely backfired. Though participants were given slanted background materials and slanted choices, they rejected cuts to social programs, endorsed higher taxes on the rich, demanded single-payer healthcare, and demanded huge military cuts.

Peterson’s “Fiscal Solutions Tour” is another try at pushing the same message under more controlled surroundings.  Let’s give him the same message: Hands Off Social Security, Medicare, and Medicaid!

Speakers: Robert Bixby, executive director of the Concord Coalition; David M. Walker, president and CEO of the Peter G. Peterson Foundation; Isabel Sawhill, senior fellow in economic studies, Brookings Institution; Michael Boskin, senior fellow at the Hoover Institution and Stanford economics professor; and Tom Campbell, former congressman (moderator).

Admission: $12 for Club members, $20 for nonmembers and $7 for students. For tickets, go to commonwealthclub.org or call (415) 597-6705.

See the Sept 17 SF Chronicle piece promoting this event.

Please forward this message.

shortlink to this posting:  http://wp.me/p3xLR-pD

Celebrate and Defend Social Security on its 75th Birthday (August 14, San Francisco)

Celebrate and Defend Social Security on its 75th Birthday
Saturday, August 14th, from 11 AM to 1 PM
At the New Federal Building, 7th and Mission Streets, San Francisco.

Join the California Alliance for Retired Americans (CARA) and the San Francisco Central Labor Council to celebrate and defend America’s most successful social program.  Social Security, Medicare, and Medicaid are under severe attack by business groups, deficit hawks, and the Obama administration. Social Security, the longest established and most financially secure of these programs, is under particular attack, with media promoting lies such as Social Security being the verge of collapse, draining the national treasury, and providing bloated benefits to undeserving seniors.

The facts of Social Security are:  (1) Its benefits have already been entirely paid by workers’ payroll taxes. (2) It has a $2.5 billion surplus.  (3) If nothing were done, it could pay full benefits until 2037, and 75% benefits afterward.  (4) If higher incomes were subjected to payroll taxes, it could pay full benefits indefinitely.   (5) The majority of seniors, disabled people, and surviving spouses are dependent on Social Security, particularly minorities and women.

Social Security, Medicare and Medicaid are under immediate threat because (1) the President’s Fiscal Commission on the Deficit, heavily stacked against these programs, is due to make its recommendations to Congress the first week in December 2010, and (2) Congress has promised to prioritize an up-or-down vote the Commission’s recommendations without amendment. So Social Security celebrates its 75th birthday under fire.

This event is (1) to give the truth about Social Security, the most successful social program in the US for seniors, people with disabilities, kids, and low-income families, (2) to warn these communities of the dangers that Social Security faces, and (3) to mobilize these communities to pressure Obama’s Deficit Commission and Congress to not privatize Social Security, reduce its benefits, or raise its retirement age.

Representatives of Bay Area US Congresspersons and US Senators are invited to hear our message, and respond. Similar events are planned for Fresno, Los Angeles, and San Diego.

Contact Michael Lyon,  mlyon01@comcast.net

shortlink to this post:  http://wp.me/p3xLR-p8

Tax on high-cost health plans is to strip down employer-provided health coverage, not raise revenue

As this and another recent NY Times piece explain, the Obama administration demands four cornerstones of healthcare reform: (1) a Medicare cost-containment Commission, (2) taxing high-cost private insurance, (3) reform of medical payment incentives, and (4) deficit reduction.  Each of these cornerstones is designed to reduce healthcare spending by reducing our health coverage, while the rest of ObamaCare guarantees windfall profits for the insurance, pharmaceutical, and hospital industries.  The article below illustrates how one of the cornerstones, taxing high-cost private insurance,  will reduce coverage for those with employer-furnished health insurance, and demonstrates how disingenuous is Obama’s claim that “If you’ve got healthcare you like, you can keep it.”  Obama, the Democrats, and the Republicans agree that we can’t afford decent healthcare for everyone, but what we really can’t afford is the profit system in healthcare.

Kaiser Health News, December 3, 2009

New Survey: ‘Cadillac Tax’ Would Force Employers To Trim Health Insurance Costs – Kaiser Health News

By Julie ApplebyKHN Staff Writer

Dec 03, 2009

Two-thirds of employers would raise deductibles, change insurers or scale back coverage to avoid the so-called Cadillac tax on high-cost benefits proposed in the Senate Democrats’ health care bill, according to a survey released today by consulting firm Mercer.

Among things employers might change or drop: flexible spending accounts, which are used to cover unreimbursed medical expenses, and dental or vision policies.

Their actions would tend to shift more costs to workers – but could help accomplish one of the goals touted by economists and policymakers who support the excise tax: slowing medical spending.

Yet some employers have already raised deductibles or taken other steps to bring down premiums and still have expensive packages.

“On the one hand, the majority of employers will respond the way policymakers hope, by reducing benefits,” says Beth Umland, director of research for health and benefits at Mercer. “But the X factor may be employers who hit the cap, but don’t offer overly generous plans. What are their options going to be?”

The excise tax —which is placed on insurers, but is expected to be passed along to employers — could hit up to 19 percent of medical packages offered by employers in 2013, the first year it goes into effect, according to a separate Mercer analysis of data from 3,000 firms.

Whether an employer’s benefits are subject to the tax depends on the combined cost of all medical benefits, including health, dental, vision and other benefits, such as worker and employer contributions to flexible spending or health savings accounts. Workers and employers can put pre-tax money into health savings accounts, helping cover deductibles, for example.

If the combined total of all benefits exceeds annual thresholds of $8,500 for individuals or $23,000 for families, the difference would be subject to a 40 percent excise tax.

The Mercer survey (.pdf) of 465 employers – a nonscientific sample – also found that of the 63 percent who would make changes to avoid the tax:

— 75 percent would raise deductibles or copayments to bring down premium costs.
— 40 percent would add a lower cost health plan as an alternative.
— 19 percent would terminate employer contributions to health or flexible savings accounts.

While employers aren’t yet changing benefits in response to the proposal, analysts say, the excise tax is one of their main concerns.

“One of the top issues is understanding and anticipating the high cost excise tax,” says Michael Langan, a principal at consulting firm Towers Perrin. “We’re finding that about half of the large employers we work with will be at or above those (threshold) limits.”

The tax is controversial, but remains one of the main ways the Senate proposes to offset the costs of its legislation, bringing in $149 billion over 10 years. It has support from many economists, who say an excise tax will help control medical spending over time by discouraging overly generous coverage. The tax could also result in higher wages for workers, economists say, if employers shift to lower-premium plans and use the savings to give workers bigger raises.

The tax – which is not included in the House health bill — is strongly opposed by labor unions. They say it unfairly penalizes workers in firms with higher proportions of older or sicker workers and those that have forgone wage increases to keep better health benefits.

The threshold has been raised from an original proposal, and Senate lawmakers also added higher limits for certain employers, such as those in high-cost states or those in high-risk professions.

Most analysts – including the Congressional Budget Office in a report out this week – say they expect employers will try to reduce their total medical benefit costs to avoid the tax by shifting more costs to workers, pushing harder to get workers to sign up for wellness programs or making other changes to their benefit offerings. The CBO forecast that 19 percent of employer sponsored plans would be subject to the tax in 2016, three years after it goes into effect.

Ken Sperling, global health care practice leader at benefit consulting firm Hewitt Associates, says that employers may first look at scaling back or eliminating flexible savings accounts.

FSAs, as they are called, allow workers to set aside money pre tax to cover such things as copayments for drugs, the cost of prescription eye glasses or contact lenses and other unreimbursed medical expenses. The legislation proposes limiting such contributions to $2,500 a year per worker, but that amount could still put some plans or employees above the threshold.

“Their first reaction will be scale back the FSA so that no employee is above the threshold,” says Sperling, who says employers may also look at reducing or eliminating other benefits, such as dental coverage, which can add about $1,000 a year to family coverage costs.

Employers have already spent the past few years pushing workers to sign up for health management programs — and raising deductibles and copayments to try to slow rising health spending, benefit analysts say. The threat of an excise tax would likely spur on those efforts.

Even if Congress doesn’t approve an excise tax, Umland says workers are likely to continue to pay more for health coverage as employers seek ways to slow the growth of premiums: “This comes down to the essential question, when you shift more costs to employees do they cut back on unnecessary care, or on needed care? Or do they just pay more? The answer is probably all three.”

Also see Bob Herbert’s December 28 NY Times article “A Less than Honest Policy” saying,  “It’s not expected to raise this money directly. The dirty little secret behind this onerous tax is that no one expects very many people to pay it. The idea is that rather than fork over 40 percent in taxes on the amount by which policies exceed the threshold, employers (and individuals who purchase health insurance on their own) will have little choice but to ratchet down the quality of their health plans.”

“Commission” is Washington Speak for Cutting Social Security and Medicare

The “experts” who could not see the $8 trillion housing bubble that wrecked the economy are now telling us that we have to create a special commission so that they can cut Social Security and Medicare. With much of Washington’s punditry behind this effort, they could succeed.

The basic story is straightforward. There is a determined clique, led by Wall Street investment banker Peter Peterson, that has been trying to cut Social Security and Medicare benefits for at least the last two decades. Peterson, a cabinet member in the Nixon administration, is especially important in this story because he has personally bankrolled much of the effort.

Peterson started the Concord Coalition for this purpose back in the early ’90s. He has written numerous books calling for cuts in these programs. He uses his vast Wall Street fortune to publicize these books, thereby ensuring that they are reviewed in major media outlets and reach a wide audience. More recently, he has pledged a billion dollars to support a foundation that is devoting considerable resources to bring about cuts in Social Security and Medicare.

Peterson and his crew have been peddling a story of fiscal calamity to advance their agenda. They try to scare young people with tales of enormous deficits driven by Social Security and Medicare.

The grain of truth in the Peterson story is that Medicare is projected to pose an enormous burden on the country in future decades. However, this is due to the fact that costs in the US health care system are projected to continue to spiral out of control. The Medicare horror stories assume that per capita health care costs in the United States increase from twice the levels in other wealthy countries to four or five times the levels in other wealthy countries.

If health care costs spiral out of control as these projections assume, then the economy will be devastated regardless of what we do with Medicare. There will be many more General Motors and Chryslers as companies that pay for their workers’ health care insurance will find themselves unable to compete. Tens of millions of workers will find themselves uncovered and unable to afford health care themselves.

In this context, serious people would focus on fixing the country’s health care system, but the Peterson crew focuses on cutting Medicare. One obvious way to both cut Medicare costs and start to get US health care costs under control would be to allow beneficiaries to buy into more efficient foreign health care systems, but the Peterson crew doesn’t seem interested in proposals that don’t cut benefits for working people.

It is especially outrageous that the Peterson crew would be leading this crusade to cut Social Security and Medicare. In part, because they were running around yelling about deficits projected for 2050, those of us who were trying to warn about the $8 trillion housing bubble could not get attention. The Peterson’s crew imaginary horror story helped to conceal the real disaster that was about to blow up the economy. Now this gang has the nerve to use the deficits created in part by their own incompetence as a reason to push their agenda for cutting Social Security and Medicare.

Peterson’s efforts in this area are especially offensive because he personally has profited enormously from the “fund managers’ tax break,” a loophole in the tax code that allowed Peterson to be taxed at a lower rate than most schoolteachers and firefighters. Peterson not only personally profited from this tax break, he has lobbied Congress to ensure that it remains in the code for future Wall Street tycoons. No doubt much of the money he is using to cut retirees’ Social Security and Medicare is attributable to this loophole.

Comment

I hate to say it, but I think this article almost minimizes the problem. Peterson is considered a right-winger in the spectrum of the ruling class, but the whole spectrum of the ruling class is dead-set on crippling Medicare, Social Security and Medicaid, and commissions are frequently proposed as a way of doing this.

Commissions are typically proposed as bodies with an equal number of Democrats and Republicans (so neither party has to accept the blame for the cuts), and include the heads and ranking members of House and Senate Committees dealing with revenues and taxation. Their recommendations are fast-tracked through Congress and frequently must be voted up or down in their entirety, no amendments allowed. You can see they’re very dictatorial.

Part of the reason they’re set up to be so powerful is that they have to overturn a basic tenet of law: that funding for Medicare, Social Security, and Medicaid must automatically increase as the number of recipients increases. (This is what “entitlement program” means.) For us, who work for a living, increasing funding for these programs as the number of recipients increases seems natural, but for the ruling class that wants the money for world competitiveness and war, it’s fiscal irresponsibility.

If you want to see a Commission in legislation, look at the Senate Health Bill. As currently written, there’s a Commission to force down Medicare spending. Almost half the Senate Health bill’s cost is expected to be gotten from reducing expected Medicare costs over the next ten years. And Obama has said one of the four obligatory cornerstones for him is a Medicare Commission.

For more on how Obama, and both Democrats and Republicans are determined to destructively restructure Medicare, Social Security, and Medicaid, see https://mlyon01.wordpress.com/2009/11/15/how-the-democrats-might-privatize-and-cut-social-security/

Michael Lyon
mlyon01@comcast.net

Senate Health Bill is a Milestone … In Rationing

I find this a pretty convincing argument that the Senate healthcare bill is about rationing, if you define rationing as Ewe Reinhardt did in a recent NY Times piece, meaning decisions by insurers about what will be covered, versus what has to be paid for out-of-pocket. As this article indcates, in the future these decisions by insurers are more likely to be made collectively in response to various pressures including taxes on high-cost plans, government guidelines on effective and cost-effective treatment such as the recent breast and cervical cancer screening recommendations, the bi-partisan Medicare cost-control Commission, and finally reimbursement reform including moving away from fee-for-service and toward payments for doctors and hospitals bundled together for particular medical care episodes akin to managed care.

As this and another recent NY Times piece explain, the Obama administration favors the Senate bill, as it incorporates its four cornerstones of healthcare reform: (1) a Medicare cost-containment Commission, (2) taxing high-cost private insurance, (3) reform of medical payment incentives, and (4) deficit reduction.

If the whole package costs roughly $900 billion over ten years, that roughly $90 billion per year. For comparison, sending 35,000 troops to Afghanistan, at $1 million/individual troop/year will cost roughly $35 billion.

The Atlantic, Nov 21 2009, 11:29 am by Ronald Brownstein

A Milestone in the Health Care Journey

When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won’t succeed unless it “bends the curve” in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.

“I’m sort of a known skeptic on this stuff,” Gruber told me. “My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.”

Gruber may be especially effusive. But the Senate blueprint, which faces its first votes tonight, also is winning praise from other leading health reformers like Mark McClellan, the former director of the Center for Medicare and Medicaid Services under George W. Bush and Len Nichols, health policy director at the centrist New America Foundation. “The bottom line,” Nichols says, “is the legislation is sending a signal that business as usual [in the medical system] is going to end.”

Both the Senate bill’s priority on controlling long-term health care costs, and its strategy for doing so, represents a validation for Senate Finance Committee chairman Max Baucus (D-MT). When Baucus released his health reform proposal last September, after finally terminating months of fruitless negotiations with committee Republicans, Democratic liberals excoriated his plan as a dead end. And on several important fronts–such as subsidies for the uninsured, the role of a public competitor to private insurance companies, and the contribution required from employers who don’t insure their workers–Reid moved his product away from Baucus toward approaches preferred by liberals.

But the Reid bill’s fiscal strategy, and its vision of how to “bend the curve,” almost completely follows Baucus’ path from September. Baucus’ bill was the first to establish the principle that Congress could expand coverage while reducing the federal deficit; now that’s the standard not only for the Senate but also the House reform legislation. And, perhaps even more importantly, the Reid bill maintains virtually all of Baucus ideas’ for shifting the medical payment system away from today’s fee-for-service model toward an approach that more closely links compensation for providers to results for patients. In the Reid bill, there is some backtracking from Baucus’ most aggressive reform proposals, but not much.

Almost everything Baucus proposed to control long-term costs have survived into the final bill. And, with only a few exceptions, that’s just about all the systemic reforms analysts from the center to the left have identified as the most promising strategies for changing the economic incentives in the medical system. (The public competitor to private insurance companies championed by the Left would affect who writes the checks in the medical system, but not what the checks are written to pay for.) Most of the other big ideas for controlling costs (such as medical malpractice reform) tend to draw support primarily among Republicans. And since virtually, if not literally, none of them plan to support the final health care bill under any circumstances, the package isn’t likely to reflect much of their thinking.

In their November 17 letter to Obama, the group of economists led by Dr. Alan Garber of Stanford University, identified four pillars of fiscally-responsible health care reform. They maintained that the bill needed to include a tax on high-end “Cadillac” insurance plans; to pursue “aggressive” tests of payment reforms that will “provide incentives for physicians and hospitals to focus on quality” and provide “care that is better coordinated”; and establish an independent Medicare commission that can continuously develop and implement “new efforts to improve quality and contain costs.” Finally, they said the Congressional Budget Office “must project the bill to be at least deficit neutral over the 10-year budget window and deficit reducing thereafter.”

As OMB Director Peter Orszag noted in an interview, the Reid bill met all those tests. The CBO projected that the bill would reduce the federal deficit by $130 billion over its first decade and by as much as $650 billion in its second. (Conservatives, of course, consider those projections unrealistic, but CBO is the only umpire in the game, and Republicans have been happy to trumpet its analyses critical of the Democratic plans.)  “Let’s use the metric of that letter,” said Orszag, who helped shape the health reform debate for years from his earlier posts at CBO and the Brookings Institution. “Deficit neutral; got that. Deficit-reducing second decade, got that. Excise tax: That was retained. Third is the Medicare commission: has that. Fourth is delivery system reforms, bundling payments, hospital acquired infections, readmission rates. It has that. If you go down the checklist of what they said was necessary for a fiscally responsible bill that will move us towards the health care system of the future, this passes the bar.”

McClellan, the former Bush official and current director of the Engleberg Center for Health Care Reform at the Brookings Institution, was one of the economists who signed the November letter. McClellan has some very practical ideas for improving the Reid bill (more on those below), but generally he echoes Orszag’s assessment of it. “It has got all four of those elements in it,” McClellan said in an interview. “They kept a lot of the key elements of the Finance bill that I like. It would be good if more could be done, but this is the right direction to go.”

Reid gave ground on one Baucus proposal that the economists identified as a priority-taxing high-end insurance plans. Like many health reformers, the economists who wrote Obama argue that such a tax “will help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount.” Amid intense opposition from unions, Reid raised the thresholds at which family plans would face that excise tax from $21,000 to $23,000. But given all the pressure from labor, the more striking thing may have been that Reid didn’t increase the thresholds even more; the CBO calculated the proposal, which the House excluded from its bill, would still raise $35 billion annually by 2019. “They held pretty strong,” said one administration health care expert. “It’s not like unions haven’t been making the case that it shouldn’t have been a much higher number.”

On delivery reform, Reid stayed even closer to the Baucus blueprint. The Finance bill laid out a series of measures to change the way providers are paid for delivering care to Medicare recipients; the hope was that once Medicare instituted these reforms, private insurers would also adopt many of them. “The goal here is that the things we do in Medicare will translate over into the private sector, and there is quite a bit of historical precedence for that,” said one Democratic aide involved in drafting the package.

The Baucus delivery reform ideas revolved around two central aims. One was to reward Medicare providers who deliver care more efficiently and penalize those that don’t. The Reid bill upholds the major proposals Baucus offered to advance that goal. For instance, hospitals under current law must report on their performance in treating patients for common conditions like heart problems and pneumonia; under the bill, their Medicare payments, for the first time, would be affected by their ranking on those reports. Hospitals would also be penalized if they readmit too many patients after surgery or allow too many to acquire infections while in the hospital itself. Another provision would begin the process of applying such “value-based purchasing” toward other providers like hospice providers and inpatient rehabilitation facilities.

With physicians, the Reid plan takes a step back from the Finance Committee bill but still a long step beyond current law. The Finance Bill proposed automatic reimbursement reductions for doctors who order up the most care for Medicare recipients with similar medical and demographic characteristics. That was meant to respond to the research showing big disparities in spending on medical services for similarly-situated patients in different communities. But, Democratic sources say, that proposal ran into charges that it would promote rationing-and even function as “a death panel by proxy”-by compelling doctors to arbitrarily reduce care. So the final bill takes a less direct route toward a similar end. It requires Medicare to begin studying the utilization patterns of doctors participating in the program. And then it establishes a “values based payment modifier” that would, in a budget-neutral manner, increase reimbursements for physicians found to deliver high-quality care at lower cost, and reduce them for physicians at the other end of that spectrum. “It will, we believe, have the same net effect [as the original proposal],” said the Democratic aide. “It should change behavior around that threshold.”

The other set of Baucus proposals were intended to promote more coordination among providers. These have survived almost verbatim into the final bill. The bill encourages groups of providers to establish doctor-led “accountable care organizations” to more comprehensively manage patients’ care by allowing them to share in any savings for Medicare they produce. It also establishes a voluntary national pilot of “bundled” payments that would encourage hospitals, doctors and other providers to work more closely together. Another pilot program would test coordinated home-based care for chronically ill seniors.

Finally, the Reid bill maintains the two powerful institutions the Finance legislation proposed to promote these reforms and develop new ones. The one that’s attracted the most attention is an independent “Medicare Advisory Board.” Under the Senate bill, that board would be required to offer cost-saving proposals when Medicare spending rises too fast; Congress could not reject its proposals without substituting equivalent savings. Since the board would be prohibited from offering changes that raise taxes or “ration care,” and since the legislation initially exempts hospitals from its recommendations, it could choose to promote the sort of payment reforms the bill establishes. (More prosaically it might also clear away some of the expensive coverage mandates that Congress imposes on Medicare under pressure from different elements of the medical industry). Given the limitations imposed on the commission, an equally important means to expand these reforms might be a second institution the legislation creates: a Center for Medicare and Medicaid Innovation in the Health and Human Services Department. Though this center has received much less attention than the Medicare Commission, it could have a comparable effect. It would receive $1 billion annually to test payment reforms; in a little known provision, the bill authorizes the HHS Secretary to implement nationwide, without any congressional action, any reform that department actuaries certify will reduce long-term spending. While the House bill omitted the Medicare Commission (a top priority for Obama) it included the innovation center.

No one can say for certain that these initiatives will improve efficiency enough to slow the growth in health care spending. Some are only pilots; others would affect only a small portion of providers’ revenue from Medicare. CBO typically evaluates them skeptically: it generally scores little or no savings from most of them. Former CBO director Robert Reischauer, who signed the November 17 letter, says that’s not surprising. “CBO is there to score savings for which we have a high degree of confidence that they will materialize,” says Reischauer, now president of the Urban Institute. “There are many promising approaches [in these reform ideas] but you…can’t deposit them in the bank.” In the long run, Reischauer says, it’s likely “that maybe half of them, or a third of them, will prove to be successful. But that would be very important.”

While generally supportive of Reid’s approach, McClellan, the former Medicare administrator under Bush, offered several specific ideas for strengthening it. He says the Senate should improve the capacity of HHS to more quickly evaluate whether the payment reforms are working, and also to provide data and technical assistance to new physician groups like the accountable care organizations that will be attempting to better coordinate care. “Ideally you’d both be able to tell the organizations involved and Congress what is working or not, and give the organizations the feedback and data they need to know whether they are doing a good job,” he says. McClellan also believes that the plan needs sharper sticks-tougher penalties on providers who don’t provide efficient and effective care. “There are a lot of carrots and not so many sticks,” he maintains. Of course, tougher penalties might provoke more opposition from provider groups like hospitals and physicians now tenuously supporting the legislation.

[[McClellan stands at the forefront of centrist Republican thinking on health. Even the more ideologically conservative health care thinkers to his right generally don’t oppose long-term reform ideas like bundling payments (John McCain promoted that during his presidential campaign). But they tend to view them as insufficient or tangential to the real problem. Their view highlights a fundamental difference between the parties’ on health care. To save costs, Democrats mostly want to change the incentives for providers. Republicans mostly want to change the incentives for patients by shifting toward a model where insurance covers only catastrophic expenses and people pay for more routine care from tax-favored health savings accounts. In essence, the Republican view is that the best way to hold down long-term costs is to directly expose patients to more of them. Few Democrats accept that logic though and it has little influence on either chamber’s legislation.

Another Republican cost-containment priority missing from the bill is meaningful medical malpractice reform. (The bill only encourages states to think about it.) Nichols, of the centrist New America Foundation, would like to see that included as well. Its omission is one reason he says he gives the plan a “b” rather than an “a”; the other is he’d like to see mechanisms to more quickly diffuse into the private insurance system reforms that show promise in Medicare. Democratic sources say a group of centrist Democrats led by Virginia Senator Mark Warner is trying to devise a package designed to do just that, perhaps by expanding the role of the independent Medicare advisory commission.

The attempt in all these ideas to nudge the medical system away from fee-for-service medicine toward an approach that ties compensation more closely to results captures how much the health care debate has shifted toward cost-control. So far, the rise in health care spending has proven almost invulnerable to every previous attempt to tame it, like the managed care revolution in the 1990s. Even if Obama signs into law a final bill embodying all these reform proposals, many skeptics wonder if they can bend, much less break, the seemingly inexorable increase in health care spending. Reischauer understands that skepticism, but isn’t able to entirely suppress a kernel of optimism that this latest reform agenda may prove more effective than its predecessors. “One never knows whether we’re turning the corner or if this is just playing the same old game for another inning,” he says. “But I sense there’s something different out there. I think the medical profession and its leaders have read the handwriting on the wall and are trying to evolve.” If so, the ideas the Senate will begin voting on tonight could mark a milestone in that journey.


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