What Else Does the Budget Contain for Health Care?

The $634 billion health care reserve fund and the combination of new taxes and Medicare reforms to finance it has understandably monopolized the discussion of the budget released today by the Obama Administration.  There's no underestimating that commitment to health care reform - it's huge.  But there are plenty more goodies in the section for the Department of Health and Human Service, and their inclusion gives both the promise of serious reform and the taste of fights still to come.

None of this guarantees the funding - we'll get a crocodile roll deathmatch with Congress before this translates into real programs - but it's a vivid portrait of the Administration's values. Here's what jumped out at me.  You can download your own copy of the FY2010 Budget and follow along.

"Expands research comparing the effectiveness of medical treatments to give patients and physicians better information on what works best." At this sentence, hordes of pharmaceutical and medical device lobbyists began sharpening their pencils.  Somewhere, far off in the night, Betsy McCaughey dreams of a reinvigorated political career or at least a book deal.  But it cannot be stressed enough how essential this is in improving quality and lowering costs.  As Atul Gawande points out, "In 1996, Americans underwent some 60 million surgeries. In 2008, that number rose to 100 million. Does that mean that Americans are healthier?  No one knows because we never measure how well our healthcare system is performing."  This will be a fight, for certain but a fight worth having -- and winning.

"Invests over $6 billion for cancer research at the National Institutes of Health." Combine this with the $10 billion in the stimulus (which, credit it where it's due, Sen. Arlen Specter went to the mattresses for) and you have an unprecedented boost to cancer research.

Millions more for HIV/AIDS prevention and support for individuals, families and communities dealing with Autism. Given the almost criminally poor funding, these are two long-overdue budget priorities.

"Invests $330 million to increase the number of doctors, nurses, and dentists practicing in areas of the country experiencing shortages of health professionals." As anyone who's observed Massachusetts in the wake of their universal health care legislation knows, extending coverage to the uninsured exposes weaknesses in your delivery system very quickly, particularly if you don't have enough doctors and nurses.  Typically, the bulk of investments in the physician shortage focus on rural areas.  Certainly the need there is great, but dealing with a rural shortage is insufficient - there's a looming crisis in the ever-shrinking number of primary care physicians compared to specialists.  The American Recovery and Reinvestment Act ear-marked money specifically for primary care providers in rural areas, but the budget leaves it vague.

Health IT, especially Electronic Health Records. The $19 billion in the Recovery Act was just the beginning.

Medicare, Medicare, Medicare. The budget gives only a glimpse of the reforms in store for Medicare - and each one of them will be a fight in and of itself.  For starters, the funding for the health care reserve fund comes in part from no longer paying the private insurance companies who sell Medicare Advantage plans 12% more to give the same benefits and yield the same outcomes as traditional Medicare.  Money for the reserve fund will also come from savings to Medicare Part D through finally allowing drug reimportation, increasing the use of generics, requiring more rebates for bulk purchases.

But the Administration is also looking to get innovative, using the Big Dog of Medicare (and Medicaid) to try out cost-saving and quality-enhancing pilot programs.  If those reforms prove successful, the private insurance industry is sure to follow suit, particularly if they substantially reduce costs.  Check this sentence out:  "New Medicare and Medicaid demonstration and pilot projects will evaluate payment reforms, ways to provide higher quality care at lower costs, improve beneficiary education and understanding of benefits offered, and better align provider payments with costs."  Under "better align provider payments," you can bunch together experiments with coordinated care, episodes of care, increasing reimbursement for primary care, and more attempts to have compensation explicitly reflect quality, and not just fee-for-service.  And if you think that's not going to be a fight...

Finally, although it's not in HHS, I'd be remiss if I didn't mention the Veterans Affairs health care system.  Most still don't realize that the VA is the best health care system in the country - producing quality health outcomes as a greatly reduced cost, and with some innovative features the rest of our public programs desperately need.  Yet the VA often gets treated like the red-headed stepchild in the budget process.  Not anymore.  The Obama Administration intends to restore eligibility to 500,000 veterans whose income-based eligibility was scaled back during the Bush years.    The Department of Veterans Affairs will see a $25 billion increase over the next five years, with much of that earmarked to increasing the funding of the VA health care system dramatically, create Centers of Excellence for specialized care, and expand access to mental health care services, particularly for veterans in rural areas.

All long overdue, all demonstrating an Administration who understands the issues at play in health care reform... and all demonstrating an Administration who's not shy about picking a fight.  After all, one man's waste is another man's profit and making our health care system more efficient will be resisted tooth and nail by those making a pretty penny on our inefficiencies.  We'll see if the government is up to the task.