Big changes in health care could be coming to the Baton Rouge area. Under a proposed plan, Our Lady of the Lake would expand to become LSU's teaching hospital and Earl K. Long would close. News 2's Chris Nakamoto gets answers on how the changes affect you.

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Lombardi tells LSU system to finalize cuts

Baton Rouge Business Report | 06.12.09

LSU System President John Lombardi today issued orders for LSU's academic, health care and research institutions to finalize preparations for steep cuts in spending, effective July 1. Delivering the bad news today to chancellors, administrators and chief financial officers via conference call, Lombardi says action now is necessary in order "to specifically address job cuts and program eliminations in a transparent, orderly and responsible way.”

In April, LSU's 11 institutions proposed preliminary plans for $102 million in potential budget cuts -- part of more than $219 million in overall reductions for higher education -- to help balance the state's $1.7 billion budget shortfall.

Gov. Bobby Jindal's pledge to limit higher education cuts to 10% of state funding is appreciated but still isn't enough for the LSU System to avoid "major reductions" in the current fiscal year and the prospect of further reductions in coming years, Lombardi says.

The budget cuts will entail the elimination of hundreds of jobs, losing academic programs and the realignment of academic units. Also, 4% merit raises have been suspended throughout the system and the furlough of non-academic employees without contracts is a possibility, he says.

"We have to be accountable and effective in acting responsibly for today and the future even if the overall budget cut is reduced," Lombardi says. "These cuts are real, and we must begin now to address the consequences for our students, employees and other commitments to the state of Louisiana."

http://www.businessreport.com/archives/daily-report/latest/

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Former state lawmaker’s son to run for Senate

Daily Comet | 06.12.09

By Naomi King

Staff Writer

Norby Chabert

HOUMA — The son of a former state lawmaker, Norbert “Norby” Chabert, announced his candidacy for the open state senate seat that covers most of Terrebonne and Lafourche parishes.

The seat is being vacated by Reggie Dupre, who is resigning to head up the Terrebonne Conservation and Levee District. Dupre’s resignation is effective at month’s end to coincide with the conclusion of the ongoing legislative session.

The election for state Senate District 20 is set for Aug. 1 with a runoff, if necessary, scheduled for Aug. 29. Qualifying is set for June 24-26.

There are 39,289 Terrebonne residents and 28,760 Lafourche residents registered to vote in the district.

Norby Chabert, 33, is the son of Leonard J. Chabert and brother to Marty Chabert, who each held the senate seat Norby is seeking. He grew up along Bayou Little Caillou and supports continued operations at the state-owned charity hospital that bears his father’s name.

“My father used to say, ‘It doesn’t matter if you’re poor and you’re sick, you’re still sick and someone needs to take care of you,’ “ Norby Chabert said. Leonard Chabert died in 1991.

Norby Chabert said he wants to continue the work his father started.

“It is essential that we elect someone who will keep fighting for the funding that is needed to take care of the people of this region,” he said. “No one will fight harder than I will to protect Chabert Medical Center.”

Though running as a Democrat, Norby has worked with and behalf of both major parties.

He worked with Republicans Hunt Downer, a former state representative, and Billy Tauzin, a former congressman. He also worked with the state Democratic Party and served as an aide to U.S. Sen. Mary Landrieu, D-La.

So far, state Rep. Damon Baldone, D-Houma, is the only other candidate to formally announce his candidacy.

Others who’ve expressed interest include Republican Wallace Ellender of Bourg, a sugar-cane farmer defeated by Baldone during last year’s House District 53 race; Terrebonne Parish Councilman Clayton Voisin, in his third and final term on the council; and former Lafourche Parish Councilman Brent Callais.

Chabert resigned in May from his job as associate director for marketing at his alma mater, Nicholls State University in Thibodaux. State ethics laws prohibit him from holding a position at the state-run university while running for office.

Chabert owns Chabert Development, a Chauvin-based real-estate company.

But campaign organizers said Chabert’s bid for office is his primary focus right now.

“I offer my service to an office that I hold in the highest regard,” Chabert states in his announcement. “I pledge to be accountable to you, the citizens of Terrebonne and Lafourche parishes.

http://www.dailycomet.com/article/20090612/ARTICLES/906129924?Title=Former-state-lawmaker-s-son-to-run-for-Senate

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Single gene found to control growth of some cancers

The Medical News | 06.15.09

Research led by Ashok Aiyar, PhD, Associate Professor of Microbiology at LSU Health Sciences Center New Orleans, showing that a single gene can control growth in cancers related to the Epstein-Barr virus and that existing therapeutics can inactivate it, will be published in the June 12, 2009 online issue of PLoS Pathogens.

The Epstein-Barr virus (EBV) is closely associated with many human cancers such as Burkitt's lymphoma, Hodgkin's lymphoma, AIDS-related lymphomas, post-transplant lymphoproliferative disease, cancers of the nose and throat, and stomach cancer. In many of these malignancies, proteins made by EBV are necessary for tumor cells to grow indiscriminately. This is especially true of AIDS-related lymphomas and post-transplant lymphoproliferative disease, which are serious complications of AIDS and transplant surgery. These cancers are responsible for thousands of deaths each year in the United States.

The LSUHSC research team, which also includes Kenneth Johnston, PhD, Professor of Microbiology, and Timothy Foster, PhD, Assistant Professor of Microbiology and faculty of the LSUHSC Gene Therapy Program, investigated a small region of a certain Epstein-Barr virus protein called EBNA1, to determine the role it plays in the activation of the EBV genes responsible for the indiscriminate growth of tumor cells in these cancers. Their research shows that EBNA1 is controlled by oxidative stress (pathologic changes in response to excessive levels of free radicals) within the EBV-infected cells. Varying levels of oxidative stress change EBNA1's ability to activate EBV genes responsible for indiscriminate tumor cell growth.

"We have shown that in vitro, existing therapeutics such as Vitamin K that can change oxidative stress within cells, inactivate EBNA1," notes Dr. Aiyar, who is also a member of the faculty of the LSUHSC Stanley S. Scott Cancer Center. "As a consequence, EBV genes required for proliferation are no longer expressed, and malignantly transformed cells stop proliferating."

The research was funded by grants from the National Cancer Institute, the Louisiana Cancer Research Consortium, and the Department of Microbiology, Immunology, and Parasitology at LSU Health Sciences Center New Orleans School of Medicine.

"It is our hope that this research will lead to new ways of controlling EBV-associated diseases in humans," concludes Dr. Aiyar.

http://www.news-medical.net/news/20090615/Single-gene-found-to-control-growth-of-some-cancers.aspx

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Tulane scientist to study limb regeneration

The Times-Picayune | 06.14.09

Amber Sandoval-Griffin

RUSTY COSTANZA / THE TIMES-PICAYUNE

Ken Muneoka, a professor of cell and molecular biology at Tulane, is leading a team that will study limb regeneration in the axolotl, or Mexican salamander.

If a salamander can grow back a severed limb, why not a human?

With $6.25 million in new research support from the U.S. Department of Defense, a Tulane University biology professor hopes to answer the question.

Ken Muneoka, a professor of cell and molecular biology at Tulane, is leading a team -- including biologists from the University of Kentucky and the University of California at Irvine -- that will study limb regeneration in the axolotl, or Mexican salamander. The research group will compare genes of the salamander to the genes of a mouse, which serves as a model for humans because of their similar genetic traits.

"What we want to do is a detailed analysis of regeneration in mice for comparison to regeneration in axolotl," Muneoka said. "At the same time, we're looking closely at what goes on when you don't regenerate" and instead find a wound left by a missing limb and ultimately covered over with scar tissue, the professor said. In the latter, common scenario, he said, the team hopes to "deduce what is missing and what (genetic makeup) correlates with a non-regenerative response."

The axolotl has a complex limb repair process in which the cells form a structure called blastema that enables regeneration. When the limb of a mouse or human is amputated, the wound healing process forms scar tissue and doesn't form blastema, thereby preventing regeneration of limb cells. However, Mexican salamanders, humans and mice share a cell called a fibroblast that, in the case of the salamanders, allows for growth of new body parts.

And that fuels a belief among researchers that human limb regeneration might be possible.

"The grant allows us to do something that wasn't really possible before," said Stephen Randal Voss, associate professor of biology at the University of Kentucky. "Until now, we haven't had the resources or the funding to identify the genes in the salamander genome, and we really need to have that information before we can build a model of molecular regeneration."

The grant was provided as a result of the Department of Defense's Multidisciplinary University Research Initiative, following a national competition. In a prepared statement, representatives of MURI said medical advances that allow the option of cell regeneration are important to burn victims as well as amputees. Any positive research findings "would have a huge impact, not only on returning wounded warriors, but on society as a whole," MURI said.

David Gardiner, a professor of developmental and cell biology at UC Irvine, said the research meshes with ongoing efforts by the military to tend to the needs of returning troops with severe wounds.

But Muneoka, who has studied limb regeneration issues for nearly three decades, and his colleagues agree that the search for answers could take several years.

Even though the salamander is the only animal capable of regenerating lost appendages, including limbs, the spinal cord and the jaw, children and mice can grow back the tip of a severed finger.

As far-fetched as it may sound for an adult human to grow back an entire arm or leg, Muneoka believes that goal isn't beyond reach.

"I think we are getting to a place where the study emerges from fantasy to real reasoning, where it can produce results," he said. "And I think that is worth a shot."

Tulane will employ 10 researchers and lab technicians to work with Muneoka during the next five years. The project is set to begin within the next month.

http://www.nola.com/news/index.ssf/2009/06/ready_for_mac_libbpmt2top7_061.html

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Projects at stake in battle of budget

The Advocate | 06.14.09

By MICHELLE MILLHOLLON

Advocate Capitol News Bureau

State funding for higher education, small towns, road improvements and senior citizen programs is ensnared in a political struggle between the Louisiana House and the state Senate.

The spending is built into House Bill 1, the $28.7 billion state budget legislation, based on contingencies. Whether the House will agree to the Senate’s revenue-generating plan is one of many issues in a roiling battle over the budget.

Added up, about $280 million is at stake, including money to reduce budget cuts to agriculture, the arts and the state’s public colleges and universities.

In order for the funding to materialize, the House would have to agree to the Senate’s proposal to delay a tax break and tap into the state’s “rainy day” fund — both unlikely scenarios.

The House agreed to the Senate’s version of the budget bill Thursday. But the approval was far from an endorsement of the Senate’s proposals.

The contingencies that the state Senate put in the budget hinge on legislation the House is likely to let die, making their inclusion in the budget meaningless.

The House’s actions infuriated many in the Senate who expected the House to reject the Senate’s changes and force the two chambers to work out a compromise.

Instead, the House one-upped the Senate by approving it without a revison.

“There’s certainly a lot of very pitched emotion or feelings between the House and the Senate and that has obviously played out and come to the surface,” said Jim Brandt, president of the Public Affairs Research Council.

The budget now goes to Gov. Bobby Jindal. Should little change between now and June 25, the last day of the session, the state’s budget would include deep cuts for higher education and health care.

The efforts of both chambers to lessen the impact of the budget cuts would be negated, assuming the House does as its members have promised and refuse to approve the contingency sources of funding the Senate wants.

House members are promising to fashion a solution, especially to help higher education. Time is short. The session ends in less than two weeks.

Barry Erwin, president of the Council for A Better Louisiana, said the House left itself with few options other than to put together a piecemeal solution.

He said tempers flared between the House and the Senate, resulting in a budget that fails to give higher education the time to make strategic cuts in the face of financial challenges that are expected to linger several years.

“I’m stunned by the fact that they would want to limit their options to such a great degree with only two weeks left,” Erwin said.

State revenue is expected to drop by more than $1.3 billion in the fiscal year that starts July 1. Like the rest of the nation, Louisiana is feeling the pinch of the recession.

State Sen. Lydia Jackson said colleges and universities need time to prepare for a leaner, more-efficient system.

Jackson, D-Shreveport, said she sponsored the tax break delay legislation to allow higher education to make prudent decisions about downsizing.

“Slash-and-burn politics is not going to get us quality in our (higher education) institutions,” she said.

Other legislators feel that colleges and universities need to face reality and rein in spending.

“They need to become efficient, to look at which universities have duplicate programs and start making adjustments,” said state Rep. Eddie Lambert, R-Prairieville and vice chairman of the House budget committee.

Lambert said the House is willing to reduce the higher education cuts to somewhere between about $100 million and $120 million.

Jindal proposed an operating budget that would have cut state funding to higher education by 15 percent, or about $219 million.

Prodded by four of the five living governors who served before him, Jindal last week promised to keep higher educations cuts below 10 percent. His predecessors told him that anything more would set back the state.

“What we need is leadership,” said former Gov. Buddy Roemer, who spearheaded the effort. “There are no easy answers.”

The House wants to use $50 million in proceeds from a proposed tax amnesty program to lessen the cuts to higher education. Where the rest of the money would come from is unclear.

Jackson and the Senate suggested generating $118 million for colleges by delaying an income tax break. That suggestion proved unpopular with the governor, and House Speaker Jim Tucker, R-Terrytown, said the legislation itself is unconstitutional.

A Senate resolution to tap into the state’s rainy day fund also is stalled. The fund, formally known as the Budget Stabilization Fund, was set up to tide the state over during a budget deficit.

Also included in the budget is more than $25 million for projects in legislators’ districts. The projects include community organizations, museums and purchases such as a fire truck for a small town.

The Senate tied those projects to the tax break delay, saying the funding could not go forward unless the delay occurred.

The funding for the projects, however, comes from a dormant insurance fund.

Jackson said the Senate did not want to make the statement that local projects are more important than health care and higher education.

She said she is waiting to see if the governor uses his line-item-veto power to free up the projects by removing the conditional language tying them to the tax break delay.

“The public will have to decide whose priorities are important,” Jackson said.

http://www.2theadvocate.com/news/48012772.html

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Area clinic offers free medical assistance

Southwest Daily News | 06.14.09

Lake Charles, La. -

The most recent statewide study revealed the rate of uninsured adults, aged 19 to 65, is 21.2 percent. This translates into almost 720,000 adults with no health insurance living and working in Louisiana.

The Calcasieu Community Clinic, located in the Nursing Building on the McNeese State University campus, was established by a group of concerned physicians to address the needs of the growing population of low-income, working uninsured persons in Southwest Louisiana. Their goal was to provide free, quality healthcare to persons who helped themselves, but were unable to provide for their own health needs. The first Clinic was held in February of 2001.

Almost eight years later, with an unduplicated patient base of over 2100 persons, the Community Clinic has provided close to $3 million in total medical services to the community. Every Thursday evening during clinic hours, volunteer physicians and nurses provide on site health care while volunteer pharmacists staff the Clinic pharmacy to dispense the medications prescribed. Patients are referred out for lab tests, mammograms, or specialized services not available at the clinic. This is done at no charge to the patient.

Seventy-eight percent of the clinic’s population is female. Many of these women have never received mammogram services prior to their treatment at the Clinic. In 2002 the staff at the Clinic began a Mammogram Screening Program which was initially funded with grants. The Clinic now holds an OB/GYN clinic once each quarter, and to date they have provided over $30,000 in mammogram screenings. In addition to mammogram screenings, diagnostic tests and ultrasounds are being made available in an effort to ensure our patients are given the best health care that the Clinic can provide. Pap tests from OB/GYN patients are referred to local labs for diagnostics.

All of the patients receive free medications from the Clinic’s state approved pharmacy located inside. While many of the medications prescribed must be purchased, the clinic receives donations of medication from physician’s offices and nursing homes. The Clinic also subscribe to patient assistance programs offered through various pharmaceutical companies.

The Calcasieu Community Clinic is financially dependent on the community it serves. McNeese State University has provided a facility, free of charge, since the Clinic’s inception in 2000. The local Medical Society has remained steadfast in their support, and in addition to private donations and grants, the Clinic is supported by the United Way of Southwest Louisiana.

http://www.sulphurdailynews.com/news/x986611099/Area-clinic-offers-free-medical-assistance

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In latest legislative maneuver, Senate president foils House

The Times-Picayune | 06.13.09

by Bill Barrow, The Times-Picayune

BATON ROUGE -- Adding a new layer of policy and political intrigue to the ebbing legislative session, Senate President Joel Chaisson II has invoked a rare procedural move to delay delivery of the budget to Gov. Bobby Jindal, effectively ensuring that lawmakers cannot consider overriding any gubernatorial vetoes of spending items.

The tactic, which pits Chaisson against House Speaker Jim Tucker, intensifies House-Senate tensions as the two chambers continue to haggle over cuts to higher education and health care while trying to find money for legislators' favored projects.

It also raises questions about how leverage is distributed among the various players, including Jindal, as the session nears a conclusion.

Chaisson, D-Destrehan, said Saturday that he was holding the $28.7 billion budget until today, the maximum three days allowed after the House, in a surprise maneuver of its own, ratified the Senate version of the spending plan Thursday.

The lower chamber voted with the assumption that the budget would go to Jindal in time to require that any line-item vetoes be made before the session's final adjournment June 25. Lawmakers now must consider the remaining money bills -- which are tied to the larger spending plan -- without knowing what the bottom line will be after Jindal's review of the budget, or which of their pet projects he has preserved.

"I wanted to think about it and make an informed decision," Chaisson deadpanned about his strategic use of presiding officers' typically ceremonial role in signing bills before they are sent to the governor. "Why? Is there an issue?"

A Jindal spokesman said the governor's staff is not working this weekend and does not expect to receive the budget until Monday, 10 days before the session's final gavel.

State law gives the governor 12 days, when the Legislature is in session, to return veto messages. If that deadline comes before the session ends, it gives lawmakers a chance to override any vetoes and, in this case, would offer more context for considering other pieces of the fiscal puzzle.

The Legislature still has the option of calling a veto-override session in the summer if both chambers agree, but lawmakers have not taken that option since Louisiana's current constitution was ratified in 1974, and it would represent a marked departure for the House to buck Jindal.

A frustrated Tucker and an unapologetic Chaisson, who both assumed their leadership roles last year with Jindal's blessing, offered different interpretations of how the gamesmanship played out.

The speaker said the two leaders met Wednesday with their respective chambers' budget chairmen and top staffers to discuss differences between the two chambers' spending plans for the fiscal year that begins July 1.

The House version added money for higher education, health care and legislative earmarks from an insurance incentive fund and a proposed tax-amnesty program. Senators restored even more money for those areas, but made it contingent on approval of separate bills, which Tucker promises will not pass, to postpone a scheduled income tax break and tap the state's "rainy day" savings account.

Chaisson wanted to push the budget to a conference committee representing both chambers while angling continued on the other measures.

Tucker and House budget Chairman Jim Fannin essentially called the Senate's bluff by gathering 69 votes to move the bill to Jindal's desk. They told House members the remainder of the budget picture, including Jindal's promise to ease higher education cuts, can be settled in spending bills yet to pass.

"You would think the speaker would have asked whether I planned to sign the bill," Chaisson said of their discussions before the House vote.

Tucker said he had not decided at that time about the strategy of concurring in the Senate bill.

Efforts to reach Fannin, D-Jonesboro, and Senate budget Chairman Mike Michot, R-Lafayette, were not successful.

Chaisson said he later "communicated that (a delay) might be a possibility," but Tucker said he has not talked directly with the Senate president since the House vote.

Of Jindal and his aides' involvement in his latest move, Chaisson said, "I think they are pretty much on the sidelines."

The Senate president broke with the administration and House earlier this session when he announced his support for freezing income tax deductions as a way to shore up higher education. And he has blistered House members -- not including Tucker -- for signing a pledge to oppose that bill before it even cleared the Senate.

Sen. Robert Adley, R-Benton, said he and several other senators urged Chaisson to get the budget to Jindal quickly. Adley said Jindal's power is unnecessarily enhanced by delaying the opportunity to override vetoes until after final adjournment.

Chaisson disagreed. "I think the Senate has all the leverage. The bills that would fix the budget," including those that Fannin and Tucker touted to their members, "solidly rest within the purview of the Senate," he said.

Those measures would have to go back to the House before reaching Jindal, but senators could delay returning them to the lower chamber until the final hours of the session, too late for a conference committee compromise.

Tucker said any leverage Chaisson may believe he has secured for the freeze on income tax deductions is illusory. "I'm telling you right now that raising new revenue is not an option," Tucker said.

He declined to discuss House-Senate relations or his professional relationship with Chaisson, saying he wants to avoid a session "meltdown."

Chaisson is scheduled to present two budget-policy bills Monday before the House Appropriations Committee.

"It ought to be interesting," he said.

http://www.nola.com/news/index.ssf/2009/06/in_latest_legislative_maneuver.html

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Louisiana's former governors do an intervention with Bobby Jindal

The Times-Picayune | 06.13.09

by Jarvis DeBerry, Columnist, The Times-Picayune

To hear Louisiana officials complain about needing more industry even as they slash the budget for higher education is like hearing a guy who's desperate for a date vow to reduce his spending on toothpaste.

Just like an attractive woman has options beyond a dude with halitosis, an industry looking to build or expand has no reason to pursue a relationship with a state that can't be bothered to make itself presentable.

Bill Haber / The Associated PressFormer Louisiana Gov. Buddy Roemer, center, addresses a news conference at the state Capitol in Baton Rouge Thursday. Roemer is joined by, from left, former Gov. Kathleen Blanco, current Gov. Bobby Jindal, and former Govs. Mike Foster and Dave Treen in talking about the importance of finding ways to lessen cuts to higher education in the state budget.

However, this entire session of the Louisiana Legislature has pitted those who comprehend the value of a strong network of public colleges against those who maintain a philosophical opposition to all taxes. To the rigid anti-tax crowd, which unfortunately has included Gov. Bobby Jindal, spending on higher education is still spending. And spending is inherently wasteful. The word "investment" is not in their lexicon.

Not that Louisiana has properly positioned itself to avoid these battles. With a state Constitution that protects spending levels on just about everything else, higher education and health care are among the few places the budget can be slashed when hard times befall us. However, lawmakers have suggested additional taxes on cigarettes to help protect the state's health-care budget and the postponement of a scheduled income-tax break to protect the state's colleges. No dice, Jindal said, to both ideas.

Lower taxes, apparently, are preferable to both a healthier population and a smarter one, a strange position to hold for a governor who once ran the state's Department of Health and Hospitals and was later president of the University of Louisiana System.

Jindal's stubbornness earned him a Thursday visit from every former Louisiana governor who is not in prison: David Treen, Buddy Roemer, Mike Foster and Kathleen Blanco. The four came together in defense of the state's higher education system after Jindal seemed so determined to sacrifice the state's colleges to maintain his ideological purity by thoughtlessly slashing their budgets by 15 percent.

After the governors emerged from their meeting, Treen said cutting the money to colleges "would be devastating in my opinion."

"The worst this budget can do is gut our colleges and universities," Roemer said, "foreclosing us to a system of mediocrity."

Blanco challenged Jindal's idea that Louisiana has "got to do more with less," saying, "You cannot do more with less. That's an impossible task. You do less with less, and that drives us to mediocrity."

Foster, who first hired Jindal for the DHH position, masterfully spoke as if Jindal was not in opposition to his predecessors, but in lockstep with them. "I'm glad the governor agrees with us" that higher education is important, he said.

Jindal said he'd been convinced to cut the higher education budget by no more than 10 percent, that he believes higher education is important for economic development and quality of life and that Louisiana can't advance without a strong system.

He should show us he means that. As Roemer put it, "Lead, governor. We are prepared to follow."

Leadership, however, requires making tough choices. Heretofore, Jindal has shown the tendency to be more dogmatic than pragmatic, to hold fast to a position no matter the circumstances, no matter the consequences.

If he does what he told his predecessors he'd do -- cut no more than 10 percent from the state's higher education budget -- the state's colleges will still feel some pain, but not as much as it could have been. At the same time, Jindal will have demonstrated that he has "a persuadable mind," a compliment bestowed upon former Supreme Court Justice Sandra Day O'Connor.

And he'll have made his state more attractive to outside industry than an unyielding no-tax philosophy ever could. He'll have shown that when Louisiana says it wants outside attention, it doesn't skimp on those things that make it attractive.

http://www.nola.com/opinions/index.ssf/2009/06/jindals_peers_try_an_intervent.html

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Despite lean year, fat stays in state's budget

The Times-Picayune | 06.12.09

by Jan Moller, The Times-Picayune

BATON ROUGE -- It is a lean budget year in state government, with health care and higher education programs trying to stave off deep cuts as lawmakers grapple with a $1.3 billion drop in revenue.

But that has not stopped legislators from earmarking money for the Natchitoches Christmas Festival. Or the Bunny Friend Neighborhood Association, the New Orleans Oral School, the Northeast Louisiana Children's Museum and the village of Dry Prong.

Major state and regional projects

The projects -- and hundreds like them -- all are financed in the $28.7 billion budget bill sent to Gov. Bobby Jindal on Thursday. It is an annual rite of spring in Baton Rouge, jealously guarded by legislators who see it as a key part of their job to bring money back home to their constituents.

The earmarks survive despite annual criticism from government watchdogs and attempts by Jindal and others to add accountability and transparency to the process.

"It's almost business as usual, despite the toughest budget cycle in decades and the huge unmet needs in health care and higher education, " said Jim Brandt, president of the nonpartisan Public Affairs Research Council, which has long been a critic of earmarks.

"Some of these projects no doubt are extremely worthwhile . . . but the way they are funded is a problem, particularly given the state's dire need for operating capital."

$28 million in projects

The projects total at least $28 million and include earmarks for "nongovernmental organizations, " as well as cash grants to hundreds of towns, villages, parishes, councils on aging and similar local needs.

This year, however, the money could be in jeopardy, as the Senate added language to the budget bill that ties the "member amendments" to passage of other bills, including a controversial measure to postpone an income-tax break that stands little chance of passing. That means the earmarks might not get financed.

But House Speaker Jim Tucker, R-Algiers, said lawmakers are already looking for other spending bills they can use for the earmarks in case they do not stay in House Bill 1.

"The money is there. It's just a matter of which vehicle does the appropriating, " Tucker said.

Rep. Jim Fannin, D-Jonesboro, who is chairman of the budget-writing House Appropriations Committee and whose amendments include $150,000 for the Louisiana Political Hall of Fame in Winnfield, said the earmarks meet critical needs in rural areas, where local municipalities do not have the political clout of larger urban areas.

"Those of us in the rural areas don't have strong chambers (of commerce) to go down and lobby for money, " Fannin said. "We're the only representation. Rural areas contribute a lot to this state in severance tax, and at the same time we don't have any other way to bring it back."

Fannin admitted the process still functions like a spoils system, where members of the "money committees" get to control which amendments are added. Legislators who do not sit on the budget panels are forced to curry favor with their members.

New rules in effect

Under rules adopted last year, any nongovernmental organization applying for a state earmark must fill out a detailed request form, available for inspection on the Legislature's Web site, describing what the organization does, who is in charge and how the money will be spent.

Jindal, meanwhile, has informed legislators that any nongovernmental organization earmarks must also have a statewide or regional impact, must have been presented or openly discussed during the session and must be a priority of a state agency.

Using those guidelines, Jindal last year struck 258 projects totaling $16 million from the spending bill. But that still left more than $30 million in earmarks -- only slightly more than what is in next year's budget.

In addition to nonprofit groups, millions more gets steered to local governments, such as $300,000 to St. Charles Parish for land purchase for a boat launch on U.S. 90, or the $25,000 earmarked for the city of Gretna, with no details of how the money is supposed to be used.

Fannin said he has urged members to be careful about their amendments to avoid getting a veto.

"House members, I think, were very aware of what happened last year and wanted to work within the criteria and the guidelines to make sure they were not vetoed and were able to help the folks back home, " Fannin said.

Brandt said a better approach would be to set up a grant or loan program for local governments that would use objective criteria to decide which infrastructure projects get financed. Similarly, he said, nongovernmental organizations could be financed through a competitive grants process that would leave it open to all nonprofits, not just those with an influential friend on a money committee.

"There is a little bit more transparency this year, which is fine, but the system itself has not changed, " Brandt said.

http://www.nola.com/news/index.ssf/2009/06/despite_lean_year_fat_stays_in.html

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Obama urges doctors to back his health care plans

The Times-Picayune | 06.15.09

CHARLES BABINGTON

The Associated Press

(AP) — WASHINGTON - President Barack Obama continues to promote his health care proposals, urging doctors gathered in Chicago to support wider insurance coverage and targeted federal spending cuts.

Obama planned to tell the American Medical Association's annual meeting in his hometown on Monday that overhaul cannot wait and that bringing down costs is the most important thing he can do to ensure the country's long-term fiscal health, a senior administration official said.

The official spoke on the condition of anonymity to discuss the president's remarks before they were delivered.

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America's doctors, like many other groups, are divided over the president's proposals to reshape the health care delivery system.

About 50 million Americans are without health insurance. The government provides coverage for the poor and elderly, but most Americans rely on private insurance, usually received through their employers. However, not all employers provide insurance and not everyone can afford to buy coverage for themselves or pay medical bills out of pocket.

The White House anticipates heavy spending to cover uninsured Americans and has taken steps in recent days to outline just where that money could be found.

For instance, Obama wants to cut federal payments to hospitals by about $200 billion and cut $313 billion from Medicare and Medicaid, the government health programs for the elderly and poor. He also is proposing a $635 billion "down payment" in tax increases and spending cuts in the health care system.

To an audience of doctors Obama plans to say the United States spends too much on health care and gets too little in return. He says the health industry is crushing businesses and families and is leading to millions of Americans losing coverage, the administration official said.

Obama's turn before the 250,000-physician group in his latest effort to persuade skeptics that his goal to provide health care to all Americans is worth the $1 trillion pricetag it is expected to run during its first decade.

The president plans to acknowledge the costs, but also will tell the doctors it is not acceptable to a nation that leaves so many without insurance, the official said.

Unified Republicans and some fiscally conservative Democrats in Congress have signaled they are nervous about how the administration plans to pay for Obama's ideas.

Obama has been speaking privately with lawmakers about his ideas and publicly with audiences, such as a town hall-style meeting last week in Green Bay, Wisconsin, in the Midwest. Obama and his administration officials have blanketed the nation in support of his broad ideas, and Vice President Joe Biden on Sunday said it's up to Congress to pin down the details on how to pay for them.

"They're either going to have to agree with us, come up with an alternative or we're not going to have health care," Biden said on NBC television.

"And we're going to get health care."

In Chicago, the president's remarks are likely to focus on how his ideas might affect the medical profession.

His proposed cuts in federal payments would hit hospitals more directly than doctors, but physicians will be affected by virtually every change that Congress eventually agrees to. Many medical professionals are not yet convinced Obama's overhaul is the best for their care or their pocketbooks.

Broadly, the AMA supports a health care "reform"-a term that changes its definition based on who is speaking-although the specifics remain unclear.

In a statement welcoming Obama, AMA president Dr. Nancy Nielsen said the medical profession wants to "reduce unnecessary costs by focusing on quality improvements, such as developing best practices for care and improving medication reconciliation."

She also said doctors need greater protection from malpractice lawsuits and antitrust restrictions.

Many congressional Republicans, insurance groups and others oppose Obama's bid for a government-run health insurance program that would compete with private companies. On Sunday, Senate Republican leader Mitch McConnell described a government plan as a "nonstarter."

"There are a whole lot of other things we can agree to do on a bipartisan basis that will dramatically improve our system," McConnell said.

To that end, lawmakers were considering a possible compromise that involved a cooperative program that would enjoy taxpayer support without direct governmental control. The concessions could be the smoothest way to deliver the bipartisan health care legislation the administration seeks by its self-imposed August deadline, officials said.

"There is no one-size-fits-all idea," Health and Human Services Secretary Kathleen Sebelius said Sunday on cable network CNN.

"The president has said, 'These are the kinds of goals I'm after: lowering costs, covering all Americans, higher-quality care.' And around those goals, there are lots of ways to get there."

Momentum might be on Obama's side. Aaron Carroll, an Indiana University medical professor who has surveyed doctors' views on U.S. health care delivery, said 59 percent "favor government legislation to establish national health insurance," an increase over a previous poll's finding.

He noted that many doctors are not AMA members, and therefore the association's views should not be overrated.

http://www.nola.com/newsflash/index.ssf?/base/national-4/1245060284222590.xml&storylist=health

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Hospital Industry Bristles at Cuts

The Wall Street Journal | 06.15.09

By JANET ADAMY and JONATHAN D. ROCKOFF

Hospitals and other medical-industry groups are pushing back against President Barack Obama's proposal to cut $313 billion in government health spending as the White House intensifies its effort to revamp the nation's health system.

Mr. Obama will seek to build doctors' support for a health overhaul in a speech Monday to the influential American Medical Association in Chicago. He will make the case for controlling costs and expanding coverage, and he plans to detail more of what he wants to see in a government-run plan that would compete with private insurance companies, an administration official said Sunday.

Mr. Obama is pressing Congress to pass legislation to overhaul the country's health-care system by October. His plan would expand insurance coverage to the nation's 46 million uninsured, an effort estimated to cost at least $1 trillion over a decade.

Under pressure to amplify its payment plan, the White House on Saturday outlined $313 billion in additional spending cuts over that period to health-care providers paid through Medicare and Medicaid, the federal health programs for the elderly and poor. That would bring total cost savings and tax increases identified by the Obama administration to help pay for the overhaul to nearly $950 billion.

The sharp response from the hospital industry, which under the proposal faces reductions in subsidies exceeding $100 billion over 10 years, illustrates the administration's challenge in winning the deep concessions from industry needed to pay for the overhaul. After agreeing in May to contribute to a $2 trillion reduction in health spending over 10 years, the hospital industry is now bristling at the prospect of more givebacks -- this time, cuts that would be set in law.

"We're certainly disappointed," said Rich Umbdenstock, chief executive of the American Hospital Association, an industry group. "It will be very, very difficult for hospitals to live with cuts of that magnitude." He said what concerns the group is that the cuts were being laid out before lawmakers have agreed on concrete proposals for reducing the number of uninsured.

A spokeswoman for the White House Office of Health Reform said that as more Americans get insurance coverage, the need for the government to subsidize hospitals for covering the uninsured will decline.

The pharmaceutical industry recently has been negotiating with the White House and Congress over how much it would contribute to the cuts, said several people familiar with the negotiations. Drug companies were initially asked to contribute $100 billion over the next decade, but pressed for their contribution to be closer to $60 billion, they said. The industry argued that giving up too much in payments would cut into spending to develop new drugs.

"Otherwise we might all just become generic drug companies," said one industry official familiar with the talks. The White House on Saturday said it would save $75 billion over 10 years by paying better prices for drugs under the Medicare Part D prescription drug plan.

The Access to Medical Imaging Coalition, which represents makers of medical-imaging equipment, said the administration's proposed cuts "will impair access to diagnostic imaging services and result in patients' delaying or forgoing life-and-cost savings imaging procedures."

So far, the hospital association, as well as other major groups representing doctors, insurance companies and drug makers, support legislation aimed at expanding health-insurance coverage and putting the nation's health system on a more sustainable path. Such changes would benefit the industry by increasing their customer base through a fresh batch of insured Americans.

One hospital advocate said he saw the White House proposal as "trying to give cover to the Hill," as congressional committees work out final details of their health packages, including spending cuts to pay for it all.

"This takes some pressure off of them," the advocate said. If Congress were to propose less-severe reductions, interest groups could greet the plan with some relief, noting it could have been worse.

New York City offers a window into what could happen when payments to safety-net hospitals are cut. Already running at a deficit, the city's public hospital system is looking at $150 million in state Medicaid cuts for next year. Next month, it will close some outpatient services, such as community-based primary and preventive-care offices.

"We are in a position already where we are making painful decisions that require us to reduce access and services," said Alan D. Aviles, president and chief executive of the system, known as the Health and Hospitals Corp.

http://online.wsj.com/article/SB124502315952113941.html

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Wrong Way on Health 'Reform'

The Washington Post | 06.15.09

Robert J. Samuelson

It's hard to know whether President Obama's health-care "reform" is naive, hypocritical or simply dishonest. Probably all three. The president keeps saying it's imperative to control runaway health spending. He's right. The trouble is that what's being promoted as health-care "reform" almost certainly won't suppress spending and, quite probably, will do the opposite.

A new report from Obama's own Council of Economic Advisers shows why controlling health costs is so important. Since 1975, annual health spending per person, adjusted for inflation, has grown 2.1 percentage points faster than overall economic growth per person. If this trend continues, the CEA projects that:

-- Health spending, which was 5 percent of the economy (gross domestic product) in 1960 and is reckoned at almost 18 percent today, would grow to 34 percent of GDP by 2040 -- a third of the economy.

-- Medicare and Medicaid, the government insurance programs for the elderly and poor, would increase from 6 percent of GDP now to 15 percent in 2040 -- roughly equal to three-quarters of present federal spending.

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-- Employer-paid insurance premiums for family coverage, which grew 85 percent in inflation-adjusted terms from 1996 to $11,941 in 2006, would increase to $25,200 by 2025 and $45,000 in 2040 (all figures in "constant 2008 dollars"). The huge costs would force employers to reduce take-home pay.

The message in these dismal figures is that uncontrolled health spending is almost single-handedly determining national priorities. It's reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs. Worse, much medical spending is wasted, the CEA report says. It doesn't improve Americans' health; some care is unneeded or ineffective.

The Obama administration's response is to talk endlessly about restraining health spending -- "bending the curve" is the buzz -- as if talk will suffice. The president summoned the heads of major health-care groups representing doctors, hospitals, drug companies and medical device firms to the White House. All pledged to bend the curve. This is mostly public relations. Does anyone believe the American Medical Association can control the nation's 800,000 doctors or that the American Hospital Association can command the 5,700 hospitals?

The central cause of runaway health spending is clear. Hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, either private or governmental. The open-ended payment system encourages doctors and hospitals to provide more services -- and patients to expect them. It also favors new medical technologies, which are made profitable by heavy use. Unfortunately, what pleases providers and patients individually hurts the nation as a whole.

That's the crux of the health-care dilemma, and Obama hasn't confronted it. His emphasis on controlling costs is cosmetic. The main aim of health-care "reform" being fashioned in Congress is to provide insurance to most of the 46 million uncovered Americans. This is popular and seems the moral thing to do. After all, hardly anyone wants to be without insurance. But the extra coverage might actually worsen the spending problem.

How much healthier today's uninsured would be with that coverage is unclear. They already receive health care -- $116 billion worth in 2008, estimates Families USA, an advocacy group. Some is paid by the uninsured themselves (37 percent), some by government and charities (26 percent). The remaining "uncompensated care" is either absorbed by doctors and hospitals or shifted to higher private insurance premiums. Some uninsured would benefit from coverage, but others wouldn't. Either they're healthy (40 percent are between ages 18 and 34) or would get ineffective care.

The one certain consequence of expanding insurance coverage is that it would raise spending. When people have insurance, they use more health services. That's one reason Obama's campaign proposal was estimated to cost $1.2 trillion over a decade (the other reason is that the federal government would pick up some costs now paid by others). Indeed, the higher demand for health care might raise costs across the board, increasing both government spending and private premiums.

No doubt the health program that Congress fashions will counter this reality by including some provisions intended to cut costs ("bundled payments" to hospitals, "evidence-based guidelines," electronic recordkeeping). In the past, scattershot measures have barely affected health spending. What's needed is a fundamental remaking of the health-care sector -- a sweeping "restructuring" -- that would overhaul fee-for-service payment and reduce the fragmentation of care.

The place to start would be costly Medicare, the nation's largest insurance program serving 45 million elderly and disabled. Of course, this would be unpopular, because it would disrupt delivery patterns and reimbursement practices. It's easier to pretend to be curbing health spending while expanding coverage and spending. Presidents have done that for decades, and it's why most health industries see "reform" as a good deal.

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/14/AR2009061402444.html

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Health Plan May Mean Payment Cuts

The New York Times | 06.13.09

By SHERYL GAY STOLBERG and ROBERT PEAR

WASHINGTON — The White House said Saturday that President Obama intended to pay for his health care overhaul partly by cutting more than $200 billion in expected reimbursements to hospitals over the next decade — a proposal that is likely to provoke a backlash from struggling medical institutions around the country.

Mr. Obama has insisted that his plan will not add to the federal deficit. He had already set aside in his budget what he calls a $635 billion “down payment” toward the overall 10-year cost of the overhaul, expected to top $1 trillion. But Republicans and some Democratic legislators have been pressing him to provide details on how he would cover the rest. On Saturday, he used his Internet and radio address to do so.

Mr. Obama said he had identified “an additional $313 billion in savings that will rein in unnecessary spending and increase efficiency and the quality of care,” bringing the total to nearly $950 billion. He did not offer a specific breakdown, but advisers said that in addition to the more than $200 billion in lowered hospital reimbursements, the president expected $75 billion in savings over 10 years by getting better prices for prescription drugs, and $22 billion in other savings.

“These savings will come from common-sense changes,” Mr. Obama said in his address. “For example, if more Americans are insured, we can cut payments that help hospitals treat patients without health insurance.”

He added: “If the drug makers pay their fair share, we can cut government spending on prescription drugs. And if doctors have incentives to provide the best care instead of more care, we can help Americans avoid the unnecessary hospital stays, treatments and tests that drive up costs.”

Saturday’s announcement came amid an intense push by the White House to sell Mr. Obama’s health care plan, his highest legislative priority. Broadly speaking, Mr. Obama wants to extend coverage to the nation’s 45 million uninsured, preserve consumer choice and cut rising health care costs. He has argued that fixing the nation’s health care system is crucial to the economic health of the United States.

But as Congress contemplates the details of the legislation, the question of how to pay for the plan is among the thorniest it will face. Already, one of Mr. Obama’s early proposals — limiting tax deductions for high-income people — has run into major roadblocks on Capitol Hill. By providing details in his weekly address on Saturday, Mr. Obama may be hoping to give lawmakers the political leeway to adopt other cost-saving measures.

The administration expects to achieve the lowered hospital payments in two major ways, by slowing the growth of reimbursements. First, said Mr. Obama’s budget director, Peter M. Orszag, payments to hospitals will be reduced to try to encourage them to work more productively and efficiently.

Mr. Orszag said hospitals could figure out ways of treating patients “more effectively, through health information technology, a nurse coordinator instead of an unnecessary specialist,” for example. These “productivity adjustments” would account for $110 billion in savings.

Second, the administration expects to lower payments to hospitals that treat large numbers of low-income patients. Medicare and Medicaid make special extra payments to these hospitals, but Mr. Orszag said those payments would become less necessary over time, as more of the nation’s 45 million uninsured acquire coverage through the new program. This would account for $106 billion in savings.

But hospital administrators, already nervous about lowered reimbursements, are likely to oppose such cuts. Less than 24 hours before Mr. Obama’s radio address, the president of the American Hospital Association, Richard J. Umbdenstock, issued a call to action to his members across the country, warning that Congress might cut provider payments.

Mr. Umbdenstock asked hospitals to “push back” against the proposed cuts. “Payment cuts are not reform,” he said, denouncing “blunt cuts that cripple hospitals’ ability to do better for their patients.”

Dr. Patricia A. Gabow, chief executive of the Denver Health and Hospital Authority, which operates a 477-bed public hospital, said it would be “pretty risky” for Congress to cut payments to safety-net hospitals before knowing whether new legislation actually reduced the uncompensated care they must provide.

“What about homeless people, the chronically mentally ill, substance abusers and people with low literacy?” Dr. Gabow asked. “You think they will be using the federal health insurance exchange to enroll in insurance plans? I don’t think so.”

Kenneth E. Raske, president of the Greater New York Hospital Association, said the proposed cuts could be “devastating to hospitals that serve inner-city communities.”

Mr. Raske pointed out that none of the major proposals in Congress would provide health insurance to illegal immigrants, and many of them would still be unable to pay their hospital bills. In addition, he said, the federal payments will still be needed because “Medicaid woefully underpays for outpatient clinics” and other services in some states, including New York.

Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, intends to introduce his plan this week. Aides said it would include a proposal to tax some employer-provided health benefits, a notion that Mr. Obama sharply criticized during his campaign for the White House. Workers might, for example, have to pay income tax on the value of family coverage exceeding $15,000 a year.

Labor unions, many employers and many House Democrats oppose such a tax, saying it would destabilize the employer-based system of health insurance.

http://www.nytimes.com/2009/06/14/us/politics/14address.html

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McConnell: Fix health care system without overhaul

The Times-Picayune | 06.14.09

The Associated Press

(AP) — WASHINGTON - The Senate's top Republican says that lawmakers should focus on making the existing health care system work better before overhauling the way Americans receive treatment.

Senate Republican leader Mitch McConnell says that President Barack Obama's proposed health overhaul would result in massive government controls and would hurt the country.

The Kentucky Republican warns that if Obama gets his way, Americans would need government permission before receiving health procedures.

McConnell says that Obama's plan for a government health insurance program to compete with private insurance companies is a nonstarter for most Republican lawmakers.

McConnell appeared on CBS' "Face the Nation."

http://www.nola.com/newsflash/index.ssf?/base/national-4/124499841969600.xml&storylist=health

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Obama radio address: New cuts in federal health spending needed

The Times-Picayune | 06.13.09

Charles Babington, The Associated Press

WASHINGTON -- President Barack Obama is seeking to help pay for his health care plan by sharply reducing the government's medical spending, mainly by trimming payments to prescription drugmakers, hospitals and other care providers.

His ambitions are thick but the details thin; the president and his aides said specific ways for achieving the cuts will be decided later. The negotiations could trigger fierce political battles between powerful industries trying to protect their profits.

Overhauling the nation's health care system is one of Obama's biggest ambitions, and lawmakers are working on a variety of plans. A top goal is to reduce costs in the government's largest medical programs, Medicare and Medicaid, which cover millions of elderly and low-income Americans and involve thousands of doctors, hospitals, nursing homes and other institutions.

In his weekly Internet and radio address Saturday, Obama proposed cutting $313 billion from the programs over 10 years. That's in addition to the $635 billion "down payment" in tax increases and spending cuts in the health care system that he announced earlier.

Together, Obama's plans would provide $948 billion over a decade in savings and/or tax increases to help cover the millions of Americans who lack medical insurance and to slow the rate of soaring health care costs.

The status quo is unacceptable, Obama said. "America spends nearly 50 percent more per person on health care than any other country."

The newly proposed $313 billion in savings, he said, "will come from commonsense changes."

He would cut $106 billion from payments that help hospitals treat uninsured people because his plan would cover nearly every American. Payments for Medicare prescription drugs would fall by $75 billion over 10 years.

And slowing projected increases in Medicare payments to hospitals and other providers -- but not doctors -- would save $110 billion over 10 years, the president said. His budget director, Peter Orszag, said the reductions are justified because health care delivery is becoming more efficient.

But Orszag and Obama acknowledged that many details remain to be worked out. Obama said simply, "If the drugmakers pay their fair share, we can cut government spending on prescription drugs."

A White House fact sheet said the pharmaceutical industry "has committed itself to helping to control the rate of growth in health care spending. There are a variety of ways to achieve this goal."

For instance, it said, drug reimbursements might be reduced for people who receive both Medicare and Medicaid.

But the pharmaceutical industry is politically powerful. Drugmakers have successfully resisted price controls in the Medicare prescription program so far, arguing that competition is enough to get elderly Americans a good deal.

Other government programs, however, such as Medicaid and the Veterans Affairs health system, may be paying less for many of the same drugs.

Billy Tauzin, president of the Pharmaceutical Research and Manufacturers of America, issued a noncommittal statement.

"We remain committed to working with the administration and Congress to help enact comprehensive health care reform this year," he said. "A lot of work remains to be done, but we will continue to share ideas and seek solutions."

Lobbyists for hospitals, doctors and many other players also have clout in Washington, complicating Obama's mission.

Even if Obama and Congress could hit the overall goal of $948 billion in health care savings over 10 years, it still might not be enough to cover the nearly 50 million uninsured Americans. Outside experts say the 10-year cost could range from $1.2 trillion to $1.8 trillion, depending on factors such as how generous federal subsidies turn out to be. One Senate proposal would subsidize families making as much as $110,000.

The administration wants to hold the cost to about $1 trillion, and Obama says the plan must not add to the federal deficit.

Orszag told reporters that $950 billion "is in the ballpark of many of the proposals floating around," and that "there may well be some additional resources that are necessary."

The administration will work with Congress, he said. But the president's earlier package of $635 billion in spending cuts and tax increases has gotten a cool reception from lawmakers, and there's no indication the latest package will fare any better.

Medical providers from hospitals to doctors to drug makers have agreed with Obama that there's enough waste in the system to cut $2 trillion over 10 years, but behind-the-scenes they are preparing to resist specific cuts.

http://www.nola.com/news/index.ssf/2009/06/obama_radio_address_new_cuts_i.html

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Following the Money in the Health Care Debate

The New York Times | 06.13.09

By REED ABELSON

Luba Lukova

Congress appears ready to confront one of the nation’s most contentious issues — health care reform — and arguments will fill the air in the coming months.

Much of the discussion so far has focused on President Obama’s proposal for a government-sponsored health plan that he says will reduce costs. Insurers and doctors argue it will limit patient choice. Drug companies warn that the quality of care could be compromised.

But Mr. Obama’s proposal is only one of many that await Congress as it wrestles with how to rein in exploding health care costs while taking care of the country’s nearly 50 million uninsured. The size and complexity of the issue are daunting. To help understand what’s going on, you need to follow the money.

Roughly $2.5 trillion is at stake, the amount the nation spends each year on health care, nearly a fifth of the American economy. How that money is divided up — or prevented from rising at its current pace — is at the center of the debate. Many doctors, insurance companies and drug companies say they fear that their revenues could shrink significantly and patient care could be threatened.

Their arguments may prove to have merit. But “people are voting with their own economic interests,” said Les Funtleyder, a Wall Street analyst who is following the debate closely for Miller Tabak & Co. in New York.

When you hear nothing from one of the interest groups on an issue that is part of the larger debate, you can assume the silence means it has no financial stake in the outcome, he said. “You wouldn’t probably weigh in if you don’t have any skin in the game because if you weigh in, it makes you more of a target,” Mr. Funtleyder said.

What all of the interest groups reliably support is any new program that would expand coverage to the uninsured. Such a program would translate into tens of millions of new, paying customers for hospitals, doctors, insurers and drug makers.

But what worries those groups is the accompanying talk in Washington about how to address the skyrocketing cost of health care, since any decline in spending would correspond to a reduction in revenues. The discussion has become particularly heated over exactly how the government will find the savings necessary to help generate the $1 trillion or so that the government will need over the next decade to pay for universal coverage. The nation’s doctors, for example, say they wholeheartedly support health care reform. But the American Medical Association has a long history of being opposed to legislation that threatens the status quo. It opposed the creation of Medicare more than 30 years ago.

What concerns doctors about a government-run insurance program that looks like Medicare is the possibility that it will pay like Medicare, said Robert Laszewski, a health policy consultant in Alexandria, Va. “Medicare pays doctors 80 percent of what an insurance company pays,” he said. “If you get a public plan, the doctors are going to get a 20 percent pay cut.”

But doctors are also likely to disagree among themselves over how different types of physicians should be compensated. Congress is thinking about raising the pay of primary-care doctors — general practitioners, family physicians and the like — as a way to encourage them to more actively oversee the care of patients and reduce expensive visits to specialists and hospitals.

The specialists — the cardiologists, neurologists, surgeons and others — may have a different take on the discussion, Mr. Laszewski noted, especially if Congress cannot raise salaries of primary-care doctors without taking money from the highly paid specialists. “The question is, how are you going to help the primary-care doctors without cutting the cardiologist and the other specialists?” he asked.

But even the family physicians, who stand to benefit the most, say they are opposed to a government-run plan if it reimburses them at the Medicare rate.

Another group with a lot to win or lose is the nation’s private health insurers. With the number of people who are privately insured through their employer or their own policy not increasing, insurers are eager to find a new source of business. Health reform promises them at least some new customers who cannot afford insurance now but who might receive government help to pay for coverage.

But the trade association, America’s Health Insurance Plans, has clearly staked out its opposition to any kind of government-run health plan, which it says would have an unfair advantage. The trade group fears its members would be driven out of business as the government uses its purchasing power to demand much lower prices from doctors and hospitals.

Karen Ignagni, the chief executive of the association, has criticized the government’s track record in running Medicare as a good reason not to expand government health insurance beyond the elderly and disabled. She says the program has done a poor job in taking care of people when they are very sick. “Medicare has not effectively coordinated care, addressed chronic illness, or encouraged high performance,” she recently told Congress.

As one way of finding savings to pay for health reform, Congress is also discussing lowering payments to private insurers who are now being compensated to cover some Medicare patients. The A.M.A., perhaps mindful that such savings would not come from doctors if it comes from insurers, says it supports such cuts.

The hospitals have also voiced concerns about a government-run plan. They, too, are paid much less by Medicare than they are by private insurers.

The nation’s drug makers are also lining up against a public plan, predicting that it would ultimately lead to a government takeover of the entire system. “I don’t think that American patients would — or should — accommodate themselves to the long waits for care, limited options and other forms of rationing that inevitably accompany government health care monopolies,” John C. Lechleiter, the chief executive of the drug maker Eli Lilly & Co., recently told a meeting of business leaders. “American doctors and patients need to retain the ability to make choices based on the real value of treatment options.”

But drug companies are also wary of the government’s pull in demanding lower prices for their products than the insurers they deal with today. “The more government intervention you have, the less payment you have,” said Mr. Funtleyder, the analyst.

These companies are also concerned that the government will play a greater role in determining the effectiveness of different drugs and medical devices and use that information to decide which should be covered and how much the government will pay for those products. Insurers, not surprisingly, support the government’s taking a harder line against drug and medical device makers so they don’t have to.

As Congress gets closer to finalizing any legislation, the opinions of the many stakeholders are likely to become more strident and self-interested, Mr. Laszewski predicted. As in watching the last lap of the Daytona 500, he said, there will be attempts by some of these groups to break out of the pack. “When you get the last lap, there are no friends — it’s me, me, me,” he said.

http://www.nytimes.com/2009/06/14/weekinreview/14abelson.html?_r=1&ref=health

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Something’s Got to Give in Medicare Spending

The New York Times | 06.13.09

By TYLER COWEN

MEDICARE expenditures threaten to crush the federal budget, yet the Obama administration is proposing that we start by spending more now so we can spend less later.

This runs the risk of becoming the new voodoo economics. If we can’t realize significant savings in health care costs now, don’t expect savings in the future, either.

It’s not the profits of the drug companies or the overhead of the insurance companies that make American health care so expensive, but the financial incentives for doctors and medical institutions to recommend more procedures, whether or not they are effective. So far, the American people have been unwilling to say no.

Drawing upon the ideas of the Harvard economist David Cutler, the Obama administration talks of empowering an independent board of experts to judge the comparative effectiveness of health care expenditures; the goal is to limit or withdraw Medicare support for ineffective ones. This idea is long overdue, and the critics who contend that it amounts to “rationing” or “the government telling you which medical treatments you can have” are missing the point. The motivating idea is the old conservative chestnut that not every private-sector expenditure deserves a government subsidy.

Nonetheless, this principle is radical in its implications and has met with resistance. In particular, Congress has not been willing to give up its power over what is perhaps the government’s single most important program, nor should we expect such a surrender of power in the future. There is already a Medicare Advisory Payment Commission, but it isn’t allowed to actually cut costs.

Scholars have been applying comparative-effectiveness research to Medicare for years, and the verdict is not altogether pretty. It turns out that some regions spend more on Medicare than others — sometimes two or three times as much, as documented by the Dartmouth Atlas Project. Yet the higher-spending regions often fail to produce superior health care results.

Robin Hanson, professor of economics at George Mason University, surveys evidence demonstrating the ineffectiveness of many medical expenditures in his 2007 paper, “Showing That You Care.”

If we are willing to take comparative-effectiveness studies seriously, we could make significant cuts in Medicare costs right now. We could cut some reimbursement rates, limit coverage for some of the more speculative treatments, like some forms of knee and back surgery, and place more limits on end-of-life-care.

Those cuts alone will not solve the fiscal problem, but if we aren’t willing to take even limited steps to conserve resources, we shouldn’t be spending any more money elsewhere.

Of course, we have not made such Medicare spending cuts yet, and there are few signs that we will. A Kaiser Family Foundation poll found that 67 percent of Americans believe that they do not receive enough treatment and that only 16 percent believe that they have received unnecessary care. If the Obama administration covers more people with government-supplied or government-subsidized insurance, the political support will broaden for generous benefits, their continuation and, indeed, expansion of current expenditures.

Suggested ways to lower costs include an emphasis on preventive care, the use of electronic medical records and increased competition among insurers. But even if these are likely to improve the quality of care, they are speculative and uncertain as cost-saving measures. Keep in mind that while computers were remarkably powerful inventions, it took decades before they showed up in the statistics as having improved productivity in the workplace.

One idea embodied in a bill sponsored by Senator Ron Wyden, Democrat of Oregon, and Senator Robert F. Bennett, Republican of Utah, is to finance new health care programs by taxing health insurance benefits. This makes sense in principle: why should insurance benefits be favored over salary by our tax system? But employer-supplied insurance is a mainstay of the current health care system, and there is no adequate replacement immediately in sight.

IT’S also hard to convince the American public that the solution to insufficient health insurance is to tax health insurance. And such a one-time tax increase would postpone but not eliminate the need to come to grips with ever-rising Medicare costs.

It sounds harsh to suggest that the Obama administration cut areas of Medicare spending, but, too often, increased expenditures and coverage are confused with good health care outcomes. The reality is that our daily environment, our social status and our behavior — including diet and exercise — have more to do with good health than does health care more narrowly defined.

The demand for universal coverage sounds like a moral imperative to “take care of everybody,” but in reality it would make only a marginal difference when it comes to the overall health of the American population. The sober reality is that universal coverage is another way to spend money, which may or may not be a good idea.

The most likely possibility is that the government will spend more on health care today, promise to realize savings tomorrow and never succeed in lowering costs. It is rare that governments successfully cut costs by first spending more money.

Mr. Obama has pledged to be a fiscally responsible president. This is the biggest chance so far to see whether he means it.

Tyler Cowen is a professor of economics at George Mason University.

http://www.nytimes.com/2009/06/14/business/economy/14view.html?ref=health

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Medical Problems Could Include Identity Theft

The New York Times | 06.12.09

By WALECIA KONRAD

Brandon Sharp, a 37-year-old manager at an oil and gas company in Houston, has never had any real health problems and, luckily, he has never stepped foot in an emergency room. So imagine his surprise a few years ago when he learned he owed thousands of dollars worth of emergency-service medical bills.

Mr. Sharp, as it turned out, was a victim of a fast-growing crime known as medical identity theft.

At the time, Mr. Sharp was about to get married and buy his first home. Before applying for a mortgage he requested a copy of his credit report. That is when he found he had several collection notices under his name for emergency room visits throughout the country.

“There was even a $19,000 bill for a Life Flight air ambulance service in some remote location I’d never heard of,” said Mr. Sharp, who made this unhappy discovery in 2003. “I had emergency room bills from places like Bowling Green, Kan., where I’ve never even visited. I’m still cleaning up the mess.”

The last time federal data on the crime was collected, for a 2007 report, more than 250,000 Americans a year were victims of medical identity theft. That number has almost certainly increased since then, because of the increased use of electronic medical records systems built without extensive safeguards, said Pam Dixon, executive director of the nonprofit World Privacy Forum and author of a report on medical identity theft.

And uncountable, Ms. Dixon said, are the people who do not yet know they are victims. They may not know that their medical information has been tampered with for months or even years until, as in Mr. Sharp’s case, it shows up in collections on a credit report.

Medical identity theft takes many guises. In Mr. Sharp’s case, someone got hold of his name and Social Security number and used them to receive emergency medical services, which many hospitals are obliged to provide whether or not a person has insurance. Mr. Sharp still does not know whether he fell victim to one calamitous perp who ended up in several emergency rooms or a ring of accident-prone conspirators.

In another variant of the crime, someone can use stolen insurance information, like the basic member ID and group policy number found on insurance cards, to impersonate you — and receive everything from a routine physical to major surgery under your coverage. This is surprisingly easy to do, because many doctors and hospitals do not ask for identification beyond insurance information.

Even more common, however, are cases where medical information is stolen by insiders at a medical office. Thieves download vital personal insurance data and related information from the operation’s computerized medical records, then sell it on the black market or use it themselves to make fraudulent billing claims.

In a widely reported case in 2006, a clerk at a Cleveland Clinic branch office in Weston, Fla., downloaded the records of more than 1,100 Medicare patients and gave the information to her cousin, who in turn, made $2.8 million in bogus claims.

When people are not aware their medical identities have been stolen, insurance companies may simply continue to pay the fraudulent claims without the victim’s knowledge. The person might learn of the fraud only when trying to make a legitimate claim, and the insurance company informs them they have reached their lifetime cap on benefits.

Or victims may eventually discover erroneous information in their medical files during a doctor or hospital visit. And that may pose a bigger danger than the financial risks. The medical records may now contain vital information like blood type, allergies, prescription drug use or a history of disease that is just plain wrong. In an emergency, doctors could treat you based on this erroneous information.

And there are none of the consumer protections for medical identity theft victims that exist for traditional identity theft. Under the Fair Credit Reporting Act you can get a free copy of your credit report each year, put a fraud alert on your account and get erroneous charges deleted from your record. If your credit card is stolen and the thief goes on a spending spree, you’re not liable for more than $50 worth of the charges.

With medical identity theft, though, the fraudulent charges can remain unpaid and unresolved for years, permanently damaging your credit rating. Under the federal law known as Hipaa — the Health Insurance Portability and Accountability Act — you are entitled to a copy of your medical records, but you may have to pay a hefty fee for them.

Worse, Hipaa privacy rules can actually work against you. Once your medical information is intermingled with someone else’s, you may have trouble accessing your files. Privacy laws dictate that the thief’s medical information now contained in your records must be kept confidential, too.

Even when you are able to correct a record, say in your doctor’s office, the erroneous information may have been passed on to dozens of other health care providers and insurers. Victims must track down and resolve these errors largely on a case-by-case basis, Ms. Dixon says.

Medical providers contend that they are taking precautions against identity theft. At Cleveland Clinic, for example, security personnel routinely audit electronic medical record systems and all records are password-protected. Many Blue Cross Blue Shield insurers use software to screen for spikes in claims from providers that look suspicious. They also work with providers on encrypting medical files and carrying out data access restrictions, said Calvin Sneed, senior antifraud consultant at the Blue Cross and Blue Shield Association.

And some medical centers and doctors’ offices now require patients to show photo ID and attach photos to patient charts.

But privacy advocates worry that these steps do not go nearly far enough, especially in light of President Obama’s plans to spend $20 billion to increase the use of electronic medical records nationwide as part of the stimulus package. “Without aggressive safeguards, we could be building an infrastructure for massive medical fraud,” said Ms. Dixon.

http://www.nytimes.com/2009/06/13/health/13patient.html?ref=health

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