Stimulus Bill and Healthcare Reform

As reported extensively in the press, earlier this week President Obama signed into law the stimulus bill (H.R. 1, the American Recovery and Reinvestment Act of 2009). It is important to understand that the bill, which has been the subject of debate regarding what it will do and when to stimulate the economy, actually unveils President Obama’s commitment to make healthcare reform a national priority. That is because the bill has specific provisions that legislate the following healthcare initiatives:


• Provides $17 billion in additional Medicare/Medicaid payments to physicians and hospitals that adopt information health technology.

• Launches Comparative Effectiveness Research, which is intended to compare the relative effectiveness of treatments for particular medical conditions, by creating a 15-member council to report annually on comparative effectiveness and by providing $1.1 billion in preliminary funding.

• Creates a $1 billion prevention and wellness fund.

• Significantly expands the HIPAA Privacy Rule and Security Standards.

In total, the $789 billion stimulus bill contains a significant $130 billion in new healthcare spending. In addition to the items above, there is $87 billion in increased state funding for federal medical assistance payments, $24.7 billion in COBRA subsidies, and $10 billion in funding for the National Institutes of Health (NIH).

Some suggest that the President’s resolve to reform healthcare will be slowed until he fills the Health and Human Services (HHS) Secretary position and appoints a Director to the newly created White House Office of Health Reform. However, dedicating 16% of the economic stimulus legislation to healthcare issues sends a pretty strong message that healthcare reform is a top priority of the new Administration and Congress.

What are the Health IT provisions?

Basically, the $17 billion in funding would provide between $41,000 and $64,000 in payments to physicians, and about $2 million in payments to hospitals, for meaningful use of electronic health records. There is no upfront funding for capital costs of acquiring hardware/software, payments will not start until 2011, and there will be penalties starting in 2015 for providers not adopting and using electronic health records. Of course, the devil is in the details of just what constitutes meaningful use of the technology. Specifics will be forthcoming when the Center for Medicare & Medicaid Services (CMS) initiates their formal rule-making process, which will allow interested parties an opportunity to comment and provide input.

The Community Oncology Alliance (COA) will be providing more information as it becomes available from CMS, which is not expected until later in the year.

Where is Comparative Effectiveness Research heading?

The $1.1 billion appropriated in the stimulus bill to undertake comparative effectiveness research (CER) provides $400 million in funding to HHS, $400 million to NIH, and $300 million to the Agency for Healthcare Research and Quality (AHRQ). Once again, the specifics need to be ironed out. Several reports are required in 2009 outlining operating procedures and research priorities, which will consider the input of stakeholders; however, it is unclear at this time exactly how this process will work.

There is already heated debate between the political parties, and even among stakeholders, about where CER is heading. Obviously, having unbiased clinical information to help physicians make more informed decisions would be a positive. However, there are those who believe that this is clearly aimed at cost effectiveness and the government dictating medical treatment. There is a very slippery slope heading from well-intentioned input on clinical comparative effectiveness to the UK NICE model that dictates coverage of treatment based simply on cost effectiveness.

COA will be providing much more information on CER as it becomes available. We will be very involved in the shaping of policy on CER and ensuring that any output from this is used to enhance the quality of cancer care, rather than to dictate the lowest cost treatment.

In the next email we will discuss the implications for community oncology and the aggressive COA legislative agenda. We will leave you with the thought that being engaged with your Members of Congress and policymakers is more important than ever. As seen by the funding for health IT and comparative effectiveness in the stimulus bill, general healthcare reform is already underway. The next step is specifically changing how Medicare reimburses for cancer care. The proactive, strong, and unified voice of community oncology is more important than ever in regaining appropriate reimbursement (Medicare and private pay) for cancer care and in holding off any further damaging cuts.