News / 

HealthBiz: Healthcare takes a back seat

Estimated read time: 8-9 minutes

This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

WASHINGTON, Dec 07, 2004 (United Press International via COMTEX) -- Healthcare will not be on the front burner during President George Bush's second term.

There are things he would like to do, of course -- malpractice reform, tax credits for insurance, and enhancing health savings accounts -- and perhaps he will get some help from Republican additions to the House and Senate, but don't look for any major piece of legislation like the Medicare Modernization Act of 2003 that sets the stage for prescription drugs to be covered or for taking the senior health insurance program down the road to privatization.

There are things Republicans in Congress probably will push through -- tinkering with Medicare payment rates to providers topping the list -- to whittle away, perhaps only in a token fashion, at the deficit. Congress has made a hobby out of doing just that over the years, giving to providers in election years only to take back in non-election years when budgets are tight.

"During the last political campaign, John Kerry made healthcare the number one domestic issue. George Bush did not. George Bush won," said Henry Aaron, a senior fellow at the Brookings Institution in Washington. "That I think tells us a fair bit about what the relative standing of healthcare will be during the next four years."

Aaron, addressing a Brookings forum on Bush's domestic policy, said the president made the prescription drug benefit his first term priority to bolster his claim he was a compassionate conservative.

"It worked. John Kerry was never able to gain much footing during the campaign with the issue of healthcare," he said, "in large part I think because President Bush could turn and face him and say, 'You talk healthcare. I did it.'"

All the talk about healthcare costs during the political season also was just that -- talk. There is nothing on the horizon to deal seriously with rising healthcare costs -- which are being pushed by technology costs but not malpractice.

Legislation to create non-economic damage caps in malpractice cases was stymied successfully by Democrats in the Senate. Even if it were to pass, it would not have a big effect on healthcare spending. It may reduce damage awards, but it does not deal with systemic problems in the legal system, nor does it necessarily mean premiums for healthcare providers are going to decrease dramatically.

"The question is what's driving technology," said Joe Antos, an analyst with the American Enterprise Institute in Washington. "By the way, we can't be too much against improving technology, because that's one of the things that keeps us alive and healthier while we're living longer."

Bush is pushing to make health insurance more affordable by shifting around the money pots -- giving people rather than employers more control over their healthcare dollars, but potentially also asking them to spend more. It might also save money -- say 10 percent -- for employers but, not enough is known about how consumers will treat their health savings accounts to say for sure.

Bush would like to expand the HSA program to encourage small business to offer the option. There also are some HSA supporters who push the idea that employers should make the accounts mandatory -- removing any other insurance options.

That idea has not taken hold, however. Business still is just getting its feet wet offering HSAs as an option -- but it presents some interesting possibilities.

What would happen if employers moved to make HSAs mandatory and Bush was able finally to win his battle in Congress for tax credits? Aaron said credits could result in fewer people buying health insurance.

"I fear that many employers will take this as a signal that they can get out of a business that really isn't their business in the first place, going through the administrative pain and suffering of dealing with rising healthcare costs and disgruntled employees," he said. "The employers can simply give employees an initial wage increase representing their current cost of insurance, and then employees will be free either to buy or not to buy insurance on their own. Many will. I fear too many will not."

The same could be said for HSAs. Employers certainly can contribute to an employee's HSA, but there is no guarantee the employee will use that money. He or she may forego needed medical care in an effort to let the money sit and collect interest, a strategy that could backfire in the form of more serious and costly medical conditions in the future. A healthy twenty-something also may be as unlikely to purchase an HSA as he or she is to buy into the company group plan -- any money spent on healthcare might be considered a waste.


Republicans gave drug reimportation lip service during the months leading up to the election, but the issue is not likely to go anywhere during Bush's second term.

Outgoing Health and Human Services Secretary Tommy Thompson went so far as to say publicly that reimportation was inevitable and advised President Bush not to stand in the way. The blunt-speaking former Wisconsin governor said early on he was not staying for a second term and this past week he made clear his many and substantial differences with the White House.

Much respected for his tough but innovative stand on welfare reform in the Badger State, Thompson early on irked the White House and entertained reporters with his candid stories and his plain-speaking but independent views.

Others in the administration and GOP, however, want nothing to do with reimportation -- they say it is a safety issue, while critics complain the GOP is in the pocket of the pharmaceutical industry.

The odds-on favorite to replace Thompson, Centers for Medicare and Medicaid Services Administrator Dr. Mark McClellan, has stayed on message regarding the issue and is very much a Washington player, given his experience in other White House jobs and as head of the Food and Drug Administration.


The White House appointed Dr. David Brailer to help prod a slow-moving healthcare industry to adopt electronic records and integrate information technology from the bottom up. At the top, however, the Capitol Hill apparently did not get the message, because Congress axed $50 million from the recently agreed-to budget for money for the fledgling federal program -- mainly structured around pilot programs, standardization efforts and other small incentives for healthcare to invest in IT.

A statement from the Information Technology Association of America questioned President Bush's priorities.

"The industry and the American people at large are wondering where the president's priorities really lie if the White House cannot hold the line on a modest amount of seed funding for an initiative he touted regularly on the campaign trail," said ITAA President Harris N. Miller.

Earlier this year, the Department of Health and Human Services held summits and made a big deal out of a 10-year plan to transform the delivery of healthcare -- to provider better care, better safety and to save money.

ITAA has projected an industry-wide investment in IT of $18.1 billion would yield gross savings of greater than $120 billion for the healthcare industry over a six-year period.


The American Hospital Association is slogging its way through a slew of lawsuits filed against the organization and non-profit hospitals across the country. Mississippi lawyer Richard Scruggs took on the hospitals over providing charity or indigent care.

The AHA reports a federal court in Northern California has ordered all federal claims dismissed against Sutter Health, while a federal court in Michigan did the same for William Beaumont Hospital.

This week, four other non-profit cases will come up. The U.S. District Court for Arizona hears motions to dismiss in a case filed against Banner Health, the U.S. District Court for Northern Florida will hear motions to dismiss in the cases of Sacred Heart Health System Inc. and Ascension Health, and in a case filed against Baptist Hospital Inc.


The DC Appleseed Center for Law and Justice in Washington, an independent non-profit advocacy organization, reports

Group Hospitalization and Medical Services Inc. -- D.C.'s CareFirst Blue Cross Blue Shield affiliate -- is not meeting its legally required charity care obligations.

GHMSI is the largest health insurance company in Washington, earning $2 billion in premiums in 2003 and having some $400 million in surplus. The center claims GHMSI should be spending from $41 million to $61 million this year on charitable care, but actually is only spending about $1 million -- less than one-tenth of 1 percent of its assets.


Pharmaceutical companies spend more than $25 billion each year promoting new drugs and giving out free samples to physicians -- but getting doctors to prescribe one drug over another is not easy, a study released Tuesday by the University of Washington has found.

Researchers looked at three widely prescribed drugs issued by some 74,000 physicians over two years. A visit between a pharmaceutical rep and a physician may take up to five minutes and the study found, on average, it takes up to seven visits and from 6.5 to 73 additional free samples to induce just one new prescription.

These tough-sell doctors are more likely to be influenced in their prescribing choices by peer-reviewed research, advice from colleagues or their own training -- which they view as more trustworthy sources of information.



Copyright 2004 by United Press International.

Most recent News stories


Catch up on the top news and features from, sent weekly.
By subscribing, you acknowledge and agree to's Terms of Use and Privacy Policy.

KSL Weather Forecast