Obama's First Budget Shows Commitment to Health Reform

In his first address to a joint session of Congress, President Barack Obama pledged a “historic commitment to comprehensive health care reform” that aims to reduce costs and expand access to “quality, affordable” health care for all Americans.

“The cost of health care eats up more and more of our savings each year, yet we keep delaying reform,” Obama told members of Congress on February 24.

Obama's recently submitted proposed federal budget for Fiscal 2010 shows his determination to follow through on campaign promises to expand access to health care. He described his budget as building on the enactment of legislation in the first weeks of the new Congress that expanded access to the State Children's Health Insurance Program to 4 million more children of the working poor and unprecedented funding to transition toward the use of digital medical records (see Incentive Payment Will Go to M.D.s Who Adopt Electronic Records).

The health reform provisions of the proposed budget—which include broad goals and few health care line items—will act as a “down payment on the principle that we must have quality, affordable health care for every American,” said Obama, by addressing inefficiencies in the health care system to help reduce future deficits.

The budget calls for setting aside $634 billion over the next 10 years in a“ reserve fund for health care reform” to expand government-subsidized health coverage The expansion would be funded from taxes on high-income earners and from cuts in Medicare payments to insurance companies, hospitals, and insurers.

The reserve would be used to fund affordable insurance programs for individuals and employers. It also would help finance disease prevention, wellness programs, and research on cost-effective treatments that aim to cut health care costs.

One item that could particularly impact physicians is the proposed budget's assumption that Congress will refrain from cutting Medicare clinician payments scheduled to occur under current law, including a 21 percent reduction planned for 2010.

“Widespread physician shortages coupled with aging baby boomers highlight the urgent need for permanent Medicare physician payment system reform to preserve seniors' access to health care,” said Nancy Nielsen, M.D., president of the AMA, in a statement regarding Obama's proposed budget.

The president's budget also would expand eligibility for Medicaid benefits while requiring drug companies to give bigger discounts, or rebates, to Medicaid and saving $37 billion over the next decade from payments to home health agencies.

The president said his plan will unfold through discussions with the public and various health care groups.

“Now, there will be many different opinions and ideas about how to achieve reform, and that is why I'm bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week,” Obama said in his February address.

“The passage of health insurance parity and the elimination of the discriminatory Medicare copay for mental health care are landmarks in the evolution of American health care,” APA President Nada Stotland, M.D., M.P.H., commented to Psychiatric News about Obama's proposal.“ Efforts to reform the health care system as a whole, however, have been politically challenging. That makes it especially exciting to see the commitment of the Obama administration both to reform and to the full inclusion of psychiatric care. I hope that we will see incentives for the integration of psychiatric care with all the other medical care our patients need, and that we will see real incentives—not just rhetoric—to attract medical students into relatively low-income medical specialties like family medicine, general internal medicine, geriatrics, and psychiatry. APA is ready, willing, and able to work with the new administration to bring these good intentions to fruition.”

The president's plan comes as a growing number of congressional leaders and health care advocates have begun pushing for action to overhaul the health care system and expand access sooner than the 2010 timeframe congressional leaders had previously planned.

Sen. Max Baucus (D-Mont.), chair of the Senate Finance Committee and a leader of health reform efforts, said several elements in the president's budget are consistent with his health care reform goals released late last year. They include provisions to base hospital and clinician payments on high-quality outcomes and to eliminate waste, fraud, and abuse in the system.

“We can and must achieve comprehensive health care reform this year, and this budget gives us a launching pad to move forward,” Baucus said in a written statement.

The president's address at the joint session of Congress is posted at<www.whitehouse.gov/the_press_office/Remarks-of-President-Barack-Obama-Address-to-Joint-Session-of-Congress/>.▪