The committee is nearly assembled with 9 of the 12 members having been announced.  From the Senate leaders selected Democrats Patty Murray (WA), Max Baucus (MT), John Kerry (MA) and Republicans Jon Kyl (AZ), Pat Toomey (PA) and Rob Portman (OH).  In the House: Republicans Jeb Hensarling (TX), Dave Camp (MI) and Fred Upton (MI) were nominated to serve.  House Democrats have not yet been selected, and must do so by August 16.

Once finalized, the committee will begin its work looking for spending reductions.  The commission must agree upon an adequate level of savings by November 23 when it will then seek support of the full Congress.  Congress must vote to approve the cuts by December 23 in order for the debt ceiling to be raised again.  However, should the committee fail to agree on cuts or successfully sell their proposal to Congress, then an automatic across-the-board cut will go into effect.  This would trigger an automatic $1.2 trillion cut to the federal budget.  Medicare cuts would be capped at 2 percent and Medicaid would be exempted from the cuts.

IHA continues to monitor the ongoing work in Washington, D.C. hospital advocates should stay tuned to the IHA Policy Blog for continuing coverage as more details unfold.

This week the so-called “Gang of Six” released a new proposal that is gaining traction.  Members include Senators Saxby Chambliss (R-GA), Tom Coburn (R-OK), Kent Conrad (D-ND), Mike Crapo (R-ID), Dick Durbin (D-IL) and Mark Warner (D-VA).

Their plan to seeks to reduce national deficit by nearly $4 trillion over 10 years and proposes billions in cuts from Medicare and Medicaid.  A few of members of the Gang of Six have yet to formally sign off on the framework but President Obama, after reviewing the proposal, added his support saying that proposal is on the right track concerning this issue.

The proposal seeks a two-part process with $500 billion in initial cuts followed by a process for congressional committees to pass a larger deficit reduction measure within 6 months.  Committees would be responsible for finding additional discretionary cuts and $800 – $900 billion in entitlement savings, as well as $1.1 trillion in new revenues.

The plan is unlikely to emerge in the short-term discussion of how to address the debt ceiling by August 2, though it could set up a series of short-term extensions giving Congress time to work on a larger measure.

The proposal comes on the heels of a party-line vote in the House this week on the bill referred to as the “cut, cap, and balance” legislation.  The 234-190 vote was backed by the freshmen “tea-party” caucus, even though it’s been widely reported that the legislation is dead on arrival in the Senate and faces a White House veto.

IHA has issued a series of Action Alerts urging Congress to protect hospital payments under Medicare and Medicaid as negotiations continue:

Prospective Payment System Hospitals – Take Action Here
Critical Access Hospitals – Take Action Here
Rural Prospective Payment or “Tweener” Hospitals – Take Action Here

As the nation inches closer to the August 2nd deadline, when the debt limit is to be reached, pressure is mounting for Congress and the White House to reach a deal.   Though no specifics have yet been released, there continues to be wide speculation that health care spending will be targeted for cuts — although many lawmakers are finding the discussion a hard pill to swallow considering the backlash that ensued after House Budget Committee Chair Paul Ryan (R-WI) released a proposal that sought to make sweeping changes to the Medicare program.

Despite the lack of political will among lawmakers, Biden has publicly stated that he is interested in achieving consensus with lawmakers on cutting $1 trillion from the budget.  To do so, the vice president said that revenue generating options, like tax increases, and spending reduction options, like making cuts to entitlement programs, must all be on the table.

Reports indicate that the group is working on a two-pronged approach to deficit reduction.  First, to make immediate cuts to federal spending and secondly, to put in place so-called “triggers” that would force programs to be cut should they grow at a certain rate.

For example, if Medicare spending from one year to the next were to outpace inflation during that same time, the statutory trigger would be pulled forcing Medicare spending to be cut by an amount that would align it with the inflation rate.

This remains a very controversial approach, as there are so many factors that come into play when dealing with these major programs, that a one-size-fits-all, or across-the-board cut approach is not likely to be the best solution in the short or long-term.

IHA remains engaged with the ongoing budget debate in Washington D.C. and is concerned about the direction the conversation is heading with regard to Medicare and Medicaid.

Hospitals in Iowa and across the nation are already enduring significant Medicare cuts as a result of mandates contained in the health care reform legislation, and further cuts could certainly put access to health care nationwide at risk.

Every year, the Budget Committee puts together a budget resolution, which is largely a blueprint – but sets the tone for the 13 annual appropriations bills Congress is expected to pass.

Of key concern at this juncture is the federal deficit.  Over the past decade the deficit has gone from a $300 billion surplus to now nearing $15 trillion in debt.

According to a committee spokesperson, “Chairman Ryan has committed to put forward a budget that deals with the drivers of the debt.  He has committed to put forward a budget that helps spur job creation and economic growth. He has committed to put forward a budget that helps save the nation’s critical health and retirement security programs.”

What is expected, however, is a proposal that would alter the way in which federal dollars are spent on Medicaid, a state-federal partnership.  Ryan’s budget is likely to propose the federal share of Medicaid be converted into a block grant structure.  This would save money for the federal government by providing set amounts to states each year (adjusted for inflation annually), rather than today’s model which allows for more uncertainty of the costs.  In other words, if a state sees a major increase in its Medicaid volume, the federal share grows along with it with and has no mandated cap.

Under a block grant proposal, regardless of increased patient volume or other factors, states would receive a pre-determined federal share and would be required to manage the population using only those dollars.  Specifics on this option are still being panned out, though the Congressional Budget Office has reported that this provision could save up to $280 billion over 10 years. The proposal in total is still in draft stage and is expected to be unveiled next week.

Iowa Headlines

Hospice workers get life out of caring for dying
Joyce  Hutchison continues to use her passion and years of experience to educate others about the benefits of hospice. Part of that is overcoming fear. Going to hospice won’t make patients die any sooner, she said.  (November 4, Des Moines Register)

Genesis will demonstrate da Vinci surgery system
Da Vinci offers a precise, minimally invasive procedure for hysterectomies and prostatectomies. Patients benefit with a faster recovery time, shorter hospital stay, less pain, less scarring and quicker return to normal activities.  (November 5, Quad-City Times)

Harkin asks big insurers to explain rate practices
Sen. Tom Harkin said this week he was launching an investigation into health insurance pricing, asking four major insurers to justify their pricing practices.  An industry spokesman called the move unfair and misguided.  (November 4, Des Moines Register)

U.S.  Headlines

Costs at urban hospitals may get extra scrutiny in health bill
As Congress struggles to rein in health care costs as part of its sweeping reform efforts, hospitals in New York City and other urban areas that provide some of the most expensive care are among the primary targets.  (November 2, New York Times)

Health bills aim a light on doctors’ conflicts
As part of the health care overhaul under consideration by Congress, lawmakers have included so-called sunshine provisions intended to shed light on the financial relationships between the medical industry and doctors.  (November 3, New York Times)

Program will monitor Maryland doctors’ hand-washing
State officials said this week they’re creating teams of staff members at hospitals around the state to secretly monitor their colleagues’ hand-washing habits as part of a first-of-its-kind program. The monitors will contribute to a systemwide report on hand-washing, using $100,000 in federal stimulus money.  (November 3, Associated Press)

Texas lawmakers try to give doctor-owned hospitals a dose of help
Texas House members are mounting a late effort to delay new limits on physician-owned hospitals, putting them at odds with Democratic leaders who think the facilities drive up health care costs.  (November 5, Dallas Morning News)

Nurses union reaches deal on H1N1 safety in U.S.
The H1N1 pact, announced on Monday as part of a contract settlement between the California Nurses Association and Catholic Healthcare West, averted a one-day strike threatened by thousands of registered nurses at more than 30 hospitals.  (November 2, Reuters)

Hospitals make slow progress in harnessing the ‘social’ aspects of social media
Hospitals’ current social media activties can be classified across to five major areas: brand management, real-time public relations, volume generation, non-marketing functions and community building. But only a small amount of hospital activity in the social media space could be described as “social.”  Rather, the majority of these efforts are either one-way “monologues” or bounded two-way conversations with little staying power.   (October 31, iHealthBeat)