Daily Health Policy Report

Thursday, April 11, 2013

Last updated: Thu, Apr 11

KHN Original Reporting & Guest Opinion

Administration News

Health Spending And Fiscal Battles

Health Reform

Health Care Marketplace

State Watch

Weekend Reading

Editorials and Opinions

KHN Original Reporting & Guest Opinion

HHS Seeking $1.5B In Funding To Run Federal Health Insurance Exchanges

Kaiser Health News staff writer Mary Agnes Carey reports: "The Obama administration is trying once again to convince Congress to provide more funding for the health law's insurance exchanges, which are set to begin enrollment this fall. According to figures released in the fiscal 2014 budget request Wednesday, the administration estimates that the federal government will spend about $4 billion on those federal- and state-run marketplaces for individual and small businesses purchasing insurance coverage" (Carey, 4/10). Read the story.

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Insurers Battle Over Federal Employees' Health Coverage

Kaiser Health News staff writer Phil Galewitz reports: "The Obama administration, in its fiscal 2014 budget proposal released Wednesday, said it favors allowing more plans to compete to cover federal employees. The Blues are fighting the change, saying there is already sufficient competition with 230 plans participating in the program" (Galewitz, 4/10). Read the story.

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Political Cartoon: 'Flipped Off?'

Kaiser Health News provides a fresh take on health policy developments with 'Flipped Off?' by Pat Bagley.

Meanwhile, here is today's health policy haiku:


President's budget 
funds exchanges. GOP
saying: Not so fast. 

If you have a health policy haiku to share, please send it to us at http://www.kaiserhealthnews.org/ContactUs.aspx and let us know if you want to include your name. Keep in mind that we give extra points if you link back to a KHN original story.

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Administration News

Obama Uses Budget To Inch Closer To 'Grand Bargain' With GOP

The budget blueprint, released Wednesday, includes what the president called "manageable" curbs on Medicare spending growth, but GOP congressional leaders were dismissive, while some Democrats were unsettled.

The Washington Post: Obama Releases A Budget Plan With A Simple Goal: Ending The Debt Standoff
But barely five months after winning a decisive reelection victory, Obama proposes nothing on the scale of the $1.2 trillion initiative to extend health coverage to the uninsured that he pursued after taking office in 2009. Instead, with sharp automatic spending cuts threatening to slow the economic recovery and another showdown over the federal debt limit looming this year, the blueprint establishes a budget deal with Republicans as Obama's top fiscal priority. For the first time, he is formally proposing to trim scheduled Social Security benefits — a GOP demand that is anathema to many Democrats. He is also offering to make meaningful reductions in Medicare benefits, including higher premiums for couples making more than $170,000 a year (Montgomery, 4/10).

The Wall Street Journal: Obama Reaches For Middle Ground With New Budget Plan
President Barack Obama took a political gamble Wednesday by proposing to curb the growth of Social Security and Medicare, hopeful that the concessions would draw rank-and-file Senate Republicans into a budget deal that has so far proven elusive. … Congressional Republican leaders mostly dismissed the package and described it as a nonstarter because of proposed tax increases. But other Republicans said it contained measures that could show promise (Paletta, 4/10).

The New York Times: Health Care And Military Spending Bear The Brunt Of Proposed Cuts
President Obama's effort to control federal spending would require the largest cuts from the government's biggest programs — health care and the military — while preserving or increasing spending on favored initiatives like early education, manufacturing and research. … The budget would require $57 billion in higher payments by Medicare beneficiaries, cut $306 billion in projected Medicare payments to health care providers and squeeze $19 billion out of Medicaid, the program for low-income people (Pear and Shanker, 4/10).

The Wall Street Journal: Social Security, Medicare Face Hits
As President Barack Obama's new budget indicates, the two political parties actually have agreed in the last two years to some significant steps to reduce deficits down the road. One big question is whether the budget points a way toward restraining the largest long-term drivers of the deficit, which are government entitlement programs, particularly for health care. The White House says its budget blueprint represents a good start down that path by offering proposals to curb the growth of Social Security, Medicare and other federal benefits programs (McKinnon and Radnofsky, 4/10).

Los Angeles Times: Obama Says His Budget Has 'Manageable' Cuts To Entitlement Programs
President Obama argued for "manageable" changes to Medicare and other social safety net programs as he released his budget proposal, a plan aimed at staking out the middle ground in the stalled deficit reduction talks. "If we want to preserve the ironclad guarantee that Medicare represents, then we're going to have to make some changes. But they don't have to be drastic ones," Obama said in remarks in the Rose Garden on Wednesday morning. "… Obama's remarks intended to draw a contrast with House Republicans' budget proposal, fashioned by Rep. Paul Ryan of Wisconsin, which would balance the federal budget in 10 years in part by transforming Medicare into a voucher-style system and cutting government spending on Medicaid (Hennessey and Mascaro, 4/10).

The Associated Press/Washington Post: Obama's Budget Seeks GOP Cooperation On Deficit Deal While Hoping To Keep Faith With Democrats
Obama's stated goal is otherwise, namely that his $3.8 trillion budget should lead to the completion of a slow-motion grand deficit-cutting bargain by offering to save billions from programs previously sheltered from cuts. Medicare, Social Security and even military retirement are among them. Perhaps to reassure Democrats unsettled by this approach, the president said his offer to trim future benefit increases for tens of millions of people is "less than optimal" and acceptable only if Republicans simultaneously agree to raise taxes on the wealthy and some businesses (4/11).

California Healthline: How Much Should We Care About Obama’s Budget?
While the White House's budget proposals since the Affordable Care Act have mostly tinkered around the edges of the health care system, Wednesday's budget request contains $370 billion in new Medicare savings. … Some of these proposals aren't new, or explicitly draw on Republican ideas. Obama had floated Medicare means-testing in his debt negotiations with House Speaker John Boehner last year, in hopes of reaching a compromise over the deficit ceiling. And other provisions are seen as the fulfillment of political promises (Diamond, 4/10).

The New York Times: Obama Budget Opens Rift For Democrats On Social Benefits
President Obama's new budget has opened a debate over what it means to be a progressive Democrat in an age of austerity and defines him as a president willing to take on the two pillars of his party — Medicare and Social Security — created by Democratic presidents (Calmes, 4/10).

National Journal: Progressives Fight Obama On Entitlements With Eye On 2014
For progressive Democrats in Congress, a fight with President Obama over the inclusion of cuts to Social Security in his budget proposal may be just a warm-up for the real looming battle: the 2014 midterms. Defending the entitlement program has long been a pillar of the Democratic Party, and it’s one that lawmakers say they cannot ignore (Kaplan, 4/10).

The New York Times: Budget Embodies Obama's Vision For Remaking Economy
To pay for a series of programs he deemed crucial to the future and reduce the long-term budget deficit, Mr. Obama also called for cuts to Social Security and Medicare, putting him at odds with many other Democrats. They instead see those programs, created by previous Democratic presidents, as sacrosanct (Lowry and Rich, 4/10).

The Wall Street Journal: Obama, GOP Senators Talk 'Grand Bargain' Over Dinner
One person familiar with the dinner conversation, speaking on condition of anonymity, said the group talked about reaching a bipartisan agreement on what the president calls a "grand bargain"—a sweeping budget deal that would shore up Social Security and Medicare while reining in deficits. It was clear from the dinner that divisions persist, participants said (Nicholas, Hook and Peterson, 4/10).

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Health Spending And Fiscal Battles

Obama Budget Would Replace SGR Formula, Boost Medicaid, Mental Health

Among the changes included in the president's 2014 budget blueprint are funding boosts for mental health and food and drug safety as well as the elimination of the SGR formula to set Medicare physician payment rates. The proposal also delays funding cuts to hospitals that treat the uninsured.

Medscape: Obama Budget Replaces Sequester Cuts And SGR
President Barack Obama today released a proposed $3.8 trillion budget for fiscal 2014 that would shrink the federal deficit by $1.8 trillion over the course of 10 years, but not on the backs of physicians. Instead, they are on the receiving end of some federal largesse. For starters, Obama's deficit reduction, similar to that in the budget plan approved on March 23 by the Democratic-controlled Senate, would replace the automatic, across-the-board cuts called sequestration that include a 2% decrease in Medicare reimbursement for physicians (Lowes, 4/10).

Medpage Today: HHS Budget Plan Cuts Billions From Medicare
The Obama administration released its fiscal year 2014 budget proposal Wednesday, trimming nearly $400 billion over 10 years from Medicare as expected. … The $967 billion proposed for the overall HHS budget, however, is larger than the $848.2 billion actually spent in FY 2012 and the $907.8 billion estimated for FY 2013. Medicare would eat up 54 percent -- about $522 billion -- of the amount proposed for next year, while 31 percent would go to Medicaid, with the remainder spent on other programs, including Temporary Assistance to Needy Families (Frieden, 4/10).

Modern Healthcare: Obama Proposes $5.6B In Medicare Payment Cuts For FY 2014
President Barack Obama's highly anticipated fiscal 2014 budget (PDF) released Wednesday proposes $5.6 billion in Medicare payment cuts for that year and about $400 billion in total federal healthcare savings over the next decade. In a news conference at the White House, the president called his budget—which aims to reduce the deficit by nearly $1.8 trillion over 10 years and would eliminate the sequester cuts—“a fiscally responsible blueprint for middle-class jobs and growth” (Daly and Zigmond, 4/10).

The Washington Post's WonkBlog: The White House Wants To Reverse $500 Million In Medicaid Cuts
The White House wants to reverse $500 million in cuts to the Medicaid program meant to start in 2014, aiming to ensure that states have adequate funds to assist those that remain uninsured under the Affordable Care Act. A bit of history is helpful here. For decades now, Medicaid has sent states billions of dollars in something called Disproportionate Share, or DSH, payments. These funds, which totaled $11.3 billion in 2011, go to the hospitals that provide a higher level of uncompensated care and are meant to help offset the bills of the uninsured (Kliff, 4/10).

The Wall Street Journal's Washington Wire: HHS Budget Aims To Boost Mental-Health Programs
The Obama administration is proposing to increase spending for mental health programs and the children's Head Start program while cutting funding for low-income energy assistance and community service grants. The 2014 budget for the Department of Health and Human Services released Wednesday totals $80.1 billion, about $4 billion above the enacted budget for fiscal year 2012. It calls for $1.5 billion for the government to build an insurance exchange that will allow certain Americans to shop for health insurance, HHS Secretary Kathleen Sebelius said Wednesday. The federal exchange is targeted to begin operating Oct. 1. and sell insurance coverage that kicks in Jan. 1 (Dooren and Burton, 4/10).

Reuters: Health Budget Spends On Mental Health; Cuts Medicare
President Barack Obama's proposed 2014 budget includes an increase of $3.9 billion to the health department as it prepares to implement the administration's healthcare overhaul, setting money aside for mental health, but cutting medicare. The budget asks for $1.5 billion in increased funding to help set up healthcare exchanges and educate consumers on the enrollment process, which is scheduled to begin on October 1 (Clarke, 4/10).

ABC News: Obama Budget Includes $235 Million For Mental Health Care
President Obama is asking for $235 million as part of his new budget proposal to fund mental health initiatives. Of the funds, $130 million will be used to train teachers and others to identify signs of mental illness in students and provide them with access to treatment. Secretary of Health and Human Services Kathleen Sebelius wrote in a blog on her agency's website Tuesday that the funds include $205 million to help identify mental health problems, improve access to mental health services and support safer school environments. The plan would affect at least 8,000 schools according to Sebelius. Another $30 million will go toward public health research on gun violence (Mohney, 4/10).

Politico: CMS, FDA Budget Winners; CDC, NIH Take Hit
President Barack Obama’s budget has significant new funding to implement the health reform law, modernize food and drug safety and implement mental health programs. The White House is requesting a 14 percent increase in its budget for the Department of Health and Human Services, much of it focused on the Food and Drug Administration and the Centers for Medicare & Medicaid Services (Haberkorn, 4/11).

CQ HealthBeat: HHS: NIH Would Get Unexpected Boost
Defying predictions of flat funding or a spending cut, President Barack Obama proposes fattening the budget at the National Institutes of Health by $472 million in fiscal 2014. At the same time, his budget request would slash funding at the Centers for Disease Control and Prevention by $432 million. Both changes are in comparison with fiscal 2012 spending levels (Reichard, 4/10).

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More Details: Paying For Insurance Exchanges, Other Health Law Provisions

According to the Obama administration's 2014 budget document, the federal government will spend about $4 billion on federal- and state-run marketplaces for individual and small businesses purchasing insurance coverage.

Politico: HHS Seeks Obamacare Funds – But Is Ready To Scramble
The landmark health law may have survived the Supreme Court, countless repeal efforts and a presidential election — but none of that required Republicans to shower money on Obamacare. And with at least 33 states refusing to build the critical health insurance exchanges, the federal government is unexpectedly on the hook to set them up — and short of money to do so. The White House requested $1.5 billion more for the health law implementation in its budget Wednesday, but health officials know they're not likely to get it (Millman and Norman, 4/10).

The Associated Press/Washington Post: What Health Care Overhaul? Tracking Costs Of Obama's Health Law In Budget Isn't Easy
It turns out that the costs of the Affordable Care Act — Obamacare to its unyielding Republican foes— are sprinkled here and there through hundreds of pages of budget books. It's partly due to the arcane ways of government budgeting. It may also be an effort to avoid giving foes more of a target. ... Even some of the major spending in the new law isn't easy to find. Starting Jan. 1, people who don't have health insurance through their jobs will be able to get coverage in two main ways. Low-income people will be eligible for an expanded Medicaid program, provided their state government accepts. Uninsured middle-class people in every state will be eligible for subsidized private plans through new state health insurance marketplaces that go live online this fall (4/11).

Bloomberg: Obama Trims Details On Health Law As Exchange Cost Rises
The $1.3 trillion U.S. health-care system overhaul is getting more expensive and will initially accomplish less than intended. Costs for a network of health-insurance exchanges, a core part of the Affordable Care Act, have swelled to $4.4 billion for fiscal 2012 and 2013 combined, and will reach $5.7 billion in 2014, according to the budget President Barack Obama yesterday sent to Congress. That spending would be more than double initial projections, even though less than half the 50 U.S. states are participating (Wayne, 4/11).

Kaiser Health News: HHS Seeking $1.5B In Funding To Run Federal Health Insurance Exchanges
The Obama administration is trying once again to convince Congress to provide more funding for the health law's insurance exchanges, which are set to begin enrollment this fall. According to figures released in the fiscal 2014 budget request Wednesday, the administration estimates that the federal government will spend about $4 billion on those federal- and state-run marketplaces for individual and small businesses purchasing insurance coverage (Carey, 4/10).

The Hill: Cost Of Exchanges Doubles
Setting up insurance exchanges — the centerpiece of President Obama's healthcare reform law — is costing the Health and Human Services Department a whole lot more than it originally expected. According to budget documents released Wednesday, the department expects to spend $4.4 billion on exchange grants to the states by the end of this year — double its estimates a year ago (Baker and Viebeck, 4/10).

Politico: Obamacare Funding A Tough Sell With Congress
President Barack Obama’s 2014 budget sketches out his vision of a grand bargain on entitlements — and makes another stab at getting the funding needed to make sure the Obamacare exchanges are up and running late this year. The federal government is going to be responsible for putting up the new insurance marketplaces known as exchanges in 33 states — a task for Washington that was neither anticipated nor funded when the health law was passed in 2010 (Norman, 4/10).

CQ HealthBeat: HHS Using Several Sources To Fund Federal Health Insurance Exchange
Federal officials revealed long-withheld details Wednesday about how the Obama administration is funding the creation of an insurance marketplace critical to the success of the health care law and its coverage expansion provisions. Health and Human Services Department officials said they expect to spend some $1.5 billion in fiscal 2013 on the federal exchange (Reichard, 4/10).

The Associated Press/Washington Post: Obama Health Care: Cover Uninsured, Trim Medicare, Hike Tobacco Taxes
President Barack Obama's new budget offers Medicare cuts to entice Republicans into tax negotiations, while plowing ahead to cover the uninsured next year under the health care law the GOP has bitterly fought to repeal. But the biggest health consequences of any new proposal in Obama’s plan could come from nearly doubling the federal tobacco tax. If enacted by Congress, it could make young people think twice about the cigarette habit (4/10).

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Budget Plan Would Allow Federal Employees To Add Same-Sex Partners To Their Health Plans

The Obama blueprint would create beginning in 2015  a "self plus one" category within the Federal Employees Health Benefits Program.  

The Hill: Obama Budget Would Open Government Health Plans To Same-Sex Couples
Federal employees would be able to add same-sex couples to their healthcare plans under a provision in President Obama's budget proposal. The budget, released Wednesday, would create a new category of plans within the Federal Employees Health Benefit Program (FEHBP) — the marketplace where federal employees choose their healthcare policies (Baker, 4/10).

CNN: Obama Budget Adds Domestic Same-Sex Partners To [FEHB]
Buried deep inside President Obama's 2014 budget released on Wednesday is a new proposal to expand federal health insurance benefits to same-sex domestic partners. Framed as a measure to reduce the deficit, the proposal would amend the Federal Employee Health Benefits Program beginning in 2015 to add a "self plus one" enrollment option in addition to the "self" and "family" options (Aigner-Treworgy, 4/10).

In other news related to federal employees' health coverage -

Kaiser Health News: Insurers Battle Over Federal Employees' Health Coverage
The Obama administration, in its fiscal 2014 budget proposal released Wednesday, said it favors allowing more plans to compete to cover federal employees. The Blues are fighting the change, saying there is already sufficient competition with 230 plans participating in the program (Galewitz, 4/10).

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Health Reform

Ohio Gov. Vows To Keep Trying On Medicaid Expansion; Ark. Lawmakers Near Key Votes On Issue

The Ohio House is dropping expansion from Gov. John Kasich's budget while he says hospitals and other stakeholders must help in the effort to expand the health care program for low-income people. Meanwhile, supporters of an expansion try to rally support in Arkansas.

The Associated Press: Ohio Gov To Continue Fight For Medicaid Expansion
Ohio Gov. John Kasich said Wednesday he will continue to fight for extending Medicaid coverage under the federal health care law, a day after his fellow Republicans removed the proposal from the state budget. Kasich told reporters he doesn't take it personally that GOP leaders in the Ohio House dropped the expansion from their version of the two-year budget proposal on Tuesday (Sanner, 4/10).

Columbus Dispatch: Kasich 'Profoundly Disagrees' With House On Medicaid Expansion
For months, Kasich’s been urging the extension of insurance coverage to 275,000 poor Ohioans by expanding Medicaid with federal funds, while Republicans in the House have balked over the expansion’s relation to Obamacare and fears over the federal debt. "I can't turn water into wine," Kasich said. "It's not my calling." Kasich said he would "do everything I can to fight for it in a constructive way," but hinted that stakeholders outside of government -- i.e. hospitals -- would need to play more of a role in the persuasion game. A rally of up to a couple thousand people sponsored by a Medicaid expansion coalition of interest groups is planned for Thursday at the Statehouse (Vardon, 4/10).

The Associated Press: Ark. Lawmakers Near Key Votes On Health Insurance
Supporters of using federal Medicaid dollars to expand private health care coverage for low-income residents in Arkansas were trying to rally support Wednesday as the Legislature approached a series of key votes on the issue later this week (Stratford, 4/10).

Meanwhile, news outlets look at the issue in other states --

The Associated Press: Jindal Won't Seek To Follow Arkansas On Medicaid
Gov. Bobby Jindal's administration announced Tuesday that it won't seek to replicate a private insurance Medicaid expansion model like Arkansas, despite requests from Louisiana lawmakers to consider it. Jindal's interim health secretary, Kathy Kliebert, told the Senate Health and Welfare Committee that the federal guidelines outlined for the Arkansas proposal don't offer enough flexibility and leave too much uncertainty about future financing and regulations (Deslatte, 4/11).

Des Moines Register: Lobbyists Seek Compromise In Divisive Health Care Debate
Interest groups and observers called for a third option on Wednesday in a legislative debate over state-sponsored health care that has so far focused on competing plans favored by Democrats and Republicans. Representatives from hospitals and others in the medical field said they favored the funding mechanism included in the Democrats’ preferred plan: an expansion of the existing Medicaid program that would draw down substantial new federal dollars. But they also lauded the innovative changes to the way the state provides health care to the poor envisioned in the alternative plan Republican Gov. Terry Branstad rolled out last week. An ideal compromise, they said, would accept federal dollars but move away from traditional Medicaid and toward care that aims to prevent serious illnesses and pays providers for keeping patients healthy (Noble and Petroski, 4/10).

The Associated Press: Bryant: Obama Budget Undercuts Medicaid Expansion
Top Mississippi Republicans say their opposition to Medicaid expansion is getting a boost from an unlikely source -- President Barack Obama. The Democratic president released his proposed federal budget Wednesday. It includes a one-year delay in reduction of "disproportionate share" Medicaid payments -- money hospitals receive for treating large numbers of uninsured patients (Pettus, 4/10).

Springfield (Mo.) News Leader: Nixon, Applauding Springfield Chamber, Pushes Medicaid Expansion
When Jim Anderson talks, people should listen. That's the message Wednesday from (Missouri) Gov. Jay Nixon who came to Springfield to promote Medicaid expansion. The Springfield Area Chamber of Commerce, which Anderson heads, was the first local chamber in the state to support expanding Medicaid. Nixon said that premiums paid for private health insurance could rise if Medicaid isn't expanded as private carriers continue to pay for some of the cost of those who are uninsured (Okeson, 4/10).

In other implementation news -

The Associated Press: Nearly 200,000 In NM Eligible For Health Credits
Nearly 192,000 New Mexicans will be eligible for subsidies to help pay for health insurance next year, according to a report an advocacy group released Wednesday. The report from Families USA, a Washington-based consumer health organization, said the federal tax credits that take effect Jan. 1 will make health insurance affordable for many working families and young people (Clausing, 4/10).

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Health Care Marketplace

Fewer Employees Getting Health Insurance At Work, But Those That Do Pay More

A Robert Wood Johnson Foundation report found that employer-sponsored coverage fell from 69 to 60 percent between 1999 and 2010.

USA Today: Rate Of Employer-Based Health Insurance Keeps Dropping
The availability of employer-sponsored insurance has fallen by about 10% over the past decade, which has spurred an increase in the overall number of Americans without health insurance, according to a report released today. ... The new study found that employer-sponsored coverage dropped from 69% to 60% between 1999 and 2010. The amount each employee paid annually for insurance more than doubled in that period from $435 to $1,056 for an individual and from $1,526 to $3,842 for a family (Kennedy, 4/11).

The Associated Press: Report: Fewer Californians Get Health Care At Work
The report by the Robert Wood Johnson Foundation, which funds health research and programs, found that the number of Californians receiving employer-sponsored insurance dropped by 1.3 million, or 8.4 percent, over the past decade. Researchers say factors like decreases in overall employment and rising premium costs contributed to the declines (Lin, 4/10).

Milwaukee Journal Sentinel: 400,000 Fewer Wisconsin Workers Get Health Care Through Employer
The percentage of the state's population under 65 with health benefits fell to an average of 69.1% for 2010 and 2011 compared with an average of 79% for 1999 and 2000 ... The rates of coverage in states such as New Mexico, Louisiana, Mississippi and Texas, in contrast, ranged from 48% to 52.1%. ... The sharpest decline was in employers with fewer than 50 employees (Boulton, 4/11).

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Some Drug Makers Cut Payments, Meals Provided To Doctors

The Wall Street Journal: Some Drug Makers Cut Payments, Meals Provided To Doctors
Two pharmaceutical companies that are among the biggest payers of fees to doctors reduced such spending last year by double-digit percentages, as greater transparency sheds light on the hundreds of millions of dollars the industry pays physicians for marketing and research efforts (Loftus, 4/10).

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State Watch

Mayo CEO's Comments Draw Minn. Lawmaker Criticism; Other Marketplace News

Comments from the Mayo Clinic's CEO that the organization's proposed expansion in Minnesota could happen elsewhere are drawing criticism from Minnesota lawmakers.

MPR News: Lawmakers Irked By Mayo Clinic CEO’s Comments
Members of the state House Tax Committee had some sharp words Wednesday for Mayo Clinic. The criticism came in a committee hearing a day after Mayo's CEO suggested that Mayo Clinic would expand elsewhere if Rochester does not receive a half-billion dollar subsidy from the state. On Tuesday, Mayo Clinic CEO John Noseworthy delivered a speech at the National Press Club in Washington D.C., during which he said that other states would be eager for Mayo to expand there if Minnesota does not provide a taxpayer subsidy (Scheck, 4/10).

In merger and acquisition news, a proposed merger between two health systems in Minnesota begins to fall apart, and a deal for a hospital purchase advances in Massachusetts -- 

MPR News: Sanford Withdraws From Fairview Merger Talks
Sanford Health is withdrawing from merger discussions with Fairview, according to a statement released by the company. The announcement comes three days after Minnesota Attorney General Lori Swanson held a public hearing to question whether the merger was in the best interest of Fairview Health Services. The merger talks had been underway for weeks, but just last week the University of Minnesota made public that it was also courting Fairview (Sommer, 4/10).

Boston Globe: Partners' Deal To Acquire South Shore Hospital Advances
The state Public Health Council voted Wednesday to grant a license to transfer ownership of South Shore Hospital in Weymouth to Partners HealthCare System, a deal that would continue the trend toward consolidation of Massachusetts hospitals. Council members, on a 9-to-1 vote with one abstention, approved a "determination of need" certificate under which Boston-based Partners, the state's largest hospital and physicians organization, would become sole corporate owner of the 378-bed regional hospital (Weisman, 4/11).

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State Highlights: Blue Shield Could Lose Contract For Calif. Workers, Retirees

A selection of health policy stories from California, Texas, Oregon, Florida and Minnesota.

Los Angeles Times: Blue Shield May Lose Exclusive CalPERS HMO Contract
Blue Shield of California may be losing its longtime grip on one of the health care industry's most coveted insurance contracts. Officials at the California Public Employees' Retirement System are recommending breaking up Blue Shield's current statewide HMO contract and replacing it with as many as four health plans for more than 400,000 public workers and their families (Terhune, 4/11).

The Texas Tribune: Proposal To Raise Medicaid Rates Could Affect Budget
The Health and Human Services Commission has requested that state lawmakers increase Medicaid premium rates -- the amount paid to managed care companies to provide health services for Medicaid recipients. The state's budget leaders are currently evaluating the proposal, which could have a significant impact on the 2014-15 budget (Aaronson, 4/10).

Los Angeles Times: L.A. Jury Sides With Doctor In Anthem Blue Cross Case
In a rare case, a Los Angeles jury awarded $3.8 million in compensatory damages to a Porter Ranch doctor who contended insurance giant Anthem Blue Cross retaliated against him for being a strong patient advocate. The jury ruled late Monday in favor of Jeffrey Nordella, 58, an urgent-care and family-practice doctor who alleged that Anthem barred him from its network in 2010, when he applied to be a preferred provider. The damages could climb higher Friday, when the 12-person panel reconvenes and considers punitive damages against Anthem, a unit of insurance giant WellPoint Inc (Terhune, 4/10). 

The Lund Report: Senate Bill 823 Outlines Courtney's Vision For Mental Health
[Oregon] Senate President Peter Courtney, D-Salem, teamed up with Sen. Brian Boquist, R-McMinnville, on Tuesday to press for Senate Bill 823, a broad-sweeping set of policy guidelines aimed at providing more comprehensive and proactive community mental health across the state of Oregon. Courtney spoke passionately once more before the Senate Health Committee about the need to facilitate mental health services, particularly for young people. He specifically called out the EASA or Early Assessment and Support Alliance program, which provides early intervention for adolescents and young adults who are suffering through a psychosis (Gray, 4/10).

The Texas Tribune: House Panel Debates "Fetal Pain" Bill
The House State Affairs Committee on Wednesday took testimony on the controversial so-called fetal pain bill, a measure backed by Gov. Rick Perry and abortion opponents who argue that 20 weeks is the point at which fetuses can feel pain. House Bill 2364, by state Reps. Jodie Laubenberg, R-Parker, and Jeff Leach, R-Plano, would prohibit abortions after that point (Aaronson, 4/10).

Health News Florida: AIDS Advocates Petition Lawmakers For Sustained Funding
Hundreds of people with HIV and their supporters descended on the capitol complex Tuesday for an all-day conference to learn about the state of HIV policy in North Carolina and to ask their legislators for support. Many said that the release of Gov. Pat McCrory's budget last month had given them a sense of urgency to visit Raleigh. The budget proposed to cut $8 million in funding for the AIDS Drug Assistance Program (ADAP) that provides access to anti-retroviral drugs for low-income patients with HIV (Hoban, 4/10).

MinnPost: Minnesota's Independent Doctors Are In Critical Condition
But the most unusual thing about Metropolitan Internists is its independence. The doctors own the practice, govern it, and love being their own bosses. ... A powerful combination of forces, mostly by for-profit entities, has been squeezing physician-owned practices. The result is their absorption by larger organizations, often large hospitals or other "Big Med" entities. Alternately, some independent practices collapse when a key physician retires or leaves. Why should you care? Minnesota has the best- performing health care system in the country, according to a recent report from the Agency of Healthcare Research and Quality. And comparing quality and costs at independent practices versus Big Med clinics offers no clear answers about superiority. But one recent study suggests that generally, independent practices outperform those owned by hospitals (Beal, 4/10).

California Healthline: Assembly Bill Would Keep Adult Day Program Going
It was a watershed moment for state officials and senior health advocates in March, 2012 when California launched the Community Based Adult Services (CBAS) program, borne of a lawsuit settlement. It was an effort that calmed political waters and dealt with the 35,000 frail and elderly Californians who had been part of the eliminated program for adult day health services. Yesterday, the Assembly Committee on Health took up the subject again, in the form of AB 518 by Assembly member Mariko Yamada (D-Davis). The bill would codify the CBAS program, ensuring that it cannot be dropped when state health officials eventually renew the federal waiver that spawned it (Gorn, 4/10).

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Weekend Reading

Longer Looks: Global Obesity, Health Care Cost Transparency, A Medical Puzzle

Every week reporter Ankita Rao selects interesting reading from around the Web.

The Atlantic: How Price Transparency Could End Up Increasing Health-Care Costs
Getting your appendix out can cost between $2,000 and $180,000. Hip replacements run from $10,000 to more than $100,000. Hospitals, we have also learned, frequently mark up the price of cotton swabs and routine X-rays by 300 or 400 percent, with most patients oblivious to the reason their health care bills are so large. As a response to the hidden variability in health care prices, an increasing number of states have passed price transparency legislation. Federal legislators have even introduced several bills into Congress to make health care prices more transparent. Expect more such bills to follow (Peter Ubel, 4/9)

The New Yorker: The D.S.M. And The Nature Of Disease
When the fifth edition of the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders hits the stores on May 22nd, it will signal the end of a fraught thirteen-year campaign. Every revision of the D.S.M. causes controversy; that's what happens when experts argue in public about the nature of human suffering. But never has the process provoked warfare so brutal, with attacks coming from within the profession as well from psychiatry's usual opponents. Indeed, it's possible that no book has ever been subject to such scrutiny in the course of being written. It is as if J. K. Rowling had produced her Harry Potter sequels in a glass studio with fans looking on and banging the windows whenever she typed something they didn't like (Gary Greenberg, 4/9).

The Washington Post: Eating Made Her Sick, But It Took Doctors Years To Figure Out Why
A year after her daughter's stomach problems began, Margaret Kaplow began having pains of her own. When she sat down to dinner with her family, Kaplow's gut would clench involuntarily as she waited to see if this was one of the nights Madeline would eat a few bites before putting down her fork, pushing away from the table and announcing, "I don't feel good." For nearly six years, Maddie Kaplow's severe, recurrent abdominal pain, which began shortly before her 13th birthday, was attributed to a host of ailments (Sandra G. Boodman, 3/25).

Health Affairs: Tackling The Weight Of The World
Working with an obese young woman in Gabon prompts US medical and public health fellows to seek solutions to obesity and its related health problems in the developing world. … We were intrigued by Marie's case. Her condition was familiar to us because we had trained in the United States, where diet-linked chronic diseases like type 2 diabetes are pervasive. But it was strange to see a morbidly obese young woman being treated in the same hospital where one of us was also developing a protocol for the nutritional needs of undernourished children. The world's rapidly changing caloric and nutritional imbalance—evident in the fact that the number of obese people worldwide is now estimated to exceed the number with malnutrition—was brought vividly home to us (Laura M. Blinkhorn and Mascha A. Davis, April 2013).

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Editorials and Opinions

Viewpoints: GOP Leaders Reject Obama's Budget Compromise; President's Entitlements Proposal Is 'Modest;' Mental Illness In Prison

The New York Times: The President's Budget
Curbing the rise of Social Security benefits and raising Medicare premiums for higher-income people were two of the highest priorities for Republican leaders just a few months ago. Senator Mitch McConnell, the minority leader, said last fall that if Mr. Obama proposed them, he would consider allowing tax revenue to go up. But, on Wednesday, when the president actually did so, Mr. McConnell dismissed the budget as unserious. Not a single Congressional Republican could be found to consider a budget that combines twice as much in spending cuts as it raises in tax revenues. ... It is clear that the incessant demands by Republicans for entitlement cuts were always hollow (4/10).

The Washington Post: Obama's 2014 Budget Is An Offer To Negotiate
Unlike the Senate Democrats’ budget, Mr. Obama’s does not pretend that deficits can be meaningfully reduced by soaking the rich while largely avoiding entitlements. ... We’re not suggesting that Mr. Obama’s plan adequately addresses the country’s long-term fiscal predicament any more than the House or Senate budgets did. ... More worrying, the president's plan confirms the federal government's relative retreat from non-entitlement functions such as defense, health and safety regulation and law enforcement (4/10). 

The Wall Street Journal: The President's Priorities
Mr. Obama wants federal spending to grow to $4.45 trillion by 2018 fueled mostly by the exploding costs of his Affordable Care Act. This spending surge appears smaller than it is only because the government will bank large reductions in military spending as the Iraq and Afghanistan wars wind down. But unlike in the 1990s, this peace dividend will be spent (4/10)

Reuters: Obama's Budget Bid For A 'Grand Bargain'
[The president] is also renewing his verbal offer to Republicans from last December's negotiations for more than $400 billion in healthcare savings – including roughly $370 billion in Medicare spending over the next 10 years. ... Obama’s budget doesn’t adequately address our soaring healthcare costs — the one thing capable of bankrupting the country. We need to rationalize our healthcare promises, change payment systems and impose a healthcare budget. We are the only industrialized nation with no limits on our healthcare spending (David M. Walker, 4/10). 

Politico: President Obama's Charmless Budget
Obama has repeatedly congratulated himself in public for his courage on entitlements behind closed doors, without ever bothering to propose in open view what he advocated in private. Now, he has put it in writing. That's progress. And he deserves credit for doing what Republicans haven't dared — cutting an entitlement benefit for current retirees. His base, which is driven into paroxysms of rage over proposals to modernize Medicare 10 years from now, is predictably unhinged over the idea of touching the holy of holies, Social Security, right away (Rich Lowry, 4/10).

The New York Times: Mental Illness In California Prisons
There are about 33,000 mentally ill prisoners in state prisons in California, close to 30 percent of the prison population. The number of suicides in state prisons has soared in recent years, to about 24 suicides per 100,000 inmates a year, a rate nearly twice the national average. ... The only way for California to satisfy Constitutional standards for its prisons is to reduce the number of inmates and improve the mental health care in those institutions without delay (4/10).

Kansas City Star: Missouri Senate Should Seize Chance To Fix Medicaid
This was supposed to be the year the Missouri Senate would show the state it was capable of wise, innovative legislating. But on the signature issue of this session — the chance to transform the state's Medicaid program and enable hundreds of thousands of low-income citizens to see a doctor — the Senate is reverting to its old, backward ways. Some smart Republicans in the House have stepped forward with courageous legislation to insure more Missourians (4/10).

The New England Journal of Medicine: Reforming Premedical Education — Out With The Old, In With The New
Recent years have seen many calls for enhancing, overhauling, or abolishing the traditional premed requirements. Critics argue that the pace of scientific discovery and its clinical application have outstripped the requirements; that information technology has made memorizing vast amounts of content unnecessary; that the requirements lack clinical, scientific, and social relevance ... [At Mount Sinai's Icahn School of Medicine since] 1987, humanities majors have been entering medical school here having neither undergone traditional premed science preparation nor taken the MCAT. ... According to a retrospective analysis, these students performed as well as their peers  (Dr. David Muller, 4/11). 

The New England Journal of Medicine: Holistic Review — Shaping The Medical Profession One Applicant At A Time
Successful adoption of holistic review in medical school admissions requires a strong commitment by the school, but the process can be bolstered by support from the AAMC's Holistic Review Project ... This effort is led by a committed group of admissions officers, diversity directors, deans, medical educators, students, and residents from around the country who continue to remind us that medical school admissions is not merely about selecting next year's first-year class, but also about selecting the physicians who will successfully lead a rapidly evolving 21st-century health care workforce (Dr. Robert A. Witzburg and Dr. Henry M. Sondheimer, 4/11). 

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Stephanie Stapleton

Andrew Villegas

Lisa Gillespie
Shefali Luthra

The Kaiser Daily Health Policy Report is published by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. (c) 2014 Kaiser Health News. All rights reserved.