First Edition: February 14, 2011

Today's headlines are focused on President Obama's budget proposal and what it does and does not include.

Kaiser Health News: How Group Health Is Holding Costs Down: A KHN Interview With CEO Scott Armstrong
Reporting for Kaiser Health News, Bara Vaida writes: "Currently there are very few co-ops in the U.S., but one that is considered a model of success is Group Health – a 64-year-old Seattle based nonprofit health system that provides insurance to more than 600,000 people. It employs doctors, nurses and other providers, owns clinics and also partners with hospitals to provide inpatient care. In 2009, Consumers Reports ranked Group Health as the nation's top health maintenance organization in terms of consumer satisfaction" (Vaida, 2/14).

Kaiser Health News: Heavyweight Budget Fight: Entitlements Vs. The Deficit
Kaiser Health News staff writer Christopher Weaver reports: "It's a perennial contest. In one corner: health care entitlement programs, one of the biggest slices of the federal budget pie; in the other, the drive to tame the deficit, weighing in this week as the political talking point du jour" (Weaver, 2/11).

Kaiser Health News Column: Political Gridlock And The Challenge Of Implementing Health Reform
In his latest Kaiser Health News column, Harold Pollack writes: "The new law will need repairs and fixes along the way. There will be glitches. Specific legislative and regulatory provisions will require adjustment once they are tested. None of this means that the measure is a bad law, or one that should be repealed. I believe the opposite is true. That's just the nature of overhauling a system that affects one-sixth of the U.S. economy. Unfortunately, our currently polarized politics makes it hard to address or even to acknowledge this basic reality" (2/11).

Kaiser Health News Column: The Politics Of Scarcity
In this Kaiser Health News column, Larry Arrington and Brian Klepper write: "Medicaid, along with debt and shortfalls in public pension funds, is driving state and local governments toward budgetary disasters. The ways we cope with this fiscal crisis will test our political system and our national character. Political expediencies could further compromise the lives of the sick and the disadvantaged, and risk unnecessary human suffering and social turmoil" (2/11).

Kaiser Health News tracked weekend news coverage, including reports about the GOP's proposed budget cuts and the inclusion of a two-year "doc fix" in the President's budget plan.

The Washington Post: Obama To Offer $3.7 Trillion Budget Blueprint
President Obama will roll out a $3.7 trillion budget blueprint Monday that would trim or terminate more than 200 federal programs next year and make key investments in education, transportation and research in a bid to boost the nation's economy and reduce record budget deficits. … A senior administration official said Obama's budget request maps "a sustainable path" that would stabilize government finances in preparation for a broader debate about how to tackle the biggest drivers of future deficits: Social Security and health care for the elderly, as well as a tax code that offers more in breaks and deductions than it collects in revenue. Senior administration officials pointed to two significant changes that would improve the budget outlook by eliminating long-standing gimmicks Congress has used to hide the true depth of the red ink. The first would cover the cost of adjusting Medicare to ensure that payments to physicians are not subject to steep reductions (Montgomery, 2/14).

The Wall Street Journal: Entitlements Won't See Big Cuts
The president and congressional Republicans moved this week toward a clash over spending cuts needed in light of growing deficits, but both sides are largely deferring a major budget challenge: how to overhaul the costly entitlement programs of Social Security, Medicare and Medicaid (Paletta, Hook and Bendavid, 2/11).

The Washington Post: Obama Spending Plan Criticized For Avoiding Deficit Commission's Major Proposals
Some who worked on Obama's fiscal panel were also disappointed by his decision not to endorse any of the major elements of their deficit-reduction plan, which calls for raising the Social Security retirement age, charging wealthy seniors more for Medicare and limiting popular tax breaks such as the mortgage interest deduction. The plan has attracted support from key members of both parties and is the focus of an effort in the Senate to develop a bipartisan spending plan (Montgomery, 2/14).

The Washington Post: Supreme Court Watchers: Roberts, Alito No Sure Bets Against Health-Care Mandate
If you are handicapping whether the Supreme Court is going to find the nation's health-care law constitutional, you have a few options (Barnes, 2/13).

The New York Times: States Aim Ax At Health Cost Of Retirement
Governors and mayors facing large deficits have set their sights on a relatively new target — the soaring expense of health benefits for millions of retired state and local workers (Greenhouse, 2/13).

The Wall Street Journal: Questcor Has A Drug Problem
After Questcor Pharmaceuticals raised the price of the drug Acthar, its sole product, more than 10-fold in 2007, its shares began a climb from pennies to $14 and change. Acthar now costs $50,000 to $100,000 as a treatment of last resort for multiple-sclerosis symptoms or for infantile spasms, a terrible seizure disorder that affects a few thousand babies a year. However, the federal government won't pay such prices for patients who receive Questcor's drug under Medicaid. In fact, the Union City, Calif., company must rebate the full cost of its high-priced drug for Medicaid patients. One exception has been those in the Medicaid managed-care plans of a couple of dozen states (Alpert, 2/13).

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