First Edition: December 5, 2012

Today's headlines include the latest news on the looming fiscal crisis as well as market developments and action in the states.

Kaiser Health News: How The  'Fiscal Cliff' Affects Health Care: Six Questions
Kaiser Health News staff writer Mary Agnes Carey reports: "The impending 'fiscal cliff' is a package of automatic spending cuts and tax hikes set to kick in next month unless President Barack Obama and Capitol Hill agree on a way to stop them. … The president and congressional Democrats have said they will reduce spending on entitlements, including Medicare, if Republicans will agree to increase tax rates on the highest earners. While Republicans have agreed to more revenue they oppose increasing tax rates, preferring to focus on closing loopholes and eliminating some deductions. Here are a few questions – and answers – about what could happen in the weeks before the end-of-year deadline" (Carey, 12/4). Read the story.

Kaiser Health News: Electronic Health Records Breed Digital Discontent For Some Docs
Colorado Public Radio’s Eric Whitney, working in partnership with Kaiser Health News and NPR, reports: "Two years and $8.4 billion into the government's effort to get doctors to take their practices digital, some unintended consequences are starting to emerge. One is a lot of unhappy doctors. In a big survey by Medscape this summer 38 percent of the doctors polled said they were unhappy with their electronic medical records system" (Whitney, 12/4). Read the story.

The Associated Press/Washington Post: Hot Rhetoric Aside, There's Overlap In Competing Fiscal Offers That Could Form Basis Of A Deal
Both sides now concede that tax revenue and reductions in entitlement spending are essential elements of any deal. If the talks succeed, it probably will be because House Speaker John Boehner yields on raising tax rates for top earners and the White House bends on how to reduce spending on Medicare and accepts some changes in Social Security (12/4).

The Washington Post: Governors Urge Obama, Lawmakers To Avoid 'Fiscal Cliff'
Although some federal programs especially key for states — notably Medicaid — are exempt, many other federal grants to states would be cut. The Pew report said 18 percent of federal grant money would be subjected to the automatic hit. That includes Title I funding, which covers education programs for the poor and the disabled, medical research money, and health and human resource programs (Fletcher and Helderman, 12/4).

Los Angeles Times: Republicans Drop Ryan Budget Plan In 'Fiscal Cliff' Negotiations
The austere federal budget plan drafted by Rep. Paul D. Ryan and embraced by Republicans as a sweeping reimagining of government has hit a roadblock on the way to the so-called fiscal cliff. Top Republicans, including Ryan, insisted this was not the end of the plan and pledged to "support and advance" its principles. But by sidestepping the plan, the House leadership sidelined the push for a transformative overhaul of federal entitlements — a move that quickly sparked dissent from the party's conservative wing (Mason and Mascaro, 12/5).

The Wall Street Journal: GOP Deficit Plan Irks Conservatives
The conservatives' attitude could nonetheless complicate Mr. Boehner's mission as he strives to negotiate with a re-elected Democratic president without losing so many Republican votes that his leadership would be in peril. GOP leaders said the criticism underscores how much Mr. Boehner's proposal was an attempt at compromise, while Mr. Obama's proposal, which would raise $1.6 trillion in new taxes, was not (Bendavid and Lee, 12/4).

The Associated Press/New York Times: As Budget Talks Continue, Markets Change Little
Stocks closed little changed Tuesday on Wall Street as budget talks continued in Washington. … Investors are waiting for developments on the budget talks, which are aimed at avoiding the government spending cuts and tax increases that would begin to arrive Jan. 1 and could eventually cause a recession. … Republicans, led by Mr. Boehner, have balked at Mr. Obama’s proposal of $1.6 trillion in additional taxes over a decade, and called on Monday for increasing the Medicare eligibility age and lowering cost-of-living increases for Social Security benefits (12/4).

The Washington Post: 'Fiscal Cliff' Warnings Yet To Faze Wall Street
The markets' sense of confidence — or, arguably, complacency — is rooted in two strains of thought. One is that all the tough talk from the negotiators is mere posturing, nothing more than a signal to their allies that they are taking a stand in advance of real dealmaking closer to the deadline. Investors and executives have repeatedly seen brinkmanship out of Washington — including over raising the cap on government borrowing in the summer of 2011 — conclude with an agreement at the last possible moment (Irwin, 12/4).

The Wall Street Journal: Health Stocks A Port In Market Storm
Some investors believe they have found a remedy for the volatile market: health-care stocks. Money managers are embracing the group following the Nov. 6 U.S. presidential election, which ensured that the health-care overhaul championed by President Barack Obama will survive. While the overhaul of the U.S. health-care system creates winners and losers within the industry, investors say the newfound certainty heightens health care's overall allure (Jarzemsky and Kiernan, 12/4).

NPR: The Perilous Politics Of The Health Insurance Tax Break
There's not much in health care that economists agree on. But one of the few things that bring them together is the idea that excluding the value of health insurance from federal taxes is nuts. "It just doesn't make sense," says Jonathan Gruber, an MIT health economist and author of Health Care Reform. "And it's important to emphasize in this world where economists seem to agree about nothing, this is something where there's just broad and universal agreement" (Rovner, 12/4).

Los Angeles Times: 'Obamacare' Saves Consumers Nearly $1.5 Billion
Consumers saved nearly $1.5 billion in 2011 as a result of rules in President Obama's healthcare law that limit what insurance companies can spend on expenses unrelated to medical care, including profit, a new analysis shows. Much of those savings — an estimated $1.1 billion — came in rebates to consumers required because insurers had exceeded the required limits. The study by the New York-based Commonwealth Fund also suggests that the Affordable Care Act forced insurers to become more efficient by limiting their administrative expenses, a key goal of the 2010 law (Levey, 12/5).

The Associated Press/Washington Post: Study: Prescription Drug Coverage Under Obama Health Care Law Could Vary Markedly By State
A new study says basic prescription drug coverage could vary dramatically from state to state under President Barack Obama's health care overhaul. That's because states get to set benefits for private health plans that will be offered starting in 2014 through new insurance exchanges (12/4).

Politico: SCOTUS Asks Tough Questions On Hospitals' Medicare Claims Lawsuit
A majority of Supreme Court justices on Tuesday sounded skeptical of a suit brought by hospitals to reopen Medicare claims as much as 25 years old because of calculations that were found to have underpaid them. The justices heard oral arguments Tuesday in the case of Sebelius v. Auburn Regional Medical Center, a challenge brought by 18 hospitals that are seeking compensation from claims dating to 1987 (Norman, 12/5).

The Wall Street Journal: Women Notch Progress
Women account for a third of the nation's lawyers and doctors, a major shift from a generation ago when those professions were occupied almost exclusively by men, new Census figures show. Women's share of jobs in the legal and medical fields climbed during the past decade even as their share of the overall workforce stalled at slightly less than half (Mitchell, 12/4).

Los Angeles Times: Olive Garden Parent Darden Suffers From Bad Specials, 'Obamacare'
The Olive Garden, Red Lobster and LongHorn Steakhouse parent lowered its profit and revenue projections for the quarter ended Nov. 25, blaming sour promotions in its eateries, Superstorm Sandy, its purchase of the Yard House USA chain and even its efforts to mitigate the coming costs of healthcare reform, also known as "Obamacare" (Hsu, 12/4).

Politico: Obamacare Press Hits Olive Garden
Harsh press coverage of how the Olive Garden and Red Lobster are implementing Obamacare depressed earnings, the restaurants' owner says. The company offered a lower earnings estimate for fiscal year 2013 on Tuesday, citing in part the media's reporting on the company's handling of the new health care law (Glueck, 12/5).

The Washington Post: Justice Dept. Recovers Record $5 Billion Under False Claims Act
The Justice Department's civil division recovered a record $5 billion in the past fiscal year from companies that defrauded taxpayers, with much of the abuse occurring in the health-care and mortgage industries (Finn, 12/4).

The Wall Street Journal: U.S. On Alert For Canadian Drugs
The White House has alerted police and border agents to prepare for a possible influx of addictive pain drugs from Canada, where cheaper, generic versions of OxyContin will soon become available. U.S. drug czar Gil Kerlikowske also called Canada's health minister last week to discuss the issue and offer assistance to address the wave of prescription-drug abuse sweeping both countries, Mr. Kerlikowske's office said (Barrett, Catan and Vieira, 12/4).

NPR: For Tea Party Activists In Florida, The Health Care Battle Goes On
President Obama's re-election sent a message to state capitals: The war over the president's health care overhaul is finished. Even in Florida, where Republican leaders led the legal battle against Obamacare, there's recognition now that the state has to act fast to comply with the new law (Allen, 12/4).

Los Angeles Times: Changes To California Children's Healthcare Won't Be Delayed, Official Says
A top official in Gov. Jerry Brown's administration said Tuesday that California will begin transferring poor children into a cheaper healthcare plan on Jan. 1, despite concerns from some lawmakers and advocates that the state's plan is inadequate (Megerian, 12/4).

The Associated Press/Washington Post: Oklahoma Court Rules Anti-Abortion Laws Pertaining to Ultrasound, Drugs Are Unconstitutional
Oklahoma laws requiring women seeking abortions to have an ultrasound image placed in front of them while they hear a description of the fetus and that ban off-label use of certain abortion-inducing drugs are unconstitutional, the state Supreme Court ruled Tuesday (12/4). 

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This is part of Kaiser Health News' Daily Report - a summary of health policy coverage from major news organizations. The full summary of the day's news can be found here and you can sign up for e-mail subscriptions to the Daily Report here. In addition, our staff of reporters and correspondents file original stories each day, which you can find on our home page.