The first Obama health care victory? Signing an expanded SCHIP into law should be a slam dunk. After all, Congress passed bipartisan legislation not once but twice in 2007. The only barrier then was a Presidential veto. Surely, now expanded SCHIP would be one of the first bills signed by the new President.

After all, when Congress failed to override the Bush veto it was candidate Obama who declared “Four million American children were denied basic health coverage today because Washington politicians failed to stand up to this President's disgraceful veto.”

On the campaign trail, there were promises that the health care Change Agenda would start first with covering all children.

What a difference a rise to power makes. The new 111th Congress has convened and just days before the inauguration of President Obama comes news that SCHIP will be dialed back. So much for supporting states in budget free-fall.

The saga gets even more surreal. On the eve of a vote on the already dialed back SCHIP bill the Senate draft has dropped coverage for legal immigrant children and pregnant women. It seems that Congress can stomach bailouts that pay big bonuses to corrupt Wall Street firms (and campaign donors).

However, when it comes to paying for basic health care for the children the will is lost.

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The news that healthcare spending “only” increased by 6.1%, the lowest rate since 1998, is just the latest evidence that healthcare is broken. With healthcare costs outpacing inflation, economic growth, and wage increases, Americans fell further behind. We all know that for this increased spending, we failed to produce better quality.

However, I am encouraged by the words of President-elect Obama and Congressional leaders to finally tackle these problems head on. But we must do it right. The focus needs to be 1) creating a payment system that incentivizes the adoption of evidence-based care; 2) building an interoperable nationwide electronic health system; 3) attacking the egregious level of money spent on fraud (tens of billions); and 4) reforming the budget process to allow for investment-based budgeting in science and technology.

As Congress considers economic recovery legislation, it needs to take steps to ensure that nobody falls through the cracks of our health care system. Although progress is being made in restraining the rising cost of medical care, health care is still out of reach for many families and employers. With unemployment at its highest level in 16 years, households and businesses are facing very tough choices regarding health care coverage.

A top priority should be to strengthen the health care safety net on which millions of Americans rely, starting with a temporary increase in the Federal Medicaid Assistance Percentage (FMAP) to help states deal with budget shortfalls and increasing enrollment. Without this assistance, states will be forced to cap enrollment or cut back on the benefits provided to the neediest Americans. In addition, Congress should take immediate bipartisan action to extend the State Children’s Health Insurance Program (SCHIP).

Another critical priority is assistance for workers who are currently going through a job transition. While COBRA provides a continuity of coverage mechanism for workers who lose their jobs, many unemployed workers are simply unable to afford to maintain their coverage. Health care tax credits and other assistance would enable more workers to maintain their coverage, and COBRA could be reformed to enable workers in transition to access more affordable coverage options.

We have an historic opportunity to achieve fundamental health care reform this year that will ensure every American has access to high-quality, affordable health care coverage. As policymakers and stakeholders from across the health care sector work together on health care reform, immediate assistance is needed for those hardest hit by the current economic slowdown.

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The recent news from the Centers for Medicare and Medicaid Services that 2007 health care costs grew at the slowest rate in nearly a decade has prompted some to ask if broad health care reform should be a less urgent priority. Emphatically, no. Slower growth of health care costs is certainly a good thing, but rising costs are only one problem in our very complex and undeniably broken health care system.

Health care costs in 2007 may have increased less than in previous years, but they have still increased at a rate far greater than the general rate of inflation. Over the last thirty years, health care costs grew at an average rate two percent greater than the gross domestic product. The U.S. still spends a whopping $2.3 trillion on health care every year, and that figure is still expected to double within the next ten years.

And for millions of families and small businesses, affordable health insurance is still growing far out of their reach. The number of uninsured and underinsured Americans remains far too high. Forty-six million Americans are still completely without health coverage. That’s more than fifteen percent of this country’s population and seven million more people than were uninsured in 2000. Many millions more don’t have enough insurance to afford to pay their remaining medical bills. All of these Americans need health reform now.

Even those Americans who can afford coverage often do not receive the quality care or value they should. Patients receive the recommended care only half of the time. America still ranks 19th out of 19 industrialized countries in preventable deaths. Reforming our health care system is vital to improve the quality and value in our system and contain further cost growth. If we don’t start getting a better return on our health care investment, we will never be able to fully remedy the economic crisis or make America competitive in the global economy.

When I released my blueprint for health care reform in November, I said that this issue would be my number one priority in the Finance Committee this year. That holds true today. The crisis is still too severe to delay.

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As the economy sputters, fixing health care becomes more and more urgent. President-elect Obama has made clear that solving our health care crisis is crucial to repairing our economy. He’s right. Let’s get to work.

Any health care remedies need to be part of a comprehensive solution to bring down costs, make health care accessible to everyone, and improve quality. First up, working families need fast action to keep our broken health care system from backsliding further, including:

– Reauthorize SCHIP, the State Children's Health Insurance Program. Even with SCHIP, nearly 8 million children don’t have health insurance – children whose parents make too much money to qualify and yet still can’t afford coverage. As the economy slows, more parents risk losing their jobs and losing their health care – or having their hours cut and losing their health care. Certainly, at a minimum, Congress should quickly reauthorize a proven program with broad support that offers a lifeline to low-income families – even as we push forward with making sure millions more uninsured children enroll in good health care. Only by insuring the uninsured can we eliminate income and racial disparities in the incidence of chronic disease and bring down health costs overall.

– Increase FMAP, the Federal Medical Assistance Percentages program, so states can preserve crucial services. Again, now is not the time for backsliding. We need to shore up programs that work and build on them, or else the downturn will sink more families and communities already nearing the breaking point. For every 1% increase in the unemployment rate, Medicaid and SCHIP enrollment are predicted to grow by 1 million nationally, with an additional 1.1 million losing their health insurance, according to the Urban Institute. With unemployment forecast to rise in the coming months, expect more demands on hospital emergency rooms and more unpaid medical bills. Without federal support, states would have no choice but to cut services to families in need, and health care providers would be unable to deliver timely care. FMAP funding clearly belongs in the economic recovery package.

– Improve health care information technology, which would increase quality and help control costs. Technology would eliminate redundancies, make it so that every visit to a new doctor doesn’t entail re-listing your entire medical history, and make government purchasing more efficient – ensuring that insurance markets work better overall. It also makes sense to set standards for health terminology, sponsor and disseminate research on which treatments work best, and reward providers who can report quality outcomes over time. Technology is a given in so many industries, why not health care?

Don't let this moment slip away. Americans voted resoundingly for change, and now is the time to deliver change that works. That means building a health care system that works for everyone, with workers, employers and the government pulling together and everyone paying their fair share.

Our job is clear: Making sure Congress knows there is broad grassroots support for finally fixing health care and promoting policies that put working families at the center of any economic recovery. We're ready. Let's get it done.

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As the 111th Congress prepares to convene, our health care “system” faces a perfect storm of challenges. The ripple effects of the financial market crisis, the subsequent rise in unemployment and the loss of job-based health care coverage have impacted health care like never before. Yet Congress, through the planned economic stimulus bill, can enact several key health care measures to help improve America’s economic and overall health.

Rising unemployment makes the challenge of finding ways to increase access to care for the uninsured even more difficult. In the stimulus package, Congress should consider a number of options to ensure and expand coverage for the uninsured, including the recently unemployed and their families, as well as assist the providers that serve them.

With financial pressures on states continuing to grow, Congress should assist states in supporting their Medicaid programs. A good first step would be to increase the Federal Medical Assistance Percentage (FMAP) to help states meet funding pressure from the rising demand for Medicaid services.

Information technology has helped improve efficiency and quality in health care. A major investment in information technology systems will help providers continue to improve the care patients receive.

In addition, hospitals have always struggled with some tough economic realities, but have been especially hard-hit by America’s economic crisis, and also need help to ensure that they can continue to deliver top-quality care to the patients and communities they serve.

Congress can help by including in the economic stimulus bill additional measures which ensure access to hospital capital financing. Access to capital not only allows hospitals to modernize, upgrade and replace aging facilities and equipment but also continues hospitals’ role as the community’s economic engine by creating and maintaining jobs. A “Dear Colleague” letter being circulated by Reps. Robert Brady, D-PA, and Joe Wilson, R-SC, outlines these measures and others that can help alleviate economic pressures facing hospitals and other providers of care.

The economic stimulus bill is an excellent opportunity for Congress and the next administration to implement solutions for delivering better health and health care for America. Hospitals stand ready to offer our ideas and energy as our nation responds to the economic and health care challenges of today and tomorrow.

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It is obviously better rather than worse that rates of increase in health care costs have moderated lately, as we have documented in our annual employer health cost survey and as CMS analysts just documented in their annual report on increases in health spending. Imagine what the level of concern about health spending and the affordability of health care would be if spending and the costs people pay were rising at the rates we have seen in the past? But the answer to Marilyn's question - should we breathe easier- is no.

We have seen peaks and valleys in rates of increase in health costs and health spending historically, although this valley has lasted a little longer than the norm, and higher rates of increase have always returned after a few years. There is no reason to believe that we have addressed the fundamental drivers behind rising health care costs and no reason to think that the historical pattern has been altered. It is a virtual certainty that we will see spending and costs return to higher rates of increase again as they have in the past although how soon that will happen is unclear.

Most importantly, the costs people pay out of pocket continue to outpace the increases in their wages and are hitting them at a time when working people and middle-class Americans are being struck by multiple other economic shocks simultaneously, from losing money in their retirement accounts, to credit card debt, to problems paying the rent or the mortgage, to losing their jobs (and their health coverage). This is why so many people cite paying for health care and health insurance as a big problem in our tracking polls, and it's why, in the context in which people are experiencing it, the pain level from rising health care costs has never been higher even though rates of increase have moderated somewhat. It is important to understand that the way in which we experts measure rates of increase in health costs is an imperfect measure of how people actually experience it.

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Did yesterday’s news from HHS solve our high health care cost problem?

So we’re talking this week about what needs to be done quickly on health care this year, and much of the early action will be geared to high health care costs. But yesterday, HHS’s Centers for Medicare and Medicaid Services reported that health care spending growth in 2007 slowed to its lowest rate since 1998. Spending grew 6.1 percent in 2007 (It grew 6.7 percent the previous year).

The reason? Well, most health care services grew at about the same rate as or faster than the previous year. But spending on prescription drugs grew at a slower rate because more people switched to generic drugs, drug prices rose at a slower rate, and consumer safety concerns limited use.

Problem solved? Are we okay if we keep growth rates at 6.1 percent? Also, that was 2007. What can we expect to see from 2008, when the economy dipped?

As President-elect Obama, Secretary-designate Daschle, and members of the 111th Congress have repeatedly affirmed, reform of the country’s health care system is integral to economic recovery. As a result, several health care initiatives are likely to be included in the forthcoming stimulus package. Potential provisions include funding for the development of health information technology infrastructure, an enhanced federal matching rate for Medicaid, and coverage expansion efforts.

While investments in information technology and our social safety net will lower costs and increase productivity in the long run, stimulus measures must also address immediate problems. In recognition of a likely dramatic increase in the uninsured, President-elect Obama and Congressional Democrats recently proposed subsidizing employers' expenses for continuing COBRA coverage for former workers and their dependents, as well as enabling laid-off workers who did not have employer-sponsored coverage to apply for Medicaid.

Other possible coverage options include providing recently laid-off workers with federal COBRA premium assistance, allowing long-term unemployed workers to have access to a public insurance program, and reauthorizing and expanding eligibility and funding for SCHIP. Payment reform to promote performance and efficiency also qualifies for inclusion in the stimulus bill. For example, establishing a new Medicare policy board authorized to move quickly on Medicare payment reform proposals serves our long-run economic interests by facilitating the development of innovative ways to reign in our nation’s unsustainable spending on healthcare.

Swift, bipartisan passage of such measures will not only make a meaningful difference to the millions of individuals and families struggling to pay for and receive adequate health care, but will also serve as an critical "down payment" on the long-term health and economic security of our nation. It is imperative that our new federal leadership move quickly to change direction and put the U.S. health system on the path to high performance.

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It definitely looks like there will be a health care component of the stimulus package when the new Administration takes office, centered around federal Medicaid help for states hard hit by the recession and perhaps also an infusion of federal money for health IT which President elect Obama recently called a "two- for " - a way to create jobs and make a downpayment on health reform. There are several reasons why including this in a stimulus package could make sense. Compared to other options, funds directed to states are used and get into the economy very quickly. Federal relief for states provided in the form of additional federal Medicaid matching funds will also directly help people, especially if they are tied to a requirement that states maintain eligibility as they were in the last downturn. They also will help women who will not benefit as much from other forms of stimulus spending such as spending for construction projects; women represent three quarters of adult Medicaid beneficiaries and are disproportionately represented in the health care workforce which Medicaid spending will shore up. These funds will also help many county and local governments who are hurting in the downturn and cutting jobs and curtailing essential services. Dealing with state relief and health IT as part of the stimulus package will also free the Congress and the President to focus on bigger issues in health reform in the Spring and lessen the chances that health reform legislation will get sidetracked by the need to address unfinished business.

Other steps would also be possible options for consideration as health components of a stimulus package. For example, putting the SCHIP reauthorization on a fast track as part of stimulus would help states coordinate planning for Medicaid and SCHIP coverage, which they will need to do. It will also reduce the chances that the need to deal with an SCHIP reauthorization will supplant broader health reform later on this year. Congress and the Administration could also take emergency measures to provide federal funding to allow states to temporarily cover the newly unemployed as was done after 911 in New York and after Katrina.

The basic equation that explains why it makes sense and is not Christmas tree spending to include a health component in the stimulus package was well established in one of our studies: for every 1% increase in the national unemployment rate, expect about a 1 million increase in Medicaid and SCHIP enrollment, a 1.1 million increase in the uninsured, a $1.4 billion increase in state Medicaid and SCHIP spending, and a $3.4 billion increase in federal and state Medicaid and SCHIP spending overall. As a former state Human Services Commissioner responsible for Medicaid who lived through a boom and bust cycle in a major state, I know that in a recession with unemployment rising and expected to go higher, states will not be able to absorb these enrollment and spending increases without federal aid. If they get enough aid with the right rules attached to it they will be able to forestall cuts and provide a temporary safety net for the newly unemployed. But I also know that unless new federal funding is tied narrowly to the specific purposes for which it is intended, many states will use it to offset other budget shortfalls. That is not always bad, but it is an issue Congress will need to weigh in designing a state fiscal relief package.

The counter cyclical nature of Medicaid underscores it's critical role but also the limitations of any system that relies on state revenues as the safety net in a recession at exactly the moment when they are weakest. Beyond the immediate issue of incorporating a health component into the stimulus package, as we head into a larger debate about health reform this should spotlight bigger issues of state versus federal capacity and responsibility in the health care system.

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