The American College of Cardiology’s (ACC) CEO, Jack Lewin, M.D., released the following statement following the testimony on “Health Reform in the 21st Century” from Secretary of Health and Human Services Kathleen Sebelius to the House Committee on Ways and Means:

“Secretary Sebelius’ testimony today is consistent with the bipartisan thinking on reforming the nation’s health care system and what we heard at the White House Summit on Health Care Reform.

“Leaders in both parties and the health care community agree: The American health care system needs to change. What we heard from Secretary Sebelius and committee members is that change needs to come sooner rather than later. The ACC has long advocated for several of the reforms Secretary Sebelius testified about today including payment reforms and the development of a health information technology infrastructure.

“Making physician reimbursement focus on quality outcomes rather than the process is essential for physicians delivering quality health care and improving the health of their patients. Study after study has shown that our current payment system rewards ineffective health care, and the lack of an interoperable health information system only increases the wasteful spending of our nation’s limited health care dollars.

“The ACC has long said that cost should be the driver, not the barrier to reform. There were a lot of good ideas from members of both sides today, all of which have merit. Together with input from physicians and patient advocate groups, we can work with Congress to come up with common sense solutions that help lower cost, both to patients and ultimately taxpayers, while improving quality outcomes.

“With 43 percent of all Medicare dollars spent fighting heart disease – our nation’s leading killer – it is clear that cardiologists will play a vital role in reforming our health care system. President Obama has shown that health system reform is a priority for his administration. We are happy to take part in that conversation and look forward to working with Secretary Sebelius further on the reforms needed to improve our country’s health care.”

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Health care reform is my number one priority in the Finance Committee this year, not because we should fix America’s broken system, but because we must. Without health care reform, our economy cannot recover, grow, or remain competitive around the world. Without health care reform, more and more families will continue to be forced to drop coverage or declare bankruptcy in the face of skyrocketing health care costs. We need to act now to address this crisis, and that’s exactly what President Obama did in his budget last week.

The President’s budget proposal showed a clear commitment to action on health care reform this year. The $634 billion that he included for reform is an important and historic down payment on the significant changes our system needs. The health care priorities the President identified closely track the priorities I outlined in my “Call to Action” on health care reform last year: increasing access to health coverage, containing rapidly rising costs, and improving quality of care. And these are not Democratic priorities or Republican priorities. We all have an interest in helping Americans stay well, keeping American businesses competitive, and reducing costs for Federal programs like Medicare and Medicaid.

But there is a price to improvements in quality and efficiency that will come out of health care reform, and we need to look for ways to pay for those priorities. Policies included in the President’s budget – like reducing overpayments in Medicare Advantage and changing payment systems to encourage high-quality care – are a good start, but they are only a first step. The hard work of nailing down all the details of reform is yet to be done.

In the coming weeks and months, I intend to work closely with all my colleagues in Congress and with members of the health care community to draft consensus legislation to fix America’s broken health care system. This won’t be an easy process, but it is clearly an urgent one. The President has given us a good start and a clear directive that, as he said in his joint address to Congress, health care reform “cannot wait, it must not wait, and it will not wait another year.” There’s never been a better moment. The stars are aligned. This budget gives us a launching pad to move forward and I intend to do just that. America needs health reform now.

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By committing $634 billion in health care funding in the budget proposal, President Obama has made clear the importance his administration places on health system reform.

All Americans should have health insurance and high quality, affordable health care, regardless of employment or health status. With all Americans covered, patients will have better access to regular and preventive care that can help reduce the cost burden on the entire health care system. Proposed investments in prevention and wellness, quality improvements, and training to address health professional workforce shortages are down-payments on a healthier nation.

For the first time, the president’s budget outline assumes that the planned Medicare physician payment cuts of 40 percent over the next decade will not occur. The budget uses a realistic forecast of Medicare spending on physician services, which helps set the stage as we work with Congress on permanent Medicare physician payment reform. Looming widespread physician shortages coupled with aging baby boomers highlight the urgent need for permanent Medicare physician payment system reform to preserve seniors’ access to health care.

The President's call to act this year to reign in our nation's unsustainable spending on health care and lay the foundation for affordable coverage for every American should be heeded. A recent report by the Commonwealth Fund Commission on a High Performance Health System shows that if we embark on comprehensive health reform in 2009, it is possible to simultaneously expand coverage and financial protection to all Americans, improve the quality and efficiency of health care, and reduce national health spending by $3 trillion over 11 years. It is critical that we make these investments now to reap significant dividends by the end of the next decade.

The $634 billion reserve fund included in the President's budget represents a meaningful and much-needed commitment to a health care system that works for everyone. Analysis of the Commission's comprehensive Path to a High Performance Health System proposal shows that a $593 billion, 11-year investment by the federal government--if combined with coverage, payment, system, and public health reforms--has the potential to decrease the number of uninsured to less than 1 percent of the total population while saving $3 trillion in total health system spending over 2010-2020 and returning $2.3 trillion to American families, $1 trillion to state and local governments, and $231 billion to private employers. If we make them now, prudent investments in health care coverage and payment and delivery reform will offer savings projected to offset the increase in annual federal spending for affordable coverage expansion by 2020.

Under the integrated Path framework, fundamental provider payment reform policies such as enhancing payment for primary care, encouraging adoption of the medical home model, and bundling payment for acute care episodes were estimated to yield 2010-2020 savings of $71 billion, $175 billion, and $301 billion if they are implemented now. By changing payment methods to reward value instead of volume, we have the potential to save $1.1 trillion over 11 years.

Although politically difficult, there is an urgent need to move in new directions. The comprehensive reforms proposed by the Commission--many of which were included in the President's budget--will spark economic recovery, put the nation back on a path to fiscal responsibility, and help Americans get the care they need and deserve. The cost of inaction is high. With both a historic political opportunity and a clear path toward a high performance health system that works for all Americans, the time has come to take bold steps to ensure the health and economic security of this and future generations.

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There are three approaches to the political process of health care reform: move boldly, tread carefully or make things worse. The President has been bold. In his joint address to Congress, he was emphatic that he intends to address health care reform this year. His budget, too, is forthright in acknowledging that expanding access will increase costs (hence the notion of a reserve fund and tax increases) and that health care reform and entitlement reform should go hand-in-hand. Yet, the “down payment” strategies in the proposed budget and the health care provisions in the stimulus bill involve treading more carefully. Unfortunately, while tinkering at the margins may make incremental improvements, a piecemeal approach also has potential to accelerate medical inflation and delay delivery system change.

The details of health care reform will likely be left to Congress and stakeholders. However, the newest projections on health care spending from CMS are so dismal that policymakers and special interests alike cannot afford to pursue policies that will make both our health care and economic problems worse. According to CMS, health care spending will continue to grow an average 2.1 percentage points faster than average growth in GDP; total health care spending will reach $2.5 trillion in 2009. In 2016, the federal government will pay more than 50 percent of national health care spending. This is the wake-up call we cannot afford to sleep through.

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The worst idea candidate Barack Obama had during the presidential campaign was his pledge to finance health reform with taxes on capital. To be fair, he didn’t word it that way. Instead, he promised to pay for universal health care in part by rescinding George Bush’s “tax cuts for the rich.”

Bush didn’t cut taxes for the rich, however. He lowered the tax rate on capital gains income and a substantially lowered the tax rate on dividend income for all taxpayers, many of whom have high incomes. Bush also lowered the top rate on wage income; but for high-income earners this is also frequently income from capital (pass-through profits to owners of small businesses, for example).

Obama is now proving that he keeps his word and then some. Overall, his new budget includes a slew of new taxes on businesses and investors totaling almost $1 trillion over the next 10 years (and that doesn’t even count the $646 billion “cap and trade” tax). He proposes to “bank” a portion of this for health care to be matched by difficult-to-make health care spending cuts and by health care “savings” that in most cases are unlikely to materialize. The only thing certain so far is the taxes.

Currently he proposes to sequester $318 billion for health care reform over 10 years — not from capital gains or dividend taxes, but from revenue produced by new limits on itemized deductions for those with incomes of $250,000 or more. Yet, since tax dollars are fungible, it really doesn’t matter which revenue dollars are targeted to pay for which spending program. The damage is the same, regardless of the labeling.

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The sketchy proposal for health care reform in last week’s Obama budget is reminiscent of the roots of our current economic bust. It would sign up both health care consumers and taxpayers to another round of subprime loans, that are based on still-low down payments and offered at teaser rates -- but soon to be followed by larger balloon payments when their exaggerated promises roll over and over. The health-reform borrower also is lying about its future income. And the whole mortgage of our future is under water – both in fiscal and operational terms.

To be sure, initial budget documents are just political markers that suggest the policy paths that are somewhat better greased for future action. Even when they purport to lay out master plans for the next ten years, their transitory shelf-life should remind one of how Dallas Cowboys running back Duane Thomas once described the Super Bowl in 1970: “If it’s so ‘super’ why do they hold it every year?”

Nevertheless, the preliminary budget framework moves our already-bloated health care sector further toward the top of the fiscal food chain for “new” money. Even in our current budget without (sustainable) borders climate, putting down more than one trillion dollars over ten years for “health reform” signals a strong commitment to step on the health spending accelerator. Selective application of the brakes apparently would only serve to maneuver around some tight political corners, because the overall goal is to re-allocate any “savings” to spend more, and more.

Even the initial tranche of financing comes predominantly from the usual suspects – reimbursement cuts imposed on focus-group-tested targets (drug companies and private insurers) and the promise to share-someone-else’s-dwindling-wealth through higher taxes on the $250k+ income club. Substantial budget savings from more fundamental, efficiency-based care delivery reforms; sensitizing the broad middle-class legions of the privately insured to value tradeoffs; and reacquainting senior beneficiaries with the full costs of their Medicare entitlements remain either illusory, undeveloped, or discarded in Obama budget 1.0. That’s because the health care portion of this budget is largely an extension of bait-and-switch tactics, for which the primary objective is to quickly lock in long-term structural changes in who controls health care choices, amidst the more fluid fear and loathing of recession politics, before worrying about reneging on the too-generous terms of the offer of universal coverage, comprehensive benefits, and hidden price tags later.

More specifically:

Reducing payments to private Medicare Advantage plans involves crippling competitors to the very public Medicare fee-for-service program. A serious search for value-enhancing, level-playing-field competition might scrap artificially elevated name-your-highest-price benchmarks, but it would replace them with competitive bidding that includes all players, including traditional Medicare.

Increasing the level of formulaic drug rebates for Medicaid beneficiaries simply reshuffles the pricing deck of cards to raise costs for other customers, without addressing more serious health care value problems or acknowledging mounting barriers to future drug development.

Bundled payment reforms in Medicare (and elsewhere) need to go well beyond crude readmission-rate triggers, which may send out signals with mixed incentives. This low-hanging fruit may turn out to be too small, if not rotten, while more substantial bypasses around the clogged and byzantine set of Medicare administered prices remain in the waiting queue.

Income-relating Medicare Part D premiums is the sort of small-bore rifle shot that excites a handful of editorial writers and revenue-biased budget balancers, but it’s mostly political “boob bait for Bubba” (in one of Pat Moynihan’s more memorable phrasings) that distracts most observers from the Obama budget’s serious neglect of more important ideas to reduce the rate of spending growth throughout the rest of the massive Medicare and Medicaid programs.

Finally, the revenue-grabbing proposal to reduce itemized deductions for upper-income families -- while leaving untouched their entitlement to a full-strength, uncapped tax exclusion for employer-sponsored health insurance – is “rich,” in irony. Apparently, class warfare stops at the water’s edge of the short-term, coalition-building accommodations needed to maintain (for now) the installed base of private insurance coverage.

Health care reform still needs to be done, and it can be done. But it will require budgets and proposals with more transparency, honesty, and humility than the initial façade submitted last week.

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