Once again free speech within the intimate confines of a doctor’s office is under attack.

In Florida, the Journal of the American Medical Association reveals today, doctors can risk losing their medical licenses or be fined up to $10,000 if they ask a patient either verbally or on a form whether they or a family member keep a firearm in the house.

According to JAMA, “the law states that licensed Florida health care practitioners and health care facilities ‘should refrain from making a written inquiry or asking questions concerning the ownership of a firearm or ammunition by the patient or by a family member of the patient, or the presence of a firearm in a private home or other domicile of the patient or a family member of the patient.’ Additionally, practitioners and facilities are instructed against recording such information (if disclosed) in the medical record.” Alabama, Minnesota, North Carolina, Oklahoma, and West Virginia have all introduced similar bills that would prohibit physicians from asking about guns in the home.

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The short-lived reprieve for Medicare and Medicaid is over. The no-longer sacrosanct government health programs will most definitely face cuts of some sort by this coming November when the new 12-person congressional “Super Committee” is charged with trimming at least another $1.2 trillion from the national budget.

On Monday, President Obama made his priorities clear: He called for “tax reform that would ask those who can afford it to pay their fair share,” (i.e. get rid of Bush-era tax breaks for the wealthy) and “modest adjustments” (i.e. cuts) to entitlement programs like Medicare and Social Security.

Senate Majority Leader Harry Reid (D-Nev.) is set to appoint Sens. Patty Murray (D-Wash.), Max Baucus (D-Mont.) and John Kerry (D-Mass.) to the congressional debt-reduction "super committee" and more appointments will be announced by other Congressional leaders as the August 16 deadline gets closer. Whatever its make-up, the committee's battle over entitlement cuts will occur on familiar territory. In a comprehensive—but ultimately depressing—post for Politico, David Nather writes that the super committee will likely start with “a list of the standard ideas that are already ‘out there’” for cutting Medicare and Medicaid.

“There’s a pretty long menu of ideas to choose from, thanks to the work that’s already been done by the bipartisan negotiations led by Vice President Joe Biden,” writes Nather. “And the supers will also be able to draw from the suggestions of other bipartisan groups, like President Barack Obama’s fiscal commission and the Senate Gang of Six.”

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The poor economy has led to rising and persistent unemployment, belt-tightening and a lower standard of living for many Americans. But this cutting back hasn’t been bad for everyone. As consumers put off medical care like doctor visits and surgery or were dropped off private insurer rolls altogether, some of the country’s largest health insurers actually saw profits rise.

Last week, UnitedHealth Group, the nation’s largest private insurer, reported a 13% increase in net profits and earlier this week Aetna (the third largest insurer in terms of market value) reported that its second-quarter net income rose 9%. According to Reuters, Aetna’s stock shares are up about 40 percent this year as well.

WellPoint, the second-largest health insurer, reported a 3% drop in second-quarter profits as medical costs for its growing Medicare Advantage business have come in "significantly higher" than the company expected this year. WellPoint, which is making a calculated foray into Medicare and betting on the demographics of the baby boom generation, was hit with an unanticipated enrollment of sicker (i.e. more expensive) subscribers over the age of 65 into its MA plan in California as other players pulled out of the market. Bloomberg reports that the percent of income Wellpoint spent on care in increased to 85.7 percent from 82.9 percent a year earlier.

Still, the company’s shares climbed roughly 30 percent this year as enrollment increased overall, (compared with the S&P 500 index rise of only about 6 percent) and WellPoint management raised their 2011 earnings estimate for the second time this year.

What’s the reason for the rosy outlook for large insurers?

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 P.S.  Are We Sure that Medicare Spending Is Still Outstripping GDP Growth? 

In yesterday’s post, I said that Wall Street was getting nervous about the stalemate over raising the debt ceiling—and the possibility that the U.S. Treasury would run out of the money needed to pay its bills. If the world begins to lose confidence in the full faith and credit of the U.S., it loses confidence in U.S. government debt (i.e. Treasuries)—which means that investors lose confidence in the dollar.  Looking for a safe haven, they begin to buy gold. This morning Bloomberg reported that gold futures have risen to a record $1,631.20 an ounce. Meanwhile, the dollar fell to a record low against the Swiss franc. Among paper currencies the Swiss franc is considered a relatively “safe haven.” This afternoon both gold and the dollar appeared to be correcting.

Wall Street abhors uncertainty, and uncertainty is seeping into the market. “Government securities, the traditional area of safety, are now at risk, so that’s why you’re seeing gold grind higher,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, told Bloomberg. “The level of U.S. government borrowing has caused the erosion of the dollar and adds more fuel to the metal’s rally.”

Wall Street’s rating agencies may lower the nation’s credit rating. “I’m pretty certain that the government is going to see a downgrade by at least one agency,” Kathleeen Gaffney, co-manager of the $21 billion Loomis Sayles Bond Fund said yesterday in an interview on Bloomberg Television’s “Street Smart.” She offered some reassurance: “Treasuries will continue to be a large, liquid market whether it’s AAA or AA.” (Gaffney is a seasoned investor. As Bloomberg notes her bond fund returned 14 percent in the past year, beating 98 percent of its competitors.)

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The Obama administration is now warning that the President will veto House Speaker John Boehner’s two-step plan to raise the U.S. debt ceiling and cut $3 trillion in government spending.

President Barack Obama’s Office of Management and Budget has announced that it “strongly opposes” the measure, which the House is set to vote on tomorrow, and would recommend a veto if it were passed by Congress.

Boehner is trying to round up the votes to pass the measure in the Republican-controlled House, but some conservative Republicans are refusing to sign on to the plan—either because they think that the cuts Boehner is recommending don’t go far enough, or because they oppose the whole idea of lifting the debt ceiling.

Meanwhile, Senate Majority Leader Harry Reid is seeking support for his alternative that would provide a $2.4 trillion increase, enough to get through the 2012 elections. Liberals argue that Boehner’s two-step plan won’t give financial markets the assurance they need. Bloomberg reports that Reid is now saying that the Senate will vote on his proposal “soon.”

Yesterday Wall Street remained sanguine, confident that politicians would make a deal, and avoid default. But today, Reuters reports, the Street is getting nervous: “Wall Street banks are preparing for the real possibility that the United States will lose its top credit rating, which they say will cost the country $100 billion in additional interest payments and hurt both consumers and the economy.”

It’s now likely that at least one of Wall Street’s three credit rating agencies will downgrade U.S. debt.  But a downgrade would be minor compared to an outright default that, as Reuters notes, “would catapult the United States to the top of the list of sovereign states whose political dysfunction supersedes sound economic management — above countries like Argentina, Ecuador and Russia.” 

It is difficult to imagine that this could happen. But in his televised speech yesterday, Harry Reid voiced his concern that conservatives might be more interested in “embarrassing the president” than in “doing what is right for the country. And today, the Washington Post’s Ezra Klein warned that “Many elected members of the GOP really are willing to let Treasury exhaust its borrowing authority. Very few elected Democrats can say the same. For that reason, Republicans always had the leverage on this issue . . .”

Senate Majority Leader Harry Reid today revealed his own budget proposal,  which would hand Obama the full $2.4 trillion borrowing authority he has requested—enough to last through the 2012 election—tied to $2.7 trillion in spending cuts that would leave Medicare, Medicaid and Social Security untouched. The plan does not attempt to raise new revenues: conservatives have been adamant that they will not vote for any proposal that raises taxes.

Reid announced his plan this afternoon, pointing out that his package meets Republicans’ two major demands: it does not raise taxes and the spending cuts are designed to meet or exceed the amount of the debt-limit increase.

“I spent all week-end trying to work something out with the Republicans,” Reid said. “We are spending $700 billion dollars this year on the military, more than all of the other countries put together. You would think the Pentagon could chip in some bucks. Gates thinks they can,” he added, referring to former Defense Secretary Robert Gates. “But this week-end, lo and behold, Republicans wanted to raise money for the Pentagon.”

Meanwhile House Speaker John A. Boehner has proposed a two-step plan to cut spending by nearly $3 trillion, laying out the details to his Republican colleagues this afternoon in a closed-door meeting in the Capitol. Boehner’s plan includes an immediate increase in the debt ceiling of up to $1 trillion that is paired with $1.2 trillion in cuts to discretionary spending over the next decade. A new, joint House-Senate committee of 12 lawmakers would then be mandated to come up with another $1.8 trillion in deficit savings over 10 years by Christmas.

“What they are trying to do is to force us to have the same debate on the exact same subject, two months from now,” said Reid. “A short-term agreement risks many of the same dire consequences that would be triggered by the default itself.” If Congress adopts a short-term approach, Wall Street might still lower the nation’s credit rating.

Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co., told Bloomberg that markets view Boehner’s two-stage plan as a “non-starter because we now know it is amateur hour on Capitol Hill and we don’t want to be painted in this corner again.”

Earlier today, Treasury bonds fell after Mohamed A. El-Erian, whose Pacific Investment Management Co. runs the world’s biggest bond fund, said the U.S. may lose its AAA debt rating even if lawmakers reach a plan to avoid a default.

While Reid’s plan takes Medicare and Medicaid off the table, Huffington Post’s Sam Stein reports that as for cuts to Medicaid or Medicare suppliers—namely hospitals and pharmaceutical companies—that remains less clear.”

According to Stein, Reid’s budget “leans heavily on cuts to discretionary spending. The package will also reportedly include roughly $1 trillion in savings that will come from the drawdown of the wars in Iraq and Afghanistan (which the Congressional Budget Office does score).” He explains, “if entitlement programs remain more or less untouched in the plan, there would be few other areas from which to draw ten-year savings.” Later this afternoon, Reid's office confirmed that $1 trillion will indeed come from the drawdown of troops.

Reid's proposal would also establish a congressional committee comprised of 12 House and Senate members to consider additional options for debt reduction. The committee's proposals would be guaranteed a Senate vote with no amendments by the end of the year.

Republican reactions to Reid’s plan were frosty, but reportedly, many of the cuts are ones that Republican leaders have agreed to in past discussion.

Reid’s proposal meets Republican’s major demand: no new taxes. At the same time, liberals will be enormously relieved that the package protects Medicare and Medicaid. From a reasonable man’s point of view this would seem like a win-win solution. Now we will find out how many reasonable men there are in Washington.

For a round-up of the most provocative posts that have appeared on health care blogs during the past two weeks, turn to Worker’s Comp Insider  where  Julie Ferguson has done a splendid job of hosting  the “Heat Wave Edition” of Health Wonk Review (HWR). As Ferguson observes, while it is “sizzling outside,” D.C.is “on fire” as “the budget battle heats up.”

 Below, I discuss and elaborate on two posts that seem particularly relevant to the war over the debt ceiling that is roiling Washington this week-end.

But I urge everyone to read the full “Health Wave Edition,” where they will find posts that focus on: a recent congressional hearing on Independent Payment Advisory Boards   (complete with video clips); an excellent primer on Health Exchanges, by Timothy Jost; The Fast Food Model for Corporate Medicine,” (a piece by Roy Poses’ that features Florida governor Rick Scott); why doctors offer credit cards in order to avoid discounting (from the Health Business Blog);  why less is more when it comes to angiograms (by Shannon Brownlee);  the effectiveness of Robotic Surgery (Gary Schwitzer); and whether OSHA's Voluntary Protection Program (VPP) is broken (Worker’s Comp Insider)

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Demagogues, Deficits and HealthCare: Are Drug-makers Untouchable?

Over at Managed Care Matters, Joe Paduda makes it clear that he is fed up with political demagoguery. 

In this timely post, Paduda reminds us that Medicare Part D, the prescription drug program passed as part of the Medicare Modernization Act (MMA) in 2003, represents “the largest expansion of entitlement programs since the Great Society." This was “a Republican program," he observes, that was “completely unfunded; short term, long term, any term. The GOP decided to NOT set aside funds, or raise taxes, or cut other programs; they just passed Part D, committed to paying for it out of 'general funds' and to hell with the future.”

 Democrats opposed the bill; nevertheless, it squeaked through Congress.  As a result, Medicare’s Actuaries recently reported, “the Part D program has contributed $9.4 trillion to the ultimate Federal deficit.”

Wait a minute. I thought conservatives wanted to slash “entitlement” programs. Why would they pass such an enormous program without worrying about how to pay for it?  

“Part D was a  political masterstroke,” Paduda explains, that  “undoubtedly helped George W Bush get re-elected along with many GOP legislators, as seniors loved the new program.”  (Part D also represented a windfall for drug-makers, and they, too, were pretty happy.)

“I bring this up not to anger my conservative readers,” adds Paduda, whose forthright and even-handed blog appeals both to conservatives and to progressives.  “But rather to educate some who aren't aware that Part D, and the costs of Part D, are the handiwork of Eric Cantor, John Boehner, Mitch McConnell et al. [his emphasis here and throughout]

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By announcing its new recommendation that all women over 40 should have yearly screening mammograms, the American College of Obstetricians and Gynecologists (ACOG) joins prominent groups like the American College of Radiology, the American Cancer Society and others who have decided to resolutely ignore the extensive evidence supporting less frequent screening in this age group.

In November 2009, the U.S. Preventive Services Task Force, an independent group of experts in prevention and primary care who are appointed by the Department of Health and Human Services, issued revised guidelines on screening mammography. After an exhaustive review of dozens of studies, the task force 1) found that yearly screening mammograms for women under 50 who have no risk factors for breast cancer offered more harm than benefit, 2) recommended that women over 50 should receive mammograms every one to two years and that 3) there was insufficient evidence to recommend routine screening for women over 75.

According to the task force findings, among women in their 40s, one breast cancer death would be averted for every 1,904 women screened regularly for 10 years. Among women in their 50s, one breast cancer death would be averted for every 1,339 women screened; and for those in their 60s, one for every 377 screened.

The task force’s overall recommendation was to endorse patient choice; “The decision to start regular, biennial screening mammography before the age of 50 years should be an individual one and take patient context into account, including the patient's values regarding specific benefits and harms."

These new guidelines incited a firestorm of controversy among breast cancer advocates, doctors and professional groups—many of whom have ties to the pharmaceutical and medical imaging industries. Accusations of health care rationing combined with impassioned stories of how women’s lives were saved by routine mammograms elicited all manner of emotional responses, including this reference to the “government takeover of health care” from Rep Marsha Blackburn from Tennessee who asserted, “This is how rationing begins. This is the little toe in the edge of the water; this is when you start getting a bureaucrat between you and your physician.”

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The Community Living Assistance Services and Supports (CLASS) is a voluntary long-term care program that was included in the Affordable Care Act. The idea was that  workers could pay a monthly premium which would eventually entitle them to monthly cash payments should they become disabled. As TCF fellow Harold Pollack described it, "Recipients could use this money to buy ramps and other equipment, assistance from home health care workers, and other goods or services that promote independence and personal well-being."

Yesterday's bipartisan budget deficit reduction plan that calls for "slashing $3.7 trillion over 10 years" would repeal the CLASS Act in its entirety, in effect pulling the rug out from under the program before it even had a chance to get started. In his most recent post on TCF's Taking Note blog, Pollack says he's not surprised–given Senators Kent Conrad (D-ND) and Max Baucus's (D-MT) dislike of the program. "The depth of opposition among fiscal conservatives is exemplified by Senator Conrad’s description of the CLASS Act as 'a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.'"

Below,  a guest post on the repeal by Howard Gleckman, Resident Fellow at the Urban Institute and author of the book "Caring For Our Parents," 

Bipartisan Senate Budget Plan Would Repeal CLASS

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Lots of attention has been focused on how over-testing, especially of the “worried well” contributes to high health care costs. To date, much of the focus has been on Medicare which spends a fortune each year on unneeded tests with no proven benefit.

Doctors, hospitals, demanding patients and defensive medicine have all been implicated in contributing to this glut of over-testing and treatment. But there’s another culprit that so far has avoided the scrutiny of government regulators. These are the stand-alone cardiac and similar health-related screening centers that employ heavy-handed consumer marketing techniques on the internet and through telemarketers; in some cases sending mobile screening units to church-sponsored and community events to help drum up business. 

Cardiac screening tests—including a CT scan for detecting the location and extent of calcified plaque in the coronary arteries—are meant to alert seemingly healthy people to the fact that they either have heart disease or are likely to develop it in the next few years. Patients don’t need a referral from a doctor to undergo cardiac testing at these centers and tests are not covered by insurance. The centers, which use direct-to-consumer (DTC) marketing, are not regulated by the Food and Drug Administration and have no mandate to refer patients with positive findings to a physician for follow-up care.

But with so many false positives and inconclusive results, many patients who do elect to have these tests end up undergoing a “cascade” of further interventions that are expensive (and are often covered by Medicare or private insurance). For example, a buildup of calcium in an asymptomatic patient’s artery might be detected yet would never have led to heart disease. Still, that patient may end up having such invasive treatments as cardiac catheterization or balloon angioplasty or be put on a statin or other medication for the rest of his life.

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