President Bush's plan to expand access to health insurance through tax deductions "is a step in the right direction," but falls short of comprehensive health system reform supported by the AAFP, according to Academy President Rick Kellerman, M.D., of Wichita, Kan.
State of the Union Address
Bush's Health Insurance Plan Includes Pros, Cons for Family Physicians
By Leslie Champlin
1/24/2007
Speaking in response to Bush's Jan. 23 State of the Union address, Kellerman praised the president's recognition that "the best health care decisions are not made by government, but by patients and their doctors."
"By putting an innovative proposal to expand health care coverage on the table, (Bush) joined America’s family physicians and other health care providers, industry leaders, governors of both parties and everyday Americans who know that the health care status quo, with ever-increasing costs and numbers of uninsured, is no longer acceptable," said Kellerman.
He also recognized the importance of Bush's plan to expand health care coverage for U.S. citizens, particularly children. "Reauthorizing the States' Children's Health Insurance Programs will help America take care of our most vulnerable (citizens) -- children in families of modest means," said Kellerman.
"By putting an innovative proposal to expand health care coverage on the table, (Bush) joined America’s family physicians and other health care providers, industry leaders, governors of both parties and everyday Americans who know that the health care status quo, with ever-increasing costs and numbers of uninsured, is no longer acceptable," said Kellerman.
He also recognized the importance of Bush's plan to expand health care coverage for U.S. citizens, particularly children. "Reauthorizing the States' Children's Health Insurance Programs will help America take care of our most vulnerable (citizens) -- children in families of modest means," said Kellerman.
Paying for Health Care
In his address, Bush called for changing the U.S. tax code to treat employer-sponsored health benefits as taxable income but to allow an annual health care deduction of $15,000 for families and $7,500 for individuals. Employer-sponsored health insurance benefits that exceeded those amounts would be taxed as income. His proposal also would fund state initiatives to provide basic health insurance by diverting $30 billion in capital funds and Medicare and Medicaid disproportionate share, or DSH, funds from hospitals and other health care facilities.
Both parts of the proposal may pose problems for patients' access to care and for medical education, say AAFP leaders. Although the plan may increase access to insurance, it doesn’t necessarily encourage access to medical homes, and it taps into funds now used to help teaching hospitals, which provide primary care education.
"As family physicians, we know we need fundamental reform that includes a health system based on primary and preventive care," said Kellerman. "Having health insurance without access to primary care or a medical home -- where the costs are better controlled -- won't solve the underlying problems."
Moreover, improving access to health insurance will do little to rectify physician payment issues, said Kellerman. Without addressing the issue of rewarding expensive procedures and underpaying primary care physicians, the United States will continue to grapple with a shortage of primary care physicians; without an adequate supply of primary care physicians, all families will have limited access to affordable and high-quality care.
Katherine Baicker, a member of the Council of Economic Advisors, acknowledged that the tax deduction would enable only 3 million of the more 40 million currently uninsured Americans to buy coverage.
"That will be the net increase in the number of insured people just from the tax piece alone," Baicker said during a Jan. 22 press briefing on the president's proposal. She did not have an estimate on the number of people who would receive coverage under the proposal. "I think that more of those details will be available in the budget when it comes out. But it's dependent on how the states react."
Both parts of the proposal may pose problems for patients' access to care and for medical education, say AAFP leaders. Although the plan may increase access to insurance, it doesn’t necessarily encourage access to medical homes, and it taps into funds now used to help teaching hospitals, which provide primary care education.
"As family physicians, we know we need fundamental reform that includes a health system based on primary and preventive care," said Kellerman. "Having health insurance without access to primary care or a medical home -- where the costs are better controlled -- won't solve the underlying problems."
Moreover, improving access to health insurance will do little to rectify physician payment issues, said Kellerman. Without addressing the issue of rewarding expensive procedures and underpaying primary care physicians, the United States will continue to grapple with a shortage of primary care physicians; without an adequate supply of primary care physicians, all families will have limited access to affordable and high-quality care.
Katherine Baicker, a member of the Council of Economic Advisors, acknowledged that the tax deduction would enable only 3 million of the more 40 million currently uninsured Americans to buy coverage.
"That will be the net increase in the number of insured people just from the tax piece alone," Baicker said during a Jan. 22 press briefing on the president's proposal. She did not have an estimate on the number of people who would receive coverage under the proposal. "I think that more of those details will be available in the budget when it comes out. But it's dependent on how the states react."
Possible Effects on Health Care Safety Net
Another concern is that limited funds may lead to a decrease in so-called safety net providers, thus leaving a certain number of people without access to care.
"Even with this proposal, people will still need safety net providers, such as community health centers. And let's not forget that family medicine residency programs are safety net providers," said Kellerman. By diverting DSH funds, the plan could financially cripple safety net services and further limit low-income patients’ access to services.
Perry Pugno, M.D., M.P.H., director of the AAFP Division of Medical Education, agreed. "If (safety net providers) lose some of those funds, then those who are currently providing the most care to the most needy populations will lose money," he said.
Of equal concern, Bush's plan to divert DSH funds could exacerbate the existing family physician shortage, say AAFP officials.
"Two-thirds of DSH funds go to teaching hospitals," said Pugno. "Because primary care -- and especially family medicine -- residencies are among the most financially challenged graduate medical education programs, they are the ones most likely to experience an adverse impact from such cuts. And the bureaucratic overhead of such a project will eat a lot of the money in the system, too."
"Even with this proposal, people will still need safety net providers, such as community health centers. And let's not forget that family medicine residency programs are safety net providers," said Kellerman. By diverting DSH funds, the plan could financially cripple safety net services and further limit low-income patients’ access to services.
Perry Pugno, M.D., M.P.H., director of the AAFP Division of Medical Education, agreed. "If (safety net providers) lose some of those funds, then those who are currently providing the most care to the most needy populations will lose money," he said.
Of equal concern, Bush's plan to divert DSH funds could exacerbate the existing family physician shortage, say AAFP officials.
"Two-thirds of DSH funds go to teaching hospitals," said Pugno. "Because primary care -- and especially family medicine -- residencies are among the most financially challenged graduate medical education programs, they are the ones most likely to experience an adverse impact from such cuts. And the bureaucratic overhead of such a project will eat a lot of the money in the system, too."
Health IT, Medical Liability Reform
Although Kellerman had concerns about some of Bush's proposals, he was encouraged by the president's focus on health care technology. "Investing in a modern health information infrastructure, long an AAFP priority, is an important prerequisite to support quality improvements and reduce medical errors," said Kellerman.
In addition, Bush's call to pass common sense medical liability reforms earned praise from Kellerman. The reforms "as called for by the president tonight, will help restrain skyrocketing costs and keep good doctors in their practices. These are solid steps that will improve health care in America," he said.
In addition, Bush's call to pass common sense medical liability reforms earned praise from Kellerman. The reforms "as called for by the president tonight, will help restrain skyrocketing costs and keep good doctors in their practices. These are solid steps that will improve health care in America," he said.
