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Washington -- The American Medical Association's campaign to raise awareness of the nation's 47 million uninsured and to help address the problem is going nationwide.

The three-phase initiative kicked off in August 2007 with $5 million in advertising in Washington, D.C., and in the early presidential primary states of Iowa, New Hampshire and South Carolina. This year the campaign will spend about $15 million to spread the AMA's message across the country using print, television, radio and Internet ads; healthy lifestyle events; mobile billboards; and profiles on the popular social networking sites MySpace and Facebook.

The effort has two main goals, said AMA Board of Trustees member Samantha Rosman, MD, a pediatric resident in Boston. "The first is to put a human face on the issue of the uninsured," she said. "We're trying to get the message out that the uninsured is not just a statistic, but really individuals who are suffering as a result. The second is to then, with that information, motivate people to go to the voting booth with that in mind -- to demand from candidates from both parties they come up with not only a plan but a commitment to take action if elected."

The AMA has had a health system reform proposal for more than a decade, but it hasn't advanced legislatively, Dr. Rosman said. The Voice for the Uninsured campaign is an attempt this election year to change that.

The Association's proposal calls for providing tax credits or vouchers to individuals and families, based on income, to help them buy health insurance. The plan also includes expansion of health plan choices, more unified regulation of health insurance, guaranteed policy renewals, an individual insurance mandate for those earning more than 500% of the federal poverty level, and subsidies for high-risk enrollees.

The AMA understands that it will take a bipartisan effort to adopt reforms to cover more of the country's 47 million uninsured, Dr. Rosman said. After the presidential election, the third phase of the Voices campaign will focus on Congress and the White House. "We will certainly be there in D.C. pushing hard for a solution with whichever administration is [in power]," Dr. Rosman said.

The campaign has been using the Web to help uninsured individuals tell their stories. More than 600 people have shared details of their lives via the campaign's Web site (www.voicefortheuninsured.org) since August 2007. Musicians, who are often uninsured because of the nature of their work, have performed and been interviewed on podcasts, and the interviews also are posted online. The campaign might sponsor concerts with some of those musicians later this year, Dr. Rosman said.

Washington -- Even with Medicare payments to physicians still in doubt for the final half of this year, lawmakers and their Medicare advisers already are thinking about how much doctors will be paid next year.

If Democrats on the Senate Finance Committee have their way, by early summer physicians will know what they'll be paid both in the last half of 2008 and in 2009.

A six-month 0.5% boost is set to run out at the end of June and be replaced with a 10.1% reduction. This means that Medicare would cut pay across the board by 10.6% from current levels from July 1 through the end of the year.

In anticipation of this, Finance Committee members are working on 18-month payment legislation, rather than just another six-month patch, a Democratic aide on the panel said at a Washington, D.C., forum in January.

An 18-month measure would put off the next round of scheduled cuts until 2010 and free Congress from negotiating a 2009 payment update in the height of the presidential election season. The Finance Committee aide did not say how much doctors would get under the plan but said it would be part of a Medicare reform package that would cost between $12 billion and $15 billion over five years.

Congress could simply extend the 0.5% increase through the second half of 2008 without paying for the entire raise. But that action would trigger a 10.6% pay reduction come 2009 under the payment formula. On top of that, the already projected 5% cut for next year would then go into effect.

The American Medical Association favors the longer-term approach. "Congress must tackle this problem head-on in the next few months by passing legislation that raises payments in line with medical practice costs for 18 months," said AMA President Ron Davis, MD. "This will give legislators time to begin creating a new payment system for physicians that will ensure that seniors don't have to worry about whether a physician can care for them."

The AMA advocates elimination of the physician payment formula. "Medicare should base updates on increases in the cost of practicing medicine, similar to how hospitals are paid," Dr. Davis said.

Speaking to reporters the same day as the congressional forum, Health and Human Services Secretary Michael Leavitt did not say whether the White House would support the proposed Finance Committee approach. President Bush has threatened to veto physician payment boosts that use cuts to Medicare private health plans to help pay for them. But the administration believes that another half-year fix is not the answer. "We cannot go on patching this on a six-month-by-six-month basis," Leavitt said.

The billions that would be required to put off pay cuts for a longer time would have to come from somewhere in the program. Finding the money would be difficult because of a Medicare funding warning that sounded last year. The alarm requires President Bush, by law, to include a comprehensive plan for slashing program spending in his fiscal year 2009 budget proposal due in February.

MedPAC strikes a balance

At its January meeting, the Medicare Payment Advisory Commission approved a recommendation on physician pay for next year. If lawmakers were to follow the advice as they develop an 18-month pay package, doctors would receive an estimated 1.1% increase in their Medicare payments next year instead of the 5% reduction that is projected to occur. The recommendation will officially appear in MedPAC's March report.

MedPAC analysts expect that the average cost to physicians of providing care in 2009 will rise by an estimated 2.6%. But they also expect doctors to make practice changes that will bring in more revenue, so they decreased that figure by a projected 1.5% in their final recommendation to account for the anticipated productivity gains. Both estimated figures could change before year's end.

The AMA objects to the deduction for practice changes. "Physician payment updates should not be reduced based on a productivity adjustment that wipes out half the update they should receive to cover inflation in their costs," Dr. Davis said.

If Congress were to take MedPAC's advice, the 2009 update would cost more than $10 billion over five years.

The 1.1% recommendation illustrates the trade-off faced by the commissioners between adequate physician payment and cost control, said Thomas M. Dean, MD, a South Dakota family doctor and one of six physicians on the 17-member panel.

"I am sure that a 1% update does not adequately compensate for increases in practice costs, and there is the real risk of further antagonizing the physician community, many of whom feel they have not been fairly treated by Medicare," he said. "At the same time, I am very concerned about the steadily increasing volume of services and the costs associated with that, as well as the implications all that has for the long-term viability of the Medicare program." Despite his concerns, Dr. Dean supported the plan.

Ronald D. Castellanos, MD, a commissioner and urologist in Fort Myers, Fla., was not convinced that MedPAC struck the right balance. He voted against the recommendation.

"Now we all recognize ... that a plus 1% is much better than minus 5% or 10%, but it doesn't keep up with our costs," he said. "This is still, by the medical community, going to be looked at as a terrible message. And quite honestly, it's insulting."

MedPAC studies patients' access to doctors when considering payment recommendations, and last year's survey does not point to signs of a widespread problem, said John Richardson, a principal policy analyst with MedPAC. "The result of our 2007 beneficiary access survey led us to conclude that, at least from a national perspective, beneficiary access to physician care is good for the vast majority of Medicare beneficiaries, but also that pockets of access difficulties do exist, especially for beneficiaries seeking new primary care physicians."

Georgia physicians and hospitals are wrangling over a rule change that paves the way for general surgeons to establish ambulatory surgery centers without going through the certificate-of-need process.

The state's Dept. of Community Health in December 2007 unanimously approved a rule that reclassifies general surgery as a single specialty rather than a multispecialty. It amends related certificate-of-need requirements for physician-owned ambulatory surgery facilities. Georgia law exempts surgery centers focusing on a single specialty, such as orthopedics or obstetrics and gynecology, from demonstrating need.

Until now, state health rules subjected general surgery facilities to the same certificate-of-need requirements as broader, multispecialty surgery centers. The new rule went into effect Jan. 3.

The Georgia Alliance of Community Hospitals is suing the health department to block what it says is an illegal move that will threaten access to care and allow general surgeons to skirt charity care requirements in favor of better-paying patients.

Meanwhile, the physician community is defending the regulation, which doctors and state health officials say will give patients more choice and attract much-needed general surgeons to the state.

Physician-owned ambulatory surgery centers face certificate-of-need hurdles in nearly 30 states, according to American Medical Association and Ambulatory Surgery Center Assn. research. But Georgia's situation is unique.

"Georgia's [former] rule that does not recognize general surgeons as specialists is out of line with every other state and every other medical indication we have out there," said Medical Assn. of Georgia Executive Director David Cook, saying it unfairly singled out general surgeons under the ambulatory facility requirements. He said the hospitals' lawsuit to reverse the regulation is aimed at limiting the kind of competition that can benefit patient care with low-cost, high-quality services.

Outpatient surgery centers are more convenient for doctors and patients, said John T. Perry III, MD, president of the Georgia Society of General Surgeons, an advocacy group formed to push for the recent rule change.

"Patients have lousy scheduling, high prices, and hospitals don't have to accommodate them because they know they have to go there," said Dr. Perry, a Cartersville, Ga., general surgeon. Surgical manpower also suffered because of the former rule, he said. Now, the potential boost in income from owning a surgery center could help doctors in the face of declining reimbursement in the largely rural state.

The Medical Assn. of Georgia and the Georgia Society of General Surgeons are seeking to join the case as defendants.

Dept. of Community Health Commissioner Rhonda M. Medows, MD, said the rule change "means greater access for patients, and for us as [public] health plan administrators, more options in terms of how we staff our provider networks."

American Medical Association policy opposes certificate-of-need restrictions on physician-owned ambulatory surgery centers. A June 2007 AMA Board of Trustees report states that such laws have not controlled health care costs. U.S. Justice Dept. testimony submitted to Georgia's certificate-of-need reform commission in February 2007 cited similar data and concluded that competition from the doctor-owned surgery centers could help cut costs and broaden access.

The hospitals in their lawsuit challenge the state health department's authority to alter the certificate-of-need regulations. The Georgia Alliance, with its more than 50 nonprofit hospital members, says the rule change defies the Legislature's intent to exclude general surgeons from the single-specialty exemption for outpatient surgery centers because general surgery services could overlap with other medical specialties.

Without the certificate-of-need process to weed out unnecessary duplication, health care costs go up, said the Georgia Alliance's attorney, Leo E. Reichert. The rule change also leaves community hospitals with the burden of covering indigent and uncompensated care, he said.

The hospitals are asking the Superior Court of Dougherty County to block the rule while the case is pending. They fear that general surgeons will rush to take advantage of it and drain hospitals of specialists and revenue. A hearing date has not been set.

Reichert said the state's actions conflict with prior court and attorney general opinions.

In 2004, the Georgia Supreme Court upheld the certificate-of-need restrictions on general surgery ambulatory facilities. Citing that decision, a 2005 nonbinding attorney general opinion said the Dept. of Community Health did not have the power to change the status of the exemptions.

The department disagrees. Officials said that in 2007, the Legislature, after hearing from the certificate-of-need reform commission, passed a law allowing the department's board to promulgate rules related to the program. The agency also said the court opinion did not address the department's role in the process.

Doctors say they provide more than their fair share of charity care and that they will continue to do so.

The Medical Assn. of Georgia and the Georgia Society for General Surgeons, along with the health department, support legislation that would mandate that ambulatory surgery centers provide a minimum level of indigent and uncompensated care. Meanwhile, a bill redefining general surgeons as a single specialty sits in a committee after the full House voted to send it back in April 2007.

MAG's Cook said fears that general surgery centers will overstep their bounds are unwarranted. The outpatient facilities generally are limited to two operating rooms and must have a certain level of capital investment, likely preventing them from offering a broad range of services, such as overnight care, he said.

In addition, hospitals are eligible for tax benefits and state funds for uncompensated care that ambulatory surgery centers are not, said Christopher Smith, MD, a general surgeon at Albany (Ga.) Surgical PC. The practice challenged the state regulations in the 2004 state Supreme Court case.

The Albany doctors also are named as defendants in the hospital industry's lawsuit because they tried to open a surgery center in the early 1990s. The plaintiffs want to prevent another attempt.

In what may prove to be a bellwether for the viability of employer-mandated health insurance, a federal appeals court allowed San Francisco's plan requiring businesses to provide benefits or pitch in for uninsured coverage to remain in place -- for now.

The city ordinance, which took effect Jan. 1, requires employers with 20 or more workers to spend a certain amount on health coverage or put that money into a city fund for "Healthy San Francisco." The program offers primary and preventive care to the city's estimated 82,000 uninsured residents through a system of clinics. Businesses with 20 to 99 workers must spend $1.17 per hour per employee, while those with 100 or more employees must pitch in $1.76 per hour per worker.

The Jan. 9 decision by the 9th U.S. Circuit Court of Appeals comes on the heels of a trial court ruling striking down the employer-spending provision. The trial judge, on Dec. 26, 2007, said the mandate is preempted by the federal Employee Retirement Income Security Act because it interferes with employers' ability to provide and maintain uniform health benefits without facing a patchwork of regulations within each state.

However, the three-judge appeals panel disagreed with that interpretation and issued an emergency order keeping the program in full effect while the city appeals the trial court decision. Siding with the city, the 9th Circuit said an ERISA violation is unlikely because the ordinance gives businesses the option of how to comply without making any changes, whether by paying into an existing health plan or the city fund.

The appeals court panel's decision differs from what other jurisdictions have said on the issue and could be precedent-setting if upheld by the full court. In 2007, courts in Maryland and New York struck down other "pay or play" laws for violating ERISA.

California lawmakers are watching the San Francisco case closely because a statewide health system reform proposal developed by Gov. Arnold Schwarzenegger and the Assembly includes a similar spending mandate.

Meanwhile, San Francisco city officials remain confident in their appeal. City Attorney Dennis J. Herrera argued the city mandate was carefully crafted to avoid ERISA preemption by giving employers "complete autonomy" in deciding how to meet the spending requirements.

"ERISA was designed to prevent private companies from mismanaging employee benefits. It was never intended to prevent cities like San Francisco from enacting programs to protect the health and welfare of its people," Herrera said in a statement following the Golden Gate Restaurant Assn.'s legal challenge.

Without a court order, "tens of thousands of San Francisco residents and workers [would be] deprived of critically necessary health care services -- and [would] suffer the health-related and financial consequences," Herrera said just before seeking the order to keep the program running.

Golden Gate Restaurant Assn. Executive Director Kevin Westlye emphasized the 9th Circuit's order is just one step in the legal process and said the appeals court judges misread the law.

"The administration [of the Healthy San Francisco employer mandate] is onerous," Westlye said. It imposes on employers new and confusing burdens that conflict with ERISA standards, he added. For example, businesses would have to differentiate hours worked by employees inside and outside the city, and possibly create waivers to track workers' health care contributions or decisions to opt out of employer-provided benefits.

Westlye said the restaurant association supports expanded access to care. But he suggested it could be accomplished through less-burdensome funding alternatives, such as a proposed quarter-penny sales tax that the city and county board turned down.

But city officials worry that without the mandate, some businesses will drop their existing benefits.

Westlye said city officials' fears that health reform lacking an employer mandate would encourage businesses to drop coverage are unwarranted. "Employers, as long as they can afford to pay the rising health care premiums, will not dump employees into the city and county clinic program," he said.

The San Francisco Medical Society supports universal access to health coverage but has not taken a position on Healthy San Francisco or the employer mandate. Still, some doctors want to see it tested, said Steve Heilig, the medical society's director of public health and education, speaking on his own behalf.

Heilig, who served on the mayor-appointed council that developed Healthy San Francisco, said the panel strove to use existing resources to make the plan work without overtaxing any one component. For example, the city already had a strong network of community clinics it tapped into, and most employers already offered health coverage, he said.

"We want to give people a medical home where they can get consistent care," Heilig said. Rather than spending money on legal challenges, "let's give it a chance to work, and if the data shows it to be too onerous for businesses, it can be adjusted."

American Medical Association policy does not address employer mandates. The AMA supports expanding access to health coverage through tax credits, insurance reforms and individual responsibility.

Washington -- While the national health spending growth rate increased slightly in 2006, the percentage rise in expenditures on physician services slowed markedly, due largely to a small Medicare pay increase and its private-sector fallout, according to a new report by the Centers for Medicare & Medicaid Services.

At the same time, the start of Medicare Part D had a major impact in the prescription drug sector.

Overall national health spending reached $2.1 trillion, up 6.7% from $1.97 trillion in 2005, states the CMS report, published in the January/February Health Affairs. The 2005 growth rate was 6.5%.

This moderate increase was possible because of a broad-based slowdown in spending growth in many categories, including physicians and clinical services. These expenditures increased by 5.9% in 2006, down from 7.4% in 2005, found the report, "National Health Spending in 2006: A Year of Change for Prescription Drugs." For the first time since 1999, physician spending increased more slowly than the gross domestic product.

The small size of Medicare's physician payment update in 2006 played a role in the decelerating physician spending, said Cathy Cowan, a CMS economist and one of the report's co-authors. "[Physician and clinical] price growth slowed significantly, in part, due to the Medicare payment update, which was 0.2%, and the impact of private payers somewhat following Medicare's lead," Cowan said.

Private health plan expenditures on physicians and clinical services -- which account for two-thirds of such outlays -- increased 6.1% in 2006, compared with 8.3% in 2005. Medicare spending on physicians and clinical services, which is 21% of such expenditures, grew by 6.6% in 2006, down slightly from 6.8% in 2005.

But preliminary 2007 data indicate that 2006's slower pace of spending on physicians may be an anomaly, Cowan said. "We're seeing that the growth of prices for physician services is inching back to the previous level."

A six-month Medicare physician update in 2008 of just 0.5%, paired with a 2.1% increase in practice costs as measured by the Medicare economic index, means physicians will need to look for new revenue, said Jim King, MD, president of the American Academy of Family Physicians. For example, he expects more doctors to offer profitable services, such as cosmetic surgery, and to reconsider offering obstetric services and seeing hospital patients.

While most major categories of health outlays saw slower growth in 2006, spending on prescription drugs increased for the first time since 1999. It grew from 5.8% in 2005 to 8.5% in 2006.

The 2006 launch of Medicare Part D, which gave many seniors and people with disabilities access to affordable drugs for the first time, is largely responsible. Medicare was the source of just 2% of funds for drug benefits in 2005. In 2006, its share rose to 18%, according to the CMS report.

When spending on Part D is taken out of the equation, Medicare spending increased by just 6% in 2006, down from the 9% increase in 2005. Enrollment in fee-for-service Medicare declined by 3.8%, to 34.5 million, Cowan said.

The 2006 shift of prescription coverage from Medicaid to Part D for the 6 million people eligible for both Medicaid and Medicare helped to boost overall drug expenditures, the report found. That's because state Medicaid drug price rebates averaged 30%, while Part D rebates were between 5% and 10%, according to CMS chief actuary Rick Foster. He cautioned, however, that this likely was balanced somewhat by Part D enrollees who previously did not have drug coverage and paid retail price before but now get a lower price through Medicare.

The shift in drug coverage from Medicaid to Medicare Part D also helped account for an overall drop in state and federal spending on Medicaid of 0.9% in 2006. This is the first drop in the program's history, Cowan said.

But when the change in prescription drug policy is factored out, 2006 Medicaid spending increased 5.6%. This is still lower than the 8.0% boost in 2005. Slower enrollment growth and continued state cost-containment efforts, such as eligibility cuts and increased fraud and abuse monitoring, helped to depress expenditure growth.

Another sector that showed major change was spending on public and private health plan administrative costs. This was the fastest-growing expense in 2006, with an 8.8% increase -- more than twice the 2005 growth of 3.6%. The spike was tied to the cost of getting Part D off the ground and a 25% growth in private Medicare health plan enrollment, to 7.1 million.

Spending on the Medicare Advantage plans is controversial. They were paid 12% more than Medicare spent on each senior's care in 2006.

Last year Democrats in Congress were unable to pass legislation to reduce payments to private Medicare plans to fund a larger Medicare physician update this year. Debate on this issue is expected to resume this year.

Spending pace could increase

Although national health spending increases have been relatively stable in recent years, there are a few reasons that trend is not expected to continue, said Paul Ginsburg, PhD, president of the Center for Studying Health System Change.

The hospital sector has been expanding capacity by adding specialty facilities. Also, entrepreneurial physicians are forming ventures to open facilities offering imaging and tests, Dr. Ginsburg writes in "Don't Break Out the Champagne: Continued Slowing of Health Spending Growth Unlikely to Last," in the January/February Health Affairs. Dr. Ginsburg wrote that the delayed impact of the 2001 recession may be ending, signaling the start of another round of higher health spending increases.