Professional News
 DOI: 10.1176/appi.pn.2012.12a25
AMA Calls for Medicare Reform, Asks for Antipsychotic Guidance
Psychiatric News
Volume 47 Number 23 page 9-32


AMA delegates approved a report recommending a strategy of "defined contribution" to control Medicare costs and another on use of atypical antipsychotics in children.

Abstract Teaser

The AMA approved a detailed report on Medicare reform recommending that the government provide a “defined contribution” toward purchase of a private health insurance plan, while also preserving traditional Medicare as an option.

At the AMA House of Delegates Interim Meeting in Honolulu last month, delegates approved a report by the AMA’s Council on Medical Services that expands on existing AMA policy supporting the defined contribution model by outlining a set of principles to ensure that Medicare remains a viable program for all beneficiaries, offering affordable and accessible health insurance coverage, especially for the poorest and sickest beneficiaries (see box below).

Additionally, approval of the report puts the AMA on record as supporting Medicare funding of graduate medical education. And during debate on the report, language was added to reaffirm the AMA’s support for parity coverage of treatment for mental illness and substance abuse under any reformed Medicare program.

The model of defined contribution had been the object of media attention prior to the AMA meeting because a reform proposal with some similar features had been put forward by Republican vice-presidential candidate Paul Ryan. With the defeat of Ryan and running mate Mitt Romney in the November elections, some delegates at the AMA meeting argued that the defined contribution strategy was now politically sidelined.

Yet it is also widely acknowledged—at the AMA and in Congress—that Medicare as currently structured will not last. And psychiatrist John McIntyre, M.D., a member of the Council on Medical Services, emphasized that political considerations should not determine AMA policy.

“We should be developing policy that represents what we think is best for patients and physicians,” he told Psychiatric News.

And that policy may fall in line with a Republican or a Democratic agenda. McIntyre noted that the AMA gave very crucial support to the Patient Protection and Affordable Care Act.

“In that case, our interest was in expanding health coverage to the uninsured,” he said. “In the case of Medicare, the AMA’s concern is that Medicare remain a viable program. The reality is that the trust fund for Medicare Part A is due to go bankrupt in 12 years. We can’t go on with Medicare the way it is with some 10,000 new beneficiaries joining the program every day. We need to do something to bend the spending curve.”

The model would do that by allowing some beneficiaries the choice of buying health insurance from a private insurance company using a defined contribution from the government; that contribution would be set at the value of the government’s per-beneficiary contribution under traditional Medicare and would be indexed to medical inflation. The model would increase beneficiary awareness of—and responsibility for—their own costs, while also exerting private market controls over spending.

But delegates at the meeting were also all but unanimous that traditional Medicare should be preserved as an option. The AMA report also received very wide and vocal support from delegates for its stand on continued Medicare funding of graduate medical education (GME); McIntyre noted that one AMA proposal calls for an “all-payer” strategy that would require private insurers as well as the government to contribute to GME.

In other news at the meeting, delegates unanimously approved a report by the AMA’s Council on Science and Public Health (CSPH) that outlines relevant literature on the benefits and side effects associated with atypical antipsychotics in children and calls on the AMA to encourage federally funded research. Specifically, the report urges the National Institute of Mental Health (NIMH) to assist in developing guidelines for physicians.

During testimony on the report at reference committee hearings, child and adolescent psychiatrist Louis Kraus, M.D., a member of the CSPH who helped write the report, said it outlines some of the recommendations for clinical use of atypical antipsychotics in pediatric populations that have been developed—for instance by the American Academy of Child and Adolescent Psychiatry.

But Kraus said assistance from NIMH in providing guidance to physicians about the use of those medications is crucial. “Using medications whose side effects may be more deleterious than beneficial, without fully understanding what the benefits and side effects are,” is not good clinical practice, he said.

He noted that studies of long-term efficacy and safety are especially important.

Child psychiatrist and APA Treasurer David Fassler, M.D., said there has been a dramatic increase in the use of antipsychotic medication in the treatment of children and adolescents, much of it off-label.

“Patients and parents need more information about the safety and efficacy of these medications especially when used over an extended period of time,” he said. “The recommendations will encourage ongoing research, monitoring, and education. ■

The report on Medicare reform is posted at http://www.ama-assn.org/assets/meeting/2012i/i12-refcomm-j-annotated.pdf. The report on use of antipsychotics in children is posted at http://www.ama-assn.org/assets/meeting/2012i/i12-refcomm-k-annotated.pdf.

Principles of Defined Medicare Contribution 

The following principles were outlined in an AMA report on Medicare reform as essential to ensuring that the program remains viable for the sickest and poorest individuals. The report said a reformed Medicare employing defined contribution must do the following:

  • Enable beneficiaries to purchase coverage of their choice from among competing health insurance plans, which would be subject to appropriate regulation and oversight to ensure strong patient and physician protections.

  • Preserve traditional Medicare as an option.

  • Offer a wide range of plans (for example, HMOs, PPOs, high-deductible plans paired with health savings accounts), as well as traditional Medicare.

  • Require that competing private health insurance plans meet guaranteed issue and guaranteed renewability requirements, be prohibited from rescinding coverage except in cases of intentional fraud, follow uniform marketing standards, meet plan solvency requirements, and cover at least the actuarial equivalent of the benefit package provided by traditional Medicare.

  • Set the amount of the baseline defined contribution at the value of the government’s contribution under traditional Medicare.

  • Ensure that health insurance coverage is affordable for all beneficiaries by allowing for adjustments to the baseline defined contribution amount. In particular, individual defined contribution amounts should vary based on beneficiary age, income, and health status. Lower-income and sicker beneficiaries would receive larger defined contributions.

  • Adjust baseline defined contribution amounts annually to ensure that health insurance coverage remains affordable for all beneficiaries. Annual adjustments should reflect changes in health care costs and the cost of obtaining health insurance.

  • Phase in reform over time.

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