Briefing Room’s Top 10 Health Stories of 2012

2012 will mark a point in history as one of the most active years in the chronicles of healthcare. Each week brought new headlines and controversies that permeated various aspects of our personal lives. Healthcare touched our pocketbooks and our wallets. It made us question the role and influence of public unions and infused itself into discussions surrounding unemployment figures. It told us what size beverages we can consume and even took a turn into the bedroom where it weighed in on women’s reproductive rights.

In hindsight, this year provided a glimpse into the future. We are one step closer to near-universal healthcare and have added another year of being the world’s most obese, developed nation to our resume. We have a social-safety net for our most vulnerable citizens, both poor and elderly, but are also in the midst of the contentious “fiscal cliff” debates occurring at the 11^th hour. We are hanging in the balance. So with that lens, here are the Briefing Room’s Top Ten Health Stories of 2012.

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#10 Scott Walker Survives a Recall Election

Scott Walker passed a controversial bill in 2011 that sought to strip collective bargaining rights of public sector employees. The bill would help shift costs to solve a $3.6 billion Wisconsin budget deficit. In the wake of its passing, health insurance for public sector employees was immediately impacted. Health risk assessments were mandated with a primary new focus: wellness. Modifications such as higher co-payments were applied to Union health plans in an attempt to decrease costs by 5%. The bill mandated a cap of 88% employer contributions to the lowest possible plan, directly conflicting with the 90.5% cap that is embodied in Obama’s Affordable Care Act. Prior to the bill, Union employees only contributed 6% towards their health insurance plan. According to a 2012 Kaiser study, that percentage greatly exceeds traditional employer standards.

As a result, there was movement in 2012 to recall Governor Walker’s election and replace him with Democratic challenger, Tom Barrett. The election caught national attention as money and support from outside groups poured into Wisconsin. In the end, support from 53% of the Wisconsin electorate was enough to keep Walker in the Governor’s seat, making him the first American politician to ever withstand a recall election.

Other GOP Governors viewed this win as a sign of things to come. It brought forth the idea that despite Obama’s popularity, voters at the local level still care about deficits and runaway government spending.

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#9 The Republican “War on Women”

This “war” refers to a series of legislative and public actions that put the Republican Party at odds against women advocacy groups and Democratic lawmakers. The tone and political positioning of party leaders hit a fever pitch as candidates running for office faced public scrutiny in wake of their off-color comments.

Below is a sampling of examples from 2012:

January 2012 – The world’s leading breast cancer research group, Susan G Komen for a Cure, pulled its funding from Planned Parenthood because of ties to abortion and a congressional investigation (headed by Republican lawmaker Clifford Stearns, Sr.). Women advocacy groups, Democrats, and millions of supporters denounced Komen’s decision. As a result, over $400,000 in donations poured in to replace the loss of funding. By August 2012, CEO/founder Nancy Brinker and President Liz Thompson had stepped down in lieu of the controversy. According to a 2010 Planned Parenthood report, abortions represented 3% of total patient services (which does not incorporate costs). Their 2011 annual report is not available on their website.

February 2012 – Sandra Fluke, a then Georgetown law student turned Women’s Rights Activist, was targeted by conservative talk show host, Rush Limbaugh, for her stance on contraception. A key provision of Obama’s health care reform bill requires employers to offer contraception to all eligible female employees, thus creating uproar from numerous religious organizations. While an exemption was put into place to delay a decision surrounding certain religious bodies, it did not include Catholic hospitals, charities, or universities. Many of these organizations have mission statements that stand in direct conflict with the Obama provision. As a result, the Republicans held a male-only committee meeting to discuss the ramifications of the overall law, leading to even further outcry from its most staunch supporters.

March 2012 – Virginia Governor Bob McDonnell signed yet another controversial law into effect. The law mandates women to have an ultrasound prior to an abortion and requires that a copy of the fetal image be included in the patient’s record. The original bill required a much more intrusive ultrasound, but due to national protests had to be altered to provide a less invasive alternative. Many believe that this law knocked McDonnell off of Romney’s list of potential Vice President candidates. Iowa, Louisiana, and Pennsylvania all implemented similar laws later in the year.

August 2012 – Todd Akin, a Republican running for a U.S. Senate seat in Missouri, uttered the phrase, “legitimate rape”, suggesting that the female body has biological capabilities to prevent rape from occurring. Paul Ryan, the Republican Vice Presidential nominee, co-signed an anti-abortion bill with Akin. The bill restricted any government funding for abortions due to “forcible rape”, introducing a new definition of rape to the political lexicon. Ryan would later lose the general election.

October 2012 – In his campaign for a Senate seat in Indiana, Republican Richard Mourdock stated that rape was a message from God that backed his anti-abortion stance regardless of force or incest. Mourdock stood by his statement even in the face of public outcry. He too, would lose the general election.

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#8 Soda Ban in NYC

Mayor Bloomberg has successfully made New York City a healthier place by using what many have dubbed to be controversial public policy changes. Bloomberg pushed legislation to introduce more hybrid and electric taxicabs. He sought to expand the smoking ban to public places and parks. He successfully banned trans-fats from all NYC fried food joints and required menus in all chain restaurants to include calorie counts. He also championed multilingual radio, TV, billboard, and subway “shock” advertisements to promote healthy lifestyle choices. Remember seeing the image of a soda turning into fat on your daily subway commutes?

However, in probably his most controversial policy move ever, Bloomberg successfully restricted the size of sugary drinks/ sodas sold by restaurants, street carts, and movie theatres. It was a fight waged against one of the largest lobbyist groups in the country, an organization backed by millions of dollars from PepsiCo and Coca-Cola.

The Mayor’s passion to curb obesity has been both a moral and fiscal battle. New York City has runaway Medicaid costs as well as some of the highest obesity rates in the country. The only way to control healthcare costs and simultaneously manage the city’s budget is to get New Yorkers healthier. Bloomberg has taken an innovative route through his utilization of both awareness campaigns and legislation to get the job done.

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#7 The Year of Mergers and Acquisitions

With 30 million Americans entering the health insurance market, Obama has touted that his healthcare reform bill will increase competition amongst carriers. As the many provisions of the bill have been released, the insurance industry has quickly reacted with a series of mergers and acquisitions. Across the country, health plans have looked for ways to find economies of scale, increase market share, and prepare for a post-reform marketplace.

As a result, major health care giants representing $115 billion in market capitalization completed a string of acquisitions in late 2012, actually decreasing the number of competitors. Eyebrows have been raised at the idea that health insurance companies might follow suit of big banks and eventually become too big to fail.

July 2012 – WellPoint, the nation’s largest health insurance carrier in terms of membership, agreed to purchase Amerigroup for $4.9 billion in cash as it expanded its Medicaid footprint to over 4.5 million members. The transaction made WellPoint the largest private Medicaid insurer in the country. It has been estimated that over 17 million more Americans will be seeking Medicaid benefits in 2014. Additionally, this expands WellPoint’s capabilities of managing dual eligible patients not enrolled in either Medicare or Medicaid.

August 2012 – Cigna purchased Great American Supplemental Benefits Group for $305 million, making it the largest producer, distributor, and marketer of supplemental health products in the United States. With federal restrictions surrounding profit margin on health insurance products, Cigna looks to diversify its revenue stream by selling plans that fall outside the cope of the health care reform bill.

August 2012 – Aetna made headlines upon agreeing to acquire Coventry Health Care for $7.3 billion. The purchase instantly increases Aetna’s medical membership by 4 million. It also substantially increases the company’s Medicaid footprint, positioning them well for Health Exchange business come 2014. The acquisition also increases operational efficiencies with synergies expected to save about $400 million.

October 2012 – UnitedHealth Group purchased a 90% stake valued at $4.9 billion in Amil Participacoes SA, the largest health insurer and hospital operator in Brazil. With a growing middle class and a vibrant economy, the future of healthcare in Brazil looks increasingly bright. Many have viewed the bold move as indicator that UnitedHealth is the most diversified health company in the United States. As more and more regulations layer on top of American insurance companies, they will need to look for more creative ways to keep up with current profit margins.

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#6 Restaurants Refuse to Add Obamacare to Menus

In 2014, companies with over 50 employees working 30 hours or more (per week) will be required to offer health coverage to all eligible employees. Otherwise, the employer will face penalties ranging from $2,000 to $3,000 per employee per year.

In the fall of 2012, Darden Restaurants, the parent company of Olive Garden and Red Lobster, publicly announced that they would shift employees from full-time to part-time in order to avoid Obama’s coverage mandate.

Papa John’s joined the fight when CEO John Schnatter said that health coverage would raise the price of pizza by 15 to 20 cents per order. He claimed that he too would search for ways to cut costs.

Applebee’s soon followed suit when their CEO, Zane Tankel, stated that he would be forced to fire employees in order to keep costs down.

Then, John Metz, the owner of over 40 Denny’s franchises in Florida, announced a 5% surcharge on all sales to help cover the added costs of health care reform. Metz also threatened to scale back the hours of his employees from 40 to 28 per week.

But history repeats itself. Few people remember in 1994 when Godfather Pizza’s CEO Herman Cain debated President Clinton on the merits of what his healthcare reform bill (crafted by Hilary Clinton) would do to the restaurant industry. Cain would later become an unsuccessful candidate for the 2012 Presidential Republic Party nomination.

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#5 Super Storm Sandy Shuts Down NY Hospitals

Sandy tore through New York, New Jersey, and other surrounding neighborhoods, bringing the Tri-State area to its knees. Disaster recovery plans were positioned on a national stage due to the unpredictable and volatile severity of the damage. Although facilities attempted to prepare accordingly, there were four major hospitals in particular that were crippled and remained closed even weeks after the passing of the hurricane.

NYU Langone Medical Center prepared for flooding with back-up generators; but when push came to shove, over ten feet of water had made its way into the basement. In addition, years of expensive, important research were lost when lab mice and other specimen drowned in the basement deluge.
Bellevue Hospital Center, the oldest Public hospital in the country, properly stored back-up generators on the 13^th floor. However, the pumps that fuel those generators were located in the basement, which ended up under three feet of water.
Coney Island Hospital stored generators, emergency room support technologies, IT servers, and electric systems in their flooded basement. The hospital had to be evacuated the afternoon after the storm crashed down.
The Manhattan VA Medical Center sustained such severe flooding that they are not predicting a reopening of outpatient services until March 2013. The hospital had to evacuate its patients on October 28^th, and lost expensive equipment such as MRI machines and other clinical items.

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#4 Romney Doubles Down on Repealing Obamacare

In probably the most interesting political theatre match of our time, we saw two Presidential candidates grapple with health care positions that left both political parties at odds. Obama, having pushed for a very centrist healthcare reform bill actually modeled after Romney’s plan for Massachusetts, had to urge Democrats to fight for a bill that many did not think went far enough. The bill left out the quintessential provision of a “public opinion”.

On the opposite end of the spectrum was Mitt Romney, who authored and signed his own healthcare bill with a Democratic-led legislature. Romney famously argued throughout the Republican primary process that he would repeal Obama’s bill, a law that closely and ironically mimicked the bill he had signed just four years prior. To make matters even more confusing, Romney stated in an interview on Meet the Press that he did not intend to repeal all the provisions of Obama’s law and would actually keep certain components in place. Some of these details included the elimination of denial of coverage based upon pre-existing conditions and maintaining the ability for people to enroll their dependents up to a higher age.

In the end, what both Presidential candidates actually agreed upon was a reduction to Medicare. Obama’s healthcare bill reduced growth of Medicare by withholding payments to health companies and hospitals that estimated roughly $716 billion in savings over a ten-year span. Likewise, Romney backed a budget plan that would transform Medicare into a voucher system for Americans under the age of 55. This would produce estimated savings of $700 billion, predominately originating from costs shifts from the Federal government to Medicare recipients.

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#3 Europe’s Healthcare Austerity Measures

While the United States wages a national debate over government expansion of healthcare, Europe and its existing nationalized health system continue to grapple with exploding costs, resulting in sharp austerity measures that have provoked violent riots and protests. Here are some of the measures taken by the Europe’s largest countries in the face of economic downturn:

France (GDP: €1,932.8B) increased healthcare taxes by 7%, yielding €1.1B in revenue per year.

Italy (GDP: €1,556B) increased female retirement age to match male retirement age. Pension reform requires Italians to work 41 years before benefits and laws impacting the pharmaceutical industry were relaxed to help expand economic growth.

Spain (GDP: €1,051B) instituted new measures that will cut €10 billion per year from public spending in healthcare and education. Healthcare benefits will be reduced as well.

The Netherlands (GDP: €588.4B) cut health care spending by €5 billion and raised retirement age to 67 from 65. Employee contributions towards healthcare costs will more closely align with annual incomes.

Austria (GDP: €286.2B) will cut €1.4B from the healthcare sector cuts by 2016.

Greece (GDP: €227.3B) cut €1B in health care spending and raised the retirement age from 61 to 65.

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#2 Mental Health Issues Raised After Connecticut School Shooting

Friday, December 14^th, 2012 will forever be remembered as the day that Adam Lanza shot his way into Sandy Hook Elementary School, taking the lives of 20 young children and 6 adults by firearm. Lanza later shot himself.

One thing that Republicans, Democrats, Mayors Against Illegal Guns, and the National Rifle Association can agree upon is the importance of raising awareness about mental health issues. Gun control and mental health have been meshed together in recent media in light of the revelation that Lanza suffered from Asperger’s Syndrome. While not every mass murderer is necessarily subject to a diagnosable disease, there have been questions raised surrounding the 16 mass shootings in the United States this year and access to quality mental health care.

A 2010 UN report on firearms reveals that the United States leads the world in firearm ownership with a rate of 88.8 per 100 inhabitants; Yemen is the next closest country with a rate of 54.8 per 100. There are roughly 270 million firearm holdings in the United States, which is more than twice the rate of India, China, Germany, and France combined. An alarming 86% of guns used by individuals now imprisoned were acquired via the black market, street deals, theft, or from friends. With this stature of statistics, the hope is that the United States can find those with mental health issues before a gun reaches their hands. Obama’s healthcare reform law calls for parity between mental health benefits and other medical benefits, certainly a step in the right direction. Hopefully we can find a solution and help to avoid another tragedy.