Governor Jim Douglas (R-Vt.) said “The challenge that we’re facing right now is a real one, and it has a cascading affect when the economy begins to go sour. Economic activity declines, investment is lower, the number of jobs decreases, income tax receipts are down, so a state’s fiscal fixtures begin to deteriorate… States are taking the lead in tightening our belts and reducing state spending… But economists across the political spectrum have made it clear that counter-cyclical spending by the federal government can accelerate our recovery.”

This is why Gov. Douglas says the National Governors Association (NGA) is making two considerate requests of Congress for a state stimulus package. First, support for infrastructure investment. Funding would go to “ready-to-go” state projects, of which more than 70% would go to transportation, and the remainder to renewable energy projects, water and sewage treatment, and investment in broadband infrastructure. Second, the NGA is requesting an increase in support for state Medicaid Programs, which are increasingly demanded during this economic downturn.

Governor Ed Rendell (D-Pa.), Gov. Douglas, and North Carolina General Assembly Speaker Joe Hackney agreed that President-Elect Obama will be very responsive to the NGA’s requests—the question is where the funding will be allocated and in what fashion.

Should we invest in Medicaid and Biomedical research in a stimulus package for our down turning economy? The House Committee on Energy and Commerce held a hearing today to discuss “Treatments for an Ailing Economy: Protecting Health Care Coverage and Investing in Biomedical Research.”

In her testimony, Arizona Governor Janet Napolitano (D-Ariz.) stated, “one of the wisest and most effective things Congress can do now to speed a national recovery is to invest in the federal-state programs that Americans rely on during a downturn.” Napolitano continued, “one of the most effective ways to aid in a national economic recovery is temporarily to increase the Federal medical Assistance Percentage (FMAP), or the share of the Medicaid program paid for by the federal government.”

A recent survey of state fiscal conditions found that more than 30 states are currently projecting budget shortfalls in fiscal year 2009, totaling $26 billion. Napolitano said the federal government should “invest in existing programs where it partners with the states.”

The committee discussed how Medicaid is continuously an issue in times of economic struggle, and “congress should make a counter-cyclical stimulus a permanent part of the Medicaid statute” as Gov. Napolitano stated in her testimony.

Alan D. Viard, American Enterprise Institute, agreed that the stimulus package can increase aggregate demand by increasing consumer demand, but it cannot permanently increase the level of jobs. Viard said, “counter-cycical increases in Medicaid matching rates would function poorly as a stimulus tool…Financial transfers from the federal government to the states do not directly boost aggregate demand because they do not directly increase consumer spending, business or residential investment, government purchases, or net exports.”

In regard to the inclusion of BioMedical Research, Families USA Executive Director Ronald F. Pollack expressed support for the National Institute of Health “in order to stimulate the economy.” Pollack said, “if the sum of all NIH awards to the states were to increase by 6.6 percent, the national economic benefit would add up to $3.1 billion worth of new business activity, 9,185 additional jobs, and $1.1 billion in new wages.”

Gene Sperling, Senior Fellow at the Center for American Progress Action Fund, expressed his support for an increase in Federal Medicaid Assistance Percentage.

 

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Dr. Robert Litan, author of “Vital Signs via Broadband: Remote Health Monitoring Transmits Savings, Enhances Lives,” stated that “of the thirty companies in the Dow Jones, eighteen of them were started in bare economies.” Litan used this as reason to investigate significant enhancements in health care technologies, even though we’re in a global economic downturn. Tom Ferree of Connected Nation said that forming new companies and commercializing new technologies will help economies get out of recessions, and that new ‘telemonitoring’ remote health care technologies are one way to do it.

Dr. Litan believes the United States could cut $197 billion form its health care bill over the next 25 years though ‘telemonitoring’ a new technology that transmits vital health information and video of people with chronic diseases to remote health care experts. The four main diseases this would target are congestive heart failure, diabetes, chronic obstructive pulmonary disease (COPD), and chronic skin ulcers (or skin wounds). Dr. Litan said, “especially for seniors, this is better than going to a doctor or a nursing home. Today approximately 17% of home health health care agencies have adopted this technology.”

In order to fulfill these savings for the government, Dr. Litan stated that there must be systematic change in public policy, such as insurance reimbursement policies for doctors through Medicare and Medicaid. Dr. Litan said, “we also need policies that deliver broadband, including ‘smart networks’ that ensure that patients’ critical data is secure and that communications are not disrupted.” If this systematic change were to occur, Dr. Litan believes that “remote monitoring can spot health problems sooner, reduce hospitalization, improve life quality and save money.”

U.S. Representative Peter King (R-NY) comments on the benefits with going forward with a second stimulus legislation and combining the bill with a medical relief package. (1:09)

 

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Policy analyst Denise Soffel from Medicaid Matters NY comments on Medicaid as a public health measure and the situation for New Yorkers if medicaid eligibility will be forced to reduce. (0:23)

 

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The Democratic National Committee hosted a conference call to discuss Senator John McCain’s (R-Ariz.) position on the Community Choice Act. The Community Choice act is a top priority of the disability community that would allow people with disabilities the chance to choose home-based or community care with in-home services over being forced into nursing homes or institutions. The act would increase the percentage of Medicaid that goes toward in-home care. (more…)

 

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The House Subcommittee on Health met to discuss a bill sponsored by Rep. Frank Pallone (D-N.J.) that would increase federal funding given to states for Medicaid. According to Rep. Pallone, over 60 million Americans currently rely on Medicaid for their health care. Pallone said fiscal pressure on states, coupled with the state of the economy, is causing more Americans to seek Medicaid’s assistance. By protecting Medicaid, Pallone said Congress would be protecting Americans’ access to medical care while securing jobs in health care nationwide.

Pallone said his bill is similar to an economic stimulus plan put forth by the Republican Congress in 2003 and signed by President Bush. Both legislation call for temporary increases in funding that help prevent states from cutting Medicaid services and creates the possibility of states reinstating abandoned programs. Democrats on the subcommittee, concerned over health care accessibility and declines in a faltering economy, expressed their desire to retain social services for low-income Americans.

Rep. Michael Burgess (R-Texas) criticized the actions of Pallone’s bill. He said 40 states experienced budget shortfalls when Congress increased Medicaid allocations in fiscal year 2003, contrasting that number with the 29 states that face budget short falls in fiscal year 2008. Burgess said the subcommittee is failing to address critical energy issues.

In an effort to reform Medicaid funding, James Frogue of the Center for Health Transformation advocated using the internet to make states more accountable for their spending. Frogue cited a New York Times article that called 40 percent of Medicaid claims in New York State into question. Frogue said Congress should verify that states are using funds responsibly prior to allocating additional funds.

Rep. Nathan Deal (R-Ga.) allocating $15 billion additional tax dollars towards Medicaid without increasing accountability concerns him, saying Medicaid funding needs reform instead of superficial measures that will not fix “entitlement spending.” (0:46)

 

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Rep. Frank Pallone (D-N.J.) promotes increasing federal funding to state Medicaid programs by saying that jobs in health care are put at risk when states are forced to cut their Medicaid programs, causing increased unemployment and economic instability. (0:34)

 

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