On August 27^th, the National Labor Relations Board (NLRB) issued a decision in a case known as “Specialty Healthcare.” The specifics of the case relate to whether certain healthcare providers can exclude other similarly situated providers when forming a collective bargaining unit. The NAM has been concerned from the outset that the case would effectively eviscerate what has been known as the “community of interest doctrine.” So, why should employers care?

The reason the community of interest doctrine is important is without it, the NLRB is paving the way for what’s known as micro-unions. Micro-unions are unions with as few as two people forming a unit for collective bargaining. Imagine a restaurant where dishwashers, prep-cooks, fry-cooks, grill-cooks, wait staff, and bartenders all form their own collective bargaining units and are represented by different unions. Specialty Healthcare essentially allows such a hypothetical to materialize. How long would this restaurant be able to function and stay in business?

The public and business community were told the Specialty Healthcare decision wasn’t a big deal so we shouldn’t worry about it. Nothing to see here, they said.

On October 19^th, the NLRB ruled on its first case invoking the new precedent created by the Specialty decision. The case, First Aviation Services, involves a company of 110 employees in which a group of 34 were allowed to form their own bargaining unit despite sharing a community of interest with all but two of the other workers in the same facility. The NLRB promptly denied the employer’s attempt to appeal the ruling of the regional director. The regional director used Specialty Healthcare as its rationale for granting the employee’s request to organize a unit of 34 employees and the full Board denied the employer’s request to review the regional director’s reasoning. While the decision is only two months old, it has already provided the road map for organizers to divide and conquer. The decision is clearly going to have far-reaching implications for decades unless it is over-turned.

Medicare Part D, the prescription drug program for America’s seniors, is a unique success story in how a government program can work effectively by harnessing the efficiencies and strengths of our private sector. Reformative in its approach, the program relies on the private sector to negotiate prices, set premiums and compete for customers on a level playing field.

Unfortunately, there are some in Congress who are pushing proposals that will undermine this popular program. With a 90 percent satisfaction rate among beneficiaries and a programmatic budget 40 percent below cost estimates, where is the wisdom in tinkering with it?

The “Super Committee” is tasked with finding $1.2 trillion in savings and one of the ideas is to impose new “rebates” on the manufacturers of the medicines low-income seniors use in the program. The justification requires a short history lesson.

Under the old system, some beneficiaries received their medicines through Medicaid because they were considered low-income first and seniors second. Under Medicaid, companies have to provide a rebate to the program for the volume of medicines used by its beneficiaries. Under the new Part D program, we treat seniors as seniors first and low-income second. The rebates previously siphoned off to the government have actually gone into discounts to the Part D plans making the program stronger and less expensive for beneficiaries. This is one of the many reasons the program is successful and highly popular among beneficiaries. (continue reading…)

During the two days of committee discussion last week on the House’s medical liability reform bill,
H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, Rep. Henry Waxman (D-CA) and several fellow committee members defended litigation and trial lawyers from the (well-founded) accusations that lawsuits increase health care costs and detract from medical treatment.

Litigation actually works to improve quality, supplementing the work of the Food and Drug Administration in the regulatory approval of drugs, they argued. Uh huh. The term is “regulation through litigation,” and it’s an inefficient, expensive and counterproductive system of dual regulation, in which trial lawyers and juries of laymen replace scientific experts and testing in determining which drugs are allowable.

At one point, an apparently frustrated Rep. Brian Bilbray (R-CA) reminded the committee members of the real-world consequences of this kind of litigation: Lawsuits force drugs off the market that help people. People really suffer because of the cash-seeking litigation by trial lawyers.

Bilbray spoke passionately about the loss of Benedictin, an anti-morning sickness medication, taken off the market after The National Enquirer published an alarmist article, “New Thalidomide Scandal-Experts Reveal,” and thousands of lawsuits followed. As a consequence, his wife was deprived of a safe and widely prescribed drug she had used in previous pregnancies. She wound up in intensive care.

Rep. Bilbray:

This is one issue you don’t talk about. You had a treatment, Benedictin, that was used all over the country. There was a National Enquirer story in ’79. It ended up being lawsuit after lawsuit after lawsuit, with no scientific data, according to the FDA, to take it off the market. But sheerly by the harassment of litigation this product is no longer available to women across this country.

And my wife was one of those that went into intensive care, while she was in the first trimester of pregnancy, because the litigation drove that product off the market and denied her access to that product. And you know what physicians do now? … They prescribe the chief components of Benedictin separately, because the private sector cannot provide it because it was driven off the market through litigation, not through science.

So this does have an effect. It has an effect on what’s available for consumers. And I say this…Who do I get to sue? Who do I get to take to trial for those who drove this product off the market. Who do I get to point the finger at? Which lawyers do I get to litigate with who drove it off the market, because my wife didn’t a product that she had in her previous pregnancies, she didn’t have the ability to get the medication that is essential to not only her, but to her unborn baby. Who do I get to have justice with because this product was driven off? (continue reading…)

The National Association of Manufacturers has signed on with a letter to Congress from members of Health Choices Coalition, urging legislators to overturn the ban on use of employees’ Flexible Spending Accounts for over-the-counter drugs. OTC drugs are effective and FSAs are effective, providing an important measure of consumer control over health-care spending, yet last year’s health care law limited the accounts.

The Consumer Healthcare Products Association issued a release on the issue earlier this week. Excerpt:

“This issue is about empowering millions of American consumers to cost-effectively manage their families’ healthcare needs,” said CHPA Vice President of Government Affairs Bill Head. “The availability of OTC medicines through an employer-sponsored FSA provides valuable cost-savings to consumers, increases worker productivity, and encourages smart healthcare decisions by both employers and employees — all of which are consistent with the goals of healthcare reform.”

Prior to January, OTC medicines were eligible for reimbursement under FSAs and other tax-preferred savings accounts. An estimated 19 million working American families purchased these cost-effective medications through their FSAs. (continue reading…)

The House Energy and Commerce Committee this morning is marking up H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011, legislation to control the unnecessary or excessive litigation costs that afflict health care in the United States. (Committee video. Hearing started at 10:41 a.m.)

In a timely and important contribution to the debate, the American Tort Reform Association has released a new paper,”The Constitutional Foundation for Federal Medical liability Reform.” In a news release, ATRA explained:

The ATRA paper, The Constitutional Foundation for Federal Medical liability Reform, addresses in some detail questions recently raised about whether provisions of H.R. 5 are consistent with the Commerce Clause, the Tenth Amendment, the guarantees of equal protection and due process, and the right to a jury trial.

“Citing more than 100 years’ worth of Supreme Court precedent, the consistent rejection of federal constitutional challenges to state medical liability reforms, and the opinion of the Congressional Research Service itself,” Joyce said, “our paper puts an end to any serious concern or question about the constitutionality of federal medical liability reform.

“With respect to perhaps the most important question about whether the Commerce Clause gives Congress sufficient authority to promulgate medical liability reform for the nation as a whole, it’s not even a close call. Congress has that authority.

Author of the paper is Mark A. Behrens of Shook, Hardy & Bacon L.L.P., a man who knows his civil liability issues. The National Association of Manufacturers has worked with Behrens and the law firm on numerous occasions over product liability litigation and related issues.

UPDATE (10:45 a.m.): Very timely report. Rep. Tammy Baldwin (D-WI) is making a “states rights” argument against the bill, proposing an amendment. She’s always been such a strong advocate for federalism.

The invaluable Lyle Denniston reports at Scotusblog on today’s oral arguments in the U.S. Supreme Court in the case of Sorrell v. IMS Health, Inc. From “Argument recap: Yes, it’s about commercial free speech“:

No more than a few minutes into the Supreme Court’s argument Tuesday on the new information technology of data-mining, it became very clear that the Justices — perhaps more than a simple majority — see this first test case as one about corporate free speech.   That might not turn out to be true in every case of data-mining that comes along, but it would certainly seem so when a legislature blatantly sets out to curb the use of that technology to convey a commercial message, made up of truthful information.

So heavy was the defense of corporate expression in the opening stages of the argument in Sorrell, et al., v. IMS Health, et al. (10-779) that the lawyer for Vermont — the state involved — obviously had to continue her argument under siege.  Only later did it seem that some of the Justices wanted to provide some leeway for states to regulate data-mining that threatened to invade privacy, perhaps by crafting a less far-reaching final decision.

An assistant state attorney general, Bridget C. Asay of Montpelier, Vt., had barely begun when Chief Justice John G. Roberts, Jr., said the Vermont law that restricts the sale and use, for drug-marketing purposes, of data drawn from doctors’ prescription blanks had the purpose of barring drug companies’ sales representatives from seeing doctors to promote their company products.   Asay could only answer that she disagreed, as Justice after Justice — especially Antonin Scalia — asserted that the state was simply trying to intervene in the marketplace for drugs to promote a message that it liked and to block one that it did not like: that is, the sale of brand-name drugs.

Scotusblog’s case pages are at Sorrell v. IMS.

The National Association of Manufacturers joined the Washington Legal Foundation in filing an amicus brief in support of IMS. We cited the NAM’s Manufacturing Law Center summary of the argument in this preview post, and the WLF’s summary is also excellent: (continue reading…)

The U.S. Senate is expected this afternoon to take up H.R. 4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act, which is a very long title for the bill to repeal the ridiculous filing requirement included in last year’s health care bill.

The National Association of Manufacturers last week sent Senators a “Key Vote” letter urging their support for an amendment by Sen. Mike Johanns (R-NE) that mirrors H.R. 4. From the NAM letter:

The Johanns amendment would repeal expanded reporting requirements under Section 9006 of the Patient Protection and Affordable Care Act (P.L. 111-148). Section 9006 requires businesses to file an Internal Revenue Service (IRS) form 1099 for all purchases of property and services in excess of $600. Previously, businesses were required to report only purchases of service and only from non-corporate entities. The new language essentially requires 1099 reporting for all transactions in excess of $600.

This reporting requirement is extremely onerous — especially for small manufacturers. The NAM supports efforts to ensure tax compliance, but not at the expense of manufacturers that are following the law.

The House passed H.R. 4 on March 3 by a vote of 314-112. The Senate has already cast this vote, more or less, when Senators voted 81-17 in early February to pass an amendment sponsored by Sen. Debbie Stabenow (D-MI) to S. 223, the FAA reauthorization bill.

So the clear majority is there for fixing this ill-conceived, anti-small-business provision in the health care law. Let’s pass this bill and send it to the President.

UPDATE (1:14 p.m.): The bill has passed, 87-12. We’ll post the roll call vote once it’s available. (UPDATE II: And here it is.)

The bill now goes to the White House for President Obama’s signature.

Leaders of the Start Over! Coalition, including the National Association of Manufacturers, wrote Sen. Kay Bailey Hutchison (R-TX) to express support for her amendment (S.Amdt.197) to the pending small business bill, S. 493, that would suspend further implementation of the Patient Protection and Affordable Care Act.

From the letter:

As you know, the constitutionality of the Affordable Care Act (ACA) is now the subject of considerable litigation before the Federal courts. To date, the U.S. District Court for the Eastern District of Virginia, ruling in Virginia v. Sebelius, and the U.S. District Court for the Northern District of Florida, ruling in Florida et al v. U.S. Department of Health and Human Services, have ruled the “individual mandate” in the ACA unconstitutional, and the latter went on to rule that the “individual mandate” is not severable from the rest of the ACA thus voiding the entire statute. Three other Federal district courts in the District of Columbia, Michigan and Virginia have upheld the constitutionality of the ACA. It is a virtual certainty that the constitutional issues in controversy in the ACA will ultimately be resolved by the U.S. Supreme Court.

The timing and outcome of the legal process in this matter is speculative at best. What is currently certain, however, is that the Federal government is continuing to implement the ACA at considerable cost to the taxpayers. If the Northern District of Florida court’s decision is upheld, State governments which have proceeded with implementation facing considerable risks if they do not do so, will have needlessly expended considerable sums of their taxpayers’ money. It is no small matter that employers find themselves similarly and expensively caught between a judicial ruling that invalidates the ACA and an Administration in Washington, DC that insists on plowing ahead with implementation as though this matter had never arisen.

Under the present circumstances we believe it is simply prudent to impose a moratorium on further implementation of the ACA until such time as the pending litigation is brought to its conclusion. This is exactly what the Hutchison Amendment would accomplish.

Earlier Shopfloor posts on Start Over!

The most puzzling of all the decisions that went into the legislative maneuvering that gave us the benighted Patient Protection and Affordable Care Act a year ago today was, why no acronym-inviting title? You would have thought if Congress was going to so dramatically expand the federal government’s control of health care and insurance, it would embrace a grandiose, if forced, title that would give us an acronym for the ages.

You know, like the PATRIOT Act, or RICO, or last year’s SPEECH Act (Securing the Protection of our Enduring and Established Constitutional Heritage Act). Give the law a name to remember it by.

No such luck. Democrats and other supporters usually drop the “Patient Protection” part to refer to the law as simply by the anodyne Affordable Care Act. Republicans deride it as Obamacare.

Such a missed opportunity for truth in acronymization. Is it too late? If not …

• The HEALTH Act — Helping Eliminate Affordable, Life-extending Treatments, Hospitalization Act
• The NANNY Act — The Not Affordable, Nope, Not Yet Act
• ABCDE Act — A Bill that Cost Democrats Election Act

Oh well. Some good commentary as the anniversary festivities subside…

• Sen. Ron Johnson (R-WI), a manufacturer, Wall Street Journal, “ObamaCare and Carey’s Heart: My daughter probably wouldn’t have survived in a system where bureaucrats stifle innovation and ration care.”
• Heritage Foundation, The Foundry blog, “Obamacare’s Failed First Year“
• Dr. Jason Fodeman and Dr. David Gratzer, The Washington Times, “Obamacare: One year later –Stripping patients and doctors of authority over care“
• Joe Trauger, National Association of Manufacturers, Shopfloor blog, “Health Care Law at One Year: Little Protection, Not So Affordable”
• Editorial, Washington Examiner, “Obamacare is even worse than critics thought“

One year ago today, President Obama signed the Patient Protection and Affordable Care Act (PPACA), the great federal restructuring of U.S. health care. The law’s value in protecting patients is suspect, and it’s doing little to make health care affordable. So, after a year of implementation what has been the real effect?

PPACA: Neither Protective, Nor Affordable

We know that the promise of being able to keep our health plan if we like it was an empty one, and even the Administration’s own actuary admits this fact. When asked during a hearing in the House Budget Committee whether the health care law really allows people to keep the plans they like, Rick Foster stated that claim was “not true in all cases.”

We also know the bulk of the funding for the new entitlement program is based on fuzzy math at best and outright deception at worst. In a stunning admission before the House Energy and Commerce Committee, the Secretary of Health and Human Services admitted the Administration is counting reductions in Medicare spending as a credit to extending the solvency of the program while also using the same funds to “pay for” a large portion of the expected costs of PPACA. This double-counting allowed the Administration to claim the legislation would save the nation more than $100 billion over the next 10 years — a statement with as much veracity as the promise our health plans wouldn’t change.

As the law enters its second year of implementation, the National Association of Manufacturers will be watching several issues sure to emerge in 2011: the essential benefits package and accountable care organizations (ACO). The essential benefits package defines for all Americans what coverage must purchase in order to avoid penalties under the law. It’s easy to predict how this will turn out: All single men will have to buy a plan that covers pre-natal and post-natal care and all single women will have to have a policy that covers prostate cancer. This is not to say these aren’t important things to cover, but the inequity is clear.

What’s also clear is how the process of determining what is an essential benefit will be manipulated by well-meaning interest groups that will gauge their importance and influence on policymakers based on whether their particular disease category is included as an essential benefit. Special-interest coverage is hardly a strategy for controlling health care costs.

While accountable care organizations (ACOs) seem to be an attractive idea in some health care policy circles, there are some (this author included) who believe the consolidation and integration of hospitals and physician practices could do irreparable harm to competition in the marketplace. ACOs may work fine in a single-payer system like Medicare, but it could wreak havoc on negotiations for payment rates and the establishment of networks in a private market which depends on competition in order to arrive at a mutually agreed upon price for services. In small to medium-sized communities, this consolidation could lead to oligopolies or monopolies in health care services. Such an outcome would raise prices and make care less affordable.

Many proponents believed, and continue to believe, Americans will warm to the law once they see all the great things and reap all the rewards of the centralized command-and-control this law will bestow upon us. The results so far leave us cold. (continue reading…)