Better broadband would boost Vermont tourism

WEDNESDAY, DECEMBER 30, 2009

Letter Box

Better broadband would boost Vermont tourism

Editor of the Reformer:

As vice president of the Vermont Hospitality Council, Vicki Tebbetts makes an excellent case that "tourism drives our economy."

While I agree that tourism is important for Vermont’s economy, I don’t think it is as simple as increasing funding for tourism marketing. When tourists arrive to enjoy everything that our state offers, they discover that they can’t use their cell phones or laptop computers.

Therefore, a priority of the Legislature should also be to expand this state’s broadband capabilities.

The Vermont Telecommunications Authority, charged by the legislature to accomplish this task by 2010, is admittedly not going to succeed. Perhaps we need to assess exactly what has been accomplished by the VTA and redirect its efforts.

Broadband is a key to economic development. Without it, those tourists will not be able to call home to tell their friends about the beauty of Vermont.

Martin Cohn,

Brattleboro, Dec. 28

SATURDAY/SUNDAY DECEMBER 26-27, 2009

Tourism drives our economy

By VICKY PARRA TEBBETTS

The holidays are a time of reflection: a time to look upon what is important, and contemplate our expectations and goals for the New Year.

Five days after the crystal ball descends in Times Square, 180 lawmakers will descend upon Montpelier to look into their own crystal balls as the Legislature convenes.

They will grapple to reach agreement on a state budget that is predicted to be one of the leanest in decades. In the face of a recession, there will be many demands on Vermont's ever-tightening money belt.

Last year, the Legislature and the Governor recognized the importance of tourism marketing funding. What is going to be important to Vermont in 2010?

The Vermont Hospitality Council, the tourism division of the Vermont Chamber of Commerce, has identified funding for tourism marketing as a priority for our state. Tourism is a critical investment for the state of Vermont, particularly now.

In the upcoming session, we will urge the Legislature to appropriate $6.8 million to tourism funding, which would bring the allocation back to fiscal year 2000 levels.

A robust appropriation that funds marketing to inspire people to travel to Vermont is key to an economically successful 2010. Marketing tourism to the state of Vermont outside our borders is one of the few ways in which the state invests money, that in turn generates a significant investment of out-of-state dollars.

Much of that return stays in state, rippling through multiple sectors of the Vermont economy. In fact, based upon national and state metrics, Vermont receives an estimated $4.48 in additional state revenues for every $1 spent on marketing. Additionally, state marketing efforts generate revenue returns quickly, within three to six months.

Vermont is poised within a day's drive of 80 million people, located in our drive markets of Boston, New York, Montreal, and along the East Coast. When people come to Vermont, they book rooms in our hotels, bed and breakfasts, inns, and at our resorts. They create their own Vermont traditions as they dine out, shop, recreate, visit our attractions, buy our products and fill their cars with gas for the drive home.

In fact, according to the latest available benchmark study of the economic impact of visitor expenditures, performed by Economic and Policy Resources in Williston, visitors make an estimated 14.3 million person trips to Vermont, resulting in 24.5 million overnight stays and $1.61 billion in direct spending.

All this spending filters down to our people and communities. The Vermont tourism employee who is the primary household wage earner earns $42,350 per year, 15 percent above the average income of $36,949 for all employed individuals in Vermont.

Tourism businesses and their employees take those dollars and buy goods and services from other Vermont businesses, such as banks, contractors and construction companies, landscapers and maintenance services, auto dealers, and professional services such as those provided by attorneys, insurance agents, and accountants.

The state coffers benefit from our tourists and the businesses they visit through meals and rooms tax, sales tax, gas tax and property taxes. Visitor spending contributes almost $207 million in tax and fee revenues to the state of Vermont, and directly and indirectly supports 37,490 jobs (12 percent of all jobs in the state).

Further, Vermont has shown itself to be surprisingly resilient in a down economy. The wounds here are not as deep as they are in many other places in the country.

According to Travelclick, an international provider of hotel marketing products, at the close of the third quarter Vermont hotels experienced the largest increase in its market share, while the returns softened or declined for other states across the country.

Vermont is distinguished beyond its borders by its character and reputation. We embrace the Green Mountain State's culture and integrity.

Now, with the help of the Legislature, we must wield that brand and make the most of it. That's one investment that will work for everyone; our people, our businesses, and our state tax revenue figures. That's one revenue stream we can rely on, one we have built over decades. That's one investment that we don't have to look into our crystal balls to predict.

Vicky Tebbetts, a resident of Cabot, is the vice president of the Vermont Hospitality Council, the tourism division of the Vermont Chamber of Commerce.

Lucy, you got some 'splainin' to do!.

An article from AP discusses how TV as we have known it may be changing. No more free tv... everything will be pay tv. This will probably make Lucy, Ricky, and scores of other television stars of the past spin in their graves.

Free broadcast TV may go way of the VHS tape

Networks may act similar to cable channels to fight declining ad revenues

The Associated Press

updated 9:29 a.m. ET, Tues., Dec . 29, 2009

NEW YORK - For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That might not work much longer.

The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks' programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming.

(Msnbc.com is a joint venture between NBC Universal and Microsoft.)

That will play out in living rooms across the country. The changes could mean higher cable or satellite TV bills, as the networks and local stations squeeze more fees from pay-TV providers such as Comcast and DirecTV for the right to show broadcast TV channels in their lineups. The networks might even ditch free broadcast signals in the next few years. Instead, they could operate as cable channels — a move that could spell the end of free TV as Americans have known it since the 1940s.

"Good programming is expensive," Rupert Murdoch, whose News Corp. owns Fox, told a shareholder meeting this fall. "It can no longer be supported solely by advertising revenues."

No 'Idol'? Some may lose Fox in game of TV chicken
Fox is pursuing its strategy in public, warning that its broadcasts — including college football bowl games — could go dark Friday for subscribers of Time Warner Cable, unless the pay-TV operator gives Fox higher fees. For its part, Time Warner Cable is asking customers whether it should "roll over" or "get tough" in negotiations.

The future of free TV also could be altered as the biggest pay-TV provider, Comcast Corp., prepares to take control of NBC. Comcast has not signaled plans to end NBC's free broadcasts. But Jeff Zucker, who runs NBC and its sister cable channels such as CNBC and Bravo, told investors this month that "the cable model is just superior to the broadcast model."

The traditional broadcast model works like this: CBS, NBC, ABC and Fox distribute shows through a network of local stations. The networks own a few stations in big markets, but most are "affiliates," owned by separate companies.

Traditionally the networks paid affiliates to broadcast their shows, though those fees have dwindled to near nothing as local stations have seen their audience shrink. What hasn't changed is where the money mainly comes from: advertising.

Cable channels make most of their money by charging pay-TV providers a monthly fee per subscriber for their programming. On average, the pay-TV providers pay about 26 cents for each channel they carry, according to research firm SNL Kagan. A channel as highly rated as ESPN can get close to $4, while some, such as MTV2, go for just a few pennies.

With both advertising and fees, ESPN has seen its revenue grow to $6.3 billion this year from $1.8 billion a decade ago, according to SNL Kagan's estimates. It has been able to bid for premium events that networks had traditionally aired, such as football games. Cable channels also have been able to fund high-quality shows, such as AMC's "Mad Men," rather than recycling movies and TV series.

That, plus a growing number of channels, has given cable a bigger share of the ad pie. In 1998, cable channels drew roughly $9.1 billion, or 24 percent of total TV ad spending, according to the Television Bureau of Advertising. By 2008, they were getting $21.6 billion, or 39 percent.

A tale of two business models
Having two revenue streams — advertising and fees from pay-TV providers — has insulated cable channels from the recession. In contrast, over-the-air stations have been forced to cut staff, and at least two broadcast groups sought bankruptcy protection this year.

Fox illustrates the trend: Its broadcast operations reported a 54 percent drop in operating income for the quarter that ended in September. Its cable channels, which include Fox News and FX, grew their operating income 41 percent.

Analyst Tom Love of ZenithOptimedia said he expects the big networks will end the year with a 9 percent drop in ad revenue, followed by an 8 percent drop in 2010 and zero growth in 2011.

Long wait for Internet ad revenue to grow
A small chunk of the ad revenue is being recouped online, where the networks sell episodes for a few dollars each or run ads alongside shows on sites such as Hulu. Media economist Jack Myers projects online video advertising will grow into a $2 billion business by 2012, from just $350 million to $400 million this year.

But that is not significant enough to make up for the lost ad revenue on the airwaves. Advertisers spent $34 billion on broadcast commercials in 2008, down by $2.4 billion from two years earlier, according to the Television Bureau of Advertising.

So rather than wait for the Internet to become a bigger source of income, the networks and local stations are mimicking what cable channels do: They're charging pay-TV companies a monthly fee per subscriber to carry their programming.

Since 1994, the Federal Communications Commission has let networks and their affiliates seek payments for including their programming in the pay-TV lineup. Not everyone demanded payments at first. Instead they relied on the broader audience that cable and satellite gave them to increase what they could charge advertisers.

The big networks also were content to let their broadcast stations essentially be subsidized by higher fees for the cable channels that fell under the same corporate umbrella. A pay-TV company negotiating with the Walt Disney Co., which owns ABC, is likely paying more for the ABC Family channel than it otherwise would, with the extra assumed to help Disney cover its costs for the ABC network broadcasts.

But over time — such contracts generally run about three years — more networks began demanding payments for the stations they own. And affiliates already receiving the fees have bargained for more money.

Tense talks
Some talks have been tense. In 2007, Sinclair Broadcast Group, which operates 32 network-affiliated stations around the country, pulled its signals for nearly a month from Mediacom Communications Corp., which provides cable TV to about 1.3 million subscribers, mainly in small cities.

The American Cable Association says its members — mainly small cable TV providers — have seen their costs for carrying local TV stations more than triple over the past three years. The group's head, Matt Polka, says those fees have gone "straight to consumers' pocketbooks" in the form of higher cable bills.

Gannett Co., for instance, which operates 23 stations, has taken in $56 million in fees from pay-TV operators this year after negotiating a new batch of agreements, up from $18 million in 2008. Dave Lougee, president of Gannett's broadcast arm, defends the fees, saying "broadcasters were late to the game in really starting to go after the fair market value of their signals."

Analysts estimate CBS managed to get as much as 50 cents per subscriber in its most recent talks with pay-TV providers that carry CBS-owned stations. CBS Corp. chief Leslie Moonves said such fees should add "hundreds of millions of dollars to revenues annually."

That could be just the beginning. CBS and Fox are also asking for a portion of the fees that their affiliates get, arguing that the networks' shows are what give local stations the leverage to ask for fees.

Over time, the networks might be able to get even more money by abandoning the affiliate structure and undoing a key element of free TV.

Here's why: Pay-TV providers are paying the networks only for the stations the networks own. That amounts to a little less than a third of the TV audience, which means local affiliates recoup two-thirds of the fees. If a network operated purely as a cable channel and cut the affiliates out, the network could get the fees for the entire pay-TV audience.

If forced to go independent, affiliates would have to air their own programming, including local news and syndicated shows.

Fitch Ratings analyst Jamie Rizzo predicts that at least one of the four broadcast networks "could explore" becoming a cable channel as early as 2011.

Any shift would take years, as the networks untangle complicated affiliate contracts. At an analyst conference last year, CBS's Moonves called the idea an "a very interesting proposition." But he added that it "would really change the universe that we're in."

© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/34619571/ns/business-media_biz/

Waiting for a miracle

The saga of the Brattleboro's First Baptist Church and its Tiffany window appeared on page one of today's Brattleboro Reformer. Current rumor is that someone has pledged $37,500 in matching dollars. Another pledged $10,000. Meanwhile money continues to arrive. Unfortunately, there does not appear to be a plan as to what will eventually happen to the window. It would be great if Brattleboro citizens could purchase the window and move it to a more visible site.

I know there are groups of concerned Brattleboro citizens looking into what can be done to keep the Tiffany window in Brattleboro. The question is if $75,000 was raised and used to purchase the window, what would then happen to the Church and to the window? Initially the Church would have money to make some of its much-needed repairs but would that be enough? Should the window be removed and placed in a more visible spot since it currently can only be seen from the inside of the Church (i.e. it is not the window facing Main Street)?

The media generated around the potential sale have raised awareness to many issues:

1. What stake do we have in preserving public art?
2. What is the public's role in preserving treasures in New England Houses of Worship?
3. How are we responding to the plight of those left homeless in the Brattleboro area? (Note: while the Baptist Church provides the space for the "Overflow Shelter", volunteers from all the Houses of Worship have been supplying food and staff)
4. Is there a better way to utilize the space in the Houses of Worship so that income can be generated (eg. rent the acoustically beautiful sanctuary in the Baptist Church for a school music program)?

I don't think there are simple answers. But there is definitely a need for more discussion.

Waiting for a miracle - Brattleboro Reformer

Brattleboro Vermont Church Sacrifices Tiffany Window to Keep Door Open for the Homeless

Last night, ABC's John Berman reported on a church in Vermont that is selling a cherished window to keep a homeless shelter open.

A Tiffany stained glass window depicting St. John the Divine has been in the church for 100 years, but the congregation is willing to sacrifice it to raise $75,000.

Here's the video of the newscast:

Church Sacrifices Tiffany Window to Keep Door Open for the Homeless - The World Newser

Boston Herald criticizes proposed tanning tax

Today’s Boston Herald had an editorial criticizing the proposed tax on indoor tanning in the Senate’s health care bill.

Yet, the Boston Herald reported earlier this year that “…international cancer experts have moved tanning beds and other sources of ultraviolet radiation into the top cancer risk category, deeming them as deadly as arsenic and mustard gas.”

Indoor tanning before age 30 has been associated with a 75 percent increase in the risk of melanoma, the deadliest form of skin cancer, according to a review of medical literature last summer by the International Agency for Research on Cancer, part of the World Health Organization.

This tax, like taxes that have been put on tobacco and alcohol, will hopefully decrease usage of indoor tanning beds and thus reduce skin cancer.

And, what is a 10% tax. If a tanning session costs $20, that means a tax of $2. Is this really a budget buster for tanning salon owners and users?

Tax anything that tans

By Boston Herald editorial staff | Wednesday, December 23, 2009 | http://www.bostonherald.com | Editorials

Forget the public option, the abortion funding dilemma or Senate majority leader Harry Reid’s astonishing pay-to-play approach to securing votes. At some point during the high-stakes negotiations over health care reform the conversation at the Capitol boiled down to this:

“So guys, do we stick with the ‘Botax’ ? Or should we save the plastic surgeons and squeeze the tanning salon industry instead?”

Oh, the framers would be so very proud.

Yes, there were some very clear winners in the product that emerged this week from the Senate sausage factory and they include the cosmetic surgery lobby, which managed to excise from the bill a planned tax on facelifts and tummy tucks.

That tax was estimated to raise an estimated $5.8 billion. Instead, the Senate bill calls for a 10 percent tax on “tanning services,” which senators estimate will raise $2.7 billion.

And, of course, it will have the added advantage of providing a disincentive to climbing into a tanning bed and risking skin cancer. That’s a helpful bit of spin.

It all came as quite a shock to the Indoor Tanning Association. Yes, such an entity does in fact exist, even if its president acknowledges it can’t possibly match the lobbying might of the American Medical Association and other groups that fought the Botax. (The Real Housewives of Orange County, perhaps?)

Vexed tanning salon owners say they’re already suffering because of the economy and they have no idea where the estimate of projected revenues came from. But since when does Congress let real numbers get in the way of its political agenda?

Yep, they’re new to this lobbying thing all right . . .

Article URL: http://www.bostonherald.com/news/opinion/editorials/view.bg?articleid=1220611

U.S. expands efforts to regulate meds in water

EPA lists 13 pharmaceuticals as candidates for regulation

The Associated Press

updated 5:15 p.m. ET, Tues., Dec . 22, 2009

Federal regulators under President Barack Obama have sharply shifted course on long-standing policy toward pharmaceutical residues in the nation's drinking water, taking a critical first step toward regulating some of the contaminants while acknowledging they could threaten human health.

A burst of significant announcements in recent weeks reflects an expanded government effort to deal with pharmaceuticals as environmental pollutants:

For the first time, the Environmental Protection Agency has listed some pharmaceuticals as candidates for regulation in drinking water. The agency also has launched a survey to check for scores of drugs at water treatment plants across the nation.

The Food and Drug Administration has updated its list of waste drugs that should be flushed down the toilet, but the agency has also declared a goal of working toward the return of all unused medicines.

The National Toxicology Program is conducting research to clarify how human health may be harmed by drugs at low environmental levels.

The Associated Press reported last year that the drinking water of at least 51 million Americans contains minute concentrations of a multitude of drugs. Water utilities, replying to an AP questionnaire, acknowledged the presence of antibiotics, sedatives, sex hormones and dozens of other drugs in their supplies.

The news reports stirred congressional hearings and legislation, more water testing and more disclosure of test results. For example, an Illinois law goes into effect Jan. 1 banning health care institutions from flushing unused medicine into wastewater systems.

The EPA's new study will look for 200 chemical and microbial contaminants at 50 plants that treat drinking water. The list includes 125 pharmaceuticals or related chemicals. This research will help federal water officials decide if regulations are needed.

In the first move toward possible drinking-water standards, the EPA has put 13 pharmaceuticals on what it calls the Contaminant Candidate List. They are mostly sex hormones, but include the antibiotic erythromycin and three chemicals used as drugs but better known for other uses.

They join a list of 104 chemical and 12 microbial contaminants that the EPA is considering as candidates for regulation under the Safe Drinking Water Act. No pharmaceutical has ever reached the list in its 12-year history, but medicines now make up 13 percent of the target chemicals on the latest list "based on their potential adverse health effects and potential for occurrence in public water systems," the EPA said.

They take a place beside such better-known contaminants as the metal cobalt, formaldehyde, the rocket fuel ingredient perchlorate, and the disease germ E. coli.

‘A major public concern’
"I think this does signal a change in the regulatory and research approaches," said Conrad Volz, a University of Pittsburgh scientist whose research raises questions about the risk of eating fish from waters contaminated with sex hormones. "What's happening is pretty amazing."

Several scientists within and outside government tied the stronger focus on human health to the Obama administration and the president's appointment of Lisa Jackson, a highly regarded former head of the New Jersey Department of Environmental Protection, to run the EPA.

"I think we are trying to be as aggressive as we can. We understand it's a major national issue. We understand it's a major public concern," said Peter Silva, the new water administrator at the EPA.

However, making the candidate list provides no assurance that a chemical will reach full-blown regulation. In fact, no chemical on the list has ever been made subject to a national water quality standard, EPA officials acknowledge. They intend to make preliminary decisions on some of the latest contaminants by mid-2012.

"They've made a lot of good first steps, so now were waiting to see those carried through," said Nneka Leiba, a researcher at the Environmental Working Group in Washington.

A health threat?
Water utilities and drug makers are wary of the federal moves. Difficult scientific questions remain over the possible threat posed to humans by minuscule concentrations in drinking water, where drugs are typically found in parts per billion or trillion. That's way below medical doses.

However, some researchers fear that very small daily amounts of unwanted drugs in water could do cumulative harm to people over decades, possibly in combination with other drugs or in sensitive populations like children or pregnant women.

Alan Goldhammer, a vice president of the Pharmaceutical Research and Manufacturers of America, said such trace amounts "really do not pose a human health issue."

"We do get concerned if we think that somebody is going to require that the consumers spend money and not get any health benefit," added Tom Curtis, a lobbyist for the Denver-based American Water Works Association.

The U.S. Geological Survey first began taking notice of pharmaceutical contamination several years ago. But until now the federal government has focused on the presence of pharmaceuticals in rivers and streams.

A recently released EPA study found more than 40 pharmaceuticals — everything from antibiotics to heart medicine to antidepressants — at nine publicly owned wastewater treatment plants. The drugs appeared in concentrations measured in parts per billion and trillion. Many passed right through the plants.

Linda Birnbaum, who is director of the National Institute of Environmental Health Sciences and also oversees the National Toxicology Program, said some program research is focusing on how much environmental pharmaceuticals can reach animal blood and tissues and how that might compare with humans.

Program to return unused drugs
Waste pharmaceuticals reach the environment when people take medicine and excrete the unmetabolized portion. Millions of pounds of waste drugs also escape into waterways from hospitals, drug plants and other factories, farms and the drains of American homes, the AP has reported.

On its new list, the FDA, which regulates medicines, says only 10 active ingredients in controlled-substance drugs need to be flushed to keep them away from children, abusers and pets.

At the same time, the agency announced it is working with partners to develop programs to return unused drugs instead of flushing them down the drain. The agency wants "to encourage their development and future use for all drugs," declared Dr. Douglas Throckmorton, deputy director of the FDA's Center for Drug Evaluation and Research. Returned drugs are usually incinerated, which destroys most active ingredients. Community drug takeback programs have increased considerably since the AP's PharmaWater reports.

The recent announcements have been striking in their speed and breadth. Just last year, Ben Grumbles, Silva's predecessor at the EPA Office of Water under President George W. Bush, said only one pharmaceutical was under consideration for the list of candidates for water standards. And it was the heart medicine nitroglycerin, better known as an explosive.

Yet some environmentalists say the government should take even bolder action. "Identifying the nature and scope of the problem is not the same thing as addressing the causes of the problem," said George Mannina, an environmental lawyer in Washington.

He said the EPA should do more to keep drugs out of the nation's water supplies and not rely on expensive filtering systems at water treatment plants.

Jon Holder, a vice president at Vestara, a seller of equipment to manage waste drugs, said the EPA should be more aggressive about enforcing hazardous waste laws that already apply to some drugs used by hospitals.

"We applaud the light that's being shined on it, but we also recognize that the simple enforcement of existing law would go a long way," he said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/34528649/ns/health-more_health_news/page/2/

WSJ: Cosmetic Surgeons Get Reid to Tax Tanning Salons Instead

DECEMBER 22, 2009

Cosmetic Surgeons Get Reid to Tax Tanning Salons Instead

By BARBARA MARTINEZ

Doctors were able to surgically remove the so-called Botax from the Senate's health-care overhaul bill and replace it with a 10% tax on tanning services.

"We suggested that the tanning tax would be a better alternative to the cosmetic tax and hopefully will reduce the incidence of skin cancer down the road," said David M. Pariser, president of the American Academy of Dermatology Association, which represents dermatologists.

The American Medical Association had also opposed the proposed 5% tax on cosmetic procedures -- dubbed the Botax after the antiwrinkle product Botox -- which was among the issues it wanted changed by Senate Majority Leader Harry Reid. After that change and others were made over the weekend, the AMA announced its support Monday for the Senate bill.

A spokesman for Mr. Reid said in an email the tanning tax was "on the table for a while" before the Botax was proposed several weeks ago.

An industry spokesman said U.S. tanning businesses were unlikely to earn enough to provide the government with the roughly $2.7 billion over 10 years envisioned by the congressional Joint Committee on Taxation. The Botax was expected to generate an estimated $5.8 billion.

There are an estimated 20,000 tanning salons in the U.S., mostly stand-alone shops, and it's impossible to know what total revenue figures are for the industry, said Dan Humiston, president of the Indoor Tanning Association. "It's almost laughable" to think the tanning industry's revenue adds up to what Congress is projecting, said Mr. Humiston, who owns a chain of 34 salons in upstate New York.

Mr. Humiston added that salons have been hit hard by the downturn, as middle-class customers cut back on spending. He said he has closed four shops since 2008, and has been discounting heavily to get customers. "Our industry is really beat up," he said. "And now, a 10% tax? Where are we going to get this?"

Mr. Humiston added the tax was a surprise. "We do have a lobbying presence in Washington," he said, "but not to the extent of the medical industry."

The tanning industry said Monday it was getting unfairly burned. But to dermatologists, the switch from a cosmetic tax to a tanning tax was a no-brainer. "Indoor tanning is a practice which is a known carcinogen," said the dermatologist group's Dr. Pariser.

For its part, the Indoor Tanning Association maintains that overexposure to any source of ultraviolet light, including sunlight, is potentially dangerous. Instead, the association promotes "responsible" tanning.

Write to Barbara Martinez at Barbara.Martinez@wsj.com

Printed in The Wall Street Journal, page A5

http://online.wsj.com/article/SB126144830913601141.html

American Academy of Dermatology Health System Reform Update

Medicare Payment Freeze Passes Congress: 21% Cuts Delayed for Now

December 21, 2009

Last week, both the House and Senate passed legislation to freeze Medicare physician payment levels through February 28, 2010. This halts the 21% cut that was scheduled to take effect on January 1, and buys organized medicine two months additional time to seek a full repeal of the flawed “Sustainable Growth Rate” (SGR) formula, which will otherwise lead to more than 40% reductions in physician payments over the next five years. The 60-day freeze was included in the Defense Appropriations bill which has been sent to the President for his signature.

The House has already passed a bill to fully repeal the SGR formula and eliminate the cuts in future years, but the Senate has yet to do so. At the request of physician groups, including the AADA, the Senate removed a proposed one-year SGR fix from the recently amended Health System Reform bill. There was widespread concern throughout organized medicine that a one-year fix would make it too easy for Congress to avoid the issue and delay a full repeal. This shorter 60-day fix keeps the pressure on Congress to address the SGR with a permanent Medicare payment solution.

Senate Debates Amended Health Reform Bill:

Cosmetic Procedures Tax Removed, Replaced with Tanning Tax

On Saturday, Senate democrats unveiled a large package of amendments to their health system reform bill. Early this morning, the Senate cleared the first hurdle, when it invoked cloture on the amendment package by a straight party line vote of 60-40. It is currently expected that the Senate will clear the two remaining cloture votes and pass the bill on Christmas Eve.

One bright spot, our AADA was able to negotiate behind-the-scenes to secure the inclusion of a 10% tax on artificial tanning using UV light as a replacement for the proposed elective cosmetic procedures tax. An exemption was included to ensure that physician-ordered phototherapy would not be taxed. And thank you to the grassroots efforts of dermatologists and others around the country, their efforts supported our negotiations. While there are still several concerning provisions in the bill, which the AADA continues to oppose, this change is clearly a victory for dermatology and was made possible by the relationships that our specialty has built in Washington.

The Amended Senate Bill: Several Improvements, but Significant Problems Remain

The amended version of the Senate’s health system reform bill contains numerous changes. There have been some meaningful improvements, several of which were made in direct response to pressure from the AADA and the rest of organized medicine. On the other hand, there are other provisions in the Senate bill which do not conform to AADA principles.

The following are a few of the changes most relevant to the practice of medicine:

Positive Changes

1. The public option and the proposal to expand Medicare eligibility to individuals ages 55-64 have both been eliminated.

2. The proposal to pay for primary care bonuses with reductions from specialty physician payments has been eliminated – instead, the primary care bonuses are now paid for with new funds.

3. As noted above, the proposed tax on elective cosmetic surgery has been eliminated and replaced with an indoor tanning tax. There is an exemption to prevent taxation of physician-ordered phototherapy.

4. In the amendment, the Comparative Effectiveness Research Institute is now prohibited from issuing practice guidelines or payment recommendations.

5. The amended bill requires that insurance companies use most of the money they collect to actually pay doctors and hospitals for health care. It would mandate that at least 80-85% of collected premiums be spent on providing health care (rather than administration or CEO salaries), and that excess premiums be refunded to enrollees.

Negative Changes

1. The disturbing proposal to create an Independent Medicare Advisory Board (IMAB) remains in the bill. IMAB is still tasked with reducing the cost of the Medicare program, but unfortunately, it must do so solely on the backs of physicians, as hospitals are exempted from review. In addition, the recommendations of IMAB will be fast-tracked and implemented with limited congressional oversight.

2. There are new provisions in the amendment which require Medicare to rate physician quality on a public “Physician Compare” Web site by 2013. In addition, outside non-governmental entities could obtain Medicare claims data to do their own physician ratings. We are extremely concerned about the risk of inaccurate methodologies being utilized, and seriously doubt that Medicare will be able to risk-adjust individual physician quality ratings by 2013. The risk is that inaccurate and misleading data profiling physicians will be released to the public.

3. There is still no identified pathway toward long-term Medicare physician payment reform.

In summary, we are quite pleased that the Senate leadership has responded to several of our concerns with some meaningful changes, particularly the removal of the cosmetic procedures tax, the lack of Medicare age expansion, the removal of specialty payment reductions to pay for primary care bonuses, and the deletion of physician enrollment fees.

However, several of our most significant concerns remain. We strongly oppose the IMAB proposal, and the physician profiling and public reporting provisions in their current form. In addition, physicians will be entirely unable to implement meaningful health system reform unless the flawed SGR payment formula is fully repealed, removing the specter of impending payment cuts of more than 40%.

If the Senate passes the amended bill this week, Congress will then have to convene a conference committee to reconcile the House and Senate bills in an attempt to find a proposal that can pass in both chambers. During the conference process, your AADA will continue to work aggressively in Washington to eliminate or improve those remaining provisions which threaten to limit patient access to care and harm the physician-patient relationship. We will soon activate a new grassroots campaign and encourage you to contact your member of Congress about the remaining provisions in the bill that may adversely affect the care of our patients. Thank you for your actions to date. Your individual voices are important in communicating the AADA’s continued concerns with provisions in this bill.

Visit AADA Health System Reform Resource Center

Please visit AADA’s Health System Reform Resource Center to find the most up-to-date version of proposed legislation, AADA position statements, and a comparative document of the provisions in the House and Senate health system reform legislation. As always, we welcome your feedback at govtaffairs@aad.org.

Who wins, who loses in Senate health bill

Who wins, who loses in Senate health bill

By ERICA WERNER (AP) – December 20, 2009

WASHINGTON — The little town of Libby, Mont., isn't mentioned by name in the Senate's mammoth health care bill, but it's one of the big winners in the legislation, thanks to the influence of Finance Committee Chairman Max Baucus, D-Mont.

After pushing for years for help for residents of the area, thousands of whom suffer from asbestos-related illnesses from a now-closed mineral mining operation, Baucus inserted language in a package of last-minute amendments that grants them access to Medicare benefits.

He didn't advertise the change, and it takes a close read of the bill to find it. It's just one example of how the sweeping legislation designed to remake the U.S. health care system and extend coverage to 30 million uninsured Americans also helps and hurts more narrow interests, often thanks to one lawmaker with influence or bargaining power.

Here's a look at some other winners and losers in the latest version of the legislation, which was expected to survive an initial test vote in the Senate around 1 a.m. Monday.

WINNERS

_Cosmetic surgeons, who fended off a 5 percent tax on their procedures.

_Nebraska, Louisiana, Vermont and Massachusetts. These states are getting more federal help paying for a proposed Medicaid expansion than other states are. In the case of Nebraska — represented by Sen. Ben Nelson, who's providing the critical 60th vote for the legislation to pass — the federal government is picking up 100 percent of the tab for the expansion, in perpetuity.

_Beneficiaries of Medicare Advantage plans — the private managed-care plans within Medicare — in Florida. Hundreds of thousands of them will have their benefits grandfathered in thanks to a provision tailored by Sen. Bill Nelson, D-Fla., that also affects a much smaller number of seniors in a few other states.

_Longshoremen. They were added to the list of workers in high-risk professions who are shielded from the full impact of a proposed new tax on high-value insurance plans.

_Community health centers. They got $10 billion more in the revised bill, thanks to advocacy by Sen. Bernie Sanders, I-Vt.

_A handful of physician-owned hospitals being built around the country — including one in Bellevue, Neb. — which would be permitted to get referrals from the doctors who own them, avoiding a new ban in the Senate bill that will apply to hospitals built in the future. Without mentioning Nebraska or other states by name, the Senate bill pushes back some legal deadlines by several months, in effect making a few hospitals that are near completion eligible to continue receiving referrals from the doctors who own them. Chalk up another win for Nelson.

_AARP, the lobby for elderly people. The new Democratic bill has about $1 billion in extra Medicaid payments to states that provide visiting nurses and other in-home or community services to prevent low-income people from needing to be admitted to hospitals. In House-Senate bargaining, AARP also is expected to win one of their top priorities: a full closing of the so-called "doughnut hole," the gap in Medicare's coverage of prescription drugs.

LOSERS

_Tanning salons, which are getting hit with a 10 percent tax on indoor tanning services, replacing the cosmetic surgery tax.

_Progressives. They had to give up on their long-held dream of a new government-run insurance plan so that Democratic leaders could lock down the necessary votes from moderates.

_People making over $200,000 a year. A proposed 0.5 percent increase in the Medicare payroll tax was bumped up to 0.9 percent in the latest version, putting the tax at 2.35 percent on income over $200,000 a year for individuals, $250,000 for couples.

_Generic drug makers. They fought unsuccessfully to block 12 years of protection that makers of brand-name biotech drugs — expensive pharmaceuticals made from living cells — will get against generic would-be competitors.

Associated Press writer Alan Fram contributed to this report.

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