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BIOMEDICAL RESEARCH FUNDING OF $6 BIL. THROUGH INSURANCE SURCHARGE

Executive Summary

BIOMEDICAL RESEARCH FUNDING OF $6 BIL. THROUGH INSURANCE SURCHARGE on health insurance premiums is included in President Clinton's health care reform plan. The Sept. 7 working draft calls for "a national pool of funds to support costs associated with the institutional costs of research, development of new medical technology, treatment of rare and unusually severe illnesses and provision of specialized patient care." In FY 1994, the pool is expected to reach roughly $6 bil. through "Medicare payments and a surcharge on private health insurance premiums," the draft states. The funds would be allocated to academic health centers and affiliated teaching hospitals "through a fixed percentage added to hospital payments." Fund recipients would "receive a new, separate payment as reimbursement for costs incurred over and above the cost of routine patient care." The system is a revision of "current Medicare indirect medical education payment formula to factor in the impact of universal health coverage." The national pool closely resembles a proposal floated by Sens. Harkin (D-Iowa) and Hatfield (R-Ore.) to create a biomedical research trust fund ("The Pink Sheet" May 31, T&G-7). Under the Harkin/Hatfield proposal, approximately $6 bil. would be raised through a $5 per month set-aside from each family's health insurance premium. The funds would then be allotted to the National Institutes of Health. The standard benefits package also appears to require coverage of investigational treatments. The package would include "coverage for medically necessary or appropriate medical care provided as part of an investigational treatment during an approved research trial," the draft states. "The intention of this provision is to cover routine medical costs associated with an investigational treatment that would occur even if the investigational treatment were not administered," the draft states. Any trial approved by FDA, NIH, the Department of Veterans Affairs, the Department of Defense or "a qualified nongovernmental research entity as identified in NIH guidelines" would be considered an "approved" trial under the plan. The draft of the Clinton plan calls for NIH to take the lead in new programs for research into preventative medicine and health services. The funding has not yet been clearly defined. Under the plan, NIH would expand prevention research in several priority areas including: child health; chronic and recurrent illnesses; reproductive health; mental health; substance abuse; infectious diseases such as AIDS and tuberculosis; and health and wellness promotion. The prevention research initiative at NIH would be overseen by an associate director for prevention. "Patient-outcomes research and the development of clinical practice guidelines form a central part of the health services research agenda," according to the draft document. Priority areas for health services research include: effectiveness research; quality and outcomes research;evaluation of health care reform; and administrative simplification.

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