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Obama administration launches $1 billion healthcare drive

By Alister Bull and Anna Yukhananov

WASHINGTON (Reuters) - The Obama administration on Monday said $1 billion of federal funds allocated in last year's health reform law will go toward innovation programs designed to boost jobs and improve patient care.

The announcement is the administration's latest attempt to show that it is working outside of a deeply divided Congress to create jobs.

The administration will award grants in March to people who come up with the best ideas to lift care and save money for those enrolled in the federal healthcare programs Medicare, Medicaid and the Children's Health Insurance Program.

However, the administration did not say how many jobs the measure would create.

Don Berwick, head of the Centers for Medicare and Medicaid Services, said a good example includes the Baylor Heart Hospital in Dallas which has worked to lower readmission rates for congestive heart failure.

"With the healthcare innovation challenge, we're going straight to the source," Berwick said during a news conference for the announcement.

"We want to find them, we want to help them, we want to spread what they know and what they've learned."

The $1 billion of awards will cut into the $10 billion that Congress set aside in the Affordable Care Act to fund a new CMS Innovation Center. The center is meant to promote better care and health at reduced costs by identifying, testing and spreading new models of care and payment.

To get a grant, projects must start within six months and the program will concentrate on those ideas that spur the most hiring and workforce training, the Department of Health and Human Services said.

Awards will range from around $1 million to up to $30 million and be spread over three years. Applications are open to providers, payers, local government, community organizations and public-private partnerships.

Separately on Monday, the Supreme Court agreed to decide the legal fate of Obama's healthcare law, with an election-year ruling due by July.

JOB POLITICS

President Barack Obama has been aggressively promoting programs that hold potential to boost hiring, amid 9 percent U.S. unemployment which will hurt his re-election chances next year unless job creation improves.

Republican lawmakers have held up passage of most of a $447 billion jobs bill that Obama proposed in September, and which Democrats want funded by a tax on millionaires.

So far, only two modest proposals in the package have been approved by the Senate with Republican support.

Republicans in the U.S. House of Representatives have meanwhile passed a number of measures to boost jobs, but these have yet to be taken up by the Democratic-controlled Senate.

Asked how many jobs the grants would create, Dr. Rick Gilfillan, acting director of the Center for Medicare and Medicaid Innovation, said: "This is not about a specific number. This is about recognizing that there are going to be more people involved in healthcare" as the population ages.

"The question is what are they going to be doing," he said, adding that the program would help identify high-value jobs in healthcare and help train people for them.

Some Republicans have questioned the innovation center's approach.

"We are concerned that at a time of significant uncertainty for the fiscal health of the U.S. government, funds are being expended by the Innovation Center with little to no actual value provided," three Republicans on the Senate Finance Committee wrote to Health and Human Service Secretary Kathleen Sebelius last week.

Senators Orrin Hatch, the top Republican on the committee, Mike Enzi and Tom Coburn said the innovation center received $10 billion in federal funding but has not yet produced recommendations or implemented any reforms.

(Editing by Mohammad Zargham)

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