Wednesday, July 29, 2009

What's the deal with the deals?

The late-breaking news from Washington is that deals have been made in both the House and Senate to trim the cost of health care reform. Not a lot of details yet, but the Washington Post reports that House Democrats have reached a tentative deal with conservative "Blue Dog" Democrats to cut "$100 billion from the cost of the legislation and would not pay health-care providers [under a public plan option] based on Medicare reimbursement rates." A final vote on the bill will be put off until after the August recess. In return, the Blue Dogs agreed to allow the final committee of jurisdiction, the House Energy and Commerce Committee, to complete the process of considering amendments to the bill so it can be voted out before the House recesses on Friday.

On the Senate side, Senator Max Baucus (D-MT), chair of the Senate Finance Committee, has reached a preliminary deal with three Republican Senators to lower the cost of the bill by $900 billion over ten years. The Washington Post says the deal will substitute non-profit regional health care cooperatives for a public plan and make additional cuts in Medicare, including provisions to "scale back Medicare payments to physicians, a long-promised but costly provision." (I think what the Post writer meant to say is that the bill will scale back relief from the Medicare SGR payment cuts, not pile on more cuts in addition to the SGR.) The deal reportedly will also replace broad based tax increases on upper income earners with "targeted" tax increases and to create "incentives" for employers to provide coverage instead of taxing those who do not.

From one standpoint, the deals will help move the legislation forward by winning support from conservative Democrats and at least a few Republicans. Rising public opposition to broad-based tax increases may be ameliorated.

The risk is that the changes will lose the support of liberal Democrats and their progressive allies who will recoil at the process of "watering down" health reform by removing a public plan option and employer mandate. How far will the cost-trimming move back the goal posts from providing the vast majority of Americans with affordable coverage? (The Washington Post says that the Baucus deal would cover 95% of Americans, compared to 97% in the current version of the House bill. But this has not been verified.) Taking more money out of Medicare could lose the support of beneficiaries (where will the AARP come down?) and on providers who likely will bear the brunt of the cuts. Going back on plans to fund long-term relief from Medicare physician payment cuts could cost physician support. And you have to wonder if plans to spend billions of Medicare dollars to fund payment increases to primary care physicians are at risk of being dropped to meet the cost-saving targets. (Nothing specific to this effect has been reported, but one has to assume that any additional Medicare spending on physicians is vulnerable.)

The give and take of legislation inevitably leads to compromise, and some of the changes - like eliminating a requirement that a public plan pay doctors and hospitals based on the Medicare rates - are likely to win support from more doctors and hospitals. But at what point will the cost-trimming unacceptably compromise some of the principal goals of health reform, including providing everyone with access to affordable coverage and reversing the shortage of primary care physicians?

I expect that there will be later deals to change these deals, many of which will take place over the August recess, so this is hardly the end of the process. We will all have a chance to make our cases for an even better deal. For ACP, maintaining funding for primary care, stopping the SGR payment cuts, and ensuring that the legislation provides enough help to the uninsured remain critical objectives that must not be dealt away.

Today's question: Do you like what you hear about the deals being made to trim the cost of health reform?


Jay Larson MD said...

Ah, the politicking begins. So far most of the emphasis is on health insurance reform. Will have to wait and see what deals are struck in regards to delivery reform, HIT, and primary care.

Unknown said...

Here is an article that discusses co-op plans. Our patients best interests should remain paramount.
Health Care Co-ops

Steve Lucas said...

What I like is the focus on cost and the review of the true winners and losers in the process. The July 30th Akron Beacon Journal highlights lab cost at a 24 doctor practice as it opens up its internal lab for outside use in Low-cost lab aids patients.

This practice serves a large number of "self-pay" patients and the difference in cost are astounding between this lab and other services. One example is "for five of the most commonly ordered test range from $34 to $347 at area hospitals and major labs.

Pioneer charges $14 to $32 for those same test..."

We are also seeing those with a vested interest in the current system lining up against change in such July 29 WSJ articles as Doctors Oppose Giving Commission Power Over Medicare Payments. Such a commission would be open to public scrutiny and subject to public record laws.

If we are truly going to see positive change the process will be neither slow or without pain. We must be able to afford the final product.

Steve Lucas

Robert J. Sobel, M.D. said...

Where is the true reform? If you want to protect patients, you need to support cognitive services and provide some margins for necessary ancillaries. If you want to control costs, you need to get more than the limited pharmaceutical rebates that make Medicaid and Medicare work like a charm for big companies and stick it to the health care providers.

As yesterday's bust in Texas illustrates, fraud that exists can be found and punished. We don't need the inefficiency of a quality bureaucracy to help us provide appropriate care for our patients. We need sane financing.

Why in God's name are my type 1 diabetics fighting for their strips and insulin? Why are my patients stopping meds they can't afford? It is because the system is broken. Do not focus on behavior modification. Instead, make the system work. Reform the Hatch-Waxman Act or the industry/physician financial ratio will get even worse and we'll all suffer. Get the perverse games out of health care.

Fair fee-for-serice and Regulated Royalties. If you don't address the exorbitant cost of the new, then it won't matter what financing scheme you create.