The health care reform debate in Washington DC may be quieter than it had been before the Democrats lost their filibuster-proof majority, but it’s far from over. In the old days, pre-Massachusetts, the goal was to pass one big comprehensive reform bill festooned with provisions, compromises, deals and more. Negotiations continue to between Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi to try to fashion a substantial bill that could be passed over a Republican filibuster. But more likely we’re about to enter a period where small, targeted bills become the norm.

Which means it’s not surprising that Speaker Pelosi has announced a vote next week on repealing the antitrust exemption currently enjoyed by health insurance carriers. No one will argue that the world will change if insurers lose this exemption. It will make their life more difficult as new rules, procedures and regulations will apply to their activities. But carriers are already subject to state anti-trust laws and other regulations.

Supporters of the exemption repeal, however, claim the anti-trust exemption is outdated and that “states lack the resources to regulate the insurance industry effectively,” according to Reuters and that “Eliminating this industry giveaway will create more choice for consumers and create more competition for insurance companies.”

Well, not so much. It’s more likely to create more opportunities for demagoguery about pernicious health insurance companies than have any meaningful impact on consumer choice and competition in the marketplace. That’s the conclusion reached by the National Association of Insurance Commissioners. In a letter to Senate Majority Leader Reid and Speaker Pelosi the NAIC stated “it is unlikely that a repeal of the McCarran-Ferguson antitrust exemption for health and medical malpractice insurers will lead to more competition and lower premiums.” The letter goes on to note that “The most likely result of this repeal would therefore not be increased competition, but a series of lawsuits testing the limits of the state action doctrine, with associated litigation costs being passed along to consumers in the form of higher premiums.”

So if applying the McCarran-Ferguson Act to health insurance carriers is at best going to change little and at worse be counter-productive, why move forward on the issue? Part of the motivation is no doubt political pay back. Health plans aggressively opposed Democrats’ health care reform bills. Another impetus is also political: insurers have been demonized in the health care reform debate. Repealing their anti-trust exemption (an exemption they share only with major league baseball) allows supporters to claim they’re taking on those evil carriers. And some lawmakers legitimately believe it’s a good, helpful idea. (Reasonable people can disagree, after all).

And there are two, more subtle benefits that could result from passage of the exemption repeal. First, it might prove the viability of a piecemeal approach to health care reform. Speaker Pelosi’s office has made it clear that considering the anti-trust repeal bill separately signals a move to break the comprehensive bill into bite-size pieces, according to the Reuters article. Yet if the anti-trust exemption issue is dealt with separately it will be evidence that other matters can be as well.

The second benefit of passage of this legislation: one less thing for critics of the industry to complain about. Hey, you get your good news where you can.

Filed under: Health Care Reform Tagged: anti-trust exemption, Harry Reid, McCarren-Ferguson, Nancy Pelosi

Whether Congress will pass comprehensive health care reform is, shall we say, an “iffy” proposition at this stage. Members of Congress continue to meet, seeking to find a way to pass meaningful reforms through a House increasingly reluctant to support anything expensive and a Senate incapable of shutting off a filibuster. Not surprisingly, observers are looking for clues as to what Plan B … or C, D, E and F … might look like.

According to the Associated Press “President Barack Obama’s modest health care budget may be harbinger of what’s ahead if his overhaul plan dies in Congress.” “Modest” is the correct word. Among the items:

1. Emergency funds for state Medicaid programs ($25.5 billion) to help handle the influx of program participants as a result of the recession.
2. $290 million to community health centers, providers to much of the uninsured.
3. Funds for Medicare to experiment with ways of treating chronic health problems.
4. Increased funding for comparative effectiveness research to help identify the treatments most effective at addressing costly conditions
5. A boost to existing efforts to speed adoption of computerized medical records.
6. increasing anti-fraud personnel and programs within Medicare and Medicaid.

Any and all of these may be useful and necessary. None individually or all of them collectively can be called “comprehensive.” As Secretary of Health and Human Services, Kathleen Sebelius describes them, the budget is “a platform.” And that is how it should be looked at. If comprehensive health care reform legislation dies in Congress, the game will shift to “small ball” in Washington, D.C. The goal will be to accumulate minor gains through the budget, to advance health care reform through executive orders, and to use existing programs to experiment with ways of improving medical care and reducing health care costs.

Comprehensive health care reform coming out of Washington is still possible, albeit far more unlikely now than just two weeks ago. As a result states are far more likely to move forward with more robust reform legislation than were considered in the past year or so. And Washington will continue to try to improve on the status quo through small efforts aimed at having a substantial cumulative effect. Significantly, because these more restrained proposals are less controversial, there’s a high likelihood at least some of these ideas will become law.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Kathleen Sebelius, Medicaid, medical cost containment, Medicare

In Washington, Democrats are contemplating ways to move health care reform forward in a filibuster-sensitive Congress and the White House is pivoting towards emphasizing job creation. Meanwhile, in the real world, Indiana and North Carolina are the site of two pilot projects that could have a significant impact on the quality and cost of medical care.

The Centers for Medicare and Medicaid Services (“CMS”) announced earlier this week the launch of what Health Data Management describes as “the first large-scale Medicare study of a multi-payer, quality reporting and improvement, and pay-for performance program. Data from Medicare, Medicaid, private insurers and employer-sponsored health plans will be combined with clinical data to test if quality improvement and pay-for-performance programs are more effective in a multi-payer environment.”

In other words, the folks who operate Medicare are testing a method of moving from paying medical providers for what they do to a means of compensating providers for what they accomplish. At the same time the program will “provide participating physicians with better information on the patients they are treating,” according to a press release issued by the CMS. This demonstration project will take place in Indiana.

In North Carolina, meanwhile, CMS is working with a group to test ways of better coordinating care, implementing performance incentives and measuring the quality of care received by low-income Medicare beneficiaries. The test is for model termed “medical home,” which Health Management Data describes as “redesigned practices that are more functional and workflow-friendly” and that “focus on quality, safety and alternative reimbursement methods.” The model also requires extensive use of health information technologies (think e-prescribing, clinical decision support, and electronic health records.)

My background is in selling health insurance and the politics and substance of health care reform. So I may be misinterpreting the import of these pilot projects, but my take is that they are baby steps down a very significant path: constraining the cost of health care. Most significantly, they are being done by the Obama Administration without the need for further Congressional authorization, without the need for bridging partisan chasms, and without a lot of fuss or bother. The CMS is just doing what the CMS is supposed to do. Their authority? According to the CMS press release,  the demonstrations are authorized by the Medicare Prescription Drug, Improvement and Modernization Act of 2003. No new or additional authority required. 

Given the lack of fanfare and attention given to these efforts, this may or may not be a signal that President Barack Obama and his administration are launching a coordinated effort to implement meaningful health care reform on their own as I wrote about earlier this week. I’m not sure it matters, however. The key fact is that these experiments could identify methods of wringing savings from the current health care system without the political sausage making inherent in legislative undertakings. So even while health care reform is at a political standstill, the real work of reform seems to be moving forward.

That’s encouraging.

Filed under: Barack Obama, Health Care, Health Care Reform, Healthcare Reform, Politics Tagged: medical cost containment

Once Senator-elect Scott Brown from Massachusetts is sworn into office, Republicans will have an unstoppable filibuster machine in place (assuming they remain united). It takes 60 Senators to shut down a filibuster. With a caucus of 41, Senate GOPs can kill most any bill on the table. (Budget related items can be moved forward through the reconciliation process with only 51 votes).

Which means when it comes to health care reform, Republicans have a choice: they can kill most any bill or they can help pass reform legislation that includes some of their pet provisions. For much of the health are reform debate it was unclear what was the Republican health care reform proposal. There were plenty of ideas thrown around by various groups of GOP lawmakers, but there was no one generally agreed to set of reforms. To be fair, it wasn’t clear what reform provisions were part of the official Democratic recipe either: liberals had their ingredients; moderate Democrats had ideas of their own.

For Democrats it’s fair to say that somewhere between the bill passed by the Senate and the one passed by the House lies their health care reform proposal. Republicans have their own legislation, the “Common Sense Health Care Reform and Affordability Act.”. While this legislation has never been considered by a Congressional committee (that I’m aware of) based on the the Republican response to President Barack Obama’s State of the Union address by Virginia Governor Bob McDonnell, it appears to be the “official” GOP plan. What Governor McConnel said is that “many of (the Republican’s health care reform) proposals are available online at solutions.gop.gov.” As Governor McDonnell was speaking on behalf of the Republican Party, and since the web site he referred to an official Republican Party site, I assume it’s fair to consider the legislation and the web site as the official GOP position on health care reform.

So what kind of health care reforms would Republicans say “yes” to?

• Require states to operate “qualified” state reinsurance programs and high risk pools to enable individuals with pre-existing conditions to obtain coverage so long as they are “citizens and nationals of the United States.” Aliens legally in the United States would apparently not be eligible.

• $25 billion would be allocated to the help fund these programs.
• Premiums could be no higher than 150% of the state’s average individual health insurance premium

• In describing this provision, Republican staff of the Ways & Means Committee describe this provision as extending “existing HIPAA guaranteed availability protections.” Among the extensions is eliminating the requirement that individuals exhaust their COBRA coverage before becoming eligible for insurance under HIPAA.

• reducing “the average per capita premium for health insurance coverage” in the individual and the small group markets.
• reducing the number of uninsured in the state by specified percentages

• The rationale for this provision, as stated by those Republican staffers, is that “differences in state regulation of health insurance have resulted in significant variance in health insurance cost from state to state. Americans residing in a state with expensive health insurance plans are locked into those plans and do not currently have an opportunity to choose a lower cost option.”

These are the primary provisions. There are others aimed at combating fraud and abuse in government health programs, preventing federal dollars to be used for abortions and the like, but these are the core elements related to access and affordability.

Some of the Republican health care reform bill is relatively non-controversial. Who opposes encouraging prevention and wellness programs? The Republican health care reform proposal’s impact on the uninsured would be minimal, according to the independent Congressional Budget Office. However, the CBO also found that the GOP reform plan would “reduce average private health insurance premiums per enrollee in the United Sates, relative to what they would be under current law- by 7 percent to 10 percent in the small group market, by 5 percent to 8 percent for individually purchased insurance, and by zero to 3 percent in the large group market.”

My point in describing the Republican health care reform proposal is not to applaud or criticize it (that’ll happen in future posts). Nor is it to imply that this legislation has any chance of being enacted.

But on the off-chance that both President Obama and the GOP are serious about negotiating over health care reform legislation, it’s useful to know the parameters of the discussion. The Senate bill, with the expected modifications as reported in this blog and elsewhere over the past few weeks, represents the starting point for Democrats. The Common Sense Health Care Reform and Affordability Act represents the starting point for Republicans.

Let the negotiations begin.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Bob McConnell, Common Sense Health Care Reform and Affordability Act, Republican health care reform, State of the Union

Just some quick thoughts on health care reform and President Barack Obama’s State of the Union address.

Bottom line: he intends to move forward with health care reform, but, given the changed political context after the Massachusetts special election, has no specifics as to how he’ll move forward and what he’ll try to accomplish. Yet.

The President’s addressed health care reform roughly half way through his speech. That alone indicates that the White House has gotten the message: the American people are focused on jobs and the economy. Health care reform in and of itself is simply less critical now than it was even two weeks ago. This is not to say it’s unimportant. The status quo is unsustainable and if reform doesn’t occur sooner rather than later there will be a heavy price to pay. Nor is it any less critical for President Obama to sign some form of comprehensive health care reform into law. He’s staked a great deal of his credibility and political capital on achieving reform. He has to deliver something.

Not surprisingly then, the President made it clear he’s not giving up on health care reform. “(W)e must also address the crushing cost of health care,” President Obama said. “This is a cost that now causes a bankruptcy in America every thirty seconds.  By the end of the year, it could cause 1.5 million Americans to lose their homes.  In the last eight years, premiums have grown four times faster than wages.  And in each of these years, one million more Americans have lost their health insurance.  It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.  And it’s one of the largest and fastest-growing parts of our budget. Given these facts, we can no longer afford to put health care reform on hold.”

President Obama then noted how close Democrats had come to passing health care reform (until the results of the Massachusetts election denied Democrats of the ability to overcome a unified Republican filibuster on their current legislation) and touched on some of the benefits Americans could expect from the legislation.

But instead of insisting on passage of the Senate version of reform through the reconciliation process or promising to vigorously pursue any specific reform package, President Obama struck a more conciliatory, bi-partisan tone. “Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week,” he said.

Next the President again reminded Americans of the importance of achieving health care reform. “I suffer no illusions that this will be an easy process.  It will be hard.  But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough.  So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.“

Then it was on to education issues.

What to make of President Obama’s quick and relatively non-substantive reference to the most critical issue of the first year of his presidency? My take is it reflects the reality that the White House and the Democratic leadership don’t know how to proceed yet – they don’t know what they can get passed or how to go about it. Yes, some members of Congress talk about passing much of the existing Senate version of reform a legislative process known as reconciliation. (what’s significant about reconciliation is that it allows the Senate to pass legislation with a simple majority – 51 votes – instead of 60). But there’s very little political upside in pursuing this course – even if there are enough moderate Democrats in the House and Senate to enable it to happen in the first place.

One of the key messages independent voters have been consistently telling Washington is that they’re tired of the political games that pass a business as usual in the nation’s capitol. Yes, Democrats can claim Republicans are playing games by filibustering health care reform. But circumventing such a filibuster through reconciliation will look like chicanery to many voters. And that’s an appearance Democrats simply can’t afford. Not after all the backroom deals they’ve cut during the health care reform process to date.

At the end of the day, I expect Congress to pass health care reform that is far more modest than what Democrats initially hoped to accomplish. And that there will be some Republican votes for a more moderate bill. But to get this done, progressives will need to come to grips with the reality that Democratic majorities are not synonymous with liberal majorities. My guess is that while President Obama meets publicly with his group of “businesses and workers, doctors and health care providers, Democrats and Republicans,” he’ll be calling a lot of liberal lawmakers and explaining basic math. Then he’ll talk about the worthiness of half-a-loaf. And about the need to offer Republicans wins on some issues (think malpractice reform or selling policies across state lines) if there’s any hope of getting support from any GOP lawmakers.

The State of the Union address is not the place for announcing scaled back ambitions. By acknowledging that there was a need to “begin work” on pulling together a reform package, President Obama was signaling that the reform bills before Congress is not going to be the legislation that winds up on his desk (certainly legislation that has been a year in the making is not something on which one “begins working” upon). But health care reform will be coming. We just don’t know what it looks like yet.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: State of the Union

The more things change the more things stay the same. Especially when it comes to health care reform.

As the Los Angeles Times reports, the White House, through senior advisor David Axelrod, is pledging to move forward with health care reform. Meanwhile Senate Minority Leader Mitch McConnel is urging President Barack Obama to start the whole reform process over. Both sentiments are driven by political needs as much as anything else. Mr. Axelrod knows that President Obama and Congress has invested too much political capital in the issue to just walk away from the effort now. At the same time Senator McConnell knows that starting over means little if any meaningful reform is likely to pass this year, giving the GOP the gift of a shiny hammer during the upcoming mid-term elections.

Mr. Axelrod, speaking on ABC’s “This Week” described the election results in Massachusetts (in which voters rejected the assumed victor, Attorney General Martha Coakley for Republican state Senator Scott Brown) as a rejection of health care reform. According to a recent poll, 68 percent of voters, he noted in the interview, supported Massachusetts’ comprehensive health care reform program. What he didn’t say, but I take as the implication, is that Massachusetts voters support health care reform, just not the White House’s health care reform plan.

Senate Majority Leader Harry Reid, Speaker Nancy Pelosi and their top lieutenants are still considering how to proceed. I continue to expect that Democrats will move forward with scaled back version of their existing reform package rather than starting over. They’ll meet with Republicans. Perhaps even include some provisions that are high on the GOP wish list. And then Democrats will move forward with a legislative package that addresses modest cost containment, insurance reforms, and increasing access to existing government programs like Medicaid.

President Obama can do more than just streamline the existing health care reform legislation – he can implement meaningful changes on his own. That’s the suggestion offered by columnist David Ignatius in the Washington Post (his full column is online and can be viewed, for free, after registering with WashingtonPost.com). What Mr. Ignatius proposes is that the President use his executive authority to launch pilot projects in the Medicare and Medicaid programs that have the promise of restraining costs. As he notes, “this approach would have the benefit of beginning to reduce the costs of delivering care before comprehensive legislation makes the system universal.”

Mr. Ignatius points out that the process leading to the current House and Senate has been “an abomination. The voters sent Obama to Washington to lead, not to engage in endless horse-trading.” By using his presidential authority to push existing public programs to pay for value, as opposed to simply activity, President Obama can demonstrate the leadership voters expect of him.

The cost containment projects suggested by Mr. Ignatius were developed by Dr. Delos Cosgrove, CEO of the Cleveland Clinic and Dr. Denis Cortese, a former CEO of the Mayo Clinic. They identified two areas in which the President could have an immediate impact. “First, Medicare should adopt a ‘value index’ that would "reward those who provide safe, high-quality care with excellent service at a reasonable cost." Second, “Medicare should start bundling payments to hospitals, physicians, nursing homes and others so that providers are paid for outcomes, rather than individual procedures.”

Mr. Ignatius recognizes that implementing these reforms across all of Medicare would require Congressional approval, but he also notes that they could begin immediately as pilot projects.  It’s an interesting idea. The failure to adequately address cost containment has been one of the most widespread criticisms of the current health care reform proposal. By looking at alternatives to the current fee-for-service medical reimbursement model, President Obama can make a meaningful contribution to improving America’s health care system. Demonstrating leadership and improving the system: not a bad outcome for an embattled president.

Posted in Health Care Reform

Hopefully the cottage industry in health care reform paranoia can calm down now. No one in Washington is talking about strategies to short circuit the election results in Massachusetts this week in which state Senator Scott Brown, soon to be the Republican’s “41st vote,” upset the Democratic candidate in a special election. While some dismayed Democrats did consider ways of passing legislation before Senator Brown is sworn into office, there was never really a chance that would happen.

One reason Senator Brown won was a reaction to the hubris Democrats in Congress displayed over the past 12 months concerning health care reform. Favors were dealt out to key lawmakers party favors at a kid’s birthday if that’s what it took to secure their votes. A temporary exemption from an excise tax on expensive health insurance policies was crafted for unions to get their support. Deals were brokered with large pharmaceutical companies and others to get them on-board. This is politics as usual, practiced by Democrats and Republicans alike.

Engaging in politics as usual, however, was the problem: voters in 2008 expressed their desire for change. Politics as usual is exactly what the public did not want.

Given this reality, Democrats passing a health care reform bill by jamming something through would be political malpractice of the highest order. Besides, there were never enough rank-and-file lawmakers in the caucus willing to go along with such silliness. So, not surprisingly, instead of passing health care reform by manipulating the rules, Democrats are now taking a breather, gathering their thoughts and developing a strategy for moving forward.

After some reflection, Democratic leaders will realize the scope of health care reform they can pass is extremely limited. Expensive, intrusive reforms are no longer an option. This doesn’t mean they can’t pass some version of reform. It just means that the reform they can pass will need to be less expensive, less comprehensive, and less intrusive than they had hoped.

What health care reform can be passed, and how long it will take, will depend in large part on which of two strategies the White House and Congressional Leaders choose to take.

President Barack Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi can either pursue health care reform that gains the vote of the fewest number of Republican lawmakers necessary or legislation that can earns support from a meaningful percentage of Congressional Republicans. Following the former strategy would see them negotiate almost exclusively with Senators Olympia Snowe and Susan Collins. Seeking truly bi-partisan reform would require negotiating with a far larger group.

The bare minimum strategy will be tempting. It requires the least amount of compromise. As I wrote the other day, they could bare the current legislation down to its cost containment provisions, health insurance reforms, and some of the less expensive ideas to expand coverage to more Americans. Such a scaled-back bill might get the support of either Senator Snowe or Senator Collins – or both. (Who knows, even Senator Brown might be supportive. He does have to run for re-election in Massachusetts in 2012. He won the special election by positioning himself as an independent and downplaying his Republican affiliation. Showing his independence from hard-line Republicans is a reasonable political strategy for him.)

The problem with the bare minimum strategy is its what got Democrats into their current mess. By pursuing health care reform that never had a chance of gaining broad support, President Obama, Senator Reid and Speaker Pelosi assured a long, politically ugly legislative process – one that required the kind of deal making that voters, especially independent voters, had voted to change in 2008.

Instead, Democrats could take the advice of House Majority Whip Jim Clyburn, who observed, “Medicare wasn’t done in one fell swoop. You lay a foundation and you get this thing done over time.” If Democrats had taken this approach from the beginning health care reform might have been enacted already. Instead months were spent battling over issues like a government-run health plan that neither Republicans nor enough moderate Democrats could support. While hanging tough for a liberal wish list pleased their base (for awhile), it was inevitable moderate Democrats would determine the final health care reform package.

To gain sufficient Republican votes, Democrats will have to be willing to accept fairly limited reforms for now. They will need to include some meaningful malpractice reform. Democrats needs not include every and any provision Republican demand. Their goal is not to pass a bill by unanimous consent. Democrats just need to offer enough to peel off a significant number of Republicans – say 12 in the Senate and 35 or so in the House. Legislation with meaningful malpractice reform and a low sticker price could do that. Is this realistic? Well, there are a number of Republicans running in moderate seats, too. Running for re-election as a candidate who “opposed President Obama at every turn” is not a recipe for job security in such seats.

If Democrats succeed in passing bi-partisan reform they’ll have laid the foundation for future health care reform efforts. But what if Republicans unify behind a strategy of blocking reform of any kind, regardless of how moderate that reform might be? Such a strategy would just confirm that the GOP is the party of politics as usual. And in 2010 that’s not an image voters are likely to reward.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Harry Reid, Jim Clyburn, Nancy Pelosi, Olympia Snowe, Scott Brown, Susan Collins