Health Reform Musings : Health Care Lawyer & Attorney : Epstein Becker Green Law Firm : Insurance & Costs : Health Reform Musings Blog

With the rejection in the Senate Finance Committee of two separate proposals to create a substantial public health insurance option and, instead, the approval of the relatively weak co-op proposal (which the CBO estimates to be unlikely to establish a meaningful presence and will result in only half the budget amount of $6 billion will be spent) it seemed as though the public option had breathed its last breath.  However, new developments indicate that the public option, in various forms, is still alive. 

Senator Schumer (D-NY), having failed to pass his “level playing field” public health insurance option proposal in the Finance Committee, is pushing a new public health insurance option that would allow states to “opt out” of the public plan.  The opt-out proposal is gaining fans in the Democratic Caucus, even amongst conservative Democrats who are worried the effects a public plan could have on their state.   

Senator Carper (D-DE) meanwhile has been floating options that would allow states to “opt in” to a federal public insurance plan or for the states to create their own public options.  Under the second proposal, the federal government would provide seed funding. 

In the hope of gaining a “bipartisan” bill, Senator Snowe’s (R-ME) “trigger” public plan option is still being considered as well.   Under this option, a public plan would be introduced if the price of insurance did not decrease. 

Finally, although not discussed often, the fact remains that the Senate HELP bill being merged with the Senate Finance bill contains a nationwide public option for the uninsured and employers with less than 50 employees.  This option is somewhat weaker than the House Tri-Committee bill’s public option because its rates would not be based on Medicare and it would not require Medicare-participating physicians to participate in the new plan.

All of these options provide a menu of choices for those at the negotiating table merging the two bills in the Senate (Reid, Baucus, Dodd, Emanuel, and DeParle).  Estimates are that 52-54 Senators support some type of meaningful public option (more than the co-op proposal).  Supporters now seemingly include Sen. Evan Bayh (D-IN), who explicitly endorsed Senator Carper’s state “opt-in” proposal, a sign that even the most conservative Senate Democrats are at least open to the issue.  

• Email This
• Print
• Comments
• Trackbacks

For the last week or so, the health reform public policy debate has been keyed to the Senate HELP Committee’s draft and thus dominated by whether or not the “Exchange” to be employed in access reform should include a “public plan” and, if so, whether such a plan should have the power to access provider payment rates tied to Medicare and whether Medicare participating providers would be required to contract with it. With this week’s release of the Senate Finance Committee’s draft, it will be interesting to see whether payment reform can similarly capture the attention of the press. Frankly, we have low expectations in this regard insofar as the consequences that the prevalence of fee for service payment methodologies have on health care output are hard to grasp relative to the easier concept of “universal coverage”. Perhaps it is ultimately less important that payment reform capture the air waves than the degree to which payment reform is incorporated in whatever pieces of health reform make it through this session of Congress.

There are, of course, a few helpful signs. The New York Times gave front page treatment to the President’s public embrace of the payment reform issue and his distribution of the Gawande article on health care incentives in the New Yorker. The New America foundation released a report on delivery system change which White House Health leader Nancy Anne DeParle also applauded. These may, however, faint notes against a cacophony of sound around the easier to enunciate (though themselves ill understood) concepts around public plan and access.

Gawande, Len Nichols, Peter Orszag and others are of course right that changing the predominant fee for service incentives that power the health care delivery system is vital to improving both the cost and quality of American health care. Using “medical home”, “accountable care organization”, and episode payments will begin to inject new incentives into the planning and care paths chosen by providers. We expect that Senator Baucus’ Committee draft will begin to increase the content of these payment methodologies into the fuel that powers our enormous health care engine. They are the crucial elements to the much lauded quest to “bend the health care cost curve”. Therefore, even if they do not capture the attention of CNN and MSNBC, the strength of these reform elements in the Senate Finance Committee’s bill, and their survival, bears watching by all who invest in as well as receive health care.

• Email This
• Print
• Comments
• Trackbacks

Although there are some big issues that remain unresolved, such as the "public plan" component, it appears that we will see reform legislation pass in 2009. Drafts of the legislation are being prepared now by various members of Congress and their staffs.

The focus on medical homes, physician hospital organizations and accountable care organizations is very real, as is the focus on payment reform, including bundled payments and other forms of capitation-like reimbursement. A key element of the debate relates to "how integrated" a provider organization will need to be to qualify for bundled payments. Can it be virtual? Can it be physician only or must a hospital be involved? What should be the role of private payors?

We wrestled with many of these questions in the 1990s, but there are new aspects now, greater data and organizational capabilities in both the purchaser and provider sectors and much more urgency to move forward with payment and delivery system reform to accompany legislation aimed at increasing access. 

One fear is that the access component will get done without payment and delivery system reform, causing costs to skyrocket and leading, potentially, to future cost controls. It is important that health care providers add their voices, individually and collectively, to this national debate. The making of major legislation is always messy, but there is real momentum right now. Whatever passes will inevitably be incomplete, and there will be unintended consequences.

• Email This
• Print
• Comments
• Trackbacks