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Just some random thoughts while we see if the Democrats can muster enough votes to enact health care reform. None of them are worth a separate post (and may not be worth being in any post), but I thought I’d clear the decks before the real fun starts over the next few weeks.

It’s Franken’s Fault: If health care reform fails I blame Senator Al Franken. Elected by a mere 206 votes, Senator Franken became the 60th Democratic vote, the super-majority the caucus needed to overcome, in theory, any Republican filibuster. This enabled President Barack Obama and Democratic leaders in Congress to treat health care reform as a Democrats-only endeavor. Yes, Senator Max Baucus tried to work out a compromise with a few Republicans (and actually got one of them to vote for the Senate Finance bill). But liberals in the party and in the land of pundits were constantly and consistently pushing reforms to the left.

File this under “Better Late Than Never” but the drum beat aimed at focusing attention on the need to constrain medical costs in America continues.

Earlier this week I wrote about Sacramento Bee columnist Daniel Weintraub’s posting a reality check for California lawmakers that all the insurance carrier bashing they’re enjoying will do little to address the rising cost of health care. That post also reported on Warren Buffet’s advice to the president to do much more to rein in costs.

Then, yesterday, President Obama indicated he’ll be incorporating into the legislation he’ll be proposing later today some of the medical cost cutting ideas put forward by Republicans during last week’s bipartisan health care reform summit.

And the beat goes on. CNN has been reporting this week on extraordinary and wasteful costs in America’s health care system. $140 for a single Tylenol pill? $1,000 for a toothbrush anyone?

Some of the unnecessary expenses are mistakes made by the hospital that slip past health insurers’ claim examiners (a Georgia patient billed for 41 bags of IV solutions for an emergency room visit that lasted two hours in which just one bag was used). But some of the outrageous expenses are intentionally designed “to make up for lower payments the government pays through Medicare and Medicaid.”

The CNN report goes on to cite, however, a Pricewaterhouse Cooper’s Health Research Institute finding that $1.2 trillion of health care spending in the United States – roughly half – represents waste. This analysis includes in the definition of waste defensive medicine, preventable hospital readmissions, medical errors, and unnecessary emergency room visits. (The Congressional Budget Office has estimated that 30 percent of America’s health care spending is wasted or spent on low-value services using a less broad definition of waste.

There hasn’t been this much talk focused on the need to reduce medical costs since Dr. Atul Gawande wrote about the difference in Medicare spending experienced in two Texas cities, McAllen and El Paso. That was right before attention shifted to the misbehavior of demonstrators during Congressional Town Hall meetings and the debate in Washington pivoted to health insurance reform rather than health care reform. And I am not suggesting that the need to focus on medical cost containment undermine efforts to reform health insurance company behavior where that’s necessary.

Nor am I saying that the health care reform bill the President will put forward today does enough to attack skyrocketing medical care costs. But it will be a start. And it will do more than the proposal he unveiled last week or those previously passed by the Senate and House of Representatives. And that’s a good thing. Let’s just hope it’s the beginning of the effort to reduce health care costs and not the end of it.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Atul Gawande, Daniel Weintraub, medical cost containment, Peter Orszag, Warren Buffet

President Barack Obama is scheduled to announce his final health care reform package tomorrow (Wednesday). This is the version of reform the President hopes Democrats in Congress will embrace and enact through a process that would side-step the inevitable Republican filibuster of health care legislation. Passage is far from assured. There are still several parliamentary maneuvers available to the GOP to slow the legislative process down. And it’s unclear whether Democrats can muster a majority behind any single bill to pass health care reform even if no super majorities are required.

Yet there are indications Democrats could be successful. For example, the House passed its health care reform bill by the slimmest of margins – 220-215 – last November. Only one Republican voted for the bill and he has indicated he won’t bolt his party again. Given that 218 votes are need to pass legislation in the House, this doesn’t give Speaker Nancy Pelosi much room for error. However, according to the Associated Press, “at least nine of the 39 Democrats” who voted against the health care reform bill in November are now “undecided or withholding judgment until they see Mr. Obama’s final product.”

That same Associated Press story also reports that the President is thinking of incorporating four Republican proposals raised during the bipartisan health care reform summit last week. These are: 1) using investigators disguised as patients to uncover fraud and waste; 2) increasing payments to Medicaid providers; 3) strengthening and expanding Health Savings Accounts; and 4) expanding the medical malpractice reform pilot programs already in his bill.

It’s not that the President thinks including these provisions increases the likelihood of any Republicans supporting his health care reform legislation. But it would provide Democrats with a useful talking point during the firestorm that would follow passage of reform legislation by a simple majority vote in the Senate. Democrats will be able to say something along the line of “We met with Republicans and had an open mind, even incorporating some of their cost saving ideas into the final package. And our package already included several provisions Republicans had supported now or in the past. Their unanimous opposition, consequently, obviously reflects politics more than policy so we had to find away around the filibuster. What we did was fair, legal and within the rules.” Or something along those lines.

What all this means is that there’s still several chapters to go in the never-ending story that is health care reform.

• Will Democrats find a way to bring health care reform votes to the floor of the Senate?
• Will the House vote first or wait until after the Senate takes action (if it ever does)?
• If a vote is taken, will there be sufficient votes to actually pass a bill?
• If Congress does enact health care reform legislation, how soon after the President signs it into law will it take before the first law suit is filed?
• Which party will suffer at the polls this November for the the procedural games both have played?

And on and on. Stay tuned.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: filibuster, health care reform summit, Nancy Pelosi, reconciliation

That health insurance carriers were ascending to the throne of political piñata in the health care reform debate has been apparent for some time now. Last July President Barack Obama began referring to health care reform as health insurance reform. A couple of weeks later Speaker Nancy Pelosi described insurance companies as “almost immoral” for opposing the creation of a government-run health plan. That insurance companies were to be cast as the villains was pretty much inevitable. People like and trust hospitals and doctors much more than health insurance carriers. And pharmaceutical companies, while profiting far more from health care than medical carriers are a bit removed from people’s daily experience. The reality is the only group Americans trust less when it comes to health care reform than insurance companies are Republicans in Congress.

Compounding the situation the health insurance industry has had atrocious timing. America’s Health Insurance Plans (AHIP), the industry’s trade organization, released a report warning that health care reform plans being considered by Congress would dramatically increase medical insurance premiums for many Americans. The message was hardly welcomed by Congressional Democrats, but what infuriated them was the timing. The Senate Finance Committee was about to vote upon the closest lawmakers had come to a bipartisan agreement (meaning at least one Republican voted for it. The vitriol the report inspired went far beyond its substance.

Then there’s the timing of recent rate increases in the individual health insurance market. While Anthem Blue Cross’ individual market increase first captured the public – and lawmakers’ attention – it’s now clear several carriers have levied double-digit premium increases in multiple states in both the individual and small business market segments. Many political observers believe that these rating actions breathed new life into flagging reform efforts.

But the 24-hour news channels and other media along with their innumerable pundits need fresh meat. Their job is to keep people watching (or reading) so the commercials don’t run together. There’s only so many ways you can use “insurance company” and “venal” in the same story before it gets old. Insurance company bashing will continue, but there are signs that serious attention may be given to aspects of America’s health care system reform beyond insurance markets.

Consider: Daniel Weintraub is one of California’s most respected journalists. In addition to reporting for and providing opinion pieces to the Sacramento Bee he maintains an excellent blog on health care issues, HealthyCal.org. In the past, Mr. Weintraub has been hard on insurance carriers. Nor is he a fan of the health care status quo in this country. So it must have been a surprise to even him when he wrote a post that makes clear that bashing health insurance companies is not the same as enacting meaningful health care reform.

Mr. Weintraub begins his post citing the political travails California insurance companies face in the state today, ranging from separate investigations by Attorney General Jerry Brown and Insurance Commissioner Steve Poizner to a host of legislative hearings led by lawmakers who, like the Attorney General and Insurance Commissioner, are seeking higher office in this election year.

While noting the entertainment value of this spectacle and recognizing that “it might actually produce information relevant to the health care debate,” Mr. Weintraub makes clear that “health insurance company profits and administrative costs remain a relatively small factor in driving the cost of coverage skyward. The biggest reason that health insurance is getting more expensive,” he continues, ”is that health care is getting more expensive.”

The post includes a useful pie chart describing national health expenditures as broken down by the US Centers for Medicare and Medicaid Services. Of the $2.3 trillion on health care Americans spent in 2008, $159 billion (approximately seven percent) “went to private insurers after deducting all the costs they pass through to the doctors, hospitals and other health care providers.” Put another way: “health care costs nearly doubled between 1998 and 2008, increasing by 96 percent. If we had eliminated private insurance companies in 1998, and assuming they provide no benefit in managing costs, health spending still would have increased by 83 percent during that decade.”

None of this means that health insurance companies and their behavior should be ignored nor their misdeeds forgiven. But as Mr. Weintraub notes, “when this election year is over and the current political bash-fest comes to an end, the core costs of health care will still be there, and chances are they will still be rising.”

That a respected journalist is noting that attacks on health insurance companies are diverting attention from other serious issues with America’s health care system is significant. But he’s not alone. According to Politico.com, Warren Buffett is advising President Obama “to scrap the health care bill and start over” because the legislation “does not focus on controlling costs.” (He went on to say that he’d vote for the Senate bill as opposed to maintaining the status quo).

President Obama and his allies will argue that their legislation does attack rising costs – and they have some evidence to back their claim. But few could honestly say it goes far enough. And while good starts are important, the question is whether the Administration and Congress have the political will to follow-up with meaningful cost containment measures.

Attacks on the health insurance industry will continue. Every drama needs a villain and in this particular theater, carriers are the bad guys. But that folks like Mr. Weintraub and Mr. Buffet are calling out politicians for failing to more fully address the most critical issue undermining America’s health care system – runaway medical costs – is an encouraging sign.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Daniel Weintraub, government health plan, HealthCal.org, Jerry Brown, medical cost containment, Nancy Pelosi, Steve Poizner, Warren Buffet

With the bipartisan health care reform summit history, President Barack Obama is turning to the future of his push to revamp America’s health care system. Here’s a simple way for President Barack Obama to demonstrate a commitment to cost containment and bi-partisanship. As he said in his weekly address this morning, “I am eager and willing to move forward with members of both parties on health care if the other side is serious about coming together to resolve our differences and get this done.”

He also made clear, however that he would move forward without Republican support if that was necessary. “I also believe that we cannot lose the opportunity to meet this challenge,” he said, concluding, “It is time for us to come together.

President Barack Obama repeatedly tried to get the bipartisan summit on health care reform to focus on policy rather than process. Now that the summit is over, however, process is rightfully back on the table.

As I noted in my previous post, many of the major health care reforms of the past few decades have been accomplished through use of the reconciliation process. But how exactly would it be used this time for this reform?

Let’s review where reconciliation fits into the wonderful whacky world of the U.S. Senate. As you’ll recall, 41 Senators can invoke a filibuster and consequently prevent a bill from coming to the floor.  Only if 60 of their colleagues vote to close debate (by invoking cloture) can a bill be voted upon by the full Senate. (For an interesting history of the filibuster and cloture, check out the Senate’s web site). There is an exception, however. Since 1974, budget and tax related items can be brought to the floor of the Senate through a process known as “reconciliation” and no filibuster can stop it. So a key issue is, what matters are eligible for the reconciliation process?

Enter Senator Robert Byrd the widely acknowledged master parliamentarian of the U.S. Senate. He created what is known as the Byrd rule to help determine what is outside the reconciliation process. Put simply, the Byrd rule defines as “extraneous matter” items that do not impact government outlays or revenue in a substantive way. (It’s more complicated than that, but that’s the gist of it).

New taxes, and the health care reform process has plenty of them, are clearly within the purview of the reconciliation process. Preventing carriers from excluding pre-existing medical conditions from coverage is not.

What this means is that the Senate can not pass comprehensive health care reform through the reconciliation process. But hang with me here, because the fact is they don’t need to pass comprehensive health care reform through the reconciliation process because they already have. Remember? It was only a few weeks ago, on December 24th, 2009 to be precise. The Senate passed a comprehensive health care reform bill on a party-line 60-to-39 vote. yes, I know. It seems like ages ago, but it has only been a couple of months. And that affirmative act still stands.

So here’s the legislative three-step Democrats are likely to use to pass comprehensive health care reform.

Step One: The House votes on and passes the Senate version of health care reform.
Step Two: The Senate, using the reconciliation process, passes legislation to “fix” certain aspects of the health care reform it passed in the Senate.
Step Three: The House passes the Senate’s ‘clean-up” bill.

Both the Senate health insurance legislation and the clean-up bill arrive on the president’s desk. He signs them both into law.

What you may (and should) ask, would be in the clean-up bill? As previously predicted here, the follow-up bill is expected to remove state-specific funding elements such as the special treatment currently in the Senate bill favoring Nebraska, Louisiana and a few other states. The clean-up is also likely to change the criteria of a “Cadillac health plan” subjecting fewer policies from being subject to the proposed excise tax. Other fees and taxes would also likely be a part of the second bill. In other words, the clean-up bill would only relate to the budget and/or taxes, meeting the test of the Byrd rule.

I haven’t come up with this on my own. This legislative dance to enact health care reform was discussed at length on “Hardball with Chris Matthews” on MSNBC (the relevant discussion starts at about 3 minutes, 10 seconds in this clip, although he refers to it as a two-step process). What’s significant, however, is that it’s a strategy that makes sense (if your goal is to pass health care reform). Republicans will object that it’s ramming health care through Congress, but the GOP can’t claim the three-step violates Senate rules.

Many thought President Obama’s health care reform bill died with the election of Scott Brown to the Senate from Massachusetts on January 19, 2010. The odds are: they were wrong.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: cloture, filibuster, reconciliation, Robert Byrd

Well, so much for a breakthrough. The health care reform summit was fascinating political science. But it certainly does not seem to have generated a clear direction for anything close to bipartisan health care reform. Which means President Barack Obama and Democratic leaders will put forward a bill for an up-or-down vote, most Democrats will vote for it and no Republicans will. The only questions remaining are: 1) will Democrats invoke a rule that will allow them to move forward with a simple majority or will they permit the GOP to prevent the legislation from coming to a vote; and 2) will Democrats make any changes to the legislative proposal put forward by the President to reflect issues raised by Republicans during today’s health care reform summit. This post addresses the first question; the next one the second.

Reconciliation: My guess is that Democrats will use reconciliation as a means of bringing health care reform legislation to the floor of the Senate for a vote. As NPR has reported, it would not be the first time reconciliation led to substantial changes to America’s health care system. As Sara Rosenbaum, chair of the Department of Health Policy at George Washington University, notes in the NPR story, “In fact, the way in which virtually all of health reform, with very, very limited exceptions, has happened over the past 30 years has been the reconciliation process.”

She’s not just talking about arcane legislation, either. COBRA, the provision that allows workers to continue their coverage after leaving an employer, was passed through reconciliation. In fact, COBRA stands for the bill in which this health insurance extension was included, the Consolidated Omnibus Budget Reconciliation Act of 1985. Reconciliation is the “R” in “COBRA.” In 1997 the Children’s Health Insurance Program, which along with Medicaid now covers one in every three children in the United States, was passed as part of a budget reconciliation bill. As the NPR story reveals, the list literally goes on-and-on. It seems health care reform simply can’t wend its way through the Senate with a super majority. is this because, as the Center for Public Integrity reports, there are eight health care lobbyists for each member of Congress? Whatever the reason, reconciliation is commonly used to pass health care reform.

It’s likely Democrats will keep this streak going. Yes, Republicans will cry foul, but at the end of the day, it’s a perfectly legal process. And while not every provision of the President’s reform package is likely to be eligible for reconciliation, enough will be to enable Democrats to declare victory.

Assuming, of course, they can muster majorities for comprehensive health care reform legislation. The earlier House bill passed with two votes to spare – including one from a Republican who is now saying he’d vote against the bill. And while the Democratic caucus numbers 59 members, there are 18 members of a the Moderate Dems Working Group. Whatever bill comes before the Senate will need to hold onto nine of those moderates – and that’s assuming all other Democrats are willing to go this route. Some liberals, including Senator Jay Rockefeller, have expressed reluctance to to invoke reconciliation. In the end, the President is likely to muster enough support for a bill – he only needs 50 votes in the Senate as Vice President Joe Biden could cast the decisive vote there. The vote will be close in the House, but Speaker Nancy Pelosi has repeatedly demonstrated her ability to muster a majority when needed.

President Obama needs a vote on health care reform. Politically he needs to demonstrate to his base and moderate independents that his commitment to hang tough on the issue – even if it means he’s the captain going down with his ship. If Republicans (and some Democrats) defeat the legislation, he’ll have shown he’ tried. America doesn’t like quitters (former-Governor Sarah Palin being the most prominent exception). They do like fighters. Politically, moving forward on health care reform is a necessity.

It also makes public policy sense. The health care status quo is untenable. Change is needed. Even if his ambitious reforms fail, the effort will set the stage for more modest reforms – modest reforms that could be introduced and voted upon before the November elections.

In an upcoming post I’ll discuss whether the bipartisan health care reform summit makes it more likely the President will moderate his health care reform proposal.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: health care reform summit, Jay Rockefeller, Joe Biden, medical malpractice, Moderate Dems Working Group, Nancy Pelosi, public option

Will the February 25th health care reform summit merely be political theater? Or will it serve as an inflection point that leads to passage of health care reform legislation? I haven’t seen any polls on the matter, but a quick search on the topic certainly creates the impression that many believe the summit will be six hours of politics with nothing substantive emerging.

I respectfully disagree.

Yes, the bipartisan health care reform summit President Barack Obama is convening will have more than its fair share of politics. That’s inevitable when that many politicians are in the same room. And given that it is in the electoral interest of Democrats to produce health care reform and in the electoral interest of Republicans to deny Democrats this victory, that politics will pervade the proceedings is to be expected. Nor should the political facets of the summit be criticized or denigrated. America’s legislative system is political. Unlike other country’s in which the ruling party is expected to rule (thus Prime Ministers are the leaders of the legislative majority), in America we set up a system that would inevitably be adversarial.

Of course, one could argue (and I do) that this adversarial relationship has gone too far. Today’s political climate is poisoned by an unwillingness or inability by one side to recognize anything of value put forward by the other. Opponents are not simply wrong, they are evil. It’s as if the prevailing logic has become: “Reasonable people cannot disagree because anyone who was reasonable would agree with me. Ergo, people who disagree with me are unreasonable.” That this is a both foolish and unhealthy, both for the individuals involved and the Republic, doesn’t seem to matter. That radio talk shows and cable news channels (especially during prime time) pour fuel on this fire – usually embellished with misunderstood or downright erroneous facts – only makes the matter worse.

Which is a long way of saying that those who claim the bipartisan health care reform summit will fail to rise above political gamesmanship have the odds in their favor. But at the risk of being naive, I think it will lead to something more substantive. Here’s some reasons why:

• It’s hard to be political for six hours straight (even with an hour off for lunch). The participants know they’re engaged in a bit of Kabuki theater. But staying in character that long is tough. These folks do have sincerely held beliefs. Even those who stifle those beliefs in favor of scoring political points are likely to let a ray of substance shine through during the course of the day.
• And each side has an incentive to seize that ray of sunshine (to butcher the metaphor) and ratchet it up a bit.

• For Democrats, the incentive is to get on record the specific provisions Republicans demand to see in a health care reform bill and identify the ones they can live with. By expanding the Obama health care reform proposal to include as many GOP ideas as possible, the Democrats assume a no-lose situation. If including those provisions gain Republican support for a bill, they win by passing health care reform legislation. If Republicans remain united against a bill that includes ideas they profess to support, the Democrats get to paint the Republicans as obstructionist.
• For Republicans, they need to re-position themselves as something other than the Party of No. Not that their base wants them to do anything other than oppose whatever bill the Democrats put forward. But Republicans won’t win elections this November just appealing to their base. It’s independent voters who decide elections. In Virginia in 2008 those independent voters helped send a Democrat to the White House. Those same independents last year put a Republican in the Governor’s mansion. By offering substantive proposals Republicans in Congress can demonstrate they’re serious about solving problems. They can then claim to withhold their support for whatever legislation the President puts forward on the grounds that they cannot support rate regulation, or Medicare cuts, or new taxes or something. But they need to show they care about fixing America’s health care system. And that means putting ideas on the table that reduce costs and expand coverage.

Which leads me to believe President Obama’s health care reform plan will be modified subsequent to the summit. And because it will likely incorporate ideas from a broader spectrum than participated in the drafting of the current plan, the result is likely to be a better proposal.

At the very least, the summit will allow Democrats and Republicans to explain to the American people the “why” behind their positions. Which will liberate Democrats to move forward with legislation regardless of whether Republicans support it or not.

• If the Republicans have used the summit to seize the high ground, the resulting legislation will be much more moderate than what the President is proposing today.
• If Republicans fail to put forward meaningful ideas, the proposal will be poorer for it, but will move forward nonetheless.

At the end of the day, I believe both chambers of Congress will vote on a comprehensive health care reform bill – something that has not happened in recent memory despite decades of effort. If Republican Senators filibuster the President’s health care reform bill, Democrats will turn to the reconciliation process (which allows them to pass legislation with a simple majority, not the super-majority overcoming a filibuster requires.) They’ll claim they gave bipartisanship a try and that they are playing by the rules (which permit circumventing filibusters in certain circumstances) and by American principals (what’s more American than “the majority rules?”)

That’s my educated guess. What’s hazier to me are two additional and critical questions.

1. Will the legislation voted on by Congress be health insurance reform or will it be real health care reform that tackles the need to control costs?
2. Will they be able to put forward a single bill capable of obtaining majorities in both the House and Senate?

But first things first. And first is the summit. Will either size, neither or both engage in a substantive debate? I think so. And even those who are skeptical of this result should hope so.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Democratic health care reform, health care reform summit, Republican health care reform

Americans’ views of the upcoming bipartisan health care reform summit will differ greatly: their ideologies and existing opinions concerning health care reform will color how they view what unfolds at Blair House on February 25th. Those in the center and right will hear talk of new government agencies and programs, new federal rules and the regulations, and wonder why those on the left are so disappointed. Isn’t what President Barack Obama proposing an unprecedented incursion by the federal government into health care? What more could the left want?

What liberals want is a single payer system. Often couched as Medicare for All, liberals hoped last year the new Administration would move forward with a complete remake of America’s health care system. Not they had much basis for such wishful thinking. Candidate Barack Obama made it clear that he would not be pushing for a single payer system if elected. After the election he made clear the private carriers would be a central part of the country’s health care system (single payer advocates would do away with health insurance companies).

In short, a single payer was off the table pretty early. But that doesn’t mean it was forgotten. I was watching Senator Bernie Sanders call for Medicare for All on one of the news stations earlier this week.

As we approach the Amidst the accusations that President Barack Obama is refusing to compromise on his health care reform package, it’s worthwhile  intention to lead a government takeover of health care in the United States Dr. Quinten Young, national coordinator of Physicians for a National Health Program, attacked both the House and Senate health care reform bills as “disastrous.” In a Huffington Blog posting, Dr. Young called on President Obama to “lay out the facts to the American people and provide energetic leadership for this eminently rational proposal.”

Not going to happen. Consider the current status of Medicare’s finances. Representative Paul Ryan, writing in Newsweek magazine this week, notes Medicare “is short $38 trillion of what it promises to provide your parents, you and your kids. In five years, the hole will grow to $52 trillion. Your family’s share: $458,000.” It’s also worth noting that the single payer bill recently passed by the California State Senate (and likely to be passed by the State Assembly then vetoed by Governor Arnold Schwarzenegger) has a price tag of roughly $200 billion. As noted: it’s not going to happen.

Which explains why liberals are so dismayed when President Obama’s health care reform plan fails to include a government-run health plan to compete with private carriers. Unlike moderates and conservatives who see this (to varying degrees) as a compromise, liberals view the lack of a public option as the elimination of a compromise they already agreed to. They want a single payer system. They were willing to accept a public option. Now that’s off the table, too?

People feel passionate about health care. The issue is personal, political and policy all wrapped into a complex mix of laws, regulations and history. Which is why many observers believe the bipartisan summit will be little more than political theater (I disagree for reasons I’ll put in another post later today). And people will naturally interpret what happens tomorrow based on their own view of health care reform policy and politics. The perspective for liberals seeking a single payer system will be that of an ever shrinking loaf, leaving them with little to celebrate – in their view.

As noted, however, the left’s disappointment is unsurprising, and the fault of their own misinterpretation of election night 2008. Democrats increased their majorities in both chambers of Congress. Democrats won the White House. Progressives interpreted these results as the triumphs of liberalism. They were not. They were triumphs of the Democratic Party – a party that includes moderates and conservatives. Just as all Labradors are dogs, but not all dogs are Labradors, most liberals are Democrats, but not all Democrats are liberal.

No one knows for sure what will emerge from the health care reform summit. But a safe guess is that liberals will be further disappointed.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics, Single Payer Tagged: health care reform summit

At last. President Barack Obama has unveiled his own version of health care reform. No longer subjecting themselves to blame or praise for what members of Congress put forward, the Administration now has a plan to call it’s own. Copies of President Obama’s health care reform plan, as well as copious supporting material, are available on the White House web site.

And it looks a lot like what we’ve seen from Congress. In fact, it’s pretty much the bill passed by the Senate last December with some several tweaks – some significant; some less so. For example, the “sweeteners” benefitting specific states (think Nebraska and Louisiana) have been removed. Not a big surprise. Seizing on the recent outrage over large rate increases in the individual health insurance market the President has added a provision that would provide for “rate review” of premiums charged by health insurers by creating a Health Insurance Rate Authority “to provide needed oversight at the Federal level and help States determine how rate review will be enforced and monitor insurance market behavior.” The Associated Press describes this provision as seeking to “regulate the health insurance industry much like a public utility.”

One area of agreement likely to be quickly identified at President Barack Obama’s bi-partisan health care reform summit on Thursday is the principal that carriers should be required to accept all applicants for coverage regardless of their health status. This concept, known as “guarantee issue,”  is high on the wish list of Republicans and Democrats alike. What will be far more divisive is whether a requirement that carriers sell health insurance coverage to all consumers should be balanced against a requirement that all consumers buy health insurance coverage.

The issue has both a political and a substantive component. Politically Republicans, and some Democrats, consider forcing individuals to purchase coverage to be overly paternalistic, unfair, a tax-by-another-name, and/or yet another step toward socialism.

From a public policy point of view, it’s hard to see how a system can work without a balance between the requirement to sell and to buy coverage. Otherwise people will wait until they need the insurance before they obtain it. It’s the equivalent of allowing motorists to buy auto insurance from the tow truck driver who shows up at a car wreck. Why buy it before you need it?

Noam Levey, in a thorough article running in the Los Angeles Times describes the costly mistake New York made when it required carriers to sell coverage to all applicants without mandating that individuals purchase coverage. After nearly two decades of this situation health insurance premiums in New York “are now the highest in the nation by some measures, with individual health coverage costing about $9,000 a year on average. And nearly one in seven New Yorkers still lacks health coverage, a greater proportion than before the law was passed.” In some New York counties, Mr. Levey reports “it is impossible to buy an individual plan for less than $12,000 a year.” For some older residents in other states, premiums of $1,000 per month may be close to what they’re paying now. But because New York has pure community rating (meaning all insureds pay the same premium regardless of their age) $12,000 is the premium facing 24 year olds, not just 64 year olds.

I’ve written about this health care reform surcharge frequently and for a long time. The Los Angeles Times article does a great job of showing why New York should serve as a case study on the issue for negotiators at the health care reform summit in Washington. The message is simple.  Mark Hall, a Wake Forest University economist who has studied New York’s experience, summarizes it well in the Los Angeles Times article: “You basically can’t have a functioning insurance market if people can buy insurance on the way to the hospital.”

If those at the summit are serious about solving problems they’ll recognize this reality. However, even folks who should know better, by which I mean anyone with an insurance license, condemn requiring individuals to obtain coverage as un-American in some way. (Never mind the various other duties we impose on citizens in this country.)  The Administration and Republicans are likely to reach an impasse on this issue.

There is at least one other way to balance guarantee issue with the need to prevent gaming with the system. As I’ve suggested before, the solution is to allow carriers to exclude coverage for existing health conditions and to impose a premium surcharge on those applying for coverage who have gone without health insurance for a significant period of time.  The premium surcharge and pre-existing exclusion period could vary depending on how long the individual went without coverage. This approach is a part of the California Association of Health Underwriter’s Healthy Solutions health care reform plan.

Yes, premium subsidies would be required to help lower income Americans purchase the coverage. Republicans have supported refundable tax credits for this purpose in the past while Democrats have put forward direct subsidies. At the end of the day, however, both parties recognize the need to provide premium support. The debate is only over methodology.

The problem with this compromise is that “pre-existing conditions” have become a blasphemous word in Washington, at least among Democrats. Whether they would allow carriers to impose restrictions on existing health problems as an alternative means of encouraging (if not requiring) all consumers to obtain health insurance is unlikely. This is where presidential leadership could make the difference. If President Obama wants bi-partisan health care reform legislation — and, a big if here, the Republicans are willing to negotiate in good faith — the Healthy Solutions method of balancing the need to balance a requirement to sell health insurance with a requirement that consumers obtain it makes sense.

 The health care and health insurance status quo in this country can not long stand. Health care reform is needed. Democrats and Republicans can insist on the purity of their positions. But if they are sincere about solving problems, there are ways to get the job done. The question is, whether there’s the will.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: guarantee issue, health insurance premiums, individual mandate, New York

On February 24th WellPoint CEO Angela Brady will appear before the House Energy & Commerce Committee. She will attempt to explain why the company’s California operating unit, Anthem Blue Cross of California, recently sought to raise rates on some individual policy holders upward of 39 percent. While the effective date of the rate increase was postponed, the hearing is not. And that it is being held the day before President Barack Obama’s bi-partisan health care reform summit with Congressional leaders is no coincidence. The Administration and others have pointed to the rate increase as one of the reasons comprehensive health care reform – or at least health insurance reform – is needed.

In preparation for the hearing, House & Energy Committee Chair Henry Waxman and Subcommittee on Oversight and Investigations Chair Bart Stupak sent a letter to Ms. Braly asking for background information. The information ranges from the general (“reasons for the premium rate increase”) to the specific (for 2005-2008, “a table listing, as applicable, premium revenue, claims payments, sales expenses, other general or administrative expenses, and profits for all individual health insurance products”) to what some might call a fishing expedition “all internal communications, including e-mail, to or from senior corporate management relating to the company’s decision to increase premium rates in California in the individual health insurance market.”)

The hearing will be closely watched, not only by lawmakers but by WellPoint’s competitors. It could provide an interesting glimpse into the rate making process employed by health insurance carriers. The information will certainly be cited by advocates – and opponents – of requiring carriers to spend a certain percentage of the premiums they take in on medical claims as opposed to administrative expenses and profits.

Ms. Braly’s testimony will also likely highlight the different ways politicians and business people view the same data. What to a member of Congress may look like profiteering could look to an executive like a prudent hedge against unknown risk.

The Associated Press has taken a balanced approach to explaining the issues behind the Anthem Blue Cross of California rate increase. The analysis is worthwhile reading for anyone following this particular controversy. Among its conclusions: rising medical costs are the main driver of rate hikes, not profits; health insurance rate regulations vary considerably from state-to-state; non-profit health plans also have large rate increases; carriers can’t, and probably shouldn’t, subsidize rates for one business line in one state with profits earned by other lines of business, especially in other states; and that there’s a lot of elements taken into consideration by carriers when they set their rates. While there’s little specifics many insurance professionals don’t already know (other than the make-up of WellPoint’s profits), it’s a very useful summary and analysis of the issues.

The timing of Anthem Blue Cross of California’s rate increase is generally perceived as constituting political malpractice. But there may be a silver lining. Ms. Braly has an opportunity to educate lawmakers on how and why carriers charge the health insurance premiums they do. If members of the Energy & Commerce Committee are willing to look beyond the politics of the rate increase, they might gain a better understanding of how health insurance works in this country.

Filed under: Health Care Reform, Healthcare Reform, Politics Tagged: Angela Braly, Anthem, Bart Stupak, Blue Cross of California, health insurance premiums, Henry Waxman, House Energy and Commerce Committee, WellPoint

The long strange trip that has been health care reform will take a few new twists and turns this week as President Barack Obama and Congressional Leaders will meet for a televised summit. No matter what actually happens at Blair House the event will be substantial for several reasons. Among them:

• We finally get to see what ObamaCare really looks like. In the past the Administration has voiced support for various elements of legislation “owned” by Congress. While Senate Majority Leader Harry Reid and Speaker Nancy Pelosi struggle to fashion a unified bill Democrats in both of their caucuses can support, President Obama will unveil his own version of health care reform. While it will no doubt be based on the two bills passed, respectively, by the Senate and the House, it will not be the official Democratic bill: it will be the White House bill.
• We finally get to see if either party can rise above the politics of health care reform to actually address the policy of health care reform. Senate Republicans bowed to the inevitable and agreed to participate in the summit agreeing to participate “in good faith” according to the Los Angeles Times. While House Republicans have yet to say whether they’ll attend the summit, they would be foolish not to. The GOP is fighting hard to be known as something other than the Party of No. Not attending would set this positioning effort way back. Besides, the summit provides Republicans with the opportunity to clearly lay out their alternatives and to eviscerate the Democratic approach to health care reform. Yes the meeting gives Democrats the same opportunity. The key for each party, however, will be how they balance the two tactics: pushing forward their own policies; and tearing down the other side’s ideas. If they focus on the benefits of their own approach there’s a real opportunity to find common ground. If they choose to turn the Blair House into a political Thunderdome then politics will trump policy.
• Health care reform will move forward after Thursday’s health care reform summit. But we’ll learn whether what moves forward represents compromise or a Democrats-only version of reform. If Republicans put forward serious ideas (and I assume they will) it will be hard for the Administration to push reforms through the Senate with a simple majority – even though an increasing number of Democrats in the Senate seem willing to use reconciliation to pass a health care reform bill. (Reconciliation allows the Senate to vote on budget related issues without providing the minority the ability to filibuster. A filibuster allows the minority to force the majority to pass legislation with a super-majority of 60 votes in the Senate. Filibusters are not allowed in the House which operates on a simple majority basis). Instead, President Obama would be likely to put forward legislation that incorporates much of what the GOP offers – and then dare Republicans to defeat such a bill. Whether Republicans would – or could – hold out for a bill in which they give up nothing and insist on a pure GOP version of health care reform would be interesting to see.
• If no common ground emerges – whether because Democrats refuse to listen to Republicans or the GOP refuses to truly negotiate – the majority party is likely to move forward on their own. Whether liberals in the Democratic caucus have learned the lesson of the past year would be interesting to watch. That lesson, that it is Democrats who have a majority in Congress, not liberals and that the two are not the same, is a major reason Democrats are in danger of losing the opportunity to pass health care reform in the first place. If the Administration and Democratic leaders had focused on a moderate bill that could gain the support of their more conservative caucus members from the beginning, they would have passed a bill long before they lost their 60th vote. By hewing to the left, they delayed the inevitable: whatever health care reform bill, if any, emerges from Congress will disappoint true believers among progressives.

The ramp-up to Thursday will be interesting. President Obama will unveil his reform plan. The House GOP leaders will agree to attend the summit. The pundits will pontificate. And on Thursday, we learn the future of health care reform. Stay tuned.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: Harry Reid, Nancy Pelosi, Republican health care reform

In politics it’s often easy being in opposition to the party in control. Since your ability to pass laws is limited, at best, the goal shifts from legislating to point making. Minority parties tend to introduce bills to bolster their base and embarrass the majority. They get to rail against the inevitable hypocrisy that is a part of governing in a democracy while ignoring their own double standards back in the days when they were in charge.

In Washington this game is clear and obvious. The Democrats, control of both chambers of Congress and the White House, try to muscle through their priorities. The Republicans unanimously oppose them. In California the game plays out a bit more subtly. Democrats have large majorities in the legislature, but a Republican occupies the Governor’s office. This allows Democrats to shift between the role of the party in control and the opposition. The result: Democrats back a bill that would establish a $200 billion single payer program in the state, safe in the knowledge that it will never become law. If a Democrat becomes Governor next year single payer legislation will still be on the table, but it will be vetted and debated far more thoroughly than this year’s bill.

Now that Democrats have lost their filibuster-busting majority in the Senate, the dynamic in Washington changes substantially. Republicans have been unified in their opposition to the Democrats health care reform proposals. With 60 votes Democrats could ignore them. The debate was all within the Democratic caucus and took place between liberals and moderates. Reduced to 59 votes, Democrats face a new reality: Republicans matter.

President Barack Obama gets this. His appearance at the House GOP conference was a masterful stroke. The give-and-take can be viewed differently depending on the partisan glasses one wears, but the political picture painted at the event unarguably favored the White House. The mere presence of the Democratic president at a Republican meeting was a victory for the Administration. Most of his questioners read from prepared documents (one from a huge book). President Obama answers were note-free. This made it seem like the Republicans had mapped out how to trap or embarrass the President while President Obama was there to simply talk.

Worse, the Republicans could not help but couch their questions in loaded, political terms. (“When will you stop being a socialist” kind of thing). President Obama not only called them on this behavior, but focused his remarks on substance and the need for bipartisanship. Because the questions were politically laden, even when the President responded in kind he won – self-defense is a valid excuse in the eyes of most non-partisans. The best evidence the President benefitted from attending the event: Republican leaders admit, off the record, that televising the question and answer session was a mistake.

Now President Obama is taking the dialogue to a new level and Republicans are in danger of being cornered again. Think of it as the “Be Careful What You Wish For Gambit.” Republicans have been accurately complaining they’ve been excluded from negotiations concerning health care reform. That’s about to change.

On Sunday President Obama announced he would convene a bipartisan health care reform summit with legislative leaders to be televised live. The New York Times quotes President Obama as stating “I want to come back and have a large meeting, Republicans and Democrats, to go through systematically all the best ideas that are out there and move it forward.” The paper goes on to say that “Mr. Obama challenged Republicans to attend the meeting with their plans for lowering the cost of health insurance and expanding coverage to more than 30 million uninsured Americans.”

This move has the potential to actually move health care reform forward. Democrats could be forced to defend some of their more tenuous proposals. Republicans might have to explain how their reforms stack up against the Democrats’ ideas. Republicans could use the opportunity to pin Democrats down on some of their favorite ideas (e.g., medical malpractice reform) while Democrats could question their GOP counterparts on how requiring carriers to accept all applicants regardless of pre-existing conditions can work without requiring all Americans to obtain coverage. In other words, there’s an opportunity for a meaningful, substantive debate that would educate the public while identifying common ground among the Congressional combatants.

And then there’s the political theater of it all. If Democratic or Republican participants use the opportunity to score political points rather than solve problems it will be apparent for the world – and their constituents to see. You can bet that President Obama will avoid this mistake. Instead this is an opportunity for him to present himself to voters – especially independent, moderate voters – as a thoughtful, serious leader focused on finding solutions to serious problems. There’s no more politically potent place for a politician to stand than above politics.

Of course, there’s no guarantee this summit will take place. Republicans are insisting that the legislation passed by the House and Senate be shelved before they participate. While I appreciate their concern about giving credence to the Democratic plan, the reality is that any discussions need a starting point. And the Democratic legislation is what’s before Congress. Taking into account that many of the provisions of the bills are non-controversial, starting with the current bills makes sense from a practical standpoint. Further, politically it’s to the Republicans advantage to force Democrats to defend their proposals. Especially given rifts within the Democratic party within and between each chamber, defending the existing bills would put Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi in an extremely awkward position.

However, instead of turning the President’s summit idea into an advantage, Republicans seem to be deploying the tactics that made them a minority party in the first place. Consider Republican Representative Darrell Issa. According to the Associated Press he said that the first question Republicans should ask President Obama is “Did you lie about moving forward on malpractice reform?” Yes, this feistiness is red meat to the Republican base, but elections are won among moderates – and moderates are tired of politics-as-usual. Representative Issa could have made the same point by suggesting the first question be “How can the GOP help President Obama keep his promise to move forward on malpractice reform?” That’s the approach most independent voters are hoping to see. (Granted, some independents are well to the right or left of the mainstream, but the ones that decide elections tend to be moderates.)

President Obama’s call for a bi-partisan health care summit is subtle and significant.  At best it leads to passage of health care reform albeit at the political price of rewarding Republicans for being partners in reform. At worst the summit proves no health care reform is possible, but in the process shows that it is Republicans who are unwilling to take substantive action.

For President Obama this is a win-win situation. For Republican it is a dangerous one. If they rise above politics it could cement their standing as the alternative to the current Congress.  That’s their win. If they follow Representative Issa’s example, however, they’ll make their base happy, but undermine the electoral momentum they’ve gained in the past year. That would be their loss.

Filed under: Barack Obama, Health Care Reform, Healthcare Reform, Politics Tagged: bipartisanship, Darrell Issa, Harry Reid, health care reform summit, Nancy Pelosi

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

Eliminating annual and lifetime spending caps on health insurance coverage

Preventing carriers from imposing pre-existing conditions on consumers if they maintain continuous coverage.

• 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.

Prohibiting rescissions except in cases of fraud and even then consumers can appeal the decision to an independent appeals panel.

Offering states incentives for:

• 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

Permitting states to “contract with a private entity to develop and operate a plan finder website” to provide information on individual coverage available to consumers in that state. These state plan finders are explicitly prohibited from directly enrolling individuals in health insurance plans.

Allows small business to come together in Association Health Plans that operate across state lines.

Allows individuals to purchase coverage from any health plan licensed in any state. Insurance from a health plan licensed in another state will “still be subject to the consumer protections and fraud and and abuse laws of the policy holder’s state of residence” according to the Ways & Means Committee GOP staff.

• 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.”

Encourages use of Health Savings Account by allowing them to be used to pay for health insurance premiums, enabling those receiving a nonrefundable tax credit to contribute to an HSA and the like.

Capping malpractice awards for noneconomic damages to $250,000 and other medical liability reforms.

Eliminates a current comparative effectiveness research initiative aimed at identifying the effectiveness of various medical procedures

Providing incentives for prevention and wellness programs

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