Health Reform Roadblocks
By Andy Miller
WebMD Guest Blogger
Eighty percent done.
That's what White House spokesman Robert Gibbs said last weekend about progress on legislation to revamp the nation's health care system. "We've got about 80% agreement," Gibbs said on Fox News Sunday. "We're still working on that last 20%."
That last 20% will be a hard slog. It's where the horse trading will be done and details sweated out. Where a deal may crumble -- or be watered down enough to be meaningless. Meanwhile, the political conflicts will percolate when Congress enters its August recess.
The broad agreement on reform includes requiring individuals to purchase health insurance and providing subsidies for lower-income people so they can afford it. And there's agreement on barring insurers from rejecting people with pre-existing medical conditions and not allowing them to charge higher premiums due to a person's health status.
Changing those insurance practices alone is a very important step, says Stuart Altman, a health policy expert at Brandeis University.
Show Me the Money
The hard part -- the final 20% -- breaks down this way:
Extending insurance coverage for up to 45 million uninsured won't come cheap – or easy.
Lawmakers have proposed a mix of ideas on how to pay the $1 trillion reform cost, and each, in turn, has drawn opposition. The House legislation introduced a surtax on the wealthiest Americans. Another proposal aims to end or cap the tax exemption on workers' health benefits paid by employers. More recently, a tax on insurers for more expensive -- sometimes referred to as "Cadillac'' or "gold-plated" -- benefit plans has surfaced.
A levy on sugary beverages, meanwhile, has gone nowhere. "That affects everybody – it ticks off too many people,'' says Dean Smith, a health care expert at the University of Michigan.
Much of the money is needed to subsidize coverage for the uninsured. But the more people who get subsidies, the greater the price tag. Will subsidies be available to people up to 300% of the poverty level ($66,150 for a family of four), or 400% ($88,200 for a family of four)? The influential, fiscally conservative Blue Dog Democrats have worked to lower the subsidy ceiling.
And a requirement that large employers provide insurance or pay a penalty -- fiercely opposed by business groups -- may not make the final cut. The Senate Finance Committee is working on an alternative to that mandate.
"It's impossible to do health reform without taxing someone,'' says Bill Custer, a health insurance expert at Georgia State University. A sunset provision on a new tax, he adds, could provide some political cover.
Overall, the money problem is the biggest potential deal-breaker for reform, Michigan's Smith says.
Get a Grip on Health Costs
U.S. health care spending rose 6.1% in 2007, a rate much higher than general inflation. And that increase was actually less than previous years.
There's consensus on trying to "bend the cost curve,'' but not how to accomplish it, says Stan Dorn, a senior research associate with the Urban Institute.
President Obama has pushed for an independent Medicare commission that would set payment policies for the huge government program. The panel could make politically unpopular decisions to control spending. "Medicare is going to go broke,'' says Altman. "What's bugging Obama is this Medicare problem.''
One line of attack is to transform the way that doctors are paid. Physicians typically get fees for each service they give to patients. That can lead to unnecessary tests and procedures – and higher costs. Reformers have pushed "bundled payments'' to doctors and hospitals, where, in Obama's words, ''you aren't paid for every single treatment ... but instead are paid for how you treat the overall disease."
Already, Dorn says, "there are islands of success, like the Mayo Clinic,'' where doctors are paid by salary. Reform legislation could test these ideas in pilot projects, then extend them more broadly, he says.
There's also a push to compare the effectiveness of medical treatments, medications, and devices to save money and improve quality of care.
None of these ideas, though, will deliver substantial savings in the short term.
How Does Government Fit In?
Much of the partisan wrangling centers on having a Medicare-like public insurance option to compete with health insurance companies. Obama himself has pushed a public plan to ''keep insurance companies honest.''
Republicans see it as a red-meat issue. They have argued a public option would run private insurance companies out of business and lead to a government-run health system. "The health insurance industry is one of the most regulated industries in America," said Sen. Jon Kyl (R-Ariz.) this week. "They don't need to be 'kept honest' by the government."
Some liberal Democrats say they would rebel at legislation that didn't include a public option. "Our votes won't be there if there isn't a public option," said Rep. Jerrold Nadler (D-N.Y.)
Altman of Brandeis says the public plan issue "has been a lightning rod,'' but also a distraction.
Meanwhile, a bipartisan group on the Senate Finance Committee is leaning toward a compromise: creating nonprofit health cooperatives that could compete locally with insurers for business.
Politics and Compromise
Obama and Democrats want a bipartisan bill, but Mitch McConnell (R-Ky.), the Senate minority leader, so far is skeptical. "The only thing bipartisan about the measure so far is the opposition to it," said McConnell.
The Senate Finance Committee is likely to produce a bill with the best hope for some GOP support.
A final bill -- if it gets that far -- may be a compendium of compromises to achieve support from some Republicans and the Blue Dog Democrats, though the result may fall quite short of universal health insurance coverage, Michigan's Smith says.
Still, there is widespread recognition that the health care system needs change, says Marilyn Moon, director of the health program at the American Institutes for Research. "There is an understanding that this problem will not fix itself.''
Sources: Fox News, "Transcript: Robert Gibbs on 'FNS'"; The New York Times, "Reach of Subsidies Is Critical Issue for Health Plan", "Hospital Savings: Salaries for Doctors, Not Fees"; The Associated Press, "Deal With 'Blue Dogs' Sets Up Health Care Vote", "Democrat Says Health Overhaul Needs GOP to Pass"; The Wall Street Journal, "Liberals Fear Losing Public-Plan Option"; Kaiser Health News, "Big Employers Could End Up Paying 'Cadillac' Tax", "Senate Committee's Reform Bill Could Cover 95% of Uninsured"; Health Affairs, "National Health Spending in 2007: Slower Drug Spending Contributes to Lowest Rate of Overall Growth Since 1998"; Stuart Altman, Sol C. Chaikin professor of national health policy, Brandeis University; Marilyn Moon, vice president and director of the health program at the American Institutes for Research; Dean Smith, professor and senior associate dean for administration of the University of Michigan School of Public Health; Stan Dorn, senior research associate, the Urban Institute; Bill Custer, associate professor, Institute of Health Administration, Georgia State University.
WebMD Guest Blogger
Eighty percent done.
That's what White House spokesman Robert Gibbs said last weekend about progress on legislation to revamp the nation's health care system. "We've got about 80% agreement," Gibbs said on Fox News Sunday. "We're still working on that last 20%."
That last 20% will be a hard slog. It's where the horse trading will be done and details sweated out. Where a deal may crumble -- or be watered down enough to be meaningless. Meanwhile, the political conflicts will percolate when Congress enters its August recess.
The broad agreement on reform includes requiring individuals to purchase health insurance and providing subsidies for lower-income people so they can afford it. And there's agreement on barring insurers from rejecting people with pre-existing medical conditions and not allowing them to charge higher premiums due to a person's health status.
Changing those insurance practices alone is a very important step, says Stuart Altman, a health policy expert at Brandeis University.
Show Me the Money
The hard part -- the final 20% -- breaks down this way:
Extending insurance coverage for up to 45 million uninsured won't come cheap – or easy.
Lawmakers have proposed a mix of ideas on how to pay the $1 trillion reform cost, and each, in turn, has drawn opposition. The House legislation introduced a surtax on the wealthiest Americans. Another proposal aims to end or cap the tax exemption on workers' health benefits paid by employers. More recently, a tax on insurers for more expensive -- sometimes referred to as "Cadillac'' or "gold-plated" -- benefit plans has surfaced.
A levy on sugary beverages, meanwhile, has gone nowhere. "That affects everybody – it ticks off too many people,'' says Dean Smith, a health care expert at the University of Michigan.
Much of the money is needed to subsidize coverage for the uninsured. But the more people who get subsidies, the greater the price tag. Will subsidies be available to people up to 300% of the poverty level ($66,150 for a family of four), or 400% ($88,200 for a family of four)? The influential, fiscally conservative Blue Dog Democrats have worked to lower the subsidy ceiling.
And a requirement that large employers provide insurance or pay a penalty -- fiercely opposed by business groups -- may not make the final cut. The Senate Finance Committee is working on an alternative to that mandate.
"It's impossible to do health reform without taxing someone,'' says Bill Custer, a health insurance expert at Georgia State University. A sunset provision on a new tax, he adds, could provide some political cover.
Overall, the money problem is the biggest potential deal-breaker for reform, Michigan's Smith says.
Get a Grip on Health Costs
U.S. health care spending rose 6.1% in 2007, a rate much higher than general inflation. And that increase was actually less than previous years.
There's consensus on trying to "bend the cost curve,'' but not how to accomplish it, says Stan Dorn, a senior research associate with the Urban Institute.
President Obama has pushed for an independent Medicare commission that would set payment policies for the huge government program. The panel could make politically unpopular decisions to control spending. "Medicare is going to go broke,'' says Altman. "What's bugging Obama is this Medicare problem.''
One line of attack is to transform the way that doctors are paid. Physicians typically get fees for each service they give to patients. That can lead to unnecessary tests and procedures – and higher costs. Reformers have pushed "bundled payments'' to doctors and hospitals, where, in Obama's words, ''you aren't paid for every single treatment ... but instead are paid for how you treat the overall disease."
Already, Dorn says, "there are islands of success, like the Mayo Clinic,'' where doctors are paid by salary. Reform legislation could test these ideas in pilot projects, then extend them more broadly, he says.
There's also a push to compare the effectiveness of medical treatments, medications, and devices to save money and improve quality of care.
None of these ideas, though, will deliver substantial savings in the short term.
How Does Government Fit In?
Much of the partisan wrangling centers on having a Medicare-like public insurance option to compete with health insurance companies. Obama himself has pushed a public plan to ''keep insurance companies honest.''
Republicans see it as a red-meat issue. They have argued a public option would run private insurance companies out of business and lead to a government-run health system. "The health insurance industry is one of the most regulated industries in America," said Sen. Jon Kyl (R-Ariz.) this week. "They don't need to be 'kept honest' by the government."
Some liberal Democrats say they would rebel at legislation that didn't include a public option. "Our votes won't be there if there isn't a public option," said Rep. Jerrold Nadler (D-N.Y.)
Altman of Brandeis says the public plan issue "has been a lightning rod,'' but also a distraction.
Meanwhile, a bipartisan group on the Senate Finance Committee is leaning toward a compromise: creating nonprofit health cooperatives that could compete locally with insurers for business.
Politics and Compromise
Obama and Democrats want a bipartisan bill, but Mitch McConnell (R-Ky.), the Senate minority leader, so far is skeptical. "The only thing bipartisan about the measure so far is the opposition to it," said McConnell.
The Senate Finance Committee is likely to produce a bill with the best hope for some GOP support.
A final bill -- if it gets that far -- may be a compendium of compromises to achieve support from some Republicans and the Blue Dog Democrats, though the result may fall quite short of universal health insurance coverage, Michigan's Smith says.
Still, there is widespread recognition that the health care system needs change, says Marilyn Moon, director of the health program at the American Institutes for Research. "There is an understanding that this problem will not fix itself.''
Sources: Fox News, "Transcript: Robert Gibbs on 'FNS'"; The New York Times, "Reach of Subsidies Is Critical Issue for Health Plan", "Hospital Savings: Salaries for Doctors, Not Fees"; The Associated Press, "Deal With 'Blue Dogs' Sets Up Health Care Vote", "Democrat Says Health Overhaul Needs GOP to Pass"; The Wall Street Journal, "Liberals Fear Losing Public-Plan Option"; Kaiser Health News, "Big Employers Could End Up Paying 'Cadillac' Tax", "Senate Committee's Reform Bill Could Cover 95% of Uninsured"; Health Affairs, "National Health Spending in 2007: Slower Drug Spending Contributes to Lowest Rate of Overall Growth Since 1998"; Stuart Altman, Sol C. Chaikin professor of national health policy, Brandeis University; Marilyn Moon, vice president and director of the health program at the American Institutes for Research; Dean Smith, professor and senior associate dean for administration of the University of Michigan School of Public Health; Stan Dorn, senior research associate, the Urban Institute; Bill Custer, associate professor, Institute of Health Administration, Georgia State University.
