Call it "The Revenge of Ira Magaziner."
Remember the regional health alliances that Magaziner included in the Clinton administration's healthcare reform plan? They were supposed to monitor the private-sector health plans that would be competing in the "managed competition" environment.
Regional health alliances were blasted by critics, who said they were a huge new bureaucracy. Eventually they were dropped from the plan by Democrats in Congress but not before the damage was done.
Now Republicans are putting together their Medicare reform plan, scheduled to be unveiled in early September.
An early draft leaked to the press said seniors would be given a number of options, including a fee-for-service plan; a variety of managed-care alternatives; medical savings accounts; and choosing to remain in their employer's plan after retirement.
According to several GOP staff members, the plan will include some type of risk-adjustment mechanism to account for a wide disparity in the health status of seniors and to ensure that plans don't spend all their time trying to "cherry pick" the seniors who offer the lowest health risks.
An unidentified umbrella organization would oversee the risk-adjustment mechanism. This entity also would manage marketing, accreditation, enforcement and other administrative functions.
According to GOP staff, that organization might be HCFA, it might be a new group within HCFA or it might be a separate group outside the federal government.
The prospect of a new bureaucracy has some congressional Democrats gloating. They say they intend to use the same criticism of the new GOP program that Republicans used to attack the regional health alliances in the Clinton plan.
"They really gave us a blueprint on how to attack a reform plan," said one Democratic aide.
But that type of attack won't stick because the circumstances are not the same, said Gail Wilensky, chairwoman of the Physician Payment Review Commission.
The difference, she said, is that the Magaziner regional health alliances were intended to control the private sector while the GOP organization would be overseeing the Medicare plan.
"These are public programs and public money," Wilensky said. "There are systems that are needed in the public sector that make no sense in the private sector."
Whether Republicans can deflect such criticism more effectively than the Democrats did last year will probably be a big factor in determining whether the GOP reform proposal suffers the same fate as the Magaziner plan.
If I can offer but one suggestion to the GOP: Be honest with seniors instead of trying to sugarcoat their plan as the Democrats did last year.
Seniors should know that the changes being considered will be massive and costly. Democrats estimate that seniors would pay an average of about $1,000 more per year if the GOP plan is enacted (though the GOP disputes this).
While these changes may increase the managed-care options available, they most definitely will not add free choice to a program that is now an open, fee-for-service, pick-most-any-doctor-you-want system.
The General Accounting Office released a report earlier this month recommending that the Department of Defense shift its managed-care contract for its 720,000 beneficiaries in California and Hawaii to Foundation Health Federal Services from QualMed, which won the contract last March.
QualMed won the contract after the Department of Defense, bowing to legal pressure from several companies that lost the bidding, canceled a five-year contract with Aetna that had been awarded in 1993. The GAO had found that the Defense Department did not consider various factors that would have changed the relative costs of the bids when it awarded Aetna the contract.
That means that in the space of about two years, Department of Defense beneficiaries have been shifted from Foundation, which had the original contract, to Aetna, to QualMed and now potentially back to Foundation.
The department's maneuvers are outrageous and costly and cannot have a positive effect on the care given to beneficiaries. Moreover, they don't offer comfort that the federal government will be able to administer a complicated managed-care-based Medicare program like the one being considered by congressional Republicans.
Thumbs up to White House senior adviser Ira Magaziner. After chasing the erstwhile reform guru through the courts, the Association of American Physicians and Surgeons was unable to have Magaziner thrown in jail. A federal prosecutor refused to charge him with lying under oath during a reform-related legal battle.
The AAPS now wants to move the issue to Congress. The thought of congressional hearings on the White House healthcare reform task force, similar to those on Whitewater and the Branch Davidians, really stirs the blood, doesn't it?
Thumbs down to Rep. John Lewis (D-Ga.) and the members of the Service Employees International Union who disrupted an Atlanta town-hall meeting on Medicare reform at which House Speaker Newt Gingrich (R-Ga.) was scheduled to speak.
Disregarding the fact that the event was clearly a GOP political rally and not a substantive Medicare debate, theatrics such as Lewis' do not get anyone any closer to developing real, needed Medicare reforms.