Despite early praise from providers, it’s likely that Sen. Max Baucus’ (D-Mont.) comprehensive plan to cover all Americans through public and private reforms is bound to face some resistance from certain sectors of the healthcare industry.
Last week, some of the biggest healthcare names in Congress made an appeal to the incoming Democratic administration, pledging to work with President-elect Barack Obama on issues ranging from Medicare’s physician pay fix to reauthorizing the State Children’s Health Insurance Program and pushing for general reforms to the system. But it was the ambitious 90-page white paper from Senate Finance Committee Chairman Baucus that caught the attention of healthcare and Capitol Hill.
Features of the plan include a Medicare buy-in for 55- to 64-year-olds, a public-plan option to compete with private-plan options in a health insurance exchange, subsidies to make coverage affordable, and a requirement that all employers, excepting small businesses, either offer coverage to their workers or pay into a fund to cover the uninsured. The plan also includes provisions to boost primary-care and chronic-care management and promote health information technology, and seeks to eliminate overpayments, specifically to private insurers in the Medicare Advantage program.
So far, the plan has been fairly well-received. “It’s a well-thought-out proposal that understands the need to address issues like (universal) coverage and quality,” specifically value-based purchasing, said Tom Nickels, senior vice president for federal relations at the American Hospital Association.
Amid the outpouring of support from congressional Democrats, provider groups, medical-device manufacturers and healthcare advocacy and legal groups, the plan also received some early nods from providers. For Michael Dowling, president and chief executive officer of 10-hospital North Shore-Long Island Jewish Health System in Great Neck, N.Y., actual details of the proposal are less important than the fact that Baucus, a major player in healthcare and the Senate, has released such a detailed proposal.
“It sends a message the Senate leadership is really serious about moving the agenda forward” on universal coverage, Dowling said.
Similarly, Jack Rovner, a senior partner and co-chair of the health law practice group at Neal, Gerber & Eisenberg, a Chicago-based law firm, thought it was a “good sign” that chief healthcare lawmakers were hitting the ground running with reform efforts. If there’s any challenge for these healthcare proposals, it’s to build coalitions between the various healthcare “silos” that include hospitals, physicians, insurers and advocacy groups, Rovner said.
The Montana senator wasn’t the only lawmaker who produced a wish list for reforms last week. Reps. John Dingell (D-Mich.) and Pete Stark (D-Calif.) pitched their own separate proposals, with pledges to work with the new administration on a healthcare overhaul. Their approaches, however, seem more incremental in scope than Baucus’. Stark, chairman of the House Ways and Means Health Subcommittee, specifically homed in on Medicare’s physician payment formula, telling reporters at a news conference last week that Congress should just erase the formula and the debt that goes with it—and start from scratch.
Meanwhile, Baucus doesn’t have a specific timeline for issuing a bill or a cost analysis of his proposal but aims to act quickly. In a meeting with reporters, he emphasized that healthcare reform couldn’t wait, and that his plan, over time, would reap savings to the healthcare industry by reducing waste to the system and producing healthier Americans.
Baucus’ intent is to work with other lawmakers, including Sen. Chuck Grassley (R-Iowa), the Finance Committee’s ranking member, and Sen. Edward Kennedy (D-Mass.), who has been crafting his own plan (Nov. 10, p. 16). Kennedy alone may be the catalyst that turns a bill into law, Rovner said.
Many healthcare players think Baucus’ widely watched plan is headed in the right direction. “As an individual family doctor, I’m really excited (Baucus) gets it,” said Ted Epperly, president of the American Academy of Family Physicians and a director of the residency program at Family Medicine Residency of Idaho in Boise.
Also coming out in support of the plan were: the American Medical Association, the Federation of American Hospitals, Families USA and the Trust for America’s Health, a not-for-profit that focuses on disease prevention. The insurance industry also seems amenable to working with Baucus, according to a written statement from Karen Ignagni, president and CEO of America’s Health Insurance Plans.
Others are generally supportive of Baucus’ plan, but have lingering concerns. Blair Childs, a spokesman for Premier, approved of Baucus’ interest in advancing value-based purchasing, a concept that Premier and the CMS have been pilot-testing in a demonstration project.
But other elements of Baucus’ plan should be tested as well, Childs said. For example, to create financial incentives for hospitals to reduce admissions, the white paper recommends reducing Medicare payment rates to hospitals with readmission rates above a certain benchmark. Penalizing hospitals for readmissions would impact their livelihood, said Childs, who added that readmission rates “often have to do with what transpires outside of the hospital.”
Other groups see Baucus’ mandate as a recipe for disaster. “We would be stuck with a government-designed and regulated health plan that will drive up costs and limit access for too many consumers,” Devon Herrick, senior fellow with the conservative-leaning National Center for Policy Analysis, said in a written statement.
It’s unclear how quickly Congress could act on Baucus’ or any other plan. Baucus and other healthcare leaders are appealing to Obama at a time when healthcare is taking a back seat to the economy. In addition, Baucus’ plan differs from Obama’s proposal from the election. Baucus’ plan, for example, wants a mandate on universal coverage, whereas Obama’s healthcare reform proposal has no such requirement that an adult buy insurance.