TIME
By KAREN TUMULTY Friday, Dec. 04, 2009
Pretty much everyone agrees that the health care legislation now making its way through both houses of Congress would do some things well. It would cover almost all of the roughly 33 million legal residents of this country who now lack health insurance. And a vast expansion of Medicaid, coupled with billions of dollars in subsidies to help low- and middle-income Americans buy insurance, would help ensure that most people end up spending less on their health bills, according to a new analysis by the Congressional Budget Office (CBO), Congress’s independent scorekeepers.
But what about President Obama’s pledge to pass a measure that reins in the larger forces driving up health care costs? Or his vow that a reformed system would deliver more-efficient care, with better results for patients? That’s where the legislation could fall well short of the promises.
In a recent letter to Obama, 23 prominent economists identified four provisions that they said “can go a long way toward delivering better health care, and better value, to Americans.” They are: ensuring that reform doesn’t add to the federal deficit; creating an independent commission to bring Medicare costs under control; discouraging high-cost insurance plans by taxing them; and changing the incentives in medicine so that doctors and hospitals are paid not for how much treatment they give but for how well it works.
Many of these economists — as well as other health experts — are watching in dismay as the legislation’s reforms and cost-saving measures are whittled away by powerful special interests. “It may be that the intersection between what economists consider good policy and [what Washington considers] good politics is very small,” says Stanford University’s Alan Garber, an organizer of the group who signed the letter to Obama.
The CBO says both the House and Senate versions of the bill would cut the deficit in the long run. But even the CBO acknowledges that its predictions are highly uncertain and based on forecasting models that assume that most of the bill’s untested reforms will actually work. To skeptics, that seems too good to be true, especially with millions of new patients coming into the system. While families’ health bills may go down, they say, costs for the government — and ultimately taxpayers — are sure to rise. “I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health care spending rather than restrain it,” Harvard Medical School dean Jeffrey S. Flier wrote in a scathing Nov. 17 Op-Ed in the Wall Street Journal.
(Read “Understanding the Health-Care Debate: Your Indispensable Guide”)
Here are three areas where the goals of keeping costs down and transforming the system are being quietly ambushed by politics:
Comparative Effectiveness After a huge behind-the-scenes fight last winter, Congress allocated $1.1 billion of the economic-stimulus measure to “comparative effectiveness” studies, which evaluate which medical treatments and tests work best. Both the House and Senate bills would set up institutes to compare the efficacy of various procedures. Proponents say the studies are essential to ending medical treatments that juice up fees without adding much benefit. But it is far from clear whether Congress would allow such studies to affect health care costs. Opponents say they are a precursor to medical rationing. Indeed, both the House and Senate bills explicitly prevent this research from being used to decide which services Medicare would pay for and how much it would reimburse.
And that’s unlikely to change. Take the recent uproar over the recommendation by a government-appointed expert panel that most women delay routine mammograms until age 50. As Health and Human Services Secretary Kathleen Sebelius furiously tried to distance the Administration from the recommendation, a chorus of critics declared it a harbinger of exactly the type of bureaucratic health care apportioning they fear most. Any similarly controversial recommendation based on comparative-effectiveness research would almost certainly be neutered by Congress.
The Senate version of the bill also requires that representatives of the drug industry, the diagnostic-equipment business and medical-device makers — all of which have a financial stake in the results of comparative-effectiveness research — hold seats on the governing board of the new agency in charge of it. The potential for conflict of interest has raised alarms among some in the research community. But Obama’s top health adviser, Nancy-Ann DeParle, contends that it’s a sign that some of comparative effectiveness’s most ardent foes have come around to the idea that technologies and treatments have to prove themselves. “Ten years ago, most of the industry was dead set against this,” she says. “Now they are saying, ‘We want a seat at the table.’ “
Medicare Commission When Obama began his push for reform, he asked Congress to create an independent commission to regulate Medicare costs. Medicare, which spends more than $450 billion a year, is such a huge health care player that any changes it makes can lead the way for reforms in the private market. As originally envisioned, the new agency would essentially take over Congress’s current authority to set Medicare payment rates for hospitals, doctors, nursing homes and other health care providers. It would use a process like the military-base-closing commission, whose recommendations automatically go into effect unless Congress votes to block them.
As it turns out, however, lawmakers are reluctant to cede the power to steer extra money to hospitals in their own districts, and the House rejected the commission idea outright. While the Senate bill does contain a version of the commission, it has become weaker at every turn in the process. Under a deal to win hospitals’ support for the bill, the Senate Finance Committee agreed they would be exempt from the commission’s recommendations at least through 2019; doctors, hospices and medical-equipment suppliers would be beyond its reach entirely. Who is left? Maybe no one. “The exception for hospitals and other providers is fundamentally counter to the goals of the original bill, and I will work to see that it is removed,” says Senator Jay Rockefeller, chairman of the Finance Committee’s health care subcommittee and an original proponent of the idea. “A watered-down approach to fixing Medicare simply will not work.”
Even more damaging in the view of many reformers is a little-noticed deal that Senate majority leader Harry Reid cut to get the support he needed to bring the bill to the floor of his chamber. The original Finance Committee bill would have triggered the commission’s recommendations whenever the rate of increase in Medicare spending outpaced overall economic growth — something that happens almost every year. But the current version would allow it to make recommendations only when Medicare spending per capita grows faster than overall health costs. That almost never occurs. The change in economic measuring sounds technical. In effect, however, it “turns off the commission” before it even begins, says a senior congressional aide.
Several sources say Reid made the change in part at the pleading of former Congresswoman Barbara Kennelly, who runs the National Committee to Preserve Social Security & Medicare, a powerful senior-citizens advocacy group. “We don’t think there ought to be a commission at all — period,” says Maria Freese, the organization’s director of government relations. “This is not supposed to be a bill that shrinks Medicare.” Administration officials are working to get the teeth restored to the commission idea — “We’ve got to have it,” says an official — but that will be a huge challenge. The White House will need to find 60 Senate votes to reinsert the provision and faces another big battle when the bill reaches a conference committee with the House.
Pilot Projects The legislation in Congress is chock-full of pilot projects designed to test out ideas for lowering costs. But critics contend that such projects work to preserve the status quo. “We don’t need pilots. We have enough information,” says Kenneth Thorpe, chairman of the health policy department at Emory University. “Let’s go ahead and get on with this.”
While the legislation would give the Health and Human Services Secretary more authority than she has now to put some pilot programs into effect, the Senate is already putting the brakes on some of the more innovative ideas. Under its version of the bill, three of the pilot programs that have the most potential to transform health care would require congressional approval before the Secretary could apply them to Medicare nationally. The first is known as “accountable care organizations,” an arrangement in which hospitals, primary-care doctors and potentially other medical professionals would have to coordinate care for their shared Medicare patients. All would be held accountable for the results and share in any cost savings. The second is the concept of “bundling” payments. Under that system, hospitals, doctors and other providers would get paid a set fee for a single episode of care — say, bypass surgery — and everyone would have to divide it up. The third is giving patients a “medical home” — another way of ensuring greater coordination among health care providers.
All of those concepts would break the traditional fee-for-service model, in which the more treatment doctors and hospitals give, the more they get paid — regardless of whether what they are doing is necessary or even beneficial for the patient. And each is likely to draw heavy flak from health care providers who see their autonomy — and their incomes — in jeopardy.
Can these shortcomings be reversed? White House officials and health reform advocates say they are trying. “We’re not done yet,” says DeParle. The question is whether the final weeks of horse-trading will move the bills toward transforming the health care system — or simply making it bigger.
