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Will cooler heads prevail in health reform?

President Obama’s speech to a joint session of Congress tomorrow night looks like the last best hope for health reform in 2009. Despite all the protestations about ‘ObamaCare’, the reality is the President has been remarkably silent on health reform specifics, preferring to let Congress work out the details, as long as they meet his goals of coverage and ‘budget neutrality’.
This looks to be the result of a careful analysis of ‘what went wrong’ with the Clinton health care reform effort, an effort blown apart by too many details that elicited devastating criticism. While some may accuse the President of fighting the last war, others note that Obama, as a relative newcomer to the Capital, understands that many in Congress, and particularly the Senate, have long experience with health care and much pride in that experience, and would resent what they might see as a heavy handed attempt by the new guy to dominate an issue that they view as their own.
Regardless, we’re now at the point where the speech, and moderate Democrats’ and Republicans’ reactions to that speech, may be the turning point in the reform effort.
Obama has largely kept his powder dry, avoiding ‘deal-breakers’, lines in the sand, and ‘non-negotiables’, and the same can be said for the Republican Senators key to a true ‘bipartisan’ deal – notably Enzi and Grassley. (Snowe is a different story; she’s the one hope for Democrats seeking to shove something thru with some form of a public option.) Despite the escalating rhetoric on the part of the two Senators, they have – so far – pretty much avoided had line positions.
This modicum of restraint on the part of the President, Enzi and Grassley, is the key to coming up with something that a) can be passed; b) is more than just a tweaking around the margins; and c) promises to control costs while expanding coverage.
A solid set of principles that would form the basis for agreement has been developed by Bob Laszewski, and are the subject of a measured piece by Brian Klepper and David Kibbe. Klepper and Kibbe suggest the following:

* Bulletproof Health Care Security. This is the idea that everyone would have significantly improved access to care, that the employer-sponsored system would remain available for those who like it, and that Congress would be required to use the same system that they pass for the rest of us.
* Medical Malpractice Reform. The Republicans have the Democrats where they want them on this one. There is no good reason why our current Med Mal system, as capricious and ineffectual as it has been, has not been revised with expert systems, except that the trial lawyers, in exchange for hefty financial support, have received protection from the Democrats. It’s time to fix this problem that pervades our health care provider community.
* Paying for It. This is acknowledging that subsidies will be required for those who can’t afford health care at its current cost level, and that there are ways to structure the new cost that are more sensible. As Bob points out, the nearly forgotten Wyden-Bennett bill would be cost neutral in its second year.
* Tough Cost Containment. As we said above, this has been the Congressional Democrats’ proposals’ most glaring and conflicted flaw. It is an area that, with a focus on primary care, paying for results instead of piecework, and cost/quality transparency, could dramatically drive down cost while improving quality, rightsizing our health system and going a long way toward ameliorating the most pernicious drag on our larger economy. Bob tackles cost control most effectively in his Health Care Affordability Model, a plan that would use tax incentives to encourage the industry to focus on driving out waste.

There are a couple huge political plusses for the Republicans in the ‘Four Points’.
First, to date the Dem’s proposals have been woefully short on cost containment, and woefully long on unfunded entitlements. By getting tough on costs, the GOP may be able to find one issue where it has a fresh, new perspective – something the party desperately needs. Sure, they’d infuriate a big donor base, but that would be an acceptable price to pay for a party that needs something to build on for next year’s mid-term elections.
Second, Enzi, Grassley et al would earn big points from the medical provider and manufacturing industry by attacking Med Mal. A successful ‘solution’ to what is perceived to be a big cost driver (although the data don’t support that perception) would play very well with their base, and take some of the sting out of the cost containment provisions.
This is not to make light of the significance of the issue for the Dems as well – passing health reform is a must-do. There’s a lot of political capital at stake so passing it will boost the party’s credentials while failing to do so will cut deeply into the public’s view of the Democrats.
What does this mean for you?
By September 30 we’ll know if reform is still alive. If Grassley and Enzi aren’t sounding strident and protesting ‘heavyhanded Democrats’, we may still get there.

One thought on “Will cooler heads prevail in health reform?”

  1. These “Four Points” touch on some of the most important issues in health reform, especially cost containment and improving quality. Now it’s time to get down to business about how to actually implement cost containment. I, for one, am trying to get us to focus on moving care to the home, instead of using expensive, overcrowded hospitals and clinics for every care encounter. There are great opportunities to cut hundreds of billions of dollars by using technologies that are already available to prevent health problems and injuries from happening in the first place. Health reform MUST start looking harder at how we are going to successfully reach our important goals of cost containment and improved quality of care.

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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