Wednesday, December 23, 2009

How Will the Senate Bill Impact the Insurance Companies and Their Customers?

How will the Senate bill impact health insurance companies and their customers?

Even better, how will it impact a not-for-profit health plan--one with a reputation for being a "good guy" that continually wins the country's top awards for member services and with historic profits of less than 1% of premium? And, one that is operating in Massachusetts--a market that has already been through much of this?

I will suggest that, in combination, these are three intriguing questions.

That is why I thought that the Harvard Pilgrim's CEO's recent post on their website was important. It is short, direct, and to the point. And, from everything I know, it is bang-on.

Some samples:
From the look of the finished product, most of the [more recent changes to the Reid bill] were unrelated to health reform, since the changes to the bill itself were marginal. The individual requirement to purchase has been tweaked, but still fails to ensure that individuals cannot delay buying coverage until they need it. A new Independent Payment Advisory Board will be created, but because its recommendations are not binding, its impact on meaningful cost containment is questionable. The most significant additions are new provisions directed at health insurers, including minimum medical expense ratio requirements, and a back-loading of the health insurance premium tax, designed to delay inevitable premium increases...

The flawed structure of the bill is therefore retained, which means that expansion of eligibility and other reforms are largely delayed to 2014, but changes having the effect of increasing health insurance premiums will take effect prior to 2014. Before seeing any material benefits of reform, some will see their Medicare payroll tax rate increase, many fully insured subscribers will, beginning in 2011, see the effects of the health insurance premium tax, and everyone in the commercial market will see the cost-shifting effects of Medicare payment reductions and the tax on drug and medical device manufacturers. Medicare Advantage plan enrollees will also see sharp increases in premiums. Since there is no significant cost containment in the bill, these increases will occur on top of normal medical trend. And because the universal requirement to purchase coverage is weak, adverse selection will further increase costs starting in 2014...

Imagine how this plays in Massachusetts, where the insurance market is already reformed, the cost of health insurance is already high, and the major health plans are not-for-profits. The impact of federal health reform will be little more than higher premiums...

Our colleagues at the Massachusetts Hospital Association just released a “Health Plan Performance Report” which compares key financial indicators for the state’s health plans. It shows that in 2009 [before any of the changes occur] the four dominant not-for-profit health plans in Massachusetts all have less than a 1% profit margin and a medical expense ratio of 90% or higher. Not much room there to finance anything else.
You can read the rest of Bruce Bullen's comments at "Let's Talk Health Care."

Related post:
There Are Four Health Insurance Renewal Cycles and Two Elections Between Now and 2014—Could be Sort of Like a “Death By a Thousand Cuts” for the Dems

Monday, December 21, 2009

The Senate Bill--Wall Street Likes It and the House Will Have To

In morning trading HMO stocks are once again hitting 52-week highs with each of the major publicly traded plans up 3% to 6% from their Friday gains.

Hospitals and pharmaceutical companies are also doing pretty well.

Liberals have been talking all weekend long about having to make the Senate bill better—and more like the House bill. That just won’t happen. Reid’s 60-vote majority is held together with bubble gum and bailing wire and can’t withstand any significant changes.

Look for lots of noise from House liberals on how they will demand more but the fact is there will be little if anything for them. And then, just like all the liberals in the Senate who back-peddled on all their bluster about not compromising over things like the public option, they will too.

There is a lot of anxiety over what some Democrats think was too good a deal for insurance companies. The stock market’s reaction to the bill this morning isn’t helping.

I would not be shocked to see House liberals demanding some more hits to the health insurance industry—perhaps in the form of more pre-2014 concessions—as part of a few face-saving measures before the House signs off.

Saturday, December 19, 2009

Coal in Your Christmas Stocking?

Is there anyone left, on either side of the political spectrum, who wants the Senate health care bill to pass?

Republican Mississippi Governor Haley Barbour had this to say about the Senate bill last week, “This health care plan is like mackerel in the moonlight. Longer that it's out there, the more that it stinks.”

And yesterday, MoveOn said this about the Senate Democratic health care bill in an email to its members, "America needs real health care reform—not a massive giveaway to the insurance companies. Senator Bernie Sanders and other progressives should block this bill until it's fixed."

When Haley Barbour and MoveOn are saying about the same things—this bill should be stopped in its current form albeit for very different reasons—that says a lot.

I haven’t seen a poll the last month that has found an approval rating for the Democratic efforts that was any better than the high 30s or low 40s.

Then came what has to be the most bizarre health care poll finding I have ever seen. In this week’s Washington Post/ABC News poll, 54% of those who are uninsured said they thought Democratic efforts to change the health care system would mean their health insurance would cost more if it were passed—35% said it would cost less.

The uninsured aren’t even buying this!

In a recent post, I pointed out that the Democrats would face four health insurance renewal cycles and two elections between 2010 and 2014 when the benefits of the health care bill would finally become effective. That’s four years of new taxes and continuing big health insurance rate increases before voters see any big benefits from what looks like it will be a very unpopular bill.

This debate isn’t coming down to the “Harry and Louise” moment we might have expected.

It does look like it could be more like a “Thelma and Louise” moment with the Democrats seemingly intent on driving this health care express off a political cliff.

Tuesday, December 15, 2009

Oh, Ease Up on Joe Already

The Democratic rhetoric coming from Capitol Hill today beating on Joe Lieberman is, in the least, disingenuous.

The public option has not been tenable for months. It was not just Lieberman that has been against it in all forms--robust Medicare-like or the neutered variety in the House and Senate bills.

All of the liberals claiming they weren't going to vote for a health bill without a public option have known all along they were going to have to ditch it to get a bill. But no one wanted to tell the base that.

But poor Joe was the one who stood up and took the bullet for all of the other moderates.

Fellow Democratic moderate Mary Landrieu said this last week:
"Some of us have found it very puzzling as to how this [the public option] became the centerpiece of the health care debate. So our hesitation whether it's Sen. Lieberman, Sen. Nelson, myself, Sen. Snowe -- you could go on and on -- there are 12 or more Democrats who've never understood the benefit of this debate being focused on a public option."
And, here is what Democratic Senator Kent Conrad said today:
"In a curious way, it may make it more possible to get something done because he wasn't the only one with these concerns, it's very clear - he vocalized concerns many were having."
Did Lieberman double cross the Dems by backing off on the Medicare buy-in deal? After all, he supported the idea when he ran with Gore nine years ago.

If you want to blame someone for blowing those chances up I'd point at these guys. Here's a quote from Lieberman yesterday:
“Congressman Weiner made a comment that Medicare-buy in is better than a public option, it’s the beginning of a road to single-payer. Jacob Hacker, who’s a Yale professor who is actually the man who created the public option, said, ‘This is a dream. This is better than a public option. This is a giant step.'"
For the record this is what Hacker actually said: "But public option two, which was never on the agenda before, a buy-in to the actual Medicare program for 55- to 64-year-olds, is an enormous positive development. It’s actually the original idea, if you will, for the public option, simply letting people get into the Medicare program that provides broad, secure coverage at an affordable price.”

That kind of reaction to the Medicare buy-in is what really poisoned the well for the moderates. How could any of the moderates who have long been opposed to the public option embrace the Medicare buy-in as a public option alternative after that kind of defense of it?

On Friday, I posted that the Medicare buy-in was already dead and it was just a matter of how the liberals capitulated on the last vestige of the public option.

But poor Joe really set himself up to be the convenient liberal fall guy by getting out front all by himself on Sunday. He did the public option crowd up on the Hill a huge favor. Now, instead of telling their base there never was going to be a public option the liberals have poor Joe to blame.

"It's all Joe's fault there won't be a public option"--even though every Democrat on the Hill has known for weeks there never were close to 60 votes for it.

It takes 60 votes to pass something like health care reform. Those are the rules. When Republicans were in control a few years ago the Democrats weren't calling for the end to those rules. They were happy to use them to temper a conservative and partisan Republican House and Senate majority.

Connecticut sent us Lieberman--as an Independent not a Democrat--just like Minnesota sent us Franken and Alaska sent us Begich--both by tiny margins.

A health care bill takes 60 Senators--one by one.

Friday, December 11, 2009

The Medicare Buy-In Is Dead--The Liberals Are Now the Swing Votes in Health Care

The Medicare buy-in idea is dead. After Democratic Congressman Weiner's candid comment, “Never mind the camel’s nose, we’ve got his head and neck in the tent," no senator from the likes of Arkansas or Indiana is going to vote for this.

Add to that yesterday's critical Washington Post editorial and the sharp response from the various doc and hospital lobbies and this was dead before Reid's request even got to the CBO.

Face it, there will be no public option--and I don't consider the OPM idea even the ghost of a public option. Heck that thing is so weak you might think someone from the health insurance industry designed it (health insurer stock prices hit 52-week highs this week).

So it is no longer the moderate Dems who are the swing votes.

It is all of those liberals in the Senate and House who said they would not vote for a health bill that did not have a public option. True, the latest version in the Reid and Pelosi bill was nothing more than the neutered variety but at least the liberals had some political cover. Now they will have none.

Reid has about a week before the CBO report--which no longer matters--comes back and the Medicare buy-in is officially dead. The word is he is trying to rejigger the Medicare buy-in idea to placate the providers. But now it will forever be the "camel's head and neck" for already nervous moderate Democrats.

Democrats have kept rolling toward a health care bill even with poll approval rates in the high high 30s and low 40s because they know they cannot offend their base by failing to produce a health care bill. They know they have already lost lots of swing voters but it would be worse for them next November if they also lost that critical base.

The base wanted a public option and is rabidly mad about what is going on.

So, your garden variety liberal now has a big decision to make.

Vote yes for a bill that just pumps $850 billion into pretty much the same system we already have--insurance companies and all--or do what they said they were going to do if they did not get a public option--ditch a health care bill.

It's not the moderates I will be watching the next few days--it will be all of those liberals who said they would never do what their President is about to call on them to do.

Tuesday, December 8, 2009

Selling Insurance Across State Lines--Now the Dems Are Pushing the Idea--Why It Won't Work

A favorite Republican health care soundbite calls for making the health insurance system more efficient by letting health plans sell across state lines.

Now Democrats are jumping on that idea. The latest public option idea would have the Office of Personnel Management (OPM) contract with national not-for-profit health plans and introduce those plans into local insurance exchanges--that would be set up under the proposed House and Senate bills. Supposedly, these outside health plans would bring a new dimension of competition to local markets.

OK, here's a health insurance 101 question. Besides buying health insurance to cover expensive health care (pure insurance), what is the most important thing you buy when you buy a health insurance policy?

Answer: The provider network. Without an in-network discount from an HMO or PPO you might pay 30% or 40% more for your health care--in higher premiums or higher out-of-pocket costs. You definitely never want to pay retail at your doctor's office or hospital.

Beyond the discounts, agreements between providers and health plans also establish managed care protocols that save lots of money and keep the cost of insurance down.

By definition an out-of-state health plan--one that does not operate in a given state--does not have a local network. If it did, it would already be doing business there.

Today there are reports that the new Democratic public plan idea would have OPM contract with Blue Cross plans, or say Kaiser Permanente, to provide another not-for-profit health insurance option to compete with local plans in the local insurance exchange.

Think about that for a minute.

So, Kaiser Permanente, which operates with highly organized and capital intensive networks in its markets, would now come into a state where it has no networks and offer a plan? Blue Cross of Nebraska might offer an individual and small group plan in Rhode Island? Tufts Health Plan out of Boston might offer a plan in Oregon?

Based upon what network of providers in those places where they do not now do business?

Where do they get these screwball ideas?

It is not just the Democrats.

Republicans have been suggesting for some time that health plans not now doing business in a state should be allowed to cross state lines and offer policies there. Other than gaming one state's mandates and other regulations by domiciling in a less restrictive state, just what value would a health plan that did not have a network in a particular state bring to that state?

Again, an out-of-state health plan by definition isn't going to have a local provider network and will have health care costs that are a lot more expensive than a local plan that does have discounts and managed care protocols negotiated with providers.

Well, at least neither side--Democrats or Republicans--have the upper hand on this issue.

Liberal Demands Over Giving Up the Public Option Threaten Health Care Deals

I actually feel for Harry Reid this morning.

He was on his way. He had mastered an incredibly fine balance in his health care bill.

No it wasn’t real health care reform and it wasn’t going to bend any curves but the Dems long ago gave up on that looking for one big political “W” instead.

The liberals were finally backing off on the public option there never were the votes for. But even the “neutered” public option both he and Pelosi put in their bills still wasn't enough for a handful of moderate Democrats and the ladies from Maine. So, he put ten Democrats in a room to split the difference and get a deal at least his 60-vote caucus could live with.

They did and came up with a bizarre public option compromise that just plain finished the idea off that a government-run plan should compete with the private market and “keep it honest”—the OPM-run not-for-profit choice within a choice.

Liberals finally woke up and understood they were about to just give the private health care market millions of new customers subsidized by taxpayers and little was going to change in America’s health care system (took’em long enough).

So they said, “Wait a minute. Here’s our list of what we want for giving up on the robust public option.”

Their list includes:
  • Tougher rules for the insurance industry—maybe including a 90% minimum loss ratio.
  • Expanding Medicaid from 133% of poverty to 150%.
  • A Medicare buy-in for people age 55 to 64.
The bottom line—if they can’t get a robust public option they are demanding that millions of people become part of the existing government-run Medicare and Medicaid public plans.

In the context of what they believe needs to be done to manage the health care system this all makes sense. It’s just another way to get to the same place.

But it also opens up a number of really big worm cans.

The insurance industry will hardly go quietly in the face of these proposals.

The previous deals with providers to limit their exposure to the health care bills are now in jeopardy. Providers now see millions of new patients coming to them at reimbursement rates 20% to 30% lower for Medicare and even lower for Medicaid. The House bill already expands Medicaid to 150% of poverty but Senate Finance purposely decided to stay at 133% to placate the providers.

The original Senate Finance bill at 133% of poverty for Medicaid was also designed to placate very nervous governors about the Congress expanding Medicaid too far and with it lots of unfunded mandates for the states. Those governors are now very worried about what is going on in the Senate.

Reid, and Baucus before him, had struck a fine balance with providers and governors.

The liberal wish list now threatens that balance.

This is not a do-over. But it does mean lots of finely balanced understandings and deals are back on the table.

And with few shopping days til Christmas!

Monday, December 7, 2009

The Latest Version of the Public Option—The Democrats Could Have Saved Us Lot of Time If This is What They Call a “Public Option”

If the latest version of the public option is something that will give its proponents reason to argue they still have a way to "make the health insurance market much more competitive," then a motor scooter is a Ferrari.

The details are still fuzzy but the word is that senators are working toward a compromise over the controversial public option that would create something that:
  • Would be run by the Office of Personnel Management (OPM), which already runs the Federal Employee Health Benefits Plan (FEHBP).
  • Would take bids from existing not-for-profit health plans which would then be offered as one or more choices in the insurance exchange open to small employers and uninsured individuals.
  • Would attempt to take advantage of OPM’s experience in negotiating health plan premiums in order to offer small business and consumers the best possible rates.
  • Would continue to have an insurance exchange, that in addition to the OPM product, would offer other both for-profit and not-for-profit health plans separate from the OPM offering.
This scheme would not involve the earlier proposals for a public option that enabled a government run health plan to require all providers to participate and would pay them Medicare-like rates—the “robust” version.

And, this idea would not be anything like the latest version included in both the House and Senate bills that would direct the federal government to set up a government-run insurance plan that would be required to negotiate provider rates instead of dictate them and could not mandate providers to participate. This newest scheme would replace the current version in the Senate bill.

In earlier posts I have referred to the latest version in the House and Senate bills as the “neutered” public option for its inability to really drive any costs down. The CBO has said that this version of a public option would likely only attract a few million customers and have rates actually higher than the general health insurance market.

I’m not quite sure what to call this latest version being negotiated by the senators. It strikes me as almost a redundant exercise. At least a scooter being passed off as a Ferrari.

The insurance exchange would already include all of the not-for-profit health plans operating in the market. These plans would already be under competitive pressure to offer their best rates—that is supposedly the point of the insurance exchange. Heck, the whole idea of an insurance exchange came from the FEHBP plan in the first place. The notion that adding the OPM to the equation--something that was based on the OPM model in the first place--will somehow drive costs down even further is hard to understand.

But let me tell you what this scheme would do.

It would give Democrats something they can call a “public health plan option” and declare victory.

If Democrats were going to buckle--really entirely capitulate--to this extent on their centerpiece health care issue they could have saved us a lot of time and aggravation by doing it a lot quicker!

I would add one concern. You might recall that the CBO said they thought that the public option in the Senate bill could attract a disproportionate number of the sickest people. As the details for this scheme emerge, I hope the Democrats don’t go so far as to create something that would set up the not-for-profits to get a disproportionate number of sick people and ironically relieve the for-profits from their share of that burden.

Sunday, December 6, 2009

2009 a Year of Surprises and Change for the EHR Technology Market

2009 a Year of Surprises and Change for the EHR Technology Market

by DAVID C. KIBBE and BRIAN KLEPPER

"Oft expectation fails, and most oft there
Where most it promises; and oft it hits
Where hope is coldest, and despair most fits."
All's Well That Ends Well (II, i, 145-147)

2009 began with a bang for legacy Electronic Health Record (EHR) vendors, promising strong sales and windfall profits on the heels of stimulus package incentive bonuses initially worth more than $19 billion to doctors and hospitals. But things changed dramatically along the way.

Here are some surprises and notable events that have impacted the EHR market.

Payment for Meaningful Use of EHR Technology, Not for the Software and Hardware Itself
The idea that using EHR technologies ought to produce improvements in quality of care, better communication with patients, enhanced safety, and better public health reporting -- and that these outcomes ought to be monitored and providers held accountable for their achievement -- was itself a surprising innovation in 2009. It has to be counted among the best 10 health care ideas to come out of government in the past generation.

For several years many EHR technology vendors had expected federal money to enhance IT adoption flowing straight to them and their investors. But the interpretation of "meaningful use" by David Blumenthal, MD and his staff and advisors at the Office of the National Coordinator (ONC) proved that they want EHR adoption tightly linked with health reform and capable of supporting accountable care payment schemes, such as bundled payment, pay-for-performance, and accountable care organizations. The burden of proof that EHRs are being used appropriately lies squarely on the physicians and hospitals that purchase them.

It's Become PC To Ask Tough Questions About EHRs, Quality, and Health Care costs.
For several years it seemed that any criticism of EHRs, any questioning of the relationship between the use of health IT and the attendant quality of care or its cost, was off limits in policy discussions. EHRs were all good, all the time. But in 2009 we've seen a trickle become a torrent of serious challenges to the conventional wisdom about EHR value. It's come from diverse sources including distinguished federal science panels, academic studies, testimony before ONC and the National Committee of Vital and Health Statistics (NCVHS), and from a chorus of individual users with personal experiences to relate on listservs and blogs. While generally extolling the virtues of health care computerization, these voices of dissent have drawn attention to the large gaps in performance, ease-of-use, and standardization that plague the current crop of EHR products and services.

Perhaps more importantly, in the process they have unburdened the physicians and hospitals who have sat on the sidelines from being labeled "slow adopters," anti-technology, cheapskates, and even worse. As it turns out, these folks may have simply not seen the value in current EHR products that offer mediocre performance at best, and which have, so far, mostly demanded a king's ransom to purchase, implement, and sustain. We expect to see continued critical examination of the uses of EHR technologies, and new reporting that links health IT with documented enhancements in safety of care, quality improvement, and cost efficiencies.

CCHIT's Loss of Invulnerability and the Displacement of Its Monopoly on EHR Certification
2009 didn't go as well as the Certification Commission on Health IT, or CCHIT (pronounced sea-chit) might have liked. The HIT Policy Committee advised ONC to replace the vendor-sponsored methodologies for both selecting certification criteria and then carrying out the "certification." Instead, the criteria for "certifiied EHR technologies" would be set through an HHS Certification process, and then an international standards-based process used certification and for selecting accredited certifying entities on the basis of competitive bid contracting.

This was a stunning reversal for the industry-leading companies involved with CCHIT. Many external to the process had criticized CCHIT as a "foxes guarding the henhouse" scheme, with apparent conflicts of interest that would never be tolerated in other industries. But CCHIT's real sins were a Byzantine certification process that failed to increase EHR adoption among physicians and hospitals, and the glaring fact that, despite an interoperability certification process, it failed to promote health data exchange among EHR applications. Among the most dramatic and damning testimonies at the HIT Policy Committee hearings in July was that of the CIO of East Texas Health System, who testified that her organization had jettisoned a multi-million dollar CCHIT certified (for interoperability) HIT system because it couldn't exchange information with another CCHIT certified system.

Then, recently, CCHIT's embattled CEO Mark Leavitt, MD announced his resignation from the organization. Although still retaining a primum inter pares status as an EHR-certifying entity due to its contractual ties to ONC, it seems likely that several other testing labs will compete with CCHIT for the contracts to certify EHRs under the ARRA/HITECH program. In fact, one company, Drummond Group, announced on November 2, 2009, that it would submit to become a certifying body upon the release of the requirements, expected in late December. The hope is that competition and oversight will create a more level playing field by keeping certification costs down and reducing the barriers to market entry.

Innovation As a Theme and Goal Going Forward, Backed by the White House
One of the most unexpected, but also most promising, twists in 2009 was Aneesh Chopra's arrival into the fray, with support from the new Chief Technical Officer for HHS, Todd Park, the former co-founder of web-based practice management software company AthenaHealth. Aneesh holds the title of first Chief Technical Officer of the United States. A known innovator and proponent of off-the-shelf and open source software, Chopra was previously Virginia's Secretary of Technology.

Chopra sits on the ONC advisory HIT Standards Committee, where late this year he formed an Implementations Workgroup. That effort breathed much needed fresh air into the smoky backrooms atmosphere of the HIT Standards Committee, which had effectively blocked entry of innovative and start-up firms into the EHR technology market by recommending a set of untested, complex, and large enterprise-centric standards.

Apparently recognizing that these were unimplementable, Chopra's work group held a day of hearings that solicited advice on what does and doesn't work with respect to standards from - imagine this! - experts with proven track records outside of the health care industry. We don't yet know the results of this last minute counterbalance to the incumbent and legacy vendors' influence on ONC. But even some of the most entrenched people on the HIT Standards Committee are now blogging on their ideas for the "Health Internet," a term quietly replacing the older National Health Information Network. This is good news.

The Power Shift Away from Legacy HIT Firms
Physicians, particularly those whose practices are owned by hospitals, will continue to purchase legacy EHR systems. But there are now alternatives, supported by a grass roots movement towards modular, web-based, and much less expensive software for managing clinical work and information in medical practices.

We've called this emerging and disruptive innovation Clinical Groupware to differentiate it from the previous generation of EHR products. We're happy to report that there is new trade association on the scene, the Clinical Groupware Collaborative, with a mission to educate, promote, and organize collaboration among its members. It's existence is simply one indication that Web-based applications and software-as-a-service (SAAS) is finally arriving in health care.

This new health IT paradigm is being aided by the phenomenal success of Apple's iPhone and apps store (2 billion downloads, more than 100,000 apps) and a chorus of technologists, politicians, and public commenters who are asking why a similar platform + modular apps approach hasn't gained more acceptance in health care among physicians and hospitals.

Interest in HIT by Big Technology Companies
The convergence of the opportunities in health care and the race toward cloud computing isn't lost on the largest Web firms. Organizations like Microsoft, Google, Salesforce, Covisint, IBM, Intel, and Amazon not only are marshaling their forces to create new health care products, but have the resource bases and very deep IT infrastructures required to rapidly scale the kind of effort that will be required in a sector as vast and sophisticated as health care.

Their emergence in this space presents a non-traditional challenge to legacy firms, which have typically faced and easily out-gunned smaller, less resource-capable innovators. These new entrants are extremely sophisticated, established businesses with enormous capitalization and, often, more leading edge technologies.

These unexpected turns of events are profoundly important for a simple reason. The changes in health information technologies over the next few years could well be foundational, shaping how health care works globally for the next several decades. Which is why it is imperative that we not allow older paradigms that have outlived their utility to prevail, just because they were there first. 2009 has been a bright spot, in the sense that we've seen signs that the old guard could be dislodged. Against a backdrop of a health care reform effort that, as far as we can understand it, will not do much to improve the system, this progress in Health IT is proving a true bright spot.

David C. Kibbe, MD, MBA and Brian Klepper, PhD write together about health care market dynamics, technology, and innovation. There collected works are here.

Thursday, December 3, 2009

Good For Orszag--Budget Director Discusses Cost Containment in Dem Bills

I was encouraged by remarks White House Budget chief Peter Orszag made in Washington yesterday.

There has been substantial debate in recent days about whether the pending House and Senate bills have the kind of robust cost containment we need to really "bend" any health care cost "curves."

Readers of this blog know of my concern that these bills amount more to expensive entitlement expansions than what we will really need to attack the underlying problem of costs.

Yesterday, Orszag conceded what is on the table is "not sufficient" to address longer-term cost problems:
"Fiscally responsible health reform is necessary but not sufficient to address our immediate-term deficit and long-term deficit problem, and there is more that will be necessary. We'll be talking more about that next year."
He also conceded that the Medicare commission proposed in the Senate bill--which can't touch hospital costs and likely physician costs--falls short:
“The key thing at this point is the Medicare commission exists," Orszag said. “There are things as we move forward that will need to be tweaked or modified, and there is significant discussion ongoing about whether the Medicare commission could be modified."
Orszag's comments are appreciated because, I will suggest, that if we do get something close to the existing bills it will be critically important that everyone understand what they do and what they do not do to contain costs. Recent comments on the subject of cost containment by the administration, Democratic Congressional leaders, and their supporters have pushed back hard against people who are concerned far too little is being done to control costs--comments like, "I can't think of anything I'd do that they are not doing in the bill. You couldn't have done better than they are doing."

Clearly it would be better to just do it right from day-one--particularly because now is when we have the momentum to get the most done. But failing that, let's not mislead the people on just how much would be left to do.

Orszag showed a lot of integrity in saying what he did and his comments should serve as an example for everyone on all sides of this debate that too often put more emphasis on spin than substance.

I would also call you attention to an excellent column on cost containment and the Democratic bills by James Capretta, "Debating Cost Control," at Kaiser Health News.
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