Medical Cost Savings Experiment Launches

In Washington, Democrats are contemplating ways to move health care reform forward in a filibuster-sensitive Congress and the White House is pivoting towards emphasizing job creation. Meanwhile, in the real world, Indiana and North Carolina are the site of two pilot projects that could have a significant impact on the quality and cost of medical care.

The Centers for Medicare and Medicaid Services (“CMS”) announced earlier this week the launch of what Health Data Management describes as “the first large-scale Medicare study of a multi-payer, quality reporting and improvement, and pay-for performance program. Data from Medicare, Medicaid, private insurers and employer-sponsored health plans will be combined with clinical data to test if quality improvement and pay-for-performance programs are more effective in a multi-payer environment.”

In other words, the folks who operate Medicare are testing a method of moving from paying medical providers for what they do to a means of compensating providers for what they accomplish. At the same time the program will “provide participating physicians with better information on the patients they are treating,” according to a press release issued by the CMS. This demonstration project will take place in Indiana.

In North Carolina, meanwhile, CMS is working with a group to test ways of better coordinating care, implementing performance incentives and measuring the quality of care received by low-income Medicare beneficiaries. The test is for model termed “medical home,” which Health Management Data describes as “redesigned practices that are more functional and workflow-friendly” and that “focus on quality, safety and alternative reimbursement methods.” The model also requires extensive use of health information technologies (think e-prescribing, clinical decision support, and electronic health records.)

My background is in selling health insurance and the politics and substance of health care reform. So I may be misinterpreting the import of these pilot projects, but my take is that they are baby steps down a very significant path: constraining the cost of health care. Most significantly, they are being done by the Obama Administration without the need for further Congressional authorization, without the need for bridging partisan chasms, and without a lot of fuss or bother. The CMS is just doing what the CMS is supposed to do. Their authority? According to the CMS press release,  the demonstrations are authorized by the Medicare Prescription Drug, Improvement and Modernization Act of 2003. No new or additional authority required. 

Given the lack of fanfare and attention given to these efforts, this may or may not be a signal that President Barack Obama and his administration are launching a coordinated effort to implement meaningful health care reform on their own as I wrote about earlier this week. I’m not sure it matters, however. The key fact is that these experiments could identify methods of wringing savings from the current health care system without the political sausage making inherent in legislative undertakings. So even while health care reform is at a political standstill, the real work of reform seems to be moving forward.

That’s encouraging.

Republican Health Care Reform: An Overview

Once Senator-elect Scott Brown from Massachusetts is sworn into office, Republicans will have an unstoppable filibuster machine in place (assuming they remain united). It takes 60 Senators to shut down a filibuster. With a caucus of 41, Senate GOPs can kill most any bill on the table. (Budget related items can be moved forward through the reconciliation process with only 51 votes).

Which means when it comes to health care reform, Republicans have a choice: they can kill most any bill or they can help pass reform legislation that includes some of their pet provisions. For much of the health are reform debate it was unclear what was the Republican health care reform proposal. There were plenty of ideas thrown around by various groups of GOP lawmakers, but there was no one generally agreed to set of reforms. To be fair, it wasn’t clear what reform provisions were part of the official Democratic recipe either: liberals had their ingredients; moderate Democrats had ideas of their own.

For Democrats it’s fair to say that somewhere between the bill passed by the Senate and the one passed by the House lies their health care reform proposal. Republicans have their own legislation, the “Common Sense Health Care Reform and Affordability Act.”. While this legislation has never been considered by a Congressional committee (that I’m aware of) based on the the Republican response to President Barack Obama’s State of the Union address by Virginia Governor Bob McDonnell, it appears to be the “official” GOP plan. What Governor McConnel said is that “many of (the Republican’s health care reform) proposals are available online at solutions.gop.gov.” As Governor McDonnell was speaking on behalf of the Republican Party, and since the web site he referred to an official Republican Party site, I assume it’s fair to consider the legislation and the web site as the official GOP position on health care reform.

So what kind of health care reforms would Republicans say “yes” to?

• Require states to operate “qualified” state reinsurance programs and high risk pools to enable individuals with pre-existing conditions to obtain coverage so long as they are “citizens and nationals of the United States.” Aliens legally in the United States would apparently not be eligible.

• $25 billion would be allocated to the help fund these programs.
• Premiums could be no higher than 150% of the state’s average individual health insurance premium

Eliminating annual and lifetime spending caps on health insurance coverage

Preventing carriers from imposing pre-existing conditions on consumers if they maintain continuous coverage.

• In describing this provision, Republican staff of the Ways & Means Committee describe this provision as extending “existing HIPAA guaranteed availability protections.” Among the extensions is eliminating the requirement that individuals exhaust their COBRA coverage before becoming eligible for insurance under HIPAA.

Prohibiting rescissions except in cases of fraud and even then consumers can appeal the decision to an independent appeals panel.

Offering states incentives for:

• reducing “the average per capita premium for health insurance coverage” in the individual and the small group markets.
• reducing the number of uninsured in the state by specified percentages

Permitting states to “contract with a private entity to develop and operate a plan finder website” to provide information on individual coverage available to consumers in that state. These state plan finders are explicitly prohibited from directly enrolling individuals in health insurance plans.

Allows small business to come together in Association Health Plans that operate across state lines.

Allows individuals to purchase coverage from any health plan licensed in any state. Insurance from a health plan licensed in another state will “still be subject to the consumer protections and fraud and and abuse laws of the policy holder’s state of residence” according to the Ways & Means Committee GOP staff.

• The rationale for this provision, as stated by those Republican staffers, is that “differences in state regulation of health insurance have resulted in significant variance in health insurance cost from state to state. Americans residing in a state with expensive health insurance plans are locked into those plans and do not currently have an opportunity to choose a lower cost option.”

Encourages use of Health Savings Account by allowing them to be used to pay for health insurance premiums, enabling those receiving a nonrefundable tax credit to contribute to an HSA and the like.

Capping malpractice awards for noneconomic damages to $250,000 and other medical liability reforms.

Eliminates a current comparative effectiveness research initiative aimed at identifying the effectiveness of various medical procedures

Providing incentives for prevention and wellness programs

These are the primary provisions. There are others aimed at combating fraud and abuse in government health programs, preventing federal dollars to be used for abortions and the like, but these are the core elements related to access and affordability.

Some of the Republican health care reform bill is relatively non-controversial. Who opposes encouraging prevention and wellness programs? The Republican health care reform proposal’s impact on the uninsured would be minimal, according to the independent Congressional Budget Office. However, the CBO also found that the GOP reform plan would “reduce average private health insurance premiums per enrollee in the United Sates, relative to what they would be under current law- by 7 percent to 10 percent in the small group market, by 5 percent to 8 percent for individually purchased insurance, and by zero to 3 percent in the large group market.”

My point in describing the Republican health care reform proposal is not to applaud or criticize it (that’ll happen in future posts). Nor is it to imply that this legislation has any chance of being enacted.

But on the off-chance that both President Obama and the GOP are serious about negotiating over health care reform legislation, it’s useful to know the parameters of the discussion. The Senate bill, with the expected modifications as reported in this blog and elsewhere over the past few weeks, represents the starting point for Democrats. The Common Sense Health Care Reform and Affordability Act represents the starting point for Republicans.

Let the negotiations begin.

Health Care Reform and the State of the Union

Just some quick thoughts on health care reform and President Barack Obama’s State of the Union address.

Bottom line: he intends to move forward with health care reform, but, given the changed political context after the Massachusetts special election, has no specifics as to how he’ll move forward and what he’ll try to accomplish. Yet.

The President’s addressed health care reform roughly half way through his speech. That alone indicates that the White House has gotten the message: the American people are focused on jobs and the economy. Health care reform in and of itself is simply less critical now than it was even two weeks ago. This is not to say it’s unimportant. The status quo is unsustainable and if reform doesn’t occur sooner rather than later there will be a heavy price to pay. Nor is it any less critical for President Obama to sign some form of comprehensive health care reform into law. He’s staked a great deal of his credibility and political capital on achieving reform. He has to deliver something.

Not surprisingly then, the President made it clear he’s not giving up on health care reform. “(W)e must also address the crushing cost of health care,” President Obama said. “This is a cost that now causes a bankruptcy in America every thirty seconds.  By the end of the year, it could cause 1.5 million Americans to lose their homes.  In the last eight years, premiums have grown four times faster than wages.  And in each of these years, one million more Americans have lost their health insurance.  It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.  And it’s one of the largest and fastest-growing parts of our budget. Given these facts, we can no longer afford to put health care reform on hold.”

President Obama then noted how close Democrats had come to passing health care reform (until the results of the Massachusetts election denied Democrats of the ability to overcome a unified Republican filibuster on their current legislation) and touched on some of the benefits Americans could expect from the legislation.

But instead of insisting on passage of the Senate version of reform through the reconciliation process or promising to vigorously pursue any specific reform package, President Obama struck a more conciliatory, bi-partisan tone. “Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week,” he said.

Next the President again reminded Americans of the importance of achieving health care reform. “I suffer no illusions that this will be an easy process.  It will be hard.  But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough.  So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.“

Then it was on to education issues.

What to make of President Obama’s quick and relatively non-substantive reference to the most critical issue of the first year of his presidency? My take is it reflects the reality that the White House and the Democratic leadership don’t know how to proceed yet – they don’t know what they can get passed or how to go about it. Yes, some members of Congress talk about passing much of the existing Senate version of reform a legislative process known as reconciliation. (what’s significant about reconciliation is that it allows the Senate to pass legislation with a simple majority – 51 votes – instead of 60). But there’s very little political upside in pursuing this course – even if there are enough moderate Democrats in the House and Senate to enable it to happen in the first place.

One of the key messages independent voters have been consistently telling Washington is that they’re tired of the political games that pass a business as usual in the nation’s capitol. Yes, Democrats can claim Republicans are playing games by filibustering health care reform. But circumventing such a filibuster through reconciliation will look like chicanery to many voters. And that’s an appearance Democrats simply can’t afford. Not after all the backroom deals they’ve cut during the health care reform process to date.

At the end of the day, I expect Congress to pass health care reform that is far more modest than what Democrats initially hoped to accomplish. And that there will be some Republican votes for a more moderate bill. But to get this done, progressives will need to come to grips with the reality that Democratic majorities are not synonymous with liberal majorities. My guess is that while President Obama meets publicly with his group of “businesses and workers, doctors and health care providers, Democrats and Republicans,” he’ll be calling a lot of liberal lawmakers and explaining basic math. Then he’ll talk about the worthiness of half-a-loaf. And about the need to offer Republicans wins on some issues (think malpractice reform or selling policies across state lines) if there’s any hope of getting support from any GOP lawmakers.

The State of the Union address is not the place for announcing scaled back ambitions. By acknowledging that there was a need to “begin work” on pulling together a reform package, President Obama was signaling that the reform bills before Congress is not going to be the legislation that winds up on his desk (certainly legislation that has been a year in the making is not something on which one “begins working” upon). But health care reform will be coming. We just don’t know what it looks like yet.

An Opportunity for Health Care Reform Leadership

The more things change the more things stay the same. Especially when it comes to health care reform.

As the Los Angeles Times reports, the White House, through senior advisor David Axelrod, is pledging to move forward with health care reform. Meanwhile Senate Minority Leader Mitch McConnel is urging President Barack Obama to start the whole reform process over. Both sentiments are driven by political needs as much as anything else. Mr. Axelrod knows that President Obama and Congress has invested too much political capital in the issue to just walk away from the effort now. At the same time Senator McConnell knows that starting over means little if any meaningful reform is likely to pass this year, giving the GOP the gift of a shiny hammer during the upcoming mid-term elections.

Mr. Axelrod, speaking on ABC’s “This Week” described the election results in Massachusetts (in which voters rejected the assumed victor, Attorney General Martha Coakley for Republican state Senator Scott Brown) as a rejection of health care reform. According to a recent poll, 68 percent of voters, he noted in the interview, supported Massachusetts’ comprehensive health care reform program. What he didn’t say, but I take as the implication, is that Massachusetts voters support health care reform, just not the White House’s health care reform plan.

Senate Majority Leader Harry Reid, Speaker Nancy Pelosi and their top lieutenants are still considering how to proceed. I continue to expect that Democrats will move forward with scaled back version of their existing reform package rather than starting over. They’ll meet with Republicans. Perhaps even include some provisions that are high on the GOP wish list. And then Democrats will move forward with a legislative package that addresses modest cost containment, insurance reforms, and increasing access to existing government programs like Medicaid.

President Obama can do more than just streamline the existing health care reform legislation – he can implement meaningful changes on his own. That’s the suggestion offered by columnist David Ignatius in the Washington Post (his full column is online and can be viewed, for free, after registering with WashingtonPost.com). What Mr. Ignatius proposes is that the President use his executive authority to launch pilot projects in the Medicare and Medicaid programs that have the promise of restraining costs. As he notes, “this approach would have the benefit of beginning to reduce the costs of delivering care before comprehensive legislation makes the system universal.”

Mr. Ignatius points out that the process leading to the current House and Senate has been “an abomination. The voters sent Obama to Washington to lead, not to engage in endless horse-trading.” By using his presidential authority to push existing public programs to pay for value, as opposed to simply activity, President Obama can demonstrate the leadership voters expect of him.

The cost containment projects suggested by Mr. Ignatius were developed by Dr. Delos Cosgrove, CEO of the Cleveland Clinic and Dr. Denis Cortese, a former CEO of the Mayo Clinic. They identified two areas in which the President could have an immediate impact. “First, Medicare should adopt a ‘value index’ that would “reward those who provide safe, high-quality care with excellent service at a reasonable cost.” Second, “Medicare should start bundling payments to hospitals, physicians, nursing homes and others so that providers are paid for outcomes, rather than individual procedures.”

Mr. Ignatius recognizes that implementing these reforms across all of Medicare would require Congressional approval, but he also notes that they could begin immediately as pilot projects.  It’s an interesting idea. The failure to adequately address cost containment has been one of the most widespread criticisms of the current health care reform proposal. By looking at alternatives to the current fee-for-service medical reimbursement model, President Obama can make a meaningful contribution to improving America’s health care system. Demonstrating leadership and improving the system: not a bad outcome for an embattled president.

Democrats Could Win With a Truly Bi-Partisan Health Care Reform Strategy

Hopefully the cottage industry in health care reform paranoia can calm down now. No one in Washington is talking about strategies to short circuit the election results in Massachusetts this week in which state Senator Scott Brown, soon to be the Republican’s “41st vote,” upset the Democratic candidate in a special election. While some dismayed Democrats did consider ways of passing legislation before Senator Brown is sworn into office, there was never really a chance that would happen.

One reason Senator Brown won was a reaction to the hubris Democrats in Congress displayed over the past 12 months concerning health care reform. Favors were dealt out to key lawmakers party favors at a kid’s birthday if that’s what it took to secure their votes. A temporary exemption from an excise tax on expensive health insurance policies was crafted for unions to get their support. Deals were brokered with large pharmaceutical companies and others to get them on-board. This is politics as usual, practiced by Democrats and Republicans alike.

Engaging in politics as usual, however, was the problem: voters in 2008 expressed their desire for change. Politics as usual is exactly what the public did not want.

Given this reality, Democrats passing a health care reform bill by jamming something through would be political malpractice of the highest order. Besides, there were never enough rank-and-file lawmakers in the caucus willing to go along with such silliness. So, not surprisingly, instead of passing health care reform by manipulating the rules, Democrats are now taking a breather, gathering their thoughts and developing a strategy for moving forward.

After some reflection, Democratic leaders will realize the scope of health care reform they can pass is extremely limited. Expensive, intrusive reforms are no longer an option. This doesn’t mean they can’t pass some version of reform. It just means that the reform they can pass will need to be less expensive, less comprehensive, and less intrusive than they had hoped.

What health care reform can be passed, and how long it will take, will depend in large part on which of two strategies the White House and Congressional Leaders choose to take.

President Barack Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi can either pursue health care reform that gains the vote of the fewest number of Republican lawmakers necessary or legislation that can earns support from a meaningful percentage of Congressional Republicans. Following the former strategy would see them negotiate almost exclusively with Senators Olympia Snowe and Susan Collins. Seeking truly bi-partisan reform would require negotiating with a far larger group.

The bare minimum strategy will be tempting. It requires the least amount of compromise. As I wrote the other day, they could bare the current legislation down to its cost containment provisions, health insurance reforms, and some of the less expensive ideas to expand coverage to more Americans. Such a scaled-back bill might get the support of either Senator Snowe or Senator Collins – or both. (Who knows, even Senator Brown might be supportive. He does have to run for re-election in Massachusetts in 2012. He won the special election by positioning himself as an independent and downplaying his Republican affiliation. Showing his independence from hard-line Republicans is a reasonable political strategy for him.)

The problem with the bare minimum strategy is its what got Democrats into their current mess. By pursuing health care reform that never had a chance of gaining broad support, President Obama, Senator Reid and Speaker Pelosi assured a long, politically ugly legislative process – one that required the kind of deal making that voters, especially independent voters, had voted to change in 2008.

Instead, Democrats could take the advice of House Majority Whip Jim Clyburn, who observed, “Medicare wasn’t done in one fell swoop. You lay a foundation and you get this thing done over time.” If Democrats had taken this approach from the beginning health care reform might have been enacted already. Instead months were spent battling over issues like a government-run health plan that neither Republicans nor enough moderate Democrats could support. While hanging tough for a liberal wish list pleased their base (for awhile), it was inevitable moderate Democrats would determine the final health care reform package.

To gain sufficient Republican votes, Democrats will have to be willing to accept fairly limited reforms for now. They will need to include some meaningful malpractice reform. Democrats needs not include every and any provision Republican demand. Their goal is not to pass a bill by unanimous consent. Democrats just need to offer enough to peel off a significant number of Republicans – say 12 in the Senate and 35 or so in the House. Legislation with meaningful malpractice reform and a low sticker price could do that. Is this realistic? Well, there are a number of Republicans running in moderate seats, too. Running for re-election as a candidate who “opposed President Obama at every turn” is not a recipe for job security in such seats.

If Democrats succeed in passing bi-partisan reform they’ll have laid the foundation for future health care reform efforts. But what if Republicans unify behind a strategy of blocking reform of any kind, regardless of how moderate that reform might be? Such a strategy would just confirm that the GOP is the party of politics as usual. And in 2010 that’s not an image voters are likely to reward.

Massachusetts Offers Both Parties a Window of Opportunity for Health Care Reform

Not that anyone asked, but here’s some free advice to both Democrats and Republicans in Washington: don’t over think what’s happened in Massachusetts. There are as many interpretations of the “meaning,” “message” and “impact” of state Senator Scott Brown’s victory Tuesday night as there are television pundits. And just like paranoids noodling with a conspiracy theory, the facts can be manipulated to prove anything (I’ve heard all of these in the past 24 hours or so): President Barack Obama was too liberal; he tried too hard to be bi-partisan; he didn’t move fast enough on health care reform; he moved too fast on health care reform.

Or that the special election results prove that the Republican strategy of non-cooperation with Democrats is working; that the Republican establishment is out of step with Republican grass roots; that the country is irretrievably locked into blue/red gridlock; that the Republicans are branding themselves up as barriers to progress.

Or that Attorney General Martha Coakley defeat reflects voters feelings about the two candidates; what they think about President Obama, Speaker Nancy Pelosi and/or Senate Majority Leader Harry Reid; that Republicans are assured of victory in November; that Democrats have had a wakeup call and will rebound; or that the results reflect the skill (or lack thereof) of the candidates and their campaigns.

Yeah, yeah, yeah. One could argue that it means all those things and more. Usually, however, the simplest interpretation is usually closest to the truth: voters rejected Republicans last year because they were fed up with political games, hypocrisy and ineptitude. They are rejecting Democrats this year because they are fed up with political games, hypocrisy and ineptitude. The reality is that both parties have shown a remarkable inability to govern this complicated country let alone unify its diverse political viewpoints.

So instead of wasting time trying to squeeze every nuance out of the Boston-brewed tea leaves, my advice to both parties is to take advantage of the window of opportunity that election created between now and President Obama’s State of the Union Address to reinvent yourselves. Because let’s face it, voters don’t like either Democrats or Republicans. And why should they? Democrats lost sight of the reality that this is a centrist country. And Republicans have lost sight of the need to stand for something besides “we’re not those guys.”

Not surprisingly, given the topic of this blog, I think health care reform provides both parties with the chance to prove they deserve votes for something other than being the best of two evils.

Democrats have to stop acting like every member of their party thinks alike. Liberals seemed to think that with 60 votes in the Senate they’d quickly adopt the Progressive Caucus’ wish list. If they’d looked past their own hubris they’d have noticed that some of the folks in their caucus room were pretty darn moderate – heck, some are downright conservative. And they were elected as Democrats, too. Which means their views and votes are just as “Democratic” as those of liberals.

Given that the liberal agenda was never within reach and now is even more remote, think carefully about what you do next. Pass health care reform through some political legerdemain and you’ll only confirm to independent voters that you’re more interested in political games than acceptable public policy. (And remember, it’s independents that will determine the make-up of Congress. Consider: there are perhaps only 50-75 House seats winnable by either party – most Congressional seats are so solidly in one camp the seats are safe for the party who holds them now, assuming the incumbent avoids scandal or indictment).

Instead of passing health care reform in the next 24 hours, promise to take a step back and reconsider some of its elements. Then streamline the bill down to the essentials. What really matters when it comes to health care reform?

• Restraining costs. There’s some interesting cost containment ideas buried in the current health care reform proposals. Paring the legislation down to its essentials will allow Democrats to make these ideas more prominent. Add some stronger malpractice reform language for good measure. Sure defensive medicine’s impact on costs is perceived as being far greater than it is, but let’s face it, Democrats have a perception problem. Pushing malpractice reform takes a talking point away from Republicans, shows independents that Democrats can stand up to trial lawyers, and can become a symbol for how serious Dems are to tackle runaway medical costs.
• Unshackle Consumers with Pre-Existing Conditions. In America today, if you don’t get coverage through your employer and you have an existing medical condition, you’re out of luck. You may want to buy health insurance. You might be able to afford health insurance. But if you don’t already have coverage, you’re not going to get it. And if you do have coverage you’re stuck with it. Carriers can raise the rates, lower the benefits or both and you’ve got nowhere else to go. Most voters know someone in this predicament. Many voters are in it themselves. Require carriers to accept all applicants (what’s called “guarantee issue.”) But do so responsibly. Either require everyone to buy health insurance (called an “individual mandate”) or impose a meaningful penalty for failing to do so. Otherwise, costs will skyrocket as everyone waits until they need coverage before they purchase it – the equivalent of buying auto coverage from the tow truck driver hoisting your car after an accident (what’s called “adverse selection”). The problem is that Republicans have painted individual mandates as the devil’s work, forcing consumers to buy policies they may not want. So let the carriers provide the discipline: if a consumer fails to purchase coverage within a specified period of time after becoming eligible for it (for example by becoming too old to be covered as a dependent on their parent’s policy or losing employer-sponsored coverage) allow carriers to exclude pre-existing conditions for 12 months and to charge a 10 percent higher premium for two years. This makes those who choose to self-insure accountable for their decision while still allowing themselves a path back to responsibility.
• Reduce the Number of Uninsured and Underinsured. Most Americans acknowledge there’s something wrong with America’s high number of uninsured. Whether the actual number is 47 million uninsured (greater than the population of California) or some lower number, the fact is it’s too many. Those with coverage pay a tax to support the uninsured, estimated at roughly $1,000 per year in higher insurance premiums. So expand Medicaid. Close the doughnut hole in Medicare prescription benefits. Offer subsidies to Americans who cannot afford premiums, but fail to qualify for government programs. Just don’t create new bureaucracies to do it. Voters know new agencies generally do more harm than good. Why feed the suspicion?
• Reduce the Cost of Health Care Reform. If a reform package sets in motion medical cost containment, makes coverage portable, and reduces the number of uninsured – and that’s about it, the cost will be far less than what’s currently contemplated. Put on the table a tax on the wealthiest Americans (removing the tax cut President George Bush gave those earning more than $1 million per year. Then offer to replace the tax with revenue provisions Republicans offer. If they object to any revenue increases of any kind, then they will have fully embraced their branding as the do nothing party.  That’s a recipe for turning their current momentum into failure.

Which brings me to advice for Republicans. Waving a sheaf of paper at a presidential address on the floor of Congress is not proof of a Republican plan. Introduce a plan that the Republican caucus in both the Senate and the House can support. Submit it to the CBO for scoring. Treat it like a real bill. Demand hearings. Declare it a starting point for negotiations and then set up a time and place for a meeting to negotiate. If Democrats don’t show up Republicans will have enough political fodder to last two, maybe three, election cycles.

Sure, Rush Limbaugh won’t like it. He wants President Obama to fail and wants Republicans to fight every step he tries to take. But independent voters want America to succeed. They don’t care about who gets the credit, but they do care about appropriate progress. And they know achieving this means legislation that both President Obama and Republicans consider acceptable. So put together something that can gain votes beyond a Chamber of Commerce luncheon (see the above for some ideas). Remember, obstinacy is not a rallying cry. And if the GOP is not not careful, someone will remind voters that Republicans controlled Congress and the White House for six years, but never even considered meaningful health care reform. Voters don’t want the wrong health care reform, but that does not mean they don’t want any health care reform. The status quo is imposing hardship on more and more Americans. They need and deserve help. If Republicans want voters to return them to power in 10 months, they need to demonstrate leadership today.

As far as changes go, please get real. Allowing plans to sell across state lines undermines state’s rights. Republicans are for state’s rights, remember? Telling voters in California that policy makers in South Dakota will determine what’s adequate consumers protections when it comes to health insurance is lousy public policy. Republicans should go through their various proposals and cobble together a coherent package. And they should make it clear they want to pass some kind of health care reform. Proclaiming the status quo as adequate is unlikely to fly as a platform for very long.

The Massachusetts Senate race is the story of the week – and then some. Yes, it will have long term political ramifications, but eventually it will be yesterday’s news. Some other issue, scandal, disaster or discovery will take its place. For now, however, Senator-elect Brown’s upset gives both Democrats and Republicans a chance to prove they’re the party of the future, not the party of the left or of no or of, worst of all, the recent past. Whether either will choose to seize the opportunity is anyone’s guess. What’s yours?

Of course, what’s significant about the Massachusetts special election is not what I think it should mean, but what the actual impact it has on health care reform. Which I’ll be writing about as soon as the crystal ball clears a bit.

Massachusetts to Determine Health Care Reform? How Fitting.

After all the policy debates, lobbying, letter writing, political infighting, town hall meetings, cable news show histrionics (let alone nonsense), fear mongering, hyperbole, overpromising, committee hearings, academic musings, back room negotiations, blogging, twittering, spam emails, rallies, and even, on occasion, thoughtful and civilized discussion, the fate of health care reform all comes down to a special Senate election in Massachusetts. No scriptwriter could get away with this plot twist. The audience wouldn’t buy it.

But tomorrow, November 19th, voters in Massachusetts determine whether health care reform will pass. Pretty much. Yes, there are ways Democrats can overcome a win by the Republican candidate, state Senator Scott Brown. They might recruit a moderate Republican in the Senate to join them in passing their legislation. But as there are really only two moderate Republicans left in the Senate (both from Maine) that’s a long shot.

They could ram through legislation before the election results are certified, but that will hand Republicans a huge stick to wield in other 2010 elections. Democrats in the House could simply approve the health care reform bill passed in the Senate, but there’s plenty in the Senate bill to give House members up for election this year heart burn.

On the other hand, even if the Democratic candidate, Attorney General Martha Coakley, manages to win tomorrow, there’s no guarantee health care reform passes. But as I’ve written recently, with 60 Democrats in the Senate passage of a comprehensive health care reform bill is not inevitable, but it’s certainly likely.

So what happens in Massachusetts tomorrow matters. A lot.

Voter turnout will be the key to determining the outcome of the special election. Which is why both parties are pulling out all the stops to get their voters to the polls. One challenge for Democrats is that, although they outnumber Republicans in the state 3-to-1, the majority of voters (51 percent) are unaffiliated with either party. And they are supporting Senator Brown.

A single state having enormous influence on American politics and policies is not unusual. Iowa and New Hampshire have a tremendous impact on who emerges as the party’s presidential nominees. And why shouldn’t Massachusetts have a big say concerning health care reform? As a reader of this blog, Jim Hicks, noted in an email, they’ve been living under their own reform plan for the past few years.

How fitting. Unbelievable, but fitting.

De-Sweetening Health Care Reform

The health care reform package being finalized by Congressional Democrats and the White House is chock full of benefits for specific states and interest groups. Some of that is inevitable in any legislation, regardless of the party in power. But the health care reform bill is widely viewed as an extreme example – we’re talking cotton candy level on the sweetness scale.

Now a Democratic Senator is trying to tone down the glucose level of the health care reform bill. Senator Russ Feingold has sent a letter to Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi requesting that “sweeteners” be removed from the final health care bill, January 14, 2010 “originally inserted to win over the support of certain members of Congress.” In the letter, Senator Feingold recognizes that there are “valid policy or fairness reasons why certain states or interests may receive seemingly different treatment.” However, he specifically cites “unmerited Medicaid assistance to certain states and carve-outs to avoid cuts to certain Medicare Advantage plans” he describes as “indefensible.” These provisions, he charges, “are intended to provide an undeserved windfall to specific states” and should be removed from the health reform bill.

Senator Feingold is right, both from a public policy perspective and from a political view. Both Democrats and Republicans engage in the practice of securing votes by inserting provisions into bills aimed at benefiting a specific Senator’s home state. That’s the American way. Really, it is.

But health care reform is complicated, controversial and sensitive. Hyper-sensitive. This is an issue that has generated charges of the American government threatening to kill old people, death threats against members of Congress, and outrageous hyperbole that only the CFO’s at Fox News and MSNBC could love. More significantly, this legislation is also going to impact every American in a highly personal way and significantly impact one-sixth of the nation’s economy. An issue like this should not be subjected to politics as usual. Removing the sweeteners makes sense.

Not that anyone asked, but I don’t think the deal struck yesterday with the unions yesterday falls into the sweetener category (at least not what we know so far. Apparently the deal postpones a tax on rich health plans until 2018, but only for coverage required by labor agreements and for state and local government workers. The compromise also removes vision and dental plans from the calculation of the value of a plan and raises the threshold for taxation from $23,000 for family coverage to $24,000. There are also adjustments for older workers and women.

The reason why I don’t view this deal as a pay-off for union support is because the nature of union agreements means a transition period make sense. Collective bargaining agreements have been made pursuant to the rules in effect today. These rules encourage unions to trade-off wage increases for enhanced (and more expensive) health benefits. To now change the rules without allowing time for new negotiations seems a bit unfair. Whether five years is needed for the transition or a shorter period of time would be sufficient is a level of detail I can’t address.

The same logic should apply to whatever mandated medical loss ratios wind up in the final bill. Health care reform is likely to require health plans to spend a minimum of 80 percent (for individual and small group coverage; 85 percent for large group plans) on claims payments. The legislation passed by the Senate would impose this requirement effective January 1, 2011. yet health plans have contracts in place with brokers, vendors and others that were made under the old rules. To now change those rules and impose spending requirements is both unfair and impractical. The disruption and pain resulting from failing to provide an adequate transition to mandated medical loss ratios will be felt not just by brokers and insurers, but by consumers and voters as well.

Should President Obama, Senator Reid and Speaker Pelosi eliminate the political sweeteners in the health care reform legislation they’re writing? Yes. Should they eliminate transition periods that ease the transition to the new world they’re creating? Yes. And those transition period should be offered to unions and health plans.

ObamaCare for Real This Time

President Barack Obama has been frequently criticized over the past several months for failing to get personally and deeply engaged in the health care reform process. While he avoided the political blunder of the Clinton Administration during it’s reform effort (developing a complex bill and, in essence, telling Congress to take it or leave it) the Obama Administration’s approach had it’s own problems.

President Obama was never truly out of the reform process. His aides were always deeply involved in negotiations. He made personal phone calls to lawmakers in both parties, led meetings in the White House with key Congressional players. But there’s a difference between talking about health care reform and negotiating health care reform. And it appears President Obama was rarely engaged in detailed negotiations. The result: President Obama was blamed for ideas and provisions (think pork) included in the reform bills Congress passed which he may never have supported.

Back in October I wrote that President Obama needed to get personally engaged in reconciling the various committee bills into a House and Senate version of health care reform (the manager marks developed by Speaker Nancy Pelosi and Senate Majority Leader Harry Reid). My point was that the chances of reform improved “if Congress – and the public – have a clear understanding of the Administration’s legislative ambitions.” The post went on to say “President Obama wanted Congress to participate in the reform process. They have. Now it’s his turn.”

Again, I’m not saying President Obama and his Administration was disengaged. But they also were not defining the legislation either.

This is no longer the case. According to the Associated Press “House and Senate negotiators resumed marathon talks with Obama at the White House around 9 p.m. Thursday. The president left the Cabinet Room meeting shortly after 1 a.m. Friday and the session ended about 25 minutes later. The Washington Post reports on President Obama’s personal involvement in working out a critical compromise with labor leaders. (The compromise, according to the Post, exempt union members from a proposed surtax on expensive insurance plans until 2018, five years after the legislation would take effect. This was not the President’s first “marathon” negotiating session with legislative leaders. Nor was it the first time he negotiated with interest groups. But it’s clear President Obama is now deeply engaged in fashioning health care reform legislation.

While Presidents usually do not get personally involved in drafting legislation, health care reform is far from typical legislation. We’re talking about impacting one-sixth of the nation’s economy and a legislative effort decades in the making. The chances of President Obama simply accepting whatever health care reforms Congress came up with was nil. Earlier involvement might have saved lawmakers a lot of pain – what will be the political cost for House Democrats who voted for a government-run health plan running for re-election in moderate districts? – but there was no doubt he would be actively at the table before the bill was finalized.

Health care reform will move quickly now. The Associated Press, in the story cited above, says it’s only a matter of days, if not hours. President Obama would like to have the health care reform bill signed into law prior to his state of the union address later this month or early February. Since Democratic leaders have pledged to put the legislation online for at least 72 hours before a vote is taken, that doesn’t leave a lot of time.

But there’s another motivation driving the midnight meetings: fear that Republicans could actually win the special election in Massachusetts to fill the vacancy created by the passing of Senator Edward Kennedy. Democrats are so concerned about the potential for an upset, they featured President Obama in a video email to Democratic voters in the state warning that the fate of health care reform depends on the outcome of the election. If the Republican long-shot effort succeeds, Democrats will need to pass health care reform before the Senator-elect can be sworn in. While they can challenge the results of a close race for awhile (and thereby delay certification of the election) the longer they resort to that tactic the greater the political danger.

Regardless of the motivation, President Obama’s personal engagement in negotiating the health care reform bill that Congress passes means he will own the result. The legislation will not reflect everything President Obama wants (or doesn’t want) concerning health care reform, but it will embody what the Administration could accomplish concerning health care reform.

The term “ObamaCare” has been tossed around loosely. Virtually every version of reform legislation considered by Congress was described as such. This was inaccurate. Those bill’s belonged to Congress, not President Obama.

The health care bill that will emerge in the next few days, the bill likely to arrive on his desk in the next couple of weeks, that is the legislation that will be a part of President Obama’s, that will be “ObamaCare” – for better or worse.

Health Care Reform Not Inevitable, But Still Likely

Passing major health care reform was never going to be easy. The issues are hard. Partisanship in Washington has rarely been greater. The status quo may be a road to disaster, but it’s a familiar road. Moving America’s health care system in a new direction is a Herculean task. Yet for the past year or more, most observers considered passage of some legislation a better than 50/50 proposition. Now, with negotiations over reconciling differences between the Senate and House versions of reform bills comes down to the wire, what are the chances of Congress passing a bill President Barack Obama will sign into law?

According to the Associated Press, House Republican leader John Boehner is claiming that Speaker Nancy Pelosi may not be able to push health care reform through their chamber. He maintains that “dozens” of Democrats who supported the bill passed by the House in November could turn against the final bill, especially if the there are significant changes to provisions dealing with abortion, aid to the states to pay for Medicaid expansion and Medicare cuts.

The outcome of the Massachusetts Senate race to replace the late Senator Edward Kennedy could also result in some Democrats reconsidering their willingness to go along with this version of reform. Not long ago the conventional wisdom was that winning the Democratic primary in Massachusetts was tantamount to election. However, recent polls show the the Democratic nominee, the state’s Attorney General, Martha Coakley, in a dead heat against Republican State Senator Scott Brown within two percentage points of the Democrat. Special elections are always difficult to predict because turnout is usually so low. Were Senator Brown to win the election on January 19th it would not only deny the Senate Democratic caucus the 60 votes they need to push health care reform through the upper house, but it would make moderate Democrats in Congress recalculate the political price of supporting the current version of reform.

Senator Brown doesn’t need to win the seat to scare Democrats. The race has been described by the media as a proxy on health care reform. Republicans are pointing to the Massachusetts Senate race  to bolster their argument that they can retake Congress in the upcoming elections. While that might be wishful thinking, it certainly would make obvious the political reality that Democratic majorities in Congress will be smaller next year than they are this year.

All of this is some evidence that health care reform could be in trouble. My opinion: passage of health care reform is more likely now than it was in December. Here’s why:

First, Senate Majority Leader Harry Reid, Speaker Pelosi and President Obama are closer than ever to an agreement. "’Prospects of reaching agreement between the Senate and the House are better than they were 24 hours ago. We’re getting close,’ the Associated Press reports House Majority Leader Steny Hoyer saying on Tuesday. Finding a compromise that will earn 218 votes in the House and 60 in the Senate is not inevitable, but it’s doable. And with President Obama more personally involved in the health care reform negotiations now than he has been in the past year, the chances of finding that combination of trade-offs is closer than ever.

Second, by emphasizing what’s at stake in the Massachusetts Senate race, Republicans have mobilized Democrat voters in the state. That’s the point made by E.J. Dionne in a Washington Post blog. Instead of staying home next Tuesday, counting on the inevitability of Attorney General Coakley’s pre-ordained victory, Massachusetts Democrats know they have to get to the polls. And they are likely to do so.

There are other tea leaves increasing the likelihood of a health care reform bill becoming law in the next few weeks. Senator Reid made some fairly obvious deals to get the 60 votes he needed to move health care reform out of the Senate. The most egregious was promising to pay Nebraska’s increased Medicaid costs in perpetuity at the request of Senator Ben Nelson. Republicans jumped all over that deal. Even the Republican Governor of Nebraska attacked the deal.

Well, fine. Senator Nelson can now head back to Nebraska and show he fought hard for the state, but Governor Dave Heineman killed the deal. (At the moment, Senator Nelson is calling for all states to get the same Medicaid relief as he negotiated for his own state). Yet Senator Nelson is still likely to support whatever health care reform bill emerges from the current negotiations, unless the abortion language is significantly weakened. What else can he do, proclaim that unless Nebraska gets a windfall he’ll torpedo reform for the rest of the country? So what’s likely to happen is that the GOP will likely to embarrass Democrats into eliminating the most glaringly unjustified deals, but not strip away any votes as a result. Meaning the bill will be “better” (for containing less pork), but will still keep the votes recruited by the eliminated pork.

Another reason health care reform is likely to pass is that Democrats can’t afford to have it defeated. The Democratic Congress has actually accomplished a significant amount in the past year (you may not agree with what they’ve done, but they’ve done a lot). That’s the argument made by Newsweek columnist Jonathan Alter. But in the public’s mind, Congress will be judged by what they do on health care reform. Their constituents, both at home and in the political arena, are demanding results. If they pass something now they will have 10 months to convince voters their fix is better than the status quo. If they fail, they will demonstrate they’re a do-nothing Congress. In these circumstances, something is better than nothing.

Painting a scenario in which health care reform goes down in flames is easy. And I’m not saying health care reform is inevitable. But this Congress and this President have gotten closer to passing health care reform than any lawmakers since the push for comprehensive reform began in the 1940s. President Obama and Democrats in Congress have bet their political credibility on producing a bill. They’re close to the finish line. Odds are, they cross it.

Of course, signing health care reform legislation into law is only the beginning. But that’s a topic for a future post.