Senate gets early start on health reform plan

Washington -- Even before Congress had closed the book on its 2008 session, leaders in the Senate began laying the groundwork for comprehensive health system reform in 2009.

Sen. Max Baucus (D, Mont.), chair of the Senate Finance Committee, on Nov. 12 released an 89-page vision for health system reform. The proposal calls for revising Medicare's physician payment formula, requiring everyone to have insurance and expanding eligibility for Medicaid and the State Children's Health Insurance Program. Baucus' "Call To Action: Health Reform 2009" is the culmination of months of committee hearings.

Sen. Edward Kennedy (D, Mass.), chair of the Senate Health, Education, Labor and Pensions Committee, is staking his own place in the debate. He announced Nov. 18 that three committee members would lead working groups on health reform to tackle the issues of prevention and public health, quality improvement and insurance coverage.

Baucus and Kennedy met the next day with a bipartisan group of five Senate colleagues to discuss how a consensus bill might proceed in the Senate next year. After the meeting, the senators issued a joint statement announcing their intention to approve a bill enabling every American to have health coverage. "We agree that members of the 111th Congress should seek to achieve comprehensive health care reform that includes access to effective coverage, quality care for all and measures to control rising costs," the statement said.

Baucus' detailed proposal mimics a reform model in Massachusetts and a similar plan offered by President-elect Barack Obama, which features a national insurance pool managed by an independent body. The Baucus plan aims to create more health plan choices with sliding-scale, income-related subsidies to make them affordable. Insured people satisfied with their coverage could keep it.

The plan isn't likely to pay for itself in its first five years, but it could do so over its first decade, Baucus said at his Nov. 12 unveiling. "Reform will require additional investment, bigger than the savings that we can generate in the short term."

Although some recent polls show the economy as voters' No. 1 concern, Baucus said health care costs are a significant part of that worry, and they demand that lawmakers move forward. "There's no way we'll solve America's economic troubles without fixing the health care system," he said. "Inaction is more expensive than acting."

American Medical Association President Nancy H. Nielsen, MD, PhD, lauded Baucus' effort to advance the cause of health system reform. "The forums Chairman Baucus conducted earlier this year with the Finance Committee showed that he and members of the committee are determined to make real progress on health system reform."

Chip Kahn, Federation of American Hospitals president, thanked Baucus for his commitment to covering the uninsured. "His thoughtful framework shows a keen understanding of the issues and challenges facing policymakers and recognizes the essential role of today's employer-based coverage system."

But Sen. Charles Grassley (R, Iowa), top Republican on the Senate Finance panel, warned of fiscal challenges Congress faces in sustaining federal entitlements and cutting the nation's $10 trillion debt. "Dramatically expanding government spending and putting additional pressure on employers already struggling to create jobs would have repercussions that need to be carefully considered."

Baucus' plan would require all but the smallest employers who don't offer health insurance to their workers to contribute to a fund to cover the uninsured. Businesses with few workers or low wages would be offered a tax credit for buying health insurance for their employees.

Big changes for Medicare, insurance?

Baucus' plan also would reform Medicare's physician payment formula by revising it according to subcategories of services. This would redistribute resources from "high-growth, potentially overpaid aspects of health care to underutilized, potentially more valuable services, such as primary care and prevention," the plan says.

Specifically, the proposal calls for additional Medicare pay for primary care services, mostly evaluation and management visits. The plan suggests that this move should be budget-neutral, meaning it would be funded by reductions in other fees.

"Some specialists might have to take a little bit of a nick," Baucus said.

Many specialists attending the November American Medical Association Interim Meeting in Orlando, Fla., said they supported better pay for primary care, but not if it meant reductions in their fees.

But there's more than one type of budget-neutral, said Robert Doherty, American College of Physicians senior vice president of governmental affairs and public policy.

More support of primary care by Medicare could improve outcomes and reduce hospitalizations. The money saved this way could be used to supplement primary care fees without increasing overall Medicare spending or cutting specialty pay, Doherty said.

Next year Congress needs to enact health reform that provides improved, sustained payment for primary care because "primary care is dying on the vine," Doherty said.

The Baucus plan calls for requiring individuals to have health insurance once affordable plans are available to everyone through the national pool. Those who do not acquire coverage would be subject to a penalty, perhaps through the federal tax system.

America's Health Insurance Plans immediately embraced the individual mandate plan. For their part, insurers are willing to offer plans that cover people with preexisting conditions, said Karen Ignagni, AHIP's president and CEO.