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AMA Analysis of Senator Baucus' White Paper on Health Care Reform
Call to Action: Health Reform 2009
November 12, 2008
AMA Staff Analysis of Key Provisions
Background
Senator Max Baucus (D-MT),
Chairman of the Senate Finance Committee, released an 89-page outline of his
comprehensive vision for health care reform on November 12, 2008. Titled “Call
to Action: Health Reform 2009,” the
document has been described as a white paper that presents many options for
reform in varying degrees of specificity.
It represents a work in process intended to stimulate debate rather than
a legislative proposal. As such, the
paper should be considered a vehicle for launching discussions that will
ultimately help Senate policymakers draft more concrete proposals for
legislation during the first months of the 111th Congress.
Briefly, the plan addresses
the goals of expanding coverage, improving value, and insuring efficiency and
stability by:
Creating
a Health Insurance Exchange where those without coverage can purchase
insurance regardless of pre-existing conditions;
Creating
payment systems that emphasize primary care, prevention, wellness, and chronic
care management;
Promoting
comparative effectiveness research and health information technology; and
Eliminating
fraud, waste, and abuse in the health care system, including reduced overpayments
to Medicare Advantage plans, greater transparency, and "careful"
malpractice reforms.
Key Areas of Agreement
When viewed as an
aspirational document, there are a number of goals and concepts that appear
supportable by the physician community. For example, principles encompassed by the white paper include:
- Health insurance coverage for all;
- The concept of shared responsibility in which employers,
individuals, and government all have a role and a contribution to make in reforming
the health system;
- Maintaining the safety net and increasing support
for vulnerable populations served by SCHIP, Medicaid, and the Indian
Health Service;
- Phasing out the Medicare waiting period for the disabled;
- Reducing racial, ethnic, and gender disparities;
- Testing alternative medical liability reforms
such as health courts, early disclosure, and administrative determination
of compensation;
- Providing a framework for comparative
effectiveness research;
- Emphasizing wellness and prevention;
- Capping the tax exclusion for employer sponsored
insurance;
- Replacing the sustainable growth rate (SGR) with
alternative means of physician updates―removing physician administered
drugs from the formula as a first step;
- Testing multiple innovative payment models for
physician and other Medicare services; and
- Strengthening the role of primary care and
chronic care management.
Areas for Discussion
Other proposals set forth in
the document raise questions or concerns for physicians and require some
clarification.
- Budget
neutrality. The white paper suggests that increased
Medicare reimbursement for primary care services should be implemented in
a budget-neutral fashion within physician payment pool, necessitating
across-the-board payment cuts for other physician services.
Issues for Consideration: While there
is general agreement in the physician community that reimbursement for primary
care services must be improved, there is little support for achieving this
through broad, offsetting reductions in payments for other services. Many other potential funding sources outside
the physician pool have been identified and need to be explored. Medicare payments for all physician services
have failed to keep pace with increased practice costs and reductions would
further threaten the stability of the program.
- Multiple
SGRs. The option is presented of replacing
the current SGR with a revised formula that creates multiple expenditure
targets based on service category sub-sets.
Issues for Consideration: While this
proposal has supporters, permutations of a fundamentally flawed concept are
unlikely to solve the problem of inequitable payments. The SGR could be retained in some form
during a transitional phase to a new payment system that incorporates other
mechanisms for accountability. If transitional
targets are implemented, Congress should eliminate the cumulative aspect of the
SGR and/or could design narrow corridors for annual payment increases and
decreases to eliminate the compounding effect that triggers steeper cuts over
the years that are increasingly expensive to remedy.
- Medicare
buy-in. The paper proposes to create a Medicare
“buy-in” option for individuals aged 55-64 who lack access to insurance on
an interim basis until health insurance market reforms are implemented to
make coverage more accessible.
Issues for Consideration: Individuals
in this age group need affordable health insurance options, and Medicare
coverage is likely to be very expensive and attractive to only a few. Further, there already are troubling negative
financial projections for the Medicare program as it serves the existing senior
population.
- Public
plan option. The paper suggests that the Health Insurance
Exchange will include a public plan option for all who seek coverage
through the exchange.
Issues for Consideration: If
individuals have choices among a range of high, medium, or low-benefit plans in
a well-regulated market, there should be no need for a public plan option. The exchange is intended to offer individuals
the same type of private plan options that Members of Congress and federal
employees enjoy in the Federal Employees Health Benefit Program. Public plans can put private options at
competitive disadvantage; they also have a history of price controls and cost
shifting, and suffer from lack of innovative design.
- Independent
Health Coverage Council. The discussion about the proposed
Independent Health Coverage Council (IHCC) raises many questions about its
composition and the scope of its authority.
Issues for Consideration: Physicians
would be concerned about adequate representation on the IHCC. In particular, it would be important for the
Council membership to encompass physicians with clinical and private practice
experience, rather than relying only on those with policy backgrounds. Authority to set standards for chronic care
management and quality reporting require further discussion to address potential
overlap or potential conflicts with efforts by PCPI, National Quality Forum,
and other standard setting activities.
Clinical care standards should be developed by physician and other
health professions organizations, not by government entities.
- Quality
reporting incentives. The paper suggests that financial
penalties will one day be imposed on physicians who fail to engage in
quality reporting.
Issues for Consideration: Considering
the extensive and yet-to-be-resolved problems with the current Medicare
physician quality reporting initiative (PQRI), it is premature to raise the
potential for financial penalties for physicians who do not participate in this
activity. (The Baucus paper
acknowledges problems with the PQRI program and the notion of penalties is
couched as a downstream program change.)
Additional Recommendations
While a generally
comprehensive document, the Baucus white paper omits a number of other
potential reforms that should be considered.
These include:
- Potential savings and efficiencies through
administrative simplifications, such as a common claims form and real-time
claims adjudication;
- Application of cost transparency to health plans
so individuals are able to determine their out-of-pocket costs;
- Addressing workforce shortages in a number of
specialties as well as in primary care; and
- Focusing efforts to eliminate waste, fraud, and abuse
on areas where problems have been well-documented.
Next Steps
Health system reform will be
one of the top domestic priorities for the new Congress and the Obama
Administration. In addition to the
Baucus proposal, other key House and Senate committees will be developing
comprehensive health reform proposals, including the Senate HELP Committee, House
Ways & Means Committee, and House Energy and Commerce Committee. President–Elect Obama has a comprehensive
proposal, as well. An ongoing,
coordinated strategy among physician groups needs to be established to ensure
that physicians are represented among these key policy-making bodies as legislative
proposals are released and modified over the next several months. The AMA will convene meetings with the
appropriate groups to explore and discuss strategies to communicate a common
advocacy message, review and develop analyses of legislative proposals, seek
opportunities to interact with congressional leaders and Obama Administration
officials, and ensure our respective memberships receive timely and informative
updates.
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