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Senior and Post-Acute Healthcare News and Topics

Reform: The Senate Version

After weeks/months of meetings, Senator Baucus of Montana representing the “gang of six” (three Democrats and three Republicans) released the Senate Finance Committee version of “healthcare reform”.  What started as a bi-partisan sub-committee alternative to the House version (HR 3200) ended as essentially, a Baucus bill; legislation lacking any real support from Senate Democrats and no support from Senate Republicans.  In fact, the goals originally stated by Baucus and his committee concerning affordability (legislation paying for itself) and bi-partisan compromise are clearly unmet in the released version.

A quick comparison between the Baucus bill and the House bill shows the Baucus bill to be some $150 to $100 billion cheaper, devoid of a government specific health plan (although non-profit cooperatives established by the government with regulation and funding are present), including an excise tax on “rich” insurance plans via the companies providing the coverage, and a government requirement that every citizen somehow purchases insurance.  A preliminary estimate by the Congressional Budget Office indicates that the Baucus bill at least contains within, revenue sufficient to offset the new costs and perhaps, establish a small surplus over the ten year implementation horizon.  As the legislative details come forth, it is likely that the Baucus bill will be found to be at best, a break-even or modest deficit producing endeavor.

To be honest, I haven’t read the entirety of the bill as of yet; perhaps I’ll finish over the weekend.  My quick scan and a review of the bill’s “guts” tell me that it is essentially DOA.  Frankly, in many respects, the Baucus bill has less chance of success in the Senate than the House bill has chance of remaining alive in the House.  There are at least enough Pelosi loyal Democrats in the House to rally a charge behind HR 3200 and the Republican numbers literally insufficient to put up anything other than token opposition.  In the Senate, Republicans are still in the minority but not to an extent that their numbers are immaterial.  Additionally, conservative Democrats in the Senate are already in a number sufficient that any balk from their contingent will crater in totality, the Baucus effort.  Finally, the Kennedy Senate liberals have already raised rancor that the Baucus bill, absent the beloved public option, is unworthy of their vote.  Doing the math, the lack of support from Republicans, the wariness of conservative Democrats and the unsupportive Kennedy liberals equals crash and burn for the efforts of Senator Baucus.

With the healthcare reform cards now on the table, the next steps of this grand reform experiment should prove to be fascinating.  The President is in full campaign mode, appealing to any warm constituency to prop up his efforts to reform the system – though none of us are exactly sure what his efforts are although his pre-election rhetoric aligns him with the House bill.  Where high drama will play out is when the House and Senate are forced to congeal around a single piece of legislation in each chamber and then vote upon the same, either passing or rejecting the final bill prior to conference committee work.  As both the House and the Senate have more than one pending piece of reform legislation to consider, it is likely that the various internal factions (liberals, conservatives, Blue Dogs, moderates, etc.) will be horse-trading and brow-beating various party members to shore-up or derail, votes for amendments as well as passage.

Where the rubber (if you will) will meet the road is when five key points are either addressed or frankly, not addressed, adequately enough for House and Senate members who will face constituent pressure at re-election time (some way sooner than others).  The Public is already on-notice regarding healthcare reform and the polls continue to build more against the present Washington versions of reform and in support. 

  • The financing/payment methodology must be clear and understandable and frankly, far closer to budget neutral than where any proposal is to date.  To date, the savings mantra that keeps playing with pro-reform politicians is less than clear in terms of actualization.  There is a certain sweet logic to the notion that if the savings via reduced waste and inefficiency was in fact already identified, quantified and attainable, why hasn’t the Government sought to go after it irrespective of healthcare reform?  I doubt anyone ultimately will buy that the legislation efforts in the House and the Senate are directly tied to reducing waste and inefficiency in Medicare and Medicaid or more logically, buy the chicken and egg argument.  Beyond the savings argument still lies the bitter pill of higher taxes; a path that both the House and Senate has said each must follow to pay for reform.
  • Medicare and Medicaid funding cuts will be front and center for providers and extensively lobbied.  If the savings via waste and inefficiency reductions is nothing more than a veil used to cover signficant reimbursement reductions, the sales pitch for reform just got tougher.  Without question, provider groups banded together inclusive of physicians will lever significant weight and influence over individual legislators, perhaps enough to sway fragile votes come crunch time.
  • The issue of a public option and government-run healthcare has to be cleared up and re-packaged to become either totally transparent (call it what it is) or eliminated.  There appears to be waning support for a government option or government run single payer system but frankly, the variable rhetoric coming from Washington is too confusing and too malleable for anyone to decipher.  Left undisclosed or eliminated, it appears that the general public will not support much reform and in turn, will likely not support their current elected representatives – the kiss of death for a politician who is electorally exposed in 2010.
  • The number of uninsured and coverage for this group needs to be clarified both economically and mechanically.  Frankly, each week the number of uninsured that seems to be at the crux of the argument for reform goes up and down.  Who exactly is this group and what are the demographics?  Given the very real nature of adverse selection taking place, the argument that somehow insuring this group (however many it is) without pre-condition (no pre-existing condition limitation, no high deductibles, coverage for chronic illness, no waiting, no lifetime maximums, great coverage, etc.) is possible and actually lowers healthcare cost is inconceivable economically.  This issue needs to be defrocked from rhetoric and addressed plainly and simply because in its present form of argument, it is ultimately unsaleable.  Given that Washington never estimates the cost of anything correctly and certainly never higher than what really occurs, this issue alone could prove to be a huge hurdle for reform prospects.
  • Both the House and Senate versions are loaded with what I’ll call, “side issues”.  These side issues are the by-product of special interest groups and they need to be removed or placed in full view for all to see.  For example, government employees and unions are treated separately from everyone else in every reform proposal.  These groups are given special dispensation and protected status.  The question of “why” will be, and already is, unavoidable.  Congress also needs to address the issue of coverage for non-citizens, coverage for abortion (especially government funded or mandated), and the issue of care rationing for the elderly.  The President can “soft-shoe” around these issues all he wants and honestly, he is good at it but in the end, these issues uncovered or unaddressed unequivocally will present open-wounds that could and likely will, infect the reform legislation outcome.
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September 17, 2009 - Posted by | Policy and Politics - Federal | , , , ,

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