What Baucus got right ... and wrong

Senate Finance Committee chairman Max Baucus (D-Mont.) released his committee's health care reform proposal last week to much criticism from his own party. But "despite all the vitriolic complaints from the left -- Howard Dean is becoming living proof that health care reform should offer a universal entitlement to Valium -- Baucus has advanced the historic Democratic cause of providing health security to all Americans by demonstrating that it can be compatible with fiscal responsibility and long-term cost control."

So writes Ronald Brownstein in The Atlantic.

In a Sept. 16 analysis of the proposal, the Congressional Budget Office concluded that the bill would reduce the federal deficit by $49 billion over 10 years and would produce savings equal to .5 percent of GDP after two decades. The bill does not include a public plan but would result in 94 percent of nonelderly people receiving coverage by 2019, excluding illegal immigrants. Notably, it would also provide a 10-percent bonus for primary care physicians on select E&M services under the Medicare fee schedule for five years.

The Baucus bill accomplishes all this by "creating a revenue stream [including a 35-percent excise tax on high-end health plans] that rises as fast as health care costs, and reshaping the incentives in the medical system in ways that should help 'bend the curve' on those long-term cost increases. Without those two elements any coverage expansion will prove unaffordable, and thus unsustainable, over time," writes Brownstein.

The bill's strategies for reshaping incentives include:

• Comparing the amount all physicians spend on patients with similar conditions and cutting Medicare reimbursements by five percent for those who generate the highest costs.

• Linking hospital reimbursement to their performance on quality measures.

• Allowing groups of providers to share in any savings for more effectively managing patients' care under Medicare.

• Creating an Innovation Center within the Health and Human Services Department that would fund experiments in coordinated care and payment reform.

• Creating an independent Medicare Commission that would be required to offer proposals for cost-savings whenever Medicare spending rises too fast and whose proposals would be fast-tracked for consideration by Congress.

The AMA has voiced several concerns, including the bill's use of payment penalties for physician outliers and the bill's failure to permanently repeal the sustainable growth rate (SGR) formula that would subject physicians to Medicare payment cuts of 40 percent over the next several years.

The bill is currently being amended in committee. Once approved, it will have to be merged with the Senate HELP committee's bill before going to the Senate floor.

Posted at 10:51AM Sep 23, 2009 by Brandi White  |  Comments[0]