I was on a conference call with White House budget director Peter Orszag and Office of Health Reform chief Nancy-Ann DeParle today, and both of them were adamant that the health care reform moving through Congress would cut costs over the long term and “move us into the future of health care,” as Orszag put it.
There has been a lot of controversy over the health care bills, with Republicans making up numbers out of whole cloth and determining that the bills will not do anything to control costs. This was the foil for Orszag and DeParle’s remarks today. Both touted substantial delivery system reforms, primarily in the Senate bill, which would contain costs in a broader and deeper way than any health care policy over the last several decades. Orszag in particular cited a recent letter from economists that featured four “pillars” for reform:
• Deficit neutrality
• The excise tax on high-end insurance policies
• A beefed-up Medicare commission with the ability to make changes to the program
• Delivery system reforms aimed at efficiency
Orszag said that the Senate bill includes these four pillars, and he elaborated on the delivery system reforms, putting them in four categories:
• Digitization or health IT, putting everyone’s medical records in an electronic format
• Comparative effectiveness research, “so people know what works and what doesn’t”
• specific reforms like bundled payments, penalties to hospitals with high readmission rates, and accountable care organizations. All of these are pilot projects in the Senate bill, but Orszag said that more data is needed before scaling these ideas up, so this would be a time of “aggressive experimentation”
• the beefed-up MedPAC (now known as IMAB, the Independent Medicare Advisory Board), which is in the four pillars so I don’t know why he brought it up again, although DeParle, who served on MedPAC in the past, said that her commission’s recommendations didn’t happen, and that a more empowered commission would force real changes.
DeParle added that it had been twelve years since any real cost containment had been attempted in health care, and it was successful, and that the current reforms would bring back lots of these cost-containment items.
Orszag didn’t go so far as to say that the President wouldn’t embrace a bill without cost control like this (many of these items don’t appear in the House bill), but that “we’re in favor of a bill that include these four pillars.”
Orszag also cited that Ron Brownstein article about cost containment, as well as David Leonhardt’s piece today, as examples of “reporters who have read the bill” coming to positive conclusions about cost. It should be noted that Leonhardt, while acknowledging that most of the cost containment ideas discussed in health policy circles over the past decade do appear in the Senate bill, it doesn’t go far enough:
But many of the ideas, like the rule on Medicare reimbursement, have been at least partly neutered. A provision to punish hospitals for infecting their patients, for example, would cut payments for the related treatments by a mere 1 percent. A provision meant to help people who don’t like the insurance options offered by their employer would apply to only a tiny fraction of them. A provision to encourage more cooperation among doctors would not apply to the areas where it is needed the most: chronic diseases like diabetes and congestive heart failure.
“There is a lot to like in the bill,” Dr. Alan Garber of the Stanford School of Medicine says, “but it needs to go further.”
Thus the opportunity for those centrist senators: to achieve their stated goal, they don’t suddenly need to turn themselves into health care wonks and rewrite the bill. They just need to improve what’s already there.
Left unexplained on the call is how the reduction in over-utilization and changes in delivery systems will deal with the plain fact that Americans pay up to 500% more for the exact same services as patients in other countries. While these reforms may end up lowering costs and scoring well, they seemingly don’t address those massive disparities in cost for individual treatments.
There’s more from the call, and the underlying issue, from The Associated Press.