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HEALTH: Baucus Plan Highlights Importance Bipartisanship and Cost of Inaction

This post also appears on the National Journal's Health Care Experts Blog. where you can also see what other health policy analysts have to say.

On Wednesday, Senate Finance Chairman Max Baucus (D-MT) made clear that reforming our health care system is an economic imperative and that comprehensive health care reform should be a priority for Congress. I applaud his leadership, vision, and willingness to work with colleagues, stakeholders and the public to "get it done" in this Congress. He has laid down a key cornerstone in our pathway to a high quality health care system that works well for all Americans.

Senator Baucus emphasized two important messages on Wednesday: 1) The cost of "inaction is much more expensive" than reform, 2) We should approach health reform with a bipartisan attitude and endeavor to persuade "80 Senators" to support the final legislation. I believe the health care reform conversation would be well-served to continue to remember and echo these two points.

As for policy, the Baucus policy plan is extensive, so today I will simply highlight what I view as the most original contributions.

Counter-cyclical FMAP formula. As the economy weakens and people lose jobs and income, more Americans will become eligible for Medicaid or some kind of safety net insurance. This occurs just as states are compelled to reduce spending to match their recession-induced drop in revenues. (The vast majority of states have balanced budget requirements). Scholarship suggests that a 1 percent increase in the unemployment rate leads to roughly 1 million more Medicaid and SCHIP enrollees. Senator Baucus' proposal to make the federal share of (FMAP) responsive to fluctuations in the economy is a great way to strengthen state and personal finances and access to care when they are in most peril. Our current economic situation is an appropriate time to implement this improved policy stance.

Immediate access to care for the uninsured. I was intrigued by Senator Baucus' thoughts on providing the chronically ill uninsured with immediate access to care. As we think about how comprehensive reform may be sequenced or phased-in, this may be one way we could provide instant relief to the uninsured with the greatest health needs while we work to establish the infrastructure and rules of the new marketplace and other key delivery system reforms.

Focus on payment reform. While Senator Baucus' decision to place an emphasis on payment reform is not surprising given the Finance Committee's expertise and jurisdiction, nonetheless the comprehensiveness of his vision is impressive. We will not control health care costs until we fundamentally restructure the incentives—for both patients and providers—in our health system. Senator Baucus offers several valuable policy solutions that would help achieve this goal.

In addition to these new ideas, Senator Baucus gently emphasizes three policy concepts which I have long believed will be necessary to achieve bipartisan support for comprehensive health reform.

New marketplace. Senator Baucus recognizes the weaknesses of the current individual and small group markets and proposes a new market or "exchange" where individuals and small businesses can purchase coverage regardless of their health history or where they live. There is much to debate about how best to structure this new marketplace, but it is encouraging that Senator Baucus-along with President-elect Obama and a growing number of members of Congress- has identified this policy choice as a key pillar of reform.

Individual requirement to purchase coverage. Senator Baucus prioritizes individual responsibility and makes clear that requiring individuals to purchase coverage (once coverage is accessible and affordable) will make health insurance markets work far more efficiently and fairly. His framing of this issue re-creates space for a dialogue about how best to introduce a requirement to purchase coverage into the American health care system. This is an important and necessary conversation that will likely engender much debate, since some liberals and some conservatives alike have opposed purchase mandates for very different reasons. Chairman Baucus should be applauded for his leadership in re-igniting this essential policy conversation.

Reforming the tax treatment of health insurance. Perhaps Senator Baucus' greatest single policy contribution in his "call to action" is the decision to highlight the need to consider changing the current tax preference for employer premium contributions. He did not advocate or demand it. Yet, he did state simply and boldly that changing the tax code for health insurance may be necessary to improve incentives and provide a source of funding for coverage expansion and delivery system improvements. After a tough political campaign in which this issue and many surrounding it became confused in campaign tit for tat, Senator Baucus should be commended for his leadership on this issue.

Real health reform will never be easy. Opponents will always work tirelessly and concoct new arguments daily. Still, proponents of comprehensive health reform have had a good couple of weeks. First, Senator Barack Obama's election shows that a majority of voters want and expect comprehensive health reform to be an important part of our nation's agenda in the next few years. The incoming administration also views health reform as a priority and a key component of a broader strategic vision to stabilize the financial future of the American middle class. In addition, Congressional leadership is apparent unlike 1992. First, Finance Chairman Baucus has boldly stepped up to declare health reform an economic imperative, whereas former Chairman Moynihan was cool if not downright hostile to health reform as a key agenda item in 1993-4. This "call to action," combined with Senator Kennedy's prodigious and ongoing work and the bipartisan bicameral cosponsors of the Healthy Americans Act have all created far better pre-conditions for a national conversation than we had in 1992. Visionary business, labor, health stakeholder, and advocacy groups have also helped jump-start our essential health reform conversation. Senator Baucus has staked out a catalytic leadership role for himself at just the right time for our nation to act: now.

Call To Action/Health Care Reform 2009

The Call to Action/Health Care Reform 2009 proposal released 11/13/08
( by Senator Max Baucus is a disaster.
The Baucus plan is an expansion and continuation of the status-quo
mixture of a government subsidized ineffective private health
maintenance insurance industry operating parallel to and within Medicare

7 Specific Reasons Why the Baucus Health Reform 2009 Plan Fails.....

1) The Baucus plan fails to enroll all Americans in a single payer
National Health Insurance such as the most efficient health insurance
plan (Medicare) which is already contracted with most doctors,
hospitals and clinics in the Country. Medicare has the lowest operating
expenses and the best morbidity (sickness rates) and mortality (death
rates) compared to all other insurance companies. The Baucus plan will
therefore divert $700 Billion to $1 Trillion per year away from
patients, hospitals, doctors, clinics, nurses, pharmaceuticals,
therapist and researchers into the overhead pockets of health private
insurance company administrators and executives.

2) The Baucus plan fails to technologically upgrade, integrate and
centralize medical billing and records systems in order to optimize
examination of clinical outcomes, pharmaceutical efficacies and monitor
fraud and abuse. In addition, by failing to centralize and
technologically upgrade billing and records systems within a single
National Health Insurance plan, America will be unable to instantly
monitor disease outbreaks and instantly respond to natural and man made
disasters or bio-nuclear terrorism..

3) The Baucus plan fails to control drug costs by failing to allow a
single efficient national health insurance company such as Medicare to
bid on pharmaceuticals. In addition, the Baucus plan by failing to put
all Americans on a National Health Insurance Plan such as Medicare does
little to shrink the 'risk pool' of insured, thereby failing to decrease
insurance premium expenses for all Americans.

4) The Baucus plan fails to provide funding for scientific, clinical and
epidemiological research and development by allowing private private
insurance companies to divert funds from medical research and
development to instead support their massive and profitable
administrative and executive bureaucratic overheads.

5) The Baucus plan fails to provide physicians with the same legal
protection from malpractice lawsuits which have been established for
commercial health insurance corporations during the last 3 decades.

6) The Baucus plan fails to explain where to find the 1.5 million new
health care workers which will be needed once 100 million new Americans
obtain health care insurance. Health care workers can be found easily by
shutting down the wasteful and inefficient private health insurance
companies, putting all Americans on National Health Insurance such as
Medicare. The 1.5 million former private insurance company bureaucrats
can then be remployed to actually deliver health care in hospitals,
clinics, nursing homes, assisted living facilities, pharmacies and home
health services such as Alzheimer family assistance.

7) The Baucus Plan fails to address this problem of disenfranchised
physicians. Many physicians in this country have left the practice of
medicine, or downsized their practices due to private insurance company
abuses, malpractice threats and direct pharmaceutical marketing. A
recent national poll of physicians based on the AMA database
demonstrated that 60% of physicians support a single payer National
Health Insurance such as Medicare. A continuation and technological
upgrading of our most fair Medicare Health Insurance for all based on
the concepts outlined above, would undoubtedly motivate those
disenfranchised physicians to return to the profession and bright
younger physicians to invigorate the field.

The Baucus plan is wasteful, inefficient, fragmented, creates a new
redundant beurocracy and will continue to provide no potential future
health improvements for America. Only an efficient National Health
Insurance carrier such as a technologically upgraded Medicare Insurance
company will be able to provide low cost health insurance and pharmaceuticals
for all Americans while maintaining the quality of private physician practices and Hospitals.