COST: Getting Real. Versus Ideal.

Academics and think tanks (including us) may pump out issue briefs and op-eds and blog posts about how to slow down health care spending, but Washington is still full of skeptics about whether or not health reform legislation will truly bend that cost curve.  

Leave it to Rahm Emanuel, President Obama's Chief of Staff, to give us our favorite quote on the curve-bending ideals versus curve-bending politics. He told the New York Times:

Let's be honest. The goal isn't to see whether I can pass this through the executive board of the Brookings Institution. I'm passing it through the United States Congress with people who represent constituents... I'm sure there are a lot of people sitting in the shade at the Aspen Institute -- my brother being one of them -- who will tell you what the ideal plan is. Great, fascinating. You have the art of the possible measured against the ideal.

Though the CBO estimated the House bill (and the Senate Finance Committee bill) would reduce the federal deficit and come in under Obama's $900 billion limit, some health care economists and lawmakers are not convinced the bills do enough to tame costs. According to The New York Times, health economists say it's impossible to know if either the House or Senate bill, or a final blended version, will actually meet President Obama's goal of reducing the federal deficit (partly because we can't be sure what Congress will do in the next few years). We've discussed cost containment before, but the Times' Sheryl Stolberg offers a good look at where some key proposals stand as of now:

IMAC. One proposal would set more stringent standards on Medicare reimbursement, a provision included in the Senate Finance Committee's health bill. Nancy-Ann DeParle, director of the White House Office of Health Reform, told the Times that she believed support for a Medicare advisory commission was building in the House as well. "There is a lot of support for cost containment," she said. The commission, sometimes referred to as IMAC (Independent Medicare Advisory Commission), would make binding recommendations on how to cut Medicare costs. According to Obama, IMAC would be an independent group of health care experts such as doctors, nurses, and hospital administrators, who would use evidence to determine how to get the most value out of our health care dollar.

Fee for service. Some critics don't think the current bills move away from fee for service reimbursement structures fast enough or far enough. Dr. Denis A. Cortese, chief executive of the Mayo Clinic, said the bills take only "baby steps" toward serious payment reform; Cortese wants to see a more sweeping move away from fee-for-service and toward rewarding quality over quantity. (The Mayo Clinic delivers excellent and low cost care by focusing on team oriented care with salaried physicians, utilizing health IT and minimizing unnecessary tests. Most other health systems in the U.S. embrace a fee-for-service model, which financially rewards doctors for delivering more care, whether or not it is helpful to the patient).

Bundling and Cadillac tax. Another proposal is "bundling," which would pay a lump sum for a specified episode of patient care. One example could be a bundled payment for a surgery and the follow up rehab and control/avoidance of complications.  Both the House and Senate Finance bills call for the development of bundling plans or at least pilot programs. Though health economists tend to favor the "Cadillac tax" on high value insurance plans, this concept is a harder sell in the House, because of worries the tax will hurt union workers.

The Times describes the fundamental conflict between health economists, who like to think about health reform in ideal, theoretical ways, and pragmatists (like Rahm Emanuel), who have to get the bills through Congress and onto the president's desk. Despite growing evidence that these strategies pay off in high performing health systems across the nation, some are not convinced. Experts are pushing for more changes much sooner, and lawmakers are pulling in several directions all at once. The article also cautions that doctors and hospital groups might back out of their agreement with the White House to support reform if they see the changes to health care reimbursement system as too extreme.

President Obama made a health bill that will contain costs and does not add to the federal deficit a priority. As we've written before, (many, many times) health care costs are growing out of control and the cost of doing nothing is high. If we want peace of mind about our future financial security, we need reform that America, and Americans, can afford. Cover everyone. Improve quality. And bend the curve.