Wednesday, November 10, 2010

qotd: Deficit commission: Co-Chairs' proposal

National Commission on Fiscal Responsibility and Reform
November 10, 2010
Co-Chairs' Proposal (Draft Document)

Reducing Health Care Costs (page 31)

## Medium Term: Fully offset the cost of the "Doc Fix" by asking doctors and other health providers, lawyers, and individuals to take responsibility for slowing health care cost growth. Offsets include:
  * Pay doctors and other providers less, improve efficiency, and reward quality by speeding up payment reforms and increasing drug rebates
  * Pay lawyers less and reduce the cost of defensive medicine by adopting comprehensive tort reform 
  * Expand cost-sharing in Medicare to promote informed consumer health  choices and spending
  * Expand successful cost containment demonstrations
  * Strengthen IPAB
  * Recommend additional health savings (illustrative examples to follow)
## Long Term: Contain growth in total federal health spending to GDP+1% after 2020 by establishing a process to regularly evaluate cost growth, and take additional steps as needed if projected savings do not materialize

Paying for the "Doc Fix" (page 32)

## Pay doctors, other health providers, and drug companies less and improve efficiency and quality
  * Replace cuts required by SGR through 2015 with modest reductions while directing CMS to establish a new payment system, beginning in 2015, to reduce costs and improve quality.
  * Require rebates for brand-name drugs as a condition of participating in Medicare Part D.
## Increase cost-sharing in Medicare
  * Eliminate first-dollar coverage in Medigap plans.
  * Replace existing cost-sharing rules with universal deductible, single coinsurance rate, and catastrophic cap for Medicare Part A and Part B.
## Pay lawyers less and reduce the cost of defensive medicine
  * Enact comprehensive medical malpractice liability reform to cap non-economic and punitive damages and make other changes in tort law.

Savings Beyond the Doc Fix (page 34)

## Expand Successful Cost-Containment Demonstration Projects by 2015
## Identify an additional $200 billion savings in federal health spending
## Strengthen the Independent Payment Advisory Board (IPAB)
  * Include all providers (no carve-outs) and recommendations on benefit design and cost-sharing.
  * Improve savings targets to 1.5% starting in 2015.
  * Eliminate the trigger that could turn off IPAB in 2019.
  * Allow cost-savings recommendations even when spending does not exceed the target growth rate.
  * Allow proposals that apply reforms to health plans in the exchange.
  * Require affirmative Congressional approval of recommendations or alternative savings, with a "back-up sequester" increasing premiums and reducing provider payments if IPAB recommendations (or equivalent savings) are not adopted.

Long-Term Health Care Savings (page 36)

## Set global target for total federal health expenditures after 2020 (Medicare, Medicaid, CHIP, exchange subsidies, employer health exclusion), and review costs every 2 years. Keep growth to GDP+1%.
## If costs have grown faster than targets (on average of previous 5 years), require President to submit and Congress to consider reforms to lower spending, such as:
  * Increase premiums (or further increase cost-sharing)
  * Overhaul the fee-for-service system
  * Develop a premium support system for Medicare
  * Add a robust public option and/or all-payer system in the exchange
  * Further expand authority of IPAB

Comment:  Today, behind closed doors, the chairmen of President's Obama's deficit commission, Erskine Bowles and Alan Simpson, presented to the other members of the commission their draft proposal for reform. The selections above, from their report, apply to health care.

The reception by the committee members is expressed well by Lori Montgomery of The Washington Post:

"Commission members, who include a dozen sitting members of Congress, emerged from the morning session in a Capitol Hill hearing room praising the seriousness of the effort but voicing deep reservations about the details."

Obviously, some of these proposals are very deleterious. It is not as if the commission didn't receive suggestions for far better policies to address costs while actually improving our health care system, though they have chosen to ignore them. Following is a quote from the testimony of Margaret Flowers, M.D. of Physicians for a National Health Program:

"The alternative scenario of a national improved Medicare for All will save lives and save money. National improved Medicare for All will place our nation on the path of becoming one of the best health systems in the world – something of which we can all be proud. This commission has the ability to recommend creating a financially sustainable universal health system. I urge the members of this commission to recommend addressing the deficit through adopting this most popular approach: national improved Medicare for All. Don't cut Medicare. Protect it, improve it and expand it to cover everyone."

Video version (in 6 of 7 at 27:30):

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