Just hours away from an election that is certain to make history one way or another, two things are clear: health care is a major issue for voters—and they’re sending a message about the change they need at the polls.

For ordinary American families struggling to pay the mortgage and living in fear they’re one illness away from losing their jobs or their homes, fixing the health care system could mean the difference between weathering this financial crisis and falling victim to total financial ruin.

We can’t afford to take a piecemeal approach to our health care crisis. The problems of access, costs, quality, and value are all linked. We must tackle them with a comprehensive approach, and we must tackle them early in the next Administration.

A comprehensive approach to fixing health care doesn’t have to mean Congress drafting a 1,200 page bill, and it doesn’t mean we should create major disruptions in the way most Americans get their coverage and their care. Health care experts and policymakers already agree on a number of points:

1. Preventing and managing chronic diseases. With chronic diseases on the rise and accounting for a large share of rising health care costs, a broad swath of policymakers, experts, unions and other stakeholders agree prevention must be a key part of health care. We must help millions of uninsured children and adults enroll in meaningful coverage and get engaged in their own care if we want to make progress on preventing, bringing down the costs of, and eliminating income and racial disparities in the incidence of chronic disease.

2. Fixing the insurance markets. Many stakeholders also agree that insurance markets must work better, particularly for small businesses and individuals who are self-employed, between jobs, in school, or otherwise ineligible for job-based group coverage. There is strong interest in replicating the success of the insurance “connector” innovation devised in Massachusetts. But a health care “field of dreams” won’t be enough. We can’t just build a new health care system and expect small businesses, uninsured workers, students and others to come unless they receive financial assistance or are enrolled in a public program that better meets their needs and circumstances. Similarly, we can’t just build a system and expect insurers to participate if we don’t take steps to ensure a stable risk pool.

3. Making government purchasing more effective. A comprehensive approach must also create a framework that allows the federal government—the largest purchaser of health care—to become a smarter, more effective buyer. This framework should:
• Set standards for health information technology.
• Sponsor and disseminate research on which treatments work best for which patients.
• Reward providers who can report measures of quality and outcomes and show improvement over time.
• Promote best practices that might, for example, be developed first in the VA health system but merit widespread adoption throughout other federal programs, and which the private sector may voluntarily adopt as well.

It might be tempting to think it is easier and less costly to tackle the country’s enormous health care challenges in small, sequential steps. But incremental reforms can get bogged down almost as easily as more comprehensive approaches—even past moves to improve health information technology have fallen by the wayside. In the meantime, costs continue to rise and coverage continues to erode for millions of Americans.

With the arrival of Election Day, there’s no question the presidential candidates’ proposals for reforming the health care system have helped set them apart in the eyes of voters. Health care consistently tops the list of concerns facing middle-class Americans—and there are no signs this priority will change any time soon. Post-Election Day, it will be up to bold leadership from a new President and Congress to fix health care and address other pressing national challenges.

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Here is what Janet Corrigan, CEO and President of the National Quality Forum, has to say about incremental health reform next year:

Incremental reform does not have to mean marginal reform. The key is focusing on the right places in our vast and fragmented “system” where we can achieve the biggest dividends for patients and their families. If leveraged strategically, increments of improvement can accrue into transformational change and a much higher-performing healthcare system.
And now is certainly the time. Our national economic crisis makes addressing healthcare even more urgent. With healthcare spending on track to reach 50 percent of America’s GDP by 2020 and states like New York and California in severe budgetary straits, it is clear that the health care status quo is unsustainable. We have an opportunity to make the world’s most expensive healthcare more affordable and higher performing. And we know how to do it.
A group of 28 national organizations representing consumers, providers, practitioners, purchasers, government, accrediting and certifying organizations, quality alliances and health plans have identified a set of Priorities and Goals to help focus performance improvement in areas with the most potential to result in substantial improvements in health and healthcare. The goal of this coalition called the National Priorities Partnership is to accelerate fundamental change in our healthcare delivery system.
These Priorities, each setting out specific measurable goals, can dramatically improve our nation’s healthcare quality. They include:
• Eliminating waste while ensuring the delivery of appropriate care
• Engaging patients and their families in managing health and making decisions about care
• Improving the health of the population
• Strengthening the safety and reliability of America’s healthcare system
• Ensuring patients receive well-coordinated care across all providers, settings, and levels of care
• Guaranteeing appropriate and compassionate care for patients with life-limiting illness
Action in these areas can save precious dollars, and use our world-class resources more efficiently to save lives and improve health. For example, we know an estimated 30 percent of healthcare spending represents unnecessary and potentially harmful treatments. That’s $600-700 billion – enough to cover the uninsured. Turning this waste into higher-value and better results for patients will be challenging, requiring changes in coverage and payment that rewards value over volume. And having more public reporting and transparency by improving our Health IT infrastructure will allow us to better monitor whether our investments are indeed generating better results for patients. And where there is poor performance, we can make faster, more responsive changes.
Consider these benefits: Hospitals with palliative care programs for patients with some of the most expensive life-limiting conditions save $279 to $374 per day, or $1,700 to $4,900 per admission, which translates into $1.3 million per year for a 300-bed community hospital. (National Palliative Care Research Center) Hospital-based palliative care programs—which emphasize team-based supportive care for patients with advanced illness—result in improved quality of care, including higher patient satisfaction, better communication, and fewer intensive care unit admissions.
These are just a few examples of transformational reform achieved through strategic increments of change that add up for patients and their families. We are facing a once-in-a-generation opportunity to fundamentally improve America’s health and healthcare, but it’s critically important to learn the lessons of past efforts to radically change healthcare. By focusing our efforts in key high-leverage areas that reduce waste, improve care and strengthen accountability – we will see results for patients that will build the kind of public and political will necessary to achieve a much higher-performing healthcare system.

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If our nation decides that comprehensive reform is too large a first step (we have not decided that yet, in my view), then incremental reform should look like comprehensive reform in stages. In my opinion the term “sequential reform” is a preferable and more correct characterization than “incremental reform,” especially since comprehensive reform will need to be implemented sequentially anyway. Sequential reform should clarify a pathway toward the ultimate goals of covering all Americans and making our delivery and financing systems sustainable economically. This requires all steps toward reform to address the real problems we face, which include: inefficient insurance markets, inadequate information about health status and best diagnostic and treatment practices, and misaligned health system incentives. We continue to deny these problems at our long run economic and social peril.

We should think of long run and short run sequences. First, we should start investing in infrastructure – electronic records systems and interoperability standards, decision support tools, RHIOs, comparative effectiveness research and dissemination programs, and payment reform experiments through Medicare and even Medicaid – as soon as possible, since these will pay off only over time, and only substantially if the pieces of these reforms are properly integrated eventually. This type of legislation should pass the Senate with a 60 vote margin (as in 80-20), and should therefore probably be started on a fast track in all relevant committees early in 2009.

The “insurance market” first step would be to create a new marketplace, or a new set of rules that would apply nationwide but be administered with discretion locally. This marketplace should be designed to work for all employees of small businesses and for the self-employed. However, it should also be designed in such a way that it could eventually grow seamlessly to include large firm workers or people eligible for Medicaid (if desirable down the road). The key features of this marketplace will eventually be guaranteed issue and modified community rating. This will end aggressive underwriting forever.

Over time and with additional financial resources, tighter insurance market rules and an individual requirement to purchase coverage could be implemented hand in hand. I could imagine phasing in a purchase mandate downward from those who need no subsidy toward those who need more complete subsidies provided there was a functioning marketplace for employees of small firms and the self-employed in place first. This new insurance marketplace will be more contentious politically than investments in delivery system infrastructure and will therefore take a little longer. Furthermore, an “all person” mandate cannot be put into place until a sufficient social commitment to make health care affordable for everyone is secured. Since the insurance market will work better for all Americans with guaranteed issue and a mandate simultaneously, the casualty of forced sequencing is, ironically, more market-based coverage expansion. Given the time it will take to sort through insurance market reforms and new financing sources politically, perhaps we can implement full coverage expansion (over a 2 year period) after a couple of years of debate about how to structure the new insurance marketplace and subsidy structure. By then, the economy will have either recovered or we will have far larger problems than the uninsured. In a way, this is sequencing by political reality, not by explicit program design.

As in all things, the key to any phased-in reform will be to balance the financial needs of the transitional period with the revenue available through a transitional financing structure. But as I have said before, the societal and economic costs of failing to fix our broken health system are high, rising, and likely greater than the upfront expense of sequential comprehensive reform. We cannot afford to wait any longer.

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One major component of any incremental health care reform effort should be a focus on disease prevention. We’ll never be able to truly contain costs until we find ways to keep Americans healthier. Right now, Americans are not as healthy as they could be or should be, and it’s costing us billions of dollars in preventable costs. A key part of any incremental approach should be an investment in proven clinical and community-based prevention programs.

The Partnership for Prevention identified a series of clinical preventive measures that, if fully adopted by 90 percent of the population, could save 100,000 lives a year. Trust for America’s Health, in collaboration with the New York Academy of Medicine, identified a series of community level disease prevention programs that could improve rates of physical activity, nutrition, and smoking cessation, which could dramatically reduce rates of type 2 diabetes, high blood pressure, heart disease, and stroke. Examples of these programs include increasing the number of parks and sidewalks, making affordable foods more accessible, and implementing tobacco taxes. Based on an economic model developed by the Urban Institute, we found that an investment of $10 per person per year in effective programs could result in savings of more than $16 billion in health care costs annually within five years. This is a return of $5.60 for every $1. Of this $16 billion, Medicare could save more than $5 billion, Medicaid could save nearly $2 billion, and private payers could save more than $9 billion.

If we’re going to get serious about reforming health care in the country, we should start by reforming our approach to keep people as healthy as they can be.

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Health care reform needs to be a top priority. Advancing legislation in a phased-in way is not at odds with comprehensive health care reform. The new president and Congress should work together to structure a solution that gets all Americans covered, contains the rate of growth in costs, and improves quality.

We should immediately repair the health care safety net to ensure that nobody falls through the cracks. SCHIP reauthorization is an important starting point in this effort. We should also expand Medicaid and base eligibility on need, without regard to gender, age or state.

Second, we need to provide a helping hand to working families who are struggling to afford health care coverage. Refundable health care tax credits offered on an income-based sliding scale would enable moderate- and middle-income families to afford health insurance. We should also level the playing field for individuals who purchase health insurance outside of an employer setting.

At the same time, the nation must address the components that are driving up the cost of coverage. Patients would directly benefit from the creation of a national comparative effectiveness entity that determines which drugs, devices, and technologies are most effective.

Workable, incremental reforms that build on the current system can win bipartisan support and lay the groundwork for broader reform.

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We all recognize the very serious need for major reform of our current health care “system,” as well as the lack of consensus on how to reach the common goal of better health and better health care. With that goal in mind, the first step in reforming health care is developing a framework—a shared vision, with input from all stakeholders, of the health care system of tomorrow.

And what should this system look like? Its key elements—a renewed focus on wellness, delivering the most efficient, affordable and highest quality care possible and making certain both patients and caregivers have the best information possible—should all be built on the foundation of health care reform: coverage for all, paid for by all.

It’s important to note the difference between incremental reform and piecemeal change. What would be most effective is a planned, steady and coordinated movement towards a health care system that works for everyone. Of particular importance will be efforts to identify steps through which undertaking one step facilitates multiple increments in subsequent years. This makes more sense and would be a more practical approach than the belief that all change should happen all at once or that, at the other end of the spectrum, we should plan and take only one step at a time.

But before we can talk about reform, we first must protect what coverage we already have. This includes renewing and expanding the State Children’s Health Insurance Program (S-CHIP) by April 1, 2009 and avoiding reductions in coverage as government threaten cutbacks to vital health programs and services in order to balance budgets.

Finally, we need Congress and the administration to find legislative common ground on a comprehensive framework and implementation timeline, with the opportunity to build out a new health care system over time. And throughout all reform efforts, we must keep our eye on the end goal—ensuring that anyone who needs health care enters a genuine system that is efficient, affordable, and accessible to all, of high quality, with coverage for everyone, and provides a care experience that exceeds their expectations.

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While it may seem that health care reform lies atop the reform agendas of many policymakers, there is no clearly defined consensus about what that reform necessarily entails. In a $2.3 trillion system that encompasses more than one-sixth of the nation’s GDP, there are many likely targets for improvement, if not outright overhaul.

Vern Smith, former longtime Michigan Medicaid Director and state budget guru, tells a wonderful story about a Civil War officer, who upon learning that he has been surrounded on all sides by enemy forces, messages his commanding officer with the positive spin that he now has the advantage of being able to attack in any direction he chooses. The key to his very apt health care analogy is that the general will certainly not be successful by attacking in ALL directions at once. This practicality, along with the unfortunate reality that not all policymakers can agree what needs to be reformed, is the primary reason why incremental reform must be the strategy.

Practically speaking, incremental reform could take several forms. First, in recognition that it is taking care of unfinished business, Congress should reauthorize the State Children’s Health Insurance Program (SCHIP). This innovative state-federal partnership has been a key component of many individual state health reform initiatives, and state policymakers need the reassurance of program stability (both in terms of being fully funded and in ensuring a reauthorization that lasts at least 5 years) in order to continue building on its success. Notably, SCHIP also presents an opportunity to further develop and implement valid pediatric quality measures, align financial incentives for quality care, and promote adoption of health information technology (HIT) for the care of children. Congress came close to reauthorizing SCHIP last year and should make it one of it’s top priorities for the first 100 days of the session.

Beyond SCHIP reauthorization, however, the fiscal realities of 2009 and beyond will not allow for major financial investments aimed solely at expanding coverage. Instead, the focus should turn to other crucial pillars of health care reform: containing costs and improving quality of care delivered. While there is broad agreement that widespread adoption of electronic health records and the increased use of health information exchange can transform our 20th century health care delivery system, this too cannot be done overnight.

A common sense first step would recognize that many states and private entities have already demonstrated the desire and capacity to make the necessary financial and structural investments to adopt basic HIT measures such as e-prescribing, but they are hesitant to roll them out for fear of incompatibility with other systems. The proper role of the federal government (and Medicare in this example) is to adopt a nationwide standard that will allow health plans, hospital systems and other third-party payers to move forward without fear of obsolescence. Far from being a federal takeover, Congress can use Medicare in a targeted way to provide leadership and some level of start-up funding to move the ball forward.

Hand in hand with HIT will come health care quality reforms, and similarly, much work has already been done on “never events,” transparency and other types of reforms. These may require collaboration with, and political buy-in from, physicians—and some up-front capital—to build on the initiatives underway in the states and the private sector. Targeted federal leadership and funding may help us further leverage these efforts in reaching our goal of a more efficient, rational system.

HIT and quality are the skeletal and nervous systems of the health care body. If they are strong, comprehensive reform—including coverage expansion—is more likely to succeed. While the financial crisis and arguments about the direction of major reform will likely prohibit these major reforms for the foreseeable future, the ability to strengthen the core of our system is within our grasp.

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The temptation of the new Congress will be to quickly act to expand the State Children’s Health Insurance Program to children in families with incomes of 300 to 400 percent of poverty, as several experts here have suggested.

While it’s easy to make an emotional argument for that action, it would be wise for members to look at the data and consider whether this is the best investment of scarce taxpayer dollars.

Lisa Dubay, John Holahan, and Allison Cook reported in Health Affairs (November 30, 2006) that “children who are eligible for Medicaid and SCHIP account for 74 percent of all uninsured children. Consequently, increasing participation among those already eligible is a critical mechanism for eradicating uninsurance among children. Another 11 percent of uninsured children live in families with incomes that make the purchase of non-group coverage unaffordable. Children who are ineligible for public programs and who have family incomes above 300 percent of poverty account for only 15 percent of uninsured children.”

Sending states new SCHIP money for children in these higher-income families would give them fewer incentives to find the uninsured children from more modest-income families who already are eligible but, as governors acknowledge, are much harder to enroll.

Further, expanding SCHIP to children in higher-income families, as Congress attempted last year, will likely primarily replace private coverage they already have. Hawaii had a similar experience this year with its Keiki (Child) Care program, finding that 85 percent of the children enrolled in this premium-free program previously had been covered under a private non-profit plan.

Expansion of SCHIP to children in higher-income families who already have private coverage doesn’t seem to be a wise investment when more than 45 million people remain uninsured.

A better alternative would be to provide the resources for uninsured families to get coverage, ideally through refundable tax credits or premium support for private coverage, including policies that may be available to parents at work.

Dubay et al report that, “Noneligible parents with incomes below 300 percent of poverty constitute the bulk of uninsured parents (57 percent).” Targeted subsidies to assist these families in purchasing coverage would provide more incentives for uninsured families to get coverage and would be a better investment in actually covering the uninsured than blanket expansion of SCHIP.

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Health care reform must first and foremost be about improving the health status of individuals. This central objective always seems to get lost in the political debate. We all must put our ideological biases aside and be open-minded to systems, programs, and techniques, be they public or private, that have a demonstrated track record of improving health status, ideally at lower cost – two objectives that are not mutually exclusive.

Promoting better health means thinking much more broadly than what Congress and the new Administration will or will not do. Governors have a very significant role to play, for example. A governor who is serious about positively impacting health status of children, for example, would require physical education in grades K-12 and strip all the junk food out of schools.

Governors can also take an active lead in creating a better market for health insurance as Governor Perdue did in Georgia this year. Governor Jindal in Louisiana is showing real leadership in reforming Medicaid, as is Governor Manchin in West Virginia. Former Governor Jeb Bush and now Governor Crist in Florida both deserve considerable credit for aggressively pushing for more transparency in cost and quality outcomes for health care providers. Governor Pawlenty in Minnesota as well.

Beyond the political arena, there are numerous examples of successful health plans and practices. The consumer-driven employee health plan of Alegent Health Systems in Omaha is showing remarkably better health outcomes at a significantly lower cost trend. Alegent is also a national leader in unilaterally reporting cost and quality outcomes. Intermountain Health in Salt Lake City is one of the best performing hospital systems in America and does so at a much lower average cost. The Dartmouth Health Atlas highlights best practices in Medicare that should illuminate the thinking of every policymaker.

There are two specific areas where both parties should be able to come together in 2009 and beyond. The first is health information technology. Nearly everyone agrees that an all-electronic system would dramatically increase care coordination, reduce medical errors, save lives and save money. This should be a starting point in Washington and every state capital in early 2009.

The second is fraud. Fraud in Medicare and Medicaid alone is well into the tens of billion of dollars annually. Instead of cutting doctor and hospital reimbursements or raising taxes, federal and state officials should aggressively pursue the obscene levels of fraud that simply do not exist in any other industry.

More broadly speaking, health care reform can only be incremental. We learned from the 1993-94 experience that the American people will not support immediate, sweeping, large-scale change on an issue as personal as their health care. It evokes too much fear and is too easily demagogued by opponents. Americans are very open-minded however to migrating toward models of health promotion and delivery that have shown to be effective.

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While I certainly applaud Dr. Reischauer and Dr. Shalala for emphasizing the importance of moving forward on implementing health IT, improving quality, and cracking down on fraud – all of which are top health care objectives of the business community – I think we might have some better options for initially expanding coverage.

Census Bureau data suggests that about 14 million people who are currently uninsured, are already eligible for government programs like SCHIP, Medicaid, and Medicare. Before we expand those programs, shouldn’t we make sure they get out there and sign up the people who should already be participating?

We also know that a huge portion of the uninsured work for small businesses. It’s true that with the economic downturn and the pay-as-you-go rules in Congress, expensive proposals with tax credits and the like will probably be untenable. But there is a bipartisan piece of legislation – S. 2818, the Small Business Health Plans Act – that actuaries estimated could reduce health insurance costs for small business by 12 percent, and lower the number of uninsured by 8 percent. And what would this legislation cost? Actually, the CBO estimated that it would reduce Medicaid costs by $1.8 billion over ten years.

If we could fix the problem for small business, and enroll those eligible for government programs (thus drastically reducing the number of uninsured, and enabling us to move the dialogue away from its almost exclusive focus on coverage), we could start discussing ways to improve the quality of health care, and lower the costs. Both Barack Obama and John McCain support lowering medical liability costs. Both support exploring ways to emphasize prevention and wellness. Both believe consumers should have more information about their providers, hospitals, and the costs of care.

The state of the economy right now has effectively wind-sheared the momentum of health reform. If we want to revive that momentum, we should begin with consensus issues, low-cost and free legislative changes, and building on the successes of the current system. Proposals that threaten the current system, require large new infusions of money, or invoke new mandates and requirements on plan sponsors, are likely to take us nowhere fast.

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I agree with Bob R. I would add some other initiatives. First, the Secretary ought to review what can be done without legislation--IT reforms, waivers to expand coverage to children and their working parents, simplifying the current payments and coverage decisions, a dramatic ramping up of fraud investigations with the IG, FBI and Justice. Second, getting consensus with Congress on the format for major reform--and how to phase it in and implement it and the costs associated with that reform is also worth doing. We know alot about implementing reform when legislation is passed but having a grand vision and phasing it in is not what govt has much experience at--or the discipline.

A sequenced strategy for health reform makes sense given economic and budgetary concerns, the need to learn from innovations, and the time required to develop new administrative structures. By sequencing the changes, provisions that "bend the curve" in health spending would have a chance to generate savings to the health system and the federal budget. Expansions of coverage could start with populations in the greatest need and/or that would have the highest return in terms of improved health.

Building blocks for reform could be included in a single legislative package that authorizes the flexible roll out of reforms over a six-to-eight year period. This has the advantage of ensuring savings from health reform are dedicated to coverage expansions, that sufficient planning is given to implementation of more complex provisions, and that politically popular as well as difficult reforms are considered in their totality and early on, when a new Administration and Congress have the requisite political capital.

A first phase could include reforms that improve the effectiveness and efficiency of health care, such as the implementation of health information technology and the establishment of a center for comparative effectiveness to improve decision-making. This phase could also expand the State Children's Health Insurance Program to cover low-income children and low-income adults, perhaps phased gradually by income level. Consideration could also be given to phasing out the two-year waiting period for coverage of the disabled under Medicare. These population groups would especially benefit from improved access to care and removing the financial burdens of medical bills. Administrative structures are already in place to handle the expansion of coverage.

Phase two could establish an independent Medicare health board that--under broad Congressional guidelines such as multi-year spending targets per Medicare beneficiary--could have the authority to make Medicare payment and coverage changes. This board could test new payment methods that hold provider organizations accountable for results and prudent use of resources--this could be accomplished, in part, through testing fundamental payment reform such as bundled payment for acute and chronic care. The board should have the flexibility to spread promising policies more broadly as experience is gained and to collaborate with Medicaid agencies and private payers to achieve greater synergy and eliminate administrative burdens. The board could also use Medicare's purchasing leverage to reduce costs by negotiating for lower prices for prescription drugs, durable medical equipment, and specialty services.

The third phase could establish the administrative mechanisms that would be required to ensure affordable health insurance for all--such as a national insurance exchange through which small employers and individuals could purchase coverage. Such an exchange could also lower private insurance administrative costs by ensuring direct competition between a public plan option modeled on Medicare and private plans. Automatic enrollment and provision of income-related premium assistance through the income tax system would also require implementation planning and cross-agency collaboration.

The final, fourth phase could provide premium assistance based on income for purchase of coverage. It could also require shared financial responsibility for financing coverage--with contributions from federal and state government, employers, and households.

Such a sequenced approach to health reform could put the U.S. on a firm path to a high performance health system, yielding better access to care, improved quality, and greater efficiency. If carefully planned, it provides opportunities to learn at each step from best practices and working solutions, rapidly spreading innovations that work and making any adjustments required to ensure a workable, effective, and affordable system of health insurance for all.

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If incremental reform means anything, it means getting rid of all the perverse incentives created by unwise policies -- one by one.

That means: making portable insurance just as attractive under the tax law as employer-specific insurance, making individual self insurance (through a saving account) just as attractive under the tax law as third party insurance, making private insurance just as attractive as Medicaid and SCHIP, and (on the supply side) allowing providers to repackage and reprice any and all of their services so long as the cost to government does not increase and quality does not decrease.

What we should not do: create more perverse incentives by the expansion of SCHIP, as Bob Reischauer and Dave Kandall are proposing.

In debating the pace of reform, we need to avoid an unproductive choice between high stakes comprehensive reform and aimless incrementalism. Instead we need a series of confidence building steps that can solidify a national consensus on the goal of reform. The goal I'd suggest is a fair and efficient system of health care coverage that joins individual choice of insurance with a public commitment to ensure that everyone has access to high quality health care.

The following three measures that Congress could enact in 2009 would set a clear course for reform while recognizing the fiscal constraints posed by a weak economy.

1.) A downpayment on reform to cover all children. As Sen. Obama has proposed, all children should have health care coverage just as all children should have an education. The fiscal cost of doing so is roughly the same as the cost of the SCHIP expansion that Congress passed this last year and President Bush vetoed. Congress could finance the expansion through Medicare changes. It should also add a requirement that parents attain coverage for their children or face the loss of personal income tax exemption for the children. That would force a productive debate about how to enroll children in programs or job-based coverage for which they are now eligible. Such a measure by itself would cover two-thirds of the nation’s uninsured children.

2.) Coverage for uninsured adults financed by eliminating wasteful medical care. Estimates of waste in health care far exceed estimates of covering the uninsured. Integrated care organizations like the Mayo Clinic and Intermountain Healthcare can deliver high value care at lower costs, but the federal government cannot simply dictate that all doctors practice medicine in integrated groups. Coalitions of public and private purchasers should reform payments systems to encourage high value care delivery and individuals should have the opportunity to choose such care. The federal government would track the savings from such efforts and credit them toward covering uninsured adults. As we know from past legislation on the prescription drug benefit and the 1994 debate, the Congressional Budget Office will likely underestimate the potential savings from market changes. Congress should create a new way to deploy savings as they are realized.

3.) Mandates if free riders continue to be a drag on health insurance markets. People who choose to go without insurance even when they can afford it impose costs on everyone else. But Washington can’t mandate that all adults have coverage unless coverage is affordable. States like Massachusetts that are further along towards affordable coverage for all should move forward with a mandate on free riders to determine how effective and important they. That experience will tell us if it makes sense for Congress to make it the law of the land as part of follow-up legislation.

Clearly, these steps raise as many questions as they answer, but the details shouldn’t obscure the need to set a course for reform and push for as much progress as possible.

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The prospects for enacting fundamental health reform in 2009 grow dimmer by the day. Next year, policymakers’ attention will be focused on reviving the economy, resuscitating the financial services sector, and helping struggling homeowners keep a roof over their heads not to mention extricating our military from Iraq. With the federal deficit exploding, there will be little enthusiasm for large scale reforms which, at least during the first few years, will cost tens if not hundreds of billion of dollars. And in uncertain economic times, a growing number of those who already enjoy the security of health insurance will become increasingly hesitant to tamper with the existing system.

Notwithstanding the inhospitable climate for fundamental reform, health should not drop of the list of priorities for 2009. We should adopt measures that will help build the foundation upon which a reformed system can be constructed in a few years, evaluate through demonstrations the effectiveness of some of the untested components of reform, enact patches to the existing system that moderate the impact of the current economic down turn, and develop detailed implementation plans for the leading future fundamental reform options.

The first category of this incremental agenda should include an all out effort to promulgate uniform national IT standards and encourage the adoption and use of EHRs. Medicare should establish IT functionality requirements as conditions of participation. Modest and temporary financial inducements should be offered to certain types of providers. In addition, a major comparative effectiveness organization should be established. An accelerated and coordinated national initiative to develop measures of quality, outcomes, and relative performance should also be mounted. Medicare should begin to disseminate this information and use it modify payments made to certain types of providers.

The second category might encompass demonstrations of bundled episode-based payment schemes, a demonstration in several states of different structures for insurance exchanges, and grants to selected states that would like to experiment with new variants of high risk pools and reinsurance.

An expansion of SCHIP along the lines approved by Congress in 2008 should be the core element in the third group. In addition, states that agree not to scale back Medicaid eligibility should be given enhanced matching rates the generosity of which should vary with the each state’s economic weakness.

Finally, a significant investment should be made in planning how fundamental reform might be implemented. While complex, designing new systems is relatively easy when compared to figuring out how we get from where we are today to that wonderful new system. In a fiscally constrained environment there will be less opportunity to overcome the challenges of implementation by throwing money at them.

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