July 2009 Archives

Updated at 9:07 a.m. on July 27.

This weekend, the Congressional Budget Office analyzed options for giving the president broad authority to make Medicare changes that would be based on recommendations from an advisory council and subject to congressional disapproval. The analysis came at the request of House Majority Leader Steny Hoyer, D-Md.

CBO reviewed draft legislation transmitted last week to Congress by the administration on July 17, and estimated that it would yield savings of $2 billion over 10 years, with all of the savings realized in fiscal 2016 through 2019, if the proposal was added to the House health reform bill.

Although the Medicare Payment Advisory Commission currently advises Congress on Medicare payment policy, Congress must now legislate any changes.

House Energy and Commerce Chairman Henry Waxman, D-Calif., and the Blue Dog Coalition last week agreed to create an independent advisory council as part of health reform to set Medicare rates, relinquishing Congress' power to make the decision. CBO has said that such an entity would be one way to contain Medicare's costs, and Obama has pushed for this approach.

Will Congress ever really be willing to relinquish power about Medicare payment decisions, or will it be tempted to micro-manage? What are the benefits and dangers in these options? What is the likely impact on health care costs?

5 responses: Kenneth E. Thorpe, Karen Davis, Uwe Reinhardt, John C. Goodman, Gail Wilensky

Editor's Note: This week, Rep. Jim Cooper, D-Tenn., is providing the question.

So, what do you think of Congressional Budget Office Director Doug Elmendorf after his testimony last week that the health care reform bills emerging from Congress would raise the cost of health care even higher than it is likely to be already? In Washington jargon, he said these bills would bend the cost curves in the wrong direction.

Pick one or more:
• Hero?
• Spoiler?
• Irrelevant?

Your answer depends on what you think the goal of health care reform is. If this is a weight-reduction contest like "America's Biggest Loser," then it is embarrassing that all the bills, so far, gain weight. So Elmendorf is a hero for speaking truth to power.

But if you think that the goal is to get re-elected without alienating too many of your health care providers back home, then spending more money than CBO likes is not a big deal. Under this view, Elmendorf is a party-pooper.

Unfortunately, Elmendorf's testimony is likely to be much less relevant than it should be, regardless of whether you think he was a hero or a spoiler. True, it excited editorial writers (the few who are left) and policy experts, but Elmendorf just confirmed their suspicions that these bills were budget-busters. Folks back home care less about what CBO thinks than whether they can afford to see the doctor when they need to. And they don't know how pending legislation will affect them, but they are worried.

-- Jim Cooper

15 responses: James P. Gelfand, Henry J. Aaron, Kenneth E. Thorpe, David Nexon, Rep. Jim Cooper, D-Tenn., Gail Wilensky, Marian Wright Edelman, Jack Lewin, Karen Davis, Darrell G. Kirch, Henry Simmons, John C. Goodman, Uwe Reinhardt, Henry J. Aaron, Marilyn Werber Serafini

With industry health care reform deals piling up, what does it all mean when it comes to financing health reform and getting to the finish line?

Hospitals became the latest health care industry this week to commit to health reform savings, joining the pharmaceutical and insurance industries in stepping forward with voluntary concessions. Vice President Joe Biden said hospitals would contribute $155 billion over 10 years in Medicare and Medicaid savings. According to a White House statement, "Hospitals have acknowledged that significant health care savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures."

Does this mean that sufficient savings really are attainable for health reform? Are these industries truly giving up something, or are they "voluntarily" giving up what they are about to lose anyway, in exchange for more business if everyone gets insurance? Do these deals mean that there is excess in these industries that needs to be cut? Should more come from them?

9 responses: Billy Tauzin, Jason Rosenbaum, Rich Umbdenstock, Karen Davis, Darrell G. Kirch, John C. Goodman, Molly E. Sandvig, Kenneth E. Thorpe, David Cutler

What are the best and worst ways to address drug costs as part of health care reform?

The pharmaceutical industry last week agreed to lower costs by $80 billion to help pay for health care reform and to narrow the Medicare Part D "doughnut hole," the gap in coverage during which seniors and the disabled must pay the total cost of their drugs. Is the $80 billion enough?

Sen. Olympia Snowe, R-Maine, called it "a modest percentage of the over $220 billion in annual spending on prescription drugs in the U.S." and said health reform could substantially increase drug sales. Snowe and Sen. Byron Dorgan, D-N.D., have pushed for legislation to allow Americans to import drugs approved by the Food and Drug Administration from other countries.

Other proposals would require drugmakers to take deeper discounts in sales to Medicaid patients and allow the Health and Human Services secretary to negotiate directly with drugmakers for prices on drugs for Medicare beneficiaries. Many also want to create a pathway at the FDA for the approval of generic biologics.

5 responses: Jane L. Delgado, Jane L. Delgado, Billy Tauzin, John C. Goodman, John Rother