Massachusetts sees RED

Looks like the Republican candidate to fill the late Sen. Edward Kennedy's seat will beat his Democratic opponent, the attorney general of Massachusetts . With 23% of precincts reporting (as of this writing), Republican Scott Brown was leading Democrat Martha Coakley by 53% to 46%. Brown ran on an anti-health care reform bill platform. He plans to be the 41st Nay vote, which will probably kill the bill that eventually comes out of conference committee, because the Democrats won't be able to end a Republican filibuster.

How ironic that the death of Ted Kennedy, the foremost crusader for universal health care, triggered the turn of events that will probably kill any chance of health care reform in this Congress.

The Democratic leadership must now decide if they are willing to moderate their plan enough to make it palatable to more moderate Republicans in the event a compromise can be reached. Word from Nancy Pelosi's office is that the House Democratic leadership is not willing to compromise that much. So my prediction is that health care reform will be ambushed from both sides (liberal Democrats and Republicans) and will fail to pass in this session of Congress.

That's too bad, because even the worst possible iteration of the proposed reform plan was better than the status quo. And if Congress fails to pass legislation, there will be no real incentive within industry to generate these reforms on their own. At least, not quickly enough to save the broken health care system.

Here are some of the things I would like to see in the final compromise bill, if it had a snowball's chance of passing:

• the Public Option. I know this is one of the most unpopular elements; however, a public plan managed by the Office of Personnel Management (the OPM, which manages the federal government's "Cadillac" health plan), with prices negotiated with providers, rather than set by legislative fiat, although more expensive in the short run than expanding Medicare and Medicaid, would be sustainable in the long run. Expanding the current government programs will just increase the burden on providers to care for even more patients at a net financial loss, which will drive providers out of the CMS programs in droves.
• a 15% tax on Cadillac health plans - including collective-bargained union plans (why should unions be exempt?). A 40% tax is repressive and counterproductive. A lower tax would generate revenue without driving generous health care plans to extinction.
• increase the Medicare tax cap on individuals earning more than $500,000 a year, or couples earning more than $1 million a year.
• Increase Medicaid coverage to persons earning at or below 133% of Federal Poverty Level (150% is unsustainably high).
• Allow health insurance companies to offer plans across state lines (this will allow them to increase their risk pools and consequently hold down prices).
• Regulate individual plans to require a minimum level of value (i.e., out of pocket caps; more generous coverage limits; limited gaps in coverage).
• Disallow exclusions and premium increases for pre-existing conditions.
• Put much more emphasis on reform of health care delivery, as opposed to just health care financing. For instance, expand the demonstration projects on accountable care organizations, medical homes, regional health information repositories - programs that will reduce waste and duplication, reward providers for quality and wellness/prevention gains, and penalize them for overutilization and sub-standard practices.
• Finally, we waste more money in the billing/collection/denial/appeal game. It is estimated that about 24 cents of every health care dollar is spent on back-end paper-shuffling. So standardize electronic data interchange and claims payments. Make hospital set real prices, as opposed to wildly inflated "monopoly money" pricing. Make payers, in turn, cover a larger percentage of charges and limit their loopholes for withholding or denying payment.

The success of the health care reform movement is in grave jeopardy. If it fails, it will be up to us in the industry to make incremental gains in quality and cost-effectiveness. We've already proven incapable or unwilling. God help you if Congress fails.