From the Founder: Public Options, Co-Ops & Other Excuses for Real Reform
The healthcare reform effort is at a pivotal moment: just before the August break, the House Energy and Commerce Committee passed their version of the healthcare reform bill (HR3200), a crucial milestone to all this becoming law. Today, much of the public debate is around the impact that creating an insurance alternative through “co-ops” or a “public option” could have in reducing costs. Listening to the bill’s proponents, having this alternative would seem to be the best of both worlds. Create a low cost alternative to put pressure on private insurance companies, while allowing those people who have insurance to keep it.
Too bad it is pure fiction. The actual cost savings will come from further reductions in physician compensation. Here is why:
Calling the public plan an “option” is dressing up a wolf in sheeps’ clothing. The current reform won’t work if the public option is an option. The Congressional Budget Office (CBO) has already said that HR 3200 as proposed doesn’t save money or address healthcare inflation unless the entire country participates in the plan (click here for link). Looking carefully at the bill, it would seem the authors recognized this too. If you turn to page 16 of the HR 3200, it essentially says that private insurance will be phased out by 2013. So much for optional (click here for link).
The White House initially favored a public health insurance plan that would offer basic as well as premium-plus insurance coverage. This system would be self-sustaining, in other words, fully paid for by the taxpayer patient base but managed by the Department of Health and Human Services (HHS). The charter for the HHS Secretary would be to ensure access to providers, promote affordability and efficient delivery of medical care at rates that will not increase overall medical costs. The CBO report would seem to have ended that rosy picture, leading to the current rhetoric that the public option, failing to create any true cost savings, must in fact be a prelude to socialized medicine.
The latest twist is leaked information from the yet-to-be-seen Senate Finance Committee bill which envisions a hybrid system which includes both a public option and healthcare “co-ops” (click here for link). The co-ops are a cheaper, weaker, state-run version of the “public option”, designed to pool individuals and businesses together to purchase health insurance and services. Still up in the air is what a national co-op would look like. Would it be truly nationwide or would each state have its own? The bill provides remarkably little detail.
As the public furor intensifies and the debate becomes increasingly acrimonious, we as physicians would be well served to recognize that in addition to a complete absence of any true healthcare reform something else is now “missing” in the current version of the bill, the one physician “victory”, repeal of SGR. The Sustainable Growth Rate (SGR) formula, the mechanism by which Medicare (and therefore much of the industry) calculates physician payments has long been a point of contention for physicians. Repeal of the SGR, present in the first version of the bill, was heralded as the AMA’s main victory in the healthcare reform negotiations. However, there is no financial mechanism to pay for the repeal of SGR, making it an unfunded provision in a bill that the President has stipulated must be deficit neutral.
As the CBO revelations have entered the debate, all parties appear to agree that physician compensation will need to be revisited as increasing healthcare costs still need to be addressed. Even Peter Orszag, President Obama’s director of budget said in an interview “The payments to physicians is in the legislation, and that is the only reason that the bill shows a deficit. Once you take that part out, the bill is deficit neutral,” (click here for link). Having failed to effectively advocate for ourselves, physicians have once again found themselves at a disadvantage. To see how all this plays out, we need only look at the recent developments in Massachusetts where a mandate for universal insurance, in the absence of true reform, has led to uncontrolled cost increases. The current solution? Cap physician payments and end fee for service medicine (click here for link).
The much heralded physician “victory”? Looking more like a mirage. There is no commitment to honor the repeal of SGR. Physician compensation will continue to go down.
Still confused? As the ones who are on the front-lines of healthcare every day, physicians know what needs to be done to reform healthcare, perhaps more than anyone else. We also know that issues like malpractice reform, patient responsibility, and reduction in overhead are tough and often politically challenging. That’s why it was so essential for Washington lawmakers to quickly neutralize the physician position by getting the AMA to sign off so quickly. The great irony here is that physicians are too busy…….treating patients to lobby for themselves.
Call it whatever you like, but the issues most important to the physician community and their patients still remain absent from any proposed legislation even as lawmakers say they want meaningful reform. Tell this to any physician and I suspect it’s old news. Poll after poll on Sermo.com has shown that physicians do not believe the current attempts at reform address the real sources of spiraling healthcare costs which they uniquely know so well.
The only thing that can change this balance is for us doctors to start having our voices heard. We need to become active participants in the healthcare reform process.
-Answering the survey questions adds to the growing voice this community has in the healthcare reform debate and will be used in media outreach.
-Our next step will be bringing the policy makers to the Sermo community.
Daniel Palestrant, MD
Founder & CEO
Sermo, Inc.
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