The Senate Finance Committee's Bipartisan (Gang) of Six Framwork for Reform: Complicated is Only the Beginning

The Disease Management Care Blog had a chance to look over the Senate Finance Committee ‘Bipartisan Six’s’ ‘framework’ for comprehensive healthcare reform. Recall this is the one Congressional Committee that has a reputation for bipartisan compromise and is the missing link in crafting a bill that will ultimately make it to the President's desk.

The 18 pages do not make for easy reading and builds on the array of federal programs, regulations, financing, incentives and tax code that are already intercalated in our national health care quilt. If reform advocates are looking for the breakthough-remake that simplifies access for our soccer moms, NASCAR men and the Millennials, they'll be disappointed. The framework is a thicket of current public program eligibility standards, income thresholds, tax credits, premium credits, cost sharing and penalties that are ultimately designed to ‘path’ consumers into doing the right thing. Since the combinations and permutations are so complex, the DMCB doubts any actuary will be able to project costs or savings, especially since the knobs and dials known and unknown are going to be legislatively` twiddled. While the DMCB has an abiding respect for economists, actuaries and oracles, it predicts their soothsaying will mimic that of a near-sighted and over-cautious radiologist’s interpretation of a fuzzy total body CAT scan: caveats and assumptions based on invisible electromagnetic shadows assembled in a very dark room. Accept it at your peril.

What does the framework have to say about wellness and prevention? Medicare will ‘cover’ health risk assessments and the creation of an individualized health improvement plan. Medicare’s cost sharing’ would be removed when it comes to the relatively conservative U.S. Preventive Health Services Task Force recommendations. A ‘five year initiative to explore consumer incentives’ would be launched. In Medicaid, States would also receive a variety of carrots and sticks to reduce consumer cost sharing and enhance incentives. Unlike Medicare, Medicaid programs would also be encouraged to develop a new ‘state plan option’ based on the Medical Home.

There are also provisions for creation of a Federal ‘national quality strategy,’ accountable care organizations (with upside gain shares), a $10 billion CMS ‘innovation center’ (to test new payment models), ‘pilots’ for payment bundling and penalties for readmissions and hospital acquired infections.

There was no specific mention of any promotion or support of other population-based care management programs. However, the DMCB thinks there are myriad opportunities for the industry. As the detail evolves, it will learn more.

And a few interesting nuggets:

Wonder why the American Medical Association leadership is gritting its teeth and not opposing huge increases in the Federal government’s role in medicine? It comes down to one sentence in the framework that is remarkable for its unusual clarity: ‘The scheduled 21% reduction in Medicare physician payment rates would be replaced with a 0.5% increase.’ The DMCB guesses that an average doc’s patient population is 50% Medicare. Even though Medicare is not necessarily the best payer, a back-of-the-envelope guesstimate is that this is all about the threat of a 10% pay cut.

And speaking of CAT scans, Houston, we have a problem with what the framework refers to as 'high cost imaging.' These include those very pricey MRIs and other remunerative pictures beloved by patients and physicians alike. Buried in the language on ‘Physician Value-Based Purchasing’ is the ‘requirement’ of establishing ‘incentives’ for physicians to ‘appropriately order’ high cost imaging with ‘feedback' and ‘penalizing physicians who use significantly more resources than their peers.' Care to guess if the 'incentives' will be positive or negative, how ‘appropriately’ will be defined and whether ‘significantly’ will be based on clinical, statistical or financial methodologies?

The DMCB pays over $1200 a month for its community rated (read no underwriting) health insurance. This is hardly a rich plan ($50 co-pays) and the DMCB knows for a fact that the insurer is not raking in lots of dough. If the DMCB is reading this right, the framework would tax premiums over $8000 for a single person and $21,000 for family, presumably to incent the choice of more modest plans and, more importantly, help pay for Obamacare. Yet, depending on how well its accountant gets up to speed on the thicket mentioned above, the DMCB’s small business could ironically end up paying more once the health reform dust settles. So why is this good?