LATimes Tim Rutten
Much like the Depression-era demagogue Father Charles Coughlin, the Fox News personality is promoting a mass movement. Should his bosses be pulling the plug?
For nearly a century, the Anti-Defamation League has stared unflinchingly into the dark corners of America's social psyche -- the places where combustible tendencies such as hatred and paranoia pool and, sometimes, burst into flame.
As a Jewish organization, the ADL's first preoccupation naturally is anti-Semitism, but in the last few decades it has extended its scrutiny to the whole range of bigoted malevolence -- white supremacy, the militia movement, neo-nativism and conspiratorial fantasies in all of their improbable permutations. These days, the organization's research is characterized by the sense of proportion and sobriety that long experience brings.
That makes its recent report on the extremist groups and propagandists that have emerged since President Obama's election -- "Rage Grows In America: Anti-Government Conspiracies" -- particularly notable. For the first time in living memory, the ADL is sounding the alarm about a mainstream media personality: Fox News' Glenn Beck, who also hosts a popular radio show.
The report notes that while "other conservative media hosts, such as Rush Limbaugh and Sean Hannity, routinely attack Obama and his administration, typically on partisan grounds, they have usually dismissed or refused to give a platform to the conspiracy theorists and anti-government extremists." By contrast, "Beck and his guests have made a habit of demonizing President Obama and promoting conspiracy theories about his administration. ... Beck has even gone so far as to make comparisons between Hitler and Obama."
What gives all of this nonsense an ominous twist is Beck's announcement that he intends to use his TV and radio shows to promote a mass movement that will involve voter registration drives, training in community organizing and a series of regional conventions that will produce a "100-year plan" for America to be read from the steps of the Lincoln Memorial to a mass rally Aug. 28.
As Beck wrote on his website, "I know that the bipartisan corruption in Washington that has brought us to this brink and it will not be defeated easily. It will require unconventional thinking and a radical plan to restore our nation to the maximum freedoms we were supposed to have been protecting. ... All of the above will culminate in The Plan, a book that will provide specific policies, principles and, most importantly, action steps that each of us can take to play a role in this Refounding."
Hard times predictably throw up their demagogues. Still, even allowing for the frenetic pace of our wired world's 24-hour news cycle, it's remarkable how quickly the arc of Beck's career has come to resemble that of the Great Depression's uber-demagogue, Father Charles Coughlin. In the months after the crash of '29, Coughlin turned what had been a conventionally religious weekly radio broadcast into a platform for championing the downtrodden working man. He was an early supporter of the New Deal, coining the slogan "Roosevelt or Ruin," but quickly turned on the president for a variety of complex ideological and personal reasons. Coughlin flirted with Huey Long, launched an unsuccessful political party, published a popular newspaper, Social Justice, and even inspired and supported a kind of militia, the Christian Front, some of whose members were arrested by the FBI and charged with plotting a fascist coup.
As the 1930s dragged on, Coughlin, a longtime admirer of Francisco Franco, became virulently anti-Semitic, isolationist and pro-German. He also was extraordinarily popular. At their height, his weekly broadcasts attracted more than 40 million listeners. Still, after he lashed out at German Jews in the wake of Kristallnacht, many major urban radio stations dropped his program. Influential American prelates, the Vatican and prominent Catholic New Dealers had worked for some time to persuade Coughlin's superior, the archbishop of Detroit, to silence him. Shortly before the U.S. entered World War II, a new bishop was installed, and Coughlin was ordered to cease broadcasting. He accepted the clerical discipline and retired into a long life of bitter silence.
It's hard to imagine any contemporary cable system dropping Fox News simply because Beck is an offensively dangerous demagogue -- not with his ratings at least. His new foray into politics, though, presents Rupert Murdoch's network with a profound challenge. Is it willing to become the platform for an extremist political campaign, or will it draw a line as even the authoritarian Catholic Church of the 1940s did? CNN recently parted ways with its resident ranter, Lou Dobbs -- who now confirms he's weighing a presidential bid.
Does Fox see a similar problem with Beck -- and, if not, why?
Wednesday, November 25, 2009
White House defends costs
White House defends costs, cuts in health bill
CHARLES BABINGTON Associated Press
The Obama administration pushed back Wednesday against claims that it's not doing enough to slow the growth of health care costs, a topic senators will debate heavily in coming weeks.
White House budget director Peter Orszag cited economists and analysts who say a pending Senate bill would take several steps in that direction. And Orszag left no doubt that the administration supports a provision disliked by many House Democrats, union activists and others: a new tax on generous health insurance plans offered by employers.
A rival health care bill passed by the House would, instead, place a new surtax on millionaires' incomes. Lawmakers must resolve such differences if Congress is to send a bill to President Barack Obama's desk.
Republicans kept up their criticisms Wednesday, saying the Senate bill would reduce the federal deficit only by raising taxes and cutting Medicare.
The goal is to drive down health care costs, not increase them along with taxes, Senate Minority Leader Mitch McConnell, R-Ky., said.
"That's not reform," McConnell said.
In a conference call with reporters, Orszag said such critics are overlooking key provisions in the Senate bill. He cited a recent letter from 23 prominent economists praising four main features:
_ Making the federal deficit level or lower over 10 years.
_ Taxing high-cost, employer-provided insurance plans, which are blamed for overuse of medical care.
_ Creating a commission to recommend ways to control Medicare costs.
_ Taking preliminary steps to encourage more efficient ways to deliver health care.
The Senate bill "includes these four pillars," Orszag said.
Previous efforts by Congress to rein in health care costs have done little. For instance, vows to trim Medicare reimbursements to doctors are routinely overturned.
The same has been true for efforts to stop what many consider government overpayments to Medicare Advantage, a privately administered program.
But "it's going to happen this year," said Obama health adviser Nancy-Ann DeParle, who also was on the conference call.
The nonpartisan Congressional Budget Office says the Senate bill would reduce deficits by $130 billion over the next decade. It would do so partly by raising various taxes and by reducing federal spending on Medicare, Medicaid and other programs by $491 billion over 10 years.
Republicans say such details are lost on many Americans, who might be led to believe the pending legislation would actually reduce overall spending on health care.
"All the Democrats' health care bills will increase costs, slash Medicare and raise taxes," said Antonia Ferrier, spokeswoman for House Republican leader John Boehner of Ohio.
Karen Ignagni, president of America's Health Insurance Plans, also criticized the Democratic proposals. She said the Senate bill would increase costs "by encouraging people to wait until they get sick to get insurance, adding new taxes on health care coverage and failing to include systemwide cost-containment provisions."
Ralph G. Neas, head of the Washington-based National Coalition on Health Care, which comprises unions, business groups, patient groups and others, called the House and Senate bills a good start. But Neas urged lawmakers to toughen the bills by including "a strong fail-safe provision" to ensure that segments of the health industry deliver cost savings they have promised.
CHARLES BABINGTON Associated Press
The Obama administration pushed back Wednesday against claims that it's not doing enough to slow the growth of health care costs, a topic senators will debate heavily in coming weeks.
White House budget director Peter Orszag cited economists and analysts who say a pending Senate bill would take several steps in that direction. And Orszag left no doubt that the administration supports a provision disliked by many House Democrats, union activists and others: a new tax on generous health insurance plans offered by employers.
A rival health care bill passed by the House would, instead, place a new surtax on millionaires' incomes. Lawmakers must resolve such differences if Congress is to send a bill to President Barack Obama's desk.
Republicans kept up their criticisms Wednesday, saying the Senate bill would reduce the federal deficit only by raising taxes and cutting Medicare.
The goal is to drive down health care costs, not increase them along with taxes, Senate Minority Leader Mitch McConnell, R-Ky., said.
"That's not reform," McConnell said.
In a conference call with reporters, Orszag said such critics are overlooking key provisions in the Senate bill. He cited a recent letter from 23 prominent economists praising four main features:
_ Making the federal deficit level or lower over 10 years.
_ Taxing high-cost, employer-provided insurance plans, which are blamed for overuse of medical care.
_ Creating a commission to recommend ways to control Medicare costs.
_ Taking preliminary steps to encourage more efficient ways to deliver health care.
The Senate bill "includes these four pillars," Orszag said.
Previous efforts by Congress to rein in health care costs have done little. For instance, vows to trim Medicare reimbursements to doctors are routinely overturned.
The same has been true for efforts to stop what many consider government overpayments to Medicare Advantage, a privately administered program.
But "it's going to happen this year," said Obama health adviser Nancy-Ann DeParle, who also was on the conference call.
The nonpartisan Congressional Budget Office says the Senate bill would reduce deficits by $130 billion over the next decade. It would do so partly by raising various taxes and by reducing federal spending on Medicare, Medicaid and other programs by $491 billion over 10 years.
Republicans say such details are lost on many Americans, who might be led to believe the pending legislation would actually reduce overall spending on health care.
"All the Democrats' health care bills will increase costs, slash Medicare and raise taxes," said Antonia Ferrier, spokeswoman for House Republican leader John Boehner of Ohio.
Karen Ignagni, president of America's Health Insurance Plans, also criticized the Democratic proposals. She said the Senate bill would increase costs "by encouraging people to wait until they get sick to get insurance, adding new taxes on health care coverage and failing to include systemwide cost-containment provisions."
Ralph G. Neas, head of the Washington-based National Coalition on Health Care, which comprises unions, business groups, patient groups and others, called the House and Senate bills a good start. But Neas urged lawmakers to toughen the bills by including "a strong fail-safe provision" to ensure that segments of the health industry deliver cost savings they have promised.
Hart -- President Barack Obama
Hart --
Tomorrow, Thanksgiving Day, Americans across the country will sit down together, count our blessings, and give thanks for our families and our loved ones.
American families reflect the diversity of this great nation. No two are exactly alike, but there is a common thread they each share.
Our families are bound together through times of joy and times of grief. They shape us, support us, instill the values that guide us as individuals, and make possible all that we achieve.
So tomorrow, I'll be giving thanks for my family -- for all the wisdom, support, and love they have brought into my life.
But tomorrow is also a day to remember those who cannot sit down to break bread with those they love.
The soldier overseas holding down a lonely post and missing his kids. The sailor who left her home to serve a higher calling. The folks who must spend tomorrow apart from their families to work a second job, so they can keep food on the table or send a child to school.
We are grateful beyond words for the service and hard work of so many Americans who make our country great through their sacrifice. And this year, we know that far too many face a daily struggle that puts the comfort and security we all deserve painfully out of reach.
So when we gather tomorrow, let us also use the occasion to renew our commitment to building a more peaceful and prosperous future that every American family can enjoy.
It seems like a lifetime ago that a crowd met on a frigid February morning in Springfield, Illinois to set out on an improbable course to change our nation.
In the years since, Michelle and I have been blessed with the support and friendship of the millions of Americans who have come together to form this ongoing movement for change.
You have been there through victories and setbacks. You have given of yourselves beyond measure. You have enabled all that we have accomplished -- and you have had the courage to dream yet bigger dreams for what we can still achieve.
So in this season of thanks giving, I want to take a moment to express my gratitude to you, and my anticipation of the brighter future we are creating together.
With warmest wishes for a happy holiday season from my family to yours,
President Barack Obama
Tomorrow, Thanksgiving Day, Americans across the country will sit down together, count our blessings, and give thanks for our families and our loved ones.
American families reflect the diversity of this great nation. No two are exactly alike, but there is a common thread they each share.
Our families are bound together through times of joy and times of grief. They shape us, support us, instill the values that guide us as individuals, and make possible all that we achieve.
So tomorrow, I'll be giving thanks for my family -- for all the wisdom, support, and love they have brought into my life.
But tomorrow is also a day to remember those who cannot sit down to break bread with those they love.
The soldier overseas holding down a lonely post and missing his kids. The sailor who left her home to serve a higher calling. The folks who must spend tomorrow apart from their families to work a second job, so they can keep food on the table or send a child to school.
We are grateful beyond words for the service and hard work of so many Americans who make our country great through their sacrifice. And this year, we know that far too many face a daily struggle that puts the comfort and security we all deserve painfully out of reach.
So when we gather tomorrow, let us also use the occasion to renew our commitment to building a more peaceful and prosperous future that every American family can enjoy.
It seems like a lifetime ago that a crowd met on a frigid February morning in Springfield, Illinois to set out on an improbable course to change our nation.
In the years since, Michelle and I have been blessed with the support and friendship of the millions of Americans who have come together to form this ongoing movement for change.
You have been there through victories and setbacks. You have given of yourselves beyond measure. You have enabled all that we have accomplished -- and you have had the courage to dream yet bigger dreams for what we can still achieve.
So in this season of thanks giving, I want to take a moment to express my gratitude to you, and my anticipation of the brighter future we are creating together.
With warmest wishes for a happy holiday season from my family to yours,
President Barack Obama
A Milestone in the Health Care Journey
A Milestone in the Health Care Journey
When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won't succeed unless it "bends the curve" in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.
"I'm sort of a known skeptic on this stuff," Gruber told me. "My summary is it's really hard to figure out how to bend the cost curve, but I can't think of a thing to try that they didn't try. They really make the best effort anyone has ever made. Everything is in here....I can't think of anything I'd do that they are not doing in the bill. You couldn't have done better than they are doing."
Gruber may be especially effusive. But the Senate blueprint, which faces its first votes tonight, also is winning praise from other leading health reformers like Mark McClellan, the former director of the Center for Medicare and Medicaid Services under George W. Bush and Len Nichols, health policy director at the centrist New America Foundation. "The bottom line," Nichols says, "is the legislation is sending a signal that business as usual [in the medical system] is going to end."
Both the Senate bill's priority on controlling long-term health care costs, and its strategy for doing so, represents a validation for Senate Finance Committee chairman Max Baucus (D-MT). When Baucus released his health reform proposal last September, after finally terminating months of fruitless negotiations with committee Republicans, Democratic liberals excoriated his plan as a dead end. And on several important fronts--such as subsidies for the uninsured, the role of a public competitor to private insurance companies, and the contribution required from employers who don't insure their workers--Reid moved his product away from Baucus toward approaches preferred by liberals.
But the Reid bill's fiscal strategy, and its vision of how to "bend the curve," almost completely follows Baucus' path from September. Baucus' bill was the first to establish the principle that Congress could expand coverage while reducing the federal deficit; now that's the standard not only for the Senate but also the House reform legislation. And, perhaps even more importantly, the Reid bill maintains virtually all of Baucus ideas' for shifting the medical payment system away from today's fee-for-service model toward an approach that more closely links compensation for providers to results for patients. In the Reid bill, there is some backtracking from Baucus' most aggressive reform proposals, but not much.
Almost everything Baucus proposed to control long-term costs have survived into the final bill. And, with only a few exceptions, that's just about all the systemic reforms analysts from the center to the left have identified as the most promising strategies for changing the economic incentives in the medical system. (The public competitor to private insurance companies championed by the Left would affect who writes the checks in the medical system, but not what the checks are written to pay for.) Most of the other big ideas for controlling costs (such as medical malpractice reform) tend to draw support primarily among Republicans. And since virtually, if not literally, none of them plan to support the final health care bill under any circumstances, the package isn't likely to reflect much of their thinking.
In their November 17 letter to Obama, the group of economists led by Dr. Alan Garber of Stanford University, identified four pillars of fiscally-responsible health care reform. They maintained that the bill needed to include a tax on high-end "Cadillac" insurance plans; to pursue "aggressive" tests of payment reforms that will "provide incentives for physicians and hospitals to focus on quality" and provide "care that is better coordinated"; and establish an independent Medicare commission that can continuously develop and implement "new efforts to improve quality and contain costs." Finally, they said the Congressional Budget Office "must project the bill to be at least deficit neutral over the 10-year budget window and deficit reducing thereafter."
As OMB Director Peter Orszag noted in an interview, the Reid bill met all those tests. The CBO projected that the bill would reduce the federal deficit by $130 billion over its first decade and by as much as $650 billion in its second. (Conservatives, of course, consider those projections unrealistic, but CBO is the only umpire in the game, and Republicans have been happy to trumpet its analyses critical of the Democratic plans.) "Let's use the metric of that letter," said Orszag, who helped shape the health reform debate for years from his earlier posts at CBO and the Brookings Institution. "Deficit neutral; got that. Deficit-reducing second decade, got that. Excise tax: That was retained. Third is the Medicare commission: has that. Fourth is delivery system reforms, bundling payments, hospital acquired infections, readmission rates. It has that. If you go down the checklist of what they said was necessary for a fiscally responsible bill that will move us towards the health care system of the future, this passes the bar."
McClellan, the former Bush official and current director of the Engleberg Center for Health Care Reform at the Brookings Institution, was one of the economists who signed the November letter. McClellan has some very practical ideas for improving the Reid bill (more on those below), but generally he echoes Orszag's assessment of it. "It has got all four of those elements in it," McClellan said in an interview. "They kept a lot of the key elements of the Finance bill that I like. It would be good if more could be done, but this is the right direction to go."
Reid gave ground on one Baucus proposal that the economists identified as a priority-taxing high-end insurance plans. Like many health reformers, the economists who wrote Obama argue that such a tax "will help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount." Amid intense opposition from unions, Reid raised the thresholds at which family plans would face that excise tax from $21,000 to $23,000. But given all the pressure from labor, the more striking thing may have been that Reid didn't increase the thresholds even more; the CBO calculated the proposal, which the House excluded from its bill, would still raise $35 billion annually by 2019. "They held pretty strong," said one administration health care expert. "It's not like unions haven't been making the case that it shouldn't have been a much higher number."
On delivery reform, Reid stayed even closer to the Baucus blueprint. The Finance bill laid out a series of measures to change the way providers are paid for delivering care to Medicare recipients; the hope was that once Medicare instituted these reforms, private insurers would also adopt many of them. "The goal here is that the things we do in Medicare will translate over into the private sector, and there is quite a bit of historical precedence for that," said one Democratic aide involved in drafting the package.
The Baucus delivery reform ideas revolved around two central aims. One was to reward Medicare providers who deliver care more efficiently and penalize those that don't. The Reid bill upholds the major proposals Baucus offered to advance that goal. For instance, hospitals under current law must report on their performance in treating patients for common conditions like heart problems and pneumonia; under the bill, their Medicare payments, for the first time, would be affected by their ranking on those reports. Hospitals would also be penalized if they readmit too many patients after surgery or allow too many to acquire infections while in the hospital itself. Another provision would begin the process of applying such "value-based purchasing" toward other providers like hospice providers and inpatient rehabilitation facilities.
With physicians, the Reid plan takes a step back from the Finance Committee bill but still a long step beyond current law. The Finance Bill proposed automatic reimbursement reductions for doctors who order up the most care for Medicare recipients with similar medical and demographic characteristics. That was meant to respond to the research showing big disparities in spending on medical services for similarly-situated patients in different communities. But, Democratic sources say, that proposal ran into charges that it would promote rationing-and even function as "a death panel by proxy"-by compelling doctors to arbitrarily reduce care. So the final bill takes a less direct route toward a similar end. It requires Medicare to begin studying the utilization patterns of doctors participating in the program. And then it establishes a "values based payment modifier" that would, in a budget-neutral manner, increase reimbursements for physicians found to deliver high-quality care at lower cost, and reduce them for physicians at the other end of that spectrum. "It will, we believe, have the same net effect [as the original proposal]," said the Democratic aide. "It should change behavior around that threshold."
The other set of Baucus proposals were intended to promote more coordination among providers. These have survived almost verbatim into the final bill. The bill encourages groups of providers to establish doctor-led "accountable care organizations" to more comprehensively manage patients' care by allowing them to share in any savings for Medicare they produce. It also establishes a voluntary national pilot of "bundled" payments that would encourage hospitals, doctors and other providers to work more closely together. Another pilot program would test coordinated home-based care for chronically ill seniors.
Finally, the Reid bill maintains the two powerful institutions the Finance legislation proposed to promote these reforms and develop new ones. The one that's attracted the most attention is an independent "Medicare Advisory Board." Under the Senate bill, that board would be required to offer cost-saving proposals when Medicare spending rises too fast; Congress could not reject its proposals without substituting equivalent savings. Since the board would be prohibited from offering changes that raise taxes or "ration care," and since the legislation initially exempts hospitals from its recommendations, it could choose to promote the sort of payment reforms the bill establishes. (More prosaically it might also clear away some of the expensive coverage mandates that Congress imposes on Medicare under pressure from different elements of the medical industry). Given the limitations imposed on the commission, an equally important means to expand these reforms might be a second institution the legislation creates: a Center for Medicare and Medicaid Innovation in the Health and Human Services Department. Though this center has received much less attention than the Medicare Commission, it could have a comparable effect. It would receive $1 billion annually to test payment reforms; in a little known provision, the bill authorizes the HHS Secretary to implement nationwide, without any congressional action, any reform that department actuaries certify will reduce long-term spending. While the House bill omitted the Medicare Commission (a top priority for Obama) it included the innovation center.
No one can say for certain that these initiatives will improve efficiency enough to slow the growth in health care spending. Some are only pilots; others would affect only a small portion of providers' revenue from Medicare. CBO typically evaluates them skeptically: it generally scores little or no savings from most of them. Former CBO director Robert Reischauer, who signed the November 17 letter, says that's not surprising. "CBO is there to score savings for which we have a high degree of confidence that they will materialize," says Reischauer, now president of the Urban Institute. "There are many promising approaches [in these reform ideas] but you...can't deposit them in the bank." In the long run, Reischauer says, it's likely "that maybe half of them, or a third of them, will prove to be successful. But that would be very important."
While generally supportive of Reid's approach, McClellan, the former Medicare administrator under Bush, offered several specific ideas for strengthening it. He says the Senate should improve the capacity of HHS to more quickly evaluate whether the payment reforms are working, and also to provide data and technical assistance to new physician groups like the accountable care organizations that will be attempting to better coordinate care. "Ideally you'd both be able to tell the organizations involved and Congress what is working or not, and give the organizations the feedback and data they need to know whether they are doing a good job," he says. McClellan also believes that the plan needs sharper sticks-tougher penalties on providers who don't provide efficient and effective care. "There are a lot of carrots and not so many sticks," he maintains. Of course, tougher penalties might provoke more opposition from provider groups like hospitals and physicians now tenuously supporting the legislation.
[[McClellan stands at the forefront of centrist Republican thinking on health. Even the more ideologically conservative health care thinkers to his right generally don't oppose long-term reform ideas like bundling payments (John McCain promoted that during his presidential campaign). But they tend to view them as insufficient or tangential to the real problem. Their view highlights a fundamental difference between the parties' on health care. To save costs, Democrats mostly want to change the incentives for providers. Republicans mostly want to change the incentives for patients by shifting toward a model where insurance covers only catastrophic expenses and people pay for more routine care from tax-favored health savings accounts. In essence, the Republican view is that the best way to hold down long-term costs is to directly expose patients to more of them. Few Democrats accept that logic though and it has little influence on either chamber's legislation.
Another Republican cost-containment priority missing from the bill is meaningful medical malpractice reform. (The bill only encourages states to think about it.) Nichols, of the centrist New America Foundation, would like to see that included as well. Its omission is one reason he says he gives the plan a "b" rather than an "a"; the other is he'd like to see mechanisms to more quickly diffuse into the private insurance system reforms that show promise in Medicare. Democratic sources say a group of centrist Democrats led by Virginia Senator Mark Warner is trying to devise a package designed to do just that, perhaps by expanding the role of the independent Medicare advisory commission.
The attempt in all these ideas to nudge the medical system away from fee-for-service medicine toward an approach that ties compensation more closely to results captures how much the health care debate has shifted toward cost-control. So far, the rise in health care spending has proven almost invulnerable to every previous attempt to tame it, like the managed care revolution in the 1990s. Even if Obama signs into law a final bill embodying all these reform proposals, many skeptics wonder if they can bend, much less break, the seemingly inexorable increase in health care spending. Reischauer understands that skepticism, but isn't able to entirely suppress a kernel of optimism that this latest reform agenda may prove more effective than its predecessors. "One never knows whether we're turning the corner or if this is just playing the same old game for another inning," he says. "But I sense there's something different out there. I think the medical profession and its leaders have read the handwriting on the wall and are trying to evolve." If so, the ideas the Senate will begin voting on tonight could mark a milestone in that journey.
When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won't succeed unless it "bends the curve" in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.
"I'm sort of a known skeptic on this stuff," Gruber told me. "My summary is it's really hard to figure out how to bend the cost curve, but I can't think of a thing to try that they didn't try. They really make the best effort anyone has ever made. Everything is in here....I can't think of anything I'd do that they are not doing in the bill. You couldn't have done better than they are doing."
Gruber may be especially effusive. But the Senate blueprint, which faces its first votes tonight, also is winning praise from other leading health reformers like Mark McClellan, the former director of the Center for Medicare and Medicaid Services under George W. Bush and Len Nichols, health policy director at the centrist New America Foundation. "The bottom line," Nichols says, "is the legislation is sending a signal that business as usual [in the medical system] is going to end."
Both the Senate bill's priority on controlling long-term health care costs, and its strategy for doing so, represents a validation for Senate Finance Committee chairman Max Baucus (D-MT). When Baucus released his health reform proposal last September, after finally terminating months of fruitless negotiations with committee Republicans, Democratic liberals excoriated his plan as a dead end. And on several important fronts--such as subsidies for the uninsured, the role of a public competitor to private insurance companies, and the contribution required from employers who don't insure their workers--Reid moved his product away from Baucus toward approaches preferred by liberals.
But the Reid bill's fiscal strategy, and its vision of how to "bend the curve," almost completely follows Baucus' path from September. Baucus' bill was the first to establish the principle that Congress could expand coverage while reducing the federal deficit; now that's the standard not only for the Senate but also the House reform legislation. And, perhaps even more importantly, the Reid bill maintains virtually all of Baucus ideas' for shifting the medical payment system away from today's fee-for-service model toward an approach that more closely links compensation for providers to results for patients. In the Reid bill, there is some backtracking from Baucus' most aggressive reform proposals, but not much.
Almost everything Baucus proposed to control long-term costs have survived into the final bill. And, with only a few exceptions, that's just about all the systemic reforms analysts from the center to the left have identified as the most promising strategies for changing the economic incentives in the medical system. (The public competitor to private insurance companies championed by the Left would affect who writes the checks in the medical system, but not what the checks are written to pay for.) Most of the other big ideas for controlling costs (such as medical malpractice reform) tend to draw support primarily among Republicans. And since virtually, if not literally, none of them plan to support the final health care bill under any circumstances, the package isn't likely to reflect much of their thinking.
In their November 17 letter to Obama, the group of economists led by Dr. Alan Garber of Stanford University, identified four pillars of fiscally-responsible health care reform. They maintained that the bill needed to include a tax on high-end "Cadillac" insurance plans; to pursue "aggressive" tests of payment reforms that will "provide incentives for physicians and hospitals to focus on quality" and provide "care that is better coordinated"; and establish an independent Medicare commission that can continuously develop and implement "new efforts to improve quality and contain costs." Finally, they said the Congressional Budget Office "must project the bill to be at least deficit neutral over the 10-year budget window and deficit reducing thereafter."
As OMB Director Peter Orszag noted in an interview, the Reid bill met all those tests. The CBO projected that the bill would reduce the federal deficit by $130 billion over its first decade and by as much as $650 billion in its second. (Conservatives, of course, consider those projections unrealistic, but CBO is the only umpire in the game, and Republicans have been happy to trumpet its analyses critical of the Democratic plans.) "Let's use the metric of that letter," said Orszag, who helped shape the health reform debate for years from his earlier posts at CBO and the Brookings Institution. "Deficit neutral; got that. Deficit-reducing second decade, got that. Excise tax: That was retained. Third is the Medicare commission: has that. Fourth is delivery system reforms, bundling payments, hospital acquired infections, readmission rates. It has that. If you go down the checklist of what they said was necessary for a fiscally responsible bill that will move us towards the health care system of the future, this passes the bar."
McClellan, the former Bush official and current director of the Engleberg Center for Health Care Reform at the Brookings Institution, was one of the economists who signed the November letter. McClellan has some very practical ideas for improving the Reid bill (more on those below), but generally he echoes Orszag's assessment of it. "It has got all four of those elements in it," McClellan said in an interview. "They kept a lot of the key elements of the Finance bill that I like. It would be good if more could be done, but this is the right direction to go."
Reid gave ground on one Baucus proposal that the economists identified as a priority-taxing high-end insurance plans. Like many health reformers, the economists who wrote Obama argue that such a tax "will help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount." Amid intense opposition from unions, Reid raised the thresholds at which family plans would face that excise tax from $21,000 to $23,000. But given all the pressure from labor, the more striking thing may have been that Reid didn't increase the thresholds even more; the CBO calculated the proposal, which the House excluded from its bill, would still raise $35 billion annually by 2019. "They held pretty strong," said one administration health care expert. "It's not like unions haven't been making the case that it shouldn't have been a much higher number."
On delivery reform, Reid stayed even closer to the Baucus blueprint. The Finance bill laid out a series of measures to change the way providers are paid for delivering care to Medicare recipients; the hope was that once Medicare instituted these reforms, private insurers would also adopt many of them. "The goal here is that the things we do in Medicare will translate over into the private sector, and there is quite a bit of historical precedence for that," said one Democratic aide involved in drafting the package.
The Baucus delivery reform ideas revolved around two central aims. One was to reward Medicare providers who deliver care more efficiently and penalize those that don't. The Reid bill upholds the major proposals Baucus offered to advance that goal. For instance, hospitals under current law must report on their performance in treating patients for common conditions like heart problems and pneumonia; under the bill, their Medicare payments, for the first time, would be affected by their ranking on those reports. Hospitals would also be penalized if they readmit too many patients after surgery or allow too many to acquire infections while in the hospital itself. Another provision would begin the process of applying such "value-based purchasing" toward other providers like hospice providers and inpatient rehabilitation facilities.
With physicians, the Reid plan takes a step back from the Finance Committee bill but still a long step beyond current law. The Finance Bill proposed automatic reimbursement reductions for doctors who order up the most care for Medicare recipients with similar medical and demographic characteristics. That was meant to respond to the research showing big disparities in spending on medical services for similarly-situated patients in different communities. But, Democratic sources say, that proposal ran into charges that it would promote rationing-and even function as "a death panel by proxy"-by compelling doctors to arbitrarily reduce care. So the final bill takes a less direct route toward a similar end. It requires Medicare to begin studying the utilization patterns of doctors participating in the program. And then it establishes a "values based payment modifier" that would, in a budget-neutral manner, increase reimbursements for physicians found to deliver high-quality care at lower cost, and reduce them for physicians at the other end of that spectrum. "It will, we believe, have the same net effect [as the original proposal]," said the Democratic aide. "It should change behavior around that threshold."
The other set of Baucus proposals were intended to promote more coordination among providers. These have survived almost verbatim into the final bill. The bill encourages groups of providers to establish doctor-led "accountable care organizations" to more comprehensively manage patients' care by allowing them to share in any savings for Medicare they produce. It also establishes a voluntary national pilot of "bundled" payments that would encourage hospitals, doctors and other providers to work more closely together. Another pilot program would test coordinated home-based care for chronically ill seniors.
Finally, the Reid bill maintains the two powerful institutions the Finance legislation proposed to promote these reforms and develop new ones. The one that's attracted the most attention is an independent "Medicare Advisory Board." Under the Senate bill, that board would be required to offer cost-saving proposals when Medicare spending rises too fast; Congress could not reject its proposals without substituting equivalent savings. Since the board would be prohibited from offering changes that raise taxes or "ration care," and since the legislation initially exempts hospitals from its recommendations, it could choose to promote the sort of payment reforms the bill establishes. (More prosaically it might also clear away some of the expensive coverage mandates that Congress imposes on Medicare under pressure from different elements of the medical industry). Given the limitations imposed on the commission, an equally important means to expand these reforms might be a second institution the legislation creates: a Center for Medicare and Medicaid Innovation in the Health and Human Services Department. Though this center has received much less attention than the Medicare Commission, it could have a comparable effect. It would receive $1 billion annually to test payment reforms; in a little known provision, the bill authorizes the HHS Secretary to implement nationwide, without any congressional action, any reform that department actuaries certify will reduce long-term spending. While the House bill omitted the Medicare Commission (a top priority for Obama) it included the innovation center.
No one can say for certain that these initiatives will improve efficiency enough to slow the growth in health care spending. Some are only pilots; others would affect only a small portion of providers' revenue from Medicare. CBO typically evaluates them skeptically: it generally scores little or no savings from most of them. Former CBO director Robert Reischauer, who signed the November 17 letter, says that's not surprising. "CBO is there to score savings for which we have a high degree of confidence that they will materialize," says Reischauer, now president of the Urban Institute. "There are many promising approaches [in these reform ideas] but you...can't deposit them in the bank." In the long run, Reischauer says, it's likely "that maybe half of them, or a third of them, will prove to be successful. But that would be very important."
While generally supportive of Reid's approach, McClellan, the former Medicare administrator under Bush, offered several specific ideas for strengthening it. He says the Senate should improve the capacity of HHS to more quickly evaluate whether the payment reforms are working, and also to provide data and technical assistance to new physician groups like the accountable care organizations that will be attempting to better coordinate care. "Ideally you'd both be able to tell the organizations involved and Congress what is working or not, and give the organizations the feedback and data they need to know whether they are doing a good job," he says. McClellan also believes that the plan needs sharper sticks-tougher penalties on providers who don't provide efficient and effective care. "There are a lot of carrots and not so many sticks," he maintains. Of course, tougher penalties might provoke more opposition from provider groups like hospitals and physicians now tenuously supporting the legislation.
[[McClellan stands at the forefront of centrist Republican thinking on health. Even the more ideologically conservative health care thinkers to his right generally don't oppose long-term reform ideas like bundling payments (John McCain promoted that during his presidential campaign). But they tend to view them as insufficient or tangential to the real problem. Their view highlights a fundamental difference between the parties' on health care. To save costs, Democrats mostly want to change the incentives for providers. Republicans mostly want to change the incentives for patients by shifting toward a model where insurance covers only catastrophic expenses and people pay for more routine care from tax-favored health savings accounts. In essence, the Republican view is that the best way to hold down long-term costs is to directly expose patients to more of them. Few Democrats accept that logic though and it has little influence on either chamber's legislation.
Another Republican cost-containment priority missing from the bill is meaningful medical malpractice reform. (The bill only encourages states to think about it.) Nichols, of the centrist New America Foundation, would like to see that included as well. Its omission is one reason he says he gives the plan a "b" rather than an "a"; the other is he'd like to see mechanisms to more quickly diffuse into the private insurance system reforms that show promise in Medicare. Democratic sources say a group of centrist Democrats led by Virginia Senator Mark Warner is trying to devise a package designed to do just that, perhaps by expanding the role of the independent Medicare advisory commission.
The attempt in all these ideas to nudge the medical system away from fee-for-service medicine toward an approach that ties compensation more closely to results captures how much the health care debate has shifted toward cost-control. So far, the rise in health care spending has proven almost invulnerable to every previous attempt to tame it, like the managed care revolution in the 1990s. Even if Obama signs into law a final bill embodying all these reform proposals, many skeptics wonder if they can bend, much less break, the seemingly inexorable increase in health care spending. Reischauer understands that skepticism, but isn't able to entirely suppress a kernel of optimism that this latest reform agenda may prove more effective than its predecessors. "One never knows whether we're turning the corner or if this is just playing the same old game for another inning," he says. "But I sense there's something different out there. I think the medical profession and its leaders have read the handwriting on the wall and are trying to evolve." If so, the ideas the Senate will begin voting on tonight could mark a milestone in that journey.
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