Article reprint from The RPM Report April 21, 2009
The CEO of the managed care industry trade association has a simple formula for health care reform: all stakeholders in the debate should come forward with proposals to trim their own annual growth by at least 1%. Read on..
Article reprint from The RPM Report April 21, 2009
The CEO of the managed care industry trade association has a simple formula for health care reform: all stakeholders in the debate should come forward with proposals to trim their own annual growth by at least 1%.
All health care industry stakeholders should commit to identifying ways to reduce their own annual growth rate by one percentage point to help fund universal coverage, America's Health Insurance Plans CEO Karen Ignagni proposed during a health policy breakfast sponsored by the National Journal March 5.
Ignagni's proposal helps quantify the concept of "shared pain" in health care reform—the notion espoused by many stakeholders that they are willing to work together towards universal coverage provided the burden of cost-cutting is not focused solely on them.
If everyone in the system is willing to "give up one percentage point each of growth" based on current projections, Ignagni said, there would be ample savings to provide universal coverage and "bend the curve" on spending to a sustainable level.
Managed care plans—similar to the pharmaceutical industry—are already facing a clear effort to cut their growth rates to fund reform. President Obama's budget proposal includes a new payment methodology for Medicare Advantage that would dramatically reduce payments to plans in that program. For pharma, the cuts come in the form of enhanced Medicaid rebates and enactment of follow-on biologics.
A key element to the proposal, Ignagni noted, is to have the actual vetting of costs turned over to a new board like the "health care federal reserve" concept discussed by former HHS secretary nominee Tom Daschle and others heading into the reform debate. "We need to change the table," Ignagni said, or else stakeholders will "get into the traditional food fight" over who gets the money.
A health care board would set up "distance from Congress" to help improve the process, she said.
Service Employees International Union President Andy Stern agreed with Ignagni on the importance of setting up a "health care fed" to help create sustainable cost trends over time. "It would be insane" to have Congress "legislate cost-effectiveness" or make coverage determinations "for high-priced biologicals," he said.
Stern and Ignagni also agreed on the potential to tie an individual mandate to a so-called "guaranteed issue" provision in health care reform—meaning that insurers would be required to cover pre-existing conditions and should be willing to do so if everyone is required to buy a policy. As long as coverage is affordable, SEIU will support an individual mandate, Stern said. You "can't have a system unless everyone is part of it."
Where Stern and Ignagni part ways, however, is on the question of whether there must be a public-sector option offered in health reform. For Stern, it is "a must have." Ignagni can't see insurers agreeing "unless the details are something I can't imagine now." Otherwise, it is "a stalking horse for a single-payor government run system."
Utah Republican Sen. Bob Bennett added that a public option is going to trigger strong Republican opposition, at least if it is of the model espoused by Daschle. Liz Fowler, a staffer to Montana Democratic Sen. Max Baucus, noted that a public option is part of the "white paper" released by Baucus on health reform, and described it as "important to some Democrats," reflecting their "mistrust of the private payer system."
That stumbling block aside, the panelists agreed that there would be action on health reform this year. The session closed with a simple question: Will there be a floor vote this year on universal coverage?
Ignagni: "Yes."
Bennett: "Probably"
Fowler: "If I don't say 'yes' it would make me wonder why we're working so hard, so 'Yes.'"
Stern: "Yes.
