29 October 2009

House Health Care Reform Bill released

You know you're deeply over the line into nerdy obsession when, upon the posting of a 1900-page reform bill, you immediately download it and start skimming the headings.  Fortunately, I didn't have anything else going on today.

The bullet point summary:
  • As widely reported, the "Robust" public option is dead; long live the "Weak" public option!  Enough House moderates - citing fiscal conservatism - rejected the cheaper option which would have paid providers at Medicare + 5%, and the bill as released would require the public option to negotiate fee schedules with providers like any other insurance company. IMHO, this is better policy even though it costs more, but hypocritical Blue Dogs get under my skin.
  • 96% of legal American residents covered.
  • The bill is Deficit Neutral and actually reduces the deficit by $100 Billion over ten years.
  • Total expenditures are in the region of $900 Billion.
  • Slows the rate of growth of Medicare from 6.6% to 5.3% annually.
  • Expands Medicaid to 150% of federal poverty level (and I didn't find the citation but I read the Feds were going to pay 75% of the costs of the expansion).
  • Financed though savings in Medicare Advantage, taxes on families earning >$1 million, individuals earning more than $500,000, taxes on the insurance industry and medical device makers.
  • The Insurance industry's anti-trust exemption is revoked.
  • Curiously, it allows states to make "insurance compacts" which will allow insurers to market policies across state lines -- a long-time conservative goal.
  • Closes Medicare Part D donut hole
  • All the typical insurance regulations, Insurance Exchanges, etc, with a strong employer mandate (8% of payroll for large companies).

Things of particular interest to me:

  • Sec 1123 states that regions of the country (by county) which are in the top 5% most efficient in delivering care (on a cost per capita basis) will receive a 5% bonus on their medicare payments.   (I'm in one of those areas!  Woo Hoo!)
  • Primary care docs will receive a 5% bonus as well, and a 10% bonus if they are in a primacy care shortage area.
  • Primary care docs providing services to Medicaid patients will be paid at Medicare rates.  This is a huge boost to the primary care infrastructure as regarding access for the poor. 
  • The SGR fix, which drove up the cost of the bill by $240 Billion, has been dropped.  Wonder if the AMA will drop their support.  Pelosi says the SGR will be addressed in a separate vehicle.
  • Death Panels are back!  Sec 1233 authorizes Medicare to pay for a VOLUNTARY consultation on advanced care planning once every five years.  Calling Betsy McCaughey!
  • Sec 1152 includes a "Bundling Pilot Program" in which a single payment would be made to all providers in an acute hospitalization and the post-acute care.  How that gets divided between the docs and hospital will be a feeding frenzy.
  • "Sunshine policy" requiring drug & device manufacturers to disclose all payments to physicians, and hospitals to disclose ownership by physicians.
  • CMS will be granted the authority to revalue codes or families of codes which it finds to be misvalued. I'm not sure what exactly this is targets at but the verbiage implies that there are codes which Medicare feels are being abused by docs and they intend to stop paying them or dramatically reduce the amount they will pay for them.

After I'd already spent an hour combing through the full bill, I found this nice, easily readable 10-page PDF summary on the House Education & Labor Committee web site.

Overall it looks surprisingly good.  Igor over at the Wonk Room has a great summary why conservatives should support this health reform bill, at least if this were a sane political environment.  I agree with it entirely with the exception of the medical malpractice reform provision, which is window dressing only.


  1. Does the House bill take into considerations the SGR provision of Medicare or does it assume Medicare cuts will be vetoed?

    If this bill considers the cost at the Medicare sustainable growth rate then this is most certainly not "deficit neutral" but will cause a HUGE deficit.

  2. No, as I wrote, the SGR fix was dropped -- and thus its costs are not accounted for in the scoring of this particular bill. You are absolutely right that if the democrats want their approach to health care to be deficit neutral then they will need to come up with new revenue or spending offsets for the SGR fix (whether temporary or permanent) when they pass that bill. Either that or let the cuts go through (less likely).

    But the CBO score of this bill is deficit neutral (actually deficit reducing)

  3. "the bill as released would require the public option to negotiate fee schedules with providers like any other insurance company."

    If so, why do we need an SGR fix?

  4. Yes, stuffing more people and money into the existing system is going to work.

    No price transparency, no effective mechanisms for increased competition, no meaningful change in the incentives that drive utilization, and no tort reform.

    Behold, the "Interest-Only Pay-Option ARM" of health-care reform.


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