The real story now on healthcare reform is not the partisan bickering, which tends to dominate the news coverage, but something more cerebral: the tension between President Obama's call for action and many lawmakers' concerns that they have yet to find a winning policy formula for reform.
In his prime-time news conference last Wednesday, Obama laid out some absolutes. "The bill I sign must slow the growth of healthcare costs," he said, noting that Democrats had come up with proposals that would "change incentives so that doctors and nurses are free to give patients the best care, just not the most expensive care."
But that's only part of the story. Inside Congress and the White House, many are in fact still grappling with doubts about the strength of these and other proposals. As of last week, the White House Council of Economic Advisers wascalling up policy experts to get their take on potential ideas, and senators are saying they need more time. So it was no big surprise when Senate Majority Leader Harry Reid decided last week that the Senate would not begin debating a bill until September, thereby conceding Obama's August deadline would not be met.
Though much has been written on the labyrinthine subject of healthcare policy, there are still many unknowns, and it is partly these unknowns that are giving policymakers pause. As Democrats craft their bills, they are eyeing ideas being developed and tested in hospitals and physicians' offices around the country, and they are trying to figure out not only if these creative approaches to medicine work but also their potential savings. "There are a lot of innovative things happening around the country," says David Harlow, who runs a health law practice in Boston and has helped shape Massachusetts health laws. "What we are talking about is a whole series of local experiments" that Washington is considering adopting.
The White House has called for creating a new panel of doctors and experts to look for ways to cut Medicare spending. But Congress is busy reviewing all sorts of other proposals. There is talk about giving bonuses to doctors and hospitals that provide higher-quality care. There is talk about rewarding healthy workers with lower premiums. And there is talk about testing out new business models that, in theory, let doctors spend more time with patients and less time on billing.
This trying search for ways to change how money is spent on healthcare got a major jolt this month, when Douglas Elmendorf, director of the Congressional Budget Office, testified that the House's bill would not achieve "the sort of fundamental change" needed to curb rising costs. The political world lit up as if a mild-mannered house guest had just slapped his host in the face.
Yet Elmendorf's comments should not have been all that shocking to anyone following the debate. The fiscally conservative "blue dog" Democrats had said as much the week before. In an angry letter to Democratic congressional leaders, they had argued that the bill being put forward failed to make substantive changes. "We must be much more aggressive in bending the cost curve," they wrote. "We cannot simply 'add' new consumers to a broken system."
Last week, after a slew of rough headlines for Democratic leaders, blue dogs finally got an audience, and they've effectively prevented House Speaker Nancy Pelosi from bringing legislation to the floor. The House Energy and Commerce Committee, with 36 Democrats, including seven blue dogs, had been scheduled to meet all last week to try to approve the House bill. But after last Monday's boisterous session, which lasted late into the night at the urging of committee Chairman Henry Waxman, plans changed. The following day Obama summoned the panel to the White House, and scheduled committee meetings were canceled in favor of private deliberations.
Negotiations are continuing this week. As of Tuesday morning, the blue dogs were reviewing a "compromise" offer from Waxman. Meanwhile, the Senate Finance Committee, led by Sen. Max Baucus, is still deliberating behind closed doors, trying to hammer out a bipartisan deal with Republican Sen. Chuck Grassley and others.
Two things are driving discussion. There are cost issues—how to pay for the roughly $1 trillion price tag—and content issues—what the bill must include in order to make healthcare cheaper for patients. The debate over a government-run insurance plan has swallowed up the lion's share of attention on the second point, but another major headache is figuring out how to encourage doctors and hospitals to provide high-quality care rather than just a lot of it.
Many ideas are on the negotiating table, some of which involve radical changes in the ways doctors practice and get paid. One is the so-called "medical homes" model, an approach that in recent years has popped up in almost every state and has some big fans in Washington. These aren't actual physical homes but more like organizational structures. Rather than practicing in relative isolation as they do now, primary-care doctors work with specialists in teams and are linked by state-of-the-art technology. Patients can access their health records online. Primary-care doctors, supporters argue, become like "health coaches," shifting their focus back to patient care. According to a recent study, this approach could reduce healthcare costs by nearly $70 billion a year by keeping patients in closer contact with doctors.
Baucus has championed medical homes. So have moderate Democrats in the House. But as Paul Nutting, a professor of family medicine at the University of Colorado Health Sciences Center, says, there are still a lot of questions. Nutting and a team of researchers earlier this year published a study that looked at several dozen physicians' offices that tried to "transform" themselves into medical homes. The verdict was mixed; the transformations were costly and time-consuming. "What we are proposing is that we follow these practices for another eight to 10 years," says Nutting.
Congress, of course, doesn't have eight years. So the House bill calls for funding demonstration programs to further test this model; if the demos are successful, the bill says, they should be expanded "on as large a geographic scale as practical and possible." But the money the House sets aside for them is pretty modest, about $1.6 billion over five years.
Baucus and friends clearly want to avoid the sort of damning verdict the CBO gave the House bill, so they've been working methodically and quietly for weeks to reach a comprehensive agreement that has a shot in the Senate. Clearly, top Democrats think they're on to something. "A decision was made to give them more time for the Finance Committee," Reid said Thursday. "I don't think it's unreasonable. This is a complex, difficult issue." In the end, one month more of debate might not be enough.
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