The Kennedy Plan

Roger collier

Politico.com this past weekend included news of what it described as Senator Ted Kennedy’s
reemergence in the health care reform debate, with proposals “distinctly
to the left” of those of Senate Finance Committee Chairman Max Baucus.
It also included the staff
working paper
being circulated among members of Kennedy’s
Senate Health, Education, Labor, and Pensions Committee, and which presumably
reflects Kennedy’s positions. 

The Politico report and a parallel piece in the New York
both claimed significant policy differences
between Kennedy and Baucus, reflecting Kennedy’s liberalism and Baucus’
more moderate (or conservative, depending on one’s politics) views.
The New York Times focused on the public plan issue as a defining difference
between the two senators, and noted Baucus’ efforts to develop compromises
with Republicans as potentially moving a Senate Finance reform bill
further to the right. So, what’s the truth? 

Comparison of Finance Committee comments
with those of the HELP Committee working paper does show differences,
but in most cases ones of nuance. The working paper is often vague
on details (What are “reasonable limits” for premium variations?
is there any real evidence of the effectiveness of “medical homes”?)
but it is also quite comprehensive in scope, including a major section
on long-term care, something that has been almost totally ignored in
the reform debate. Other than the long-term care issue, though, there
is little in the HELP paper that is truly at odds with the Finance Committee’s
own policy outline—the November 2008 White Paper.

While the HELP paper does call—as
reported by Politico and the Times—for creation of a public plan,
no specifics are provided, and the words used could be as applicable
to the “weak” models suggested by Senator Charles Schumer and the
New America Foundation’s Len Nichols as to the “strong” Medicare-based
models suggested by liberals. 

The conclusion: obviously there are
differences between Senators Kennedy and Baucus and between their respective
committees, (notwithstanding the two senators’ latest joint announcement ) but there is no deal-breaker. Yet. 

Roger Collier was formerly
CEO of a national health care consulting firm. His experience includes
the design and implementation of innovative health care programs for
HMOs, health insurers, and state and federal agencies.
He is editor of Health


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3 replies »

  1. All that aside, why does Edward (“Silver Spoon” aka “Chappaquiddick”) Kennedy continue to be elected?
    Term limits for everyone!

  2. ““Over the last several months, HELP [Committee] Democrats have been working non-stop to develop a health reform bill that reduces cost, protects individual choices and assures affordable, high-quality healthcare for every American,” Kennedy spokesman Anthony Coley said in a statement.”
    Anyone that knows history should be running for the hills. How bad does Kennedy have to screw up American Healhcare before he loses his seat at the table?
    Other steller Kennedy Health Reform circa 1978;
    “”The current revival of the HMO movement should come as no surprise. HMOs have proven themselves again and again to be effective and efficient mechanisms for delivering health care of the highest quality. HMOs cut hospital utilization by an average of 20 to 25 percent compared to the fee-for-service sector. They cut the total cost of health care by anywhere from 10 to 30 percent. And they accomplish these savings without compromising the quality of care they provide their members.”
    “”In fact, many medical experts argue that the peer review built into group practice in the HMO setting promotes a quality of care superior to that found in the traditional health care system…. “In our enthusiasm to see HMOs proliferate throughout this country we should not lose sight of the need to guarantee the quality and integrity of the prepaid plans we create.”
    Lets not pick on just Teddy, if someone didn’t tll you this was said in 1971 by Edward Kennedy could you tell the difference between Democrat rehtoric then and now?
    “Introducing the HMO hearings, Kennedy said,”We need legislation which reorganizes the system to guarantee a sufficient volume of high quality medical care, distributed equitably across the country and available at reasonable cost to every American. It is going to take a drastic overhaul of our entire way of doing business in the health-care field in order to solve the financing and organizational aspects of our health crisis. One aspect of that solution is the creation of comprehensive systems of health-care delivery.”
    When comparing all these Liberal plans to fix healthcare why don’t we ever review past efforts to fix healthcare and discuss how they turned out? We have plenty examples of what happens when we allow Liberals to reform healthcare;
    Congress’s plan to save its members’ political skins and national agendas relied on employer-sponsored coverage and taxpayer subsidies to HMOs. The planners’ long-range goal was to place Medicare and Medicaid recipients into managed care where HMO managers, instead of Congress, could ration care and the government’s financial liability could be limited through capitation (a fixed payment per enrollee per month regardless of the expense incurred by the HMO).
    To accomplish this goal, public officials had to ensure that HMOs developed the size and stability necessary to take on the financial risks of capitated government health-care programs. This required that HMOs capture a significant portion of the private insurance market. Once Medicare and Medicaid recipients began to enroll in HMOs, the organizations would have the flexibility to pool their resources, redistribute private premium dollars, and ration care across their patient populations.
    Using the HMO Act of 1973, Congress eliminated three major barriers to HMO growth, as clarified by U.S. Representative Claude Pepper of Florida: “First, HMO’s are expensive to start; second, restrictive State laws often make the operation of HMO’s illegal; and, third, HMO’s cannot compete effectively in employer health benefit plans with existing private insurance programs. The third factor occurs because HMO premiums are often greater than those for an insurance plan.” 9
    To bring the privately insured into HMOs, Congress forced employers with 25 or more employees to offer HMOs as an option–a law that remained in effect until 1995. Congress then provided a total of $375 million in federal subsidies to fund planning and start-up expenses, and to lower the cost of HMO premiums. This allowed HMOs to undercut the premium prices of their insurance competitors and gain significant market share.
    In addition, the federal law pre-empted state laws, that prohibited physicians from receiving payments for not providing care. In other words, payments to physicians by HMOs for certain behavior (fewer admissions to hospitals, rationing care, prescribing cheaper medicines) were now legal.
    read more about the successful history of healthcare reform at http://www.cchconline.org/privacy/hmoart.php3

  3. For an excellent summary of the reasons why a public plan option is not desirable, I strongly recommend Victor Fuch’s article in a recent issue of the New England Journal of Medicine. It is a devastating argument.