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The State Of Health Reform

Source: Forbes.com – January 27, 2010
By: David Whelan

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If health reform were an engine, it’s fair to say that reformers left it in overdrive for too long. The result: its gears stripped off last week after the shocking Republican victory in the Massachusetts Senate race.

Can President Barack Obama rebuild and restart health reform tonight during his second State of the Union address? There are reasons to believe support is there for a more limited approach.

Edward Kaplan, a benefits consultant with The Segal Company in New York, says that even though his union and corporate clients are relieved that a huge overhaul wasn’t rammed through, they still want to see something happen. “When you really read the bill it was overkill,” says Kaplan. “But a little regulation would be good.”

Clearly the original bill must be revised: Nancy Pelosi has said she doesn’t have the votes in the House to get the Senate bill on the president’s desk.

Targeted initiatives have a better chance of picking up enough support from Republicans and moderate Democrats to pass.

One shortcut to picking up bipartisan support might be to borrow from Republicans’ own counterproposal on health care. Called the Patients’ Choice Act, it would establish state exchanges, but no subsidies; push for price and quality transparency among providers of care; expand the use of HSAs; and use a tax credit to give health insurance bought by the self-employed the same effective subsidy that at-work insurance already gets. The bill would also promote prevention and coordinated care for chronic diseases. Somewhere in those proposals there could be common ground.

Kaplan says he hopes that’s the case. His firm’s union clients supported reform but were concerned about the Senate bill’s excise tax on high-cost health plans. Corporations wanted relief from health inflation but were worried that new spending would inflate the cost of private insurance.

Hospital consultant Ron Wince, of Guidon Performance Solutions in Phoenix, says President Obama should rally around the least controversial, core parts of the bill and force a vote. Those would include spending on electronic health records, new rules to keep insurance companies from discriminating against those with pre-existing conditions, and initiatives to root out waste and fraud.

Wince’s hospital clients are glad the massive overhaul slowed but would like to see smaller, targeted reforms. “It was the magnitude of change that worried them,” Wince says. “We’ll see what comes out of the State of the Union but hopefully health reform is not dead. It’s just altered.”