Baucus Takes Pole Position in Upcoming Health Reform Debate

Senate Finance Committee Chairman Max Baucus is ensuring himself a prominent and visible seat at the health reform table with a white paper outlining his legislative proposal.

The white paper, “Call to Action: Health Reform 2009,” was unveiled on Nov. 12 and represents a culmination of discussions both in Congressional hearing rooms (10 hearings including one scheduled for Nov. 19) and behind closed doors with key stakeholders.

“The need is so great, we have to act now. There is no choice,” Baucus said during a same-day press briefing on why the economic situation should not delay acting on broad—and expensive—health reforms. “If we wait, the costs will grow.”

Baucus said the next administration and Congress will not repeat two mistakes made by the Clinton Administration in reforming health care: waiting too long and conducting the process from the top down.

In other words, Congress will want to show that it will act quickly after the Jan. 20 inauguration and key lawmakers and committees will be heavily involved in the legislative process from the very beginning.

The Baucus plan is a clear play by the Montana Democrat to get out in front of the health care debate ahead of a number of Democratic heavyweights looking to make health care their signature issue. The Finance Committee has jurisdiction over Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP), and all tax policy changes including those affecting health care.

There’s a strong sense among lawmakers, industry representatives and policy wonks that the first term of an Obama Administration is the time to move on sweeping health reform, with universal health coverage for all Americans the crown jewel of Congressional efforts.

Carving Out A Position

But two key questions are making the rounds in Washington: 1) What will the final plan look like? and 2) Who will get credit?

President-elect Barack Obama touted health care for all as a legislative priority closely behind an economic stimulus plan for the middle class during his campaign. Sen. Hillary Clinton (D-NY) made universal health care the cornerstone of her domestic agenda during her bid for the White House. Clinton led the failed effort to create one federal health care system in 1993.

During his speech on the final night of the Democratic Primaries in June, Obama singled out Clinton as a key figure in the fight for universal coverage. “You can rest assured that when we finally win the battle for universal health care in this country, she will be central to that victory.”

Senate Health, Education, Labor & Pensions Committee Chairman Edward Kennedy has been leading the fight for universal health coverage for decades and has made it his cause for the 112^th Congress.

“This is the cause of my life: new hope that we will break the old gridlock and guarantee that every American, north, south, east, west, young, old , will have decent, quality health care as a fundamental right and not a privilege,” Kennedy said on the first night of the Democratic National Convention in Denver.

Kennedy has been working behind the scenes for months with physician organizations, patient groups, and insurers to craft universal health care legislation ready for introduction at the beginning of the next session.

The Baucus proposal, though, essentially cuts off the Kennedy legislation and steals some of the Massachusetts Democrat’s thunder. Still, Baucus says he plans on working with Kennedy and other leaders, naming Republicans Chuck Grassley (Iowa) and Michael Enzi (Wyo.). “I received a call this morning from Sen. Kennedy. It was a very complimentary call…I was truly touched.”

Those feelings may not last, however, as discussions heat up over what a reform bill will include and whether there will be two Senate bills or one. “I’m less concerned with that. I’m more concerned about getting the job done.”

The Baucus press briefing was a show of power for Baucus with a packed room of media attending, including every major national newspaper and more focused trade publications. The whitepaper was also previewed to the national press the day before in order for stories to show up in headlines on the front pages of mainstream newspapers.

The formal presser was followed by a backgrounder for press with a half dozen top Baucus health staffers. Immediately after the backgrounder, Baucus’ policy team was slated to meet with staff from other Congressional members to brief them on the plan and provide specifics on some of the more technical aspects of the white paper.

The Baucus Plan: Walking a Moderate Line

In jockeying for position among reform-minded Democrats, Baucus is carving out a moderate one as his own.

“Some people say the US should have a single payer system—I disagree with that,” Baucus said. The Finance Committee Chairman is casting his proposal as a moderate call for reform that blends private and public coverage to create a “uniquely American system” for universal health care.

Three examples of Baucus’ more moderate approach to reform:

1) The white paper establishes a low threshold of reporting physician relationships with medical product and drug manufacturers but doesn’t go as far as prohibiting gifts to physicians.

2) The proposal notes that the Medicare Payment Advisory Committee estimates Medicare Advantage (MA) insurers are overpaid by 13% more than if the same beneficiaries remained in the traditional Medicare fee-for-service program. However, Baucus calls for a more nuanced approach to MA payments in order to avoid “severe underpayments” by “reducing payments to high-use areas and increasing payments in low-use areas.”

3) The Baucus plan avoids discussion of drug price controls but does address Medicare Part D cost savings by bringing Medicare rebates for dual-eligible beneficiaries in line with the rebates states are able to secure under the Medicaid program, according to Baucus policy staff.

Priorities and a Mix of Ideas

The white paper bases reforms on three overriding principle: meaningful coverage for all Americans; insistence that any coverage expansion be coupled with higher quality care and cost savings over time; and an “absolute commitment” to eliminate waste and overpayments.

The Baucus plan would make health coverage immediately available for Americans between the ages of 55 and 64 years old and begin a phase-out of the two year wait for Medicare coverage for individuals with disabilities. The plan would also strengthen the role of primary care—a theme Baucus hit on multiple times during his remarks—and chronic care management, and increase investments in comparative effectiveness research and health IT infrastructure.

Baucus and his staff drew from ideas from a number of different sources in developing their comprehensive proposal. For example, Baucus policy staff say they had discussions with administrators of the Massachusetts universal coverage “Connector” plan, something Kennedy and his staff have been doing for some time.

The Finance Committee Chairman’s call for the creation of a national Health Insurance Exchange (HIE), which would sell and oversee the administration of coverage, was the centerpiece of Obama’s health proposal.

The Medicare Part D dual-eligible rebates reform plan is a key piece of legislation that House Committee on Oversight and Government Reform Chairman Henry Waxman (D-Calif.) is planning to introduce.

Baucus allowed that certain elements would be implemented quickly, citing expansion of SCHIP, while others, such as HIE and the creation of a Comparative Effectiveness Institute, would take longer to phase in.

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