Lobbyists Pull the Teeth out of Health Care Reform

An article in today's New York Times describes the frantic efforts of lobbyists to limit payment reform and hinder policymakers efforts to curb the spiraling cost of health care.

One of the most obvious reforms that's been proposed would be to tax high cost health plans which fuel rising costs because employers are more willing to accept higher premiums when they're tax free. Employees, generally unaware of the cost of health insurance, remain in the dark about what their employers are paying and therefore have no incentive to limit costs themselves. Congress has appropriately considered taxing so-called "Cadillac" plans in an effort to direct employers to purchase less costly health insurance plans and expose consumers to more of the costs. Naturally this check on rising costs is being challenged by the interests that have the most to lose - hospitals, doctors, and insurance companies. Ironically, big-labor has also opposed the reforms even though it would mean employers may pass on the savings in the form of increased wages. The CBO has given this initiative high marks in terms of cost-saving, yet lobbying efforts threaten to kill this part of the bill in committee.

The second major reform is to set up a non-partisan independent Medicare Commission, which seems a lot like the NICE in the UK. The commission would finally leverage Medicare's significant purchasing power to negotiate prices for drugs and negotiate lower costs with hospitals. Drug companies have negotiated only $80 billion in cost reductions over 10 years, which not only represents a drop in the bucket in terms of overall profits, but actually protects them in the long run. By agreeing to small losses, they would actually be protected from further cuts by the Medicare Commission even if five years from now there are major benefits to be extracted. Likewise, hospitals and the AMA are vigorously opposing the $155 billion in reductions to hospital and physician payments even though bloated, inefficient, and often profitable groups working essentially in a cost-plus environment currently have no incentive to limit their costs. What's left? Pilot programs in coordinated care, health IT, and comparative effectiveness (which get seriously dinged by the CBO).

This is just sad, and it's not just Republicans - Democrats in the House are being maneuvered, too. The Baucus bill that represents the only real change in the status quo is being so ticky-tacked that it's going to come out totally ineffective. I understand the need to pass something with some sort of bipartisan appeal, but what's the point if it can't effect any real change? The fact that our political process can't put together something that benefits citizens instead of the influential people that fund campaigns is absolutely pathetic.