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The Health Care Cost Containment Initiative Report

National Review

Monday, April 22, 2013

Last week, the Bipartisan Policy Center’s Health Care Cost Containment Initiative (HCCI), led by Former Senate Majority Leaders Tom Daschle and Bill Frist, Former Senate Budget Committee Chairman Peter Domenici, and Former Congressional Budget Office Director Alice Rivlin, released its recommendations for the next phase of health system reform. I had been looking forward to the report, as Frist advocated a number of interesting health system reforms while serving in the Senate, including a federal reinsurance mechanism. First has also said, however, that he believes that the Affordable Care Act ought to be reformed rather than repealed, which remains a minority view on the right.

The report is built around four pillars: structural Medicare reform; tax and regulatory reform; an effort to prioritize quality, prevention, and wellness; and encouraging states to pursue delivery, payment, workforce, and liability reform.

1. One of interesting tensions on structural Medicare reform is that while Domenici and Rivlin are the architects of the Bipartisan Policy Center’s Protect Medicare Act, which uses competitive bidding between fee-for service (FFS) Medicare and approved private plans to yield savings over time, a concept that has been embraced by congressional Republicans and that presumably appeals to Frist, Daschle has been skeptical of this approach. Moreover, while conservative lawmakers have by and large accepted a continuing role for FFS Medicare as a “public option” that will compete with private plans, there has been a great deal of hostility towards the Independent Payment Advisory Board (IPAB) that is meant to improve the efficiency of FFS Medicare by driving payment innovation.

HCCI calls for the creation of “Medicare Networks” as an option within traditional Medicare. These Medicare Networks would essentially be integrated care delivery networks, and each would enter into a contract with CMS that would establish a unique spending target. Networks that spend less than the target would be entitled to share in the savings while those that exceed the target would be obligated to eat some of the overage. Beneficiaries choosing to enroll in a Medicare Network would receive a premium discount. And to make Medicare Networks more attractive still, providers that belong to or contract with them will receive payment increases as established under current law while those that only participate in fee-for-service Medicare will have their payment rates frozen for several years.

Reihan Salam is a policy analyst, a writer at National Review Online, and a commissioner of BPC’s Commission on Political Reform.

2013-04-22 00:00:00
National Review