The Cost of Repeal

Statement

The U.S. House of Representatives went through the motions of repealing the Affordable Health Care Act of 2010 last week. Many have said this was a meaningless gesture, but votes like this have meaning. They convey priorities and send a message to the nation.

Last week, the message was that the House's first order of business would not be to get people back to work. It would not be a bill that would reduce the debt-- in fact quite the opposite. No, the House's first task would be H.R. 2, formally titled (for an added bit of theater), "An Act Repealing the Job-Killing Health Care Law". An unfortunate and misleading title at any time, but particularly the week following a week when people were actually killed in service to the Congress.

Because of the Affordable Care Act, families will soon be free from the constant worry that they will not be able to get health care when they need it the most. But repealing the law would strip Americans of this new freedom and take us back to the days when big insurance companies had the power to decide what care residents of Missouri could receive--allowing them to once again deny coverage to children with pre-existing conditions, cancel coverage when people get sick, and place limits on the amount of care people can get, even if they need it. What's more, without the law, insurance companies could overcharge for insurance just to boost their profits, or use fine print to deny medical treatments that are covered under people's policies.

In addition, repealing the law would add at least a trillion dollars to the deficit. We cannot afford to add to the deficit, nor do we want to pass that debt to our children and grandchildren.

At a time when Missouri residents will soon be finally free from worrying that affordable coverage will not be available to them and their families when they need it the most, repealing the Affordable Care Act would be devastating. Missouri residents, providers, small businesses and other employers would be denied critical new benefits of the law, from protections against insurance industry abuses to new coverage options and millions of dollars in support so states like Missouri can deliver quality, affordable health care options to all of its residents.

I asked the House Committee on Energy and Commerce to analyze the impact of repeal of the Affordable Care Act in the 5th Congressional District of Missouri. The analysis finds that repeal of the health reform law would have significant consequences in the district by:

* Allowing insurance companies to deny coverage to 112,000 to 291,000 individuals, including 9,000 to 39,000 children, with pre-existing conditions.
* Rescinding consumer protections for 369,000 individuals who have health insurance through their employer or the market for private insurance.
* Eliminating health care tax credits for up to 14,300 small businesses and 171,000 families.
* Increasing prescription drug costs for 9,300 seniors who hit the Part D drug "donut hole" and denying new preventive care benefits to 98,000 seniors.
* Increasing the costs of early retiree coverage for up to 8,600 early retirees.
* Eliminating new health care coverage options for 2,100 uninsured young adults.
* Increasing the number of people without health insurance by 53,000 individuals.
* Increasing the costs to hospitals of providing uncompensated care by $68 million annually.

It is impossible to say which of these things my friends on the other side of the aisle might be able to mitigate as part of their proposal to overhaul the health care system, because they have yet to propose an alternative. Rather, they voted to repeal a bill nearly a century in the making only and have yet to propose what would replace the measure that provides benefits to so many of our fellow Missourians.

Ron Brownstein, in the National Journal, wrote an article that points out some of the difficulty in the new majority's plan to repeal the bill, and THEN hold hearings on what to replace it with.

Repeal and Avoid

Critics of the health care reform law overlook its innovative efforts to restrain health care costs.

With this week's vote to repeal President Obama's health care reform, House Republicans struck a blow for freedom.

They struck a blow for the freedom of hospitals to avoid financial penalties, no matter how many Medicare patients develop infections under their care. They struck a blow for the freedom of hospitals to avoid consequences, no matter how many Medicare patients are re¬admitted soon after treatment. And they struck a blow for the freedom of health care providers to receive unending annual increases in their Medicare reimbursements, even if they fail to improve their productivity by even a fraction of what's occurring in other industries.

Take that, Big Government.

Penalties for excessive infections and re¬admissions, as well as productivity-linked cuts in provider payments, are all part of the health care law that House Republicans voted unanimously to repeal this week. They are among dozens of the statute's provisions intended to improve efficiency, increase coordination, enhance quality, and expand competition in the health care system. The House voted to rescind all of them.

House Republicans today can't undo Obama's law, or impose their own. But their vote underscored the GOP's determination to uproot the plan if the 2012 election empowers it to do so. One casualty of that effort would be the law's frequently overlooked, but consistently innovative, efforts to slow the crushing rise in health care costs.

The health care law mobilized an integrated array of carrots and sticks to reshape the incentives for all participants in the medical system. It encourages greater personal responsibility by authorizing employers to provide larger premium discounts than currently allowed to workers who lose weight or take other steps to improve their health. It nudges consumers to focus more on cost by imposing a first-ever tax on high-price "Cadillac" health insurance plans.

Simultaneously, it exposes insurers to new competitive pressures. One or two insurance companies now dominate many markets; the statute establishes insurance exchanges that should attract competitors, potentially lowering prices. It also authorizes more insurance sales across state lines, while preserving consumer protections.

But mostly the legislation takes initial steps to reorient the financial model for providers, such as doctors and hospitals, from volume toward value. It seeks to tilt away from today's bloated "fee-for-service" system, in which providers are paid based on the amount of care they provide, toward a structure that more closely links compensation for providers to outcomes for patients. With repeal, Republicans voted to raze those reforms and signaled again their intention to ask patients, rather than providers, to bear the brunt of controlling health care spending.

The health care law pushes on providers from many angles. It pressures them to improve quality for Medicare beneficiaries with the penalties for excessive infections and readmissions and by linking compensation for hospitals to their ranking on performance measures. It encourages teams of providers to better coordinate care by allowing them to share in savings when they work together more closely to manage a patient's overall health. It establishes new systems to compare the effectiveness of alternative treatments and also to track which doctors are ordering excessive care for their Medicare patients. From the other direction, the law's reduction in annual Medicare payment increases encourages providers to adopt these and other productivity-enhancing reforms.

These ideas represent cutting-edge thinking about controlling costs. But no one knows how well, if at all, they will work. So the legislation establishes two powerful new institutions--a Center for Medicare and Medicaid Innovation and an independent Medicare payment advisory board--to test these and other new ideas and expand those demonstrating the most promise. In that way, the law offers a floor, not a ceiling, for further change. In all, says Donald Berwick, administrator of the federal Centers for Medicare & Medicaid Services, "The law puts into our hands, in concert with the private sector, a chance to not just encourage providers to do far better for patients at sustainable cost, but also to help them do that."

If anything, the law's payment and delivery-system reforms need stronger incentives and more-rapid implementation (as Berwick is working to do by rallying private insurers to adopt such innovations as rewarding better coordination of care). But House Republicans, in their resolution establishing priorities for an alternative bill, say nothing about changing the way providers operate; instead, they talk only about encouraging more "personal responsibility for health care coverage and costs."

That reflects the widespread GOP belief that the best way to control health costs is to directly expose consumers to more of them--for instance, by relying on insurance only for catastrophic expenses while using tax-favored accounts to pay routine costs. That may, in some circumstances, be part of the solution. But it's not the entire solution. By voting this week to free providers from the responsibility to reform, House Republicans have signaled that if they get the chance after 2012, they will seek to control costs primarily by asking patients to shoulder more of the burden.

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