Health reform must tackle Medicare costs

Congress returns this week from a summer of discontent to stare down health care legislation – including Medicare reform – once again.

Fresh from their battering back home, Democrats will be trying to figure out how to salvage health care reform without setting themselves up for a fall in next year’s mid-term elections. President Obama is expected to lay out his must-haves in a Wednesday address to Congress that will likely be two parts “go get it done” and one part “I’m in this with you.”

The prospects for real change depend in part on what drives the legislation. Much of the talk emerging from within the Democratic party revolves around whether to public option or not to public option. That’s the wrong place to begin.

True health care reform is at its very core primarily about cost. The United States cannot afford to permit the the health care spending trajectory – on pace to eat up 40 percent of the gross domestic product by mid-century – to continue unabated.

Controlling costs is how this nation gets to a place where it can ensure universal coverage. Without curbs, health care will bankrupt the nation just as surely as it is bankrupting families today.

In the Senate, Democrats are said to be eyeing the idea of a trigger that would give private insurance companies benchmarks for insuring more Americans and reducing health care costs. If insurers failed to meet the target, the government would begin offering health insurance, presumably to achieve the same aims through competition.

The plan has promise, especially if it can win moderate Democrats’ and Republicans’ support and avoid bending the rules to get the bill out of the Senate on the barest of margins.

But the feds cannot try to put others’ house in order while neglecting their own. Unchecked growth in Medicare spending threatens to swamp the federal budget. No one will be pulling a trigger to expand government-run health care down the road if Congress can’t bring what it’s already got to heel.

Medicare now rewards volume and political clout. Doctor reimbursement rates are lower in states like Washington where doctors have historically been cost-conscious and the population relatively healthy. Meanwhile, Medicare beneficiaries in high-reimbursement areas receive 60 percent more services but aren’t any healthier.

The Congressional Budget Office estimated last year that the country spends nearly $700 billion a year, much of it in Medicare, on health care services that do not improve health.

A deal hammered out by Washington’s congressional delegation and other Medicare-disadvantaged states would help, at least in concept. The Institute of Medicine would issue recommendations to make reimbursement rates more fair, and a broader study would look at changing the Medicare system to reward value, not volume.

Some critics worry that the deal doesn’t go far enough to lock in savings now. That’s a healthy skepticism. But what will be ultimately unhealthy is to try to accomplish everything in one bill. Such legislation would die under its own weight.

Lawmakers can’t let the perfect become the enemy of the good. It’s crunch time on Capitol Hill.