What Reforms Should Be Considered If Comprehensive Changes Fail?

The failure of major federal health reform bills, if failure occurs, will be largely due to the mishmash of almost incomprehensible provisions, whose ultimate effect was basically unpredictable.  Not passing reform doesn’t mean the problems went away, on the contrary, the recession has exacerbated many of them, and one major driver of cost increases, the aging of the population, marches on with time.  There are a number of smaller steps that could be taken at the federal level to address these problems.  Any federal legislation, however, needs to clearly preempt contrary state laws or regulation, including those which might tend to undermine the effectiveness of the federal bills, even if not directly  opposed to them.

In regard to costs, the data demonstrates that much of it is concentrated in a relatively few individuals with chronic disease.   Preventing or delaying people from getting a chronic disease, and intensively managing the care of those who have severe chronic diseases are obvious approaches to get cost under control.   Although both approaches have endured substantial debate about whether they save costs, recent evidence is more encouraging.  Worksite wellness programs seem to limit cost increases, particularly when sustained over longer periods of time.  Federal and state laws often place barriers in the way of these programs and the incentives which encourage participation in them.  These barriers should be removed.  Furthermore, participation in wellness should be mandatory in publicly funded programs such as Medicaid and CHIP.  Although CMS appears to believe its Medicare disease management programs were ineffective, the time periods were likely too short and other design flaws existed.  Newer mobile technologies also lower costs and improve efficacy of those programs.  CMS should re-initiate wide-spread disease management efforts for the Medicare beneficiaries.

Coverage in the private sector has suffered as costs and premiums have risen.  Much of this increase, however, is due to state and federal laws mandating all kinds of benefits, any willing provider laws which restrict creation of cost-effective, good quality provider networks and limitations on utilization and cost management.  A national law permitting any health insurer or plan to offer a no-frills benefit plan, with a network of the insurer’s choosing and with few if any restrictions on how care is managed would result in substantially reduced premiums and enhanced coverage.  Similarly, Medicaid in many states is gold-plated, often far better coverage than the private sector has.  If the states were required by federal law to strip their Medicaid plans back to what is really needed, more persons could be covered for the same dollars.

Don’t hold your breath waiting for these or similar suggestions to be adopted.  Under our political system, money and lobbying talks and anything that really benefits the public in general is likely to be opposed by enough special insurance, provider or consumer interests to fail.