Health Care Reform Today

• G. William Hoagland
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  G. William Hoagland

  

  G. William Hoagland

  Cigna's vice president for public policy and government affairs

Shortly before returning home for Thanksgiving, the Republican and Democratic Co-Chairs of the Joint Select Committee on Deficit Reduction (dubbed the "Super Committee") released the following statement:

"After months of hard work and intense deliberations, we have come to the conclusion that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline."

That deadline was Thanksgiving Eve, November 23. Had an agreement been achieved to reduce the federal government's red ink by $1.2 trillion over the next decade, the super procedures granted the committee would have resulted in Congress considering the legislation under expedited procedures with a final vote by Christmas Eve.

But now, without an agreement, automatic spending reductions will be triggered in January 2013 to achieve by crude formula what the committee could not do by thoughtfully considered legislation.

What brought the Co-Chairs to the conclusion they could not reach an agreement? As would probably be expected in a highly polarized, contentious Congress, both sides began finger pointing almost immediately upon the release of the Co-Chair's statement.

For Republicans, the Democratic members of the Committee were unwilling to consider "fundamental" entitlement reforms to reduce spending. For Democrats, Republicans were unwilling to produce a "balanced" plan that increased taxes on the wealthiest Americans.

Setting aside the to-be-expected political posturing, an objective analysis would conclude that the failure to reach an agreement stems from the simple fact that the committee was operating in an environment marked by a deep partisan divide over fiscal policy. And even if seven of the twelve members of the committee reached an agreement on legislation, that would not have guaranteed passage in the House or Senate. As a result, the super committee members could not stray far from the balance of opinion in their respective party caucuses.

While Republicans and Democrats agreed that the country's current fiscal path was unsustainable, they remained starkly divided over how to reverse that path. From my perspective, it is hard to see how reducing our debt burden in the future can be achieved without both spending restraint and revenues increasing relative to current projections.

Spending restraint means focusing on public health care programs, particularly Medicare and Medicaid, the fastest growing components of federal spending today.

But extremely deep-seated and basic disagreements over controlling the path of health care spending dominated both in and outside the super committee's deliberation. These differences were so significant that it is not even clear that had the committee agreed on a revenue increase that fundamental changes to Medicare spending could have been achieved.

This mega-policy argument is important to Cigna's focus on reorienting the current delivery system to one that is higher quality, lower cost and accessible to all Americans.

Democratic super committee proposals to reduce Medicare's current reimbursement rates to health care professionals or increase some co-payments or deductions to beneficiaries, while lowering federal spending in the near term, might only have shifted costs to the private sector and exacerbated premium increases for millions of individuals and businesses in the longer term.

Republican members of the committee sought more fundamental, long-term changes to the Medicare program's fee-for-service payment system; along the lines of a defined benefit with consumer choice in the private sector. Respected health economists believe such fundamental changes to Medicare are required to not only lower overall health care costs and federal budget expenditures, but also to increase the quality of care provided.

Along with the standoff on increasing revenues, these two significantly different approaches to controlling health care expenditures in the future remain at the core of why the committee failed to reach an agreement. The issues are not going away and will continue to dominate the fiscal and political environment throughout the upcoming 2012 election year.