New Day: Managed care grabs new opportunities under Obama

January 1, 2009

New political leaders and intense economic woes set the stage for a new day in healthcare reform. No one disagrees with the need, just the means for getting there.

Incoming Congressional leaders and the President-elect have launched a major campaign to overhaul the nation's healthcare system, and insurers, employers and providers are reaching out to grab their piece of the opportunity. Ironically, the global economic crisis has created a situation that bodes well for U.S. healthcare reform.

The high cost of expanding government programs usually stymies reform initiatives, however, strategies for reducing healthcare costs are being championed now as key to rescuing U.S. industry. Employers are desperate to reduce soaring outlays for healthcare, while record layoffs are sharply increasing the number of uninsured. Those concentric circles provide the impetus for overhauling the inefficient and inequitable U.S. healthcare system.

"What's an exciting paradox is that this economic downturn might force the United States to do some really creative and innovative things in healthcare," says Georganne Chapin, president and CEO of Hudson Health Plan, a managed-care Medicaid provider in New York.

Enrollment in commercial health plans has been stagnant, except in Medicare Advantage and Part D drug plans, so the current interest in expanding coverage provides plans a desirable opportunity for new business.

Howard Dean, chairman of the Democratic National Committee told e-Health Initiative conference attendees last month that some of the billions allotted to economic stimulus programs should support expanded government health programs, subsidies for individuals and small businesses purchasing coverage, and improvements in the nation's health infrastructure.

"This is the best time for reform," he says. "If we can afford $150 billion for AIG, we can afford $150 billion for healthcare coverage."

"If we want to overcome our economic challenges, we must also finally address our healthcare challenge," he said during the announcement.

Daschle's intimate knowledge of the legislative process is a clear asset in leading the reform effort and dealing with turf wars on Capitol Hill.

CONGRESS ON TASK

Senate Finance Committee Chairman Max Baucus (D-Mont.) is crafting legislation based on a universal coverage plan he unveiled in early November. Similar to Obama's campaign proposal, the Baucus plan retains the employer-based benefit system but requires large employers to play or pay. Individuals and small businesses would receive sliding-scale subsidies to purchase coverage through a new health insurance exchange, which would promote competition between commercial plans and a Medicare-like public plan.

Senator Edward Kennedy (D-Mass.), chairman of the Senate Health, Education, Labor and Pensions Committee (HELP), resigned his seat on the Senate Judiciary Committee last month in order to devote full attention to enacting health reform legislation this year. Kennedy will seek a consensus bi-partisan bill that will attract 70 to 80 votes in the Senate and hopes a fundamental reform of the system will be his public legacy.

Although Senate Democrats have taken the lead, House leaders plan to craft their own bill, says Rep. Henry Waxman (D-Calif.), new chairman of the House Energy and Commerce Committee. He says that the time is ripe for enacting legislation that "secures the goals of universal coverage, sensible controls on cost, and assurance of quality care," and that he will work closely with the House Ways & Means Committee to build support.

The legislative process will be shaped by the economic stimulus bill before Congress. State governors want $30 billion to bolster state Medicaid programs. Democrats might try to reauthorize the State Children's Health Insurance Program (SCHIP) and provide $10 billion to support health information technology. Ways & Means Health Subcommittee Chairman Pete Stark (D-Calif.) has pressed for added subsidies for people who lose their jobs and want to buy insurance.

A generous bailout bill now would set the stage for broader health reform legislation later in the year.