The healthcare reform debate is about to heat up again as the Senate and House start to reconcile their bills into one.  This process is going to be highly political and you are going to be hearing a lot about the various differences in the bills.  This information is already pretty well known and while the outcome is still uncertain, I think it’s reasonable to expect to a final bill in the next few weeks.  The key issues to reconcile include:

1. New Taxes – what  taxes are going to be implemented pay for this reform
2. Abortion Coverage – how restrictive will the language be in the final bill
3. Individual Mandates – what threshold will be established to make sure all Americans carry health insurance
4. Employer Responsibility – what penalties (and incentives) will be in place for employers to provide health insurance
5. Structure of Cost Reforms – what process will be implemented to review how we spend healthcare dollars today in order to reduce costs in the system

To me, this last item is probably the most difficult to understand and most likely will not impact a final bill.   There is some irony involved with cost reforms.  It is probably the most important component of healthcare reform, yet it is without question the least understood part.  Further, the implications of cost controls in healthcare reform are enormous.  Whatever changes take place, they will have a tremendous impact on how healthcare is delivered in this country.  I get more questions than you can imagine on cost controls.  My answer is frequently the same:  it’s complicated.  Understandably, it’s complicated is a very unsatisfying answer.  Over the next few weeks, I will start telling you what cost controls mean in terms of healthcare reform.  I will explain both sides of the issues and you will be able to see why it is going to be so difficult to accomplish without some form of sacrifice.

The first component to cost control will be a new group looking at how various diseases are treated/managed and make recommendations on best practices.  This is known as comparative effectiveness.  It would seem obvious to many that we reward/pay doctors and hospitals based on what is understood to be the best and most effective way to treat a condition.  While it is still unknown how this group will work, who will be included, and what power they will ultimately wield, we do know they will be looking at various types of diseases and conditions and making recommendations on routine protocols.  I have to believe the recommendations from this  commission will eventually lead to a change in reimbursement for specific drugs in treating certain conditions .  To be clear, this commission will not be able to limit Medicare reimbursement.  This power will remain with Medicare.  That being said, this commission will look at all available data to make the most informed recommendations that I can imagine will lead to a great deal of controversy related to their work.  While this group cannot say “drug A” is not allowed to be used (that will remain with the FDA), I do see situations where Medicare will take the commission findings and no longer reimburse a certain drug if the benefit is not scientifically and statistically proven to be worth the cost.  Since most insurance companies follow Medicare guidelines, it would become a defacto reimbursement policy.  As a society, we will be faced with the promise of new drugs and technologies against the realities of limited budgets.   For example, can we as a country afford $100,000 in drug costs to extend life for 2, 3, 4 or even 5 months?  What is the quality of that life in the last few months and how is its value determined?   I do not expect this to be the focus of the commissions work in the beginning of healthcare reform.  However, I think we would be naïve in thinking this is not going to come down the road.  It already happens in western nations.  It seems to be to be fair to look at all costs associated with treating illnesses.  It also seems reasonable that many will want to try anything and everything to save a life.  There is no right answer.  We know we can no longer afford the healthcare system we have today and this is only one of many concepts yet to be faced.  Stay tuned for more.

Do I like the Senate Bill?   You know what, I do and let me tell you why.  The current healthcare expenditures in this country represent 16% of the total economy.  And while we have the best doctors, hospitals, equipment, and drugs in the world available to us, we still have a tremendous number of people who do not have any access to the healthcare system.  Further, we have many more who believe they are protected but find out how vulnerable they are once they get sick and realize that their insurance has limited or partial coverage, leaving many in terrible debt.  We can do much better as a nation.  The Senate bill puts us one step closer.  As you know, I have said all along this is not a perfect bill.  There is no such thing as a perfect bill, particularly when we are talking about something as complex as healthcare.

This bill will provide more Americans with access to affordable and stable healthcare - insurance plans that will not drop you when you get sick, will provide a minimum level of protection that we all understand, and will not deny you coverage merely because you have a pre existing condition.  Will everyone have coverage?  No.  There is still work to do, but this gets us moving in the right direction.  While there are many that object to the provision requiring mandatory coverage, I simply say tough.  It is without question the only way to make the insurance markets work.  Without the mandate (whatever version ultimately gets passed in the reconciled bill), the insurance markets will not work.  We want to maintain some sense of private insurance which is why the government plan was dropped.  The only way to do this is to make sure every American pays into the pool.

The healthcare reform is funded two ways.  New taxes and cost controls.  First, on new taxes.  No one likes them, I particularly don't.  They are going to be put on families making over a certain amount of money (500k/1M in the house and 200K/250K in the senate) using different methodologies depending on how the bills get reconciled.  You know what?  We must do this for our country.  Low taxes are great, I get it!  But so is making sure we take care of everyone in this country with affordable and quality healthcare.  We can cut the quality for everyone but that makes less sense to me.  We have to take care of our fellow man and unfortunately, this is the only way it will work.  If you do not believe me, talk to some of the hard working callers who ask me for help each week on my radio show.  People who just do not have access and are broke.  They did nothing wrong other than getting sick.

Both bills recognize we have a great deal of waste in the current system and can also deliver care in a more efficient way.  Cutting waste is easy so long as you can find it.  As someone who works in the current healthcare system, trust me, it's out there.  The harder part is going to be looking at how we treat and pay for certain diseases.  This is going to be much harder for the country to accept.  The bills have structures in place to look at this issue with the Senate bill being much stronger.  The question that remains is whether we as a nation are prepared to make the decisions that must be made.  Hopefully with better education and more understandable information, we will be able to tackle the hard choices like when is enough going to be enough?  And at what price do we say we can no longer afford it?  Difficult, I know, but 100% necessary.

Stay to tuned.  After many months, this is still only the beginning.  But I am satisfied we are moving the in the right direction.  This country will ultimately be much better off with this version of healthcare reform.   We will be fixing the mistakes made in the bills for years to come but at least there will be a significant number of newly insured Americans with access to healthcare we all deserve in the greatest country in the world.