That’s the word from several senators, at least as of last night. The last holdout, Ben Nelson of Nebraska, is reportedly on board after a lengthy negotiating session that ended late Friday.

The bill is currently being read to the entire Senate on request from GOP Senators, after which the vote will be taken – sometime around 5 o’clock this afternoon. The price for Nelson’s vote was $45 million; the US Senator forced the Federal government to pay for the entire cost of the Medicaid expansion for his home state of Nebraska.
Who would’ve thought Nebraska would need even more pork, or that the Senator would feel no shame in forcing taxpayers from other states to pay for his vote. Since 1983, Nebraska has received more from the Federal government than it has paid in taxes; Nelson’s extortion will skew the numbers in favor of his voters even more.
Things could break down, there could be defections from the ranks of the theoretically-committed, Lieberman could decide he’s not done grandstanding, the House and Senate could run into difficulties in reconciliation, a meteor could hit the earth…suffice it to say there’s a lot that could derail passage, but there’s the beginning of a whiff of inevitability about reform, enough to make it very difficult for anyone to stand in the way of the bill.
In broad terms, the bill will result in a national health insurance exchange where individuals and some small businesses will shop for insurance, provide subsidies to help low-income people buy insurance and expand Medicaid. There are numerous pilot programs to evaluate different forms of reimbursement, cuts in Medicare reimbursement to specific provider groups, elimination of the use of medical underwriting and other ‘risk selection’ tools by insurers, and a host of excise taxes, fee cuts, and other funding mechanisms to help pay for the bill.
I’ll be taking a deeper dive into the bill tomorrow – but I won’t read the entire thing.

As health reform stumbles like an exhausted runner towards the finish line, we are starting to get a clearer picture of the potential changes reform will bring to the health care landscape.
One that bears close watching is the increasing likelihood Medicare will be cutting reimbursement to hospitals. There are two ways this may affect work comp; in those jurisdictions that base reimbursement off Medicare rates, any changes may – or or may not – have a direct impact on comp reimbursement. I’m not expert in the various ways states apply their own formulas to Medicare’s, but will be studying up on it and will repor back in more detail later.
The other, and likely more significant impact may be the result of cost shifting by hospitals if/when Medicare cuts come down from CMS coupled with the expansion of Medicaid. this has plusses and minuses; Hospitals may get more paying and fewer indigent patients if the Medicaid expansion goes thru, but if these were formerly privately insured or if there is a substantial increase in their Medicaid census then their revenue mix may worsen. (Recall Medicaid reimbursement is well below most hospitals’ cost). It is mo likely the MedicUs expansion is a net plus but this will vary across the country.
Potentially more significant would be any major decrease in Medicare reimbursement as medicare is a major payer at most hospitals. Expect hospitals hit hard by a cut to look for other places to make up the lost income, and the softest target around is usually work comp.
Apologies for typos; this post written on my iPhone.

Today’s revelation that Joe Lieberman is once again flexing his political muscle to force the Senate Dems to remove the Medicare for 55-64 provision is just the latest evidence of the evisceration of the Senate Health Reform bill.
Here’s a few of the items that were considered for inclusion that have somehow not made it this far (this isn’t to imply or deny an endorsement).
– a meaningful mandate penalty instead of the paltry $750/individual $2250/family in the current Senate plan (the income-indexed penalty in the House plan is better but still not enough…)
– a public plan with reimbursement based on Medicare (if this was mandatory it would definitely have reduced costs – a lot)
– some form of tax on high-value/high benefit plans, aka ‘cadillac’ plans
– a plan that would actually cover the vast majority of Americans (the current plan still leaves 15 million uninsured)
– a clause enabling the Feds to negotiate drug prices for brand medications purchased for Medicare patients
– a non-fungible ban on lifetime caps on medical expenses
– a ‘budget neutral’ plan; although the current Senate plan is indeed budget neutral, it doesn’t include the quarter trillion accumulated deficit in Medicare physician costs. Notably the coming cut to physician reimbursement is addressed in the House bill, where it is eliminated.
What’s next? As Lieberman et al get more and more of the power and influence they so obviously crave, their appetites grow ever more insatiable. Liberals and centrists are getting increasingly desperate to pass something, anything, to deliver on the promise of health reform, and the longer Lieberman et al can put this off, the more press they get and the more their swelling egos demand.
(I’m wondering exactly how far the Senate Dems are going to let Lieberman push them before they decide enough is enough and smack the political crap out of him. He’s become the schoolyard bully to the Democratic weaklings, taking ever more of their lunch money in hope he’ll be nicer next time.)
The current mishmash of giveaways and concessions can only be called ‘reform’ by those willing to hope we can do much over the next decade to rein in costs before they kill our economy. I’m not among those optimists.
It is time to trash the whole thing and start over – preferably with the Wyden-Bennett Healthy Americans Act. (for a comparison of WB HAA to the current mishmash see the Kaiser Family Foundation’s excellent web tool.
But that won’t happen; We’ll likely get something passed in Congress, and President Obama will sign it, and they’ll all declare victory and move on to energy, Afghanistan, and other critical issues. Meanwhile, health care costs will continue to escalate, and in ten years the average family will be paying north of thirty grand for their health insurance and deductibles, and we’ll be reading books about how and why we missed this golden opportunity.
And this from the worst kind of government in existence, except for all the others.

Healthplan stock prices climbed yesterday as a Goldman Sachs analyst upgraded his view on the entire sector, concluding “Key to our view is that an end to health reform uncertainty (in a better-than-worst-case outcome) will be a positive catalyst, bringing investors back into the sector…”
Meanwhile, another analyst downgraded the sector, albeit from “overweight” to “market weight”.
I didn’t get it last month, and I still don’t get it. Unless these gentlemen are just looking at the next few quarters or couple of years at most, their recommendations, even the modest downgrade, don’t jibe with the future for health plans under reform.
Which is pretty damn bleak.
Health plans will be forced to take all comers in the individual market. The penalties for individuals not enrolled in healthplans are essentially insignificant in the Senate bill (starting at $95 individual, $285 family in 2014, increasing over two years to $750 individual/$2250 family), and somewhat tougher in the House bill (2.5% of income).
Pray tell me, with individual premiums above $5,000 and family above $15,000 today, how exactly is a penalty that is going to be less than 15% of the cost of a health insurance policy going to force anyone to buy coverage? Especially when the underwriting restrictions will allow those non-members to sign up whenever they get the flu, fall down skiing, discover they’re pregnant, or contract ebola.
No, what we’ll have is what’s happened – already – and is continuing to happen in Massachusetts – people enroll when they need care, stop paying premiums when they’re better, and health plans are getting murdered.
Perhaps the analysts are not concerned about what happens in 2014, or they are thinking the employer plans will provide enough margin to make up for sure losses in the individual sector. Perhaps they don’t think Congress will pass legislation establishing taxes on excessive health plan profits, or require plans to pay a minimum percentage of premiums towards medical care. Perhaps they’ve bought in to the greater fool theory.
Or perhaps their view is the bad news has been exaggerated, and the problems health plans have had of late are over and better times are coming. Those bad times include big losses in membership, with especially high disenrollment among commercial members.
I don’t see commercial membership increasing any time soon, not with the recent announcement by Aetna that it expects to lose up to 650,000 members in 2010. Those people will need coverage, and the current ‘reform’ bills will allow those people to purchase coverage on an ‘as needed’ basis.
What does this mean for you?
Something to ponder as you view your portfolio.

Lost in the fight over health reform is a single, huge truth – if the private insurance market worked, there would be no need for reform.
We wouldn’t be in this mess if private insurers were able to control cost inflation. And at the end of the day, that’s what they are supposed to do. Sure they have lots of experience in underwriting and risk selection, and some have made some progress in some areas of disease management/mitigation, but UHC and Coventry and Wellpoint and HealthNet et al’s ‘experience’ have not been able to consistently deliver lower health care costs.
I know there are lots of reasons/problems/complicating factors, but the stark reality is when it comes to controlling inflation, none of them have been able to.
Why not?
Several reasons, some good, some not so good, but all worth considering as we contemplate a new world built on one of the bills before Congress.
Health plans’ best interest
As Maggie Mahar so eloquently and persistently reminds us, we live in a culture of ‘Money-driven Medicine’. Health plans, providers, brokers, and suppliers are in this business to make money. For health plans, controlling costs means lower revenues, and this is one of those wonderful industries where top lines grow every year by ten percent plus – regardless of any increase in the number of customers (members). Wall Street loves top line growth and rewards companies that consistently grow their revenues.
Quite simply, it is not in a health plan’s best interest to control cost, as most of their policyholders are going to stick with them regardless of the increase in premiums, and the business they lose they’ll make up by stealing customers from other health plans.
Churn
Employers change plans every three or four years, so any ‘investment’ in reducing long term costs is an expense incurred by the current healthplan for the benefit of a competitor. This is particularly true for smaller groups, and is further exacerbated by the increased mobility of the workforce, which tends to change jobs more now than a couple decades ago.
Mindset
After the great explosion triggered by providers’ negative reactions to capitation and employees’ negative reaction to small provider networks, healthplans, led by UHC, adopted an ‘open access’ model, wherein members could go ‘out of network’ to receive care, albeit at a higher copay rate. Employers are certainly to blame for a failure to explain the logic behind and lack of will to stick with the tighter managed care models, but they’ve certainly paid a high price for their lack of foresight and will. The result of the ‘dimming down’ of managed care is the current employer-based health cost inflation.
Regardless, since the adoption of the open access model in the mid-nineties, consumers have gotten used to, and highly attached to, that model. Undoing that mindset is going to be painful, and health plans don’t succeed by causing pain amongst their members.
Cost control by price control
Listen to health plan execs on their quarterly earnings calls, read their transcripts, review their press releases, look at their product offerings – see much in the way of real cost control? Strong disease management, medical homes, useful data on provider outcomes and costs presented in a way that Joe Sixpack or Maria Martinez can readily use?
Didn’t think so. Sure, a few health plans (Aetna probably being the best among the for-profits) are making an honest effort, but most are not. Instead, health plans rely on price control – squeezing providers down as hard as they can on reimbursement rates for specific procedures – a practice that solves one part of the cost equation but does nothing to control utilization, and may well exacerbate it.

For-profit health plans operate in the best interests of their stockholders – not those of their members, providers, or society. That’s how capitalism works. And not-for-profit health plans have to compete with the for-profits, a reality that has forced the Kaiser Permanentes and Group Healths to adopt many of the business practices of their competitors.

The net
The reason we need reform is the current ‘free market’ is not fixing society’s problem. The reform we need is real, meaningful reform, with true cost control, not a few pilots here and a bit of disease management there and a couple of billion of comparative effectiveness research sprinkled on top of a layer of slightly-modified fee-for-service reimbursement.

Paraphrasing Sen Ron Wyden (D OR) produces the most accurate soundbite description of the House’ health reform bill.
Is this the best we can do?
If the answer is yes, we’re in deeper trouble than even I thought. I’m really disappointed with the Republicans. They are supposed to be the budget hawks, but instead they’ve spent their time railing against abortion funding, illegal immigrants, and death panels, along with scientific research and taxes on device manufacturers. Instead of attempting to govern responsibly, they’ve abandoned all morality in their quest to re-energize the lunatic fringe of their once-dominant party. Now comes news that Maine’s Susan Collins is convening news conferences to rail against the cost of the bill.
With all due respect, Senator, this isn’t exactly new news. Now you’re getting concerned about cost? After nine months of debate, discussion, and appearances on Meet the Press? Not to single out Collins; at least she’s finally saying something rational about cost.
While there’s plenty of blame to pile at the door of the Republicans, it is the Democrats who are to blame for coming up with a huge entitlement program set up to do nothing but grow.
Cost containment as proposed in the bill is in the form of cuts to Medicare totaling about $420 billion, including:
– $155 billion (about) from price cuts to hospitals,
– reductions in Medicare Advantage subsidies,
– increasing drug rebates payable to CMS, and
– requiring CMS to negotiate with pharma for Part D drugs.
Then there’s a potpourri of funding for Accountable Care Organizations, better primary care coordination, research on quality and effectiveness, and other should-have-been-doing-all-along initiatives.
As for real cost containment, methods/techniques/tools that can actually reduce cost over the near term in the public and private sectors? Bupkus. Nada. Zippo.
Sure, at some point in the future this research will result in data we can use to recommend more changes. But by that time we’ll be broke, and China will own everything of substance.
Oh, and when insurance underwriting reform kicks in health plans will have to take all comers, yet at 2.5% of adjusted gross income, the mandate penalty is not tough enough to force compliance. What we’ll get is individuals and families buying coverage when they need it, only to drop it when the condition is fixed/surgery completed/rehab over. And under the terms of the House bill, you could fall off your motorcycle, buy insurance, get treated, and then stop paying premiums when your rehab is over.
I’m no fan of the insurance industry, but that just isn’t fair. And lest you think this isn’t going to happen, talk to Charlie Baker, former CEO of Harvard Pilgrim Health in Mass. It’s happening in Massachusetts today.

Drastic times call for drastic measures. If we aren’t going to seriously consider Wyden-Bennett – and more’s the tragedy if we don’t, then we need cost containment with teeth.
How about starting with normalizing treatment costs for specific conditions? The huge and wildly inappropriate variation in practice patterns and costs associated with conditions such as COPD and back pain and prostate cancer and diabetes and dozens of other conditions have to stop. Medicare should, and could, gradually ratchet down reimbursements across the country till they are match global reimbursement for care delivered by delivery systems that are demonstrably efficient and deliver quality outcomes – Mayo, Lahey, Geisinger, et al.
Or develop an all-payer fee schedule (similar to the one in Japan) allowing all payers access to the Feds negotiating power.
Crazy? Sure. But the current bills will not reduce cost inflation. And therefore, sure as the sun comes up tomorrow, within ten years you will be paying $30,000 for family coverage. And pretty poor coverage at that.

What does this mean for you?
Despair? Disgust?