Republicans jumped into the center of the health care debate with a reform proposal called the Patients' Choice Act on May 20. Sens. Tom Coburn MD (R-Okla.) and Richard Burr (R-N.C.), and Reps. Paul Ryan (R-Wisc.) and Devin Nunes (R-Calif.) introduced the legislation, saying it "delivers on the shared principles of promoting universal access to quality, affordable health care, and does so without adding billions of dollars in new debt or taxes."
It comes as no surprise that the plan (click here for a summary) does not call for another public plan. It appears that it would take a swipe at traditional Medicare and further strengthen Medicare Advantage -- reversing the current course set for private plans and the Medicare population.
Aides for Senate Finance Committee Chairman Max Baucus released this statement attributed to the Montana Democrat: "I'm thrilled there is such broad support for health care reform. The Patients' Choice Act embraces several ideas that meet my goals of lowering health care costs and expanding access to health care. We clearly have shared objectives in increasing focus on prevention and wellness, creating insurance pools to lower costs, improving access to health care coverage, and preventing insurance companies from denying coverage to sick individuals. Where I part ways with this proposal is in eliminating the tax incentives for employer-provided health care benefits, which would destroy the employer-based health care system we have today. I want Americans to be able to keep the plan they have if the choose to do so, and eliminating those incentives could erode that choice. But what's clear is that this bill recognizes the fundamental flaws that exist in our health care system and the urgent need to correct them. I look forward to working with my colleagues and considering their ideas as the health reform process moves forward."
Here are some Medicare-related highlights from the Dr. Coburn-Burr-Ryan-Nunes proposal:
Increase Choices for Seniors and Implement Fair Reimbursements for Private Plans
This Act implements a fair reimbursement mechanism for private plans providing health benefits to seniors. Rather than the current bureaucratic formula, which many contend wastes taxpayer dollars and lines the pockets of insurance executives, the Act would force plans to compete against each other. Competitive bidding would allow the market to set reimbursement rates to plans. The Congressional Budget Office has estimated this may save taxpayers as much at $158 billion, if implemented correctly.
Additionally, the Act would encourage plans to design high‐quality, innovative benefits because they would bid on the value of benefits. Rather than bureaucrats telling seniors what they can have, seniors would tell bureaucrats what they want. This model of competitive bidding and actuarial equivalence is already working in Medicare's prescription drug benefit achieving a savings of 26%, or $136 billion, below original estimates. Beneficiary premiums under this model are 37% lower than expected.
Realign Payment Incentives to Improve Quality and Reduce Costs
Traditional Medicare's outdated payment structure fails to reward high‐value and personalized care. The average face time that patients get with their doctors is a mere 13 minutes. Physicians get paid by how may procedures they can perform rather than the health of their patients. Medicare spends three times more per patient in some areas than in others, but the quality and outcomes are the same. Rather than onerous new rules, the Patients' Choice Act realigns incentives to encourage health care providers to provide better value at a lower cost. New ideas from the supply side of the market would result in physicians being paid based on quality instead of procedure: performance for pay.
Reduce Government Handouts to Wealthier Americans
The Act would ask wealthy retirees to pay a little more for their Medicare benefits in order to avoid prevent their grandkids from facing future tax hikes. The Congressional Budget Office estimates that this would reduce entitlement spending by $30.6 billion over the next 10 years. Couples making more than $170,000 (without an annual index to inflation) would pay more for their Part B premiums. Part D would be means‐tested at the same level for wealthy retirees.