Orszag Hit With Queries on White House Health Care Reform Efforts
At a Senate Finance Committee hearing Tuesday, White House Office of Management and Budget Director Peter Orszag refused to provide details of the Obama administration's plans for overhauling the U.S. health care system, the Miami Herald reports.
Orszag said, "Let me just note immediately, so that perhaps we can avoid the typical Washington game of gotcha, the administration has been very clear that we put a significant down payment on the table," referring to the $634 billion included in Obama's 10-year budget proposal.
He added, "But on exactly what the administration does and does not favor on the benefits and coverage side, you should not expect and you will not be receiving definitive answers from me."
According to the Herald, Orszag's response "frustrated Republicans and a few Democrats" at the hearing.
Committee Chair Max Baucus (D-Mont.) asked Orszag, "How do we coordinate this? Is there anything that's off the table?" adding, "We need some help. This is not easy."
Orszag said that coordination would take a team approach, adding, "There are lots of different ways of getting there but it's clear we have to get there."
The Herald reports that senators "peppered Orszag with questions that he wouldn't or couldn't answer."
Sen. Jim Bunning (R-Ky.) asked how much money the administration would need under its health care overhaul plan.
Orszag said that the amount would depend on the approach (Werner, Miami Herald, 3/10).
Orszag also said that a comprehensive health care bill would have to be budget neutral over five or 10 years. "You have to invest to get savings later, but again, given our medium-term fiscal trajectory, we think the best way to move forward is to invest in a deficit neutral budget," he said.
Baucus, who along with advocacy groups has expressed concern over whether attempting to completely pay for the plan in the short term could jeopardize an overhaul, asked whether aiming to pay for such an overhaul in a six-year window would be a mistake.
Baucus and the advocates note that the Congressional Budget Office's scoring rules limit the agency from realizing the full potential of many cost-cutting measures.
Orszag said that the concern is valid and that changes could be made. "There's a group of scorekeepers that should get together to discuss the rules; that would be a good thing" (Edney, CongressDaily, 3/10).
Orszag said, "One of the frustrations is that [there] has not been enough research done on quantifying the things that we're talking about," including an expansion of electronic health records, emphasizing preventive medicine and comparative effectiveness research (CQ HealthBeat, 3/10).
Republicans Begin Voicing Concerns
CQ HealthBeat reports that Republicans have largely agreed with the need for an overhaul, even if they disagree regarding the methods for achieving it.
Senate Finance Committee ranking member Chuck Grassley (R-Iowa) said, "I haven't had a single Republican senator say to me we shouldn't be doing anything with health care."
However, Republicans have expressed opposition to proposed payment cuts for Medicare Advantage plans estimated at $175 billion over 10 years, comparative effectiveness research and the introduction of a public insurance option to compete with private insurers (Armstrong, CQ HealthBeat, 3/10).
Grassley expressed concern that Obama's proposal to cut payments to insurers offering MA plans to help fund an overhaul would negatively affect rural states.
Grassley said, "I want to make sure that we -- if we have a national system of health care -- it's going to deliver the same thing in Iowa as it does in California, because, for 40 years, it didn't" (Lengell, Washington Times, 3/11).
However, Grassley said, "We haven't had to make any difficult decisions yet," adding that the "true test of this bipartisan process will be how we handle these details," such as what means of cutting costs will be included in the final bill.
Grassley said he would not support any proposal that makes major changes to coverage for beneficiaries.
In response, Orszag said, "I know many people believe capitalism is founded on private markets, and it is," but "[w]hat it is not founded on is excessively high subsidies," referring to statistics that MA plans receive higher payments on average than traditional Medicare plans.
Baucus said of the MA program, "We'll see how we can modify it, compromise. ... Everything is on the table. We need give and take" (Armstrong, CQ HealthBeat, 3/10).
At the Senate Finance Committee hearing, Baucus repeated his pledge to have a health care overhaul bill out of the committee by June and to the president before the August congressional recess. Grassley called that goal "ambitious but achievable."
Baucus said that he will hold a series of informal "walkthroughs" in late April where legislation will be previewed for interest and advocacy groups (Armstrong/Wayne, CQ Today, 3/10).
CBO Director Questions Savings
At a House Energy and Commerce Health Subcommittee hearing Tuesday, CBO Director Douglas Elmendorf said that Obama's health care proposal might not result in large-scale savings desired by most advocates. He said that over the first 10 years, any major overhaul "might not yield substantial budgetary savings or reductions in national spending on health care."
He added that some provisions might even result in higher costs. According to Elmendorf, "expanding use of disease management" likely would improve health and could be cost-effective, but the effort might not lead to reductions in spending because the number of people receiving such services is typically much greater than those who would avoid costly procedures as a result of the efforts (CongressDaily , 3/10).
Elmendorf also warned that seeking to cut costs in health care will be difficult because many people and companies benefit from these costs and because payment systems do not include incentives to encourage care providers to reduce spending.
He said, "The available evidence suggests that a substantial share of spending on health care contributes little if anything to the overall health of the nation, but finding ways to reduce such spending without also affecting services that improve health will be difficult" (Armstrong/Wayne, CQ Today, 3/10).
DeParle Opinion Piece
Although some have suggested otherwise, the "reality is that if we want to fix the economy, we can't afford not to tackle health care," Nancy-Ann DeParle, director of the White House Office for Health Reform, writes in a Boston Globe opinion piece.DeParle concludes, "With a focus on cutting costs, expanding coverage, and improving the quality of health care, and with the new sense of urgency across the spectrum, as Senator [Edward] Kennedy (D-Mass.) said on Thursday, 'this time we will not fail'" (DeParle, Boston Globe, 3/11). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.