Senate Finance Committee – Roundtable Discussion on Financing Comprehensive Health Care Reform

Today the Senate Finance Committee held the last of three scheduled roundtable discussions on health reform. Today’s discussion focused on financing. There will be a closed-door Committee walk-through of this third element of tentative legislation on May 20.

The major themes of the financing discussion were:

• Extensive discussion of the current exclusion from income tax of employer sponsored health care. Senator Baucus stated that the exclusion would not be repealed but that modifications should be discussed. Some of the ideas for modification included capping the exclusion or linking it to income level. Some witnesses advocated phasing it out. There was some agreement that no single mechanism exists that will finance all of health reform.
• Another issue raised in the context of using the tax code to finance reform was geographic variation in health costs and whether geographic variation in the tax burden would be constitutional.
• There was some discussion of the reasons for geographic variation in health care costs and that the adherence of physicians to evidence-based guidelines is quite low. The need for developing compliance incentives was highlighted. The existence of integrated systems (Washington, Oregon, Minnesota) was noted as a mechanism that can make a difference in controlling costs.
• Comparative effectiveness research was discussed and a number of witnesses stated that it had an important role to play in ensuring that the care paid for is of high value and results in good outcomes.
• Bundled payments to hospitals, Medicare physician payment reform, and health information technology were all highlighted as areas where reforms can improve care, health outcomes, and result in savings.
• Employers do not want to abdicate their historic role in providing health insurance to their employees. Employers do want better alignment between cost and quality. Critically important to build on employer-sponsored system.

The participants in today’s roundtable are listed below. Their written statements may be accessed at http://finance.senate.gov/sitepages/hearing051209.html
Stuart H. Altman - Professor of National Health Policy, Heller School for Social Policy and Management, Brandeis University, Waltham, Mass.
Joseph R. Antos - Scholar in Health Care and Retirement Policy, American Enterprise Institute
Katherine Baicker - Professor of Health Economics, Harvard School of Public Health
Leonard Burman - Director, Tax Policy Center, Urban Institute
Robert Greenstein - Executive Director, Center on Budget and Policy Priorities
Jonathan Gruber - Professor of Economics, Massachusetts Institute of Technology
Michael F. Jacobson - Executive Director, Center for Science in the Public Interest
James A. Klein - President, American Benefits Council
Edward Kleinbard - Chief of Staff, Joint Committee on Taxation
Gerald M. Shea - Assistant to the President, Governmental Affairs, AFL-CIO
John Sheils - Senior Vice President, The Lewin Group
Gail Wilensky - Senior Fellow, Project HOPE
Steven Wojcik - Vice President, Public Policy, National Business Group on Health