The Grand Senate Compromise: First Draft

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What's to make of the formal death of the public option in the Senate? Conservatives cheer, but it's not at all clear what's been sent to the Congressional Budget Office for scoring. The possibilities include: allowing eligible folks 55 years and older to buy into Medicare -- the folks most likely to be unemployed and under-insured, although the highest risk pool. (Who's eligible? When are they eligible? 2010? 2014? Not sure.)  Another possibility: expanding Medicaid eligibility (though not to more than 133% of the poverty line) and more money to pay for a significant increase in community health care centers. Will the federal agency that's going to oversee the variant of the congressional/federal employee plan have the ability to make changes that bend the cost curve? The upside for Dems: more people would be covered by high-quality federal plans. The downside: there'd be little in the way of competition for the insurance companies, and there'd be no trigger to hang over their heads. Sen. Russ Feingold rejected the compromise, but he did not say it would force him to vote against final passage: "I will base my vote on the bill on the entirety of what is in the bill, and whether I think the bill is good for Wisconsin."

As Ronald Brownstein wrote two weeks ago, Harry Reid's bill includes significant cost containment mechanisms, some of which are currently in the process of being weakened. Still, proposals that would pay doctors more for better care are moving along, as is some version of the Independent Medicare Advisory Commission (the difference is when the recommendations kick in.), as are aggressive plans to test pay-for-performance mechanisms. These are very complicated issues. For example, cancer patients often develop pneumonia repeatedly and are readmitted to the hospital for treatment. It would be unfair to the hospital if they were penalized for these so-called "readmissions" because the etiology of the disease is the cancer, which the hospital cannot control. More promising programs would track surgery patients and see how many were re-admitted on the basis of infections or because of mistakes by the surgeons. The fate of "bundled" payments and their incentives on providers is unclear. One early reform: prohibiting doctors from owning or having financial interests in the labs they send tests to -- does not seem to be in the cards.

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Marc Ambinder is an Atlantic contributing editor. He is also a senior contributor at Defense One, a contributing editor at GQ, and a regular contributor at The Week.

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