NU Online News Service, April 24, 3:34 p.m. EDT

WASHINGTON–The head of a Senate committee working on health care reform said details of a “public option” proposal utilizing Medicare and Medicaid resources to provide competition to private health insurers’ products are still in the works.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said today that creation of a public option for health care services is “on the table,” but how it will work and the role it will play in health care reform remains undecided.

Sen. Baucus made his comments at a briefing for reporters as he announced that his committee will start the process of drafting such legislation next week by releasing a position paper on the various options for changes in the health care system.

On the public option, which the health care industry–including producers–strongly oppose, he said the committee “will get to this a little later.”

He said “there are a lot of ways of dealing with this,” but he wants to get a “little momentum” behind the legislation before he tackles such divisive issues.

“Cool it,” he said. “We don’t have to deal with it now–it’s kind of a hot-button item.”

The “opportunity for reform is now,” said Sen. Baucus, because “the stars are aligned,” unlike the situation in 1993 and 1994, when efforts by the Clinton administration ended in failure, followed by a takeover of Congress by Republicans in November 1994.

The reason such legislation is needed now, he said, is that there is bipartisan support for it, “and the need for change was not as great in 1993-94 as it is now.”

He explained that his committee will develop health care reform legislation by dividing the drafting into three separate areas: changes to the health care delivery system, systems for expanding coverage to all citizens, and the proposals for financing, such as the tax increases needed.

The white papers will be the first step, followed by a “walkthrough” of legislative proposals on each option. “The white papers will be the basis for what we will wind up with this year,” he said.

Afterward, in June or July, drafting will begin, he said, with the aim of reconciling them with legislative proposals being drafted by the Senate Health, Education, Labor and Pension Committee.

The hope, he said, is that a Senate bill can be on the floor by mid-July. That will allow for work to be completed by the August recess, then reconciliation with the House version, also expected to reach the floor by mid-July, in the fall.

In his detailed comments, Sen. Baucus said the overall approach is to develop a coherent, less expensive health care system that would replace the current “hodgepodge” that he said has led to a 29 percent disparity between regions in the cost of treating particular problems just because “that’s the way we do it.”

He also said a critical component of a revised system is one that provides health care for all, including those employed by small businesses.

Specifically, he said, there will be pressure on employer plans currently covered under the Employee Retirement Income Security Act (ERISA) to provide coverage “if our plan works.”

In explaining how the revised system might function, Sen. Baucus generally followed the outline of proposals unveiled in a Commonwealth Fund Commission report titled “The Path to a High Performance U.S. Health System: A 20/20 Vision and the Policies to Pave the Way.”

That report recommended “an integrated set of reforms” that would change the way the United States pays for health care.

The objective, the report said, would be to reward “high-quality care and prudent stewardship of resources and to encourage reorganization of the health care delivery system.”

According to the report, the reforms would:

o Strengthen and reinforce primary care by revising the Medicare fee schedule to enhance payment for primary care services and to ensure annual increases that keep pace with the cost of efficient practice.

o Institute new ways of paying for primary care to encourage adoption of the medical home model and promote more accessible, coordinated, patient-centered care, with a focus on health and disease prevention.

o Promote more effective, efficient and integrated health care delivery by
adopting more bundled payment approaches to pay for care over a period of time or for the duration of an illness, with rewards for quality, outcomes and efficiency.

o Correct price signals in health care markets to better align payments with value.