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Patrick Springer, Published April 01 2010

Conrad touts health reform’s cost-savings

A crucial but often overlooked component of the sprawling health reform package is the incentives medical providers will have to deliver good outcomes at lower cost, Sen. Kent Conrad, D-N.D., said Wednesday.

Conrad, flanked by local hospital administrators and representatives of nurses, physicians and seniors’ organizations that backed reform, briefed reporters on key elements of the package.

The so-called “frontier amendment” to increase Medicare payments $65 million a year to doctors and hospitals will help maintain delivery of health services throughout North Dakota, Conrad said.

“North Dakota was at or near the bottom in reimbursements even though we were in the top 5 percent of outcomes,” he said.

Adequately funding Medicare payments to hospitals and clinics will directly benefit patients by helping to maintain staff and services, Conrad said.

Health representatives on hand for the briefing, including administrators of Innovis Health and MeritCare, spoke in support of the legislation.

Dennis Millirons, president of the MeritCare Medical Center, applauded the expansion of health coverage, which proponents say will allow coverage for 95 percent of the population.

Removing the geographical disparities in Medicare reimbursement is a strong starting point, said Kevin Pitzer, chief administrative officer of Innovis. “We need to move forward, both as a country and as a state,” he said.

Although much of the bill, including most insurance reforms, do not take effect until 2014, some take effect immediately, including tax credits of up to 35 percent of premiums to help small businesses cover employees. About 90 percent of North Dakota businesses would be eligible, Conrad said.

An analysis by the Congressional Budget Office concluded the health reforms will save $143 billion over 10 years and $1.3 trillion in the next 10 years. Critics, including Republicans, have contended health reforms will exacerbate deficits, an argument Conrad disputes.

“This legislation is already fully paid for,” Conrad said, adding that no further tax increases beyond those in the reform package will be required.

New accountable care organizations will be rewarded when delivering good care efficiently by allowing medical providers to pocket part of the savings, giving them a strong incentive to improve, Conrad said.

“Economists tell us over time that’s going to make a difference,” he said. Also, he added, pilot projects to test methods of delivering effective care more affordably can be implemented nationwide immediately if their merit is proven.

“This bill moves to paying for performance,” rather than paying for procedures regardless of results, what’s called “fee for service,” Conrad said.

Other provisions will provide scholarships for health professionals who work in rural areas, and give 10 percent yearly bonuses over five years in reimbursements to primary care doctors and general surgeons.

Studies show that primary care helps to lower health costs and improve outcomes. The higher payments are intended to encourage more doctors to focus on primary care.

Health care now consumes $1 of every $6 in the U.S. economy. Unchecked, the current trend, which Conrad said is economically unsustainable, would mean $1 of every $3 dollars would be spent on health care by 2040.

“Those who say do nothing are false prophets,” Conrad said. “We cannot afford to do nothing.”

He added of the reform package: “It’s not going to solve all of the problems. But it is a good first step.”


Readers can reach Forum reporter Patrick Springer at (701) 241-5522