Monday, May 11, 2009

The Weekly Strike-5/11-5/17

Good morning and welcome to the Weekly Strike, where we preview another busy week in politics. Make sure you leave your comments this week! We will post the most insightful one in Friday's Daily Strike.

THE WHITE HOUSE: The President has a meeting this morning on a topic dear to my heart, health care reform. A group of health care stakeholders, ranging from doctors and nurses, to suppliers and insurance companies, have unveiled a proposal to cut health care costs by $2 trillion over ten years. Were they to accomplish these cuts, it would make a big dent in our budget deficit. The proposal, which the group will present to the President, outlines several areas of potential cost savings:

1. Administrative simplification and standardization.

2. Reducing overuse and underuse in health care by incentivizing high quality and efficiency. This would include payment reform in which doctors would receive a "bundled" payment to treat a chronic disease, instead of a traditional fee-for-service payment system, which incentivizes unnecessary care.

3. Promote care coordination to help reduce preventable hospitalizations.

4. Reduce the cost of doing business by addressing "cost drivers."

Not specifically mentioned in the letter, but implied by sources close to the group, is that these stakeholders will also accept changes to Medicare that would do away with "advantage" payments to private companies, an unnecessary expenditure that costs taxpayers billions of dollars each year.

I would say that I’m cautiously optimistic about these proposals. Two things make me extremely encouraged. One, the proposals themselves are VERY good. Trying to cut down on hospital readmission is a great way to save money, because you are using less services, and you are giving doctors and other providers incentive to do things right the first time. Also, I’m very encouraged that they’re talking about bundled payments. At the hospital systems that have adopted this type of payment reform (where you pay a set fee to treat a chronic disease, instead of paying for each procedure) has drastically improved quality scores and has saved providers large sums of money. Also, getting industry representatives to agree to cut private payments to Medicare is a HUGE accomplishment. In the course of a few months, we’ve gotten industry and Big Pharma companies to make enormous concessions on preexisting conditions and Medicare Advantage. The big negative I see at this point is that they are agreeing to broad principles but haven’t made any firm commitments. They can back out at any time and try and sabotage the whole plan. As Paul Krugman wrote, though, the pressure is working! Keep applying it! The more health care stakeholders see that their power might be threatened, the more they might be willing to make some key concessions. That’s why it might have made sense to at least suggest the possibility of a single-payer system early, so that industry people would come crawling back and offer to “just” have a public option, not a full government-run program.

Later today, the President meetings with the 2009 NCAA Basketball Champion North Carolina Tar Heels. Obama will be pleased with this crew, because he picked them to go all the way in his tournament bracket. He also practiced with the team during a campaign stop in North Carolina last spring.

Tomorrow, President Obama hosts a poetry slam at the White House. I can't say I could have seen that happening when Bush was in office. Wednesday, the President heads west to give the commencement address at Arizona State University. As you might remember, the school caused some controversy by refusing to give the President an honorary degree because he hadn't "accomplished" anything yet. With intense public pressure to not be a bunch stubborn idiots, they decided that the first African American President at the very least had done enough to have a scholarship named after him. Thursday, the President travels to New Mexico for a town meeting.

THE SENATE: This week will be another very busy one on Capitol Hill. There are two weeks left until the one week Memorial Day recess. The Senate will take up the Credit Card Bill of Rights this week, a measure endorsed by President Obama in his weekly address. The bill, which enacts new regulations protecting consumers from credit card companies, passed the House a couple of weeks ago. I expect the Senate to debate and vote on a slew of amendments before getting to final passage Thursday or so. Despite opposition from Republicans, I expect the Credit Card Bill of Rights to pass pretty comfortably. It will presumably then go to a House-Senate conference.

THE HOUSE: The House also has a packed schedule. Tomorrow and Wednesday, the House will consider various bills under suspension of the rules. One of those bills is a version of the Senate-passed military procurement reform proposal, which applies new regulations to military contracting. The Senate passed the bill unanimously, so House leaders probably decided it wasn't worth taking too much time to debate.

Next, the House moves to consider a bill to make public schools energy efficient. While this bill makes a lot of sense to most reasonable people, I expect Republicans to object for a variety of reasons. One, the proposal probably authorizes a good deal of money to be spent (which would of course be offset by savings in the long-run from decreased electricity usage). Second, Republicans usually reactively oppose anything having to do with green energy or public schools. This bill is the double whammy!

Finally, the House will consider a bill to fund wars in Iraq and Afghanistan through the end of September. I expect the bill to pass pretty easily, with support from moderate Democrats and most Republicans. So far, Democratic leaders have not added additional non-defense spending to the bill (as they have with supplemental funding bills in the past). Nor have they sought to restrict the President's policies in the two countries. House Appropriations David Obey, an critic of the administration's policy in Afghanistan, wants to condition funding after one year on progress on various benchmarks. I'm not sure whether those benchmarks will make it into the final version for the bill. If the House Rules Committee allows for amendments, I expect one of the liberal members, like Rep. Barbara Lee of California, will propose bringing troops home immediately.

That's it for now. Track the progress on these important pieces of legislation by reading our Daily Strike! See you tonight!

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