Blue Dogs Won’t Vote For What They Support

bluedogsupersizeThe fifty-member Blue Dog Coalition has written a letter to House Speaker Nancy Pelosi (D-CA) revealing “strong reservations” about the Tri Committee’s health care bill. “After reviewing the draft tri-committee health care reform proposal, we believe it lacks a number of elements essential to preserving what works and fixing what is broken,” the letter reads:

Deficit Neutrality: “Paying for care reform must start with finding savings within the current delivery system and maximizing the value of our health care dollar before we ask the public to pay more.”

Delivery System Reform: “The discussion draft fails to include adequate structural changes that will succeed in lowering costs and increasing value.”

Rural Health: “We must not fail to address the underlying problems and inequities that plague rural providers.”

Public Option: “A Medicare-like” public option would negatively impact hospitals, doctors and patients…using Medicare’s below-market rates would seriously weaken the financial stability of our local hospitals and doctors.”

Democrats have already committed themselves to fully funding health care reform and the President has identified $632 billion worth of savings from within the system. Rahm Emanuel, who visited the Capitol twice this week to discuss health care proposals with House Democrats, has said Obama would prefer that money to pay for the legislation come from within the health care system — as he argued in a letter to Sens. Baucus and Kennedy — and OMB Director Peter Orszag is urging lawmakers to include “further cuts in the Medicare and Medicaid payments that hospitals receive for treating the uninsured. In fact, according to a CBO estimate of the Tri Committee bill, the draft would save some $500 billion from Medicare cuts.

More importantly, the letter contains an inherent contradiction: the Blue Dogs want to find more savings within the system — they’re asking for Delivery System Reforms and “maximizing the value of our health care dollar” — but they’re also asking the bill to spend more on rural health and physician reimbursement. And they are reluctant to support any legislation that moves us towards that goal, causes providers to lose revenue, or regulates the system to improve efficiency.

Consider their objection to a “Medicare-like” public option that reimburses providers 5 to 10 percent above Medicare rates. According to MedPAC, Medicare rates are adequate and consistent with the efficient delivery of services. In fact, over-payments by private insurers to health-care providers drives up overall costs. “Hospitals which didn’t rely on high payment rates from private insurers ‘are able, in fact, to control their costs and reduce their costs when they need to’ and ‘combine low costs with quality,’” Glenn Hackbarth, the chairman of MedPAC, said during recent testimony in front of the House Ways and Means Committee. Moreover, if the public plan pays bloated market rates, it will fail to offer lower premiums within the Exchange, and would cause the government to spend more money on subsidies.

Thus, as Pelosi said yesterday, “squeeze out what you can from the system — savings, savings, savings. … Otherwise the bill is endless.” In this case, the Blue Dogs are slowing down an effort that implements their principles for reform.