The White House has sent a letter to Congress formally inviting Republican and Democratic leaders to the February 25th health care summit. The letter lays out the rough framework for discussion and strongly implies that the President will unveil the final package of compromises between the Senate and House health care bills ahead of the meeting:

Since this meeting will be most productive if information is widely available before the meeting, we will post online the text of a proposed health insurance reform package. This legislation would put a stop to insurance company abuses, extend coverage to millions of Americans, get control of skyrocketing premiums and out-of-pocket costs, and reduce the deficit.

It is the President’s hope that the Republican congressional leadership will also put forward their own comprehensive bill to achieve those goals and make it available online as well.

While it’s unclear what exactly the White House is proposing, the letter’s phrasing — Obama hopes Republicans “will also put forward their won comprehensive bill” — suggests that the administration is planning on posting something beyond a set of principles or talking points.

Meanwhile, the Republican House Leadership has written a letter to President Obama asking him to suspend negotiations ahead of the summit. “[W]e were taken aback by a report in the Tuesday, February 9 edition of Politico stating that President Obama ‘hopes to walk into the Feb. 25 summit with an agreement in hand between House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid on a final Democratic bill, so they can move ahead with a reform package after the sit-down.’”

“To ensure we can move forward in good faith, we ask that you publicly disavow these reports and assure the American people that Democratic Leadership is not putting together any kind of backroom deal or plotting any kind of legislative trickery to pass it,” the letter said.

This morning, Fox & Friends covered President Bill Clinton’s hospitalization by asking if the President would have been treated for his heart problems “if the health care reform had gone through.” “Would he have gotten those stents?” host Brian Kilmeade asked in-house health reform expert Peter J. Johnson Jr.

Johnson admitted that “under a lot of protocols he would have gotten those stents,” but suggested that if the government adopted best practice methods using comparative effectiveness research, “perhaps hundreds of thousands of people like the president” would receive a cheaper, less effective, treatment:

JOHNSON: If the government decides to adopt the Peter Orszag, budget director, architect of health care, method and put in regulations that say there is a gold standard, there is a best practice based on the literature, perhaps hundreds of thousands of people like the president, I’m not going to make a determination…if the new standard is save money, best practices, does President Clinton or you or I who needs it get the stent under that new regimen of health care effectiveness?

Watch it:

Conservatives have long used comparative effectiveness research (CER) to further their claim that health care reform would ration treatments based on cost, impose a one-size-fits-all standard for medicine, and keep doctors from prescribing more expensive and effective procedures. But this line of thinking misunderstands the purpose of CER and ignores legislative language that specifically prohibits the government from applying research findings to coverage decisions. CER is a recommendation, not a mandate. (See pg. 1652 of the Senate bill or pg. 769 of the House bill).

Rather than making arbitrary decisions based on cost, CER — which compares clinical outcomes of alternative therapies used to manage the same condition — would provide doctors with unbiased information about the most effective treatments, help doctors and patients make better informed decisions, and improve the quality of care. Properly conducted CER will actually promote faster adoption of personalized care, not one-size-fits all medicine.

As Alan Garber of Stanford and Sean Tunis of the Center for Medical Technology Policy point out, “far from impeding personalized medicine, CER offers a way to hasten the discovery of the best approaches to personalization, providing more and better information with which to craft a management strategy for each individual patient.”

Indeed, CER could have actually improved treatment for heart disease by exposing harmful procedures and informing health care providers about best practices. The course of treatment, however, will always be left to the patient and their doctor.

Earlier this week, Massachusetts Governor Deval Patrick introduced legislation giving the state insurance commissioner “authority to review and reject rates charged by hospitals, physician groups, medical imaging centers, and insurers.” The commissioner could “reject premium hikes ‘significantly higher’ than 3.2%, the current medical inflation rate, and prevent health insurers in the small business market from “raising premiums by more than 1.5 times the rate of medical inflation.”

Patrick’s proposal follows a recent report released by Massachusetts Attorney General Martha Coakley, which concluded that “insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care” because hospitals and dominant physician groups with the greatest market leverage are “able to demand the most money.”

Deval’s new legislation tries to prevent providers (and payers) from using their leverage to artificially inflate prices and it relies on a strategy popular in the 1970s and 1980s, when at least 30 states — including Massachusetts itself — used all-payer rate setting to contain health care spending. Lawmakers established rate boards that considered “the differences in labor markets and how much a hospital pays in wages; the amount of charity care the hospital does; and whether it treats a large number of severely ill patients” and set rates accordingly.

By setting prices at the actual cost of delivering services, lawmakers hoped to reduce wasteful spending and spur efficiency — while freeing hospitals from the uncertainly of annual rate negotiations with insurers. And it worked. At least, a little. One study found that from 1982 through 1986, “all-payer ratesetting reduced hospital expenditures by 16.3 percent in Massachusetts, 15.4 percent in Maryland, 6.3 percent in New York, and 1.9 percent in New Jersey, compared with the national average.” Other studies disagreed and during the conservative revolution of the 1980s, most states abandoned the practice in the hopes that managed competition could deliver lower rates. Today, Maryland is the only state that continues to maintain an all-payer rate setting system, but the strategy is also used in France, the Netherlands, Japan, Australia and Germany.

The indispensable Maggie Mahar notes that “a review of the Maryland plan published in a recent issue of Health Affairs reports that, since 1976, state regulation of hospital rates has saved $40 billion. Had a similar system been in place over the same period of time for all states, savings would have totaled $1.8 trillion or more.” The Maryland system is “widely regarded as having created a market in which payments are predictable, transparent, and fair, and in which profits have not suffered as a result,” Mahar argues. “Providers are protected from having to negotiate rates with payers; payers, meanwhile, are shielded from the high markups attached to hospitals services in other states; and patient access to hospital care is protected.”

But it’s not clear how much money Massachusetts would save. A recent RAND study of 12 options for reducing health care spending in the state ranked traditional hospital all-payer rate setting as the second most likely tool for changing the trajectory of health care growth, but concluded that “there were no ‘silver bullets’ that, alone, would reduce the rate of growth in health spending to that of GDP.” The report concluded that, “at a maximum, hospital rate setting could reduce health spending in Massachusetts by nearly 4 percent between 2010 and 2020.” RAND warns however, that providers could try to undermine rate setting by unbundling certain services, increasing admissions or length of stay.

Patrick’s legislation reads like a very modified rate-setting proposal which, if it has support from the providers — in Maryland the hospitals actually introduced the idea — could put Massachusetts on the road to lowering costs. It’s one of many solutions the state should be considering.