This afternoon, the Department of Health and Human Services (HHS) announced a new pilot program that will pay hospitals and doctors a lump sum for treating a particular condition, rather than reimbursing for each separate service. The initiative is part of the new payment reform demonstration projects authorized by the Affordable Care Act:

In Medicare currently, hospitals, physicians and other clinicians who provide care for beneficiaries bill and are paid separately for their services. This Centers for Medicare & Medicaid Services (CMS) initiative will bundle care for a package of services patients receive to treat a specific medical condition during a single hospital stay and/or recovery from that stay – this is known as an episode of care. By bundling payment across providers for multiple services, providers will have a greater incentive to coordinate and ensure continuity of care across settings, resulting in better care for patients. Better coordinated care can reduce unnecessary duplication of services, reduce preventable medical errors, help patients heal without harm, and lower costs.

The Bundled Payments initiative is being launched by the new Center for Medicare and Medicaid Innovation (Innovation Center), which was created by the Affordable Care Act to carry out the critical task of finding new and better ways to provide and pay for health care to a growing population of Medicare and Medicaid beneficiaries.

Policy makers are hoping that by paying for an episode of care as a whole, providers will have the flexibility and financial incentives to better coordinate care within each episode and avoid complications and readmissions. HHS is now accepting applications for the program and if it accrues savings will hopefully expand the project to more providers and health conditions.

The Center On Budget and Policy Priorities’ (CBPP) Paul N. Van de Water is out with a new report warning lawmakers on the Super Committee against considering proposals that would gradually raise the Medicare eligibility age from 65 to 67. President Obama and House Speaker John Boehner (R-OH) recently accepted the idea as part of an overall package to increase the debt ceiling and many expect that policy makers will revisit the option in their search for savings.

Van de Water argues that raising the age would actually increase overall system costs and only save the federal government money “by shifting costs to most of the 65- and 66-year-olds who would lose Medicare coverage, to employers that provide health coverage for their retirees, to Medicare beneficiaries, to younger people who buy insurance through the new health insurance exchanges, and to states”:

Be sure to read the full report here, but suffice it to say raising the Medicare age — aka pushing 65 and 66 year-olds into insurance plans on the exchange — is just another way of partially privatizing the program, shrinking it, and ultimately moving the nation closer to the conservatives’ goal of eliminating it entirely.

Modern Healthcare is out with its annual list of 100 influential people and up top sits House Budget Chairman Paul Ryan (R-WI), who successfully managed to shift the public health care conversation towards privatization and cost shifting to the beneficiary. That placement is questionable, particularly since it argues that Ryan is more influential than HHS Secretary Kathleen Sebelius and President Obama, both of whom are responsible for pushing through and implementing the biggest health care changes in American history. The top six look like this:

1. Paul Ryan
U.S. representative (R-Wis.), chairman of the House Budget Committee, Washington

2. Peter Shumlin
Governor, state of Vermont, Montpelior

3. Barack Obama
President of the United States, Washington

4. Donald Berwick
Administrator, CMS, Washington

5. Kathleen Sebelius
Secretary, HHS, Washington

6. Newt Gingrich
Founder, Center for Health Transformation, Washington; former House speaker

Part of me thinks these lists are designed to trigger controversy, another believes that there is a point to the argument that Ryan has successfully transformed the “cost control” conversation to one about vouchers and for that he probably deserves some recognition. But his success only speaks to the failure of progressives in clearly articulating how the cost control provisions in the Affordable Care Act work to reduce the rate of health care spending, how new payment and delivery models encourage doctors and hospitals to provide more efficient care and how a greater investment in medical research will help the government determine which ineffective treatments it shouldn’t pay for. So if Ryan is influential this year, health care reform advocates have all the more reason to make sure he’s not next year.

The Hill’s Sam Baker reports that the health insurance and small business lobbies are teaming up to advocate for the repeal of the Affordable Care Act’s tax on health policies. The provision, which is scheduled to go into effect in 2014, will raise $8 billion in its first year (and more thereafter) to pay for the coverage provisions in the law:

NFIB is already part of a large coalition dedicated to fighting the sales tax. AHIP — which has consistently opposed the tax — said it’s partnering with NFIB to highlight the effects not only on employers, but also people who buy individual coverage on the open market.

“This tax will increase costs for small employers and also for individual market customers and public program beneficiaries. We appreciate NFIB’s leadership on this critically important issue, and look forward to working with them to shine the spotlight on how the new premium tax will drive up the cost of coverage,” AHIP spokesman Robert Zirkelbach said in a blog post.

Insurers have referred to this tax as “an unprecedented sales tax on small businesses and individuals,” and unless the industry offsets the fees through innovation and efficiency, some of the costs may be passed down to employers and individuals. But generally speaking, in a law that pays for its coverage expansions and reduces the deficit, somebody has to pay more if others get more. Taxing the industry — which is currently seeing incredible profits and will gain millions of new customers from reform — sounds like a much less burdensome option than lowering the premium subsidies and cost-sharing credits for the newly insured.

Paul Krugman reiterates the wage disparity between states in the Northeast and Texas and I would just add that all of this has some serious consequences when it comes to health care coverage:

Of the 211,000 jobs Texas created last year, the Bureau of Labor Statistics tells us that 37 percent paid at or below minimum wage. The state now has the most minimum-wage workers (550,000 in all) in the nation and that naturally translates into a growing demand for Medicaid. In fact, the number of Texans eligible for the program has soared from 2.1 million in 2001 to 3.5 million today and the uninsured rate has also skyrocketed to an astounding 26 percent — the worst in the nation for health care coverage.

The low wage economy also means a low tax structure and constant funding shortages. As a result, lawmakers this year cut $805 million from doctors serving Medicaid patients and postponed $4 billion in Medicaid costs for payment in the next budget cycle. The latest state budget also included an 8 percent cut in reimbursement rates to hospitals, which came on top of a 2 percent cut in the last budget, in addition to a 23 percent cut to trauma care funding.