Who will rein in healthcare costs? Don't look to Congress.

The issue of controlling healthcare costs is so contentious that Congress may opt for a bill that punts much of the task to an independent commission.

By , Staff writer

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    Senate Majority Leader Harry Reid gestures during a news conference in Washington on Tuesday.
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As Congress grapples with how to rein in the high cost of healthcare in America, the option of outsourcing hard decisions to a new, independent commission is gaining momentum.

Backers say a commission with a mandate to improve America's healthcare delivery system and rein in unsustainable costs could be a game-changer.

At a time when lawmakers are getting hammered by interest groups, it’s also a nod to the goal of fiscal discipline without having to specify where those cuts will come. Critics say it’s the latest sign that Congress can’t muster the political will to cut unsustainable costs.

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“In their current forms, none of the bills go far enough to reduce healthcare costs given the tremendous fiscal problems facing the country and the major role healthcare plays as a driver,” according to a report by the Committee for a Responsible Budget released Monday.

CRFB president Maya MacGuineas says the polarized, partisan climate on Capitol Hill isn't conducive to making tough political decisions.

“If politicians are going to spend so much of their energy beating up each other and pandering to interest groups, putting in a panel of experts to lend political cover makes these changes more likely to occur,” she says.

The Senate Finance Committee’s healthcare bill proposes a 15-member, independent Medicare Commission to present Congress with comprehensive reform proposals. In years when Medicare costs are projected to be unsustainable, these proposals take effect, unless Congress intervenes with an alternative that achieves the same level of savings.

The commission will have the power to set reimbursement rates for doctors and hospitals in order to stop “excessively high increases in healthcare costs,” said Sen. Max Baucus (D) of Montana, who chairs the Senate Finance Committee and is one of three negotiators working out a compromise bill to take to the floor.

The Congressional Budget Office estimates that such a commission would reduce Medicare spending by $22 billion from 2015 to 2019, when its recommendations would begin to be implemented.

Exhibit A for the political perils of cutting healthcare costs is Senate debate this week on a bill to end mandated reductions in payments to doctors treating Medicare patients. The “sustainable growth rate” (SGR) for Medicare was a centerpiece of Congress’s last round of deficit-reduction reform in 1997.

But the formula met such resistance from seniors and their physicians that Congress has passed a “Doc fix” to restore the cuts every year since 2003. Without the fix, doctors treating Medicare patients would face a 21 percent reduction in Medicare payments in fiscal year 2010.

Republicans slammed Senate Democrats on Tuesday for ending the mandated reductions without identifying $245 billion in offsets to pay for it.

“The majority wants to begin the healthcare debate by passing a bill which potentially will cost $300 billion and not be paid for,” said Senate Republican leader Mitch McConnell in a briefing with reporters. “I thought the whole healthcare debate was about getting costs down.”

Sen. Debbie Stabenow (D) of Michigan, the lead sponsor of the bill, calls the SGR formula “a mistake” that must be corrected in the interest of honest budgeting. “We are pretending we are solving this problem by paying for it every year and we are not,” she said. “In the context of healthcare reform, we are not going to move forward with devastating cuts.”

In a nod to the practice of the last seven years, the Obama administration did not include projected revenue from reducing Medicare SGR payments in its budget for FY 2010.

“There aren’t any easy deficit reductions anymore,” says Stanley Collender, a budget analyst at Qorvis Communications here. “If there were easy reductions, they would have been done already.”

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Where in the world are they getting healthcare right?

As the US struggles to overhaul its system, nations from Taiwan to Germany offer a few lessons – and warnings. Click here to read.

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