Congress left to pick up health care pieces

By Gary Harmon
Friday, February 5, 2010

Congress seems ready to take on a piecemeal approach to changing the nation’s health care system, U.S. Rep. John Salazar, D-Colo, said.

If the one-plan approach fails in Congress as President Obama now fears it will, Salazar said, he hopes to see Medicare given the ability to negotiate prices with drug companies, as well as eliminate antitrust exemptions for the health care industry.

Drug-price negotiations by Medicare would be “a good idea,” Rocky Mountain Health Plans President Steve ErkenBrack said. “Getting drug costs ratcheted down by allowing negotiations would be a definite help.”

Congress, however, should be careful that eliminating health care exemptions from antitrust provisions doesn’t boomerang and damage systems such as the one in Grand Junction, ErkenBrack said.

Allowing for negotiations between the federal health care program and drug companies, much as the Department of Veterans Affairs does, could save the federal government 50 percent on those purchases, Salazar said. Medicare spends about $48 billion a year on drugs, so the ability to negotiate prices “could save the taxpayer lots of money with that,” he said.

While Salazar said lifting the antitrust exemption from health care would stimulate competition, ErkenBrack said he worried that Grand Junction’s cooperative system of independent nonprofit providers could be harmed.

Grand Junction’s system has been praised in studies conducted by Dartmouth University, and in publications such as The New York Times and The Los Angeles Times, for its lower costs and close working relationships among hospitals, the insurer, an electronic-records manager and other participants.

“I would fear the unintended consequences of precluding the collaborative relationship with physicians,” ErkenBrack said.

The McCarran-Ferguson Act, adopted in 1945, gave states the power to regulate insurers and freed companies from federal antitrust authority in areas controlled by state laws.