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Cost Issues Loom Large Over Health Care Debate

(CBS/AP)
The Democrats' comprehensive health care reform bill will prove to be a complex, multi-faceted proposal, but the common theme found in every discussion of the legislation is cost -- how to cover the cost of expanding care, and how to make existing health care practices more cost-efficient.

On Tuesday, two key players from the Senate and the White House said that the health care package that passes in the Senate will have to be budget-nuetral for its first years of implementation, but it must also include long term cost-saving measures like comparative effectiveness research. They made their point the same day President Obama urged Congress to pass "paygo" legislation, which would require any new tax cut or entitlement program to be paid for.

During a forum at the Brookings Institution on Tuesday, White House Office of Management and Budget Director Peter Orzag promised the health care reform package the president ultimately signs will be deficit-neutral for five to 10 years under Congressional Budget Office scoring.

"It seems to me implausible a plan that is a big deficit-increaser would pass the Senate," he said.

The bill, he added, will also have to include, "the long term game changers we believe over time will lead to a more efficient health care system. We cannot perpetuate a sitaution where we spend twice as much in some areas versus others and don't seem to get anything from that."

The goal of comparative effectiveness research is to find the best treatments at the best prices. More research in this area could make health care more cost-efficient, but skeptics say it could lead to rationing of health care and the denial of various treatments that could work for some patients but not others.

"It strikes me that this is not about getting in the way of you and your doctor," Orzag said. "It's precisely about making sure your doctor and you have as much information as possible about what's going to work for you."

The American Recovery and Reinvestment Act included $1.1 billion for comparative effectiveness research, and Sen. Max Baucus (D-Mont.), who is leading health care reform in the Senate Finance Committee, intends to make it part of the Senate's health care package as well, he said Tuesday.

"We believe it is fundamental to transforming our health system from one that is volume driven to one that his evidence based," Baucus said.

The cost of health care reform is just one of many significant hurdles in the way of creating a well-supported, bipartisan bill. Baucus said his committee has gone to great lengths to include Republican input in the legislation.

"I've never participated in a more inclusive endeavor in my life," he said.

Nevertheless, nine of the 10 Republicans on his committee sent a letter to President Obama yesterday opposing the creation of a government-sponsored health care plan, a critical component of reform for liberals.

Baucus said finding a resolution "requires a lot of education. We all have a fairly steep learning curve here, and for some of us, it's nearly viertical. Ignorance breeds fear."

Ignorance, Orzag emphasized, also results in higher costs for health care without improved results.

"We have a payment system that accommodates the more intensive approaches (to treatment), even if they are not backed by evidence they work," he said. "Simply providing information (to doctors and hospitals) and benchmarking against comparison hospitals can help."

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