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Inslee strikes deal for Washington State health care

July 27, 2009

On Thursday, in a six-hour meeting with House leadership, U.S. Rep. Jay Inslee (D-Wash.) forged a deal to better reimburse Washington state physicians and hospitals for the high-quality, low-cost medical care found in Washington state.  For years, a complicated state-by-state payment formula and a fee-for-service reimbursement system deprived Washington doctors and hospitals of proper payment for quality, cost-conscious care.

“For years we have worked to untie the Gordian knot that kept Washington on the low end of the reimbursement system,” said Inslee, a member of the powerful House Energy and Commerce Committee.  “On Thursday, we cut it.   Norm Dicks and I worked together to create a provision to incentivize Washington state’s legendary efficiency in the rest of the country. 

“For too long, Washingtonians pioneered high-quality, low-cost care while other places continued with out-dated, wasteful systems,” he continued.  “These new steps forward could now save the country billions in the long term by rewarding value, rather than volume, in health care delivery.  The agreement will correct the staggering regional disparities in Medicare reimbursement rates, which will mean millions in additional reimbursement for doctors and hospitals in our state.

“This deal is huge victory for Washington, as it could correct the fundamental inequalities in the Medicare which result in underfunded health care in low-cost states like Washington.”

Thanks to the work of Inslee and U.S. Rep. Norm Dicks (D-Wash) over the past two weeks, an agreement was reached that two Institutes of Medicine studies in the health care reform bill will now be completed and implemented simultaneously over the next two years.  One study will examine how to create a value index to guide Medicare reimbursement rates instead of the current “fee for service” system.  The recommendations will automatically go into effect unless Congress objects within sixty days. 

The other study will examine geographical disparities in reimbursement rates.  The Institute’s recommendations to fix those disparities will then go into effect automatically. 

The goal was to finish all studies and changes before the public option goes into effect in 2013 so the recommendations would be incorporated into it.  Originally, the studies would be completed over the next three years, leaving inequalities in place as the public option came into effect. 

The studies will critically examine inputs, such as cost of living, and the inclusion of a value index in Medicare reimbursement rates.  This deal would provide real cost containment in the bill and would begin to incentivize the quality, not the quantity, of medical care across the United States.

Additional issues remain for Washington state, including resolving concerns over the phase-out of Medicare Advantage.