McCain Health Plan Aims to Cut Costs to Forestall Implosion

WASHINGTON, Oct. 11--Republican presidential candidate John McCain unveiled a health plan today that focuses more sharply on reducing costs than providing coverage for the uninsured.

The Arizona senator warned that the U.S. health care system could "implode" as it approaches a "perfect storm" of unaddressed problems.

In an address to the Des Moines Rotary Club, McCain said spiraling costs are unsustainable as patients pay more every year "to get service they don't think is very good."

Current health care spending of .2 trillion will nearly double to trillion by 2015, while in ensuing years Medicare will be broke and the Social Security system will be spending more than it is taking in, McCain warned.

Issuing a tough warning to physicians, hospitals, pharmaceutical and insurance companies for not doing a better job of managing Americans' care, McCain said the government should demand and pay for quality outcomes rather than volume of services or medical mistakes. He'd expand current pay-for-performance programs.

Campaigning in Iowa, McCain promised a "conservative vision" for health care on the basis of expanding patient choices. He firmly rejected mandates, favored by most Democratic candidates, to require individuals or employers to purchase coverage. "We do not believe in coercion and the use of state power to mandate care, coverage or costs," he said.

McCain, running behind his key rivals in polls, mocked Democratic candidates for their "usual default position: if the government would only pay for insurance everything would be fine." He cautioned that their proposals would result in massive tax increases, mandates and government regulation.

To encourage the purchase of insurance, McCain would provide all Americans with a refundable tax credit, ,500 per individual, ,000 per family. The credit would apply whether they received insurance through employment or bought it on their own. That proposal is similar to those of other Republican candidates and President Bush's proposal to expand tax deductions for health insurance.

To control costs, McCain wants to do more to assess the performance of the health industry. He favors greater use of national standards for measuring treatments and outcomes. Measuring performance is difficult but absolutely necessary to cut wasteful spending, he said.

One example might be a doctor treating a patient with type 2 diabetes. Instead of being paid for each medical service performed, the doctor could be paid for a month or a year's services, with the variety of treatments bundled together, Dan L. Crippen, a domestic policy adviser for the McCain campaign, told the New York Times. Then the doctor would be judged on performance in treating the disease, which could affect payment.

McCain would use Medicare as a lever to spur reform throughout the system by increasing payments for better coordination of care, and cutting payments because of unnecessary hospitalizations and preventable errors. He is working on the details to require providers to make public information about cost and medical outcomes of procedures.

"The first principle of real reform is that Americans should pay only for quality,'' McCain said. This system could increase competition by giving patients a database that shows which doctors or programs are more successful.

Other McCain proposals include:

• Opening health-care markets by letting providers practice nationwide, rather than restricting them regionally. "In disasters like Katrina we saw how stupid and harmful it is to refuse the services of doctors just because they had an out-of-state address. We should have a national market place."

• Creating a national market for health insurance by allowing people to buy policies nationwide instead of limiting them to in-state companies.

• Allowing patients to purchase coverage through any organization or association they choose as well as through their employers or buying directly from an insurance company.

• Developing routes for cheaper generic versions of drugs to enter the U.S. market, including allowing for safe re-importation of drugs from Canada and other countries where government controls keep prices lower than in the United States. Reimportation of drugs is strongly opposed by the Bush Administration.

• Promoting medical liability reform. "We cannot let the search for high-quality care be derailed by frivolous lawsuits and excessive damage awards... Reforms should eliminate lawsuits for doctors that follow clinical guidelines and adhere to patient safety protocols."

• Supporting retail walk-in clinics at places such as Wal-Mart, and shifting some care to nurse practitioners.

The McCain campaign provided no estimated price tag for his plan.

Iowa is the site of the first event in the presidential nominating process in less than three months.