A group representing health plans and hospitals proposed health insurance reforms that would revise payment systems on Tuesday, clashing with a respected private foundation that proposed much more extensive reforms.

The idea from Commonwealth Fund, published in the May/June issue of the journal Health Affairs, calls for all companies to be required to help fund health insurance in the United States and for the establishment of a government entity to sell low-priced plans to small businesses and individuals, as part of a plan to dramatically shrink the rolls of the uninsured.

That plan met with opposition from the industry group, underscoring the difficulty in any attempt at reforming the health care system.

"The US is the only industrialized country that doesn't cover everyone," Commonwealth Fund president Karen Davis said, in previewing her plan in a press briefing on Monday.

Her goal is influence the debate over health reform, seeing an opportunity for change when a new president takes office in 2009.

Escalating costs and limited access to quality medical care in the US are among the top domestic health issues cited by voters in national polls ahead of the November election.

The Commonwealth plan would build on the current employer-based system, which finances health care for about 160 million Americans.

The number of people without medical insurance in the United States is now estimated at 47 million, or about 15 per cent of the US population.

Industry view

The industry group of health-care insurers and providers, including the big insurer Aetna Inc and drug wholesaler McKesson Corp , in releasing its own reform bid, was highly critical of several ideas proposed in the Commonwealth plan.

"At the end of the day, I think we should get everybody in the system," said Ron Williams, chief executive of Aetna, but added he would "stop short" of backing an employer mandate.

The industry plan, introduced at a briefing in Chicago, includes revising payment systems to reward quality as opposed to volume, and increasing information about prices and quality of care.
The current reimbursement system generally pays a doctor or hospital more money the more tests and procedures are performed, and for longer hospital stays -- no matter how efficient or how good the care.

The Commonwealth plan also proposes paying care providers for specific performance measures, and information technology improvements.

Denis Cortese, the chief executive of the prestigious Mayo Clinic hospital system in Minnesota, said a new public program modeled off Medicare, as Commonwealth is proposing, would be a terrible idea.

"Medicare has been trying to deal with the delivery system for over 30 years," he said. "Medicare is paying for the inverse of value."

Agree spending key

Both groups agree on one thing -- out-of-control spending must be tamed. Medical spending has tripled over the past four decades and now comprises more than $2 trillion per year, or 16 per cent of the US gross domestic product. That is expected to rise to 20 per cent by 2017.

The Commonwealth plan calls for employers to provide health coverage or pay into a fund up to seven per cent of earnings, or $1.25 per hour per worker, to raise about $45bn.

That would likely be opposed by most companies, said Steve Wojcik, vice president for policy at the National Business Group on Health, which represents large employers.

Davis said employers not currently providing health insurance, some health care providers not seeing patients enrolled in current public plans, and those selling individual health plans would likely see increased costs as a result of the plan.

"Each of these features certainly has elements that will give pause to some groups," Davis said. "But I think the basic bottom line is that if everyone will give a little, it means you can get universal coverage." (Editing by Jeffrey Benkoe and Gerald E. McCormick)

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