Health care reform: What's at stake for Minnesota?

Democratic lawmakers will be meeting with President Barack Obama at the White House tomorrow -- the eve of a crucial vote on his health care overhaul.

Obama wants to make one last push for his top domestic priority, which has been debated for more than a year. Although the bill would set national policy, there are some issues in it that are particularly important for Minnesotans.

There have been several key areas where Minnesotans have tried to push, block or influence the crafting of a national health care package.

The Mayo Clinic pushed for a change in how the federal government pays doctors and hospitals that treat Medicare patients. It wanted the government to pay less to health providers in states like Florida who bill more for procedures but where patients aren't any healthier.

Mayo also wanted the government to reward physicians and hospitals in states like Minnesota, which provide high quality, low cost health care.

Mayo Clinic's Health Policy Center Executive Director Jeff Korsmo says the reconciliation bill contains the so-called pay-for-value language, but it's based on the Senate version, which was weaker than the House bill.

"We do think that the Senate pay for value provisions are an important first step, not the end, but an important first step," Korsmo said. "And as compared to not very long ago, this wasn't even talked about much so we see it as a positive step forward in this area of pay for value."

Minnesota's health insurance industry trade group has some concerns about the latest version of health care reform. Julie Brunner, executive director of the Minnesota Council of Health Plans says while it's good that the bill expands coverage, it still has problems.

"Our disappointment in the legislation is that it does not have the focus on bringing down the cost of health care and insuring the quality of health care goes up," she said.

Some local HMOs are upset that the bill didn't fully exempt them from a fee on insurance companies. In Minnesota HMOs operate as non-profits, and Blue Cross Blue Shield of Minnesota's CEO Pat Geraghty says even a partial fee means premiums will go up.

"We had hoped that Minnesota, being a not-for profit state, that the insurers would be exempted from that fee," Geraghty said. Because the only place a not-for-profit insurance company can go with that fee is into their premium and charge that on to the member."

Another area that could affect Minnesota more than other states is a tax on medical device makers. Minnesota is home to a number of these manufacturers including 3M and Medtronic. The new bill would delay a 2.9 percent tax on medical devices for two years.

Debbie Wang, an equity analyst at Morningstar, says the delay gives medical manufacturers more time to prepare for the tax but that it'll still impact companies' bottom lines. On the other hand, Wang says other parts of the bill, such as expanding coverage to millions of Americans, could help medical device companies.

"Folks who didn't have insurance before, getting a hip implant simply wasn't an option," Wang said. "But if they have insurance, then it becomes an option for them. And we expect that at least to some degree there's going to be an offset from new folks freshly-insured entering into the pool."

Minnesota Chamber of Commerce President David Olson says the state's businesses share the insurance companies' criticisms that the bill raises taxes and doesn't curb health care costs. But the non-partisan Congressional Budget Office reported that the new fees, taxes and other cost-cutting measures would reduce the deficit by $138 Billion in the next decade. Olson says the chamber is skeptical.

"Not everybody agrees that their analysis is solid," he said. "And I guess from our perspective, that's one of the concerns about what seems to be a rush to move this through; can't we kind of pause and see if these numbers line up."

Organized labor disagrees. Unions are backing the latest version of the legislation.

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