Dear Senator Lieberman,

Your pledge to filibuster any legislation that contains the mislabeled “public option,” which many view as a stalking horse to collapse the current employer-based system into a federally run single payer system, has given you a pivotal role in the health reform debate. Combined with your concern that current proposals are unaffordable, you have staked out a centrist position that mirrors the beliefs of a clear majority of middle class Americans.

Doing nothing at all, however, is also not a viable alternative, which most Americans also realize. The existing health system is not clinically, fiscally nor morally sustainable, a position that I know you share as well.

These two seemingly contradictory policy positions open the door for you to insist that the majority Democrats adopt a fundamentally different strategy, creating a less complex, less fiscally unacceptable set of reforms that could resolve many of current health sector problems but in a manner that would gain broad support across the country.

The key to a workable strategy is to split apart the current massive “comprehensive” proposals into a series of separate bills, bringing up for consideration the least controversial ones first. Not only would this sequential process ensure that a number of widely acceptable reforms could in fact be passed, but it would also reduce the opportunity for some senators less honorable than you to hide unsavory side deals deep in a massive and unreadable document.

How would this work in practice?

There are four different types of reform measures contained within the current omnibus legislation, each of which could be brought up as an independent freestanding bill:

1. Security for People with Insurance. This bill should be submitted, voted on, and passed into law before any other health reform legislation is introduced. It would encompass the many regulatory measures that guarantee to those Americans who already have private insurance coverage (some 60% of the population) that they will be able to count on it when they need it. The most obvious examples are the prohibitions against refusing to cover pre-existing conditions or dropping individuals when they get sick, and copayment ceilings to eliminate medical-related bankruptcies.

All these measures mimic the regulatory strategy that other countries, like Switzerland and the Netherlands, have long been used to steer for-profit private insurers, in effect transforming them into a public utility. Indeed, in Switzerland private insurers are prohibited from making a profit on the basic health insurance – a measure that should also be considered in this regulatory package.

Of course, all these regulatory measures (except the last) will cost additional money to implement, and, unless modified as in proposal 2, below, will likely increase premiums. However, there is broad agreement among the citizenry that these measures are essential, and until these measures are passed and implemented – until existing health insurance is seen as “safe” – a majority of the middle class will not trust or support any additional effort by Congress to reform other aspect of the health system. .

2. Cost Reduction. The existing omnibus bill makes only a slight bow toward the types of fiscal restructuring that most experts agree is necessary to adequately constrain costs. Creating a medical home for chronically ill patients, increasing the relative pay of primary care as compared to specialist physicians, and requiring Medicare to receive the lowest rate for pharmaceuticals negotiated by private sector pharmacy benefit managers (such as Medco) are all examples.

Note that none of these measures calls for explicit rationing of necessary services or other highly controversial intrusions of federal power into individual medical decisions. Measures such as requiring counseling on living wills for Medicare recipients should be kept for a separate bill entitled, “Rationing Publicly Paid Health Care,” which is unlikely be brought up for consideration until after the 2010 election.

3. Expanding Coverage to the Uninsured. The passage of bills 1 and 2 make it possible to consider extending coverage to the complex mix of citizens (and only citizens and legal immigrants) who currently are not insured. This third category of reform probably should consist of several separate bills, again with the easiest to pass being brought up first.

This process arguably would start by extending Medicaid to all income-eligible citizens, and extending the income eligibility ceiling to 150% of the poverty rate. Since the 50 states are in terrible fiscal shape and cannot cover their 45% share of the cost, this legislation should only come into force contingent on passage a separate piece of legislation paying for it, as in proposal 4, below. 

By extending Medicaid to all those it was intended to serve when it was passed in 1965, all legal citizens below the poverty line would then have full coverage. This would free the Congress and the American people to have a free-ranging debate (which they have not had thus far) on how to cover the remaining different groups of uninsured. 

Additional, separate bills could be introduced sequentially that would address the largest of these groups. One bill could require parents to cover children until age 26 unless those children had separate coverage. A set of arrangements could be made for dealing with the unemployed through the extension of COBRA coverage, although, as with Medicaid expansion, a rider should prevent implementation until a separate funding bill is passed.

4. Paying for the Uninsured. This is the most difficult of the four reform topics, which is why it should be left for last. It is also separated out so that there can be a clear debate on the financing issue. Further, a specific requirement for discussion of all health financing bills should be that all new federal expenditures must be costed out on a 30-year basis, including all interest on borrowed funds. This would add precipitously to any new spending proposal, and allow the American citizenry to understand the full extent of what it will cost current taxpayers and – inevitably – their children.

Most importantly, the first separate funding bill to be brought up should be for the Medicaid extension from proposal 3, above. This bill should force the federal government to undergo all of the recession-related financial savings measures recently adopted by most state and local governments across the country (and similar to those adopted by most private employers).

Before a single cent of additional taxes is levied, Congress should impose A) a total hiring freeze on every branch of the federal government, except for the uniformed services, B) an across-the-board 10% pay cut for every federal employee, starting with the president and every member of Congress, and C) additional furlough days, based on a sliding scale tied to future federal revenue shortfalls.

The bill should further specify that every cent of savings from this program will be directed to fund the Medicaid extension, and that no additional funds will be applied except to make up a shortfall after the savings from this federal government austerity plan are applied. Only after the passage and immediate implementation of this austerity measure (as with the security of insurance bill in proposal 1, an emergency preamble is in order) should any new tax burdens of any kind be considered.

Taken together, this four-part process would probably take somewhat longer to legislate than the omnibus health reform bills now in Congress. However the separate, sequential nature of this approach is much more likely to ensure passage of key health reforms that the majority of the American people want. It would also ensure a free and open debate about all financing issues, and require that the federal government itself take the first steps by putting the country’s most expensive government – and the only government not currently subject to the recession – on a long-overdue fiscal diet.

I urge you, Senator Lieberman, to use the leverage you now have as the necessary 60^th vote in the Senate to demand that the above strategy of sequential health reform be adopted. Your actions could well represent the last viable chance for major health care reform in this presidency.

Richard B. Saltman is professor of health policy and management at the Rollins School of Public Health of Emory University and associate director of research policy at the European Observatory on Health Systems and Policies in Brussels. RSALTMA@​emory.​edu; 404–727-8743.