Sen. Tom Harkin, who took the Committee after the death Kennedy, that disparities Medicare end.

Sen. Tom Harkin, leader of the powerful Senate Health Committee, said Friday that vast differences in Medicare costs -- as exist between the high-cost Miami and lower-cost areas -- must be ended to make for sensible healthcare reform.

"These huge disparities can't continue," the Iowa Democrat said in a teleconference sponsored by the consumer group Families USA.

Dartmouth studies have shown that the average Miami senior costs almost two-and-a-half times what a senior in Minneapolis does.

This is due at least partly to more specialist visits, more expensive diagnostic tests and more intensive care in the last six months of life.

Because Medicare numbers are public, healthcare experts often use them as a proxy for overall healthcare costs.

Harkin said a proposal from Sen. Chuck Grassley, a Republican from Iowa, would "change the parameters of how reimbursement rates are made."

He noted that Iowa has always ranked near the top in quality of care measures while ranking 48th of 50 in Medicare costs.

MEDICARE PANEL

Much of the hard work for changing costs could come in a new Medicare Commission, where experts would figure out what care is most productive and how to reshape payment plans.

Congress would still get a say, but only after the commission had made its determinations.

Harkin likened a Medicare board to Congress setting up a Base-Closing Commission "because we could never vote to close a base."

At present, Congress almost always rejects any reductions in Medicare spending because of intense pressures from lobbying groups for doctors, hospitals and drug companies.

Families USA director Ron Pollack added that, however Medicare payments are changed, a provision in the main Senate legislation -- the Baucus bill -- has a provision guaranteeing seniors that any changes would not increase their out-of-pocket expenses.

Harkin, who took over leadership of the Health Committee after the death of Sen. Ted Kennedy, was also emphatic on another point: Whatever shape reform takes in the House and Senate, "it will have a public option."

House Democrats are overwhelmingly in support of a new government insurance, and Harkin said Friday that 52 Democratic senators are solidly for a public option, with only five Democrats strongly opposed.

"Should the 52 give in to the five, or should the five come on board?" Harkin asked rhetorically.

HOW IT WOULD WORK

A public plan could take several forms, Harkin said:

A nationwide insurance plan, which would be self-funded so that it would break even.

A state-option plan, so that some states could vote to opt out and instead form nonprofit co-ops to offer insurance to individuals and small business that couldn't get coverage elsewhere.

A public plan that would come into existence only if private insurance did not cover a targeted number of the uninsured.

In that case, a government insurance plan would be "triggered" into existence at a pre-determined date.