Physicians Foundation - Washington Report from Physicians' Foundation

July 4, 2009 - The Physicians’ Foundation is pleased to share the Washington Report, written by long-time friend to physicians, Lee Stillwell. Earlier this year, the Foundation engaged Mr. Stillwell to monitor and provide regular updates to the Foundation’s board on the health care reform debates in Washington DC.

The reports will be made available weekly on The Physicians’ Foundation website, www.physiciansfoundation.org. The most recent Washington Report appears below. We hope you find Mr. Stillwell’s reports a pertinent source of information and insight on current health care reform efforts. Please feel free to share this announcement with anyone who may be interested.

Lee Stillwell is founder and CEO of The Stillwell Group, a full-service global public affairs company with a strong life sciences practice. Lee worked on both sides of the aisle in the U.S. Senate as a key aide first for an eastern Democrat and later in his career for a western Republican. For more than 18 years, Lee was the chief advocate for the American Medical Association (AMA). As senior vice president of the AMA Advocacy Group, he managed a staff of more than 120 employees in Chicago and Washington, DC.

Good Intentions with Unintended Consequences

As Congress breaks for the Fourth of July recess, the Democratic-controlled Congress and the Obama Administration now realize that there are unintended consequences in their good intentions to reform the nation’s health care system.
No matter how hard they try to stay on schedule to pass a new law—the forces that represent countering viewpoints and the revelations of the impact the changes bring seriously are endangering their efforts to move legislation before year’s end.

Cost Dominates All Discussions

Actual cost for the reforms and how to pay for them—including taxing employer provided health insurance-- dominate all discussions along with a public insurance proposal which would rival plans from private insurance companies. The contentious debate over the merits and solutions to each new policy are bipartisan with Republicans and Democrats often on the same side and offering the same concerns.

Strong Opposition to Pay-or-Play

The political uncertainty is driven by interest groups that will be impacted. The so-call play-or-pay plan raised in the Democrat House bill drew strong opposition from the United States Chamber of Commerce and National Federation of Independent Business. Employers would be required to provide insurance coverage or pay a fee equivalent to eight percent of their payroll.

The powerful senior citizen lobby, AARP, reportedly is having disagreements with the Senate Finance Committee on legislative details and the other main-stream interest groups are raising concerns publicly and privately.

“Pledging” Savings To Save Health Reform

Consequently, the chairman of the Senate Finance Committee, Sen. Max Baucus (D-Mont.), is pressuring hospitals and insurers to follow the lead of the pharmaceutical industry and “pledge” savings to help pay for health system reform. It will have to be a serious contribution to the cause if they are going to reach the one-trillion-dollar mark projected as the 10-year cost of the proposed changes. Baucus keeps reminding the six health care organizations that publicly went to the White House and stood with the President about their public commitments to save money for the cause.

PhRMA, which represents the pharmaceutical industry, led the way last week by committing to $80 billion in savings. Insiders say they are trying to strong-arm another $150 billion to $220 billion in savings from the hospital industry. Many believe these negotiations are a make-or-break moment with other players—from nurses to medical device manufacturers --falling in line if the hospitals come aboard.
The health insurance industry has been asked to find $100 billion to $150 billion.

Medicare Advantage Considered Fair Game

The Medicare Advantage program also is considered fair game for cuts because funding is 12 percent higher than traditional Medicare. Also under consideration are administrative changes, including forcing insurers to standardize enrollment forms and creation of a single portal for doctors to use when dealing with the industry’s many companies.

Annual automatic increases in Medicare—which are tied to inflation and other variables-- are being carefully reviewed with reductions in growth in mind.

Medicare Pay Formula for Doctors Doomed

Efforts by the American Medical Association to have an unfair Medicare reimbursement rate formula fixed because it leads to annual decreases unless fixed by Congress seemed doomed. At best, physicians may be asked to make do with modest increases and new pay-for-performance rules.

CBO Assessments Frustrate and Slow Reform

Frustrating the legislative process are a barrage of assessments from the Congressional Budget Office (CBO) that negate the numbers put forward by the politicians as methods to pay for the reforms.CBO continues to refuse to count all of these pledges as real savings.

CBO put a one-trillion-dollar price tag on the Senate Health Committee plan and stated it covered only 16 million of the uninsured. They scored a scaled-back plan at $611 billion with 21 million of 54 million uninsured covered. CBO says that is 39 percent of the uninsured although the committee and the Administration claimed it would cover 97 percent. CBO also has disagreed with the Congressional bean counters on the impact on small business of proposed employer health insurance plans.

Congressional staff continues to do creative accounting to make the numbers work.
If President Obama didn’t have enough problems with health care reform, he recently met with a bipartisan group of governors who warned him that changes could impact the states. They argued against a shift in cost that would add to the states’ current financial crises. The governors obviously want a seat at the table to make sure states are not impacted.

The Public Option

Meanwhile, the Conservative Blue Dog Democrats continue to demand a say in the House decision-making process and 120 House Democrats signed a letter stating they’ll oppose any legislation that doesn’t have a public option in an insurance overhaul. A large number of liberal activists groups are targeting Democratic senators who they worry are not committed strongly to their causes. Republicans and Conservative organizations continue their campaign against the proposed health care changes.
While the lawmakers are back home participating in parades and holding town hall meetings, President Obama and his health system reform team keep publicly working the issue. Nancy-Ann DeParle, White House Office of Health Reform director, held a clever web chat earlier this week. President Obama the next day hosted an on-line town hall meeting. The questions picked were well chosen and the answers very clever.
However, if you listened closely to the President, there was a very important nuance contained in a reply. He said he wants a bill on his desk in October. He has moved his timeline back.

The Physicians’ Foundation is pleased to share the Washington Report, written by
Lee Stillwell is founder and CEO of The Stillwell Group, a full-service global public affairs company with a strong life sciences practice. Lee worked on both sides of the aisle in the U.S. Senate as a key aide first for an eastern Democrat and later in his career for a western Republican. For more than 18 years, Lee was the chief advocate for the American Medical Association (AMA). As senior vice president of the AMA Advocacy Group, he managed a staff of more than 120 employees in Chicago and Washington, D.C.

The information contained in the Washington Report is provided by Lee Stillwell of The Stillwell Group and is not intended to reflect the views or position of The Physicians’ Foundation or its board members. For more information about The Physicians’ Foundation, please visit our website: www.physiciansfoundations.org