March 29, 2010
This week's edition of the Chandler Chicco Companies-DC Health Policy Pulse includes:- The End of the Beginning
- MVC Health Reform Summary
- Industry Winners and Losers
- The New CMS Administrator
- How it Happened
- Perspective: The Atmospherics
- Healthcare Playmakers Profile: Don Berwick
The End of the Beginning
With apologies to Winston Churchill (and our colleagues at the government relations firm Mehlman Vogel Castagnetti), passage of the massive reworking of our health care financing system is not the end, nor is it even the beginning of the end. But it is the end of the beginning.
Various provisions of the law begin as soon as June, 2010, while others do not kick-in until 2014-2015… and the excise tax on so-called “Cadillac plans” is not effective until 2018. But the effort to understand, develop and write the many rules, regulations and policies needed to implement the laws begins now. At the same time, lobbyists are working to amend those provisions to which they object and some are working repeal the new law in its entirety.
Congress, for better or worse, has left town and Members are headed home for the Passover-Easter recess. Those who voted for the bills must be wondering whether they will face a repeat of last summer’s town meeting offensive by the law’s opponents. At the same time, the White House insists it will campaign hard for those who supported the bill (President Obama probably won’t have time to help those Democrats who opposed it) and it will work to communicate the bill’s benefits for everyone.
So, for those of you who wondered whether there would be anything to write about now that health reform has passed (this time with apologies to Karen Carpenter),we’ve only just begun.
MVC Health Reform Summary
So how do we determine what’s in the law? Our friends at Mehlman Vogel Castagnetti (MVC), a leading, bipartisan government relations firm here in Washington, have developed a comprehensive and easy to read summary of the new law.
A quick glance at the Table of Contents reveals how far-reaching the new law is and will be. Further, the Implementation Timeline demonstrates the complexity of implementing the law, some of the political compromises that were made to secure the needed votes for passage and multiple the opportunities for mischief between now and many of the law’s effective dates.
Our thanks to MVC, a CCC partner in our Health360Strategies offering, for making this available.
Click here for a summary of the new law.
Click here for the Implementation Timeline.
Industry Winners and Losers
We can’t help ourselves. As always, there is lots of discussion about which industries are winners, and which are not. In some cases, the “winners” will be those who didn’t lose as much as we thought they might have. In others, perceived non-winners might be those for whom health reform was an opportunity lost. We offer some analysis from a variety of sources below.
Big Pharma
Many reporters and political and financial analysts agree that drug makers fared very well in health reform. They won some significant concessions on the policy level – including 12 years of protection from generic competition for new biopharmaceuticals – and limited their financial contribution. They also prevented new policies that Democrats have long-favored, including allowing “drug re-importation” from Canada and allowing the government to set prices for drugs under Medicare Part D. http://news.yahoo.com/s/ap/20100329/ap_on_go_co/us_health_overhaul_pharma_s_big_win/print
Insurers
From reading the papers, one would assume that insurance companies were facing disaster if health reform passed. Yet most analysts believe that, in the long run, health insurance companies will be better off now that health reform has passed. While the bill includes a number of provisions that insurers find objectionable, it offers the prospect of 32 million new covered lives and a healthier, younger insurance pool. But, you wouldn’t know it from their ads and statements. http://industry.bnet.com/healthcare/10002208/insurance-companies-stand-to-benefit-from-reform-in-long-run/
Hospitals
Hospitals are also perceived as big winners in the health reform debate. They avoided the large cuts some had suggested they might face and exempted hospital reimbursement from the Independent Medicare Advisory Board’s authority, at least for now. Beyond that, however, hospitals stand to gain most from the prospect of far fewer uninsured seeking treatment in hospital emergency departments. http://www.thestreet.com/story/10708022/1/health-reform-winners-hospitals-medicaid.html?cm_ven=GOOGLEN
Doctors
For physicians, it appears that health reform is a mixed blessing. Medicare will provide a bonus payment of 10% for primary care docs, but radiologists and other specialists will be paid less. And physicians still have not won a permanent fix to the formula that sets Medicare payment for doctors, a formula that threatens large reductions each year and has resulted in no increase in Medicare payments for doctors for the last decade. Doctors had hoped that their support for health reform would get them the fix they are seeking. http://www.washingtonpost.com/wp-dyn/content/article/2010/03/26/AR2010032604387.html?hpid=topnews
Device Manufacturers
For medical device makers, it could have been worse. They face a 2.3 percent excise tax on the sale of most medical devices, but the tax won’t be implemented until 2013. And manufacturers hope that health reform will bring more patients and, ultimately, higher demand for the machines and instruments they manufacture. http://www.dotmed.com/news/story/12080/
The New CMS Administrator
President Obama has announced that he will nominate Don Berwick, a Harvard professor and the head of the Institute for Healthcare Improvement as Administrator of the Centers for Medicare and Medicaid Services (CMS). CMS has been operating with only an “Acting Administrator” since the Obama Administration began in January, 2009. Berwick has been the rumored choice for some time, but he made is appointment conditional on passage of comprehensive health reform. We have more about him below (see our Healthcare Playmaker Profile) but Berwick is certainly a change agent. His focus is on improving the quality of care, in understanding and enhancing the patient experience (in very real ways) and avoiding medical mistakes, medication errors and the costly implications of hospital acquired infections. However, it may be an awkward beginning. His confirmation hearings will likely offer the first opportunity for the GOP to formally attack health reform since the bill became law. http://www.businessweek.com/news/2010-03-29/new-medicare-chief-s-hearings-may-re-ignite-overhaul-debate.html
How it Happened
We all thought it was dead. After the Massachusetts special election in January eliminated the Democrats’ 60-vote, filibuster-proof majority in the Senate, it appeared that health reform this time would face the same dark fate it met in 1993-1994. But, there was a way. And while the risks were considerable, the Obama Administration determined that they were far better off trying one last time to get it done than resigning themselves to failure. What were the key moments along the path to passage? http://www.usatoday.com/news/washington/2010-03-25-health-care-moments_N.htm
Perspective: The Atmospherics By Al Jackson, CCC Washington
Absent some huge intervening event – a terrorist attack, a massive natural disaster, a new unforeseen military action – the 2010 elections will be seen as a referendum on the health reform legislation recently enacted and signed into law. While there are many factors that determine success or failure for a campaign – the quality of the candidate, nature of the opponent, campaign organization and fundraising prowess, among others – the “atmospherics” will probably have more to do with determining the 2010 results than any other factor. Candidates have some control over most if not all of the other factors. But they cannot control their environment. This year, it is likely to be a nationalized – rather than local – election, and such elections are, by definition, top-down affairs.
The next several weeks and months will be about who wins the war to create the most favorable atmospherics. So far, health reform opponents have had more success highlighting the detriments of health reform than its supporters have had in featuring its benefits. The bill was passed and became law despite the fact that a majority of Americans opposed it. However, not everyone is either a Tea Party opponent or a liberal advocate. The majority of Americans live somewhere in the middle. The task for the President is to win a majority of those in the middle.
The White House won the votes of reluctant Democrats by convincing them of two things: first, that they’d be better off helping the President pass an unpopular health reform bill than be led into battle by an impotent leader who could not convince even his own party to support his top domestic initiative; and that the White House would be singularly focused on ensuring the benefits of health reform would become clearer between now and Election Day.
No one doubts that the President and his surrogates (including Vice President B.F.D. Biden) will campaign with energy and passion. The Administration deserves great credit for reviving the bill when we thought it was dead. But it will be harder to convince a majority of Americans that reform is a good thing than it was to persuade a handful of frightened and vulnerable Democrats to support their President.
The President’s party will have succeeded in November if they give up fewer-than-expected seats in the House and Senate. No one expects them to win… they are simply hoping not to lose too badly. But it is more difficult to explain the benefits of this extremely complex law than it is to tear into specific provisions of the legislation that are easily picked-apart. All Democrats are hoping that the White House is up to the task.
Healthcare Playmaker Profile
Donald Berwick, MD, President, Institute for Health Care Improvement
Word on the street is that President Obama will nominate Dr. Donald (Don) Berwick to head the Centers for Medicare and Medicaid Services (CMS). As the President and CEO of the Institute for Health Care Improvement, a not-for-profit organization whose mission is to “lead the improvement of health care throughout the world,” the nomination is rather fitting. Dr. Berwick is also the Clinical Professor of Pediatrics and Health Care Policy at the Harvard Medical School, professor of Health Policy and Management at the Harvard School of Public Health, an Associate in Pediatrics at Boston’s Children’s Hospital, and a Consultant in Pediatrics at Massachusetts General Hospital.
Previous notable positions include Chair of the Health Services Research Review Study Section of the Agency for Health Care Policy and Research, Chair of the National Advisory Council of the Agency for Healthcare Research and Quality, Vice-Chair of the U.S. Preventive Services Task Force, and President of the International Society for Medical Decision-Making. From 1997-1998, Berwick also served on former President Bill Clinton’s Advisory Commission on Consumer Protection and Quality in the Healthcare Industry. He has published more than 130 scientific journal articles on health care policy and health care quality management, and has received several honors for his work. Of note, Modern Healthcare named Berwick the third most powerful person in American health care in 2005. He’ll likely move up to number one before the year is out.
http://www.hsph.harvard.edu/faculty/donald-berwick/
For more information or to subscribe directly to the CCC-DC Health Policy Pulse, please email healthpolicypulse@chandlerchiccocompanies.com or call CCC-DC Health Policy Pulse Editor Al Jackson at 202-609-6002 or contributor Katherine Lea at 202-609-6021.
© Chandler Chicco Companies LLC
