It’s crunch time for healthcare reform. The Senate may vote on legislation as early as next month, and the cake might be baked by the end of the summer. Trillions of dollars hang in the balance.
The industry groups representing
physicians, hospitals, pharmaceutical companies, device makers, and insurers
saw this coming and have been meeting for several months to come up with the
cost-saving proposal they presented to President Obama on Monday. The docs and
insurers don’t love each other, and the drug companies and hospitals have
little in common, but they are all invested in the status quo. While they know
it can’t last, the change they can believe in is as little change as possible.
The real threat to the industry is
the lack of government money to expand coverage. Obama proposed a reserve fund
that was half of the minimum amount that reform might cost, and he can’t even
fund that, because Congress kicked him in the teeth when he proposed capping
tax deductions for the rich. Meanwhile, Sen. Max Baucus can’t seem to get the
CBO to play ball and say that his untested reform ideas will save money. So the
industry players—except for the insurance companies, who have problems of their
own--are mightily afraid that Congress will make major changes to contain
costs. Knowing that the Democrats can push reform through the Senate with the
budget reconciliation maneuver, the industry realizes it has no choice but to
make nice with the reformers. Instead of fighting them, it has decided to
co-opt them. It’s talking a good game about quality and health IT and reducing
overuse of services, but it doesn’t want the government to negotiate drug
prices, transfer income from specialists to primary care docs, launch a public
health plan, or limit any of the high-cost, low-value technologies that eat up
so many dollars.
By the way, the pundits have it
wrong: Healthcare reform is not going to pass because the industry supports it;
the industry is coming to the table because it knows that reform is going to
pass. That’s why there are so many born-again, socially conscious healthcare
businessmen. All of a sudden, insurers are talking about not charging women
more than men for insurance; drug makers are talking about value-based pricing
on drugs for the chronically ill; and healthcare leaders are proposing that
they (not the government) cut the growth in healthcare costs by 1.5 percentage
points, which would save about $2 trillion over 10 years. They weren’t talking
like that last year, before Obama was elected President.
Of course, this is all part of the
dance that will lead to some kind of rough compromise. All parties know that 1)
the public is fed up with the status quo; 2) employers are mad as hell and
won’t take it anymore; and 3) unless health care is tamed soon, it will destroy
whatever is left of the economy. Still, nobody wants to take a big financial
hit if they can avoid it. So the industry will try to preserve as much as it
can, while hoping that some Hail Mary pass like electronic health records or
the “patient-centered medical home” will reach a wide receiver in the end zone.
But I suspect that even hospital and drug and insurance executives, in their
heart of hearts, realize that the old world is dying and that a new one will be
born before the year is out, whether they like it or not.
