What does the Republican takeover of the U.S. House of Representatives, eight additional Governor’s Offices and State Legislatures mean for the current healthcare law?
These numbers tell the political story: 60, 67, 1, 48, 47 and 2012.
Counting Votes
The first lesson of Lobbying 101 is counting votes.
Sixty is how many votes are required in the Democrat-controlled U.S. Senate to pass any major bill. Sixty-seven is the number of votes needed to override a presidential veto and one represents the veto pen on the President’s desk. Forty-eight is the percentage of voters in AP exit polls who want the healthcare bill repealed and forty-seven is the percentage of voters who want it to remain or expanded.
Republicans are outnumbered in the Senate 47 to 53, with two independents caucusing with Democrats and Connecticut Democrat Joe Lieberman swaying in the middle.
Divided Government and Voters
The branches of government and voters are divided and, according to our experts, will limit the ability of either party to make any major changes to the existing healthcare law.
What is likely to happen however is the same thing that happened when massive new social legislation such as Social Security and Medicare were passed in the 1930s and 1960s, respectively. Ensuing Congresses changed and modified the original legislation.
Congress has the power of the purse and all money bills have to originate in the House of Representatives. The House can slow down the implementation of the healthcare law by not funding specific items of the law such as the extra IRS agents that were to be hired to enforce the tax provisions of the bill or get rid of the Independent Payment Advisory Board (IPAB).
Public Theater of the House
New house committee chairs now have the stage for our best public theater and secular debates. Those new chairmen will hold hearings and summon the administration’s top political appointees to answer questions about how the healthcare bill was passed, what exactly is in the bill and how it will be implemented.
“Oversight will play a crucial role in Republican efforts, ” Senate Republican Leader Mitch McConnell of Kentucky told the AP. “We may not be able to bring about straight repeal in the next two years…but we can compel administration officials to attempt to defend this indefensible health spending bill.”
Republicans will look forward to the chance to question Medicare administrator Don Berwick, who was appointed without Senate confirmation and has yet to testify before Congress.
Devil in the Details
Congress wrote the healthcare law in broad strokes and left the devil of the details to regulation writers in the Obama administration to spell out specifics of how the components will work.
Orthopedic surgeon and Senator Mike Enzi, M.D. of Wyoming, ranking Republican on the Senate health committee, has said he plans to take a close look at those regulations and try to slow down or try to block elements that he finds problematic.
The Alternative?
“The biggest problem the Republicans have is a lack of an alternative health plan. Repeal and replace the existing law with what?” wrote insurance expert Robert Laszewski on his healthpolicyandmarket blog.
Laszewski said it’s possible that Republicans could try to amend the new law’s insurance subsidies to look more like their tax credit proposals, for example. “But even there they risk looking like they want to repeal employer-based health insurance and that would be a very tough sale.”
He says Republicans might also try to restore the Medicare Advantage cuts. But to do that they would have to come up with about $150 billion to offset that cost in order to avoid just adding to the budget deficit.
Republican strategist Ross Douthat, columnist for The New York Times noted that the 2010 takeover of the House is very different from the Gingrich takeover in 1994 when Republicans were for a long set of specific policy initiatives. In this case, he wrote, Republicans have only been able to agree on what they are against and have not agreed on various proposals from individual members. Therefore, House Speaker-elect Boehner and Senate Minority Leader McConnell have been lowering expectations and want voters to hold Democrats accountable again in 2012.
Irresistible Force of Economics
Ed Dougherty of B&D Consulting told us that the election hasn’t changed his previous comments in OTW. “In my view, finances continue to be the key driver of policy, purchase and other decisions made. Hospitals will be squeezed and docs will feel underpaid. This will put industry in an increasingly tough position where they will have to offer better value (lower prices, broader services) to stay appealing to customers. Robust data collection, quality metrics, etc. will be the key defensive strategies and critical success factors. “
Dougherty points out there are now fewer moderates in either party and fewer chances for consensus. This means little will get done. “Healthcare reform is ‘hardwired’ and probably can’t be overturned, but can be defunded in areas where Congress has discretion.”
Likely Changes
Congress is likely to repeal or greatly change the IPAB which is a target of both Democrats and Republicans because it essentially infringes on Congress’ legislative prerogatives.
Dougherty believes the FDA/CMS (Centers for Medicare and Medicaid Services) collaboration and broader focus on evidence and comparative evidence (Comparative Effectiveness) will continue. Sectors like orthopedics will certainly continue to be under the microscope. New/experimental therapies, devices, etc. (e.g., in spine) are not likely to be covered
The States
Don’t forget the states, says Dougherty. With a majority of Republican governors, the states are at the nexus of much of reform implementation.
“I think there’ll be waivers, exceptions and lots of variation in exchanges across the states. This will also be played out in Medicaid benefits structure. Even though the feds pick up the difference in cost from current levels to 133% of fed poverty level, states will still be required to administer the benefit, costing them more to do so, ” according to Dougherty.
His B&D colleague, Vince Ventimiglia said Republican governors will be meeting around November 17-19 to discuss the exchanges and to a lesser extent the Medicaid expansion.
Ventimiglia told listeners during a Wells Fargo institutional investor call that the governors will question whether to follow federal law, or to perhaps take a more experimental route toward establishing the exchanges. He said the Massachusetts model makes many governors nervous as they question the success of the program. He mentioned that many may want to move toward a more Travelocity type exchange option which would act as a pure information provider to potential members.
FDA: Increased Scrutiny Distractions
Senator Charles GrassleyVentimiglia said he does not anticipate material changes at the FDA although he does foresee increased scrutiny and oversight from the new Congress. He expects increased visibility on 510(k) reform, with a work plan for guidance change in early 2011. He also expects a reduction or even elimination of the industry device tax starting in 2013.
Ventimiglia believes increased scrutiny by Congress will become a major distraction for the agency, which will have to devote substantial resources to respond to document requests, send senior leadership to the Hill to answer questions and engage with various committees.
The $20 Billion Doc Fix
Perhaps the most pressing issue for orthopedic surgeons is the need for Congress to fix the mandated 23% Medicare physician payment cut by the end of November. It will cost almost $20 billion to patch that problem for just 13 months. With the voters saying, “no more debt”, both parties will, once again, have to find a way to agree to stop the cuts.
Raj Rao, M.D.Raj Rao, M.D., NASS’ Advocacy Chair says House and Senate staffers say that Congress is unlikely to pass legislation before going on a Thanksgiving break to prevent the cut in Medicare physician reimbursement rates scheduled to take effect December 1. “Although members of both parties have said they would like to avoid cuts to physician reimbursements, a tight schedule and continued gridlock in Congress have cast doubt on the prospects of a ‘doc fix’ before the end of the year.”
He also noted that the Obama administration recently voiced support for a 13-month freeze of rates which would allow a new Congress one year to develop a long-term solution. “Fiscal conservatives in Congress will likely insist on offsets in the federal budget to pay for any SGR (Sustainable Growth Rate) legislation. The estimated price tag for a 13-month patch is $17 to $20 billion. Given the very few legislative days available for debate and the difficulty in finding offsets for the costs of the fix, it is unlikely that a one-year freeze will be enacted before the end of the year. A more likely scenario involves the passage of a patch through the end of the year.”
2012
Remember that 2012 number we told you about at the beginning of this story? That’s the next time a divided nation will have an opportunity to cast their ballots. Bill Clinton made a strong comeback in 1996 after losing Congress in 1994. Americans have shown an affinity for checks and balances in their branches of government. The results of the recent election may not result in the repeal of the healthcare bill, but may force modifications favorable to the orthopedic industry.
If history is a guide, the next election will be decided by another number….the unemployment rate.
