View from Washington: Mid-Term Checkups

Healthcare issues dominate policy discussions leading up to mid-term elections.

Historically, healthcare reform is a perennial election-year domestic-policy issue. With the upcoming mid-term elections, the House and Senate each held “Health Weeks” this legislative session. The Senate focused on medical malpractice reform and measures to help small businesses afford health insurance. The House focused discussion on “pro-consumer healthcare bills.” However, little success was yielded from these discussions for either political party.

The following are politically sensitive issues that will play a role in talks leading up to the mid-term elections.

Medicare drug benefit: Medicare’s new prescription drug benefit commanded center stage this year among beneficiaries, lawmakers, drug manufacturers and pharmacy benefit managers. Although the benefit experienced some blips during take-off, it is viewed by Republicans and a handful of Democrats as a success. According to a Senate Finance Republican staffer “work still needs to be done.” Areas for potential reform include: eliminating the late enrollment penalty, simplifying the benefit and ensuring pharmacies are reimbursed in a timely fashion.

Medicaid: Some lawmakers denounced President Bush’s proposed Medicaid reductions in his FY’07 budget blueprint. A source of contention is the Administration’s attempt to use procedural efforts to curtail states’ ability to use provider assessments to fund Medicaid programs. The Administration is also seeking to cap payments to government providers to no more than the cost of furnishing services. A recent Senate bipartisan letter asked the Department of Health and Human Services (HHS) Secretary to refrain from implementation of these proposals and to work with the Senate to achieve reform.

Specialty hospitals: A contentious issue among lawmakers from both parties are physician-owned specialty hospitals. Some Republicans believe both community hospitals and such specialty hospitals can coexist. A vocal group of Democrats generally want to extend the federal moratorium preventing the construction of new physician-owned specialty hospitals. The Centers for Medicare and Medicaid Services (CMS) is expected to meet an August 8th deadline outlining the agency’s strategic plan for how they will proceed with these types of facilities.

Medicare physician payment: Physicians are expected to receive a 4.7 percent cut in their 2007 Medicare reimbursements. In 2005, physicians successfully lobbied preventing a 4.4 percent cut, keeping 2006 reimbursement stable. Legislation reforming the payment system was introduced July 24 and backed by many, including the American Medical Association. However, physician payments will need to be offset by cuts in other areas of Medicare.

Price transparency: Consumerism and the push for competition has ignited a new campaign among lawmakers. Although this terminology is new the concept is not. For several years, the federal government has implemented many changes in pharmaceutical pricing, including listing certain sales prices on the Internet. The prices of the 30 most common hospital procedures began being publicly posted in June by HHS. Many policy experts believe these are closer steps towards price controls. Expect to see more initiatives out of Washington, DC in this regard.

Although these health policy issues are up for discussion now, they’ll likely take a back seat in the upcoming elections to such political issues as immigration, the federal and trade deficits, and the the Middle East. Expect healthcare issues to return to shape Congressional focus after the elections, especially if the country is sentenced to a lame duck session.

Robert Betz Ph.D. About Robert Betz Ph.D.

Robert Betz, Ph.D., is president of Robert Betz Associates, Inc. (RBA), a well-established federal health policy consulting firm located in the Washington, D.C. area. Additionally, Dr. Betz is an adjunct professor teaching at The George Washington University where he specializes in political science and health policy. For more information about RBA, visit www.robertbetz.com.

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