From the President


Richard L. Clarke, DHA, FHFMA

I never thought I would look forward to TV commercials selling weight-reduction schemes, debt-reorganization services, and amazing all-in-one appliances.

But after three months of constant negative election ads, returning to these commercials is a welcome relief. The mid-term elections are over. And the Republicans gained control of the House and closed the gap in the Senate in what the president referred to as a personal shellacking. So now what?

Republicans have vowed to "repeal and replace" the new healthcare reform law-the Affordable Care Act. They also insist that they will balance the budget while maintaining current tax rates that were to expire at the end of the year. And they have publicly declared their primary goal is to defeat President Obama in 2012. On the surface, these goals seem to be incongruent.

The key components of the law that Republicans complain about include the tax consequences of individual and corporate mandates. Several Republican state attorneys general have filed suit in federal courts to declare the individual mandate unconstitutional. Some states have enacted state constitutional or legislative actions to block enactment of the mandate at the state level.

Republicans also rail against the escalating cost of increased subsidies for Medicaid expansion and support of premiums for individuals and companies in the insurance exchanges. They complain that the benefit packages described in the bill are too rich and expensive. Finally, they say that the Medicare "cuts" in the act, especially for Medicare Advantage, will hurt seniors.

It is unlikely that President Obama or the Democrats who control the Senate will agree to the repeal of the Affordable Care Act. But they have indicated they are open to "tweaking" it. One area of compromise may be the individual and corporate mandates. But insurance reforms related to guaranteed coverage and elimination of rescissions are difficult to maintain without an individual mandate. Voluntary approaches, such as incentives, could bring in a large number of covered lives, as was done for Medicare Part D. But changing this area of the law would produce a cascade of other changes that would be more than "tweaking."

The Democrats also could agree to modify the benefit packages in state exchanges to offer a more scaled-down version. However, they probably will not agree to reversing the cuts in Medicare and Medicaid payments, given the overall budget impact of those cuts.

In the end, it is difficult to imagine either party accomplishing much. The most that the Republicans can do is to disrupt key components of the law through public hearings, legal action, and budgetary constraints on CMS and the IRS. Some of these actions will be successful, but many will not.

It will be a messy couple of years. And that is unlikely to change the unsustainable economic trajectory of the healthcare system. At some point, that trajectory will force action on the federal government and all other healthcare stakeholders, with unpalatable results. My advice is to keep working within your organizations and with stakeholders in your communities toward being accountable for care by improving value-increasing quality while reducing cost. Washington has not yet found the model for high-value health care. But I am confident that local innovators can.


Publication Date: Wednesday, December 01, 2010

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