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The Fine Line the Obama Administration Is Walking With Doctors and Hospitals The Fine Line the Obama Administration Is Walking With Doctors and Hos...

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Health Care

The Fine Line the Obama Administration Is Walking With Doctors and Hospitals

(Joern Pollex/Getty Images)

photo of Clara Ritger
March 10, 2014

The success of Obamacare--and the White House's efforts to drive down health care spending--depend on the cooperation of the doctors and hospitals charged with carrying out reforms.

Keeping those parties happy, however, isn't easy when health care providers lose billions of dollars each year as Congress looks for ways to trim the budget.

It's a mixed message, says Chip Kahn, the president and CEO of industry lobby group Federation of American Hospitals, to say that hospitals are saving money and still facing cuts.

 

"There's already been so much taken from hospitals," Kahn said. "It'd be hard to feel good about the progress underway because of the Affordable Care Act. The mechanisms are in place now to provide incentives to improve care. I do think from a standpoint of access to care and providing us the funds we need for reform--because reform costs money--there will be a point at which the camel's back breaks if Congress chooses to cut hospitals."

Exactly when the cuts become "too many" isn't clear. But hospitals want more money in the budget, and doctors want a permanent fix to the broken Sustainable Growth Rate formula that will slash reimbursements to physicians who provide services to Medicare beneficiaries--and neither of those "asks" looks promising.

"I think they're very concerned about the timeline," said Ardis Dee Hoven, president of the American Medical Association, about Congress and the "doc fix" legislation.

The AMA, along with other doctor lobby groups, met with Hill leadership last week to push for the passage of a permanent SGR repeal-and-replace bill. Congress has to get something done by March 31, otherwise doctors get an automatic pay cut.

While there's a bipartisan, bicameral agreement--supported by the doctors' lobby--about how to replace the SGR, how to pay for that replacement has stalled the issue altogether. The newest proposal is hardly a solution: House Republicans plan to vote this week on a version of the bill that is paid for by repealing the Affordable Care Act's individual-mandate penalty, an effort that will surely be vetoed by the president if not struck down in the Senate.

Congress also has hospitals worried about cuts--the industry could lose billions if lawmakers keep the reductions as proposed in President Obama's budget last week.

Despite the prospect of tight finances, the doctor and hospital groups say they have a positive relationship with the administration. Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner said she regularly breakfasts with Kahn to talk about what's going on with hospitals, and Hoven said the AMA has been included in many of CMS's discussions about how to implement the health law's reforms.

"We've been quite well received," Hoven said. "They've been very receptive about our concerns with exchanges, and I feel very confident that [Tavenner] and her colleagues will listen to us."

Both organizations were in town last week for their annual conferences, where Tavenner spoke about the year ahead for the president's signature legislative achievement.

Her message reflected shared priorities of the administration and the associations. These priorities include that the more patients they can get signed up for health insurance, the more they can achieve the goals of improving population health by getting patients care and securing reimbursement for providers who have historically taken hits when uninsured patients can't make bills.

"Lower readmissions, new delivery system reforms, reductions in infections," Tavenner said at the hospital conference, "you all have stepped up and you've stepped up solidly for the past four years. We've already seen significant progress.

"U.S. health care spending grew 3.7 percent in 2012, the slowest four years on record," she continued. "At some point, we have to stop saying this is about the economy and start saying this is the result of hospitals and health care professionals."

Tavenner emphasized that the agency wants to continue to work with the doctors and hospitals in crafting regulations and furthering the move toward a fee-for-service system that ties payment to quality care and performance outcomes.

But it's tough to continue to ask for help in implementing the biggest change to America's health care system in 50 years, when health care providers are navigating the financial challenges doled out by Congress and the administration.

And on that, Tavenner had little to say, perhaps because there's little the administration can do.

"We are pleased that the three committees have come to an agreement on a bipartisan proposal," Tavenner said of the SGR effort at the doctor conference. "We look forward to working with you to get this issue through Congress."

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