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

HARBURG, GERMANY - JUNE 08: A woman donates blood at the blood donation service Hamburg on June 8, 2011 in Harburg, Germany. Hospitals and the Red Cross in northern Germany have appealed to the public for blood donations as a result of the current outbreak of enterohemorrhagic E. coli, also known as the EHEC bacteria. With at least 2,200 people afflicted by the infection, and approximately 500 suffering from the HUS complication from EHEC that attacks the kidneys, hospitals have seen an explosive growth in their need for donated blood plasma. The EHEC outbreak has thus far killed at least 22 people in Europe's deadliest recorded outbreak of E. coli. (Photo by Joern Pollex/Getty Images)  
National Journal
Clara Ritger
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Clara Ritger
March 10, 2014, 1 a.m.

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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