American Hospital Association: An Update of Healthcare Reform and the Political Climate

The past three years in the U.S. healthcare system have been shrouded in political uncertainty and sweeping changes under the Patient Protection and Affordable Care Act. As the hospital sector moves into a key year of reform, its main advocacy group is ramping up its efforts to protect hospitals from further cuts and regulations.

At the American College of Healthcare Executives' 56th Congress on Healthcare Leadership in Chicago, several officers within the American Hospital Association shared the major goals and efforts of the AHA and how the political climate of Washington, D.C., is impacting healthcare reform today.

Healthcare reform

Since President Barack Obama was re-elected this past November, it has become increasingly certain the PPACA will stay on the books and will become the new blueprint for hospitals and health systems across the country, said Richard Pollack, AHA's executive vice president of advocacy and public policy.

"It's now the law of the land," Mr. Pollack said. "There will be challenges as this law goes forward, and there are efforts in the House to defund elements and…to repeal it. But the president has the veto pen, and it's safe to say it's the law of the land."

Many of the PPACA's key components, namely the health insurance marketplaces and Medicaid expansion, are still up in the air as each state grapples with how they will implement each piece. However, AHA's Deputy Director and Vice President of Policy Ashley Thompson said many of the technical aspects of the law — such as reduced readmissions, value-based purchasing and accountable care organizations — have proliferated. Currently, there are more than 250 ACOs covering more than 4 million people, and VBP officially went into effect this past October, as CMS reduced hospitals' Medicare reimbursement by 1 percent and will redistribute those funds based on quality measurements.

One of the big payment reforms that will progressively impact hospitals and health systems is the reduction of disproportionate share hospital payments. Mr. Pollack said this spring, when CMS issues its annual proposed rule for the inpatient prospective payment system, the government will outline how Medicare DSH payments will be redistributed. Under healthcare reform, 75 percent of Medicare DSH payments will be redistributed to hospitals based on care provided to the "uninsured," but Mr. Pollack said it remains to be seen how CMS will define uninsured. Medicaid DSH funds are also on the chopping block this year under the PPACA.

The political climate of D.C.

Healthcare reform has been the nucleus of hospitals' strategies right now, but the surrounding environment has been defined by "Washington's continued fiscal war," Mr. Pollack said. At the heart of the fiscal war is a Congress that is deeply divided and highly partisan.

"Divided government is something that has changed," Mr. Pollack said. "When we used to have divided government, it led to compromise. Today, it…leads to paralysis and some kind of dysfunction. There is no middle, and each party is dominated by the wings."

Lisa Kidder, AHA's vice president for legislative affairs, said the House and Senate have toed such strict party lines mostly due to a "disappearing political center." For example, she said Blue Dog Democrats in the House, usually considered to be moderates overall, have declined by 50 percent since the last election cycle, and many moderate Senate Republicans, such as Olympia Snowe of Maine and Ben Nelson of Nebraska, have retired.

Consequently, this has left the AHA and others with fewer legislators to work with who are willing to compromise, Ms. Kidder said.  

Deficit reduction

No issue has left Congress more divided than attempting to reduce the country's multitrillion-dollar debt. The country is currently two weeks into sequestration, which was the policy of across-the-board spending cuts triggered due to legislative gridlock. If Congress wanted to eliminate the sequester for the rest of the federal fiscal year, it would have to find $85 billion in savings, and within that total is a 2 percent cut to providers' Medicare reimbursements, which is set to go into effect April 1.

However, sequestration passed because it benefited both parties. "It's fair to say both parties were disinclined to get in the way [of sequestration]," Mr. Pollack said. "From Democrats' perspective, Social Security is protected. Medicaid for beneficiaries and providers is protected. VA benefits and Medicare for beneficiaries is protected. For Republicans, this was the only way they achieve spending cuts."

Mr. Pollack said he believes there are two fundamental ways to achieve deficit reduction: a grand bargain or "small ball" temporary patches and extensions, which has been the policy strategy as of late. However, since President Obama is entering his lame duck presidency, Mr. Pollack said the president may fight hard for the grand bargain to cement a legacy. He quoted journalist Robert Caro, who said lame duck presidents have "only one thing to run for: a place in history."

"This is where the president looks to build legacy," Mr. Pollack said. "He knows part of having a legacy is having a record of accomplishment. Will the president seek a legacy and try to work the grand bargain?"

Since FY 2010, hospitals have been a major part of the country's deficit reduction, as Congress has enacted $250 billion in Medicare reimbursement reductions. Mr. Pollack concluded that the AHA is working hard to convince legislators how the healthcare sector needs more predictability and how more provider cuts will lead to unforeseen impacts on patient access to healthcare.

More Articles on the American Hospital Association:

More RAC Activity Focused on Setting, Not Necessity of Care
12 Ways to Lower Healthcare Costs Without Cutting Provider Payments
AHA Supports IPAB Repeal

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars