PHILADELPHIA – The healthcare industry is making progress but is being held back by a broken political structure, said American College of Physicians leadership Thursday in a live web broadcast reviewing its State of the Nation’s Health Care report.
“Instead of seeking bipartisan solutions, American politics today are characterized by deep ideological polarization, cynical and deceptive attacks on the ideas of others, an aversion to compromise and a failure of politicians to level with the public about the choices that must be made,” said Virginia Hood, president of ACP, in her opening remarks.
The ACP cites bad budget choices on the federal level as being the number one restraint on the future progress of healthcare.
“The sequestration cuts will do great harm to the agencies responsible for public health and safety, access, medical research and physician workforce,” said Robert Doherty, ACP’s senior vice president of governmental affairs and public policy. “They must not be allowed to stand.”
The ACP decided not to just criticize policy makers; the organization, in its report, lays out an alternative scenario that includes:
• repealing the Medicare sustainable growth rate (SGR) and transitioning to patient-centered payment models;
• reducing the costs of defensive medicine by capping non-economic damages, limiting contingency fees and launching a national pilot of no-fault health courts;
• promoting high-value, cost-conscious care;
• making structural entitlement reforms such as negotiating Medicare Part D drug prices and requiring all payers to contribute to graduate medical education;
• reforming federal tax policy to encourage consumers to consider cost of health benefits by accelerating or modifying the “Cadillac” plan tax and creating a limit on deductibility of high cost health plans.
At the top of the ACP’s alternative scenario is repealing the SGR, something that has long been on the agenda of the ACP and numerous other medical societies.
[See also: SGR is curveball in budget debate.]
Earlier this week the ACP and more than 100 medical societies, including nearly all 50 state and the District of Columbia societies, sent a letter to the chair of the House Ways and Means Committee urging Congress to repeal the SGR using excess baseline projections for Overseas Contingency Operations (OCO).
[See also: AMA wants Congress to use projected funding for Iraq war to pay for SGR fix.]
In its report, the ACP lays out its argument supporting this idea.
“Some may question why we believe that OCO funds, which on paper have been set aside to fund operations in Afghanistan and Iraq, should be used to pay for repeal of the SGR,” said Doherty.
“The OCO funds will never be spent, because the United States has ended its operations in Iraq and will be winding down operations in Afghanistan. Yet the Congressional Budget Office assumes that those monies will be spent, because it can’t do otherwise unless Congress passes a bill to eliminate or reallocate the OCO funds.”
“The key issue is whether the OCO spending was indeed included in the baseline. If it was, then a reduction in OCO spending would free funds up for other uses,” said Ken Perez, director of healthcare policy and senior vice president of marketing at MedeAnalytics, a healthcare performance analytics company.
“The Congressional Budget Office’s August 2011 baseline did include OCO funding as an adjustment to and part of discretionary spending based on current law at the time,” he explained. “To the extent OCO spending is reduced versus that baseline, those funds will be available, though they would not contribute to the Budget Control Act-mandated $917 billion in savings from statutory caps on discretionary spending nor the still-to-be-determined $1.2 trillion in further budgetary savings - of which $600 billion must come from defense - under sequestration. Obviously, we need to be very careful in our scorekeeping.”
Senate budget committee Republicans have already questioned the sense of those arguing war savings can be used to offset domestic spending and reductions in revenue so the likelihood that law makers will be persuaded by the arguments of the ACP and other medical societies is doubtful.
Furthermore, said Henry Aaron, a healthcare expert and senior fellow at Washington, D.C.-based think tank the Brookings Institute, “there really isn’t a defense-draw-down-dividend. Military spending is getting squeezed in order to contribute to deficit reduction by more than we may save from the end of the war. Fixing the SGR will raise the deficit. Linking them (the SGR and military spending) would seem to imply cutting defense even more than the currently planned cuts - which many fear will put the nation at jeopardy - in order to sustain doctors’ incomes. If someone is actually favoring that trade-off as political strategy, I think he or she should find different employment.”
Follow HFN associate editor Stephanie Bouchard on Twitter @SBouchardHFN.
