Health lobbyists remain on alert as focus shifts

Lobbyists in the healthcare industry say they must remain vigilant even as their focus narrows and their profiles diminish with healthcare reform on the back burner.

Absent a major reform bill, healthcare industry interests such as hospitals remain exposed to funding cuts, which would not be offset by the tens of millions of newly insured customers they stood to gain under healthcare reform.

Other sectors need Congress to act on priorities that were meant to ride along with the bigger bill.

Lobbyists and other healthcare industry sources said they remain largely in a wait-and-see stance while Democrats on Capitol Hill and in the White House try to sort out a way to move forward on healthcare reform after losing their crucial 60th vote in the Senate to Republican Scott Brown (Mass.).

Even with Washington turning its attention to the economy, special interests with stakes in the healthcare bill cannot take their eyes of the ball. “You’re probably making a mistake” if you do, said Chris Jennings, a Democratic strategist and healthcare lobbyist.

“I was always nervous when people said it was a certainty it was going to happen and I’m dubious now that people are saying it’s dead,” Jennings said. “People are still working on this,” he said, referring to lawmakers, staff and administration officials.

In the immediate aftermath of Brown’s victory, healthcare interests — not unlike the Democrats — paused to regroup. “There was a point last week, especially, at which everybody was quiet because it seemed impolitic not to be,” said a Republican healthcare lobbyist. Soon after, however, these interests began to contemplate where reform was headed and what their exposure was either way.

The biggest risk facing healthcare industries is that the hundreds of billions of dollars in Medicare cuts from the reform bill will survive even if reform itself does not.

Some industry groups, such as hospitals and drug companies, agreed not to fight those cuts if they were married to a major expansion in insurance coverage. “Now they’re worried there’ll be nothing traded back,” Jennings said.

“They’re seeing that the whole focal point of the debate in Washington is shifting to deficit and debt,” Jennings said. “The most scary outcome of failure to pass health reform is there will still be pressure to cut costs and reimbursement levels.”

Indeed, after the Clinton administration’s healthcare reform plan failed and Republicans seized control of Congress in 1994, the stage was set for the big cuts in Medicare payments included in the Balanced Budget Act of 1997.

Congressional Democratic leaders and the White House are still plotting a strategy on how to revive their comprehensive healthcare reform bill. The clearest path forward is for the House to adopt the Senate-passed bill and for both chambers to take up a second measure containing negotiated compromises and moved through the Senate under the budget reconciliation process, which requires only a simple majority vote to pass.

“We’re in a holding pattern right now, but on the other hand we’re actively game-planning,” said one healthcare industry source who requested anonymity because of the sensitivity of Democratic deliberations. “You have to see what you’re trying to influence first — and that’s the problem.”

Beneath the surface of the big political battle over healthcare reform were innumerable smaller matters considered vitally important to provider groups and beneficiaries.

For example, the failure to enact a healthcare bill last year exposed therapy providers and their patients to a strict cap on benefits that started Jan. 1.

Congress has stepped in year after year to postpone the so-called therapy cap, but now providers worry there is no legislative vehicle to resolve their problem.

Healthcare interests are reluctant to be seen trying to influence the approach Democratic leaders take even as they publicly call on Congress to finish the bill.

“We really do not think it’s our job to decide for the Congress or the administration the process by which they should go,” said Cecil Wilson, the president-elect of the American Medical Association. At the same time, he exhorted Congress that “just because it’s gotten hard does not mean that the need or the urgency for health system reform has gone away.”