Healthcare reform: Obama cut private deals with likely foes

With 60 votes needed for passage of healthcare reform in the Senate, the clout of home-state senators in closed-door negotiations over such issues could be critical.

Physicians

The American Medical Association, which represents doctors, proved a formidable foe in blocking President Truman’s healthcare reform as “socialized medicine.” But on Thursday, in a timely boost to reform prospects, the AMA endorsed the House bill – for a price: that the House also commit to abolishing the formula for mandated cuts in payments to physicians who serve Medicare patients.

The formula was set by a 1997 law designed to reduce federal deficits. Without the “fix,” doctors face a 22 percent drop in Medicare payments in 2010. The AMA wants to put a permanent end to the “sustainable growth rate” cuts to physicians now mandated by law. The Senate on Oct. 21 voted down a measure to do that, on grounds that the cost of the repeal was not offset.

But after the AMA endorsement of the House healthcare bill, the speaker’s office confirmed that the House will vote on a bill to end the issue by Thanksgiving. Moreover, the $210 billion cost of the bill will not be offset, a move that conservative Democrats have said is a violation of House pay-go rules.

"The 'pay as you go' principle of budget discipline requires Congress to find a way to pay for any new spending, outside of an economic crisis. A previous Congress established the policy for paying Medicare doctors, so the update for 2010 is not a new policy to be paid for,” said a spokesman for Sen. John Dingell (D) of Michigan, who is sponsoring the legislation.

Majority leader Reid says he will continue to work on passing the change the AMA is seeking.

“There was no quid pro quo [in meetings with Democrats on healthcare reform], but the implication was that they would get a doc fix and doctors would support healthcare reform,” says Julius Hobson, a senior policy adviser at Bryan Cave LLP who lobbies on healthcare. “If you don’t see a permanent doc fix, you might see a division in the house of medicine” about the health-reform effort.

A recent poll of physicians found that 2 in 3 oppose healthcare overhaul proposals on Capitol Hill. They cite concerns about soaring costs, possible rationing of care, and government competence, according to the survey by TechnoMetrica Market Intelligence and Investors Business Daily.

Insurers

In exchange for universal coverage (and as many as 30 million new clients), the insurance industry committed to ending discrimination based on preexisting conditions, discontinuing ratings based on health status or gender, and cutting overall healthcare costs by 1.5 percent annually.

But the Senate Finance Committee weakened proposed penalties for individuals who fail to obtain insurance. That, insurers say, will drive down the number of healthy people prompted to buy health insurance under the terms of the law. In September, just before the finance panel began its markup of a bill, America’s Health Insurance Plans (AHIP) released a scorching report concluding that the bill would increase the cost of healthcare coverage for Americans.

On Oct. 21, Senate and House Judiciary panels announced plans to repeal the insurance industry’s limited exemption from federal antitrust regulation, a move the industry sees as punitive.

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