The budget is complete. Congress has gone home for its August recess. Now hundreds of special-interest groups are spinning like gyroscopes as they try to take credit for everything from the invention of aspirin to the Mars space probe.
It's time again to grade how the major healthcare groups fared in this budget.
American Hospital Association-Grade: C
Several questions relative to the grading scale must be considered in evaluating all the groups. If an issue came out bad but better than it would have without a group's intervention, is that a victory? Should the groups be graded relative to what was included in the ill-fated budget passed by Congress in 1995 but vetoed by the president?
In the AHA's case, there were very few absolute victories, but things clearly could have been much worse were it not for the AHA's damage control.
One way to grade the AHA is to look at the issues the group focused on. Early in the debate, the AHA had two priorities: avoiding a one-year freeze on Medicare inpatient payments and opening the Medicare program to provider-sponsored organizations under a favorable regulatory framework. Later, after it became obvious a freeze was a done deal, the AHA shifted away from that fight and took up the issue of how much Medicare should pay when a patient is transferred to a post-acute facility.
It also focused on getting graduate medical education and disproportionate-share payments removed from Medicare managed-care reimbursements.
How did it fare? The freeze was included in the final budget package, a total defeat for the AHA. And while the negative impact of the transfer provision was reduced considerably, that gain came at the expense of even deeper reductions in Medicare inpatient payments. Another blot on the AHA's record.
In a marginal victory, GME payments were removed from managed-care reimbursements, but disproportionate-share payments weren't.
PSOs, meanwhile, will be allowed to contract directly with Medicare beginning in 1999. And while the regulatory framework isn't all providers had wanted, most observers say it's manageable for hospitals. That's another marginal victory.
Contrary to the AHA's press releases, however, it didn't have a significant hand in the children's health initiative.
Overall, the budget package is better for hospitals than it could have been and better than the 1995 congressional budget would have been. But it's still far from good.
Federation of American Health Systems-Grade: CBoy, am I glad I don't have to lobby for a group whose primary member is getting more bad press than Joe Camel. Columbia/HCA Healthcare Corp.'s legal troubles must have made life miserable at least some of the time for the federation's lobbyists on Capitol Hill.
The federation lost some high-profile battles, most notably to the Catholic Health Association over Medicare reimbursement for property taxes and bad debt. It did, however, have a number of smaller, less public wins. It managed to reduce spending cuts for PPS-exempt hospitals by more than 20%, for example.
To the extent the PSO issue came to a positive end for providers, the federation should get some of the credit. In the 1995 budget debate, federation Vice President Laura Thevenot and Premier's Carol Kelly were instrumental in creating the insurers' PSO strategy. After jumping ship to the hospital industry, they helped shape its recent PSO strategy, which was much more cohesive and organized than in 1995.
American Medical Association-Grade: C+
Because projected Medicare spending growth for physicians already is next to nothing, it's not surprising doctors were targeted for a very small hit in the budget bill. Still, that should be considered a victory. The AMA also won a delay in the implementation of the new physician practice-expense fee schedule that would have shifted money from specialists to primary-care doctors. But despite aligning itself with a $1 million lobbying team put together by a group of physician specialty societies, the AMA wasn't able to kill a $390 million "down payment" on the practice-expense overhaul.
By choosing sides in the practice expense fight and then lobbying in a heavy-handed way, the AMA angered several physician groups with which it shares members.
American Association of Health Plans-Grade: BThe AAHP was targeting four major issues going into the budget battle: payment rates, payment rates, payment rates and PSOs.
The final compromise on managed-care payment rates reduces projected payments by about $23 billion from fiscal 1998 to 2002. It guarantees, however, that plans in the highest-paid counties still will see a minimum 2%-per-year increase. The fee-for-service portion of Medicare will increase by about 5% a year under the plan, while managed-care payments will rise by about 4% annually. Rural counties will see a significant increase.
Graduate medical education is carved out of managed-care payments, a loss for the AAHP. But disproportionate-share costs remain in, a victory.
Overall, the new payment formula is tough on managed-care plans. But, as in the case of the AHA, it could have been a whole lot worse.
The PSO compromise crafted by lawmakers must be a good one because providers and insurers both give it a passing grade.
In the past, the Blue Cross and Blue Shield Association and the Health Insurance Association of America have received grades along with the AAHP, but this year both attended so few classes that they can only receive incompletes.
Catholic Health Association-Grade B
The CHA took on just a few issues, but it made them count. Through a combination of hard work, good fortune and bad press (for Columbia), the CHA was able to defeat the Federation of American Health Systems in a head-to-head fight over Medicare reimbursement for property taxes. It also had a hand in the PSO fight and in defeating an attempt by a small group of large urban hospitals to capture as much as $1 billion in Medicare capital payments at the expense of other hospitals.