President Clinton last week laid out what may be a rough lobbying road for the hospital industry when he presented a plan to keep Medicare solvent for two decades.
On the one hand, Clinton's State of the Union address called on Congress to use $700 billion in federal budget surplus over the next 15 years to keep Medicare in the black through 2020. He also promised $1 billion in grants to public hospitals and other providers over five years to help them track the uninsured and ensure they get necessary medical treatment.
On the other hand, Clinton's fiscal 2000 budget, due out in early February, may try to squeeze another $10 billion from Medicare hospital payments.
Hospital groups questioned why the White House was considering the latter move. "It makes absolutely no sense in a surplus environment to go back and hit healthcare providers again," said Thomas Scully, president and chief executive officer of the Federation of American Health Systems.
The promise of a solvent Medicare program and a new $1 billion grant program appears to sweeten the pot for hospitals to accept the payment reductions. But Richard Pollack, executive vice president of federal relations at the American Hospital Association, said such a trade-off "is not something we accept."
Clinton's surplus gambit also has the potential to slow the work of the National Bipartisan Commission on the Future of Medicare (See story, p. 27).
That commission, created by a 1997 law, is scheduled to meet this week to consider a proposal that would transform Medicare from a giant payer into a "premium support" system through which the federal government would assist seniors in purchasing private coverage.
Many of the commission's Democratic appointees have resisted that effort, but they have struggled to articulate an alternative. By extending the life of the Medicare Hospital Insurance Trust Fund to 2020 from its projected exhaustion date of 2008, Clinton has given the Democrats a proposal to rally around.
Rep. Fortney "Pete" Stark (D-Calif.), the ranking minority member of the House Ways and Means health subcommittee, praised Clinton's proposal because he said it will avert a "radical experiment" with premium support.
But Stuart Altman, a member of the bipartisan commission, said the proposal to use the surplus does not necessarily represent an alternative to the premium support program.
Altman favors the use of surplus dollars to extend the trust fund but said he envisioned a compromise on the commission, by which the surplus money would be bundled with a premium support system and an expansion of Medicare benefits to include coverage of prescription drugs, which Clinton also endorsed in his address.
"I'm willing to look at it as a package," said Altman, a Brandeis University healthcare policy professor and former chairman of the Prospective Payment Assessment Commission, a congressional advisory panel.
President Clinton also called on Congress to pass "strong, enforceable" patient-protection legislation. It was just one of a number of healthcare measures that peppered last week's State of the Union address (See box, this page, and cover story, p. 26).
In response, House Speaker J. Dennis Hastert (R-Ill.) sent a letter to House members promising a vote this year on such legislation. He said he wants to pass legislation that does not increase costs or cause people to lose health insurance but will make sure patients have power over their healthcare decisions.