Overshadowed by managed-care reform and outflanked on policy, hospital lobbyists have stumbled into midyear with little left of the lobbying momentum that has yielded billions of dollars in new Medicare payments in the past two years.
Although the outcome of this year's lobbying campaign is far from certain, the American Hospital Association already appears to have lost out on the biggest piece of its Medicare lobbying campaign: a proposal, worth some $6.1 billion from 2002 to 2006, to boost hospital labor compensation in many low-wage areas.
That proposal aims to help largely rural hospitals. Yet rural lawmakers have not included it in a major bill to boost rural payment rates by $13 billion to $15 billion over 10 years (June 18, p. 6). That omission came after the Medicare Payment Advisory Commission criticized the labor-compensation proposal because it didn't target the new dollars to hospitals in need.
Meanwhile, congressional attention has turned away as the Senate debate raged over a patients' bill of rights and House Republican leaders have prepared their response to the Senate-passed bill. Other congressional panels not directly involved in the managed-care reforms, such as the Senate Finance Committee, appear to be more focused on Medicare restructuring legislation than new hospital payment increases.
"I think the challenges this year are far greater than they've been the last two years," says Herb Kuhn, vice president for advocacy at the Premier hospital alliance.
AHA officials note, however, that Medicare payment increases enacted in 1999 and 2000-which amounted to some $19.1 billion in new Medicare hospital spending from 2000 to 2005-didn't come until very late in the congressional session. That leaves them plenty of time to build backing in Congress this year, observers say. In total, the AHA is pushing for about $28 billion in federal dollars during the next five years, either in worker training grants or in new Medicare spending.
"Some of these issues are likely to come back to life later on," says Robert Reischauer, president of the Urban Institute in Washington and MedPAC's vice chairman. "They're the kinds of issues that can be added onto another bill, but I don't think they're a prime mover."
Indeed, AHA officials say they haven't yet begun to fight. An AHA-coordinated media campaign called the Coalition to Protect America's Health Care plans to premiere a $9 million advertising push in September to highlight the need for federal spending to relieve a healthcare workforce shortage (June 11, p. 16).
Sensing strong support
Thomas Nickels, AHA's senior vice president of federal relations, says he senses strong support for another round of Medicare payment increases. That is particularly so for rural hospitals, Nickels said, pointing to a letter signed by House Budget Committee Chairman Jim Nussle (R-Iowa) and Rep. John Tanner (D-Tenn.), both advocates for rural hospitals who are pushing for rural payment relief.
"Our goal is to build a drumbeat for rural healthcare on Capitol Hill, and the Nussle-Tanner letter is a positive indication of growing support," Nickels says.
That letter did not express support for the special rural labor-payment boost, however. Nor did it support one of AHA's other prized objectives, a full-inflation increase for all hospital inpatient payments in 2002 and 2003, which is worth some $4 billion from 2002 to 2006.
AHA officials note, however, that legislation to boost rural labor compensation has drawn 66 co-sponsors in the House, whereas legislation for the full-inflation update has drawn 85 co-sponsors in the House.
The labor-shortage argument, which is the AHA's chief weapon in the new campaign for Medicare dollars, has taken some hits. A MedPAC advisory sent to congressional staffers June 18 points out that the formula for calculating annual updates-which is based on an inflation measure called the hospital marketbasket-already reflects rising labor costs.
In fact, the MedPAC memo notes, the way the marketbasket reflects wage pressure actually resulted in higher-than-deserved updates from 1995 to 2000. The marketbasket wage index includes both hospital-specific and economywide labor-cost inflation, and the hospital-specific wage inflation trailed the economy's in those years.
As a result, the marketbasket's wage inflation was at least 0.2 percentage point greater than the hospital-specific measurement during each of those five years.
"If labor shortages result in higher wages, those higher wages will be reflected in the marketbasket," says MedPAC Research Director Jack Ashby.
It's also not the first time hospitals have relied on the argument, says one longtime political observer.
"I've chuckled about another nursing shortage as an excuse for more Medicare money," says David Abernethy, senior vice president of public policy and regulatory affairs with HIP Health Plan of New York and a onetime Democratic healthcare aide to the House Ways and Means Committee.
"I chuckled when I saw that because I said, `There they go again,' " Abernethy says. "This is the classic hospital political ploy that (the AHA has) been employing for as long as I can remember."