“Over the long term, providers are going to have to remain very engaged in this,” Michael Regier, senior vice president of legal and corporate affairs at VHA, said in an interview. “That's because the size of the budget deficit means they will have to include Medicare.”
Senate Democrats and five Republicans joined forces to defeat the Ryan budget May 25, in large part because it would allow cuts in Medicare spending by eventually transforming it into a system of private insurance premium subsidies. The Senate vote came the day after the Democratic candidate in a New York special election won in a predominantly Republican district. The election results followed a multimillion-dollar ad campaign in the district that attacked the Republicans' proposed changes to Medicare.
“We saw people's opposition on full display during Tuesday's special election in New York, where the central issue was the Republican plan to put insurance company bureaucrats between patients and their doctors,” Senate Majority Leader Harry Reid (D-Nev.) said Thursday. “Last night, the Senate also sent a strong message that the Republican proposal is a nonstarter.”
Richard Pollack, executive vice president for advocacy and public policy at the American Hospital Association, agreed that the programs' size will necessitate some role in any agreement to reduce federal deficits.
Healthcare's role in deficit reduction may depend on the recommendation of a bipartisan congressional deficit reduction group led by Vice President Joe Biden. Washington-based advocates and policy experts have focused deficit reduction speculation on the group after several other major deficit reduction groups in recent months produced no congressional action. Republicans on the panel, including House Majority Leader Eric Cantor of Virginia, initially complained that Democrats had taken Medicare cuts off the table in the talks but later dropped such concerns.
“There's still a lot of political money and energy going to saying that there is no problem with these programs and we can go on our merry way,” said Michael Franc, vice president of government studies for the Heritage Foundation. “But if you don't include Medicare and Medicaid, then you would have to eviscerate discretionary spending and other entitlement spending.”
Providers' advocates in Washington have their own suggestions for ways to save money in the programs.
First, some providers support the response to spiraling federal healthcare spending traditionally urged by Democrats: Implement the Patient Protection and Affordable Care Act.
“We want to see the ACA carried out, which will produce some savings,” Chip Kahn, president and CEO of the Federation of American Hospitals, said in an interview. “Any changes beyond that will impact the ability of seniors to get the care they need.”
Dr. Georges Benjamin, executive director of the American Public Health Association, agreed that policymakers should allow full implementation of the law over the coming decade to see if it delivers the promised savings. “It will do a lot of the things budget cutters want to get done but in a much more thoughtful way,” Benjamin said.
Similarly, the American Medical Association had urged broad adoption of many of the initiatives included in the 2010 federal healthcare law, such as the use of comparative effectiveness research and expanded chronic disease prevention efforts. But the group also wants additional measures not included in the healthcare law, such as an overhaul of medical liability law.
Medical liability changes also are urged for consideration in the deficit debate by the AHA, as well as new taxes on junk foods.
“Those two make total sense, policy wise,” Pollack said about the initiatives, which he said could provide about $200 billion in savings or new tax revenue within 10 years.
But like the approach that urges lawmakers to wait and see if the law produces its promised savings, other initiatives that promise eventual savings could fall short of looming fiscal realities. For instance, Medicare's trustees concluded that the federal healthcare law extended the life of the fund that pays for Medicare's hospital benefits by seven years but it is still expected to reach insolvency by 2024.