Health Care Reform--Now What???

How quickly things change. Just six months ago, our nation was poised to pass sweeping legislation that would overhaul both the insurance and the health care industries. President Obama appeared to have the necessary votes to pass this legislation by late August, and the country was just starting to get its arms around new concepts like “public option” and “health care exchanges.” Just one month ago, a bill passed the Senate, and the country prepared for the administration to combine the House and Senate bills into one bill. It seemed inevitable that the President would be signing his John Hancock prior to the State of the Union Address. Then, one week ago, the unthinkable happened: A Republican won the Senate seat in Massachusetts, and suddenly the whole political landscape changed. This week, the President is set to give his State of the Union Address. Not only has he been unsuccessful in signing a new health care bill into law before the Address, but with such tremendous loss in momentum, it's starting to look unlikely that he will be successful in getting any health care legislation to pass at all. How quickly things change.

So what happens now? Well, there are several directions this could go. The Obama administration could try to pass sweeping health care reform by either sending the bill that already passed the Senate to the House for a vote, or they could go through reconciliation to try and get a combined bill passed. Neither of those options seems very likely at this time. Speaker Pelosi has made it very clear to the White House that she doesn’t have the votes to pass the Senate bill in the House. One Democrat Representative reportedly said that they wouldn’t be able to get more than 100 votes in the House for the Senate bill to pass…and it takes 253 for passage!

Here is the more likely scenario: The White House will probably go back to the drawing board and come up with an incredibly slimmed-down version of health care reform. They will probably keep much of the insurance reform, as that aspect seems to be popular with both parties. Additionally, they will probably provide some tax incentives for small business and individuals to help them purchase health care and reduce the number of uninsured. This approach will be a mere shadow of the 2,000 page mega-bills that we have been exposed to over the last six months. But even this will be difficult to pass, as the Republicans now smell the blood in the water and would like nothing more than to have the President strike out on something that he has put so much of his time and energy into.

Does this mean we are out of the woods and that its time to pass out the champagne? Not quite. You see, several things still must be addressed. First, we have not resolved the problem of the Medicare SGR and the fact that Medicare is projected to go bankrupt in less than seven short years. Second, we still have the problems of the uninsured and the escalating costs of health care. And finally, we now have a scared insurance industry that may start acting like a person who just survived a heart attack scare.

The problems with Medicare and the uninsured won’t just go away. At some point, whether now or later, these issues are going to have to be dealt with. The election in Massachusetts may have set back the time frame for dealing with these issues, but it didn’t do anything to solve them. My bigger concern is for physicians because we don’t know how the insurance industry is going to act. Remember the reason this whole thing started in the first place? It was because we were supposed to be controlling costs, and we were told, time and time again, that the insurance companies’ were incapable of controlling costs on their own. When it looked like the public option was going to pass, the insurance companies panicked as they thought that their business was going to disappear. We even had a Senator introduce a bill that would have eliminated health insurance companies all together and expand the Medicare system to cover every American. Can you imagine the huge sigh of relief that the insurance companies are breathing today? They probably feel like they just survived the industry equivalent of a massive heart attack! Like many heart attack survivors who suddenly change their eating habits and begin exercising, the insurance industry will most likely react this same way by taking steps to prevent another scare.

So what exactly are these steps? These steps will likely be focused on lowering the cost of health care. Since 85% of every premium dollar is paid to a provider of health care, insurance companies are going to start getting aggressive on cost control. They will do this in various ways including utilization management or the “mother may I order this test?” approach, by being more selective on what they cover, and by making significant reductions in fee schedules or contracted rates. If you think I’m over reacting, consider this: One Blue Cross Blue Shield plan recently changed its policy on covering IMRT. IMRT will no longer be covered for abdomen, pelvis, breast, or lung cancer because they now consider this to be merely “investigational.” This service was previously covered by the Blue Cross Blue Shield plan, but the new policy was just announced on 12/21/09 and it will become effective on 3/1/2010. And that’s just one example. Should the entire insurance industry decide to begin drastically lowering costs, it is likely that the biggest hit will be taken on the backs of health care providers.

While the pressure of sweeping health care reform may have been lifted temporarily, these underlying problems won’t just go away; at some point these issues are going to have to be dealt with. So until we figure out effective ways to address each of these issues, and until we can get a clear gauge on how the insurance industry is going to react, don’t pop that cork just yet. Our health care problems are still far from over.