Public Policy

Turbulence Ahead


After the wild ride of 2010, public-policy watchers could be forgiven for fervently hoping that 2011 offers a calmer year on the healthcare front.

Fat chance.

The turbulence could begin immediately, with the seating of the 112th Congress on Jan. 3. “I think the first question that’s on everybody’s mind is, ‘What will the Republican majority in the House do to Obama’s healthcare reform initiative?’ ” says Eric Siegal, MD, SFHM, a member of SHM’s Public Policy Committee (PPC) and a clinical assistant professor of medicine at the University of Wisconsin School of Medicine and Public Health.

For most issues of direct concern to hospitalists, he says, especially those centered on healthcare delivery, “the wheels were in motion” long before the reform bill became law. Dr. Siegal also says most healthcare experts support the substance of accountable care organizations (ACOs), pay for performance, and reforming Medicare in ways that reward quality instead of quantity. “I think that ship is out of the harbor,” he says.

Throughout the year, the PPC will focus on three priorities identified in the Affordable Care Act: hospital value-based purchasing, bundled payments including ACOs, and hospital readmissions and transitions of care.

There’s no end to mischief. There are as many opportunities as the day is long. … It is totally unclear what is going to happen.

—Bill Vaughan, senior policy analyst, Consumers Union, Washington, D.C.

Debate, Delay, Defund?

There are several ways that Congress can delay or thwart the launch of specific reform initiatives. The first is to hold hearings about reform measures, Dr. Siegal says, “with the hope that they can somehow undermine it by raising questions about either the finances of it or about the implications for average Americans in terms of what kind of healthcare they’re going to get.” Such tactics carry significant risk, however, because highlighting specific aspects of the reform law could actually increase overall public support. “It has the potential to backfire on them,” he says.

“Repeal won’t happen anytime soon,” predicts Pat Conway, MD, chair of the PPC and director of hospital medicine at Cincinnati Children’s Hospital. “However, Congress could gut or significantly reduce funding to multiple programs within the bill, and then if you significantly reduce the funding, this may make it nearly impossible for those programs to be successful.”

Rough estimates suggest that some $150 billion worth of programs over the 10-year life of the healthcare reform act remain unfunded and are at risk. As an example, Dr. Conway cites wording in the bill that authorizes a program to help ease patient transitions in and out of the hospital. “If you reduce that funding to near zero, hospitals and hospitalists may still be successful, but you’ve essentially removed the program to learn how to be successful,” he says.

Bill Vaughan, a senior policy analyst in healthcare with the Washington, D.C.-based organization Consumers Union, says targeted riders could be added to appropriations bills. For instance, one rider could prohibit the Centers for Medicare & Medicaid Services (CMS) from spending any money to help develop government-supported insurance exchanges. Another could prevent the IRS from collecting money to be channeled into the trust fund for the Patient-Centered Outcomes Research Institute and its focus on comparative-effectiveness research. “There’s no end to mischief,” Vaughan says. “There are as many opportunities as the day is long.”

A major confrontation could arrive in March or April, when the U.S. runs into its debt ceiling. A continuing resolution would then be required to continue the appropriations process (and increase the U.S. debt ceiling past its current limit of $14.3 trillion). At that point or soon thereafter, Vaughan says, an opportunity could arise for legislators to say they won’t vote for a critical appropriations bill unless it includes certain spending reductions cited by one of several commissions tasked with recommending ways to reduce the deficit. “That could include hospital cuts, more doctor cuts, significant cost shifting to beneficiaries, higher copays,” he says.

Amid a “firestorm of ideas” on how to further cut Medicare and Medicaid spending, ideas once deemed radical could gain more traction. Some legislators have tossed around the idea of shutting down the government, if need be. “There’s nothing on the radar scope but static and fuzz,” Vaughan says. “It is totally unclear what is going to happen.”

Dearth of Drugs

Another trend generating both uncertainty and headaches in the nation’s hospitals is an unprecedented prescription drug shortage that could last well into the New Year, based on the number of medicines now in scarce supply across the country. In mid-November, for example, the American Society of Clinical Oncology announced “severe and worsening shortages of many critical therapies,” including doxorubicin, leucovorin, etoposide, nitrogen mustard, vincristine, propofol, and morphine.

Join Team Hospitlaist

Want to share your unique perspective on hot topics in HM? Team Hospitalist is accepting applications for two-year terms beginning in April. If you are interested in joining the team, e-mail Editor Jason Carris at

Valerie Jensen, associate director of the FDA’s drug shortage program, told the Associated Press that her agency was seeing a record number of drug shortfalls in 2010. In mid-November, the FDA’s Current Drug Shortages list ( included multiple formulations of 50 different medicines. Why so many? Jensen blamed the scarcity, in part, on the fact that many older drugs are not as profitable as newer ones. Manufacturing issues or delays and increased demand were the two biggest official reasons, though the FDA reported that at least eight formulations had been pulled or held from the market.

Vaughan says he’s heard plenty of buzz about the problem showing up quickly and unexpectedly in hospitals. Drug companies are supposed to give the FDA six months’ notice if they stop producing a drug, he says, but there’s no penalty if they don’t. “It’s amazing the number of people who are starting to worry about it,” he says. TH

Bryn Nelson is a freelance medical writer based in Seattle.

Health Reform Timeline

Some key dates tied to the Affordable Care Act; a more comprehensive timeline can be found at

  • March 23, 2010

    Patient Protection and Affordable Care Act signed by President Obama.

  • June 2010

    Senior citizens begin receiving $250 rebate to reduce size of “doughnut hole” gap in Medicare prescription drug coverage.

  • July 1, 2010

    Enrollment begins for patients uninsured for six months due to a pre-existing condition, under the Pre-Existing Condition Insurance Program run by states and federal government.

  • Sept. 23, 2010

    Dependents up to age 26 can be included on parents’ health insurance. Lifetime benefit limit ban is lifted. Children with pre-existing conditions no longer excluded from insurance plans. (In response, some major insurers announce they will no longer sell child-only policies; others announce premium hikes due to new provisions.)

  • Nov. 16, 2010

    Center for Medicare and Medicaid Innovation established, with a goal of testing new methods for coordinating, delivering, and paying for healthcare.

  • Jan. 1, 2011

    Medicare begins paying 10% bonus for primary care.

  • Jan. 3, 2011

    112th Congress seated, signaling official start of new political battles over multiple provisions in healthcare act.

  • Early 2011

    Community-Based Care Transitions pilot program will begin accepting grant proposals from hospital-community organization collaborations.

  • March 23, 2011

    First grants for state-run health insurance exchanges to be awarded (patient enrollment slated to begin Jan. 1, 2014).

  • Oct. 1, 2011

    Funding available for a 15-member Independent Payment Advisory Board, which will begin determinations in 2013 on whether Medicare expenditures are exceeding target rate of growth, the first step toward potential payment reductions.

  • Jan. 1, 2012

    ACOs that voluntarily meet quality metrics will be allowed to share in Medicare cost savings.

  • Oct. 1, 2012

    A hospital value-based purchasing program (payment adjustments based on performance measures) begins covering new hospital discharges. Also, hospitals with excessive readmission rates will begin receiving decreased Medicare payments.

  • Jan. 1, 2013

    Voluntary national pilot on bundling Medicare payments for 10 conditions set to begin.

Source: Kaiser Family Foundation

Next Article:

   Comments ()