Politicking Interferes With Strategic Planning

HealthLeaders Media Staff, June 8, 2009

Lately, I've been hearing different versions of the following caveat from a growing number of healthcare leaders: "Our plan is X,Y, and Z, but of course it could all get wiped out with healthcare reform."

The biggest problem with healthcare reform right now isn't healthcare reform itself. It's the proliferation of talk and political posturing, which causes fear and a hunker-down mentality that is unlikely to pass until we can get some clarity on what the future will bring. By this, I mean at the very least a comprehensive legislative package, which President Barack Obama has requested by Oct. 1.

Healthcare leaders I've spoken to in recent weeks say the economy and the uncertainty of what health reform will mean a year from now is stalling strategic plans like never before and causing many to pull back from committing to any capital projects that aren't vitally necessary. Others say the mood is one where organizations are not looking to enter into new debt for the remainder of the year. Having cash in the bank is a No. 1 priority, and admittedly a good one in any environment.

While we don't know whether we can really believe politicians when they promise meaningful reform, we can't rule out something big happening. Three big questions that need to be answered before many will feel like they can make solid plans are: Will there be universal coverage? Will there be bundled payments and will there be a public health plan? Wary leaders know that a yes to any one of these could potentially send some hospitals into a financial tailspin and eat up available reserves.

In the meantime, just in the last week alone, several big news stories came out regarding healthcare reform moves on Capitol Hill. President Obama met with a couple dozen Senate Democrats and followed up his visit with a letter outlining his support of an insurance mandate for all Americans. And according to some Senate Democrats, he has expressed a willingness to consider a tax on employer health benefits, something he was vehemently opposed to during campaign season. And again, the question is will any of this make it into a final reform package?

For those of you spending 12 hours a days running the business of healthcare, here is what happened on Capitol Hill.

President Obama supports mandate for adults: In a letter to Senate Democrats, President Barack Obama stresses the need for legislation that includes health insurance coverage for every American. The president didn't provide a broad outline on how to cover the close to $1.5 trillion this could cost, but said he would "set aside $635 billion in a health reserve fund as a down payment on reform."

Senators to have a bipartisan bill this summer: Senate Republicans are grumbling after President Obama sent a letter to Senate Democratic leaders saying he supports "moving towards a principle of shared responsibility‚ÄĒmaking every American responsible for having health insurance coverage, and asking that employers share in the cost." Some senate Republicans say the letter will make it difficult to gain bipartisan support for a healthcare reform package. Nonetheless, Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, and Sen. Charles Grassley (R-IA), the ranking minority member of the Senate Finance Committee, in a joint statement this week said they will have a bill that is close to universal coverage this summer.

Employer tax is on the table: When he was campaigning for president, Barack Obama came out guns-blazing against Sen. John McCain (R-AZ) for proposing a tax on employer health benefits. Now, it looks as if it wasn't such a bad idea after all. According to this Washington Post article, taxing employer health benefits above $14,000 could yield $35 billion a year and is something President Obama will now consider.

Leftist groups back public health plan: Organizations such as MoveOn.org and the AFL-CIO converged on Washington this week in support of specific reform measures such as a government-backed public health plan.

Healthcare groups propose $2 trillion in savings: Leaders from six healthcare groups, including the American Medical Association and the American Hospital Association, spoke at the White House last month promising to find ways to reduce yearly healthcare spending by 1.5%. They presented their findings this week. In this article by HealthLeaders Senior Editor Janice Simmons, healthcare stakeholders highlight three areas in which the industry can save, including utilization of care ($150 billion to $180 billion), chronic care ($350 billion to $850 billion), and administrative simplification ($500 billion to $700 billion).

Report: Reducing healthcare costs will give significant boost to economy: A report by the Council of Economic Advisers, which reports to President Obama, says slowing growth of healthcare costs 1.5 percentage points a year "will increase real GDP in 2030 by nearly 8%."

Once we move past the rhetoric and onto meaningful legislation, maybe healthcare organizations will have more resolve to get back to the business of planning.

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