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How will the Democrats' resurgence affect Congress?

From the December ACP Observer, copyright © 2006 by the American College of Physicians.

By Robert B. Doherty

The stunning gains made by Democrats during the 2006 mid-term elections have altered the course of national policy—including health care policy—for at least the remainder of President Bush's term, and potentially, for many years to follow.

At press time, the Democrats regained control of the House of Representatives and had captured the majority of seats in the U.S. Senate. That means an entirely new team of liberal-leaning Democrats chairing congressional committees that have jurisdiction over Medicare.

Nancy Pelosi (D-CA), will become Speaker of the House. Liberal stalwart Charlie Rangel (D-NY) will replace Rep. Bill Thomas as chair of the Ways and Means Committee. Rep. Pete Stark (D-CA) will replace Nancy Johnson (R-CT), who lost her own re-election battle, as chair of the Ways and Means Committee's health subcommittee. Rep. John Dingell (D-MI), the longest tenured member of the House of Representatives, will replace Rep. Joe Barton (R-TX) as chair of the Energy and Commerce Committee.

Fortunately, the College is well positioned to work constructively with the new Democratic leadership and maintain good relationships with returning Republicans and the White House. Our policy proposals are generally viewed by both Democrats and Republicans as less self-serving and more patient-centered than those held by many other advocacy groups.

Changes in Medicare

The new House Democratic leadership is likely to seek major changes in the Medicare Part D prescription drug benefit. They have promised to give the federal government the ability to negotiate drug prices directly with manufacturers rather than relying on private sector "pharmacy benefit managers" to do the job. They are likely to vote to allow "re-importation" of drugs from Canada. Many would like to eliminate penalties for late-enrollees and to reduce the "doughnut" hole in drug coverage.

Most of these changes have been fiercely opposed by the Bush administration and drug manufacturers. However, the College supports drug re-importation with appropriate patient safeguards, supports allowing the federal government to negotiate drug prices, and favors easing the late-enrollment penalties.

One of the most important issues for internists is getting legislation enacted to eliminate automatic Medicare payment cuts due to the sustainable growth rate (SGR). Here, there is little difference between Democrats and Republicans, since most have gone on record as wanting to eliminate the SGR. The Democrats are more likely to push for offsetting the cost by reducing payments to Medicare Advantage plans (the HMO side of Medicare), however, while Republicans likely would resist such offsets.

One of the most important issues for internists is getting legislation enacted to eliminate automatic Medicare payment cuts due to the sustainable growth rate.

Democrats will also want to hold beneficiaries "harmless" from any increased out-of-pocket costs associated with eliminating the SGR. Doing so will increase how much the federal government must pay to eliminate the SGR, since under current law, beneficiaries would pay 25% of this cost through higher premiums. Democrats may also seek to have alternative "volume" controls enacted as a condition of repealing the SGR.

Many Democrats and Republicans share the College's interest in pursuing broader physician payment reforms that would include ACP's proposal for a Medicare pilot test of the patient-centered medical home.

When it comes to pay for performance, however, there is a great deal of skepticism on the Democrat side. Rep. Pete Stark (D-CA) has expressed the view that since licensed physicians are already expected to deliver high-quality care, it shouldn't be necessary to pay them for it.

Mr. Stark likely will oppose modifying the self-referral laws (named after him) to create "safe harbors" for hospitals to share health information technology with physicians. He has expressed support for providing Medicare reimbursement support to help physicians afford health information technology. ACP similarly has championed the idea of providing an office visit fee "add-on" for practices that use electronic health records, as called for by a bipartisan bill introduced by Rep. Charles Gonzalez (D-TX). The College supports creating a safe harbor for sharing information technology.

Expanding Access

The Democrats are far more likely than the GOP to push for expansions of health insurance coverage. The Republican approach to expanding coverage has focused on making "consumer-directed" products, like health savings accounts, more available to patients and introducing "transparency" in pricing and quality measures to help consumers make informed choices. Democrats will be more likely to push for expanding Medicaid and S-CHIP, and possibly creating new entitlements and subsidies to help provide coverage for the working poor.

Any ambition to greatly expand the federal government's role in expanding coverage will almost certainly run into opposition from fiscal conservatives of both parties, who generally oppose expansion of "entitlement" programs. They also are likely to insist that any required new spending be paid for by cuts elsewhere.

The College continues to support the goal of universal coverage through a mix of public program expansions, tax credits for low-income working families and expanded choices of health coverage options.

Political Realities

Whether Democrats are able to deliver results depends on a variety of factors. Most importantly, President Bush will continue to control the executive branch for the next two years. Even without a majority, Senate Republicans will have the ability to block legislation if they stick together. Finally, many of the newly elected House Democrats are more conservative than the party as a whole, meaning that presumptive Speaker-elect Pelosi will need to balance the ambitions of liberals for a more active role for government with the more circumspect views of the conservative members of her own party. At the same time, returning House and Senate Republicans will be even more conservative in composition than their predecessors, since most of those who lost re-election were mainly from the moderate wing of the GOP.

The biggest unknown is how President Bush will react to the changed politics. Will he reach out to the Democratic leadership and govern in a more bipartisan fashion, as he did when he was governor of Texas? Or will he continue to try to govern from his (now diminished) Republican base, using his control of the veto pen to blunt the ability of Democrats to move their agenda forward?

There is no question that health care policy now will be considered in an entirely new political environment. The results are uncertain, but the College remains in a strong position to promote ideas that can appeal to both Democrats and Republicans, including reforming the dysfunctional Medicare payment system, moving toward patient-centered primary care and expanding health insurance coverage for all.

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