• Repeal and the reform coalition

    An expansion of something I expressed in several tweets earlier today:

    Presume for the moment that Republicans retain the House and take the Senate and White House in 2012. Can they repeal health reform? Legislatively, it appears so. And, by the way, with a simple majority they could rewrite the filibuster rules so that reconciliation isn’t the only way.

    But what about politically? That question isn’t just about the electorate or the GOP base, but about interest groups. Will the coalition of interest groups that supported the ACA oppose repeal? I’m not convinced they will (in entirety), especially given what austerity may do to hospitals. Slashing payments doesn’t win political favors or garner support for one’s reformed regime.

    This austerity/health reform connection seems to be underappreciated. Medicare succeeded initially in part due to generous provider payments. Thus, cost control and health reform are (at least initially) at odds politically. That’s why the only way to succeed at cost control is to build the cost control structures first but don’t actually add the cost control teeth until later, and then only slowly.

    Quoting myself, “You have to make eventual losers feel like winners.” I cannot imagine another politically viable approach. So, the question becomes, how does the ACA make key interest groups feel, not in 2010, not now, but in 2013? There is no guarantee they’ll feel as they did when they supported the legislation. Times change, and so do positions. What the supercommittee and Congress do over the next year will play a role in how those positions shift. Certainly what might replace the ACA, should it be repealed, matters too, particularly to the insurance industry.

    In any case, I’m less confident than others are that repeal through legislation (as opposed to by the courts) is impossible or even improbable. A lot depends on how deficits are cut. A lot depends on the 2012 election too. If that goes big for the Republicans, I think there is a good chance health reform will be at risk.

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    • To follow up on your response in the comments of the previous post, as well as this one:

      Your previous post, unlike this one, highlighted the possibility of a sort of swinging back and forth, where reconciliation opened an avenue to repeated changes to the legislation. I should have been clearer in stating that is EXACTLY the scenario that interest groups would fight against. They need some near-term certainty on which to base their business models.

      This post focuses on one-time repeal through reconciliation. That certainly is possible. And each of us is weighing the factors and making some assessment of the likelihood.

      One factor I think you’re underweighing is how much the health care system has already responded to long-term trends that have been in some sense codified by the ACA. For example, the HUGE wave of M&As in the hospital sector, as well as experimentation with new payment and organization models, are responses to both decade-long trends as well as specific provisions of the bill.

      This is in some sense an advantage of the bill. Since it was conservative, and really tried to push existing trends rather than create an entirely new system, it simply added more carrots and sticks to policies that hospitals were considering anyway. My own hospital system acquired four (!) separate medium to large sized community hospitals and countless small practices in the past 3 years alone. The plans were in the works forever, but the ACA pushed them over the edge.

      You’re right that the political calculus in 2013 will be different than in 2008 for the various interest groups. But many of these groups are huge, systemic entities themselves, and if they’ve already committed resources to one vision of what healthcare will look like in 2020, they can’t just pivot on a dime, even if their new calculations suggest they never should have supported the bill in the first place.

      And as you said in the original post, the Republican promise is repeal and REPLACE. So you make all these plans to respond to the ACA, then allow it to be repealed, then watch all of your business models completely undone by whatever the new Republican alternative is? I think that’s unlikely.

      • Yes, the replace part matters, as does the (new) status quo. AHIP and the AHA are already on record as favoring increasing the Medicare eligibility age. If we start down that road, big changes might follow.

        I do not say what I think is likely. I only say what I think is not impossible. I do not think repeal (and replace with something) is impossible, depending on the 2012 election and the climate of austerity. Note that “repeal and replace” can, in total, leave many things not that different from the way they were headed anyway. It could just be a rearrangement of deck chairs so as to declare victory. But that rearrangement may be enough to infuriate the left (going too far) and the right (not going far enough).

        Reform is an evolution, after all. I’m just saying we’re not done and we’re probably not done using reconciliation to make changes.

        Most importantly, I don’t think it is wise to think the ACA is somehow above repeal or substantial revision. Relying on interest groups who, tenuously, held it together in 2010 to continue to do so despite a changing landscape seems like misplaced faith. There’s no proving right or wrong on this. Your opinion is as valid as mine.

        LATER: Put it this way, do hospitals want higher payments? Yes. Do insurers want more profitable business? Yes. Can those groups get that via some type of “repeal and replace” (or call it what you like)? Legislatively, yes. Politically, it’s possible depending on the 2012 election.

        • Sure, I think we’re pretty much on the same page. It’s absolutely possible, can’t disagree with you there. I do think we’re giving the pro- and anti-repeal options slightly different weights, but on the whole I think I get and agree with your general gist.

          And thanks for coming down into the comments and responding. Love it when a blog author has the courage and know-how to do that! Keep up the great work.

    • I think repeal is very likely. I think replace is incredibly unlikely. When in office, the GOP has not been interested in promoting health care reform. I just dont see them spending political capital on this issue. If they do, they will have to, somehow, come up with a plan which results in lower payments to some important constituency. I just do not see that happening. I think the PCA is mostly for show, and I dont see it cutting costs anyway. Maybe Don’s series will convince me otherwise.

      Steve

      • “Replace” could be to attract or retain support of key interest groups. It need not solve the same problems the ACA attempts to address.

      • @steve
        I think the PCA act could be real, but it depends on the filling out the details, and primarily its ability to expand coverage depends on how effective aggressive auto-enroll procedures (things that are soft mandates but than can called not a mandate) turn out to be. Given that there has been no move in the House to begin marking this bill up, I think skepticism is warranted. Also, conservatives crowing about CLASS should realize that it would easily work with a mandate. Similarly, the replace plans likely won’t work either without a mandate of some sort.