Thursday, January 13, 2011

The Health Policy Divide: East Coast vs. West Coast (Part 1: The Reform Law)

The annual JP Morgan health care conference drew thousands of health care industry executives and investors to San Francisco this week, offering a nice chance to contrast the views of health care policy inside the Beltway and (far) outside.

We will start with today’s headline from Politico: Investors see health reform's potential. “As Republicans push forward on repealing health reform, planning the law’s demise, a different conversation is happening among thousands of health care investors gathered in San Francisco for this week’s J.P Morgan Health Care Conference: how to capitalize on health reform’s new business opportunities,” writes Sarah Kliff.

Indeed, presentations by insurers, PBMs, retail pharmacy and other service companies all touched on the potential benefits—yes, benefits—of the reform law on their prospects for growth. Now, that doesn’t mean investors are thrilled at the idea that insurers’ profit margins will (in effect) be regulated by the feds or that Medicare Advantage is facing steep cuts. But the outlook is decidedly optimistic.

Of course, that was not supposed to be the Politico headline today. But for the horrible events in Tuscon this weekend, the big health reform news would have been coming out of DC, where the House vote on repealing the law was supposed to happen January 12. That vote has been delayed, but not for good.

Indeed, as former Sen. Judd Gregg told the JP Morgan conference during a January 12 keynote, the vote to repeal the law will likely be the first of several staged votes to keep the anti-reform pressure on. Gregg expects the GOP to follow-up the first vote with a series of more targeted votes to repeal items like the individual mandate, the MA cuts, and so on, with each vote intended to dramatize the message that it will take a GOP sweep in 2012 to get rid of the law for good.

Gregg, incidentally, worries that the staged votes might “poison the well” on opportunities to do more “substantive legislation” in health care, focused squarely on what he sees as the overarching priority for the new Congress: deficit reduction. He believes there can and will be progress on areas like tax reform, social security reform, and cuts in discretionary spending—but argues that deficits can’t be avoided without more meaningful steps to address health care costs.

Still, the repeal votes will come soon enough. But it will be interesting to see whether the message from San Francisco this week starts to change the politics of health care reform in DC.

No comments: