Medical Device Daily Washington Editor

WASHINGTON – The change of power in the executive branch and the extension of the lead the Democratic Party enjoys over the GOP has policy watchers abuzz with the prospects for healthcare reform, but the current state of the economy and the size of the federal budget deficit both promise to temper any grand ambitions.

Still, veteran watchers of the federal government tend to agree that whatever the incoming administration of President-elect Barack Obama has in mind, it will have to hurry or risk squandering its only opportunity to significantly recast healthcare.

Speaking at this year's conference on reimbursement sponsored by the Medical Device Manufacturers Association (MDMA; Washington), Erik Rasmussen, a member of the minority staff for Republican members of the House Ways and Means Committee, confirmed the casual observation that "we're seeing a lot of quick movements on the chessboard regarding healthcare." He reminded attendees that Obama's first promise "was universal coverage," and said, "some big constituencies said they want action soon." These constituencies, he said, have promised to pitch in if the next White House acts within 100 days of inauguration.

"A lot of that is the lesson we learned from Hilary Care," he said, which is that President Bill Clinton erred in waiting until 10 months had passed in office before attempting to move on healthcare. According to Rasmussen, the effort crashed for a number of reasons, one of which was "sniping between committees."

Obama "will face a lot of the same challenges" Clinton faced, Rasmussen predicted, adding that there will likely be "a struggle in the Senate" over whether Ted Kennedy (D-Massachusetts) will be able to return from his bout with a brain tumor. If not, Hilary Clinton will take a much more central role in the operations of the Senate Health, Education, Labor and Pensions Committee, which Kennedy chairs and which exercises a substantial influence over healthcare.

In addition to the potential shake-up in the Senate is a power struggle now ensuing between Rep. Henry Waxman (D-California) and John Dingell (D-Michigan) over Dingell's chairmanship of the House Energy and Commerce (E&C) Committee. By some accounts, Waxman, who currently runs the House Oversight and Government Reform Committee, is said to have the backing of House Speaker Nancy Pelosi (D-California) in his bid for the E&C chairmanship.

Pelosi is easily the most influential speaker of the past decade, but Dingell has announced support from several Democrats, including FDA critic Bart Stupak (D-Michigan), who chairs the E&C oversight and investigations subcommittee.

Waxman's move is said to be spurred by an interest in cracking down on the auto industry over emissions, but also by a purported lack of interest in his current assignment, now that a Democrat will occupy the White House. Dingell has resisted moves that would damage the auto industry, employees of which are his constituency.

Rasmussen said the idea of expanding Medicare to those at the age of 55 has made the rounds on Capitol Hill of late, but would cover a "hugely expensive population." If Medicare, Medicaid and the Children's Health Insurance Program (CHIP) are all expanded, coverage determinations "become hugely expensive," he said. The current CHIP authorization expires in March, setting the stage for another piece of expensive healthcare legislation.

Despite substantial support, Obama cannot take eight years to put in place a program for universal coverage, Rasmussen observed, even though he will have to come up with a fairly unique approach. "CMS careerists will have to oversee this," he said, and CMS staffers think that the approach taken in the UK creates "the difficult question of denying the best care because of cost."

What can device makers do? Rasmussen said that device makers' outreach efforts to Congress can be more effective by getting members of Congress out of their offices. "Getting [elected officials] out to those plants is helpful," he said. "At the end of the day, they're interested in helping their constituents. As much as a meeting here can help, nothing is better than getting them" to the site of a device maker's facility, he stated. "That's something that sticks in their head for the rest of their career."

Comparative effectiveness is all the rage, but Rasmussen acknowledged that substantial uncertainty remains over how it might be used to control costs, and the approach employed by the UK's National Institute of Clinical Excellence (NICE) is not the gold standard. Rasmussen said that Congress "recognizes that NICE has a lot of warts," remarking further that "if you dropped NICE into U.S. healthcare tomorrow, it would be a very stark jolt." Still, he cited "a lot of positive feedback" on the idea of a comparative effectiveness institute.

As to how the federal government would fund all this ambition, Rasmussen said "Medicare Advantage cuts are the first place Mr. Stark has mentioned," in reference to Rep. Pete Stark (D-California), the chairman of the health subcommittee at the House Ways and Means Committee, but Obama has expressed an interest in tax increases on upper income earners. "That's going to be a big give-and-take with the Ways and Means Committee."

Whatever becomes of the financing end of things, the focus of reform will be on Medicare. Rasmussen said, "Medicare is not the 800-lb. gorilla, it's the only gorilla."

When asked if the recent district court case dealing with the use of least costly alternatives (LCA) to determine Medicare coverage will shape the debate on comparative effectiveness, Rasmussen said, "if there's a case before the Supreme Court that pushes Medicare's hand and makes it obvious we'll need a law on the subject," Congress will want to see how stakeholders react. He said LCA "sounds like rationing, and proponents of comparative effectiveness don't want to fight that fight."

Now that Democrats run two branches of government, agencies at the Department of Health and Human Services may get some relief from the congressional magnifying glass. Rasmussen said Congress will look more at industry and less at CMS, with fraud and abuse "the lowest of the low-hanging fruit" where cost savings are concerned. He said DME "is a legitimate place to save money," but the recovery audit contractor program for hospital overcharges is also an area of interest.

On the other hand, "there's been some pushback on the use of these contractors, who get to eat what they kill," Rasmussen said. The problem is figuring out which mechanism for fraud and abuse control works best, "so you're going to get that traditional fault line" between Democrats and Republicans, with the Office of Inspector General at HHS likely to take up more of the anti-fraud work than has been the case in the recent past.

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