Gridlock in Washington, change everywhere else: 2011 in health policy


(Kiichiro Sato/AP)

After the 2010 passage of the Affordable Care Act, health care legislation settled into a bit of a holding pattern. It wasn’t for a lack of effort: House Republicans kicked off the year with a Jan. 19 vote to repeal the health reform law. Budget Chairman Rep. Paul Ryan would follow by defining the deficit reduction debate as one over Medicare spending, while the White House pushed out any of the good news it could find on the health reform law. Sen. Ron Wyden (D-Ore.) rounded out the year by partnering with Ryan to endorse a Medicare reform plan where seniors could use government funds to purchase a public or private insurance plan.

But for all the health care policy and politics, nothing much changed. Aside from a tiny tax-reporting requirement, Republicans failed to repeal any part of the health reform law. No grand bargain was struck in this summer’s deficit reduction negotiations. And while some Medicare proposals were positioned as “game-changing,” it all felt a bit familiar to veterans of the debate. As Heritage Foundation’s Bob Moffit and Rea Hederman note, the Wyden-Ryan plan that rounded out this year picked up where similar proposals in the 1980s and 1990s left off. As Princeton’s Uwe Rhinehardt put it in the New York Times “The Ryan-Wyden Plan: Deja Vu All Over Again?”

“The politics of Medicare are depressing,” says John Rother, who spent 27 years at the AARP before leaving this year to become CEO of the National Coalition on Health Care.

This year, he says, was no different. “I’m not sure we’ve moved the ball very far despite a lot of attempts to make the program more efficient.”

And on the health reform law too, public opinion remained stubbornly stuck in place: Americans are just as evenly split on the health reform law as they were when it passed in March 2010:


A lot of that probably has to do with most of the health reform law still not implemented: Many benefits, like an end to pre-existing conditions, won’t start for another two years. The health insurance market is just as dysfunctional as its ever been, with individual market premiums rising to their highest level ever. With little noticeable change to the public, it’s hard to rally voters in favor of the health reform law.

Rallying Americans against the Affordable Care Act has proved an equal challenge. The law’s unpopular requirement to purchase health insurance has not started yet -- and may never start, depending on how the Supreme Court rules in 2012. The Supreme Court will hear more than five hours of oral arguments over three days in March. The Court will opine by late spring on whether the federal government can require Americans to purchase health insurance and, if it can’t, what that means for the rest of the law. With that lawsuit pending, many states have moved forward cautiously on implementing the health reform law, not wanting to lay the groundwork for a law that could disappear in six months time.

But compared to all that gridlock in health care politics and policy, the health care industry feels like an alternate universe. As Anna Wilde Mathews chronicled in a heavily-reported Wall Street Journal piece this month, the health care industry is became increasingly consolidated in 2011: Hospitals launched their own insurance plans. Health insurance companies bought up physician practices and health care technology companies. Some health insurance plans went out of business. New partnerships and mergers sprung up regularly.

“There’s this feeling, in the health care world, that something big is going to happen,” says Bob Kocher, a former Obama advisor and current health care venture capitalist. “Maybe it’s the Affordable Care Act, maybe that’s overturned and it’s something else, maybe it’s the Affordable Care Act on steroids. Either way, something is going to happen. The fiscal situation is forcing the government to act and businesses to ask. So people are changing their business plans and repositioning.”

A lot of that had to do with all the wave of health care regulations released this year, largely as part of the Affordable Care Act. The health care industry operates in a world that’s changed a lot in 12 months. A new medical loss ratio requires them to spend at least 80 percent of every dollar on medical costs. Accountable Care Organizations, a new, bundled payment system that Medicare begins testing in 2012, pushes hospitals, doctors and insurers to collaborate more. Double-digit premium increases are now subject to increased regulatory scrutiny to determine whether or not they’re “reasonable.”

“Our members all created special units this year to make sure they’re keeping abreast of all the new requirements,” says Karen Ignagni, president of America’s Health Insurance Plans. “That has been a full court press.”

In health policy, 2011 might be best viewed as the year of getting ready. The health care industry got ready for a wave of changes already coming at them, moving towards more integrated and coordinated care. Congress readied for a battle over Medicare spending, but never quite fought one. And the White House got ready for what will be a hard-fought battle to implement and sell the health reform law over the next two years. And it’ll probably be much of the same story in the coming year too, as health industries ready for a Supreme Court decision, a presidential election and another wave of regulations that stand to shape the sector for years to come.

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