The GOP’s dramatic change in strategy to pass its health-care law

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To get the Affordable Care Act passed, Democrats used a big-tent approach, convening health-care groups that did not normally talk to each other while cutting deals and strong-arming key industry players to build broad support for the plan. First, the drug companies got on board. Then came the hospitals and the doctors.

“It was a little thuggish. You’d be at the table or you’d be on the menu,” said Doug Badger, who was a senior health-policy adviser to President George W. Bush.

In contrast, the Republican effort to sweep away President Barack Obama’s signature health-care law has unfolded so fast that lobbyists and industry groups barely had time to digest the bill before lawmakers began marking it up.

The difference between the approaches speaks to a drastically changed political atmosphere and the reality of passing a health-care plan chiefly aimed at dismantling the current law, vs. building one from scratch. Republicans have little time, a different philosophy and less to offer industry, with many health-care analysts predicting that fewer people will be able to buy insurance coverage, afford hospital visits, see doctors or buy medicines under the GOP legislation.

“I think they were largely left out. This was – from what I can tell and, I think, smartly – done behind closed doors,” said Tom Scully, a former administrator of the Centers for Medicare and Medicaid Services who works as a health-care lobbyist and at a New York private-equity firm. “You’re scaling back. It’s hard to negotiate. You’ve just got to do it.”

As GOP lawmakers move their bill through the House, plowing forward without each industry’s blessing may free them from special interests, allowing them to craft a policy that reflects the desires of their voters. One potential risk is future opposition, signs of which are crystallizing already as powerful groups representing major health-care industries have begun sending lawmakers critical letters. Last week, two major hospital associations highlighted what they see as major problems with the bill.

Ultimately, the biggest threat in a bill that is opposed by the major industry players is the possibility it will create a system that is not viable for businesses or patients.

A GOP legislative aide said the focus is on policy.

“If we get the policy right and it aligns with their mutual goals and we get a letter of support, we’re going to read it from the dais,” the aide said. “But if we don’t get it, that’s not going to slow us down.”

It is not just the political approach that has changed; the industries are also less motivated to provide a unified front as they jockey for relationships with the new political power structure.

“Each of the special-interest groups are far less interested in working together formally, as a coalition, because those groups . . . are also trying to curry favor with Republicans who control all the levers of power,” said Ron Pollack, executive director of the consumer advocacy group Families USA, which took part in meetings with industry stakeholders during the development of the Affordable Care Act.

Companies and trade groups are making their positions known, raising issues and concerns in public and private meetings with lawmakers and staffers. Republicans argue that, far from rushed, the broad outlines of the bill have been out in the open since last summer, when House Speaker Paul D. Ryan, R-Wis., introduced his “A Better Way” proposal.

The office of House Majority Whip Steve Scalise, R-La., has held a conference call every weekday since Jan. 4 for industry leaders and conservative groups .

“The bottom line is, some insurers, hospitals and other providers may not appreciate our decision to repeal the individual- and employer-mandate penalties, because that could lead to less people paying for coverage,” said a spokeswoman for the House Ways and Means Committee. “But we refuse to force individuals and families to purchase expensive insurance they don’t want, don’t need and cannot afford.”

The stark difference in strategy is perhaps most visible when looking at what industries that took an outspoken position on the health-care overhaul under Obama have – or have not – said this time around.

The pharmaceutical industry was first into the ring in 2009.

Obama “was going to pass something, and therefore it was in our interest to be at the table, making sure we were part of those discussions,” said W.J. “Billy” Tauzin, a former congressman who then headed the Pharmaceutical Research and Manufacturers of America, or PhRMA.

The industry trade group agreed to $80 billion in discounts on prescription drugs under Medicare and committed $150 million to an ad campaign to help get the bill passed. Among the concessions it won in return – efforts to control drug prices under the legislation were quashed.

The new bill gives the industry a big tax repeal, worth nearly $25 billion over a decade, according to an analysis by the Joint Committee on Taxation, but drug companies have been reticent, simply saying they look forward to working with Congress.

The power balance is different this time. The pharmaceutical industry has been a bipartisan political punching bag for more than a year over drug prices.

A pharmaceutical industry official said that the industry is not going to be taking such a public or vocal an approach this time, because the exchanges represent a tiny fraction of its business. The person spoke on condition of anonymity because he was not authorized to comment.

The hospitals joined a news conference with Vice President Joe Biden in 2009, where they agreed to $155 billion in payment cuts in return for the revenue that would come from millions more Americans with health coverage.

This week, major hospital groups have attacked the bill in letters to lawmakers that highlight concerns and “significant issues.”

Hospitals were integrally involved in the discussions around the ACA, but their ability to influence the bill has been more through back channels, said a health care industry official who also spoke on condition of anonymity.

Chris Condeluci, a former Republican Senate Finance Committee staffer who now runs his own policy shop, CC Law & Policy, said that hospitals may feel sidelined because their willingness to take cuts and support President Barack Obama’s law is still a sore spot for some Republicans.

“Republicans generally feel there’s a lot of fat that can be cut from the hospital industry,” Condeluci said.

Insurers were the gorilla in the room the first time around. At a White House health care summit in March of 2009, Karen Ignagni, then the head of the powerful insurance lobby, America’s Health Insurance Plans, stood up to say her member companies wanted to work together with the president to pass health reform that year. Later, insurers threw their weight against the bill to fight unfavorable changes. John McDonough, a former senior adviser on national health reform to the Senate Health, Education, Labor and Pensions committee recalled it as “open warfare.”

So far, AHIP – which has lost two of its biggest members in the interim – has been far more muted. AHIP put forth a wish list of policy changes in December, and for 18 months has been working closely with lawmakers on how to improve the business of selling insurance to individuals according to spokeswoman Kristine Grow. In response to the bill, it sent a broadly supportive letter last week, but expressed concern about the changes to Medicaid.

Insurers aren’t all happy, but the industry’s voice hasn’t fallen on deaf ears: insurers would get a huge tax repeal worth $145 billion over a decade, more freedom to charge young people less and old people more for insurance and a continuous coverage rule to help encourage people to sign up for insurance.

“To a degree, the Republicans currently are more open to many of the requests, that the insurance companies have made to the previous administration, as it relates to improving the current regulatory environment,” Condeluci said.

(The Washington Post)