The Meaning of Industry Silence on the Healthcare Bill

 

June 18th, 2017; Chicago Tribune

When it comes to healthcare and the House and Senate bills meant to repeal and replace the Affordable Care Act, individuals, professional groups like the American Healthcare Association, nonprofit organizations like NPQ, and others have weighed in. Before there ever was a bill in the House or Senate, coalitions of consumers and liberal advocacy groups spent over $2 million in television ads targeting specific moderate Republicans to dissuade them from supporting whatever the Republican-led Congress might devise, and emphasizing the importance of keeping the ACA in place. Now that there is a bill on the table, these same Senators are still feeling pressure. But they are not feeling it from the healthcare industry groups who might benefit the most from the Republican plan.

Why are these industry leaders laying low when other, related groups are not? The hospital industry, physician groups, and patient advocacy groups have all come out in strong, united opposition to the bill.

The Chicago Tribune explained, “Hospitals, often among the largest employers in a region, are a powerful industry, but they were vocally supportive of the Affordable Care Act, a position that did not endear them to Republican lawmakers.” Insurers themselves, some of whom stand to gain profits if the Republican bill passes, are staying in the background and offering limited support to components of the Republican bills, as are trade groups that represent drug companies and medical device manufacturers.

This silence from insurers and device companies represents a split in the healthcare industry. Direct financial interests are at stake, and for some the bills will be positive, while for others perhaps it will be neutral. The goal of these companies seems to be to protect their bottom lines and not antagonize the political leaders who might do them good on other issues.

The Chicago Tribune noted,

When the Affordable Care Act was being implemented, many healthcare industries stood to benefit due to coverage expansion that was likely to bring them more insured customers. But the Senate bill is a cut, and industries—even sub-sectors of industries—are affected in different ways.

Health insurance is a diverse business, made up of for-profits, nonprofits, community plans, and national companies. Some are big players in the Medicaid space, while others have little exposure to cuts in that area. Many of the big companies had already exited the Affordable Care Act markets that will be reshaped by the law.

The groups with the most to lose in the replacement plans are the poor. But those that speak out for them are also splintered, with multiple individual groups taking positions, holding rallies, and lobbying legislators. There is no one unified voice here either. “There really is no not-for-profit that really speaks up on behalf of low income patients” akin to the AARP, said J. Mario Molina, former CEO of Molina Healthcare. “You look at what’s happening—hospitals don’t like this bill, physicians’ organizations don’t like this bill, the cancer society doesn’t like this bill, but there’s no one that can unify them and lead the charge.” So while the hospital industry and physicians have opposed many of the proposed changes and lobbied extensively, other parts of the health care industry have remained quiet.

The reason for the quiet hesitancy on the part of what is usually a very vocal healthcare industry is clearly self-interest. These companies’ legislative agendas include a commitment to tax reform and other industry-friendly initiatives. They will need to continue to work closely with this government, who is the nation’s largest healthcare payer. They do not want to risk their future positioning and so are offering targeted and limited support for aspects of the repeal-and-replace bills. “I think first and foremost, they have to think about if they want to play scorched earth lobbying when they have a lot of things they need to do in Washington,” said Kim Monk, a managing director at Capital Alpha Partners, a firm that provides political research for investors. “They want to be careful what they do here—pick their battles.”

Voices of protest are heard loudly in the hall and offices of Washington, D.C. and on the home fronts of legislators.  But industry leaders, some of them nonprofits, seem to be biding their time for a future that could bring them tax breaks and industry supports. This could come, however, on the backs of the poor and those least able to silently wait this out.—Carole Levine