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We hear a lot these days — some would say 20-30 years too late — that Congress can no longer kick the deficit/debt can down the road.  Of course, the clear and factually accurate implication of this statement is that Congress has seen this deficit/debt train wreck coming for a long time.  In their wisdom, they chose to put off the inevitable with year after year of highly touted cuts in spending which were actually cuts in the rate of increased spending, not net reductions leading to lower deficits, so we kept slipping further and further into debt.

What is going to happen now?  Since Medicare is and will continue to be the single biggest driver of federal spending, and future projected deficits, what role should healthcare providers play?

The healthcare industry’s normal response is to do nothing aside from complaining, and then adjusting to the significant reductions in reimbursement.  Spending more money, or even maintaining current funding levels, does not guarantee quality of care and service.  However, there is only so much money you can strip out of the current healthcare structure without causing irreparable harm to patients.  Major cuts, the size of which will be necessary to make a meaningful impact, will require a new business model.

I would argue that following our normal path of adapting is tantamount to kicking the can down the road.  

The Patient Protection and Affordable Care Act (PPACA) made an attempt to reduce the number of uninsured Americans but largely missed the boat in achieving material and sustainable reductions in healthcare spending.  Yes, I know what the Congressional Budget Office projected – important savings.  I know what the President and the Democrat leaders promised.  I am not accusing them of misleading the American people.  Rather, I am zeroing in on the phrase “sustainable reductions”.

The fact is that you cannot control healthcare spending over the mid-to-long term, whether it is for Medicare or commercial insurance, until you completely restructure the way patient care is delivered, how it is paid for and consumers are more financially responsible for the care they receive.  Tort reform should be included in the fix, as should improved accountability for quality and service, but those are not big drivers of the increased costs which this year doubled the rate of inflation and overall economic growth.

Congress, as I have said many times before, lacks the political will and moral courage in the current volatile political climate to revisit healthcare reform.  Democrats, some of whom understand the structural problems that contribute to higher costs, are of the view that any effort by Congress to lead a material restructuring will provide ample fodder for Republicans and Tea Party devotees to re-scream government takeover, socialism, the trashing of personal liberties… You get the point.  Republicans, while deserving much credit for the innovative ideas for Medicare reform in Rep. Paul Ryan’s “Path to Prosperity”, are seeing a rising tide of independent voters who are increasingly uncomfortable with, trending to outright opposition of, what is essentially privatization of a program that most Americans feel is a successful government program.  

This has all the makings of a black hole environment that will preclude Congressional action, must less leadership.

The most important business in Washington today is not the “people’s business” unless you believe that average Americans today are focusing more on the next election rather than jobs and scrapping by to pay the bills.  The really depressing part is that when the 2012 election cycle is over, regardless of the outcome, the political operatives that create the red-hot, demonizing rhetoric, will begin thinking about the 2014 off-year election.  

So who is going to take the lead on this necessary restructuring?  Who will take the chance to design and promote a new approach — from how hospitals are designed and operated to the role of physicians and other providers, to the payment mechanisms, economic alignments, and incentives?

Doing nothing, and adjusting to the marginal tweaks from Washington, is tantamount to kicking the can down the road.

What would you do?    

© 2011 John Gregory Self