It’s a commonly held belief that, when it comes to Medicare reform, stakeholders in the health care industry are as gridlocked as the members of Congress.

But things don’t have to be that way.

According to Mary R. Grealy, “It’s stunning how well they work together.” Grealy is president of the Washington, D.C.-based Healthcare Leadership Council (HLC), a lobbying group that represents all sectors of the health care industry. She’s been with the council since 1999.

In 2009, at the height of the health care reform discussion that led up to the Affordable Care Act, Grealy’s organization spent $1.1 million on lobbying efforts. In the first four months of 2012, they spent $220,000.  

The HLC lobbies for relatively dramatic changes to the health care system, and they support Medicare reform proposals—the Wyden-Ryan plan, at the moment—that increase the private sector’s role.

In May, 2012, the U.S. House Ways and Means Subcommittee on Health held a hearing on premium support models for Medicare reform. In a written testimony sent to subcommittee chairman Rep. Wally Herger (R-Calif.), Grealy warned against the Budget Control Act's sequester cuts, scheduled to hit in January 2013. Instead, she said the subcommittee members should support a system that gives beneficiaries a choice between staying in fee-for-service Medicare or opting into a competitive exchange, where they could choose from many plans. 

In addition to supporting increased choice for consumers, the HLC wants to see updates in medical technology; investments in research, development and education; and, finally, an integrated health care system to create a continuum of care.

“It’s a shared vision,” said Grealy, in an interview with The Medicare NewsGroup. “They really believe in innovation and how we can create an environment that fosters, supports and protects innovation, and a strong role for the private sector.”

The diversity of the HLC membership is remarkable: It includes hospitals, health plans, medical device manufacturers, pharmaceutical companies, biotech firms, large health product distributors, academic health centers and chain drug stores. Naturally, each industry has its own perspective, and it’s Grealy’s organization’s goal to synthesize these ideas into a coherent mission.

“They understand if they do not collaborate with each other and find solutions to challenging problems—whether it’s the uninsured or how we improve the quality and safety and efficiency of health care—if they don’t work together to find a solution, they will wind up having a solution imposed that perhaps is not good for protecting and fostering innovation,” Grealy said.

Take the conundrum of cutting costs, for example.

 One of the measures in the Affordable Care Act that attempts to cut costs is the controversial Independent Payment Advisory Board (IPAB). In her health care policy blog, Prognosis, Grealy—speaking on behalf of the HLC—wrote that IPAB is forbidden from rationing care, changing benefits or increasing beneficiary cost-sharing, which leaves it no choice but to cut provider reimbursements—thereby hurting the groups the HLC represents.

“So you’re left with arbitrarily cutting reimbursement to providers, and the fact that hospitals are exempt for the first ten years doesn’t leave a whole lot of people over which to spread those reductions, but frankly I don’t think they should be applied to anyone,” Grealy told The Medicare NewsGroup. “It’s not really reforming the system. It’s sort of like sequester. We’re just going to cut across the board.”

This proved to be an opportunity for the HLC to flex its muscle in Washington. In the run-up to a July 13, 2011, meeting of the House Energy and Commerce Committee hearing on the IPAB, the HLC organized and mailed a letter to all House members urging repeal. The letter was signed by 275 providers, advocacy groups and other health care organizations.

On July 13, Grealy testified before the committee, explaining that the HLC and other organizations think the IPAB will limit the access to care for seniors because of the likely across-the-board reimbursement cuts.

In March, 2012, the House voted to repeal IPAB.

”We have continued to raise the IPAB issue in meetings with Senators and members of Congress,” Grealy said. “We are also raising the issue in our meetings with candidates running for the House and Senate. We have asked our IPAB repeal coalition members to continue the drumbeat back in the states to raise this issue in the media and with members of Congress.”

The HLC asks its members to not just jabber, but to take action. The recently released Value Compendium compiles the efforts made by HLC members to control health costs, improve patient care and bring greater value to the health care system.

“We’re fortunate: Our members tend to be early adopters, the leaders in improving quality and reducing costs,” Grealy said.

The HLC asked members to do more than provide ideas for what might work. Instead, they were asked to try new things and provide metrics showing how many lives were saved and by how much costs were reduced. They used the three aims outlined by Donald Berwick, former head of the Centers for Medicare & Medicaid Services, in a report published by Health Affairs in May 2008: improve the health of populations, improve the experience of care and reduce the per capita costs of health care.

Grealy recognizes that an essential part of reforming the health care system is Medicare reform, and she hopes that the demonstration projects of the newly created Center for Medicare & Medicaid Innovation, established by the Affordable Care Act, show that the government is similarly ambitious.

Grealy said having the discussion about reform, which she recognizes will probably be set aside until after the 2012 presidential election, is an imperative.

In a perfect world, the HLC would like to see a care model for seniors based on the Federal Employees Health Benefits Program, which Grealy said would increase choice, quality and outcomes while decreasing cost. Grealy credits the 17-member National Bipartisan Commission on the Future of Medicare, established by the Balanced Budget Act of 1997, as the innovators of this idea.

Today, the Medicare reform proposal that comes closest to this ideal is the Ryan-Wyden plan, which Grealy sees as an improvement over the plan Ryan put forward in 2011.

“If we don’t do something along the lines of the [Ryan-Wyden plan], it seems the only other option is what I call ‘death by a thousand cuts,’” Grealy said. “You’re just continuing to cut reimbursements to hospitals or put on therapy caps, or reduce home health payments, which isn’t really doing anything to reform the delivery or payment system. It’s just taking the existing fee-for-service system and paying less, and of course, cost-shifting over to privately insured patients.”

Some organizations, especially those that are beneficiary-centered, believe the Ryan-Wyden plan is not a viable option. David Lipschutz, a policy attorney at the Center for Medicare Advocacy, said that the amount given to beneficiaries in the form of vouchers will not keep up with the costs of health care and health care inflation. In effect, health care costs will be passed on to the beneficiary.

He also believes that claims that Medicare is bankrupt are grossly exaggerated.

“It’s true that Medicare costs are increasing, because of the growing Medicare population, but the whole notion of Medicare going bankrupt is pretty misleading,” Lipschutz said. “Right now when people talk about bankruptcy and solvency, they’re talking about Medicare Part A, the Hospital Fund. It’s pretty healthy compared to where it’s been over the past decades.”

Lipschutz said that the projected date of insolvency has fluctuated anywhere between three years to 20 years, based on the health of the economy at the time the Medicare trustees release their annual report. Most recently, the trustees’ 2012 report projected that the exhaustion date (when the program won’t have enough money to pay all of its obligations) is 2024.

“The important point to make is, say if everything stays the way it is now, at the point the trust fund can’t pay 100 percent of the costs, it will be paying something like 87 percent. It’s still covering the vast majority of the cost,” Lipschutz said. “The dangers are being overstated. There are things that can be done that would have much less impact on Medicare beneficiaries.”

Lipschutz said the organizations pushing premium support should let the Affordable Care Act show its full potential before resorting to measures that he said would harm beneficiaries.

According to Grealy, when beneficiaries are given the freedom to choose what type of care they receive, as they ostensibly would under a voucher system, they make choices that lead to a less costly system. She holds up the Medicare Prescription Drug Plans (Part D) program as a shining example.

Spending on Medicare Part D has been 30 percent lower than projections the Congressional Budget Office made in 2003, when the program was introduced. Some people contribute the lower-than-expected costs to an increased competition between Part D plans, which is the type of market-based solution the HLC supports.

When Part D was introduced, for example, the HLC knew that they needed to inform beneficiaries but they didn’t know how. Initially, Grealy thought the HLC would need to make a hard sell and spend a lot of money on advertising. The survey results surprised her. Beneficiaries said they wanted noncommercial information from someone they could trust, someone they felt to be an expert.

Using the leaders of its six regional advocate programs as outreach, the HLC scheduled town hall meetings with local congressional representatives, Democrats and Republicans, to help educate their constituents about Part D benefits. They also established a coalition of more than 400 national and local organizations to help go door-to-door and hold community-level events. 

“I remember going into some rather hostile audiences, and once you gave them a tool that shows the benefits of Part D, and they could do the calculation, it was a big ‘a-ha!’ moment, where they saw the real value,” Grealy said. “Once the program was in place, even those members of Congress who didn’t support it or voted against it, they understood it was an important benefit for their constituents.”

--By Donald Sjoerdsma/The Medicare NewsGroup