Wednesday, November 01, 2006

Patients, Hospitals & Care-Givers Would Fare Better Under Democrats

Reuters reports:
Hospitals could benefit from a Democratic takeover of one or both chambers of the U.S. Congress, industry analysts and health care executives said ahead of next week's elections.

Democrats in the House have issued an agenda ahead of the Nov. 7 poll that pledges to end "wasteful giveaways" to drug companies and health maintenance organizations.
Hospitals and other health care providers, the target of deficit-reduction proposals in the Republican-controlled Congress, are expected to be viewed more favorably by Democrats.

"If Democrats take the House, deficit reduction becomes less likely," said Tony Clapsis, an analyst at Lehman Brothers in Washington, D.C. "In the Democratic playbook, pharma (drugmakers) and managed care are the biggest targets."

Recent polls show Democrats may be poised to gain the 15 seats needed to reclaim the House and perhaps the six seats needed to win the Senate.

If victorious, Democrats have said they will quickly propose letting the Medicare program for 43 million elderly and disabled people negotiate directly with drugmakers for lower prices.

Private health insurers like Humana Inc. have taken a bigger role in Medicare under the current Congress and the Republican administration of President Bush.

But that push has been criticized by Democrats as edging toward privatization of the popular government program.

Hospitals, on the front lines of treating the rising rolls of those without health insurance -- now at 46.6 million people, or nearly 16 percent of the U.S. population -- are seen faring better under Democrats.

The chief executive of Triad Hospitals Inc., one of the biggest U.S. hospital companies, said the rising numbers of uninsured will play well politically for hospitals.

"Especially as we get into the midterm elections, a lot of people are concerned about ... what is going to happen to their community hospitals," Triad CEO Denny Shelton said.

Lehman's Clapsis said the Medicare Payment Advisory Commission reports that hospitals have negative margins on Medicare business, making them a harder target.

Kim Monk, an analyst with Prudential Equity Group in Washington said that if Bush seeks budget cuts, "Democrats are going to say we're not going to get it from hospitals, we're going to get it from the greedy HMOs."

A legislative proposal earlier this year to wipe out billions of dollars for private insurers in Medicare failed due to opposition by House Republicans. It was backed by Senate Democrats and Republicans, and House Democrats.

But Humana Chief Executive Officer Michael McCallister thinks it will be difficult for Congress to reverse the growing involvement of private insurers in Medicare.

"The politics have changed," McCallister said earlier this week. "Last time we went through any kind of major shift in the Medicare program, we only had about 8 states with any business in them. This time we have 100 (Senators) with a stake in it."

Experts said managed care companies would come under fire from a Democratic Congress but even if legislation was passed, Bush was unlikely to sign a bill cutting payments.

"The most critical shift will be in oversight as opposed to legislation," said Bob Hayes, president of the Medicare Rights Center, a consumer group. "Oversight through hearings will be much more aggressive if there is a Democratic chair of the House health committees."

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