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Industries See Reform as Victory

They may not be popping the corks on the Champagne bottles yet, but a number of medical stakeholders are cheering the health care package that could sweeten their bottom lines and bolster their political clout on Capitol Hill.

The brand-name drug companies, hospitals, doctors and senior citizens group AARP were all early supporters of the Democrats’ effort to overhaul the health care system. As a result, the Democratic leadership sought to protect these key interests in the final package approved by the House, part of which will be signed into law by President Barack Obama this week.

The Senate still has to consider fixes to the legislation under an unpredictable budget reconciliation process, and the administration must figure out how to implement the complicated and massive policy changes.

Nevertheless, the legislation’s goal to provide dramatically expanded health coverage is a winner for hospitals and drug and insurance companies, which could soon be flooded with new business.

“I believe the health care industry leaders stayed at the table because they knew the health reform law will benefit them,” said Ralph Neas, president of the National Coalition on Health Care, which supports reform.

“They realized from the beginning there could be tens of millions of new customers.”

Neas noted that even the health insurance industry, which was more critical of the legislation, did not run nearly as aggressive a campaign against this health care effort as it did in 1994 when it helped sink the Clinton health care plan with the “Harry and Louise” ads.

An insurance industry official said that while the bill would theoretically bring in many new customers, the financial penalties for failing to enroll are not sufficient to force many people to sign up.

But the official said the industry was “in a much better place” than when the debate started, noting that the decision to drop the public insurance option was one major improvement.

The image of health insurance companies, however, may have been one of the casualties of the rancorous high-profile process, according to one expert.

“The health insurance industry took the biggest battering,” said Bob Blendon, professor of health policy and political analysis at Harvard University. Obama and Congressional Democrats repeatedly blasted the industry for rising health care costs while unions and other liberal groups have been running ads attacking insurance companies for months.

Conversely, Blendon noted that the drug companies, which in the past have been a target for those advocating health care reform, emerged largely unscathed.

“The most visible political success story was the pharmaceutical industry,” Blendon said. “They really were able to use their influence.”

The Pharmaceutical Research and Manufacturers of America reached a deal early on with the White House and key Senators to contribute tens of billions of dollars to reducing drug prices for seniors.

In return, the drug companies also secured substantial benefits in the bill, including a 12-year exclusive period to develop biologic drugs.

The drug companies also beat back efforts to allow importation of drugs from Canada — a huge victory for the industry.

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