Teetering on the Edge of the Fiscal Cliff: An Exclusive Interview with CHIME’s Sharon Canner

Dec. 14, 2012
As negotiations over the so-called “fiscal cliff” enter a key phase, Sharon Canner, Director of Advocacy Programs at CHIME, speaks exclusively with HCI Editor-in-Chief Mark Hagland about the prospects for Medicare cuts and other issues for legislators on Capitol Hill

As reporters and commentators in the mainstream news media noted, the situation at the moment is an extremely fluid, even unpredictable one, with a variety of potential outcomes, but with huge implications for healthcare providers in any event. On Dec. 13, HCI Editor-in-Chief Mark Hagland spoke with Sharon Canner, the Washington, D.C.-based director of advocacy programs for the Ann Arbor, Mich.-based College of Healthcare Information Executives (CHIME), regarding possible outcomes and areas for healthcare leaders to watch carefully.  Below are excerpts from that exclusive interview.

What’s the very latest that you’re hearing about the fiscal cliff negotiations?

I don’t have any inside information other than to be able to look at the past and to look at somewhat similar situations that have played out in the past. I think that Congress and the policymakers were smart to put themselves into this pickle, really, because it does force the issue. President Obama was reelected with a pretty sizeable margin; the Republicans maintained the House; and the Democrats picked up seats in the Senate. So they are all working to [support their constituencies’ interests].

Obviously, the political crosscurrents are causing a lot of the tension in the negotiations, then, correct?

Yes. You’ve seen John Boehner look pretty pained; and I think one of the more telling elements is that Jim DeMint has left the Senate, because he’s been the ringleader outside of Grover Norquist to push all out on resisting tax increases.

Still, there could be considerable consequences fairly soon after the beginning of January, if we do indeed “go over the cliff,” correct?

Yes; reading some of the coverage in the Washington Post this morning, it was noted that the FAA  [Federal Aviation Administration] will have to lay off a number of traffic controllers quite soon, and these things will happen. And you remember when Gingrich [Newt Gingrich, Speaker of the House, 1995-1998] called [President Bill] Clinton’s bluff, and the government did shut down [in 1995 and 1996]. The President is holding many of the cards now, and the GOP is really under the microscope. If they want to come back as a majority party, they will have to make some changes. And if they can deliver on this, that would be a real plus.

So you think the signs are good that something could happen even before the end of the year?

I wouldn’t bet the farm on that, but I think it’s looking better, given the cards that are on the table that are being played.

We’re hearing $400 billion, $600 billion, $800 billion, figures being thrown around in terms of the potential Medicare cuts that might come out of an agreement between President Obama and Speaker Boehner. What are your thoughts on the potential impact on Medicare reimbursement to hospitals and physicians?

They’re looking at areas like fraud and abuse and other areas of “fat,” but there aren’t many of them to find. And if you look at hospital employment, hospitals have a lot of clout, and the AHA [American Hospital Association] is a powerful group, because there are a lot of hospital jobs in local communities. House members are vulnerable [when it comes to balancing out potential cuts to Medicare reimbursement with potentially negative impacts on local healthcare employment in their districts]. We have visited with Republicans from the House, and I’m think of people like Rep. Phil Gingrey [of Georgia]; he’s got Greenway and McKesson both in his district, and that’s a lot of jobs. And these members get religion when it comes down to the jobs [in their districts].

So you think that that will moderate the voting patterns of some Republican House members?

I think so. They have to make their public pronouncements that they have to stick with their principles, particularly the very conservative members. So I think Boehner will count the votes, and there will be some tradeoffs; and that’s what they do.

So you think they’re counting now?

I think so, yes. Because we haven’t seen details; with the Republicans, there’s always a lot going on behind the scenes, and that’s good, that’s positive. We don’t want to see everything played out in public, we don’t want to see everything tweeted or on YouTube, because that would mean the die is already cast. In reality, behind the scenes, the House whip is constantly going out and counting votes.

What are the prospects for significant Medicare cuts coming out of whatever deal is struck by the two national parties in Washington?

I think that everything is going to be subject to some cuts. What specifically happens and how they score it… a lot of it will depend on how the CBO [Congressional Budget Office] scores the cuts over the next ten years [determines the financial value of those cuts]. And then there’s the SGR [sustainable growth rate for physician payment under Medicare] problem.

Earlier this week, I interviewed Blair Childs of the Premier healthcare alliance. He told me that he thinks that perhaps congressional leaders will come up with a stopgap three-month or six-month “doc fix,” and then architect a permanent fix as part of a grand bargain on taxes. What do you think of that supposition?

I’ve heard about a one-year fix. But a permanent fix would be very expensive. I tend to trust Blair's perceptions, though; he is Mr. Inside.

It’s hard for me to believe that Medicare physician reimbursement won’t take some hit at some point; after all, $300 billion is a lot of money.

It is a lot of money. But the physician relationship with the patient is more personal than the hospital relationship with patients; and physicians are well-known in their communities.

What should healthcare leaders look for, in the coming week? It’s hard to believe that the leaders of the two national political parties will resolve all the unresolved issues in this situation within the next week.

What I’m hearing is that they might be able to strike a deal on the broader outlines, and then they’ll come back and work out the details. It’s very important to reassure the financial markets; and the markets have been relatively calm until now. The Dow was up all week, and it was a little bit off the other day, but it hasn’t crashed. But the GOP in particular does not want to signal to the markets that things are going south, because things really will go south in the markets, then.

We’re really talking about their having just a few days now before they run out of time? Some of the media commentators have noted that it’s highly unlikely that something could happen this month if a deal isn’t struck by Dec. 17, next Monday, because it will take at least a few days to draft the legislation itself.

Yes; so if they come up with something, it will be a more general statement of principles. But this has to happen, and the President holds a lot of the cards.

So you think concern for the power and influence of providers in their communities will moderate some of the potential cuts to Medicare?

I think so. Healthcare has a huge influence in communities, yes.

But there will be some cuts, inevitably, to Medicare?

Yes, I'm certain that some Medicare cuts are inevitable. 

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