Paper, scissors, rock

The week, along with the Heath Care Summit, has come and gone. I make it a point not to underestimate the resourcefulness and will of the Democrat majority to push through a health care reform bill, but at this point simple math points to no legislative product. Unless the entire process begins anew, the only version of the bill that has a chance is the Senate version, passed through the process of reconciliation. The math consists of the number of members of the House of Representatives who will vote for some version of the Senate bill and everything that I read points to the votes not being there. How much the bill can be modified is an open question, based upon the arcane tenants of the Byrd Rule, the opinion of the Senate Parliamentarian, and the willingness and desire of the majority party leadership to challenge any ruling which was not in their favor.

Independent of any Parliamentarian drama, it is not at all clear that the Democratic majority can find a consensus within their own ranks and it is highly doubtful that they can rely on any support from the Republicans. Within the Democratic party, exclusion of elements which explicitly deny finding to abortions likely will withdraw support from specific members while inclusion is unacceptable to a distinct and even larger subset. Scaling back the scope to deal with financial concerns is unacceptable while not scaling back the scope will prompt the Blue Dogs to withdraw support. I could go on and on but the gist of the problem is that multiple groups have drawn lines in the sand regarding non-negotiable items. Each of these groups has essentially veto power over the legislation and  the non-negotiable items are multiplicative and redundant resulting in impasse.

While this is all going on, the Medicare SGR fix has lapsed. I have heard repeatedly that this will get fixed. I am not so sure. We will see what happens tomorrow morning. If it does not get "fixed", this may initiate events independent of Congress which may in fact alter the health care landscape more than any legislative reform. The blunt approach of broad cuts (>21%) will have the most prompt effect on those who are at the bottom end of the payment scheme, primary care care and those who use mostly E&M services. Look for large numbers to throw in the towel and simply withdraw from Medicare like many have withdrawn from Medicaid programs. The ripple effect will diffuse out to affect patients, hospitals, training centers, and a host of other entities downstream from the Medicare funds flow.

While the parties at the lower end of the food chain may be forced to withdraw from Medicare, they are not going to where the most interesting action will happen. As a rule, they are not very leveraged. They have not bet the ranch and made large capital investments which need big Medicare billings to to cover their borrowings. My question is who has made the most leveraged bets contingent upon Medicare money?  I don't know the answer but it will become apparent when they they can't make payroll.