In the wake of the Nov. 6 federal elections, Blair Childs, senior vice president for public affairs at the Charlotte-based Premier health alliance, spoke with HCI Editor-in-Chief Mark Hagland regarding the election’s implications for healthcare policy and healthcare IT policy. Below are excerpts from that interview.

What are your predictions regarding the prospect of budget sequestration and the so-called “fiscal cliff” facing the U.S. Congress, in the wake of the elections this week?

The fiscal cliff and sequestration are the levers that are going to force action. The key thing here is a major budget deal, and that’s what’s going to have to happen. There will be some kind of budget deal next year, and something’s got to be done. I should send you our election report, with all the different recommendations from the different committees.

Blair Childs

So you believe that a grand deal will be achieved?

I think so. Now, the question is how big it will be. I think it will be on the order of $3-4 trillion. With regard to healthcare, I think it will involve combination of payment reductions, and benefit changes when it comes to entitlement programs, because everyone knows that something will have to be done about healthcare spending. I’ve been sharing a chart that contains all the different proposals by all sides. And when I look at that chart and think about what the things are that are likely to happen, I think that among the Medicare payment changes might be a shift to what’s being called “site-neutral payment.” Right now, one type of patient care site leads to a different payment rate for physicians than another; so that’s one area that might be explored. Another is a closer look at physician payment for evaluation and management, or E&M.

Those elements will be among the things on the table for discussion; and I think [when it comes to making budget or payment cuts], that it will be your classic Washington, D.C. slugfest; or what I call the circular firing squad, where everybody’s shooting at everybody else. The doctors say it should come out of the hospitals, the hospitals say it should come out of the doctors, and so on.

What about the “SGR problem” [the complicated issue around physician payment cuts based on requirements of the sustainable growth rate formula under Medicare]?

I think they’re going to do something on SGR within the context of the larger budget deal. Some of the ideas circulated on the Hill have been that, for example, the first year there would be a pay freeze; the second year, a pay reduction to specialists with primary care physicians kept whole; and then they shift it over to CMS [the federal Centers for Medicare & Medicaid Services] to come up with different payment ideas to bend the cost curve, which will essentially be providing incentives for physicians to participate in accountable care organizations or bundled payments. They can’t keep doing this every year, where they’ve got to come up with savings to balance out the [SGR] patches.

With regard to the threats to shut down HITECH payments [letters sent this autumn to Health and Human Services Secretary Kathleen Sebelius by Republican House Ways & Means Committee and Republican Senate Finance Committee and Health, Education, Labor, and Pensions Committee members]—will those threats now go away?

I don’t think the threats will go away, because there will continue to be congressional oversight of that program, and you’ll see letters like that from time to time, though I don’t think they’ll say “shut it down”; they’ll be more along the lines of, “what can we do to tweak it?” And you’ll see more letters like those in the House, overseeing implementation. If you think about the magnitude of things now that are in healthcare reform that impact the budget, it’s just so huge that you almost can’t do anything in Congress every year, without touching healthcare. So everything’s going to be looked at all the time.

Will there still be maneuvering to reduce some funding for ACA [Affordable Care Act] implementation?

I think that’s still very possible. If you look at the environment today and the lack of preparation on the part of the states to expand Medicaid and to establish the health insurance exchanges, and the fiscal pressures on state governments, I think there’s some money there that could be sliced away without fundamentally affecting the program. So I think every year there will be challenges. I think Republicans are going to be very focused on policing the implementation of the ACA, and on advancing ideas that would potentially tweak the ACA, but it obviously won’t be anything like the discussion in the past around wholesale “repeal-and-replace.”