How the 2012 Election May Impact Post-Acute Care

By Ray Sierpina

The 2012 Presidential and Congressional elections were built up over the last year to be historic – and they certainly delivered regardless of one’s political inclinations. It was certainly the most expensive election cycle in history. But now the election is over and we must assess what it means for Kindred and our efforts to advance common-sense legislative and regulatory reforms in the best interest of the care we provide to our patients, residents and clients.

So now is the time for a little Monday morning quarter-backing. Here is what we know about the elections today. President Obama has secured a second term, the Senate remains under Democrat control and Republicans still control the House of Representatives. While there are still a few outstanding races, there was little change in the balance of power in the House, and the Senate Democrat majority increased to effectively be 55-45 with two Independents expected to caucus with the Democrats. Kindred has a long history of working with both parties in a non-partisan fashion, and we will continue to do so with this incoming Congress.

This means that the partisan breakdown in the 113th Congress is strikingly similar to what we have experienced for the past two years. But that is not necessarily bad news. While there was significant gridlock over the past several years with a divided government, there are a great deal of “must-accomplish” issues that have to be dealt with either during the forthcoming lame-duck session of Congress or very soon in 2013.

Looming Issues

We are ever mindful of those expiring provisions that have a direct impact on the care we deliver, that we seem to address annually – the need for a doc fix, which dictates the reimbursement rates not only for physicians, but for our rehab therapists as well, and the need to extend the Part B therapy cap exceptions process. Kindred’s Government Relations team has been hard at work on Capitol Hill and with our coalition partners to educate Members of Congress and their staffs of the critical need to extend these issues until the underlying issues can be more thoughtfully approached through entitlement reform.

No doubt you’ve heard of the “fiscal cliff” that Congress must address prior to 2013. This includes a number of provisions including the expiration of the “Bush Tax Cuts,” the end of the temporary payroll tax relief (thus a 2% payroll tax increase for all employees), and the automatic “sequester” spending cuts that are scheduled to go into effect the beginning of the new year.

What does this mean?

While it is difficult to read the tea leaves and predict exactly how the outgoing Congress will act in a lame duck session or the newly elected politicians will act in the 2013, the looming financial crisis may force their hand to work across the aisle. This is for two reasons.

First, if the fiscal cliff – as currently in law – were to occur, the impact on the economy would be dramatic. Experts at the non-partisan Congressional Budget Office (CBO) predict that the combination of higher taxes and spending cuts would cut the Gross Domestic Product by four percentage points in 2013. This would send the economy into another recession and likely have the impact of higher unemployment. No one – not the President or either chamber of Congress – want to be in a position of blame for that type of economic reality.

The second reason, is partially related. Because in political circles, the day after an election, is really the first day to start preparing for the next election. As hard as it is to believe coming off this election, the mid-term elections in 2014 are not that far off. Every member of the House of Representatives will need to point to success and achievements in 2013 if they have any hope of reelection. This means that politicians will be highly motivated to address not only the fiscal cliff and other necessary extenders, but also critical areas that are currently unsustainable, including: tax reform, the debt ceiling, and entitlement reform to Medicare and Medicaid. Without bi-partisan action in a divided government, success can not be achieved.

What Does The Election Mean to Kindred?

The election results will have no immediate or direct impact on what you do each day – provide quality care and rehabilitation to our patients and residents. Kindred has a dedicated Government Relations team, and we are well represented in DC through association partners and consultants that will continue to educate new and returning Members of Congress as to the value of post-acute care to our nation’s healthcare system, and the need to preserve certain programs and reimbursement levels so that beneficiaries have continued access to medically necessary care and services. We will continue, as we have in the past, to work effectively across party-lines, as we – and our issues – are non-partisan.

We will continue to have Members of Congress and their staffs visit our hospitals and nursing and rehabilitation centers so that they can witness – first hand – the care you provide daily. This experience is invaluable to appreciate the role we play in providing healing and recovery in their home towns.

Additionally, we will promote common-sense reforms to the current healthcare system that will enable us to be part of the solution to the current fractured system. Our Continue the Care and integrated care strategies will also be important as we illustrate how by positioning Kindred across the post-acute continuum, we will drive improved quality outcomes and patient experiences, reduce costly rehospitalizations, and improve care transitions from one care setting to the next – which all considered, helps reduce healthcare spending.

While this recent election was historic in spending and rhetoric alone, we must all concentrate on our priority of focusing on those entrusted to our care, on quality and customer service because there are no politics at the bedside.

By: Ray Sierpina, Vice President of Public Policy and Government Relations, Kindred Healthcare
Coauthored by: William Altman, Senior Vice President of Strategy and Public Policy, Kindred Healthcare