(Bloomberg) — Here’s the scenario: You run a trade association, and your corner of the health-care sector gets stuck with part of the bill for Obamacare. Naturally, you’d rather not pay that bill, so you start a campaign against it. You assemble a coalition of lawmakers from both parties to support your argument. You pay for studies. You write letters. You meet with officials.
What happens next? If you represent the insurance industry, and you’ve been fighting the law’s reduction in Medicare Advantage payments, you rack up a series of modest wins. If you represent the medical device industry, and you’ve been fighting the law’s excise tax on your products, you get bupkis.
The two situations aren’t perfectly analogous, of course. But they’re similar enough to raise the question: Why has one campaign succeeded and the other failed? A few differences in strategy stand out.
First, it helps to look for a way around Congress. Both the device tax and the cuts to Medicare Advantage payments were written into the law. The trade association for device makers, the Advanced Medical Technology Association, or AdvaMed, tried to fight the law head-on, pushing lawmakers to repeal the tax.
But that’s a high-risk strategy, as Congress isn’t passing much these days. The insurers’ association, America’s Health Insurance Plans, was more subtle. Rather than push to repeal the part of Obamacare that cut rates, insurers lobbied the government to offset those cuts with other money. This week, they succeeded, turning a 1.9 percent cut into a 0.4 percent increase — without changing the law.
To be sure, AdvaMed, with no equivalent regulatory fix to pursue, had a weaker hand to play. But that isn’t the only difference. AHIP’s second bright idea was making it easier for the Barack Obama administration to back down, by not framing their campaign as a challenge to the president’s signature achievement.
In fact, the print ad that accompanied the campaign doesn’t even mention the law (the Patient Protection and Affordable Care Act (PPACA)) by name. “In 2010, seniors saw Washington cut Medicare Advantage funding by $200 billion, causing rate cuts that have already hurt them,” is as close as the ad gets to Obamacare.
AdvaMed, on the other hand, hasn’t been shy about linking the device tax to the health law, in issue briefs, letters to Congress and pamphlets. Republicans began using the device tax as a weapon against Democrats, at one point even demanding a repeal of the tax in exchange for raising the debt ceiling. AdvaMed allowed its biggest ask to become synonymous with partisan politics.
Another move by AdvaMed that looks foolish in hindsight is making its demand binary. There was no campaign to reduce the tax or have it take a different form; either Congress could repeal the tax or not. By contrast, AHIP has been able to chip away at the effects of the Medicare Advantage cuts — a little extra risk-adjustment money here, a delayed change to the rating system there. Many small victories are easier than one big one.
Finally, AHIP framed its campaign around regular people. (Not just any people, as one industry executive pointed out, but old people.) AdvaMed fought on behalf of companies; when that didn’t work, it started focusing on the people who work at those companies — or might work there, or would like to. But their campaign was never focused on regular people, who after all will continue to get their hip implants and defibrillators.
Those lessons matter. Every industry group is watching the fallout from Obamacare, and will use those lessons to fight future attempts to cut federal health-care spending. Legislators looking to make those cuts — and make them stick — should be watching with equal interest.
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