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AdvaMed’s Nexon: Expect More Health Cost Reduction Pressure

This interview is part of KHN’s video series “Supreme Uncertainty: What’s Next After The Court Rules,” which solicits views from public officials and policy experts about the upcoming Supreme Court ruling on the health law and its implications for the future of health care.

David Nexon, a top health care advisor to the late Sen. Ted Kennedy, says that no matter what the outcome is of the Supreme Court deliberations or the fall elections, tremendous pressure to reduce spending and cut the deficit will continue to push lawmakers to find ways to control health care costs. Nexon is now senior executive vice president at the Advanced Medical Technology Association, also known as AdvaMed, a trade group representing medical device manufacturers.

MARY AGNES CAREY:  If the law is upheld, take us through the political dynamics on Capitol Hill.  What do you think happens next?

DAVID NEXON:  First of all, whatever happens with the law, I don’t think there will be any legislative action until after the November elections.  If the law is upheld—again, unless the Republicans sweep the elections—I anticipate it will go into effect.  And that means millions of people will attain health insurance coverage, and we’ll begin to start a number of steps toward reducing health care costs. 

I do think that, regardless of what the Supreme Court does on the health law, and regardless of the outcome of the election, there’s going to continue to be further pressure for cost reduction beyond what was done in the Affordable Care Act, simply because of the tremendous pressure to reduce the deficit and reduce federal spending.

MARY AGNES CAREY:  Things seem politically polarized—very much so on Capitol Hill.  Would [the parties] work together if it’s upheld?  Or, if it’s struck down on an issue like cost, on an issue like coverage—people seem so far apart—how could they possibly come together?  Do you see that happening

DAVID NEXON:  Well, I think it’s very difficult.  After the defeat of the Clinton health care plan it took us about 14-15 years to get back to considering universal coverage.  I think, unfortunately, that if the law is struck down, barring some huge upheaval in the election, I think it’s unlikely we’ll get back to universal coverage any time in the foreseeable future. 

I do think that many of the cost control measures—which, in some general sense have been historically supported by health policy experts and members of both parties – are likely to be revived and, given the pressure for deficit reduction, will probably go further.

MARY AGNES CAREY:  So speaking to your point talking about the election, how does that shape any future action on the health law on entitlement spending?  You mentioned nothing will happen until after the election, what do you see—particularly on entitlements—in 2013?

DAVID NEXON:  Some people have decided it’s the mother of all reconciliation bills, because you have the debt limit converging, you have tremendous political pressure for deficit reduction, you have the likelihood of having to consider the whole tax reform, and what we’re going to do about the Bush tax cuts—which I don’t see being extended, certainly permanently, before the election. 

I think it’s going to be a very active legislative session, no matter who wins.  Hopefully the parties will find some way to come together on many of these very difficult issues, but it’s very tough in this polarized environment—things sitting so ideological and so divided.  Now we did have something similar before the ’96 presidential election, and then in ’97—after the election was over—the parties did come together to pass the Balanced Budget Act, which did a number of constructive things, including passing the Children’s Health Insurance Program, which Senator Kennedy was so deeply involved with.  So, I wouldn’t say there’s no hope, but it is going to be very difficult.

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