Healthcare Reform: Endgame?

Finally. We seem to moving to closure on the seemingly unending national debate over healthcare in the U.S.. Tomorrow, Sunday, March 21, 2010, in an unusual Sunday session, the U.S. Congress will put healthcare reform to the vote. I predict that the Democrats will get the necessary votes and the legislation will pass. Then it’s over and we can all go home, right?

We may all go home but this is far from over. Let’s not forget that august body, the U.S. Senate which would still need to put its imprimatur on the proposed legislation. The Republicans are preparing a desperate, last ditch defense there that would make John Wayne’s Alamo look like a tea party (and I don't mean the one in Boston Harbor nor the current anti-Republican/Democrat Party) If the Senate can’t pass the legislation before the spring recess we could be in this state of affairs for a while longer. (Am I the only one who’s reminded of Waiting for Godot?) Various governors and state legislatures are promising to challenge the constitutionality of government mandated healthcare reform. Their positions are based on the old states’ rights arguments. (Somebody should tell those guys that those arguments didn’t work very well for the Confederacy.)

CNBC’s Patti Domm wrote a piece (http://www.cnbc.com/id/35956840 ) yesterday about the potential short term negative impact of healthcare reform on stack prices. I’m still convinced that most people still unsure about what healthcare reform means for business, especially in the life sciences sector. I’m excluding the Republicans and Tea Party members from this because they’re just opposed in general to the whole idea.

Tomorrow, we may have the unusual situation of most of the country sitting around their televisions, computers, PDA’s, whatever to follow the final debates in the Congress. I can’t wait to see the audience ratings. (Another prediction, they may rival the recent Olympics.)

After all that has gone on before now, the present moment seems somewhat anticlimactic. If the past is any guide even if the legislation passes not much may change immediately. But, changes will be put into play that combined with the law of unintended consequences will change many things. (Nobody ever thought that when Congress put through a minor piece of legislation for something called a 401k plan would become the primary financial tool for retirement planning and practically shut down employer funded pensions as generations knew them.) What will we wake up to on Monday morning if healthcare reform passes?

No one knows what the future holds for healthcare reform. I can predict passage but that’s just one person’s opinion. But, passage is just one point in time. It’s binary – yes or no. What happens after that is much more complicated and the stakes are very high. Let’s see what happens.

As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.

Contributed by Guy de Lastin

Healthcare Reform: Where’d It Go?

I’ve been a little distracted lately (busy Holidays, snowstorms, colds) but I stopped the other day and U.S. healthcare reform was gone. Poof! Not there anymore. Now, Larry always kids me (you are kidding Larry, aren’t you?) that when distracted I can miss a lot. But, I must’ve had one heck of a lot better New Year’s Eve than I’d realized.

I went to my usual haunts to see if anyone had any perspective on this. Mike Huckman at CNBC (http://www.cnbc.com/id/15837675 ) and Pharmalot (http://www.pharmalot.com/ ) didn’t mention it. (My apologies if they did and I missed it.)

OK, don’t worry, I’m not going to drag this out. I had heard about Scott Brown’s (http://www.brownforussenate.com/ ) election in Massachusetts. (Ted Kennedy’s old seat no less.) The irony of that victory has not been lost on me. I wasn’t as much surprised by Brown’s victory as how the national discussion on healthcare reform has practically shut down. Despite some noises from Nancy Pelosi and other supporters, there’s virtually nothing compared to prior to Congress’s late Christmas Eve recess.

What’s going on here? Further, what does it mean for Big Pharma? I’m going to go out on a limb here with my views.

First, the Democrats obviously couldn’t arrive at a consensus within their own party about what healthcare reform was all about. (I’m not going to go into the political missteps that cost them Ted Kennedy’s seat.) There were no killer ideas. What began as a high minded crusade to overhaul healthcare in America became a mad, undignified dash for the finish line replete with all sorts of cloakroom deals to make it all happen. No one had any reason to cross the aisle or to worry about why they hadn’t. I suspect that President Obama is probably relieved that he no longer has the Supermajority for this one. We just don’t have any good ideas to implement major healthcare reform. Consensus on smaller issues like tort reform or health insurance regulation may be possible but that’s going to be it for now. We may see this happen as the November midterm elections draw near.

Next, what about Big Pharma? I don’t think that the current status quo concerning healthcare reform is good for them. The topic isn’t going away. Both sides are going back into their corners to get ready for the next round. Uncertainty prevails. The Tea Party movement will play the role of spoiler this year possibly foretelling what will happen in the 2012 Presidential election. Decisions on future drug development not to mention how capital markets will value these companies are only several of the possible issues here.

I’ll be blogging on this theme for a while. With the Congressional elections coming and the White House trying to find common ground with the Republicans, there will be plenty of good material here.

As always, we welcome your feedback. Please contact us at larryrothmansblog@gmail.com. We look forward to hearing from you.

Contributed by Guy de Lastin