Washington, D.C. — A consensus of opinion is one of the hardest things to come by in Washington. And yet a leading panel of healthcare pundits at “The Healthcare Debate 2.0” at this year's HCap Conference in early December all agreed on one fundamental point: The fate of healthcare reform will largely be decided by the way the nation resolves the fiscal and political turmoil over the next 12 months.

In the coming year, two key events will play an especially important role along the path to resolution, according to the panel. They include the election of 2012, and the ongoing effort to reduce the federal debt.

“We face an unprecedented level of debt in this country right now,” said Dan Mendelson, Founder and President of Avalere Health, and moderator of ‘The Healthcare Debate 2.0.’ “The entitlement programs are growing very rapidly, both Medicare and Medicaid, and there is a lack of consensus on what to do about it. . . . And you can't deal with the debt issue if you don't deal with healthcare.”

The options on the table, according to the panel, come down to two choices. There's the Obama plan, which was framed by The Affordable Care Act of 2010 and continues along the tradition of a fee-for-service model. And there's the Ryan plan—named after U.S. Representative Paul Ryan (R-WI)—which promotes a “defined contribution” model designed to encourage private-pay competition.

“The next big issues will be to see what the Supreme Court decides in terms of the Affordable Care Act and what happens in the elections,” said Dean Rosen, a Partner with Mehlman Vogel Castagnetti. “I think Republicans are dead serious about repealing the law and maybe replacing it with something else.”

Whichever reform plan prevails, even if it's a compromise, the panelists echoed a common belief throughout the industry that both Medicare and Medicaid are on course for an overhaul. Shawn Bishop, Senior VP of Research for the Marwood Group, related how that thinking may affect the skilled nursing sector.

“When MedPac looks at providers and analyzes their margins and their payment-to-cost ratios, they see that skilled nursing facilities have 22% margins,” Bishop said. “MedPac is telling Congress those margins are high, and so Congress is concerned that their payments might be too high.”

In turn, when Mendelson asked the panel if they agreed that the probability of entitlement cuts to nursing home and home health payments in the next year could be as high as 70% to 80%, they all agreed. “My guess is that it will come mostly from the states, which are grappling with how to pay for their existing Medicaid programs,” said Micheal Cannon, Director of Health Policy Studies at the Cato Institute. “And one of the only levers they can pull on Medicaid is to change the way they pay healthcare providers.”

Another change that nursing homes can expect in the near future, panelists said, is the trickle down of the readmissions restrictions currently being imposed on the hospital sector. “There's a discussion to extend that policy to skilled nursing facilities, so that there would be a payment reduction if skilled nursing rates of readmission were too high,” Bishop said.

For the long-term outlook, ‘Debate 2.0’ panelists agreed that the uncertainty that healthcare providers face could go on for quite a while, and warned against ignoring the effects of the end of the Bush tax cuts in 2013.

“This industry, and almost every healthcare sector, is going to continue to face significant downward pressure. Because after the election, we're going to have to deal with tax reform, with the (end of the) Bush tax cuts, which expire in 2013,” said Rosen. “I think we're going to be dealing with deficit reduction 2.0 or 3.0, and the mix of the political actors will be critical.”