President-elect Donald Trump's plan to turnaround the healthcare industry presents uncertainty and opportunity, according to a report from PwC's Health Research Institute that examines the potential impacts of his healthcare policy.
Becker's caught up with Benjamin Isgur, leader of PwC's Health Research Institute, to discuss the key things providers can expect to see from the Trump administration in terms of healthcare. Here are six things to watch.
1. An ACA repeal — in some form — is likely. Mr. Trump campaigned heavily on repealing the ACA, so this is one of the issues the healthcare industry is focused on first and foremost, according to Mr. Isgur.
HRI rated the likelihood of a repeal gaining traction as moderate because it depends how the repeal is defined, according to Mr. Isgur. Repealing "every nook and cranny of the ACA" is not likely, he said. "On the other hand, if it means repealing the individual mandate, or just defunding subsidies and exchanges, or repealing the medical device tax…it's a lot more likely," he added. If a full repeal is not possible, Congress will be able to use the reconciliation process or appropriations process to at least dismantle parts of the law.
2. Uncertainty exists around the insurance exchanges. "Taking away people's new insurance is going to be extremely disruptive to people's lives and how the industry operates," Mr. Isgur said. Creating a plan to replace coverage if the exchanges are repealed will likely be a major point of discussion early in Mr. Trump’s presidency, he added.
HRI rates the impact of an ACA repeal on the federal budget, payers and providers as negative. This rating is based on the information currently available about the repeal and replacement plan. At face value, a repeal would increase the federal deficit and increase the number of uninsured by almost 20 million people, HRI wrote, citing a Commonwealth Fund study. Employers would have to spend to change policies and data systems, while revenue and tax provisions, including tax credits for premiums, would end, according to HRI.
"We know that a lot of hospital bad debt has decreased over the last few years as more people have been insured…Health insurers we are talking to are concerned right now because they don't know what the plan is," Mr. Isgur said.
3. Medicaid expansion will likely continue. Overall, what takes place in the industry under Mr. Trump will be a game of balance. While campaigning, Mr. Trump supported a block grant program for Medicaid. Based on a 2015 proposal by House Budget Committee Chairman Tom Price, R-Ga., using block grants for Medicaid would reduce federal spending by $913 billion over the next decade, according to HRI. However, many people ,may lose coverage under the block grant program.
There are indicators from Mr. Trump and Vice President-elect Mike Pence suggesting Medicaid expansion will continue. For example, as the HRI report notes, while Mr. Pence was governor of Indiana, Medicaid was expanded with some flexibility around cost sharing. "We can certainly see a scenario where the Medicaid expansion continues forward," Mr. Isgur said.
4. Volume to value is here to stay. The federal government was the primary accelerator of healthcare's changing payment models through Medicare ACOs, bundled payments and the like, but Mr. Isgur says the value-based care trend has now eclipsed policy. "[The volume-to-value] issue has changed from one that was mainly driven from a public policy, government standpoint," he said. "Now it has permeated through all payers…Employers want to see continued movement to value, insurers want to see continued movement to value and consumers — who are taking on more out of pocket cost — want to see the value they are going to get."
HRI notes that a Trump administration is likely to support the continued move to value, though mixed results in some value-based care programs mean reimbursement programs will continue to evolve. "Health system executives can feel pretty confident this concept is not going away. It may look different depending on how the new administration puts their stamp on volume to value," Mr. Isgur said.
5. Free market forces will take center stage, while major industry trends march on. Mr. Trump's health plan is based on infusing free market approaches in the healthcare industry. "This is the world providers need to prepare for," Mr. Isgur said. "Not just all the scenarios around repeal and replace, but also will we start to see a more businesslike approach and philosophy around healthcare."
Coupled with his plan to expand health savings accounts, consumeristic trends will continue to hold. Patients will be more involved in their healthcare and making more choices for themselves, meaning issues like transparency, access, convenience and quality are still critical for providers. Increasing use of technology and mobile devices for example, will continue no matter what policies are put in place on the Hill.
6. Macroeconomic healthcare trends still need to be addressed. These trends were not discussed on the campaign trail by either candidate, but loom as a challenge to future policy, according to HRI. Some of these issues include the Medicare Trust Fund for Part A, which is on track to run out by 2028 unless changes are made, Mr. Isgur noted. Over the next 10 years, mandatory spending on Medicare, Medicaid and Social Security is projected to account for most (88 percent) of the growth in federal spending. This will put pressure on discretionary spending for roads, parks, schools and defense programs, according to HRI, which in turn means reimbursement cuts are inevitable.
"That's something providers really need to think about. There's not going to be a new injection of money…They are going to have to turn to themselves and figure out how they are going to provide services in an era of less reimbursement," Mr. Isgur said.
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