The state of healthcare under Trump: 3 key observations

The days and weeks after President Donald Trump's victory in November 2016 were marked by uncertainty for healthcare executives across the country. Because most polls had hospital and health system leaders preparing for a different outcome, after the election they were left to determine if the results nullified their existing strategic plans — and more than six years of reform efforts under the ACA. 

"Each of the health systems I had an opportunity to chat with had an A plan and a B plan. I think pretty much everybody's plan was torn up and tossed aside on that election morning," said Peter Doerner, executive vice president and chief development officer of North American Partners in Anesthesia, a national, physician-led anesthesia and perioperative management company.

This content is sponsored by North American Partners in Anesthesia.

The morning after the 2016 election, NAPA led an executive roundtable discussion, hosted by Becker's in Chicago, to explore how the results of the national and state elections may influence the direction of healthcare reform. At that time, the executives present largely agreed they planned to take a "wait-and-see" approach to strategy under the new administration, according to Mr. Doerner.

Nearly one year later to the day, NAPA hosted a follow-up discussion at the Becker's Hospital Review 6th Annual CEO+CFO Roundtable on Nov. 14, 2017 to see if executives were still governing with a wait-and-see approach, or if a rollercoaster year of healthcare policy had changed strategic imperatives and shifted their thinking.

Here are three key observations from the discussion.

1. On a policy level, nothing has materially changed — though that's not necessarily positive. No matter who voters wanted in the White House, Congress and state legislatures, the 2016 election held promise that the issues plaguing the healthcare industry would be addressed in one way or another, either by mending the ACA's flaws or scrapping it entirely. However, in the months since President Trump took office, Congress has not been able to agree on healthcare policy, so this promise has yet to be realized. While this makes for a predictable healthcare landscape, many of the existing challenges presented by the ACA have been prolonged or exacerbated.

"From our perspective, nothing has really changed," said a regional CFO of a 44 bed-hospital system in the Midwest. "As far as the ACA goes, we thought there were major problems with it before the election …The way it was set up, it needed fixing, but conceptually we were on board."

The CFO named Medicaid expansion as a challenge; in particular the lack of access to Medicaid providers for newly enrolled patients. In some of the states where his health system operates, he said Medicaid expansion has not improved population health because many physicians still refuse Medicaid patients.

Other providers named the looming threat of narrow networks, which grew in popularity under the ACA, as a significant challenge. For example, an executive from an independent critical access hospital in the Midwest said narrow networks are an obstacle for her organization because it doesn't employ providers, and two large health systems operate clinics nearby. 

"We don't have employed providers, so we can't join an ACO. How do we continue to be viable and independent and gather everyone together to take care of community, while we have narrow networks coming through that could potentially squeeze us out without us knowing?" she said.

Similar to Medicaid expansion and narrow networks, executives noted the growth of high-deductible health plans under the ACA solved the health insurance coverage problem, but not necessarily the access to care problem. A regional CEO of a multistate health system in the West said the biggest issue her system faced this year was educating patients about what their HDHPs really meant in terms of out-of-pocket payments.

"If you have a $10,000 deductible, that's self pay in my mind," she said. "People think they have insurance until they come to our facility. We have to educate them and say, 'You need to understand, you don't really have insurance.'"

2. Providers are rethinking the way their hospitals and networks are designed. Hospitals need to solve the paradox: improve the health of their patient populations, but lower costs, largely by keeping patients out of the hospital.

"I run seven hospitals, but I'm trying to keep people out of them," said the regional CEO of the multistate health system.

For her, like many executives in the room, the answer has been to grow, though not necessarily by mergers and acquisitions. "We created a learning delivery network. We didn't have the capital to buy it, so we partnered," she said. "Some of the things we're able to do is go to our critical access, small facilities and say, let's put a collaborative together and lower all our costs together."

Other executives said they are working with community providers, nontraditional partners and even competitors to improve access and quality, in the hopes of reducing readmissions, emergency room use and other costly forms of care.

"We are doing creative strategic partnerships with what would have been viewed in the past as competitors — physician practices, other providers and other agencies," said the president and CEO of a community hospital in the Northeast. "There are alternate forms of care that are less expensive; it's just a matter of having strategically aligned partners."   

However, this also means inpatient volumes will decline, presenting another cost efficiency issue. For one community hospital CEO, who operates a hospital in upstate New York, his facilities are old and too big, but they don't have the money to invest in a brand-new, downsized facility. The solution? "We are now looking at repurposing the building and doing an all private room model," he said. The hospital hopes the single room model will boost patient satisfaction, making the institution a provider of choice with a growing consumer base.

3. Meanwhile, advocacy took on renewed importance. The lack of consensus between political parties on healthcare policy and persisting cost and access issues prompted many healthcare providers to ramp up their advocacy efforts in the past year. "Republicans have not had a plan, and we as an industry dropped the ball in working with them to have a plan just in case," said the president and CEO of a midsize nonprofit hospital in the Southeast.

The lack of action at the federal level also put increased attention on state and local politics as another way to influence change. After the election, an executive from a Chicago-based health system said, "The thing we got more serious and deliberate about was advocacy. I'm from Chicago, so it was not just the presidential election, it was also the state and local elections that concerned us."

However, as hospitals ramped up their advocacy work, they found consolidation had changed the rules of the game. Some mega health systems started striking out on their own to advocate for themselves without going through a hospital association. One executive in the room was part of a health system that could soon be one of the country's largest, pending approval of a merger. When asked if her system planned to use that newfound market share to drive policy, she replied, "Obviously, one of the reasons we are doing this is scale."

In some ways, the more individualized approach to advocacy has left smaller hospitals in the dust and limited the collective power of hospital associations to speak loudly on behalf of all healthcare providers. As the CEO of a critical access hospital and long-term care center in the Midwest said, "It's harder to speak with one voice because the larger health systems are speaking for themselves, and it's not necessarily aligned with the associations."

However, not every corner of the industry has experienced this change in advocacy dynamics. The president and CEO of a home health and hospice organization based in the Northeast said after CMS proposed a new model of care as part of the Home Health Care Prospective Payment System that could have cut reimbursements by 15 to 17 percent, home health and hospice providers were able to band together and advocate for themselves with one voice.

"We tweeted; we Facebooked. It was amazing what we did," she said. To delay the program, called the Home Health Groupings Model, several home care and hospice associations banded together to lobby Washington, including the National Association for Home Care and Hospice, ElevatingHOME and the Home Care Association of America.  "We blasted to the point that OMB said, 'Stop, we heard you,'" the CEO said.

When CMS issued the final 2018 HHCPPS rule, it decided not to implement the Home Health Groupings Model due to comments from the public — a win for home health and hospice advocates. Their work demonstrates the potential power of advocacy in shaping future healthcare policy.

 

More articles on leadership and management:

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Aligning strategic and clinical initiatives: 23 hospital leaders weigh in

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