Top four healthcare industry changes to watch in 2017
With Donald Trump as the new commander in chief, the healthcare industry is in the midst of many changes. In order to survive as a managed care organization, it’s important to stay on top of policy changes and reimbursement trends, such as those related to Medicare, Medicaid, and the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Healthcare executives also need to know if trends, such as consumerism and consolidation, will continue as is or change course. Industry experts weigh in on what to watch as the year unfolds.
Trump’s presidency has already brought and will continue to bring a flurry of activity and discussion around healthcare policy. Pathways exist for Congress and the administration to repeal many key elements of the Affordable Care Act (ACA) quickly. “But developing and enacting a replacement will be much more difficult,” says Ankur J. Goel, partner, McDermott Will & Emery. “We may see a second effort at healthcare reform but with Republicans in charge of developing the replacement and from a different starting point with Medicaid having been expanded in many states, millions of individuals with subsidized coverage, and consumer protections for individuals purchasing insurance in the individual markets. Republican efforts to enact a replacement will need to take the current landscape into account—as well as assemble the necessary votes.”
Bob Atlas, president of Epstein Becker Green’s consulting affiliate, EBG Advisors, says that beyond repealing many key elements of the Affordable Care Act, Trump and the Republican-controlled Congress may look to reshape Medicaid and Medicare into more of a defined contribution for the federal government. For Medicaid, this means converting federal financing to block grants or per capita spending caps. For Medicare, it may entail a shift to more of a premium support (or voucher) approach that would have the effect of moving most beneficiaries into private plans.
The impending ACA “repeal and replace” is likely to put an end to Medicaid expansions. But states do see its value to their citizens and their economies, including many states governed by Republicans. One way Medicaid expansion might survive is if Republicans insert “personal responsibility” features of the nature found in Indiana, where then-Gov. Pence led an expansion effort. Personal responsibility in this context translates to participant cost sharing, incentives for healthy behaviors, and work requirements.
Also, some ACA provisions must stay in place for other laws to operate, Atlas says. For example, MACRA, enacted in 2015 with strong bipartisan support, can only work if the “advanced alternative payment models” (APMs) spawned by ACA, such as accountable care organizations, continue. And then there are technical provisions of the ACA that aren’t visible to the public but matter a lot to the healthcare industry, such as the payment formula for Medicare Advantage plans.
To prepare for big policy changes, Atlas advises anticipating what may be coming and modeling how it could affect your organization and its key stakeholders. “While right now there is no certainty about the shape of legislation, there are proposals from conservative groups that could be the basis of new policy,” he says. “Sketch out possible scenarios, then prepare action plans for different potential outcomes. Then get going. For some, action will mean advocating early and assertively in the political arena. For most executives, action also means tailoring the healthcare organization’s strategy and tactics to suit the new, altered reality. Waiting and hoping it won’t affect you is not an option for a responsible healthcare leader.”