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Modern Healthcare: Trump upset will force healthcare leaders to rethink the future

Nov 09, 2016

[From Modern Healthcare]

Republican Donald Trump's shocking victory Tuesday will force a major shift in the healthcare industry's thinking about its future. Combined with the GOP's retention of control of the Senate and the House, a Trump presidency enables conservatives to repeal or roll back the Affordable Care Act and implement at least some of the proposals outlined in the GOP party platform and the recent House Republican leadership white paper on healthcare.

Addressing supporters just before 3 a.m. ET, Trump struck a conciliatory tone and did not specifically mention the ACA. “It is time for us to come together as one united people,” he said. “It's time.”

But the assumption of Republican control over both the White House and Congress most likely means an end to the expansion of Medicaid to the 19 states that have not yet implemented it, and puts the expansion in the other 31 states in serious jeopardy.

But there are divisions even among conservatives over issues such as Medicare restructuring and how to help Americans afford health insurance. And Senate Democrats almost certainly would try to use their filibuster power to block major ACA changes.

Trump's victory also assures a conservative majority on the U.S. Supreme Court, meaning a possible rollback in abortion rights for women. It also means the U.S. Justice Department and Federal Trade Commission may look more favorably on mergers and consolidation in the healthcare industry.

After being behind in the polls for the entire general election campaign, Trump shocked political analysts. Democrat Hillary Clinton, however, did not concede the election. Clinton reportedly called Trump to concede the race.

Healthcare leaders were not prepared or eager for the healthcare changes a Trump victory would bring about. Modern Healthcare's second-quarter CEO Power Panel, a survey of 86 healthcare CEOs, found that the chief executives overwhelmingly backed the Affordable Care Act and supported its goal of pushing providers away from fee-for-service medicine and toward delivering value-based care.

The overwhelming message from the survey was that the next president and Congress should stay the course set by President Barack Obama and the ACA. “I think the Affordable Care Act needs to stay, and we need to keep improving it,” said Dr. Gary Kaplan, CEO of the not-for-profit Virginia Mason Health System in Seattle. “I think that we can put together great minds and make some further improvements and hopefully take it out of being a political football.”

But last week, Trump promised to immediately repeal and replace the ACA if elected. “When we win on Nov. 8 and elect a Republican Congress, we will be able to immediately repeal and replace Obamacare. We have to do it,” Trump said.

“I will ask Congress to convene a special session so we can repeal and replace,” he added. “And it will be such an honor for me, for you and for everybody in this country because Obamacare has to be replaced. And we will do it, and we will do it very, very quickly. It is a catastrophe.”

Some conservative policy analysts believe that under a Republican-controlled government, the ACA probably would be shrunk rather than abolished and would receive a new name. It's widely expected that Trump will hand off the health policy portfolio to House Speaker Paul Ryan, whose House leadership white paper is seen by conservative wonks as the blueprint for a Republican administration's policy.

Some think the political backlash from suddenly ending ACA coverage for an estimated 20 million Americans will prompt Trump and congressional Republicans to proceed cautiously. While Senate Democrats likely would use the filibuster to try to block any drastic changes in the law, Republicans have devised a plan to sidestep a filibuster and make the changes through the budget reconciliation process.

Given their druthers, Trump and congressional Republicans would push to end the individual and employer mandates, eliminate ACA insurance reforms such as minimum essential benefit packages, pare back and restructure the premium subsidies, and junk the CMS Innovation Center and the Medicare Independent Payment Advisory Board, said Douglas Holtz-Eakin, an adviser to Sen. John McCain's 2008 presidential campaign and former director of the Congressional Budget Office.

Experts say those measures would largely unravel the ACA system and could lead to millions of people losing coverage.

It's not clear whether or how a Trump administration would provide subsidies to help people buy or keep coverage. The House Republican leaders' plan proposed refundable tax credits for individuals without access to employer-based or public coverage. But the Trump campaign's seven-point healthcare proposal and the GOP health policy agenda don't mention any subsidy mechanism. Another issue is that if they moved to repeal the ACA and its hundreds of billions in revenue, Republicans would have no way to fund subsidies for the uninsured, noted John Goodman, a veteran Republican health policy expert.

House GOP leaders have proposed taxing employer health benefits to provide revenue for subsidies and help control overall healthcare spending. But it's not clear whether Trump would embrace such a widely unpopular measure.

With Trump in the White House, Ryan and congressional Republicans would press hard to transform Medicare into a so-called premium support program, in which the government makes fixed per-capita contributions and beneficiaries use those payments to get their care from either traditional Medicare or private plans. A move away from defined benefits would potentially expose seniors to higher out-of-pocket costs. The GOP platform includes that proposal, even though Trump repeatedly promised in the primaries to leave Medicare unchanged.

Holtz-Eakin suggested that a Trump administration might try to nudge Medicare toward a premium-support model by making the privatized Medicare Advantage program more of a competitive bidding system. “They could do it in a sequential way and (eventually) get rid of CMS price-fixing entirely,” he said. To win Democratic support for this, he added, the Republicans might agree to expand the bundled-payment model within traditional Medicare.

On Medicaid, Trump and GOP congressional leaders want to convert that low-income health coverage program into a system of capped federal contributions to the states and give state leaders enormous freedom to set eligibility, benefits and program structure. Democrats, healthcare providers, and even many state officials oppose such a change, fearing it would slash funding, reduce provider payments, and leave lots of low-income people without healthcare.

The House Republican leadership plan, which calls for repealing the ACA and its Medicaid expansion, would let states roll back their coverage extensions to “able-bodied” adults. At the same time, conservative experts argue that giving states more flexibility under the block-grant approach, such as letting them set work requirements and trim benefits, would enable them to cover this population more cost-effectively.

Healthcare providers are leery of that approach. “I distrust the intent of 50 different states to appropriately support people who need healthcare coverage to do that through the complete freedom of block grants, said Dr. William Conway, CEO of the Henry Ford Medical Group, which is part of Henry Ford Health System in Michigan. “That sounds like a formula for going backwards and uninsuring people. It's a terrible idea.”

Trump also has called for letting Medicare negotiate prescription drug prices. But GOP congressional leaders reject that, preferring to focus on reforms to speed Food and Drug Administration approvals for new drugs and devices that they say will reduce costs. Despite that stance, some conservative health policy experts have said a Trump administration would face mounting public pressure to address the drug cost issue.

In addition, Trump and congressional Republicans have promised to implement a number of perennial conservative health policy favorites, including allowing consumers to buy insurance across state lines and expanding health savings accounts. He's also indicated that he favors Ryan's preferred approach of covering people with preexisting medical conditions through state high-risk pools rather than requiring insurers to accept all applicants regardless of health status.

Similar pools had a long and rocky history in many states before Obamacare's guaranteed coverage took effect, and they would cost taxpayers billions of dollars a year.

Tuesday's election outcome completely scrambles the widespread thinking in the healthcare industry that the ACA framework for the U.S. healthcare system is here to stay. Now leaders in all the healthcare sectors may have to re-assess their strategies and decide whether to accommodate big changes proposed by Trump and congressional Republicans or try to fight them.

The ACA has been “a heckuva deal” for healthcare stakeholders including providers, insurers, drug companies, and medical device manufacturers, said Lawrence Jacobs, an expert on healthcare politics and policy at the University of Minnesota. “But they've played it coy and sat on the fence, taking the benefits and not expending political capital to keep the program.”

Now, he asks, will those powerful stakeholders, in combination with the tens of millions of Americans who have gained coverage and benefits under the ACA, fight the new president's efforts to roll back the law?

In one of the first reactions to a possible Trump win, America's Health Insurance Plans, the health insurance trade group, released a statement saying it would "work across the aisle to find solutions that deliver affordable coverage and high-quality care for everyone."