Elec­tion un­cer­tainty clouds busi­ness cli­mate

Modern Healthcare - - NEWS - By Har­ris Meyer and Shan­non Much­more

Health­care stake­hold­ers should brace for a year of busi­ness un­cer­tainty in 2016—an elec­tion year where the Se­nate and White House are up for grabs with Democrats and Repub­li­cans offering com­pet­ing vi­sions of the gov­ern­ment’s role in health­care.

The po­lit­i­cal con­flict will play out across a pub­lic opin­ion land­scape that has been trans­formed in re­cent months by high prescription drug prices, which have up­staged the Af­ford­able Care Act as health­care’s big­gest pol­icy is­sue. Polls show drug af­ford­abil­ity is now the pub­lic’s top health­care con­cern.

But will it be­come a ma­jor point of con­tention be­tween the par­ties once they have moved be­yond the pri­maries? The po­lit­i­cally pow­er­ful phar­ma­ceu­ti­cal in­dus­try will fill the cam­paign cof­fers of both po­lit­i­cal par­ties as drug­mak­ers press their own agenda, which in­cludes stop­ping any price reg­u­la­tion or Medi­care ne­go­ti­a­tions on prices.

The drug­mak­ers have al­ready won bi­par­ti­san sup­port for leg­is­la­tion eas­ing reg­u­la­tory re­view of new drugs and med­i­cal de­vices. Se­nate lead­ers prom­ise to take up the Se­nate’s own version of a House-passed bill early in the year.

For now, though, drug costs have given Repub­li­cans a respite from com­ing up with spe­cific changes to the ACA, which might alien­ate the mil­lions of Amer­i­cans who re­ceive cov­er­age un­der the law. Any sub­stan­tive “re­peal and re­place” bill would re­quire tough trade-offs, not likely in an elec­tion year where the GOP hopes to main­tain con­trol of both houses of Congress and win the White House.

In­stead, House Speaker Paul Ryan (R-Wis.) and the GOP pres­i­den­tial can­di­dates may tout their pro­pos­als to con­vert Medi­care into a de­fined-con­tri­bu­tion pro­gram and turn Med­i­caid into capped block grants to the states. But even if they don’t, Democrats will surely re­mind vot­ers, es­pe­cially those over 65, of the Repub­li­can plans.

In­sur­ers, who’ve be­come scape­goats for both par­ties, will con­tinue to draw po­lit­i­cal scru­tiny be­cause of pro­posed merg­ers now un­der re­view by fed­eral and state an­titrust reg­u­la­tors. Ex­pect some lively rhetoric on whether the Aetna-Hu­mana and An­them-Cigna tie-ups will pro­duce cost ef­fi­cien­cies or hurt con­sumers and providers.

As in 2015, a fed­eral court case could throw a wrench into the ACA’s fund­ing struc­ture. A fed­eral dis­trict judge in Wash­ing­ton will rule in 2016 on whether the Obama ad­min­is­tra­tion il­le­gally sub­si­dized the out-of-pocket costs for mil­lions of low-in­come ex­change plan en­rollees. A rul­ing against the sub­si­dies—the judge sounded skep­ti­cal in a pre­vi­ous hear­ing—could cause headaches for in­sur­ers.

Hos­pi­tals, physi­cians and in­sur­ers will push hard this year for fa­vor­able de­ci­sions from the ad­min­is­tra­tion and Congress on pay­ment and reg­u­la­tory mat­ters. The hot-but­ton is­sues will in­clude equal­iz­ing Medi­care pay­ments be­tween hos­pi­tal and out­pa­tient sites, in­creas­ing Medi­care Ad­van- tage rates, eas­ing fed­eral rules on mean­ing­ful use of elec­tronic health records and mod­i­fy­ing Medi­care’s two-mid­night pay­ments rule.

Physi­cian prac­tices will closely track the CMS’ moves to im­ple­ment the val­ued-based Medi­care physi­cian pay­ment sys­tem cre­ated by Congress in 2015 to re­place the sus­tain­able growth-rate for­mula. Im­ple­men­ta­tion will be tricky, es­pe­cially as pri-

Hos­pi­tals, physi­cians and in­sur­ers will push hard this year for fa­vor­able de­ci­sions from the ad­min­is­tra­tion and Congress on a num­ber of pay­ment and reg­u­la­tory mat­ters.

vate in­sur­ers be­gin em­u­lat­ing the Medi­care sys­tem, said Tom Miller, a res­i­dent fel­low at the con­ser­va­tive Amer­i­can En­ter­prise In­sti­tute.

Will hos­pi­tals and health sys­tems fol­low other stake­hold­ers and press Congress for re­lief from ACA Medi­care cuts that helped pay for the law’s cov­er­age ex­pan­sion? The tax pack­age law­mak­ers ap­proved at the end of 2015 granted much-sought ACA tax re­lief to em­ploy­ers, la­bor unions, med­i­calde­vice makers and health in­sur­ers. Providers may ar­gue they should get a sim­i­lar break.

The bi­par­ti­san ef­fort in Congress to re­form the na­tion’s men­tal health­care sys­tem and boost fund­ing for ser­vices will con­tinue to gain trac­tion in 2016. Whether it crosses the leg­isla­tive fin­ish line may de­pend on whether there are more mass shoot­ings in­volv­ing mentally un­bal­anced in­di­vid­u­als, even though ex­perts say this rare type of vi­o­lent be­hav­ior is not the main rea­son that men­tal health re­form is needed.

Henry Aaron, a se­nior fel­low at the Brook­ings Institution who sup­ports the ACA, said that while the re­form law will con­tinue to be a fo­cus of con­flict, Repub­li­cans may move away from their re­peal-or-noth­ing stance. In­stead, he said, they may pro­pose let­ting each state de­cide how to tai­lor the ACA for its own needs through flex­i­ble use of the law’s Sec­tion 1332 in­no­va­tion waivers.

For their part, Democrats won’t be able to ig­nore the real prob­lems with the ACA, he said. They’ll have to of­fer ways to cover more peo­ple, im­prove af­ford­abil­ity and re­duce over­all costs. Pres­i­den­tial can­di­date Hil­lary Clin­ton al­ready has out­lined pro­pos­als to fix what she has called the law’s “gl­itches,” in­clud­ing help­ing con­sumers with outof-pocket and drug costs.

Miller said the un­cer­tain po­lit­i­cal out­look re­flects the un­pre­dictable tone and sub­stance of pres­i­den­tial cam­paign dis­course, which will shift midyear when the nom­i­nees be­gin stak­ing out their po­si­tions. At this stage of the po­lit­i­cal process, he said, “We’ve moved into the Ber­muda Tri­an­gle and the in­stru­ments don’t seem to be work­ing prop­erly.”

The bi­par­ti­san ef­fort in Congress to re­form the na­tion’s men­tal health­care sys­tem and boost fund­ing for ser­vices will con­tinue to gain trac­tion.


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