Health­care re-re­form

Modern Healthcare - - NEWS - By Har­ris Meyer

2017 had been shap­ing up as a year fo­cused on fix­ing the Af­ford­able Care Act’s in­sur­ance mar­kets, slow­ing pre­scrip­tion drug price hikes, ex­pand­ing Med­i­caid, im­prov­ing men­tal health­care and spread­ing value-based pay­ment and de­liv­ery.

Sud­denly there’s a new, more con­ser­va­tive agenda. And al­most ev­ery­thing in health­care is up in the air.

In­sur­ers and providers were count­ing on con­tin­u­ing to add pay­ing cus­tomers un­der the ACA’s pre­mium sub­sidy frame­work, with more states ex­pand­ing Med­i­caid to low­in­come adults. But after the sur­prise pres­i­den- tial vic­tory of Repub­li­can Don­ald Trump, in­dus­try groups have no clear idea what the new frame­work will be if Trump and the Repub­li­can Congress make good on their pledge to re­peal and re­place Oba­macare.

Be­yond that, there’s great un­cer­tainty whether and at what level Repub­li­cans will fund a wide range of health pro­grams, in­clud­ing med­i­cal re­search, men­tal health and ad­dic­tion ser­vices, pub­lic health, com­mu­nity health cen­ters and the Chil­dren’s Health In­sur­ance Pro­gram. Trump’s picks for cab­i­net-level posts, no­tably Rep. Mick Mul­vaney (R-S.C.) at the Of­fice of Man­age­ment and Bud­get, are no fans

Trump’s picks for cab­i­net-level posts, no­tably Rep. Mick Mul­vaney (R-S.C.) at the of­fice of Man­age­ment and Bud­get, are no fans of gov­ern­ment so­cial spend­ing.

of gov­ern­ment so­cial spend­ing.

“It’s hard to plan a busi­ness with this many out­stand­ing ques­tions,” said Ceci Con­nolly, CEO of the Al­liance for Com­mu­nity Health Plans, which rep­re­sents not-for-profit in­sur­ers.

Repub­li­can experts say there’s no ques­tion Congress will push to re­peal the ACA via a party-line, ex­pe­dited bud­get bill. It’s likely they’ll also try to erase or roll back the law’s Med­i­caid ex­pan­sion. But these ob­servers ac­knowl­edge that con­gres­sional GOP lead­ers them­selves don’t know what they’re go­ing to put in the ACA’s place—or pre­cisely how they’ll do it.

“They’re work­ing through that,” said Dean Rosen, a Repub­li­can lob­by­ist who formerly served as a se­nior Repub­li­can Se­nate staffer. “Repub­li­cans will own the changes, and they have to be very care­ful they don’t find them­selves in the same po­si­tion as the Obama ad­min­is­tra­tion, de­fend­ing an un­pop­u­lar, par­ti­san piece of leg­is­la­tion.”

Other ob­servers warn that Repub­li­cans may not fully re­al­ize what a daunt­ing task they’re tak­ing on, and how it could get in the way of their other leg­isla­tive pri­or­i­ties such as job cre­ation, tax re­form, im­mi­gra­tion and trade.

Adding to the chal­lenge, the Trump ad­min­is­tra­tion and Congress will have to weigh whether to take ac­tion to keep the in­di­vid­ual in­sur­ance mar­ket sta­ble un­til they es­tab­lish an al­ter­na­tive sys­tem—or let it crash and try to blame Oba­macare. All the while, con­gres­sional Democrats will be blast­ing the GOP’s ac­tions as tak­ing away health­care from tens of mil­lions of Amer­i­cans, with an eye on winning the 2018 con­gres­sional elec­tions.

Health­care re-re­form “has the po­ten­tial to swamp any pres­i­den­tial ad­min­is­tra­tion be­cause of its com­plex­ity and the ex­tra­or­di­nary emo­tional con­text of peo­ple’s lives and health,” said Tom Daschle, the for­mer Demo­cratic Se­nate ma­jor­ity leader who helped craft the ACA. “Repub­li­cans will find them­selves in a very de­fen­sive po­si­tion if they can’t meet the Amer­i­can peo­ple’s ex­pec­ta­tions.”

Chip Kahn, CEO of the Fed­er­a­tion of Amer­i­can Hos­pi­tals, said his group and the Amer­i­can Hospi­tal As­so­ci­a­tion com­mis­sioned a study be­fore the elec­tion of the dire im­pact re­peal­ing the ACA would have on hos­pi­tals—not think­ing they’d ever have to use it. Hos­pi­tals and other stake­holder groups ac­cepted a “grand bar­gain” of in­dus­try taxes and pay cuts in re­turn for the prom­ise of more pay­ing cus­tomers.

Now the ACA’s cov­er­age ex­pan­sions and ad­di­tional fed­eral fund­ing are in jeop­ardy, with no prom­ises that they will be re­placed and that providers’ abil­ity to serve the poor and unin­sured will be sup­ported. “The key ques­tion is whether Repub­li­cans can be flex­i­ble enough to re­al­ize it’s not some­thing we can just undo,” Kahn said at a Modern Health­care event last month.

That real-world im­pact is why some experts are skep­ti­cal Repub­li­cans will be able to get the 51 Se­nate votes needed to pass ex­pe­dited re­peal leg­is­la­tion. “I’m not as­sum­ing this is a done deal,” said Jeff Gold­smith, a na­tional ad­viser to con­sul­tancy Nav­i­gant Health­care. “It’s go­ing to be a real ed­u­ca­tion for these new folks how hard this is. You want to take some­thing away from a $3.4 tril­lion in­dus­try? It’s go­ing to cost you.”

The po­lit­i­cal price could be even higher if Repub­li­cans fol­low through on plans by House Speaker Paul Ryan and HHS sec­re­tary-nom­i­nee Dr. Tom Price to try to pass ma­jor cost-sav­ing over­hauls of Med­i­caid and Medi­care in 2017. Some pre­dict Trump will wob­ble if polls show he’s los­ing sup­port among his base of older vot­ers.

“We had a pres­i­den­tial race where Medi­care wasn’t even an is­sue,” said Tom Miller, a Repub­li­can health pol­icy expert at the con­ser­va­tive-lean­ing Amer­i­can En­ter­prise In­sti­tute. “When the real live ammo starts fir­ing, let’s see if Trump still says, ‘What­ever Congress does is fine.’ ”

On Med­i­caid, providers, state elected of­fi­cials and pa­tient ad­vo­cacy groups will fight fiercely if Repub­li­cans try to roll back the ACA ex­pan­sion and turn Med­i­caid into a sys­tem of capped fed­eral pay­ments to the states, end­ing any en­ti­tle­ment to ben­e­fits.

Re­peal­ing the ex­pan­sion would cost states bil­lions of dol­lars, cre­at­ing bud­get strains for both Repub­li­can and Demo­cratic gover­nors. Crit­ics warn that switch­ing to a sys­tem of flat fed­eral pay­ments would force states to slash el­i­gi­bil­ity, ben­e­fits and pay­ment rates to providers. It also could set off a huge bat­tle over how to cal­cu­late the amount of fed­eral money each state re­ceives.

Gover­nors think Med­i­caid block grants would en­able them to con­trol their bud­gets bet­ter, said Kahn, who be­lieves states would make “wrong de­ci­sions” about how to spend the money. But the end re­sult would be a lot of in­equity in dis­tribut­ing money to the states. “I hope that’s when the bot­tom falls out of this con­cept.”

De­spite the for­mi­da­ble po­lit­i­cal ob­sta­cles, Miller pre­dicts Repub­li­cans will charge ahead on Med­i­caid re­struc­tur­ing. That’s be­cause it may be the only po­lit­i­cally vi­able way to score the big bud­get sav­ings they need to pay for their pro­posed tax cred­its to re­place the ACA’s in­come­based pre­mium sub­si­dies.

“If you can’t get sav­ings out of Med­i­caid, I don’t know

“The key ques­tion is whether Repub­li­cans can be flex­i­ble enough to re­al­ize it’s not some­thing we can just undo.” Chip Kahn, CEO of the Fed­er­a­tion of Amer­i­can Hos­pi­tals

where else you can get them and put out new ben­e­fits to other peo­ple and make them happy,” he said.

The out­look is murkier for ac­tion by the ad­min­is­tra­tion or Congress to rein in pre­scrip­tion drug prices, given GOP op­po­si­tion to gov­ern­ment in­ter­ven­tion in mar­kets. With con­sumers, hos­pi­tals and in­sur­ers seething over these higher prices, Rosen, the GOP lob­by­ist, said mod­est pol­icy ac­tion is pos­si­ble to in­crease drug­mak­ers’ cost trans­parency and speed the process for get­ting generic prod­ucts to mar­ket.

Such cost-re­lated mea­sures could be at­tached to must­pass leg­is­la­tion in the sec­ond half of 2017 to reau­tho­rize the Food and Drug Ad­min­is­tra­tion’s user fees for drug and med­i­cal de­vice ap­provals.

But Stephen Ubl, CEO of the Phar­ma­ceu­ti­cal Re­search and Man­u­fac­tur­ers of Amer­ica, sig­naled at the Modern Health­care event last month that his in­dus­try would fight any such moves be­cause the pro­posed pol­icy solutions “aren’t vi­able.”

Some be­lieve Trump him­self may weigh in on the is­sue in light of his state­ment last month that “I’m go­ing to bring down drug prices.” Just as he pres­sured Car­rier Corp. after the elec­tion not to re­lo­cate sev­eral hun­dred fac­tory jobs from In­di­ana to Mex­ico, he could try to “Car­ri­er­ize” drug com­pa­nies through tweets or other pub­lic com­ments if they raise prices.

“You don’t need gov­ern­ment price con­trols to cre­ate a cli­mate where prices in­creases are a po­lit­i­cal prob­lem,” Gold­smith said.

Trump and con­gres­sional Repub­li­cans have promised the busi­ness com­mu­nity broad re­lief from fed­eral reg­u­la­tion. That sounds sweet to health­care in­dus­try groups and may prompt them to ac­cept some im­me­di­ate fi­nan­cial pain and cut deals on ACA re­peal and other GOP pol­icy pri­or­i­ties. That could bring them greater lee­way to in­no­vate, such as us­ing tele­health to ex­pand ac­cess to Medi­care Ad­van­tage pa­tients in ru­ral ar­eas. It also might mean more free­dom to merge or part­ner with other or­ga­ni­za­tions.

In­dus­try groups may have con­sid­er­able bar­gain­ing lever­age this com­ing year, be­cause Trump and his fel­low Repub­li­cans know they can’t af­ford to fall short on their cam­paign prom­ises on health­care.

“The les­son of health pol­icy leg­is­lat­ing is there’s al­ways a way for a des­per­ate ma­jor­ity to get to its end re­sult,” Miller said. “The al­ter­na­tive is fail­ure and be­ing thrown out of of­fice.”

“You don’t need gov­ern­ment price con­trols to cre­ate a cli­mate where prices in­creases are a po­lit­i­cal prob­lem.” Jeff Gold­smith, na­tional ad­viser to Nav­i­gant Health­care

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