South Florida Hospital News
Tuesday January 19, 2021

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December 2020 - Volume 17 - Issue 6


“So Now What?”

Healthcare Organizations Wonder What’s Next Under a New President and a Divided Government
The four years of the Trump Administration have been a decidedly mixed bag for providers. The President’s signature attempts to repeal the Affordable Care Act, to institute Medicare and Medicaid spending reductions, to impose stricter requirements on Medicaid eligibility, and to foist upon providers new regulations related to price transparency and interoperability have left many providers on their heels waiting for the next shoe to drop. There has been plenty of rhetoric (but not much action) on issues important to consumers like pharmaceutical pricing and surprise billing. Among providers, there has been relatively slow adoption and middling performance of value-based care strategies. And let’s not forget the raging pandemic which has had an overwhelming negative effect on the healthcare industry.
So now what? We may likely have a divided government which will make sweeping healthcare reform difficult, if not impossible. That doesn’t mean there won’t be incremental reform, and here are four major categories of healthcare proposals and initiatives.
COVID-19 Response: President-elect Biden has made it clear that he thinks that the Trump administration has failed the American people and that Mr. Trump’s “leave it to the states” approach to dissemination of PPE, testing of individuals, and distribution of vaccines has not worked. He proposes a much more active and involved role for the federal government in the pandemic response. He has already assembled his transition team of public health and healthcare industry advisors and he has begun to address racial and ethnic disparities in testing and treatment. He also believes a well-coordinated worldwide response to COVID would be helpful, and he is therefore proposing to rejoin the World Health Organization and to ramp up collaborative efforts in the Pan American Health Organization.
Enhanced Access to Care: Mr. Biden has decried the Trump Administration’s repeated attempts to repeal the Affordable Care Act and has developed his own rallying call for a “public option” alternative to private health insurance that members of the general public could buy into. This lofty policy proposal will almost certainly not have any legs in a Republican Senate. Likewise, Biden’s proposal to expand access to care for older Americans by lowering the eligibility age for Medicare from 65 to 60 will probably meet legislative resistance and has already engendered an angry response from the hospital industry.
However, Mr. Biden is likely to continue to seek greater access to care in other ways. He will almost assuredly seek to expand the role of the Affordable Care Act by increasing the availability and the magnitude of federal subsidies for individuals purchasing insurance on the Exchanges. And he will likely look for ways to make Medicaid more attractive to states as well.
During the pandemic, the Trump Administration acknowledged that the economic consequences of the pandemic would cause the Medicaid rolls to swell, and it therefore temporarily increased the Federal Medical Assistance Percentage (FMAP) match for Medicaid services to ease the strain to state budgets.
Mr. Biden is likely to make these increases permanent and to stymie any efforts to make Medicaid more restrictive by implementing block grants or work requirements. These enhanced “access to care” efforts should be a net positive for providers as they see a greater preponderance of insured patients and fewer uninsured patients.
Control Rising Healthcare Costs: Expanding access to care will come at a cost to the federal budget, and Mr. Biden is therefore likely to try to pay for part of this increased federal expense by finding ways to limit payments to drug companies, physicians, hospitals, and other organizations receiving federal dollars through Medicare and Medicaid. Most efforts on cost control signal a net negative for providers.
Although President-elect Biden campaigned on a platform to allow Medicare to negotiate or set drug prices, the pushback from the pharmaceutical industry will likely prevent that from happening.
Likewise, Congress will probably continue to struggle to find a solution for “surprise billing” by out-of-network providers. However, there seems to be bipartisan support for providing some consumer relief on drug pricing by setting drug prices at no greater than the international pricing average.
It is likely that the new Administration will try to limit the total out-of-pocket expenses for Medicare enrollees. In yet another nod to consumers, the Biden administration is likely to continue to support both insurer and provider price transparency initiatives to help consumers “shop” for healthcare services.
Provider-specific Issues: Mr. Biden will likely continue the slow march to value-based care, but his approach will probably be more consumer-centric than provider-focused. For example, he will likely push for permanent parity of telehealth reimbursement because it furthers his goals of improved access for consumers. He will also want to arm consumers with the power of their own health information, and that will require providers to ramp up their Electronic Health Record interoperability efforts.
One issue that may easily get caught in the political crossfire between the House of Representatives and the Senate is the ability for safety net institutions to access low-cost 340b drugs and benefit by receiving a reimbursement rate much higher than the drug cost. One issue he will likely not shy away from, however, is the growing concern among consumers about large healthcare systems exercising undue market power and actually increasing prices after a merger or consolidation. That may not bode well for providers who have suffered financial losses during the pandemic and are therefore looking for a larger partner with deep pockets to stay afloat.
None of these issues are cut and dried, and all of them are complex. We know that there will be an interest by the new President to quell the pandemic, increase access, and empower the consumer. Yet we also know that there will be a countervailing interest in the Senate to curb big government spending, lower taxes, and allow market forces to prevail. The reality is that none of us have a crystal ball. All we know is that it will be an interesting four years.

Calvin Glidewell is President and CEO of inspirEx Healthcare Strategies.

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