Is Obamacare About to Get Trumped?

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We won't have to wait long to see how the President-elect's promise to repeal and replace the Affordable Care Act will play out.


President-elect Donald Trump

As we look ahead to the uncertainty of an unlikely presidency, there are more questions than answers about what the U.S. healthcare system might look like under Donald Trump's proposed policies.

Is repeal and replace possible?
About 21 million Americans are insured through the Affordable Care Act's (ACA) Medicaid expansion and insurance exchanges. Republican leadership, including Mr. Trump, have indicated they want to come up with a way to repeal Obamacare without leaving millions of their constituents without coverage. But President-elect Trump's reforms might turn out to be less drastic than he promised. The ACA, which became law in 2010, is complex legislation that's already entrenched in the nation's healthcare system. Its policies extend well past insurance exchanges to touch on payment reform, quality outcome reporting and patient-centered care. Republicans might soon discover they'll have to settle for remaking and renaming, not repealing and replacing, Obamacare.

Some of the ACA's insurance reforms — eliminating adverse selection, underwriting people who couldn't otherwise afford insurance, encouraging healthy individuals to sign up to increase pools for high-risk patients — make sense, says anesthesiologist David Shapiro, MD, past president of the ASC Association. "If all that gets repealed, how do you replace it and what do you replace it with?" he asks. "Everybody wants the same thing, but differ on how to get there."

The Republicans will likely use budget reconciliation to repeal elements of the ACA that have substantial impact on the federal budget. That way forward has already been established. Last January, the House and Senate sent to President Obama a bill that would have repealed the core of the ACA. President Obama, as expected, vetoed the bill, but it could be a blueprint for how Republicans will push their repeal of ACA though budget reconciliation. It withdrew funding for subsidies for individuals to purchase insurance on the exchanges, and eliminated the individual mandate, the Cadillac tax (a planned 40% excise tax on high-cost insurance plans) and Medicare expansion. All of those provisions got through the reconciliation process, so Republicans could quickly repeal Obamacare's insurance exchanges through the same reconciliation process once Mr. Trump takes office.

John E McDonough, DrPH, MPA quote

Making larger market reforms to the ACA that move beyond budgetary concerns will require new legislation passed with a 60-vote majority in the Senate. That means 8 Democrats who are all but certain to toe the party line will need to cross the aisle. Could Republicans come up with a bill that will attract at least 8 Senate Democrats and pass muster with Tea Party members? "The compromises they would have to make to get Democrats onboard could alienate Republican hardliners such as Ted Cruz from Texas and Mike Lee from Utah," says John E. McDonough, DrPH, MPA, a professor of public health practice in the department of health policy and management at the Harvard T.H. Chan School of Public Health in Boston, Mass.

Others say reform will center on making insurance affordable by getting healthy people to pay into the system. "But if you have a system where funding is eliminated for people to purchase insurance and other requirements in place require insurance to be sold to individuals at any time, Republicans will be forced to solve many of the same issues Democrats faced while trying to get the ACA passed," says Ankur Goel, JD, a partner at McDermott Will & Emery, a Washington, D.C.-based healthcare law firm.

CAMPAIGN PROMISES
Trump's Main Talking Points

Donald Trump THE BEST PLAN Donald Trump believes his plans for healthcare reform will improve coverage for millions of Americans.

Here's a look at what President-elect Donald Trump had to say about healthcare reform while crisscrossing the nation in the months leading up to the election. How or if he follows through on his campaign promises remains to be seen.

  • More choices. Modify existing laws that inhibit the sale of health insurance across state lines with the goal of increasing market competition that will drive down premium costs.
  • Tax breaks. Let individuals fully deduct health insurance premium payments from their tax returns under the current tax system.
  • Health Savings Accounts (HSAs). Let individuals contribute tax-free contributions to HSAs, which could be used by any member of the individual's family without penalty.
  • Price transparency. Require healthcare providers and drug companies to reveal the true cost of care so individuals will able to shop for the best prices for procedures, exams or any other medical-related procedures.
  • Roll back Medicaid. Establish block grants to states, giving them the power to manage funds at the local level and incentivize the elimination of fraud, waste and abuse.
  • Increase drug choice. Remove barriers to entry into free markets for overseas drug providers that offer safe, reliable and cheaper products to provide Americans with access to more treatment options.
  • High-risk help. Mr. Trump has recently expressed interest in letting individuals with pre-existing conditions purchase insurance as long as they maintain consistent coverage.

— Daniel Cook

What will become of payment reform?
The Obama administration aggressively rolled out payment reform programs. It also covered new ground by making the programs mandatory and integrating the silos of surgical and medical care. For example, CMS launched the Comprehensive Care for Joint Replacement (CJR) model in April 2016. The bundled payment plan pays hospitals a single fee for an episode of care, which begins at hospital admission and extends to 90 days post-op. The program is designed to eliminate the significant variation in Medicare reimbursements for inpatient total hip and knee procedures performed in different parts of the country. There's been talk of expanding and implementing bundled payments in the outpatient setting, says Sheila Madhani, MPH, director of McDermott+Consulting in Washington, D.C., who adds it remains to be seen what will happen with the program under President Trump.

Ms. Madhani points out that uncertainty surrounds the future of value-based purchasing, because Mr. Trump has issued very few detailed policy statements. She anticipates that reimbursing for surgical procedures based on quality outcomes and patient-centered care will remain, partly because the program has been in place on the inpatient side for some time and moving the risk to HOPDs, ASCs and physician practices makes sense.

Dr. McDonough anticipates that bundled payments and the value-based payment system — reforms found in Title III of the ACA — will survive the Republican's attempt to downsize Obamacare. The reductions in payments to Medicare providers through payment reforms totaled about $800 billion over the past 10 years, says Dr. McDonough. "Republicans like those cuts," he says. "Bundled payments and readmission penalties are staying. They won't say so in public, but Republicans secretly think they're good."

Ms. Madhani sees a continued move away from the fee-for-service payment plan. "The new administration is looking for ways to save money. There probably won't be many new funds put into health care, so they have to figure out how to stretch healthcare dollars using resources that are already in place," she says.

What about ACOs?
Accountable Care Organizations (ACOs) are groups of doctors, hospitals and other providers who team up to give coordinated care to their Medicare patients. ACOs that provide high-quality care while saving Medicare money get to share in a portion of the savings. The Trump administration will examine whether ACOs are saving healthcare dollars before setting its policy, says Michael Strazzella, co-head of federal government relations at Buchanan Ingersoll & Rooney, a Washington, D.C.-based law firm. Practicality might make it impossible to eliminate or cut back on ACOs. "They're already in place across the country," says Dr. McDonough. "Eliminating them now would throw the healthcare system into turmoil."

Ms. Madhani would be surprised if ACOs were shuttered. "They've been in place for a while and a lot of resources have already been invested in making them work," she says. "Dismantling them would be difficult and there'd be an outcry among some healthcare leaders."

Dr. Shapiro hopes the new administration discourages healthcare consolidation that creates monolithic health systems and instead favors decentralized health care, which benefits independent surgery centers. "Has that been the effect of the ACA up until this point?" he asks. "That's up for debate, but it certainly seems to be."

The marketplace created by the ACA has discouraged the entrepreneurial spirit in the ASC space, says Dr. Shapiro. He also points out that increasing numbers of physicians are seeking employment within large health systems instead of striking out on their own in private practice since Obamacare was passed. "That trend has contributed to the flattening of growth of new ASCs," says Dr. Shapiro.

Piper Su quote

Price transparency
At his core, Mr. Trump is a businessman who wants to see individuals move into insurance markets and make coverage choices for themselves, says Mr. Strazzella. To that end, Mr. Trump believes in expanding the use of health savings accounts (HSAs). The accounts are currently available under Obamacare for individuals enrolled in high-deductible plans to contribute and draw tax-free money from for certain medical expenses. Mr. Strazzella says Mr. Trump is also interested in seeing price transparency take hold across all healthcare providers. The goal is to combine price transparency with HSAs to make consumers more aware of how much health care costs and to have them take ownership in managing the expense.

Most people who support Mr. Trump's desire for free market health care are excited by the election results, says Andy Poole, CEO of Monticello Community Surgery Center in Charlottesville, Va. Mr. Poole, who posts bundled pricing for various surgical procedures on his facility's website, is at the forefront of the price transparency revolution [see "We Posted Our Prices Online (You Can, Too)" on p. 14]. He envisions an increase in self-pay patients if legislation is passed that increases the use of HSAs or counts money spent in direct pricing toward tax deductibles.

"I'm a bit of a political skeptic, so I don't see any big changes coming," says Mr. Poole. "But even if we keep going down the current path, the prohibitive costs of both the exchange plans and the company plans will push people to explore self-funding on an individual or company level."

Will meaningful use be meaningful?
The Obama administration has worked off the "if you build it they will come" belief that propping up reform programs with federal dollars will make them work, says Mr. Strazzella. How will Mr. Trump's philosophical shift to free market reform impact governmental backing of programs such as Meaningful Use, the ACA-funded program that provides financial incentives to hospitals that implement electronic health records to reduce paperwork and administrative burdens, cut costs and reduce medical errors? "Hospitals might have to decide if the technology is worth having solely on the basis it makes them better providers," says Mr. Strazzella.

Ms. Madhani says it's widely accepted among healthcare providers that electronic record intraoperability is necessary to run an effective health system. "There's been a lot of criticism about how the technology is being implemented, and that's something the new administration will address," she says. "Everything's on the table, but I don't think the financial incentive for EHR use is going away."

Medicare and Medicaid?
More questions and uncertainty surround what Mr. Trump and Republican leaders plan to do with the nation's universal healthcare system. Republican House Speaker Paul Ryan has long wanted to reform Medicare by turning it into a premium support model in which individuals receive vouchers to buy coverage from private payers. "It's a bit of an irony: eliminating exchanges in one market and creating them in another," says legislative and health policy strategist Piper Su, vice president of McDermott+Consulting in Washington, D.C. Mr. Ryan also wants to increase the qualifying age from 65 to 67. Mr. Trump has expressed interest in "modernizing" Medicare, but has provided little detail.

Mr. Trump and Mr. Ryan also want to cut Medicaid by establishing block grants to states that would provide local governments with annual funds to allocate as they see fit or a per capita allotment that would provide states a flat amount for each enrollee.

With Republicans in control of Congress and Mr. Trump in the White House, Mr. Ryan has the chance to push though the Medicare and Medicaid reforms he's been touting for years.

No more excuses
Mr. Strazzella says Republicans are already developing an aggressive repeal-and-replace strategy so there will be achievable action points on Mr. Trump's desk as soon as he takes office next month. The GOP is firmly in control of Washington, providing it with the opportunity to fulfill the promise of healthcare reform that has energized its base. That opportunity also comes with immense pressure.

"The Republican dog has finally caught the car it's been chasing," says Dr. McDonough. "There's so much at stake. It's entirely possible they'll be able to complete the repeal, but unable to pull off the replace. That would be a train wreck, especially because they have all 3 branches of government and the whole country will be watching." OSM

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