Plan for potential swings in a few critical areas
Should the Republicans win the presidency again, providers and Medicaid managed care plans should prepare for a continuation of the administration’s efforts to transform Medicaid by encouraging states to impose work requirements on some beneficiaries, increase eligibility reviews for coverage and seek block grants for federal funding. The administration also has tied immigration policies to public coverage.
These efforts have helped reduce Medicaid enrollment, driving up the numbers of uninsured Americans. Providers serving large numbers of Medicaid beneficiaries in states enthusiastically embracing these policies could see increases in uncompensated care and bad debt. Children’s hospitals could be affected, as the number of children losing Medicaid coverage has increased, according to an analysis by The New York Times.[ix] Medicaid managed care plans may find reductions in enrollment and increased churn as beneficiaries lose coverage more often.
A Democratic presidential win likely would signal an end to approvals of waivers for these sorts of programs and an end to policies linking immigration status to public coverage. Democrats may work to shore up the ACA exchange enrollment through restoration of advertising dollars and funding for support services. They also may reverse course on the expansion of access to short-term, limited duration insurance and association health plans and attempt to pass legislation around drug pricing and surprise billing. The Democrats also appear less likely to continue the Trump administration’s approach to Chinese trade policy, and pharmaceutical and life sciences companies, in particular, may benefit from increased certainty in this area.
Pharmaceutical companies likely will continue to experience some degree of uncertainty around trade no matter who wins the White House. Tariffs on essential chemicals produced in China have complicated supply chains for drug companies, which should scenario plan for extended trade tensions with this key nation.[x]
The long march toward value-based care likely will continue no matter who wins
Both parties favor the federal government’s shift toward paying for quality and not quantity of services.[xi] Publicly rating healthcare organizations also has bipartisan support. Health organizations should continue to invest in information infrastructure and staff that are able to collect and analyze data necessary for maximizing value-based payments.
In 2018, Danville, Pennsylvania-based Geisinger Health launched the Geisinger at Home program, which addresses nutrition needs and provides urgent and specialty care and other services.[xii] At the Cleveland Clinic’s 2019 Medical Innovation Summit, Dr. Jaewon Ryu, president and CEO of Geisinger Health, said the Geisinger at Home program, which is offered to the sickest 5 percent of the provider’s patients, “led to a 43 percent drop in emergency room visits” in that group.[xiii]
The march toward value-based care also requires developing skills around addressing the social determinants of health, factors that have been getting more attention from CMS in recent years. “Medicare has been paying for diabetes for a long time, paying for things like somebody needing an amputation because a limb needs to be amputated, paying for the prosthetic. Just seven years ago they began to pay for diabetes prevention programs,” former HHS Secretary Kathleen Sebelius told healthcare executives at PwC’s 180 Health Forum. “Finally, CMS is getting the point that maybe investing before someone becomes diabetic makes a little more sense than waiting until you have to deal with some of the horrific outcomes.”[xiv]
CMS has started reimbursing for services that could be categorized as social determinants of health, and has indicated interest in doing more.[xv] Tax policy also is supporting these activities. The Tax Cuts and Jobs Act of 2017 created a tax program that could inject millions of dollars into projects aimed at addressing the social determinants of health.[xvi]
The opportunity zone program offers investors tax benefits in exchange for investments in low-income census tracts deemed “qualified opportunity zones” by the federal government. The investments present natural opportunities for health organizations to team up with investors, such as private equity firms or family offices, to address health issues in a struggling community.[xvii]
Identify other areas of change
Increasingly, companies outside healthcare are taking action, banding together to develop better, more efficient or more cost-effective care models.[xviii] “Our members are focused on the levers with which they can do something about addressing pricing, overall cost and quality,” Elizabeth Mitchell, president and CEO of the Pacific Business Group on Health, told HRI.[xix]
Healthcare companies should consider how strategic actions of non-healthcare firms may begin to remake the healthcare environment through competition rather than legislation. By strategically aligning investments to these trends, businesses can better weather any policy or regulatory changes that may come. They should also consider how economic trends may significantly affect healthcare trends.
The overall economy is another factor. Twenty-seven percent of healthcare executives polled by HRI said they were “very” concerned about a potential economic downturn or recession affecting their business in 2020, including 40 percent of life sciences executives. Just 22 percent of health services provider executives expressed the same concern.[xx]