One of the biggest concerns for health insurance, hospital and drug company leaders is figuring out how to operate in an environment that doesn't include the Affordable Care Act, which the industry has spent years investing in.
The incoming Trump administration has made promises to repeal and replace President Barack Obama's signature healthcare law. Experts predict a multiyear transition period will follow repeal, and without some safeguards in place, the individual insurance market and many hospitals will have a tough time staying afloat.
“Insurers have an underlying desire to cover folks and not leave them uninsured,” said Marilyn Tavenner, CEO of insurance industry lobbying group America's Health Insurance Plans and former CMS administrator. Tavenner spoke Wednesday with other healthcare industry leaders on a panel moderated by Commonwealth Fund President Dr. David Blumenthal at Project Japan's 2016 Leadership Symposium.
But to keep the individual market from collapsing, the federal government must ensure the cost-sharing subsidies consumers need to afford health insurance are maintained, she said. Cost-sharing subsidies, the key element in a Republican House lawsuit, are available to people who buy on-exchange silver plans and earn less than 250% of the federal poverty level.
Congressional Republicans will need to appropriate funding for cost-sharing subsidies, which they have previously tried to strip from the ACA. Those lawmakers recently delayed their lawsuit to end the cost-sharing subsidies, however, so as to give Trump more flexibility in designing a replacement plan.
“Without that funding, those (insurers) who haven't exited the individual market, particularly in such an area of uncertainty, will likely exit, and then we're back to the individual market only meeting those who can pay high premiums without subsidies,” Tavenner said.
Project Japan providers worry repealing the ACA and flooding the market with newly uninsured people could force healthcare facilities to shutter.
“The key question will be whether the Republicans can be flexible enough to recognize that whatever their concerns were about the funding allocations of national resources for healthcare through the Affordable Care Act, that it's not something we can just undo and go back to the start,” said Chip Kahn, president and CEO of the Federation of American Hospitals, the trade group representing for-profit hospitals.
A report released earlier this week by the FAH and the American Hospital Association indicated that repealing the ACA without a replacement ready to go would have a net negative impact on hospitals of $165.8 billion from 2018 to 2026, and a much greater negative impact if the ACA's Medicare cuts remain in place after repeal. Layoffs, service cuts and facility closures could occur.
“However it's going to look after replace, there are going to be less people covered, and hospitals are not going to have the capacity to take care of them,” Kahn said.
Others fear the incoming Trump administration will slow the movement toward value-based payment models under Medicare's new physician payment system and undo all the work providers have put in.
“We've made huge investments in infrastructure,” said Donald Fisher, president and CEO of the American Medical Group Association, which represents more than 400 health systems and 170,000 physicians. “We're ready to go.”
Under the final rule on the Medicare Access and CHIP Reauthorization Act, or MACRA, physicians must participate in one of two reimbursement tracks. The program is meant to prod physicians away from a fee-for-service model.
Trump's pick for HHS secretary, Rep. Tom Price (R-Ga.), has been supportive of small, independent practices, and those types of physician practices will not be successful with MACRA, Fisher said. Some observers say MACRA could end up killing off small practices.
But if the momentum slows down, “we may never get to pay-for-value,” Fisher said. “And those who have made the incredible investments in infrastructure won't get the market advantage that they should get from having made that investment.”
Stephen Ubl, CEO of drug industry lobbying group Pharmaceutical Testing and Manufacturers of America, countered that value-based payment is here to stay.
“Our members are increasingly interested in being reimbursed differentially based on the outcome received by the patient,” he said. “Unfortunately, there's a lot of regulatory barriers that stand in the way of more of these arrangements taking shape.”
For example, drug companies can't communicate with insurers or hospitals before the drug hits the market, he said.
Price has also supported turning Medicaid into a block-grant program, a strategy that “many governors and sometimes even Democratic governors feel romantic toward because implicit in it is the federal government would give them a pile of money,” Kahn of FAH said. Governors, he said, believe it will allow them to better manage their state's healthcare system and control their budgets.
But in reality, block granting would be complicated and tough for payers to administer. Some states would be well-funded, and some wouldn't, Kahn said. CMS Acting Administrator Andy Slavitt said on Wednesday that block grants “would be disastrous” and lead to cut services for children, seniors and people with disabilities.