Andy Slavitt’s ACA roadtrip: What he’s heard from healthcare, tech executives

U.S. roadmap
Andy Slavitt, former acting administrator of CMS, is taking to the road to talk to healthcare executives about how an ACA repeal will affect their organizations.

Andy Slavitt is no longer one of the top federal health officials, but his support of the landmark healthcare reform legislation he helped implement hasn’t wavered.

Not only has Slavitt—the former acting administrator of the Centers for Medicare & Medicaid Services—launched a flurry of tweets defending the Affordable Care Act, but he also embarked last week upon a multistate tour to speak to healthcare and other industry executives about how they are reacting to disruptive effects of a likely ACA repeal.

This week, in part two of what he dubbed in one tweet as his “ACA roadtrip,” Slavitt is meeting with technology companies—both in and out of the healthcare space—and doctors. And all along the way, he’s chronicled his findings on Twitter.

The idea, Slavitt said in an exclusive interview, is primarily to replicate the on-site visits he conducted while at CMS, albeit in a different role.

“What moving on from my last job allowed me to do was a lot of my favorite part of my old job, which was get out of Washington and get into the real world,” he said.

To that end, Slavitt was in Arizona last week, is in Northern California this week and will be in New York next week, he said. In the near future, he also plans to visit Louisiana, Nashville and Houston.

With each trip, Slavitt said, his goal is to “try to bridge the gap a little bit between what goes on in D.C.—which is a big mystery to everybody else—and people who are seeing patients every day and are trying to make their systems work better, trying to make their budgets work better, trying to get better care.”

A chilling effect on capital investments

Andy Slavitt speaking
Andy Slavitt, former acting administrator of CMS

While the people Slavitt has spoken to all have varied perspectives, some common themes have emerged. For one, healthcare organizations see the coming policy changes differently than those within the Beltway.

“They start not with the big-picture policy lens; they start with the lens from their own hospital system," he said. “So they see how things are affecting them or impacting them and they want to know what’s going to change.”

Based on Slavitt’s recent conversations with healthcare leaders, one major way they expect the ACA’s demise to impact their organizations will be in the form of a slowdown on their investments in value-based care.

As many health systems move toward becoming more integrated, more community-oriented, more focused on primary care and population health, he noted, that necessitates having different internal skills, technology, data analytics and relationships with physicians and health plans. “All of which requires investment not just in mind share but in actual dollars,” Slavitt said.

Meanwhile, coverage gains tied to the ACA—particularly in states that have expanded Medicaid—have had a positive impact on hospitals’ finances, reducing bad debt and positively impacting payer mix.

But as they now face a period of significant uncertainty, healthcare leaders are worried about not only the implications for their finances and investments in value-based care, but also the impact on their patients. And when they meet with their boards, knowing they can really only control two major variables—labor and capital expenses—both could be in line for cuts.

“So you’re not going to start a big project, and you might not even continue a project you’ve already started,” Slavitt said.

At a healthcare industry event in Phoenix, for example, Slavitt took “the pulse” of the audience after his onstage discussion through an informal survey via handheld polling devices. Of the roughly 175 executives who responded, 39% said their organization was reducing hiring because of the uncertainty surrounding the ACA's fate, and 31% said they are reducing capital expenses.

Disruptive forces coming for tech

Compared to the healthcare executives Slavitt has spoken to, the leaders at technology companies tend to be less worried about change. Instead, he said, they are looking for hidden opportunities in the new wave of healthcare policies.

However, healthcare technology vendors are “very fearful” about healthcare organizations’ potential reductions in capital expenditures, as it could have a major impact on their bottom lines.

“I’ve had a handful of people come and ask me if I would talk to their clients and tell them that everything is going to be okay so they will start spending money again,” Slavitt said.

And outside of the healthcare realm, startups that are part of the burgeoning “gig economy” such as Uber and Airbnb could also feel the effects of an ACA repeal, he added. Many of those companies came of age during and after the ACA, so they are used to a world where people who work as self-employed contractors can still access health insurance.

“That’s the new normal for them, so doing that in a way where you can’t get insurance feels both scary and completely nuts to some people who are in the tech world,” Slavitt said.

A dialogue with Washington

Now that he’s no longer part of the federal government, one of Slavitt’s goals when he visits different locales is to ensure that healthcare stakeholders are communicating well with their representatives, senators and governors about the issues that matter to them, he said, “because sometimes they don’t know how to bridge those gaps.”

But the most senior CEOs of the biggest healthcare systems are already actively engaged with policymakers about what they want to keep—and scrap—when the ACA is repealed and replaced.

For those healthcare leaders, “their No. 1 priority is making sure to keep Medicaid expansion,” Slavitt said. As part of the ACA, Medicaid expansion would disappear if the law is repealed, and “the strong likelihood is that it will never get replaced,” he added.

Indeed, previous studies have indicated that levels of uncompensated care have gone down for hospitals in states that have expanded Medicaid eligibility under the ACA. Researchers have also pointed out that the financial stability provided by Medicaid expansion has allowed safety-net hospitals to hire more staff, open new facilities and expand services for clients with the greatest healthcare needs.

Some healthcare organizations and lobbying groups, though, might be optimistic about certain aspects of what the Trump administration and the Republican-controlled Congress have planned for healthcare, Slavitt acknowledged.

“I didn’t really have many of these conversations, but I think people are glad to have a regime that’s saying they’re going to regulate less,” he said. For instance, “all of the Washington associations have long wish lists of regulations they’d like to do away with.”

When he was with CMS, Slavitt said he was receptive to finding ways to make certain regulations less onerous for industry stakeholders, but noted that the flip side is that some rules are necessary to protect patients.

But whatever path the new administration takes when it comes to healthcare policy, Slavitt hopes that it finds a way to build on what the ACA accomplished.

“The ACA is meant to be a starting point, not an endpoint,” he said. “So we’ve got to break this logjam and we’ve certainly got to break the uncertainty of threatening to repeal it until we’ve got a much more thoughtful plan and approach.“