Though there are a multitude of ways Republicans might address the Affordable Care Act, healthcare organizations should focus on just a few likely scenarios when planning how they will weather change in the industry.
Such is the thesis of a new report (PDF) from PwC and its member firm Strategy&, which modeled what would happen under three possible outcomes: Repeal, replace and repair.
A repeal scenario would happen if Republicans end up cutting budget-related ACA provisions through the budget reconciliation process, but without replacing them with their own healthcare reform provisions. This would likely leave 32 million more Americans uninsured by 2025 than would be under the ACA, the report estimated.
Under a replace scenario—which is the option most like the now-tabled American Health Care Act—ACA provisions would be repealed through budget reconciliation and replaced with Republican-favored policies like Medicaid block grants. This approach would result in 12 million more lacking insurance in 2025 than under the ACA.
Finally, a repair scenario would involve lawmakers leaving most of the ACA intact while also adjusting and improving the law with some Democratic support. This would result in 6 million more uninsured individuals in 2025 than under the ACA, the report said.
Sundar Subramanian, a partner with Strategy&, told FierceHealthcare that he thinks some combination of replace and repair is the most likely of all the scenarios. That said, he noted that the “timing is totally uncertain,” as policy and regulatory changes could come in months or take years.
Health insurers would likely fare the best under a repair scenario, Subramanian said. That would involve a repeal of the ACA’s individual and employer mandates, but would also include provisions that make exchanges more sustainable, such as funding for high-risk pools and widening of the age-rating band.
“So even with modest losses in insured lives, the market is much more palatable for insurers,” he said.
Providers, on the other hand, would fare the best under none of the three scenarios his firm modeled, Subramanian noted. They’d be the best off if the ACA is left as is, as any increase in the number of uninsured individuals would likely increase the rates of uncompensated care.
To prepare for any of the modeled scenarios, or even none of the above, the report suggested that organizations do the following:
- Invest in quality and value, including new care and contracting models, as such efforts are generally “immune from reform”
- Become resilient to uncertainty and change by identifying any relevant risks and finding ways to confront or avoid them
- Work with partners and new entrants, which can help companies quickly scale up by using highly specialized expertise
- Innovate by developing new products, delivery methods, care models, contract designs, customer experiences and other ways to stay competitive
- Leverage, capture and manage data to find more efficiencies and growth opportunities
The key to charting the best way forward, according to Subramanian, is to avoid getting into too much of a guessing game about the future. When other industries faced extraordinary period of uncertainty, a handful of players correctly predicted what was going to happen and were perfectly positioned for that scenario.
“But generally, he added, "the bigger players that survived through that are ones that are not the most clairvoyant—they’re the ones that were the most resilient in how they thought about their strategic planning.”