Hospital Impact: Providers, patients in for bumpy ride as health policy shifts

Document titled "Patient Protection and Affordable Care Act"
The nomination of Tom Price, M.D., to lead the Department of Health and Human Services and Seema Verma to head up the Centers for Medicare & Medicaid Services indicates that Republicans are going to try to dismantle the ACA. (Getty/designer491)
headshot of Kent Bottles

“You couldn’t predict what was going to happen for one simple reason: people.” —Sara Sheridan, “Brighton Belle

“The idea that the future is unpredictable is undermined every day by the ease with which the past is explained. … The illusion that we understand the past fosters overconfidence in our ability to predict the future.” —Daniel Kahneman, “Thinking, Fast and Slow

Since the November presidential election, I have participated in programs in Connecticut, Maryland, the District of Columbia, Pennsylvania and Tennessee, where “experts” (myself included) have expounded on what Donald Trump’s election will mean for healthcare.

While one would be wise to acknowledge that Sara Sheridan and Daniel Kahneman offer wise counsel with regard to the difficulty of predicting anything, hospital leadership must try to plan for changes in the industry. What will the future of the clinical delivery system look like with Republicans controlling every branch of the federal government?

Since the passage of the Affordable Care Act, I have traveled all over America to discuss the need for reform with hospital, medical and lay groups. Many blamed President Barack Obama and the ACA for everything that did not work perfectly, whether the problem was related to the law or not. I suspect that after the inauguration of the president-elect, all of the blame will be directed at Trump and the Republican-controlled Congress.

For an appreciation of the complexity and difficulty of reforming healthcare in the current political climate, it’s worth watching Vox’s recent hourlong interview of Obama.

So what will happen under Trump? The nomination of Tom Price, M.D., to lead the Department of Health and Human Services and Seema Verma to head up the Centers for Medicare & Medicaid Services indicates that the Republicans are going to try to dismantle the ACA. Price is the author of a 242-page bill called the “Empowering Patients First Act,” which as Vox explains, would:

  • Repeal Medicaid expansion without replacement
  • Restrict but not ban discrimination against people with pre-existing conditions by charging the sick more for insurance if they do not maintain continuous coverage
  • Promote health savings accounts
  • Have tax credits based on age, not income
  • Cap the tax exemption for employer-based health insurance plans
  • Eliminate the ACA essential health benefits package  

Price has also voiced strong opinions about various issues, including:

  • Opposition to the ACA-created Center for Medicare & Medicaid Innovation, which has provided evaluation and funding for value-based payment pilots
  • Opposition to legal abortions
  • Opposition to bundled payment programs for hip and knee surgery, even though one study, published in JAMA Internal Medicine, found they save Medicare 20%
  • Support for defunding Planned Parenthood

Verma is best known for her unusual and controversial Indiana Medicaid expansion, which requires poor citizens to contribute to a health savings account and purchase their coverage.

The nominations of Price and Verma need to be approved by the Senate, and questions about possible conflicts of interest by Price investing in healthcare stocks have already been raised by Democrats. One might recall that Obama’s first choice for HHS secretary, former Sen. Tom Daschle, withdrew his nomination because of questions about unpaid taxes. However, even if Price or Verma—or both—fail to receive Senate confirmation, the Republican goal of repealing and replacing the ACA remains. 

Repealing and replacing the ACA is easier said than done; because of the narrow GOP majority in the Senate, the plan is to use budget reconciliation in order to avoid a Democratic filibuster. This parliamentary maneuver will allow the Republicans to repeal some but not all of the ACA because it has to result in immediate budget savings. This plan, according to The New York Times, could:

  • Eliminate the individual and employer mandate
  • Eliminate subsidies to states that expanded Medicaid
  • Repeal subsidies for the poor to buy insurance on the exchanges
  • Repeal the taxes on high-income earners, health insurers, pharmaceutical companies and medical device companies

But, The Times notes, budget reconciliation will not overturn the ACA’s insurance market standards, which:

  • Prevent insurers from charging women more than men
  • Prevent insurers from discriminating against people with pre-existing conditions
  • Allow children to stay on their parents’ plan until age 26
  • Eliminate yearly and lifetime maximums for insurance coverage

The above details reveal the difficulty of the repeal and replacement strategy. The unpopular provisions that can be eliminated by the budget reconciliation process pay for the popular insurance market standards that many want to remain in effect. 

At his news conference Wednesday, Trump insisted that the repeal and replacement of the ACA would occur simultaneously, but there is no evidence that Republicans in Congress have coalesced around a united replacement plan.

Because loss of coverage could result in a political backlash, the current plan appears to be a repeal and delay tactic, where the new GOP replacement plan would not be revealed for two to four years in the future, as Vox explains. But experts on both sides of the aisle warn that the real-world consequences of a “repeal and delay” tactic could result in chaos:

  • Insurance companies will be reluctant to sell insurance in the exchanges if they do not know what the rules will be.
  • Subsidies to stabilize the insurance exchanges and keep premiums low could increase the federal budget deficit, one Commonwealth Fund study finds.
  • The American Hospital Association and the Federation of American Hospitals jointly predict that hospitals could lose $165 billion in the next decade.
  • Another Commonwealth Fund study estimates that 2.6 million jobs will be lost in 2019, with the majority being outside the healthcare industry.
  • State budgets will be severely impacted by the loss of federal subsidies for healthcare reform. 
  • A Kaiser Family Foundation poll released in January 2017 found that 75% of Americans wanted Congress to leave the ACA alone or have a specific plan in place if it is repealed.

The GOP plan to repeal and delay the replacement of the ACA has the potential for political backlash from the voters who elected Donald Trump, as illustrated by the Kaiser Family Foundation's findings after conducting six Rust Belt focus groups with Trump voters:

  • They were not angry about healthcare.
  • They were worried about cost of premiums, deductibles, copays and drugs.
  • They did not like surprise bills due to narrow networks.
  • They did not understand or support health savings accounts.
  • They did not want to lose their insurance coverage.

All of the above indicates that hospitals and patients are in for a bumpy and uncertain ride as we transition from implementing the Affordable Care Act to seeing it dismantled and replaced with an unknown and untried alternative.

Kent Bottles, M.D., is a lecturer at the Thomas Jefferson University School of Population Health and chief medical officer of PYA Analytics.