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Post-Election Analysis: Making Healthcare “Great Again”

The election results are in and Donald Trump will be the 45th president of the United States. His appeal to “Make America Great Again” resonated across the heartland sparking an unprecedented political upset that surprised even the most astute prognosticators and pundits.

When he takes office in January, he’ll face enormous challenges domestically and globally. Healthcare will be at the top of the list: he promised to “Repeal and Replace” the Affordable Care Act, and he pledged changes that strengthen the system in his campaign’s seven-point plan. In this effort, his team will face harsh realities:

    • Containing health cost will to be the dominant issue.  Total healthcare spending will increase 6% annually for the next decade. Utilization is up. Demand is increasing and traditional reimbursement is not keeping pace with underlying costs. That’s not sustainable. Something’s got to give.
    • The fundamental structure of the health system is shifting. Healthcare is no longer a cottage industry. Mega deals across the board are pending: the Anthem-Cigna, Aetna-Humana, Dignity-CHI and more. And in most communities, half of the physicians are employed by hospitals that are affiliated with multi-hospital systems. The health system’s future will play out against new ways of competing.
    • Alternative payment programs (APMs) are changing incentives for providers. With MACRA payments to physicians and mandated bundled payments for heart failure, coronary artery surgery and joint replacements for hospitals coming on line next year, providers are anxious. What’s next? What’s their future?
    • Competition from non-traditional entrants is increasing. Investors are flocking to start-ups that challenge the status quo in healthcare. Their ranks include retail clinics, micro-hospitals, telemedicine, urgent-care centers, disposables, smart implantables, hybrid insurance models and others that challenge stakeholders to innovate faster and more effectively. It’s a huge industry that’s historically made its own rules and kept outsiders out. That’s changing.
    • And the public is divided about the Affordable Care Act: half believe it a necessary impetus for expanding insurance coverage and lower costs, and half feel it’s an over-reach by federal bureaucrats that want a government-run health system.

The Trump Agenda for the Health System: Repeal and Replace the ACA

Details about the Trump healthcare agenda are not clear, but the Campaign promised to Repeal and Replace the ACA on his first day in office. With majorities in both houses of Congress, the vehicle whereby the law can be changed is straightforward: the bigger questions are how it is to be replaced.

After the vote, it’s likely a series of administrative orders and targeted legislation will follow that begin the process of undoing the ACA including…

  • Dismantling Healthcare.gov and transitioning control of the marketplaces to the states.
  • Negotiating with Congressional budget officers and HHS for the transfer of Medicaid responsibility to the states via block grants.
  • Expanding tax credits and high risk pools for individuals and allowing purchases of insurance across state lines.
  • And through legislative negotiations, transitioning oversight and subsidies for its 12 million newly insured to states over a period of several months.

It’s likely the Trump team will advance other proposals, like allowing for the importation of prescription drugs, but the mechanisms whereby these are enacted is problematic.

The first 100 days: appointments, deals and posturing

The first 100 days of an administration are marked by three major activities: 1-political appointments to the Cabinet, key agencies and programs, 2-deals with Congress to set a tone for lawmaking to see who’s in charge, and 3-posturing to garner public opinion gains.

Appointments: A new administration has 4000 political appointments to make including more than 200 in key healthcare slots. Since cooperation with states will be central to the new administration’s health strategy, the HHS Cabinet position is likely to be filled by a former Republican Governor with state healthcare officials filling many of the key slots. Dr. Ben Carson, a former Presidential candidate himself, is likely to play a key role along with other campaign operatives in their selection.

Deals: The new administration and Congress will advance bills to eliminate the Cadillac tax on employers and medical device tax as a start. With the composition of a supportive Congress, the low hanging fruit include ways to improve Veteran’s Health programs and potentially legislation to control drug prices.

Posturing: The honeymoon for a new administration is short, particularly one elected in a bitter Campaign season in which distrust for the leading candidates was the central issue. The Trump team is unknown on Capitol Hill, so uncertainty abounds. Confirmation of cabinet appointments will surface how battle line are drawn. The confirmation of the Supreme Court vacancy left by the death of Justice Scalia will be huge symbolically as ideologues flex their muscles.

Campaign 2016 was far from ordinary. There remain many unknowns, especially about healthcare.

Implications for Key Stakeholders

So, what does all this mean for the stakeholders in the industry—the providers of services, the intermediaries who organize networks and negotiate rates, and the manufacturers of the drugs, technologies and “stuff” we use?

  • It means the role of the federal and state oversight will change in every aspect of our businesses.
  • It means cost containment will be table stakes as margins shrink. Healthcare spending will increase, but at a slower pace. There will be winners and losers in every sector.
  • It means the line between financing and delivering care will fade as providers take on responsibility for insurance and affordability. Hospitals will become systems of health.
  • It means the gaps between health services and human services and between physical and mental health will narrow as health is redefined.
  • It means the business of healthcare will be exposed to greater scrutiny—how we operate, how we negotiate deals, how we are structured, and who wins and losers. Transparency was a prominent pledge in the Trump campaign.

Campaign 2016 is now history. President-elect Trump’s business savvy will no doubt be the underlying theme of his administration. It will be put to the test at home and abroad, and especially in our healthcare system.

 

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14 replies »

  1. “Many Trump voters just decided that his policy agenda is a better match to their views on peace, fairness, reducing inequality, uprooting corruption, standing up to corporations, and such.”

    Trump won by draining the trailer parks – white, uneducated, bitter, hateful. If those are the people you think are the future of this country then you will be disillusioned. They think they deserve the same as the rest of us without educational effort. Beer, bullets, bibles and boots – Trump’s constituency. When have Repugs ever gone against their corporate donors to help the ordinary citizen? Who orchestrated the 2008 financial meltdown that we are still struggling to recover from?

    You’re betting Trump will piss off the Dems an Repugs – not likely – K street’s not going anywhere. The extent of reverse legislation will spin your head Margalit – initial transition niceties aside.

  2. “8 years of hard left socialist policies shaped by greedy corporations paying the lobbyists ”

    LOL. That one’s a beaut. Irony-Free Zone, much? In a “free market,” the “greedy corporations” and their K Street operatives are, well, “free” to game the system in whatever way they like. We mustn’t put onerous regulations on Gucci Gulch. After all, Money is “Speech.”

  3. The disaffection and desperation I’ve witnessed “out here” in the fly-over hinterlands told me Trump would win. I had patients age 70+ who told me they had never voted before, and they registered to vote for this election, specifically to vote for Trump. When the cotton mills shut down a quarter of a century ago, your kids are on meth, and your grandkids aren’t learning to read but are wondering about what public bathroom to use, all hell breaks loose.
    I’m excited that Slavitt, Sylvia, and all the rest will be unemployed now. O-care, MACRA and other abominations will surely get a wrecking ball.

    8 years of hard left socialist policies shaped by greedy corporations paying the lobbyists have led us here. Here’s to a blank slate and to the reduction of federal intrusion. Freedom to buy the insurance you need, freedom to treat the patient as she and I both want, not as some bureaucratic has declared is the “best practice”.

    My Moet is on ice. Friends and family this weekend will be celebrating the death of leeches.

  4. We should also stop generalizing our preconceived notions about “Trump supporters”. I voted for Trump, Rabbi, and I can assure you that the “right” didn’t teach me anything, (I’m a little to the left of Bernie Sanders) and nobody else taught me to hate anybody back in Jerusalem where I grew up. Many Trump voters just decided that his policy agenda is a better match to their views on peace, fairness, reducing inequality, uprooting corruption, standing up to corporations, and such.
    I understand and appreciate that you probably mean well, but your words above are patronizing and probably as damaging as those liberals you criticize.

  5. I think there are two possibilities here: 1) Trump way of doing health care and 2) toss it over to Paul Ryan. If he goes with #1, it will be very interesting and possibly successful, but nothing like the bureaucratic mess we now call health care reform. I think we can all agree that he goes outside the box rather nicely, so nothing will surprise me here, including tossing all current nonsense (a.k.a. value-based whatever) out the window. If he goes with #2, and Congress goes along, we are doomed and so is his presidency. I think he is smart enough to avoid #2.

  6. Then there’s some contrarian Garrison Keillor:

    “So he won. The nation takes a deep breath. Raw ego and proud illiteracy have won out, and a severely learning-disabled man with a real character problem will be president. We are so exhausted from thinking about this election, millions of people will take up leaf-raking and garage cleaning with intense pleasure. We liberal elitists are wrecks. The Trumpers had a whale of a good time, waving their signs, jeering at the media, beating up protesters, chanting “Lock her up” — we elitists just stood and clapped. Nobody chanted “Stronger Together.” It just doesn’t chant.

    The Trumpers never expected their guy to actually win the thing, and that’s their problem now. They wanted only to whoop and yell, boo at the H-word, wear profane T-shirts, maybe grab a crotch or two, jump in the RV with a couple of six-packs and go out and shoot some spotted owls. It was pleasure enough for them just to know that they were driving us wild with dismay — by “us,” I mean librarians, children’s authors, yoga practitioners, Unitarians, bird-watchers, people who make their own pasta, opera-goers, the grammar police, people who keep books on their shelves, that bunch. The Trumpers exulted in knowing we were tearing our hair out. They had our number, like a bratty kid who knows exactly how to make you grit your teeth and froth at the mouth.

    Alas for the Trump voters, the disasters he will bring on this country will fall more heavily on them than anyone else. The uneducated white males who elected him are the vulnerable ones, and they will not like what happens next.

    To all the patronizing B.S. we’ve read about Trump expressing the white working-class’s displacement and loss of the American Dream, I say, “Feh!” — go put your head under cold water. Resentment is no excuse for bald-faced stupidity. America is still the land where the waitress’s kids can grow up to become physicists and novelists and pediatricians, but it helps a lot if the waitress and her husband encourage good habits and the ambition to use your God-given talents and the kids aren’t plugged into electronics day and night. Whooping it up for the candidate of cruelty and ignorance does less than nothing for your kids…”

    https://www.washingtonpost.com/opinions/trump-voters-will-not-like-what-happens-next/2016/11/09/e346ffc2-a67f-11e6-8fc0-7be8f848c492_story.html?postshare=7101478734206179&tid=ss_fb

  7. Interesting. A bit of Thomas Frank riffs there. to wit:

    “Clinton’s supporters among the media didn’t help much, either. It always struck me as strange that such an unpopular candidate enjoyed such robust and unanimous endorsements from the editorial and opinion pages of the nation’s papers, but it was the quality of the media’s enthusiasm that really harmed her. With the same arguments repeated over and over, two or three times a day, with nuance and contrary views all deleted, the act of opening the newspaper started to feel like tuning in to a Cold War propaganda station. Here’s what it consisted of:

    – Hillary was virtually without flaws. She was a peerless leader clad in saintly white, a super-lawyer, a caring benefactor of women and children, a warrior for social justice.

    – Her scandals weren’t real.

    – The economy was doing well / America was already great.

    – Working-class people weren’t supporting Trump.

    – And if they were, it was only because they were botched humans. Racism was the only conceivable reason for lining up with the Republican candidate.

    How did the journalists’ crusade fail? The fourth estate came together in an unprecedented professional consensus. They chose insulting the other side over trying to understand what motivated them. They transformed opinion writing into a vehicle for high moral boasting. What could possibly have gone wrong with such an approach?

    Put this question in slightly more general terms and you are confronting the single great mystery of 2016. The American white-collar class just spent the year rallying around a super-competent professional (who really wasn’t all that competent) and either insulting or silencing everyone who didn’t accept their assessment. And then they lost. Maybe it’s time to consider whether there’s something about shrill self-righteousness, shouted from a position of high social status, that turns people away.

    The even larger problem is that there is a kind of chronic complacency that has been rotting American liberalism for years, a hubris that tells Democrats they need do nothing different, they need deliver nothing really to anyone – except their friends on the Google jet and those nice people at Goldman. The rest of us are treated as though we have nowhere else to go and no role to play except to vote enthusiastically on the grounds that these Democrats are the “last thing standing” between us and the end of the world. It is a liberalism of the rich, it has failed the middle class, and now it has failed on its own terms of electability…”

    https://www.theguardian.com/commentisfree/2016/nov/09/donald-trump-white-house-hillary-clinton-liberals

  8. The comment section trolling and flaming is NOTHING like it was a few years back. Not even close. It’s positively sedate by comparison.

  9. via E-mail:

    Stop Shaming Trump Supporters

    It turns out that shaming the supporters of Donald J. Trump is not a good political strategy.

    Though job loss and economic stagnation played a role in his victory, so did shame. As the principal investigator on a study of the middle class for the National Institute of Mental Health, I found that working people’s stress is often intensified by shame at their failure to “make it” in what they are taught is a meritocratic American economy.

    The right has been very successful at persuading working people that they are vulnerable not because they themselves have failed, but because of the selfishness of some other villain (African-Americans, feminists, immigrants, Muslims, Jews, liberals, progressives; the list keeps growing).

    Instead of challenging this ideology of shame, the left has buttressed it by blaming white people as a whole for slavery, genocide of the Native Americans and a host of other sins, as though whiteness itself was something about which people ought to be ashamed. The rage many white working-class people feel in response is rooted in the sense that once again, as has happened to them throughout their lives, they are being misunderstood.

    So please understand what is happening here. Many Trump supporters very legitimately feel that it is they who have been facing an unfair reality. The upper 20 percent of income earners, many of them quite liberal and rightly committed to the defense of minorities and immigrants, also believe in the economic meritocracy and their own right to have so much more than those who are less fortunate. So while they may be progressive on issues of discrimination against the obvious victims of racism and sexism, they are blind to their own class privilege and to the hidden injuries of class that are internalized by much of the country as self-blame.

    The right’s ability to portray liberals as elitists is further strengthened by the phobia toward religion that prevails in the left. Many religious people are drawn by the teachings of their tradition to humane values and caring about the oppressed. Yet they often find that liberal culture is hostile to religion of any sort, believing it is irrational and filled with hate. People on the left rarely open themselves to the possibility that there could be a spiritual crisis in society that plays a role in the lives of many who feel misunderstood and denigrated by the fancy intellectuals and radical activists.

    The left needs to stop ignoring people’s inner pain and fear. The racism, sexism and xenophobia used by Mr. Trump to advance his candidacy does not reveal an inherent malice in the majority of Americans. If the left could abandon all this shaming, it could rebuild its political base by helping Americans see that much of people’s suffering is rooted in the hidden injuries of class and in the spiritual crisis that the global competitive marketplace generates.

    Democrats need to become as conscious and articulate about the suffering caused by classism as we are about other forms of suffering. We need to reach out to Trump voters in a spirit of empathy and contrition. Only then can we help working people understand that they do not live in a meritocracy, that their intuition that the system is rigged is correct (but it is not by those whom they had been taught to blame) and that their pain and rage is legitimate.

    Michael Lerner, the rabbi of Beyt Tikkun Synagogue in Berkeley, Calif., is the editor of Tikkun magazine and chairman of the Network of Spiritual Progressives.

  10. Nice initial reaction piece, Paul. Good points. However, I don’t think it’s possible to predict yet what’s going to happen in health care policy — the what, the how, the when.
    We are in uncharted political territory now, with a president who is not predictable and whose positions (with exception of ACA repeal) on health care issues have been muddled or not fleshed out.
    In the course of human events, sometimes s**t like this happens. This is a kind of revolution; a political earthquake. A giant wake-up call on the depth of disaffection and anti-establishment, anti-government, anti status-quo sentiment that’s out there.
    In coming weeks, things may become clearer, or not. And there’ll be no end of analysis on what it means and what’s to come.
    That will include here at THCB. Much of the dialogue here is constructive and useful, with sharp, insightful analysis and solid debate. But like elsewhere in our culture and politics over the last couple years, I’ve found more ideologically driven partisanship and anger-driven posts and comments creeping in (especially the comments). IMHO, that just makes THCB another place on the web for troll-like complaints and rancor and ugliness (which eventually alienates purposeful people).
    At this unprecedented political and social turning point I’d suggest we become part of the solution/ antidote to hyper-partisanship and divisiveness….with more emphasis on constructive (maybe even bipartisan) ideas about how we might make progress towards better medicine and a better health care system. That doesn’t mean a stifling of debate–that’s impossible. Rather it means bringing more dignity and magnanimity to the dialogue.

  11. Things are about to get very interesting …

    1. Where will repealing and replacing the ACA be on Trump’s list of priorities? Blowing up the law has high symbolic value for opponents. Trump clearly gets symbolism. Expect a concerted effort to repeal and replace Obamacare to be at or near the top of Trump’s list.

    2. To say that Trump has no ideas is silly. He has ideas. Unsurprisingly, his opponents dislike them. During the reform process, it is logical to assume that Trump will continue to behave in the same ways he did as a businessman and during his insurgent campaign for the White House. Expect Trump to ignore the experts and to dismiss the conventional wisdom. You can also expect him to change course frequently when he doesn’t like the results he’s getting. So yes, we’ll get ideas and lots of them. Those ideas will certainly include: some good ideas, some bad ideas, some very bad ideas, some half-baked ideas, as well as a remarkably common-sensical ideas you’ll wish somebody had come up with earlier. What will that all mean? It’s too early to tell. Much will depend on who Trump listens to.

    3. What does the shift in Washington mean for value-based care? What about the consolidation trend in healthcare? If Trump’s position on the AT & T – Time Warner deal tells us anything we may see antitrust action against large healthcare systems …

    4. Trump says he is looking for new ideas. In America, this generally means the tech industry. Will we see more innovation? Different innovation?

    5. People who invested heavily in the Affordable Care Act are in a very uncomfortable position right about now. They will be looking to reposition themselves and minimize their losses. What does that look like?

    6. Come January, there will be an exodus of talent from government healthcare. Much of that talent will end up in the private sector. Will this mean that business will embrace the ideas behind value-based care? Or are we about to see a backlash against many of the ideas at the center of the Affordable Care Act (measurement, quality + value, managed care?) As I said at the beginning of this comment, this is going to be very interesting to watch.

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