Health 2.0

So what does Trump mean for new health tech?

Matthew-Holt-colorI’m a pundit who like everyone else was surprised by Trump’s victory in the (profoundly undemocratic and hopefully-to-be-abolished-soon) electoral college, and everything I say here is prefaced by the fact that there was very little discussion of healthcare specifics by Trump. So there’s no certainty about what will happen–to state the obvious about his administration!

What we do know is that Trump said he’d repeal & replace the ACA and the House has voted to repeal it many times (but the Senate has only once & Obama has always vetoed that repeal). A full and formal repeal requires 60 votes in the Senate which it won’t get with the Democrats holding 48. Note that the Democrats needed 60 votes to to forestall a Republican filibuster in order to pass the ACA in 2010. That 60 vote total is a very rare state of events which existed for only only one year–from Jan 2009 until Scott Brown won Ted Kennedy’s old seat in Jan 2010 and one we likely won’t see again for many years.

But this doesn’t does not mean things will continue as usual for two reasons. Congress can change the budget with the Republican 52 seat Senate majority, and the Administration can change regulations and stop enforcing them. So we have to assume that the new Administration and its allies(?) on the Hill will roll back the expansion of Medicaid which was responsible for most of the reduction in the uninsured (even if it didn’t happen in every state). They’ll also reduce or eliminate the subsidies which enable about 10m people to buy insurance using the exchanges. Both of those were in the repeal bill Obama vetoed, although in the bill the process was delayed for 2 years.

This of course may not happen or may be replaced by something equivalent because many of the people who voted for Trump (the rural, white, lower-income voters) fall into the category of those helped by the law, and in a few of his remarks he’s also said that he’ll be taking care of them. Even this week Senator Wicker (R-Mississippi) said that they weren’t going to take away 20 million people’s insurance. In Kentucky which went from a Democratic to Republican governor 2 years ago, the new administration ended their local exchange (from 2017), but in fact not much consequential happened as people were sent to the Federal exchange. If there are changes to the exchanges and the individual mandate or they’re both abolished, there’ll be lots of commotion but it won’t be completely system changing.

My day job at Health 2.0 involves running a conference and innovation program based on a community of companies using SMAC technologies to change health care services and delivery–either by starting new types of health care services or selling those technologies to the current incumbents. So I’m acutely interested in what happens next, albeit somewhat biased about my preferences!

Overall I think that (unlike many other areas of American life) health care technology won’t be that greatly affected. 

There are a few reasons for this. First, the insurance part of ACA only covers 20 million of the 325 million Americans (fewer than 10%). The vast majority of the rest get their insurance from an employer and the rest get it from Medicare (over 65) or Medicaid (low income). There may well be changes to those programs but they’re not going away. What we will see is the continuation of a market trend that the ACA actually turbocharged, which is the transition to high-deductible insurance plans, meaning more people are responsible for spending more of their income directly on their health care. That will result in an even more market/cash-driven system for the vast majority of households who spend less than $10,000 a year on care. This will increase the already growing the trend towards using technology for things like remote doctor visits, new types of care delivery organizations (retail clinics, second opinions online, direct primary care), transparency tools around pricing, and remote diagnosis tools. I expect to see a continued uptake of those types of tools and services.

Second, the big fillip the ACA gave the health technology sector in recent years was in two parts. One was actually not part of the ACA but was the $32 billion in government subsidies in the 2009 Recovery Act paid out to doctors to install EMRs. That money is already spent and again most health systems are looking for the next thing. The “next thing” is technologies to overlay those EMRs, in particular to deal with their recent integration of inpatient and outpatient services created in part due to their growing need to manage “population health” (sorry, there’s no better phrase for that yet!).

The second booster part (which was in the ACA) was the change in how Medicare pays doctors and hospitals–usually tagged in powerpoint as “from fee to service to fee for value.” That transition is being followed by nearly all private insurers and employers who buy care directly for their employees. When they hear the term “Obamacare” I doubt many red-meat-eating frothing-at-the-mouth Trump fans are much concerned about (or understand) that transition.

What’s more, almost all of those new initiatives in how Medicare will pay (bundled payments, ACOs, alternate payment models et al) have been codified and regulated in the MACRA legislation which was passed last year with bipartisan support by the Republican Congress and signed by Obama. It’s hard to see a lot of change happening to that legislation or indeed much appetite to go back and revisit it. There is lots of complexity in this overall payment transition which includes huge opportunities for tech companies because there are still lots of needs for providers. In particular everyone is going to be focusing on health outcomes for patients, and both the changes required to make those improvements (like remote tracking & telehealth) and the analytics required to measure it will require technology.

Thirdly, insofar as we can see a clear agenda for Trump, job creation will be one of the highest priorities. When he looks at the electoral map and overlays his support base with the number of jobs in rural hospitals across America (jobs that have increased in recent years) it’s going to be very hard for him and the Republicans to allow the cost-cutting implicit in the ACA repeal that the stock market is expecting–even though fear of that cost-cutting has been reflected in the extremely rough week for-profit hospital stocks have had!

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On the other hand, while the health technology sector isn’t a huge jobs engine, it is one that provides decent jobs and many of them are away from the coasts and are connected to hospitals–which again are hard to export. No question that we are seeing many cities and states coming to Health 2.0 trying to attract companies to fuel job growth (yes, we help with that too!), so again it’s hard to imagine a big shift away from improving the use of technology as a means to improve health care.

In summary, there’s relatively little in the world of health technology that affects or is affected any likely changes to the ACA. But the overall system change impacted by technology and the need to combat cost increase will continue. I’m relatively comfortable that the day jobs for people in the health tech community are safe.

I just wish I could say the same for the rest of American society and the world.

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23 replies »

  1. Great piece! (actually, it’s depressing) The filibuster/60 vote threshold may not stop repeal efforts — expect GOP to use budget reconciliation process to repeal instead — only need simple majority, once a budget is passed. GOP will charge that Democrats used reconciliation to pass the ACA – which they didn’t (they broke a filibuster with 60 votes;) they only used reconciliation in a subsequent bill for budgetary tweaks. Hopefully reason (and maybe a little reform) will prevail — we’ll see.

  2. Can you point me to where I was discussing France? You can’t. That means you are fabricating a storyline because you have no better arguments. Play fiction writer with someone else.

    We have a Constitution that defines all these things we are talking about and we have an amendment process. You don’t like it? Change it legally. That is the way things should be done. Are you one that prefers to change things illegally and by force?

  3. So let me get this right. The other nations that have direct Presidential elections yet separate parliaments than can have split governments between different parties like say France, are communist totalitarian hell holes, and we are saved from that fate by the glory of God, the 2nd amendment and the Electoral College–set up to explicitly over-value the votes of slave owners. Thanks for setting me straight!

  4. Though your response is saying little to nothing I note you point right to the Constitution so you know it exists. But, that is the point. Without that constitution you point to, democracy can lead to 51% enslaving the other 49%. You might think it juvie stuff, but if you do it means a lack of understanding on your part.

  5. See Article III. Seriously? Don’t try that juvie stuff on me. The federal judiciary are primus inter pares. They exist because not EVERYTHING is subject to the plebiscite du jour. It’s right THERE IN the Constitution.

  6. Matthew, I certainly know what collectivism is though I might not know what you are. In another posting you made a comment about what you believed calling yourself an admitted whatever which sounded like a type of collectivist. I’ll let you define whatever you are, but if you can figure out the post I am referring to you can let me know and I can go there to refresh my memory.

    You are right, when enterring the sovereign nation of the United States your passport says America, but if we look at your drivers licensce it will say California. That is known as the division of power.

    The Constition was a voluntary agreement, a compromise, between the states. I could better understand your position if perhaps you were an anarcho libertarian, but you would be one of a few that would hold little power in a pure democracy. You can, of course, push for a Constitutional amendment or attempt to succeed from the union.

    Following the Constitution is rational government at its best. Of course I understand some would like to rid the nation of that pesky Constitution and have a pure democracy as long as they are in control.

  7. Maybe they deserve the guided thrones or maybe not, but Hillary certainly deserves bars along with a ball and chain.

  8. Bobby, a chicken and two wolves vote and the wolves vote to eat the chicken. It is the vote that is denying freedom to the chicken.

  9. “I heard a story I don’t know if true”

    Which, meeting the Cardinal criterion, automatically makes you a leading contender for Trump® Press Secretary.

  10. Allan. you clearly dont know what a collectivist is (Stalin/Mao). I’m not in favor of the state owning all means of production. I am in favor of having a rational national government. My passport doesn’t say “California” it says “America” yet it appears that those whose passports come from Michigan, North Carolina Florida et al, have a much higher value as Americans than I do

  11. Of course you think that way. You are an admitted collectivist and that requires a big state with big guns to make everyone follow the leader.

  12. Bobby, if democracy is not controlled 51% could literally vote the other 49% into slavery. You know better. That is why we are a constitutional republic that protects the rights of the people and the states. You also know your history that some of the most important founders preferred a monarchy to a democracy.

  13. Everyone that wanted to was able to vote. In fact I am sure even some of the dead voted for Hillary. I heard a story I don’t know if true that in Virginia 60,000 felons were pardoned and were then able to vote. Hillary, according to the story, won by about 60,000 votes. Is that because like minded people stick together so the felons chose the biggest crook?

    For all you know the none votors if pushed to vote might have voted for Trump. But we understand how the left likes to count votes and it isn’t pretty.

  14. “You are one of those that believes 51% can enslave the other 49%.”

    Looks like 25.5% can enslave 72.5%

  15. “You are one of those that believes 51% can enslave the other 49%.”
    __

    I always love this one. Democracy = “Slavery.” Having to defer to law (and subsequent regulation) is “slavery.” Because Freedom.

  16. “I happen to believe in Democracy which across the world is defined as one person one vote.”

    That’s fine. You are one of those that believes 51% can enslave the other 49%. That is democracy.

    Of course you present of a lot of extraneous material that is totally meaningless and there just to hide the fact that we are a republic and that democracy by itself is a horrible type of governing system. That was recognized by the ideas of those you would like to call outmoded , but tell me kind sir, what else does a a vote of 51% mean?

    That is why we are a constitutional republic and that is why there is an amendment process to manage these flash in the pan ideas so often presented by otherwise intelligent folk.

    “I guess you think Sharia law is fine too….”

    No, that goes against our Constitution, but that type of system would be fine by you as long as 51% of those that vote, vote for Sharia.

  17. I’d be happy to see states abolished in terms of much of their role. They dont make much sense as administrative units, their impact on the nation’s democracy is toxic (via the Senate and the Electoral College), and 80% of the time “states rights” is used as a smokescreen to oppress some underprivileged minority. I have not problem fully federalizing Medicare, medicaid & the ACA

  18. You may choose to believe that we should live by an outmoded 240 year old political compromise created when there was no modern communications system, and designed to accommodate the interested of slave owners. I happen to believe in Democracy which across the world is defined as one person one vote.

    You know perfectly well that the structure of the Senate and the states, while outmoded and irrelevant to modern world, prevents significant change in the constitution, and will lead America into irrelevance over the balance of this century.

    On the other hand, there are plenty of people living under the rule of outmoded documents elsewhere in the world. I guess you think Sharia law is fine too….

  19. “…(profoundly undemocratic and hopefully-to-be-abolished-soon) electoral college,…”

    We are not a democracy nor did the founders wish us to be a democracy. We are a Constitutional Republic and have had a mechanism for abolishing the electoral college for over 200 years, a constitutional amendment. Moreover, this question was considered when the Constitution was written. Read the Federalist and anti Federalist papers. The intention was that the federal government would have specific functions and the rest would be left to the states and the people. A great deal of power has been usurped by the federal government, but the electoral college provides smaller states a bigger voice. That was the compromise made at the time this nation was founded. The electoral college until amended is part and parcel of our Republic. The victory of Trump is totally fair and exactly the way intended.

  20. “…because many of the people who voted for Trump (the rural, white, lower-income voters) fall into the category of those helped by the law,”

    This group has a history of voting against it’s best interests – better guns than health care.

    “Even this week Senator Wicker (R-Mississippi) said that they weren’t going to take away 20 million people’s insurance.”

    Yes, from the State that strives to be last in everything – except religion.

    http://khn.org/news/how-obamacare-went-south-in-mississippi/

    Trumpland – where hate and ignorance is popular again.

  21. The abolition of the electoral college means the abolition of states. That happens with the Constitution being abandoned. All institutions of the former Republic would be gone…Medicare, Medicaid, ACA…all acts of the former Congress. Care to start over with that string of nonsense?

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