Trumpcare Beta: mHealth, MACRA and ACOs

While readers digest the reality of a Trump Presidency and Republican control of both houses of Congress, your correspondent has been trying to assess the “down ballot” implications for healthcare and mHealth providers.

While the universe has been turned upside down, its initial reaction for mHealth is bullish. As for the rest……. read on.

While he was a wacky campaigner, your correspondent suspects that Mr. Trump’s “campaign promises” were really opening negotiating positions. While immigration, the Supreme Court and business regulatory reform will be top of mind, he’ll eventually get around to making deals in the healthcare space, because that is his nature. That is the real wild card and increases uncertainty.

That being said, what can your correspondent predict?

Given Mr. Trump’s and the Republican majority antipathy to Obamacare, the Affordable Care Act is likely to be gutted. While U.S. Senate Democrats can create mischief with the filibuster, many are also up for election in two years. As a result, commercial insurance premium subsidies, the minimum benefit, the IRS penalty and ACOs are toast.

Because it’s working pretty well, your humble correspondent rates it as unlikely that Congress will alter the basic underpinnings of fee-for-service Medicare and the Medicare Advantage programs. Unfortunately, however, that also means that the complex reporting and payment changes of MACRA – and its premise of “value-driven” Medicare – will stay on track.

According to The Washington Post, more of the federal support of Medicaid will transition to block grants. Your correspondent suspects that when the budgeting is done, the Republicans will trade greater local leeway for less money. It remains to be seen how states will respond by altering eligibility requirements.

So, over the short term who wins and who loses?

Patients lose – but slightly: those who are outside of Medicaid, many of them will buy skinnier coverage or not buy any commercial insurance. While that will mean that many will forego needed medical care, Obamacare’s deductibles were already leading in that direction. Those in Medicaid will find their healthcare coverage dependent on their state’s fiscal priorities; on the other hand, many Governors will fight to do the right thing. Medicare patients will do OK. The good news is still that if anyone shows up at 3 AM with motor vehicle trauma, the system will still take care of them.

Hospitals/Inpatient Service Providers lose and a lot: Without premium subsidies, more persons will forego commercial health insurance, and Medicaid will have less money. Since a lot of inpatient healthcare utilization is preference insensitive, that means more bad debt and deeper fee schedule discounts. By the way, interest rates are destined to rise, making hospital debt more expensive. They’ll consolidate, and a pro-business climate in D.C. may make this easier.

Physicians neutral: while physician incomes will also be buffeted by more bad debt and deeper Medicaid discounts, your correspondent suspects a critical mass of docs were increasingly disenchanted with Obamacare and its impacts on their professionalism. While policymakers and organized medicine groups (such as the AMA) may argue that this is a Pyrrhic Victory, all of this will be overshadowed by the top line impacts of MACRA, which is not going away. This will quickly eat up the docs’ bandwidth. They’ll continue to consolidate into larger groups, but away from hospitals, which can no longer afford them.

Organized Medicine loses: the AMA and many of its sister organizations supported Obamacare and stayed inside the Beltway Bubble. Eight years later, those chickens are coming home to roost. They now have to choose between being part of a new solution or being a member of the loyal opposition. Both are unpalatable.

Health Technology/mHealth wins: patients will look for tech solutions that offer faster, cheaper or better care that include, for example cloud-based guidance for diabetes control, remote provider advice web sites and home telemonitoring. To the degree that it offers a substitutive level of care, insurers will gladly pay for it, and since there are revenue opportunities for providers, they’ll pay for it too. A pro-business posture in Washington DC, a focus on other healthcare issues and less regulatory overhang means that apps, devices, gadgets, big data, The Cloud and SasS will continue to expand. The future remains bright for companies like MedSolis.

Long term? This depends more on the economy. If it can return to 3% growth and if the labor participation rate increases, more persons will be able to afford housing, transportation, education and healthcare.

Jaan Sidorov, MD blogs at the Population Health Blog and is an advisor for mHealth firm MedSolis.

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1 reply »

  1. Not sure it’s as cut and dried as Jaan says, but I I do know that the term mhealth was over in 2009…. time to move on Jaan! SMACK Health it is!