The presidential election is top-of-mind for many health systems and will continue to dominate headlines through the transition of administrations. President-Elect Donald Trump campaigned on a repeal and replacement of the Affordable Care Act (ACA). The question that many of us are asking is: what does this mean for healthcare providers? Going forward, what can we as providers in the acute, ambulatory and post-acute sectors expect from the now Republican-controlled executive and legislative branches? I have a few thoughts.
Over the next four years and beyond, the White House and Congress must address rising healthcare costs. Payment reform is inevitable for the following reasons:
- The U.S. is facing significant cost pressures as the Baby Boomer population ages into Medicare, with the Medicare Trust Fund projected to run out in 2028 at the current rate of healthcare spend.
- U.S. healthcare spending continues to drastically outpace GDP.
As such, there has been and will continue to be bipartisan support for healthcare payment reform. Most recently, MACRA, which creates strong incentives for physicians to manage quality and cost outcomes of their patient populations was passed with broad Democratic and Republican support.
The shift from Fee-for-Service (FFS) to Value Based Payment (VBP) is ultimately a cost-management measure that is necessary for the continued solvency of Medicare. While how programs are developed and implemented may change under new leadership at Health and Human Services, the general tide won’t roll back. Further accelerating the shift to VBP models is the development of alternative quality contracts by commercial plans. Providers are taking on commercial risk in the form of ACOs and bundles similar to Medicare models. Therefore, health systems and physician groups are financially incentivized to continue to develop delivery models that focus on managing patient cost and quality outcomes across episodes of care.
In the coming years, it remains to be seen what happens to features of the ACA such as Medicaid expansion and the individual mandate, among others. What most healthcare experts agree is here to stay, though, is healthcare payment reform. The shift to value-based payment models will continue across all payer types out of necessity given looming demographic shifts and rising healthcare costs.