The Future of Healthcare Reform Under President Trump

One of president-elect Donald Trump’s core campaign promises was the repeal of the Affordable Care Act (ACA), so it is only natural that executives, providers, payers and policy analysts have questions about the possible direction of healthcare reform under his leadership. The new administration has already sent out strong signals of its intent with the appointments of Tom Price, M.D., as secretary of Health and Human Services and Seema Verma to head the Centers of Medicare and Medicaid (CMS).
 
Based on what we know today, here are three ways I expect the Trump presidency to affect healthcare reform:
 
Regardless of who is in charge, healthcare costs must be reduced
 
The 2016 Medicare trustee’s report projects that the Medicare Trust Fund, used to cover 55 million Americans, will be insolvent by 2028—two years earlier than estimated in the 2015 report. The Trump administration’s proposals will have to be at least cost neutral to the ACA. Value-based care initiatives, like bundled payments, are the undisputed rising stars of healthcare reform with strong data proving that alternative payment models provide higher quality of care at lower costs. Bundled payments are valuable for offsetting future, more experimental reforms.
 
Medicaid will be a core focus for this administration
 
Medicaid enrollment grew by 15 million people from October 2013 to June 2016, making it the most prevalent way the newly insured access coverage under the ACA. This means changes to Medicaid are high stakes as they will affect the largest swath of voters who benefited under the ACA.
 
Currently, Medicaid expansion is at the discretion of the states. Seema Verma worked with former Gov. (now vice president-elect) Mike Pence to design a Medicaid expansion program that would be accepted by the conservative majority in Indiana. The Healthy Indiana Plan 2.0 (HIP 2.0) requires enrollees to make a small, income-based payment to access health insurance. The plan also includes a health savings account-like register called a POWER that participants use to pay their first $2,500 of medical expenses. Verma’s plan is designed to make participants treat health expenses with discretion by requiring them to contribute small amounts to their POWER accounts and giving them the ability to roll over unused funds.
 
This design is being used as a template for Medicaid expansion programs in other conservative states like Kentucky, Iowa, and Ohio. Given the direction of U.S. Rep. Paul Ryan’s plan to increase state control over Medicaid, it is likely that plans that resemble HIP 2.0 will be approved.
 
Bundled payments will continue their rollout, but new bundles may be rolled out differently
 
The general consensus is that Price, being an orthopedic surgeon himself, will be sympathetic to physicians. On March 23, 2016, Price introduced a bill calling for the delay of the start of the Comprehensive Care for Joint Replacement (CJR) bundle from April 2016 to January 2018. Moreover, Price co-authored a letter to acting CMS Administrator Andrew Slavitt protesting what he regards as an overreach by the Center for Medicare and Medicaid Innovation group (CMMI) to make programs like CJR mandatory for large groups of providers.
 
It is important to note that Price has never disagreed with bundled payments as a cost-cutting solution. Rather, his dispute is with the speed and scale at which CMS made them mandatory. Price is expected to be confirmed at the tail end of year one of CJR. This confirmation will be too late for making significant changes to the program without throwing a monkey wrench into years of industry planning. In fact, hospitals are already investing in products like PeerWell, that improve patient self-care before and after joint replacement surgery and help control costs under the bundled payments model.
 
Expect some of the federal power in healthcare to dissolve as individual states gain more control over their Medicaid expansion. Also, brace for changes in the ways other bundled payment models roll out over the coming months. The tides are changing, but the goals for healthcare reform and policy makers remain the same.

** The author is a former acting administrator of the Center for Medicare and Medicaid Services.