The forecast for healthcare finance in 2017 hinges largely on the fate of Obamacare, a couple of anti-trust cases, and a new law that relaxes oversight on drug and device makers.
1. MACRA
In 2017, federal officials will start implementing the new Medicare payment system for clinicians. Next year's rollout of the Medicare Access and CHIP Reauthorization Act features voluntary performance-category reporting for the main MACRA payment pathway—the Merit-based Incentive Payment System (MIPS).
CMS Offers Physicians QPP Prep in Advance of Transition
Mandatory MIPS reporting begins in 2018. Full implementation of MACRA—the successor to the reviled Sustainable Growth Rate payment system—is set for 2019.
Kyle Wilcox, MHA, vice president of finance and business development at Grinnell Regional Medical Center in Iowa, says MACRA poses daunting challenges for rural healthcare providers. "Small, rural practices need result-oriented rules that don't hinder them from taking care of patients. Paperwork and reporting timelines simply add to the reasons why rural America doesn't have enough providers."
2. Obamacare's Fate
Ira Wilson, MD, professor of medicine at Brown University in Providence, RI, says the stakes are huge as President-elect Trump and Republicans in Congress plan to repeal and replace the Patient Protection and Affordable Care Act.
"Consider as an exercise the extreme case: Full repeal, with little or no replacement, or repeal and delay. First, some 20 million Americans stand to lose their health insurance. It is hard to imagine the chaos and suffering that such a scenario would cause in the lives of our friends and neighbors."
"It is easy to forget that every dollar not spent on healthcare is a dollar of revenue that some provider does not get. So providers of all kinds—from nurses, to physicians, to hospital systems—will all experience dramatic falls in revenue, which will lead to layoffs. When this is 18.8% of the economy—about $3.2 trillion dollars—the kinds of changes that we have to consider have far-reaching consequences," he says.
Lynn Guillette, vice president of finance for payment innovations at Dartmouth-Hitchcock Health in New Hampshire, says the collapse of Medicaid expansion under Obamacare would rock The Granite State.
It "would result in a significant increase in uncompensated care costs for the state's hospitals and physician practices. While these moves may result in 'savings' at the state and federal levels, these costs would simply be shifted to the provider and lower-income individuals," she says.
3. Defining Value
Eugene Nelson, DSc, MPH, a professor at Dartmouth College's Geisel School of Medicine and director of the Population Health Measurement Program at The Dartmouth Institute for Health Policy and Clinical Practice, says perfecting methods for measuring value looms large in 2017.
"There will be continued movement toward paying for value over paying for volume, but what practical and sufficiently accurate measures can be used to measure value?"
"There will need to be a 'set' of value measures for general populations (e.g., adults or children in primary care populations) as well as for high impact sub-populations (e.g., children with asthma, older adults with multi-morbidity, people undergoing total joint replacement). Co-designing and testing 'sets' of value measures that reflect the interests of patients, clinicians, payers and policy makers is an activity whose time has come," he says.
4. Payer Consolidation
With the $37 billion Aetna-Humana and $48 billion Anthem-Cigna mergers both enduring federal anti-trust trials this month, rulings on the cases next year will likely set the commercial-payer stage for many years to come.
The commercial-payer market is already concentrated to a handful of players, including the country's largest for-profit payer, UnitedHealthcare. If the megamergers withstand the federal court challenges, three mega-payers could establish dominant market shares.
5. Prescription Drugs and Medical Devices
During the wave of healthcare reforms under the Obama administration, the pharmaceutical industry was one of the only stakeholders in the industry spared significant belt-tightening or regulatory changes that upended the market playing field.
Next year, drug makers have the potential to seize new opportunities even as criticism over drug pricing mounts.
This month's enactment of the 21st Century Cures Act is seen by patient advocates as a boon to pharmaceutical companies, which stand to benefit from provisions that ease regulatory oversight of drug and device makers.
PhRMA, the industry's trade organization, lobbied for the bill and applauded its passage.
Christopher Cheney is the CMO editor at HealthLeaders.