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Beyond 'Repeal and Replace,' Further Health Reforms Loom

Analysis  |  By Philip Betbeze  
   January 05, 2017

The changes will not be immediate or drastic, observers say. But they are coming.

The old saying, "May you live in interesting times," may sound like a blessing.

U.S. healthcare leaders know it is a curse.

All they've been working toward and preparing for since the Patient Protection and Affordable Care Act was enacted almost seven years ago has been turned upside down in the wake of the Republican election sweep.

Yet, for all their campaign promises to repeal the ACA, most congressional Republicans and President-elect Donald Trump must know that healthcare costs are too much for many Americans, and abolishing Obamacare with no replacement could be politically dangerous.


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A report from consulting firm KPMG and an opinion piece published on LinkedIn by a Navigant executive predict that the Republican Congress and the executive branch will change the healthcare reform efforts initiated through the ACA, but the concept of value-based care will stay.

Changes Will Be Gradual
The report and the LinkedIn piece also agree that changes to the ACA itself could come more slowly than recent election-season rhetoric would suggest.

Republicans in Congress won't want to unravel the law in a chaotic fashion, given the possible problems in coverage that could result from a blanket repeal—and possible political consequences during the 2018 elections.

That means drastic, immediate changes are likely off the table.

It's likely the executive branch will weigh in most quickly, with Congress looking for areas of bipartisanship, says S. Lawrence Kocot, who leads KPMG's Center for Healthcare Regulatory Insight and was an advisor to the CMS administrator during the George W. Bush administration.


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The Trump administration may quickly move to relax certain regulatory requirements of the ACA through Executive Order or regulatory guidance (non-enforcement).

Kocot expects, however, that value-based reform efforts, in the form of alternative payment models, will continue to proliferate, driven by the Medicare Access and CHIP Reauthorization Act and its Medicare Quality Payment Program.

Whither the CMMI?
The Navigant and KPMG analyses differ on the fate of the Center for Medicare and Medicaid Innovation, an incubator for Medicare demonstration programs such as the Comprehensive Joint Replacement Model and the Part B Drugs Payment Model, which Medicare officially dropped just before Christmas.

CMMI's other mandatory demonstrations are still active—at least for now. Kocot speculates that Republicans might defund the CMMI to kill it without legislation, but they could leave other payment reform initiatives alone.

"The vehicles for payment reform may change, but the demand for greater innovation in payment and delivery is not likely to decrease as a result of changes in leadership," he says.


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On the other hand, Navigant's 2017 Healthcare Outlook analysis argues that CMMI might have a purposes in the new administration.

Instead of killing the CMMI, Republicans may instead use it to drive reforms, says Rulon Stacey, the author of the LinkedIn article. Such value-based models as bundling and MACRA, which have bipartisan support, aren't tied directly to the fate of the CMMI.

The results from such programs may be difficult to resist. One Medicare bundling participant showed a 20% reduction in Medicare payments, while also reducing patient length of stay and readmissions.

Besides that, Navigant's analysis of Medicare data shows that close to half of the nation's hospitals already participate in a Medicare-based ACO or bundled payment program.

Focus on the Certain
Regardless of the mechanism for reducing healthcare costs, hospitals and health systems should "stay the course" in pushing toward value, Stacey says. Targeting variation and increasing standardization by more closely following evidence-based protocols will pay off.

Hospitals and health systems should also seek efficiency through medication reconciliation and adherence initiatives. Use of medical data to engage surgeons on clinically equivalent, but cheaper, implants and medical devices will also yield results, Stacey adds.


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Focusing on value is worthwhile under any regime, says KPMG's Kocot. He suggests hospitals and health systems adopt more consumer-facing business models because of the unrelenting trend toward increasing patient cost-sharing.

That trend, which also does not depend wholly on government action or inaction, will drive largely cost-based decisions about where and how both healthcare services and insurance coverage are procured and delivered.

Interesting times, indeed.

Philip Betbeze is the senior leadership editor at HealthLeaders.


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