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3 political issues for hospitals to watch in 2018

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3 political issues for hospitals to watch in 2018

Hospitals and health providers suffered minimal damage in this year’s political collision over Obamacare. But 2018 will bring a series of equally high-stakes debates that will affect the financial viability of hospitals and the future of how care is measured and delivered.

And by the way, the war over Obamacare is hardly over — it’ll start up again next year with proposals to stabilize insurance markets and renewed GOP repeal efforts.

Here are some additional issues to watch:

Redefining value

The Trump administration is promising to set a new course for medicine’s value movement. Seema Verma, the chief of Medicare and Medicaid, is evaluating proposals for ways to link government reimbursement to patient outcomes. She is moving away from the mandatory payment programs created under President Obama — in which hospitals received lump sum payments for repairing fractured hips and other services — in favor of voluntary models with more flexible arrangements created by doctors and hospitals.

Greater leeway from the federal government might make it easier for hospitals to experiment with novel ideas, like pushing for new payment arrangements in specialty areas such as gastroenterology, behavioral health, and cancer care. But the additional flexibility could also take the teeth out of reforms and fatten providers’ margins without delivering corresponding cost and quality benefits.

It is unclear when the Trump administration will unveil its plans for new payment programs, but keep an eye out for news in the first half of 2018.

Medicaid, Medicaid, Medicaid

The federal program that provides care for the poor and disabled will remain a Republican target next year. The prospects of sweeping federal legislation appear dim, with strong Democratic opposition against a razor-thin GOP majority in the Senate. But the Trump administration may cut the program anyway, by giving states more flexibility to reshape their programs. That could mean swift approvals of popular GOP reforms, such as work requirements and premium-like payments by beneficiaries.

The implications couldn’t be bigger for providers, or their low-income patients. The underlying goal of these efforts is to reduce enrollments in the $500 billion program, an outcome that would increase uncompensated care and financial instability for struggling hospitals and households. But Republicans argue that cuts are necessary to keep federal spending in check and free states from mandates that are crowding out other budget priorities. That clash of interests will generate skirmishes across the country in 2018.

FDA regulation of medical technology

The Food and Drug Administration is redefining what it means to be a medical device in the digital age — a process that will have implications for the health care facilities that are the primary purchasers of such devices.

The FDA recently proposed streamlining the regulation of many health software products. The move will broaden providers’ arsenal of digital tools, such as decision support programs that helps doctors detect and respond to infections or diagnose rare diseases.

However the agency did not take a firm position on machines that rely on artificial intelligence, an area poised to generate plenty of debate in coming months. Products like Watson, IBM’s supercomputer, still fall in a regulatory gray area, as do others that rely on algorithms whose inner workings are shielded from users.

The key question is this: Should the FDA require companies to prove their products deliver safe and effective advice, or can they unleash these machines in health care with minimal oversight?

 

The uninsured are overusing emergency rooms — and other health-care myths

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https://www.washingtonpost.com/news/wonk/wp/2017/12/27/the-uninsured-are-overusing-emergency-rooms-and-other-health-care-myths/?utm_term=.98d00c3511a6

In the search for ways to bring down American health-care spending, there are certain ideas that are close to dogma. Chief among them: If you provide health insurance to people, they will stop overusing the emergency room.

“A lot of people just didn’t bother getting health insurance at all. And when they got sick, they’d have to go to the emergency room,” President Obama said in a 2016 speech. “But the emergency room is the most expensive place to get care. And because you weren’t insured, the hospital would have to give you the care free, and they would have to then make up for those costs by charging everybody else more money.”

The idea that uninsured people are clogging emergency rooms looks more and more like a myth, according to a recent study published in Health Affairs. Uninsured adults used the emergency room at very similar rates to people with insurance — and much less than people on Medicaid. Providing insurance to people can have many benefits, but driving down emergency room utilization doesn’t appear to be one of them.

 

Medicaid is GOP target in 2018

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http://thehill.com/policy/healthcare/366728-gop-could-push-medicaid-cuts-in-2018

Image result for medicaid target

Medicaid could face crucial tests in 2018 at both the federal and state levels.

Republicans in Congress failed in their attempts earlier this year to impose drastic cuts to the program as part of ObamaCare repeal, but GOP lawmakers could try again next year.

The tax bill that President Trump recently signed into law is projected to add $1 trillion to the federal deficit, making cuts to Medicaid an even more tempting target for some conservatives.

“Medicaid is front and center in any budget exercises, and now that deficits have increased, it puts Medicaid squarely in the bull’s-eye,” said Joan Alker, the executive director of the Georgetown University Center for Children and Families.

Speaker Paul Ryan (R-Wis.) has said he wants to bring down entitlement spending, saying in December that “health-care entitlements such as Medicare and Medicaid are the big drivers of debt.”

Any entitlement cuts from Ryan will likely face pushback from members of his own party, including Senate Majority Leader Mitch McConnell (R-Ky.). McConnell has said he doesn’t expect to see entitlement reform on the agenda next year ahead of the midterms.

“The sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result,” McConnell told reporters in late December.

Medicaid covers nearly 75 million people, and the program has proven resilient in the face of conservative opposition.

Cindy Mann, a consultant at Manatt Health who ran Medicaid under former President Obama, said attacks on Medicaid have made it more popular.

“Medicaid has always been supported by the people closest to it,” Mann said.

Some Republican senators have recognized the political risks of Medicaid cuts, too. The GOP’s ObamaCare repeal push failed in part because of senators opposed to the Medicaid cuts.

“The Medicaid program is starting to get a politically powerful status,” said Eliot Fishman, the senior director of health policy at Families USA, an advocacy group.

Fishman noted that Maine, Arizona and Alaska are all Medicaid expansion states represented by Republican senators who have shown a willingness to protect the expansion funding.

Over 16 million people have enrolled in Medicaid since states began expanding coverage under ObamaCare. The program could continue to grow in the near future, as more states could seek to take advantage of the additional federal money offered by the health law.

Future Medicaid expansions could be especially likely if a Democratic wave in November’s midterms gives Democrats control in more statehouses.

In Virginia, Gov.-elect Ralph Northam (D) has promised to expand Medicaid, something Democrats in the state have been unable to accomplish in the last four years in the face of a GOP-controlled legislature. But with a 50-50 split in the House or even a 51-49 Democratic minority, depending on the results of a recount, Northam has much better odds than current Gov. Terry McAuliffe (D).

In Maine, voters approved a ballot initiative allowing the state to expand Medicaid. Gov. Paul LePage (R) has refused to implement it, but a new governor replacing LePage after he leaves office in the face of term limits could be more willing to accept the results.

If even a few more states choose to expand Medicaid, “it starts to get to be enough critical mass nationwide that I would hope it just makes it a permanent part of the Medicaid program,” Fishman said.

But advocates worry that unprecedented flexibilities offered by the Trump administration will allow states to completely change the nature of Medicaid.

Administration officials have said they will allow governors to add work requirements, time limits and lockout periods for people who can’t pay their premiums on time.

Advocates say adding such provisions would further the Republican case that Medicaid is a welfare program, instead of health insurance.

“Whether you support them or not, those activities are not the function of a Medicaid program,” Mann said. “People can differ as to the efficacy of those efforts, but few people can accurately say that’s what health insurance ought to be doing.”

In the coming months, the Trump administration could approve waivers allowing states like Arkansas, Arizona, Indiana and Kentucky to impose work requirements on Medicaid beneficiaries.

Arizona also wants to impose a five-year limit on Medicaid eligibility for the “able-bodied.”

States that want work requirements have acknowledged that tens or even hundreds of thousands of people would lose Medicaid coverage under the proposals.

Prior to ObamaCare, Medicaid mainly covered children, the disabled and pregnant women. The law’s optional expansion allowed many more low-income people to become eligible, leading to criticisms from conservatives that “able-bodied” beneficiaries were essentially freeloading off the government.

Alker said that’s the wrong way to look at it.

“[Medicaid is] predominantly run by managed care insurance companies, so that kind of rhetoric is a gross oversimplification,” Alker said. “But people who want to cut it, they tend to focus on one population.”