The Future of Health Care Mergers Under Trump

Though there has been a flurry of merger and acquisition activity in recent years, industry experts are unsure whether the merger momentum will continue under President-elect Donald Trump’s administration, according to The New York Times.

Here are five things to know about how M&A activity in the healthcare industry may be affected under the Trump administration.

1. President-elect Trump nominated Sen. Jeff Sessions (R-Ala.) to replace Attorney General Loretta Lynch. While it is unclear how the department will handle antitrust cases under Sen. Sessions, the impact from the change in leadership will not be felt immediately. The outcomes of the two major antitrust cases in the insurance market, the Anthem-Cigna and Aetna-Humana mergers, are expected to be decided before Mr. Trump takes office in January. However, the new administration might still have an impact on the mergers, particularly if either the companies or the government decide to appeal the decision, according to the article.

2. According to the article, there is little expectation the Department of Justice under President-elect Trump would drop the cases if the insurers lost and appealed. However, any agreed upon settlement deal may be less onerous to the insurers involved.

3. There is a chance the federal government’s approach to healthcare mergers may not change, according to the article. “There is a history of bipartisan support for antitrust enforcement in healthcare,” said Leslie Overton, a partner at Alston & Bird and a former DOJ official. “I don’t think we should expect a wholesale shift, based on the change from Democratic to Republican.”

4. The Federal Trade Commission’s position on M&A activity may change even less, according to industry experts interviewed by The New York Times. The independent agency is less subject to the political preferences of the president and of Congress.

5. Industry experts also suggest the possible repeal of the ACA will not impede the increasing M&A activity of the past few years. According to the article, hospitals may feel more pressure to join together if the ACA is repealed due to reduced Medicare and Medicaid payments and increased volumes of uninsured patients.

Pence says Trump plans to repeal ACA right ‘out of the gate’

http://www.beckershospitalreview.com/hospital-management-administration/pence-says-trump-plans-to-repeal-aca-right-out-of-the-gate.html

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President-elect Donald Trump has decided repealing the ACA will officially be among his top priorities when he takes office, Vice President-elect Mike Pence told Chris Wallace on Fox News Sunday.

“Decisions have been made by the President-elect that he wants to focus out of the gate on repealing Obamacare and beginning the process of replacing Obamacare with the kind of free market solutions that he campaigned on,” Mr. Pence said on Fox News.

The Trump-Pence transition team has been working with congressional leaders from both political parties to move Mr. Trump’s “aggressive policy agenda” forward, Mr. Pence said. This weekend Mr. Pence met with Senate Minority Leader Chuck Schumer, D-N.Y., Senate Majority Leader Mitch McConnell, R-Ky., House Minority Leader Nancy Pelosi, D-Calif., and House Speaker Paul Ryan, R-Wis., according to the interview.

Later on the show, Fox News spoke with Sen. Schumer, who said the ACA is one of the issues on which Democrats plan to “oppose [Mr. Trump] tooth and nail.” Sen. Schumer said Mr. Trump would not be successful in his efforts to repeal the healthcare reform law.

“He won’t be able to do it, because now even he, after his meeting with President Obama, said, ‘Oh, I want to keep the good things.’ Well, you can’t keep the good things without keeping [the] ACA,” Sen. Schumer told Fox News.

Scott Becker, publisher of Becker’s Hospital Review, says it is still unclear if Mr. Trump can or will be able to push through an ACA repeal. “It’s a fascinating statement because it’s not clear Republicans have the votes to repeal this without making complicated accommodations on a few levels, particularly for preexisting conditions and some funding issues,” Mr. Becker says.

Fitch: ACA repeal would be credit negative for hospitals

http://www.beckershospitalreview.com/finance/fitch-aca-repeal-would-be-credit-negative-for-hospitals.html

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http://www.businesswire.com/news/home/20161109006033/en/Fitch-Trump-Victory-Rattles-Healthcare-Industry

 

8 key strategies for improving a hospital’s margins

http://www.beckershospitalreview.com/hospital-management-administration/8-key-strategies-for-improving-a-hospital-s-margins.html

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As healthcare shifts toward value-based care, hospitals are looking for new ways to improve quality without unnecessarily increasing the cost of care.

“We think less about cost cutting and more about margin improvement,” says Allen Miller, CEO of COPE Health Solutions. “Folks are going to be more successful taking a strategic approach and focusing on improving margins by taking risks and building the type of infrastructure that will support value based contracts through which they take financial risk instead of the traditional cost-cutting approach.”

Here are some key strategies for financial success:

It’s Easy for Obamacare Critics to Overlook the Merits of Medicaid Expansion

At a national level, the expansion of Medicaid continues to yield benefits. Its coverage was increased, and its quality raised. Some states that have expanded Medicaid are even expecting net savings for the next few years. In states where Medicaid was expanded, hospitals had fewer uninsured visits.

Focusing on only the positives can be as misleading as focusing on only the negatives. Policy decisions, including those involving health, need to be considered in terms of trade-offs. It is true that providing Medicaid can cost the federal government, and even states, a lot of money, which can’t then be spent on other worthy pursuits. It is true that Medicaid reimburses physicians and hospitals less generously, and that it often leaves beneficiaries with fewer choices than private insurance might.

But when we look at the balance sheet for Medicaid — health benefits, financial security, societal improvements through education — it’s not hard to argue that money allocated to Medicaid is well spent.

 

Obamacare repeal plan stokes fears of market collapse

http://www.politico.com/story/2016/11/obamacare-repeal-market-collapses-231653?utm_campaign=CHL%3A+Daily+Edition&utm_source=hs_email&utm_medium=email&utm_content=37969677&_hsenc=p2ANqtz–Wv-16E4bE7iT4jhF2j2QKWBhCJZPBLuy-TBTKYxxVNSL8KAVSAyRmDFndXujD1e6r6JMx9BX3zcgMSf3biYBAMLyJug&_hsmi=37969677

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Republicans warned for years that Obamacare would blow up the nation’s individual insurance market. Instead, their own rush to repeal the health care law may be what triggers that death spiral.

GOP lawmakers say they plan to repeal the Affordable Care Act as soon as President-elect Donald Trump takes office, including a transition period of a year or two before it takes effect. That way, they satisfy their base while giving notice to 20 million Obamacare customers that they must find other coverage options.

But repealing the law without a replacement is likely to spook health insurers, who might bolt from the markets prematurely to avoid losses as some people stop paying their premiums, while other people rush to have expensive medical procedures before losing coverage. Insurers would have little incentive to stick around without knowing what to expect at the end of the transition. And that could spell chaos for consumers.

“The discussion right now about repeal and replacement is making the market very, very nervous,” said Washington Insurance Commissioner Mike Kreidler, a Democrat. “I would not be surprised to see the potential for a stampede to exit the market.”

Even if Congress delays immediate action to kill the health care law, Obamacare insurers would have just a few months to decide whether to stay in the law’s marketplaces for 2018. Deep uncertainty about the Republicans’ Obamacare replacement could drive out those companies, cutting off insurance for, potentially, millions of customers.

“A repeal that kicks the can on replace would put the market in serious jeopardy, and the American people will hold them accountable for the results,” Topher Spiro, who heads health policy at the left-leaning Center for American Progress, said on a call with Obamacare supporters last week.

Uncertainty about Obamacare’s future is occurring against the backdrop of strong demand for coverage. More than 1 million people signed up through HealthCare.gov in the first two weeks of the current enrollment season, including 100,000 who enrolled the day after the election, according to the Department of Health and Human Services. The administration projects that 13.8 million people will participate this season, which ends about two weeks after Trump takes office. Millions more — including young adults on their parents’ policies and those in expanded Medicaid — will also get coverage this cycle.

Uncertain Fate Of Health Law Giving Health Industry Heartburn

Uncertain Fate Of Health Law Giving Health Industry Heartburn

WASHINGTON, DC - NOVEMBER 10:  President-elect Donald Trump (L) talks after a meeting with U.S. President Barack Obama (R) in the Oval Office November 10, 2016 in Washington, DC. Trump is scheduled to meet with members of the Republican leadership in Congress later today on Capitol Hill.  (Photo by Win McNamee/Getty Images)

Six years into building its business around the Affordable Care Act, the nation’s $3 trillion health care industry may be losing that political playbook.

Industry leaders, like many voters, were stunned by the election of Donald Trump and unprepared for Republicans’ plans to “repeal and replace” Obamacare.

In addition, Trump’s vague and sometimes conflicting statements on health policy have left industry officials guessing as to the details of any substitute for the federal health law.

“It will be repealed and replaced,” Trump said Sunday in an interview on CBS’ “60 Minutes.” At the same time, he vowed to preserve popular provisions of the law like ensuring that people with preexisting conditions can get insurance and allowing young adults to stay on their parents’ health plans.

Charles (Chip) Kahn, chief executive of the Federation of American Hospitals, said that before the election, health groups had not been meeting with Republicans about a rewrite of the law “because the working assumption was we had a program that wasn’t going anywhere. That working assumption is now no longer operative.”

Upending the health law plays havoc with a health industry that had invested heavily in strategies geared to the ACA’s financial incentives. The flipped script initially left some industry groups speechless. Others issued bland statements pledging cooperation with the next administration as they awaited greater clarity from the next president.

Said Donald Crane, who heads CAPG, a national trade group for physician organizations: “Nobody was ready for this. We didn’t have a Plan B.”

The results appear to have rattled the fragile industry coalition that the Obama administration carefully crafted to support the law. Looking ahead, some health sectors might have even more reason to worry.

The hospital industry may be the most vulnerable to proposed changes, which could result in millions of Americans losing health coverage, both through the insurance exchanges and expansion in the Medicaid program for those with lower incomes.

Not Just Obamacare: Medicaid, Medicare Also On GOP’s Chopping Block

http://www.huffingtonpost.com/entry/obamacare-medicaid-medicare-gop-chopping-block_us_582a19b8e4b060adb56fbae7?jn7jtocg8bzqia4i

rious about repealing Obamacare, and doing so quickly. But don’t assume their dismantling of government health insurance programs will stop there.

For about two decades now, Republicans have been talking about radically changing the government’s two largest health insurance programs, Medicaid and Medicare.

The goal with Medicaid is to turn the program almost entirely over to the states, but with less money to run it. The goal with Medicare is to convert it from a government-run insurance program into a voucher system ― while, once again, reducing the money that goes into the program.

House Speaker Paul Ryan (R-Wis.) has championed these ideas for years. Trump has not. In fact, in a 2015 interview his campaign website highlighted, he vowed that “I’m not going to cut Medicare or Medicaid.” But the health care agenda on Trump’s transition website, which went live Thursday, vows to “modernize Medicare” and allow more “flexibility” for Medicaid.

In Washington, those are euphemisms for precisely the kind of Medicare and Medicaid plans Ryan has long envisioned. And while it’s never clear what Trump really thinks or how he’ll act, it sure looks like both he and congressional Republicans are out to undo Lyndon Johnson’s health care legacy, not just Barack Obama’s.

f course, whenever Trump or Republicans talk about dismantling existing government programs, they insist they will replace them with something better ― implying that the people who depend on those programs now won’t be worse off.

But Republicans are not trying to replicate what Medicaid, Medicare and the Affordable Care Act do now. Nor are they trying to maintain the current, historically high level of health coverage nationwide that these programs have produced. Their goal is to slash government spending on health care and to peel back regulations on parts of the health care industry, particularly insurers.

This would mean lower taxes, and an insurance market that operates with less government interference. It would also reduce how many people get help paying for health coverage, and make it so that those who continue to receive government-sponsored health benefits will get less help than they do now.

It’s difficult to be precise about the real-world effects, because the Republican plans for replacing existing government insurance programs remain so undefined. Ryan’s“A Better Way” proposal is a broad, 37-page outline without dollar figures, and Senate Republican leaders have never produced an actual Obamacare “replacement” plan.

But the Republican plans in circulation, along with the vague ― and shifting ― health care principles Trump endorsed during the campaign, have common themes. And from those it’s possible to glean a big-picture idea of what a fully realized version of the Republican health care agenda would mean.

True value-based care is a trillion-dollar unicorn for the health care industry

True value-based care is a trillion-dollar unicorn for the health care industry

In Silicon Valley, Kendall Square, and points in between, unicorns are more than mythical creatures that adorn software engineers’ ironic T-shirts. They’re disruptive technology behemoths with billion-dollar-plus valuations. These beasts have largely shied away from the health technology sphere over the last decade, despite many promising upstarts. Maybe we’ve been hunting for the wrong kind.

Get ready for the uber-unicorn. It won’t be a single, enormous company with a trillion-dollar valuation. Instead, it’s a movement called value-based care.

Value-based care isn’t a new concept. But it’s been used a bit bashfully, traditionally referring to carrot-and-stick-based incentive payments and penalties for physicians. Today these pale in comparison to the fee-for-service care that rewards reactive, episodic, paternalistic care — and lots of it.

Here’s what I mean by true value-based care: fully capitated payment contracts in which a lump sum of money is available to treat a patient over the course of a year. No penalties or incentives, simply ownership of the total cost of care and the total cost of outcomes. The better the care, the more money the organization bearing the risk receives. This is how to best reward exceedingly efficient, effective health care.