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Image created by RRY Publications LLC / Sources: Wikimedia Commons, Constantine Brumidi and Lavabaron

Drinking the Kool Aid in DT’s D.C.

Robin Young • Thu, December 15th, 2016

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With barely a month before inauguration, Washington is swinging around to the Donald Trump revolution. DT is now D.C.’s boss. Soon his appointments will be cracking whips at the FDA, CMS (Centers for Medicare and Medicaid Services) and HHS (Department of Health and Human Services).

He promised a revolution.

First up is the Affordable Care Act (ACA).

What does that mean for you, your hospital, your suppliers, friends and colleagues? Here’s what the top analysts think.

You Say Repeal, I Say Reverse

Republicans want quick, even cosmetic, action and then two years to sort out the details.

Let’s start with what they can’t likely change:

  1. Nongroup market’s guaranteed issue
  2. Prohibition on preexisting condition exclusions
  3. Modified community rating
  4. Essential health benefit requirements
  5. Actuarial value standards

The rest of ACA’s key provisions are against the brick wall, with a cigarette and a blindfold. They include:

  1. Medicaid expansion
  2. Federal financial assistance for Marketplace coverage (premium tax credits and cost-sharing reductions)
  3. Individual and employer mandates

The demise of these ACA provisions would:

  • Eliminate insurance coverage for 22.5 million people. If the nongroup insurance market collapses as a result, which is possible, another 7.3 million people would join the uninsured rolls.
  • Affect working families disproportionately since 82% of those now uninsured folks would be in working families. Thirty-eight percent would be aged 18 to 34, and 56% would be non-Hispanic whites. Eighty percent of adults becoming uninsured would not have college degrees.
  • Deny Medicaid or CHIP (Children’s Health Insurance Program) coverage to 12.9 million people by 2019.
  • Stop assistance for private nongroup health insurance for approximately 9.3 million people.
  • Cut federal health care spending by $109 billion in 2019 and by $1.3 trillion from 2019 to 2028 because the Medicaid expansion, premium tax credits, and cost-sharing assistance would be eliminated.
  • Cut state spending on Medicaid and CHIP by $76 billion between 2019 and 2028. In addition, because of the larger number of uninsured, financial pressures on state and local governments and health care providers (hospitals, physicians, pharmaceutical manufacturers, etc.) would increase dramatically. This financial pressure would result from the newly uninsured seeking an additional $1.1 trillion in uncompensated care between 2019 and 2028.

There’s no consensus around an alternative health policy to, umm, replace these eliminated ACA provisions. For orthopedic physicians, hospitals and suppliers, repeal of the funding provisions of the ACA is bad news.

The ACA Knee Bump

Signing the ACA in March 2010 clearly raised demand for surgery and related services and products. The most “preference-sensitive” procedure undergone by new subscribers to Obamacare was knee replacement surgery, according to a 2015 report by the Society of Actuaries.

A preference-sensitive procedure is defined as one without which a patient can continue for some time. However, their quality of life can be greatly improved for patients who have the surgery.

Authors of the 2015 Actuaries report found that getting more people on insurance released pent-up demand for preference-sensitive procedures of which, total knee replacements, were the most popular.

Raw procedure data as reported by the major manufacturers showed a clear Obamacare bump between Q2 2013 and Q2 2015.

Source: Company reports

Source: Company reports

Losing ACA insurance coverage would likely send the orthopedic community into a multi-year period of procedure and revenue decline.

Key stakeholders in the ACA are lobbying to keep the financial support for insurance in place. Hospitals, surgeon associations and, we would expect, suppliers will all lobby to keep insurance support in place for patients seeking orthopedic care.

Health Spending Up

Wells Fargo healthcare analyst Craig Bijou wrote last week: “CMS Actuaries have released new data on healthcare spending showing a 5.8% overall increase in 2015, compared to 5.3% in 2014. The report points to increased utilization as the result of broader insurance coverage and growth in spending for retail prescription drugs as the main drivers of growth. Drug spending increased 9% in 2015, lower than the 12.4% growth in 2014, yet significantly higher compared to 2.3% growth in 2013. While this report provides some ammunition to policymakers concerned about high-cost drugs, we believe that issue has currently taken a back seat to the broader ACA repeal and replace effort.”

Two Major Health Networks Collaborate: Politico.com announced this week that Commonwell and Carequality, two major health information exchange networks will allow their respective members to share patient information across the two networks. Said Politico: “It's pretty substantial news for the networks, who are sometimes seen as opposites with not a great deal of membership overlap. Costs to use the respective services should not substantially increase, they say.”

“Leaders of the two efforts say that technological development will consume the first half of 2017, followed by pilots in the latter half of the year. If all goes well, a broader rollout will begin in 2018 and 2019.”

Digital AdvaMed? The largest medical device trade group, AdvaMed is launching a digital health initiative to support the group’s advocacy efforts on several policy issues, including security, payment and interoperability. Said Politico’s Darius Tahir about the AdvaMed announcement: “While most of the members listed in its launch page are traditional medical device makers, the group also includes a number of tech companies, such as IBM, Intel, Apple, and Verily Life Sciences (a division of Alphabet, the conglomerate that includes Google).”

“This new frontier of care promises incredible benefits for patients and efficiencies for health care systems, but only if public policies are in place that promote innovation along with high standards for patient safety, and companies understand how to navigate the regulatory and reimbursement systems still being developed, ” said Scott Whitaker, AdvaMed president and CEO.

It’s a Digital Bandwagon and Gravy Train! The American Medical Association along with DHX Group, HIMSS (Healthcare Information and Management Systems Society) and the American Heart Association are collaborating to evaluate (huh?) mobile medical apps. And the name of this collaboration is Xcertia. No. Seriously? And that’s pronounced “shershia?”

At any rate, Xcertia is charged by its collaborators with creating guidelines for assessing mobile apps. Other folks who want to get on this gravy train—folks from academia, developers, or payers—are invited to contact Xcertia to attend meetings, travel, have long meaningful discussions and create some guidelines. Fun times.

Here’s the website. One key point to keep in mind, Xcertia won’t be actively certifying apps. It will, instead, concentrate on privacy, security, content, and interoperability issues.

Survey says: A Surescripts survey released on December 13 reports that patients are dissatisfied that their medical records aren’t easily shared and are hard to assemble in a single location. And the numbers weren’t close. Ninety-four percent of patients feel their medical information should be stored electronically in a central location, and 58% have tried to compile records on their own—but it’s often too tedious, with records that are inaccurate or incomplete.

Patients spend an average of eight minutes telling their doctor their medical history, up from six minutes in the 2015 survey. The survey also noted that 52% of patients expect doctors to start offering remote visits, and 36% believe most appointments will be remote in the next 10 years.

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