Kaiser Permanente CEO Bernard Tyson watched the election results on TV at home and, like many Americans, was surprised by the results. Now he and other hospital and health system leaders are preparing to work with a Trump administration and congressional leaders committed to ending the Affordable Care Act programs that now provide coverage for millions of their patients.
“This is what our country has decided, and with that is the question of the implications of the differences in the points of view of how healthcare should be covered and paid for in this country,” Tyson said in an interview the day after Donald Trump's upset victory.
While Trump has promised to repeal the ACA, “he also shared views that people who might not have the money didn't have to suffer unnecessarily,” Tyson noted. “He seems to agree that everyone ought to have affordable, high-quality care and access.”
Anthony Tersigni, CEO of St. Louis-based Ascension, the largest not-for-profit health system, struck a similarly hopeful note last week. “It's our hope that, with the election behind us, our newly elected leaders in Washington will come together to ensure 100% access and 100% affordable coverage for every American.”
But other leaders and analysts were blunt about the upheaval that providers face, and investors dumped shares of companies likely to suffer. Trump's election has thrown the entire industry into “uncertainty,” said Robert Annas, senior managing director of Solic Capital, a private equity company that owns a hospitalist staffing unit and a telemedicine business.
On the one hand, the president-elect will surely make good on his fundamental promise to uproot Obamacare in some form. But hospitals, especially those in rural areas, could be tremendously hard hit if the replacement rolls back the progress made under the ACA to insure patients and the incentives for providers to make sure patients get care before their illnesses require emergency room visits or hospitalization, Annas said. “Our problem is we don't have specifics” about Trump's alternatives, he said.
Shares of hospital companies, particularly Tenet Healthcare Corp. and Community Health Systems, slumped in the days after Trump's victory while the Dow Jones industrial average and the Standard & Poor's 500 index edged up.
In a note to investors the day after, Fitch Ratings warned that “successful efforts to repeal or materially replace the ACA would be a credit negative for healthcare providers as it is contributing to higher volumes of insured patients.”
Mizuho Securities went a step further, issuing a blanket downgrade from buy to neutral on “ACA vulnerable stocks” in the healthcare services sector: AmSurg, Universal Health Services and Mednax.
“The worst possible outcome for healthcare stocks is a reality,” Mizuho said. “We see extreme risk of ACA repeal/replace, loss of the Medicaid expansion, a primary driver of results for both hospitals and health plans, and reversal of the many value-based regulations that promote home healthcare.”
But hospital trade groups appeared optimistic even though Modern Healthcare's spring CEO Power Panel, a survey of 86 healthcare CEOs, found that the chief executives overwhelmingly backed the ACA and supported its goal of pushing providers away from fee-for-service medicine and toward delivering value-based care.
American Hospital Association CEO Rick Pollack said in a statement that amid the changing political landscape, the trade group was committed to the same priorities: “Advancing the transformation of healthcare, ensuring access to coverage, preserving adequate resources for health care, protecting patient access to care, enhancing the quality of care and patient safety, and making healthcare more affordable.”
America's Essential Hospitals, a trade group representing safety net providers, congratulated Trump and said it would work with the administration to create policies that provide high-quality care for vulnerable patients. “We must sustain federal support for this mission, reject policy changes that reduce spending at the expense of coverage and access, and continue progress toward transformative approaches to better quality and value,” Dr. Bruce Siegel, the organization's CEO, said in a statement.