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December 17, 2016 12:00 AM

Leadership Symposium 2016 - The Great Disruption: What's next for healthcare policy?

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    Modern Healthcare's inaugural Leadership Symposium, held in early December and sponsored by Accumen, brought together two dozen of the nation's top healthcare leaders to discuss the major forces disrupting the industry and the next direction of healthcare policy after President-elect Donald Trump's unexpected victory.

    One roundtable discussion engaged CEOs from four of the nation's leading healthcare trade associations in addressing the dramatic changes in policy likely to occur in the first year of the Trump administration.

    The session, moderated by Dr. David Blumenthal, president of the Commonwealth Fund, featured Marilyn Tavenner, CEO of America's Health Insurance Plans; Chip Kahn, CEO of the Federation of American Hospitals; Donald Fisher, CEO of the American Medical Group Association; and Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America.

    Modern Healthcare's Leadership Symposium is an invitation-only event. Request an invitation for 2017

    Blumenthal set the context by reminding the invitation-only audience that a new administration loses power almost from the first day it takes office. Any dramatic changes will need to happen fast if they're to happen at all.

    “Repeal and replace sounds like a technical exercise—like taking out your hip and replacing it with an artificial one,” he said. “But repeal and replace is the moral equivalent of reform. … That is a non-trivial exercise.”

    Their responses reveal how the nation's top healthcare lobbying groups are likely to respond to the dramatic proposals for change that are likely to come out of Washington in the next few months.

    Cherie Schrader

    Marilyn Tavenner, CEO, AHIP

    Q: How do you see "repeal and replace" playing out in Washington?

    Marilyn Tavenner, CEO, AHIP

    “We all have to acknowledge that going into 2017, we are not in a great place as a health plan industry. While I think the Affordable Care Act has done some wonderful things—a tremendous amount of work went into reducing (the uninsured population) into the single-digit figure it is today and no one wants to lose that—the issues today are choice and competition.

    “Lots of plans in the market were struggling with that in the past year. And there were reasons that I think we can all point to. … Exemptions that were too broad so that you actually had as many people exempting out of insurance as were in; a lack of young people entering the market because the design was difficult to understand and probably not very appealing to young people.

    “It's going to be a very tough road ahead. It is going to be impossible to repeal and quickly replace. So how are we going to get through a transition period? That's probably two or three years.”

    Cherie Schrader

    Donald Fisher, CEO, AMGA

    Donald Fisher, CEO, AMGA

    “It's clear that the Trump administration is going to repeal Obamacare in some form or another and they will replace it. The Republicans now really get it that there are so many unintended consequences that could occur with a repeal without a replace immediately.

    “They don't want to own it. Because if they break it, they do own it and they're going to be responsible at the midterm election and they could lose a lot of seats. So we're convinced that there will be a three-year maybe even a four-year transition. There's just no way to do it that quickly.”

    Cherie Schrader

    Chip Kahn, CEO, FAH

    Chip Kahn, CEO, FAH

    “There isn't a clear consensus among Republicans. There really isn't an administration yet … so they don't have a policy. And the Republicans on the Hill didn't expect to win the election. … I don't want to say 'deer in the headlights,' but clearly the dog caught the car.

    “It really comes down to one thing in terms of their point of view: the amount of money that was both raised and spent in the ACA for coverage was unacceptable. If you begin with that presumption, then (repeal) presents a real problem to hospitals and other providers.

    “If you take the issues that Marilyn is most concerned about, a few billion dollars—not a small amount of money—but a few billion dollars could address the adverse-selection issues. But hospitals will be in real trouble. The number they could lose is in the hundreds of billions of dollars.”

    Cherie Schrader

    Stephen Ubl, CEO, PhRMA

    Stephen Ubl, CEO, PhRMA

    “Insurers and hospitals have a lot more at stake. So as we head into choppy waters it's clearly not in our sector's best interest to have the uncertainty that's been described by the other panelists.

    “Our biggest challenge in healthcare is the rising prevalence of chronic disease. And as we get into healthcare 2.0, we shouldn't lose sight of the fact that chronic disease drives most of our healthcare spending. Our companies' products stand the best chance of ameliorating those costs.

    “As we move to a new system, the contours of which are somewhat apparent—more state flexibility, more benefit design flexibility, likely more high-deductible plans—we are looking at creatively ensuring that patients continue to have access to innovative treatments.”

    Q: What's the likelihood of maintaining a viable individual insurance market in the next several years?

    Marilyn Tavenner: “It's the individual market and it's also Medicaid expansion. Both are important to insurers.

    “There are some immediate things that need to happen. This whole issue of cost-sharing subsidies. … So our first message has been that the Republicans will need to agree to appropriate funding for the cost-sharing subsidy because without that funding people will likely exit the individual market. Then we're back to the individual market only being those who can pay high premiums without subsidies.

    “The incoming administration and the Republicans who ran for repeal and replace also said they didn't want to see people lose coverage. So you've got to sync up those two things.

    “The same thing is true in Medicaid expansion. All the governors and insurance commissioners are saying what we need. But the most immediate thing for us is going to be the cost-sharing subsidies so we can keep the individual market. Without that, it's going to be difficult for insurers to price, and that will impact physicians and hospitals because they won't know what the status of their contracts are going to be.”

    Q: Do you think HHS under Rep. Tom Price, who has very distinct views about the federal government and its role, will keep the value-based payment agenda on target?

    Donald Fisher: “That's on our mind every day because we really want to move forward on this. Paying providers based on volume and intensity of service really isn't in the patient's best interest. You want to pay providers based on the outcomes they get and the value they provide.

    “There was bipartisan support for moving to a value-based payment. Our concern initially when the law was passed was that they were moving way too fast and it would take three to five years to get ready. We just finished a survey of our members and what we've seen is they've increased their capacity to be a value-based reimbursement system.

    “There is desire on both sides of the aisle to pay providers for getting good quality care in an efficient way. I can't see that being rolled back. The biggest issue will be how long do they want to take to get there. If they slow it down too much, there could be a whole lot of problems that would pop up just like we've seen with ACOs, where they won't be as successful as we had hoped they would be and then it will be abandoned.”

    Q: What are the prospects for turning Medicaid into block grants to the states?

    Chip Kahn: “Block-granting is one of those policies that people have a romance for, particularly people on the right. And Medicaid block grants particularly are something that many governors, and sometimes even Democratic governors, feel romantic toward because implicit in it is that the federal government would give them a pot of money.

    “These governors look at this and think it would allow them to really impact their healthcare system and, frankly, control their budgets. That's the easy part. That's the conceptual part. The dilemma is the money. Show me the money.

    “Medicaid is a complicated program. Not only is it byzantine in terms of how people qualify for it and who actually provides care, it's long-term care for the elderly disabled; it's the acute-care part of Medicaid; and then there's the ACA expansion.

    “It's even more complicated on the payment side. No one could tell you right now with any accuracy what the real match rate is because states have all these adjustments and waivers. And on top of that, they have taxes and other ways to capture Medicaid money.”

    Q: Do you see the issue of drug pricing coming to a head? What do you expect to happen?

    Stephen Ubl: “It's really important for us to get to the same fact basis. We have a situation where despite the fact drug spending is going up, it's actually coming off this spike in 2014 and 2015, which was somewhat anomalous.

    “The hepatitis C medicines came to the market, which we can argue about the cost at launch, but through market competition and several other companies now in that space prices have come down by around 60%. Even Express Scripts and CVS would argue that it's cheaper to acquire Sovaldi in the U.S. than it is in Western Europe, and it will dramatically reduce incidence of liver cancer hospitalizations.

    “In 2014-15, you also had fewer drugs come off of patent than was historically the case and you also had a record number of Food and Drug Administration approvals of medicines. So what's happening is (drug spending is) coming back down and CMS' own actuaries predict that will be in line with overall healthcare spending in the next several years.”

    Innovation in pursuit of the triple aim

    Lassiter-Woods

    Wright Lassiter III, president of Henry Ford Health System (left):

    "We need to find a way for our patients to call, click, or come in. It's about radical convenience. We're very purposeful about coming in being last."

    "We're starting to confuse patients with all these choices. At the time that you're making a decision, do you go to the urgent care or do you go to the ED? We're stepping back and trying to get better at intervening at that decision point with a slate of options. It also has some consumer-directed aspects. We try to give them some cost and price differentials so people can self-select."

    Eugene Woods, CEO of Carolinas HealthCare System (right):

    "All of us are familiar with Yelp. We've created our own version. It's an app to help patients find a physician. What have other patients said about that physician? It's a way to allow patients to have some choice based on real data."

    "We had the CEO of NASCAR in to talk to us about innovation.They had pit crews who were very, very good mechanics that tried to do it as fast as they could. Now they're using ex-football players. They're teaching athletes how to be mechanics versus teach mechanics how to go fast. There's a lot of opportunity in healthcare for us to look at talent innovation differently."

    Competition or collaboration?

    Lassiter and Woods

    Solving the integration puzzle

    Healthcare panelists

    Building a healthcare system that delivers quality across the continuum of care isn't easy.

    From left: Thomas Jackiewicz, CEOof Keck Medicine, University of Southern California; colleen blye, CFO of Montefiore Health System; Dr. James Madara, CEO of the American Medical Association; and moderator Steve Nelson, CEO, UnitedHealthcare Medicare & Retirement.

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