Five takeaways from the midterm election results

With the results of the mid-term election now being firmed up, Advisory Board put its experts to work assessing the impact of the new Congress on healthcare policy.

Five significant impacts are on the horizon.

Healthcare reform
A split Congress will keep healthcare reform squarely in the spotlight, while limiting the possibility of drastic legislative action in the next two years. With Democrats regaining the House majority, Republicans will be unable to make another attempt to repeal-and-replace the ACA (even if they wanted to, which is far from clear). And without control of the Senate, Democrats will be unable to send any sweeping legislation such as Medicare for All, or even a restoration of the individual mandate, to President Trump’s desk for veto.

Nonetheless, healthcare is likely to remain a key issue of debate in Congress, particularly if House Democrats follow through on campaign promises to use oversight and investigation power to scrutinize the administration’s actions toward the ACA. And the role that healthcare played in securing Democrats’ House victory has important implication for future elections, as the party’s stance on reducing out-of-pocket expenses and maintaining protections for pre-existing conditions helped secure victory in several battleground House districts and governorships.

Collaborative possibilities
Most recent healthcare activity in Congress has been—and will continue to be—bipartisan in nature. Despite the intense focus placed on diverging healthcare philosophies in this year’s elections, Democrats and Republicans have continued to collaborate on a number of health policy issues in Congress, including efforts to address the opioid epidemic and advance bipartisan updates to MACRA. In fact, the two parties share several areas of focus for the next two years—these include advancing transparency, scrutinizing consolidation, and bolstering rural healthcare facilities. Providers should expect such consequential, if unheralded, cooperation to continue.

Medicaid expansion
The outcome of several key state races and ballot measures will have larger near-term implications for providers in a handful of states—particularly vis-à-vis Medicaid. With voters in Nebraska, Idaho and Utah voting in favor of Medicaid expansion and Democratic gubernatorial candidates winning races in Kansas, Wisconsin and Maine, hospitals and health systems in those states are likely to experience at least slight increases in coverage levels.

However, Republican gubernatorial victories in key states including both Florida and Georgia—where Democratic victories could have resulted in expansion of Medicaid to more than 2 million individuals—mean that the any upcoming wave of Medicaid expansion will fall far short of the most aggressive projections.

Rulemaking is ongoing
The heavy focus on administrative action and rulemaking will continue unabated. The past six months alone have seen a redesign of the Meaningful Use program (now called Promoting Interoperability), an expanded requirement for hospitals to post standard charges online, a major payment reduction for off-campus HOPD clinic visits, and a (delayed) overhaul of E&M payment and documentation.

As 2018 draws to a close, providers are awaiting a final rule following CMS’s proposed overhaul of the Medicare Shared Savings Program and a potential innovation pilot to test direct provider contracting in Medicare and Medicaid. Given the administration’s now-limited ability to drive major reforms through legislation, 2019 and 2020 are also poised to be busy rulemaking years.

Healthcare spending concerns
While the debate around health care coverage will linger on, the drive to slow the growth in healthcare spending remains a bipartisan effort at both the federal and state levels. Efforts to increase transparency, shift care to lower-cost settings and reward providers for value are here to stay, both leading up to 2020 and beyond.

Meanwhile, players in the private sector—including assertive health plans, activated employers and outside disrupters—are coming to the forefront in attempts to apply pricing pressure above and beyond efforts from the federal and state governments. And with not-for-profit hospital margins already at an all-time low, it’s never been more important for hospitals and health systems to develop a comprehensive approach to margin management.