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Repeal and Replace has failed. Now what?

By Ron Howrigon  bio

It’s no secret that the healthcare environment is changing on a daily basis. As it stands today, it appears highly unlikely that the Republicans will be able to make good on their promise to repeal and replace the Affordable Care Act. This means Obamacare (or some form of it) will continue to be the law of the land. Many physicians and medical practices are left wondering how all of this will impact them.

It’s important to understand that changes can still be made to Obamacare through administrative order from the Secretary of Health and Human Services, Dr. Price.  He will probably make some changes to the current structure of the ACA, but nothing that will look like repeal and replace. Knowing this, it is important for physician practices to look ahead to 2018 and the changes that are likely to take place to determine the impact on their practices.

The biggest change starting in 2018 will be the demise of the healthcare exchange market.  The major national payers, Aetna, United, Cigna and Humana, have either already pulled out of the exchanges or will do so in the near future.  Anthem has already made suggestions that it is leaning toward exiting most – if not all – of the exchange markets they are currently involved with.  I would also expect that most – if not all – of the independent Blue Cross and Blue Shield plans will make similar announcements over the next few weeks. What we are seeing is the corporate equivalent of a run on the bank where no one wants to be the only one left without an exit strategy. 

The problem is that the payers now have enough experience with the population covered by the ACA exchanges to realize that it will never be profitable.  The population is just too severe, and they haven’t been able to attract enough young healthy people to offset the risk. When the payers exit the exchanges, it will leave a significant number of Americans without any option to purchase insurance under the ACA subsidies.  As a result, we are likely to see a significant increase in the uninsured population. If something isn’t done to stop it, we could get back to pre-ACA uninsured levels within a couple of years. 

The other thing that is likely to happen is a shift toward more patient responsibility through high deductible and catastrophic coverage plans.  Medical practices and hospitals need to make sure they are checking benefits prior to rendering service and that their revenue cycle management is as tight as possible.  If a medical practice has signed an exchange-based contract with any payers, those contracts may become a moot point if that payer drops out of the exchanges.

The long-term prognosis is much more troubling.  Healthcare has been inflating faster than general inflation for over 60 years. It has increased from being just 5% of the U.S. economy to over 17%. That trend cannot continue because if it does, I will see healthcare consume over 50% of the U.S. economy in my lifetime. Economists agree that the entire U.S. economy will fail long before healthcare reaches those levels.

The bottom line is that we still have a healthcare system with unsustainable costs.  Think of it like being on an airplane that is losing altitude.  Neither the ACA nor the failed attempt at repeal and replace has changed our rate of descent.  The ground is coming quickly, and if we don’t pull up soon, we are not likely to survive the crash.

Medical Office Manager is pleased to welcome our newest contributor, Ron Howrigon.

Ron Howrigon is president of Fulcrum Strategies, a healthcare-consulting firm that represents medical practices across the U.S. in their dealings with managed care companies. Ron is the author of the recently published book “Flatlining: How Healthcare Could Kill the U.S. Economy.”

Join us on April 19, 2017 at 1pm ET for Ron’s webinar presentation: Improving the Patient Experience in Patient-Centered Healthcare.

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