DENVER, Colo. – The Patient Protection and Affordable Care Acts passed in 2010 attempted to improve the healthcare system through a multitude of regulations and incentives. While Americans wait for a replacement plan from the new administration, legislators have the opportunity to make significant changes through the 2017 budget approval process.
On Wednesday night, healthcare and policy leaders gathered at the Westin Denver to discuss the impacts of potential regulatory changes to the healthcare industry. The panel convened by Brownstein Hyatt Farber Schreck included:
- Cate McCanless, Policy Director at Brownstein
- Barry Jackson, Strategic Advisor at Brownstein and Former Chief-of-Staff for John Boehner
- Jason Ficken, Managing Partner at Quadriga Partners
- Bill Burman, MD, Interim CEO at Denver Health
The panelists broke down key points on topics ranging from the legislative process to repeal of the Affordable Care Act to cost containment efforts that will be continued under new Medicaid funding models.
The Repeal Process
In January, the Senate approved a budget resolution that allowed for portions of the ACA to be repealed through a process called reconciliation. “You can’t just full scale repeal a law through reconciliation but you can take away the things that pay for the law,” explained McCanless.
The reconciliation process allows committees to develop instructions to decide how to find cost savings within the existing ACA. Once decided, the measures would move forward to a vote in the Senate, and would only require a majority vote since reconciliation measures cannot be filibustered.
Ficken described the appropriate response of the private market to the political environment as being cautious. “It is such an uncertain time right now, businesses don’t want to make any proactive bets.”
According to CMS, in 2015 Medicaid spending grew by 9.7% to a total of $545.1 Billion, accounting for 17% of the national health expenditure.
Currently, the federal government pays a percentage of each state’s cost to provide Medicaid through matching dollars and grants. Panelists suggested that the new administration will look to control costs by shifting funding towards a more defined contribution model, giving states the responsibility of managing costs for their populations.
“If you think about the private sector, one of the main tools that the private sector used to get spending under control was to move towards a defined contribution plan,” said Jackson.
Under the suggested block grant program, each state would be given a set amount of funding and more flexibility on spending. However, according to the Center on Budget and Policy Priorities, under the proposed block grant program, Medicaid and the Children’s Health Insurance Program (CHIP) would be cut by 26% over the next 8 years.
Community hospitals, such as Denver Health, have made a huge commitment in recent years to controlling Medicaid costs by keeping patients out of high-cost acute care. Dr. Burman welcomed less federal regulation on Medicaid spend to support innovative cost containment models.
Around the country, more than 60% of all Medicaid beneficiaries are enrolled in risk-based managed care organizations (MCO). Republicans have held up MCOs as a solution to controlling healthcare spending moving forward.
As Dr. Burman put it, “Managed care is part of the direction forward because it provides the right incentives as long as it is paired with very clear and transparent metrics for outcomes.”
Any changes to the ACA will likely build off the foundations of value-based care to promote high quality, low cost services. Despite uncertainty in the particulars, panelists asserted that Congress would take current metrics of success into account and shape laws that allow these programs to continue to move forward.