Post-Election Thoughts

Nov. 14, 2016
How a Trump presidency will ultimately play out in healthcare is anyone’s guess at this moment, but here are seven non-partisan observations about the near-term.

The election of 2016 is over and Americans have elected Republicans more-or-less across the board at the Federal level. Beginning in 2017, the GOP will control the executive and legislative branches and be well positioned to select judges for the U.S Supreme Court.

My inbox and Twitter feed have been filled with comments and questions from colleagues about how this will affect the U.S. healthcare system. How this will ultimately play out is anyone’s guess at this moment but here are seven non-partisan observations about the near-term.

The need to reform our healthcare system remains. By any standard, care costs too much, quality is inconsistent and access is uneven. An aging population is pushing demand for chronic care. Workforce shortages and maldistribution of providers is real. The impact of the cost of healthcare on the overall economy remains a major issue for both the public and private sectors.

The ACA has already altered the playing field. Regardless of your position on the Affordable Care Act (ACA, a.k.a. “Obamacare”), it is undeniable that it expanded coverage to millions of previously uninsured people, eliminated pre-existing condition limits and allowed parents to keep children on their insurance plans until age 26. Many analysts believe that the ACA has also “bent the cost curve,” decreasing the overall rate of healthcare inflation even more than expected.

Opponents of the ACA rightly point out flaws or are philosophically opposed to this kind of role for the federal government. What they would do instead remains unclear. Many of these opponents will now be in a position to repeal or radically alter the ACA. What will they actually do given the facts above? Who knows, but it is clear that the ACA has already impacted many millions of lives and major changes would be widely felt. Most politicians will take this into account as they consider changes to the ACA.

Uncertainty will rule the day. Healthcare executives, boards of directors and investors will be facing dramatically increased uncertainty about the direction and pace of healthcare policy change. The recent struggle was mostly about how to make the transition from fee-for-service to value-based care. Now comes the more fundamental question of if there will even be a transition. Before the election we knew where we were going but were unsure about how to get there. Now we are unsure about where we are going.

Don’t just do something, stand there. Uncertainty may, in turn, paralyze many individuals and organizations. Unsure of what direction to move and what strategies to choose, many will likely tread water and focus on mitigating financial and other risks. This paralysis will affect providers, payers, IT and life sciences. Investors in healthcare may move more slowly and start hedging their bets.

No Margin-No Mission. Profitability is always a good strategy and will continue to be extremely important, perhaps even more so. Organizations will increase an already intense focus on reducing expenses. They will seek low-risk ways to increase revenue. What is far from clear is how innovative they will be in pursuing greater profitability. Innovation can bring great rewards but it nearly always carries greater risk. Many will likely see innovation as a relatively obvious expense to eliminate. Product and service companies that offer practical, rapid, low-capital solutions to reduce expenses should continue to do well. Investors will want them in their portfolios.

Risk mitigation still matters. Despite the general uncertainty, real and perceived risks will get attention. Things that could crash an organization or get someone fired will always influence decision making. A great example is rising cybersecurity-related threats. The public relations, financial and personal job security stakes are high. The board of directors and C-suite are aware and asking questions. CIOs get fired when bad stuff happens. This kind of risk will not be ignored.

The lobbying will be fierce. Lots of stakeholders with billions of dollars at stake. As noted above, this will impact providers, payers, IT, life sciences, investors and average citizens. One group that is sure to profit: lobbyists. They will no doubt be very, very busy for some time to come.

Dr. Dave Levin has been a physician executive and entrepreneur for more than 30 years. He is a former Chief Medical Information Officer for the Cleveland Clinic and serves in a variety of leadership and advisory roles for healthcare IT companies, health systems and investors.