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10 Reasons Why Value-Based Care Will Prevail in the Trump Administration

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With the American election behind him, President-Elect Donald Trump and his administration are prepping a full-court press to fulfill one of his main campaign promises – repeal and replace the Affordable Care Act (ACA). And the President-Elect will have eager partners in the Republican-led Congress.

It’s still unclear how the new administration will approach the repeal or what the actual replacement plan will look like. What is clear, however, is that the rising and unsustainable cost of healthcare that precipitated the ACA still persists. The desire to transition from a fee-for-service environment to one that favors value-based arrangements preceded the ACA, and efforts to do so are expected to continue, regardless of any potential replacement plan.

Here are 10 reasons why value-based care will prevail following the presidential inauguration:

  1. The Medicare Access and CHIP Reauthorization Act (MACRA) was passed with overwhelming bipartisan support. The House voted 392-37 in favor of the bill. The bill passed the Senate with a vote of 92-8. Even Representative Tom Price from Georgia, Trumps pick for the secretary of health and human services and an ardent ACA critic, voted for MACRA. So, a Trump White House will not compromise the broad consensus that exists for payment reform.
  2. Prior to the ACA, Republicans were bullish on Medicare Advantage (MA). The fact that Medicare pays a fixed amount to private insurance companies offering MA plans creates more of an incentive to reduce costs by better managing the health of the Medicare population.
  3. We need to get costs under control, and the same fee-for-service model isn’t going to get us there. According to the Department of Health & Human Services, healthcare spending could climb to $3.35 trillion by the end of 2016. That equates to $10,345 for every American, which dwarfs the per capita healthcare spending of every other industrialized nation.
  4. Medicaid is continuing to reform. Many states are experimenting with Medicaid payment reform that will continue, or even accelerate, under the block-grant proposals favored by many Republicans.
  5. Accountable care has legs well beyond the ACA. Although the ACA introduced “accountable care” into the healthcare lexicon, commercial payors have run with the concept and show no signs of backing away. By some estimates, commercial payor “ACOs” now outnumber the original CMS version by 4 or 5 to 1. In other words, the proverbial toothpaste is already out of the tube.
  6. The positions of current Republican thought leaders favor value-based care. Books and policy papers by Newt Gingrich (including “Saving Lives and Saving Money: Transforming Health and Healthcare”) and Paul Ryan (“A Better Way”) advocate for value-based care as a means of reducing costs and improving health outcomes.
  7. Many employers have already made up their minds about value-based care. In an effort to keep their employees healthier and curb premium costs, employers are increasingly collaborating with health insurers and medical service providers to design value-based reimbursement arrangements.
  8. Healthcare consumers want value. As in other industries, consumers want to know that there is value in the services they are purchasing, be that in the form of cost, quality, convenience, experience, or a combination. Consumerism is not a partisan issue.
  9. Disruptive innovation has been unleashed on the healthcare industry. Technology, industrious thinking, and easy availability of venture capital have led to a rush of market entrants that are changing the who, what, when, where, why, and how of care delivery. Health systems need to keep pace. While policy certainly matters, market factors are also driving much of this change. We’ve all heard the saying that the light bulb wasn’t invented by continually improving the candle – and there are hundreds of well-funded healthcare Edisons vying to replace portions of the current system.
  10. It’s simply the right thing to do. The payment innovation of the last half-decade has created many headaches, but it has also given providers permission to do the right thing – providing accessible, cost-effective, and high-quality care.

In short, regardless of what happens with the ACA, healthcare organizations have much to lose by not proactively pursuing a path to value-based care.

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