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2017-01-27 / News

The potential impact of “Repeal and Replace” on Pennsylvania hospitals

By r. brock pronko
Regional Business Analyst

On Saturday, January 14, President-elect Trump told the Washington Post that his administration has nearly completed a national healthcare plan to replace President Obama’s Affordable Care Act, also known as Obamacare. Trump said his plan has the goal of “insurance for everybody” and will be simpler and more affordable than Obamacare.

Trump’s plan will force drug companies to negotiate directly with the government on drug prices for Medicare and Medicaid. Spiraling drug prices are one of the chief reasons for the rise in healthcare costs in the U.S. where the insured pay significantly more for the same prescription drugs sold to Canadians and Europeans.

Obamacare took a year and a half to be designed with input from various stakeholders including hospitals and six years to implement. However, Trump expects his plan to replace Obamacare within hours or days after the repeal.

House Speaker Paul Ryan said that a longer transition period will be necessary while the details of the new plan are legislated, passed and then implemented. Since 60 votes are needed to pass a bill in the Senate and the Republicans only have 52 votes, they will need eight Democrats to vote with them.

“We want to make sure that as we give relief to people to Obamacare, we do it in a transition that doesn’t pull the rug out from anybody during that transition period,” said Ryan.

Regardless if the ACA is replaced this month, next month or next year, a national healthcare plan based on the Republicans’ three basic principles of tax cuts, market competition and freedom of choice has Pennsylvania hospitals concerned about how the new plan might change the delivery of healthcare and how hospitals are reimbursed for services.

“In 2010, the broad hospital community supported passage of the Affordable Car Act, because it was going to reduce the number of uninsured, and it offered a lot of incentives and opportunities to transform the delivery of care,” said Paula Bussard, chief strategy officer for the Hospital and Healthsystem Association of Pennsylvania in Harrisburg.

“As we listen to members of Congress debate federal health policy, we are advocating that whatever replacement they come up with, it should continue to reduce the number of uninsured.

“From our experience with the Affordable Care Act, we know that individuals who have health insurance report more contact with primary and preventive care.

“We want to make sure that the components of ACA that were supporting the transformation of care from one of volume to one of value, better health and better care are sustained, and that Medicare and Medicaid payment policies enable a strong, competitive healthcare delivery system.”

To help subsidize insurance premiums, hospitals agreed to less reimbursement for Medicare and Medicaid payments.

“The hospital community agreed to various Medicare and Medicaid cuts over a 10-year period to help provide some of the federal revenue used to subsidize individuals purchasing insurance coverage,” said Bussard.

“If the Republicans eliminate that subsidized coverage but don’t restore our payments, then we will not only see our uncompensated care go up, but we’re still going to be impacted by these payment cuts.

“So, we’re stressing that hospitals need financial predictability and sustainability, and that we want to continue the movement toward providing better health, better care and better value.

“We want a national healthcare program that helps us reduce hospital acquired infections, prevent readmissions, and tests innovative payment systems that help align the incentives between hospitals and physicians while also reducing premiums and out-of-pocket costs to patients.” .

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