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November 7, 2018

The 5 key health care takeaways from last night's elections

Daily Briefing

    Read Advisory Board's take on the elections and what they mean for providers

    Republicans in Tuesday's midterm elections expanded their Senate majority but lost control of the House—likely signaling an end to GOP efforts to repeal the Affordable Care Act (ACA) and creating an opportunity for Democrats to scrutinize the Trump administration's health care policies.

    What happened in the Senate and House

    Republicans as of early Wednesday had gained at least two seats in the Senate, ensuring that they will retain control of the chamber, according to the New York Times.

    Democrats, meanwhile, as of early Wednesday had won the 218 House seats they needed to gain control of that chamber, according to the Times.

    At least 15 House seats and three Senate seats had not been called as of publishing, according to the Times' tracking polls.

    What the election results mean for health care

    Democrats taking control of the House could mean "a major reset of the political direction on health care," according to Politico, while Modern Healthcare reported that the win means "a new era of checks on the Trump administration's health care regulatory agenda."

    However, federal lawmakers are not expected to pass any major health care legislation because split control of the chambers is likely to result in gridlock, Modern Healthcare reports.

    Affordable Care Act is safe from repeal—for now

    In particular, Republicans are no longer expected to pursue a repeal of the ACA because House Democrats would likely block such a measure.

    Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, in a tweet said, "Democratic control of the House, no matter what the margin is, means ACA repeal is dead in its tracks, at least for now."

    Senate Majority Leader Mitch McConnell (R-Ky.) in October had said Republicans may have taken another pass at ACA repeal in the next session of Congress if Republicans had maintained control of both houses.

    While a repeal of the ACA is unlikely, federal lawmakers are expected to take other actions related to the ACA. House Democrats, for example, could investigate actions the Trump administration has taken to undermine the ACA, such as the Department of Justice's decision to support a lawsuit challenging the ACA.

    Tomorrow: The health care trends you need to know for 2019

    House Democrats also are expected to pursue legislation aimed at bolstering the ACA's consumer protections—including the ACA's protections for individuals with pre-existing conditions—and insurance markets, according to Politico. Democratic lawmakers also have called for increased outreach and marketing funding for the ACA's open enrollment period, according to Modern Healthcare.

    It's also not clear whether ACA tax delay extensions for insurers and medical device manufacturers would win approval in a Democratic-controlled House.

    Future of Medicare and Medicaid reforms unclear

    Republicans have long-called for stronger reforms to Medicare and Medicaid to address the nation's growing deficit and debt.

    McConnell in October signaled any approach to reforming the programs would need to be a bipartisan effort, but the parties in recent years have struggled to find common ground. It's not immediately clear whether leadership in the House and Senate will be able to achieve a bipartisan solution in the next Congress.

    House Minority Leader Nancy Pelosi (Calif.) in a victory speech said Democrats winning the House is "about stopping the GOP and Mitch McConnell's assaults on Medicare, Medicaid, the [ACA], and the health care of 130 million Americans living with preexisting medical conditions."

    Several Democrats also have come out in favor of "Medicare-for-All" proposals, but no movement on those proposals is expected while Republicans control the Senate and White House.

    House Democrats in the next Congress also are expected to use their subpoena power to examine the Trump administration's decision to allow states to impose work requirements on Medicaid beneficiaries.

    A bipartisan approach to rising drug prices could be on the horizon

    One area where bipartisanship could prevail is in responding to the nation's rising drug prices. Democrats and Republicans both agree drug prices need to be reduced, and on Tuesday Pelosi signaled a willingness to work with President Trump and his administration to lower prices.

    Pelosi, during an interview on PBS NewsHour, said, "I think we could find common ground on reducing the cost of prescription drugs, if the president is serious about his saying that he wants to do that." Pelosi in a victory speech Tuesday said she hopes to pass a bill in the House that would allow the federal government to directly negotiate Medicare drug prices with drugmakers.

    In addition, Democrats are expected to introduce a bill aimed at increasing generic competition to lower drug prices. A congressional aide said Rep. David Cicilline (D-R.I.) will reintroduce the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act in the next Congress. The CREATES Act would allow generic drugmakers to sue brand-name drugmakers to obtain samples of brand-name treatments to develop generic versions. The Pharmaceutical Research and Manufacturers of America said it does not support the current version of the CREATES Act, but it does take concerns over the issue seriously (Luthi, Modern Healthcare, 11/6; Baker, "Vitals," Axios, 11/7; Bartz, Reuters, 11/7; Weixel, The Hill, 11/6; Ollstein/Cancryn, Politico, 11/6; Martin/Burns, New York Times, 11/6; New York Times, 11/7; Alker Tweet, 11/7; Levitt Tweet, 11/6; Diamond, "Pulse," Politico, 11/7; Cancryn, Politico, 11/5; Karlin-Smith/Owermohle, "Prescription Pulse," Politico, 11/5; Rovner, Kaiser Health News, 11/2).

    Advisory Board's take

    Yulan Egan

    Yulan Egan, Practice Manager, Health Care Advisory Board

    We expect that last night's results will have important implications for the health care industry. Here are our five main takeaways:

    1. A split Congress will keep health care reform squarely in the spotlight, while limiting the possibility of drastic legislative action in the next two years. With Democrats regaining the House majority, Republicans will be unable to make another attempt to repeal and replace the ACA (even if they wanted to, which is far from clear). And without control of the Senate, Democrats will be unable to send any sweeping legislation such as Medicare-for-All, or even a restoration of the individual mandate, to President Trump's desk for veto.
    2.  Nonetheless, health care is likely to remain a key issue of debate in Congress, particularly if House Democrats follow through on campaign promises to use their oversight and investigation power to scrutinize the administration's implementation of the ACA.  Notably, the role that health care played in securing Democrats' House victory has important implication for future elections, as the party's stance on reducing out-of-pocket expenses and maintaining protections for pre-existing conditions helped secure victory in several battleground House districts and governorships.

      “The two parties share several areas of focus: advancing transparency, scrutinizing consolidation, and bolstering rural health care facilities.”

    3. Most recent health care activity in Congress has been—and will continue to be—bipartisan in nature. Despite the intense focus placed on diverging health care philosophies in this year's elections, Democrats and Republicans have continued to collaborate on a number of health policy issues in Congress, including efforts to address the opioid epidemic and advance bipartisan updates to MACRA. In fact, the two parties share several areas of focus for the next two years: advancing transparency, scrutinizing consolidation, and bolstering rural health care facilities. Providers should expect such consequential, if unheralded, cooperation to continue.
    4. The outcome of several key state races and ballot measures will have larger near-term implications for providers in a handful of states—particularly vis-à-vis Medicaid. With voters in Nebraska, Utah and Idaho voting in favor of Medicaid expansion and Democratic gubernatorial candidates winning races in Kansas, Maine and Wisconsin, hospitals and health systems in those states are likely to experience at least slight increases in coverage levels. However, Republican gubernatorial victories in key states including both Florida and (likely) Georgia—where Democratic victories could have resulted in expansion of Medicaid to over two million individuals—mean that the any upcoming wave of Medicaid expansion will fall far short of the most aggressive projections.
    5. The heavy focus on administrative action and rulemaking will continue unabated. The past six months alone have seen a redesign of the Meaningful Use program (now called Promoting Interoperability), an expanded requirement for hospitals to post standard charges online, a major payment reduction for off-campus HOPD clinic visits, and a (delayed) overhaul of E/M payment and documentation. As 2018 draws to a close, we await a final rule following CMS' proposed overhaul of the Medicare Shared Savings Program (MSSP) and a potential innovation pilot to test direct provider contracting in Medicare and Medicaid. Given the administration's now-limited ability to drive major reforms through legislation, 2019 and 2020 are also poised to be busy rulemaking years.
    6. “2019 and 2020 are poised to be busy rulemaking years.”

    7. While the debate around health care coverage will linger on, the drive to slow the growth in health care spending remains a bipartisan effort at both the federal and state levels. Efforts to increase transparency, shift care to lower-cost settings, and reward providers for value are here to stay—both leading up to 2020 and beyond. Meanwhile, players in the private sector—including assertive health plans, activated employers, and outside disrupters—are coming to the forefront with attempts to apply pricing pressure to health care providers. And with not-for-profit hospital margins already at an all-time low, it's never been more important for hospitals and health systems to develop a comprehfaensive approach to margin management.

    To discover more about how these developments in health policy will impact providers—and to learn how leaders can capture the revenue growth they need as part of a comprehensive margin strategy—make sure to register today for our Health Care Advisory Board National Meeting.

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