How the Trump admin wants to make health care more competitive

HHS on Monday released 119-page report with recommendations on how to promote choice and competition in the U.S. health care system.

Cheat sheet: What you need to know about the ACA

Report details

President Trump under an executive order last year directed HHS, the Department of Labor (DOL), and the Department of the Treasury (DOT) to issue a report every two years on how to promote choice and competition in the U.S. health care market, MedPage Today reports. HHS Secretary Alex Azar, DOL Secretary Alexander Acosta, and DOT Secretary Steven Mnuchin co-authored the report.

The report examines how state and federal laws, regulations, and multiple stakeholders affect health care competition. The report includes policy recommendations across four categories: the health care workforce, provider markets, insurance markets, and health care consumers.

According to HealthLeaders Media, the report largely reiterates the Trump administration's previous positions and includes several recommendations previously considered and advanced by Republican lawmakers.

Policy recommendations

The report states that currently, "[t]here is likely an inadequate supply of physicians in the United States." It continues, "Moreover, there is an uneven distribution in physician supply (both geographically and across specialties), GME training slots, and in government support for GME. Yet there is inadequate information to assess overall physician needs, and for different specialties in different geographic areas."

To remedy those problems and improve workforce competition, the report authors recommended:

  • Allowing providers to offer telehealth services across state lines—and improving reimbursements for those services;
  • Changing how the government allocates medical education funding to factor in the number of residents a hospital trains for careers in in-demand specialties;
  • Easing scope of practice laws to allow all health care providers to perform at the top of their licenses and be directly reimbursed for provided services;
  • "[E]asing the licensing pathway for highly qualified, foreign-trained doctors"; and
  • Permitting multistate medical licenses.

How to bolster provider markets

According to the report, state policies that limit provider entry into new markets "have resulted in higher health care prices and fewer incentives for providers to improve quality."

To improve market competition among providers, the report recommended:

  • Allowing the Federal Trade Commission to enforce antitrust laws for nonprofit hospitals;
  • Easing the Affordable Care Act's (ACA) rules that bars new physician-owned hospitals from Medicare;
  • Implementing more site-neutral payments;
  • Promoting the development of value-based care models; and
  • Repealing or significantly scaling back state "certificate-of-need," or CON, laws, which require providers to request permission to build certain new facilities.

The authors wrote, "Not only may CON laws impose costly barriers to provider entry, but by interfering with market forces that normally determine the supply of facilities and services, they can suppress supply, misallocate resources, and shield incumbent health care providers from competition from new entrants."

They also criticized the ACA's restrictions on physician-owned hospitals. The authors noted that the current restrictions, which were backed by the American Hospital Association, were intended to eliminate potential conflicts of interest and were based on "concerns that physicians may be referring the healthiest patients to their own hospitals." However, the argued, "Those concerns may have been overstated, considering that many studies suggest physician-owned hospitals provider higher-quality care and that patients benefit when traditional hospitals have greater competition.

How to bolster insurance markets

The report authors in this section took aim at many of the Affordable Care Act's regulations and mandates, noting, "Government mandates often reduce choice and competition in insurance markets and increase overall premiums." 

To improve insurer competition, the report recommended:

  • Expanding access to health savings accounts (HSAs) and health reimbursement accounts;
  • Increasing access to association, limited-duration, Medicare advantage, and short-term health plans;
  • Relaxing the ACA's network adequacy requirements; and
  • Repealing the ACA's employer mandate.

The report authors proposed several ways HSAs and HRAs could be expanded, including:

  • Expand employers' ability to offer health reimbursement accounts (HRAs);
  • Expanding access to HSAs to all U.S. residents, including Medicare beneficiaries who are currently barred from contributing to HSAs;
  • Allowing consumers enrolled in a health plan with a 70% actuarial value to contribute to an HSA; and
  • Allowing consumers to use HSAs to pay directly for a broader scope of preventive care and premiums.

How to improve care for consumers

The report also said consumers should be given more control over their health care spending. The authors wrote, "Our health care system's excessive reliance on third-party payment insulates consumers from the true price of health care and offers them little incentive to search for low-cost, high-quality care."

To address those issues, the report recommended:

  • Implementing reference pricing, which refers to when a payer sets a maximum amount it will reimburse for certain services and medication; 
  • Improving price transparency;
  • Improving access to electronic health records; and
  • Reconsidering the ACA's nondiscrimination provisions, which the administrations argues can result in undue administrative burdens.

Reaction

The report drew a mixed response from hospital groups, which warned against the proposal to ease restrictions on physician-owned hospital, Becker's Hospital Review reports.

Chip Kahn, president and CEO of the Federation of American Hospitals (FAH), in a statement said, FAH supports the administration's goal to increase competition and some of the administration's proposals related to telehealth and quality report, but "[t]oo many elements of the administration's report resort to the same old bromides that got us here in the first place, and would reverse the progress hospitals and others are hard at work on." In particular, Kahn said "physician-owned hospitals are part of the problem, not the solution, as reports from [Government Accountability Office], [HHS' Office of Inspector General], and MedPAC have well documented."

Tom Nickels, executive vice president of the American Hospital Association, in a statement said, "Based on our initial read, we are pleased by several of the proposals put forth in today's report, such as those to broaden providers' scope of practice and expand access to telehealth, which will improve access to care for patients. At the same time, we strongly oppose attempts to loosen the current restrictions on physician-owned hospitals" (Baker, "Vitals," Axios, 12/4; Commins, HealthLeaders Media, 12/4; Lotven, Inside Health Policy, 12/3 [subscription required]; Rappleye, Becker's Hospital Review, 12/4; Friedman, MedPage Today, 12/3; AHA release, 12/3; FAH Hospital Policy blog, 12/3).

Cheat sheet: What you need to know about the ACA

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The Patient Protection and Affordable Care Act, otherwise known as the ACA, is the comprehensive health care reform bill passed by Congress in March, 2010. The law reshapes the way health care is delivered and financed by transitioning providers from a volume-based fee-for-service system toward value-based care.

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