How Digital Health Companies Are Navigating The Rough Waters Of Trump Era Healthcare Politics – Forbes
Donald Trump’s election combined with continued Republican control of Congress creates uncertainty for the U.S. health care economy that has no recent parallel. Digital health companies and digital health investors are undeterred. Many push forward by focusing on long-standing patient needs and efficiency challenges that any administration will need to tackle.
Healthcare is highly regulated, the federal government pays for half of it, and were are in the midst of a major reform launched by President Obama and a Democrat-controlled Congress in 2010. Now new hands are on the tiller, and they promise a sharp turn to starboard, but as of yet they not have plotted a comprehensive and coherent course. The Kaiser Family Foundation, IMHO one of the best resources for understanding U.S. healthcare, posted a distillation of President-elect Trump’s declared positions on healthcare after the election. What does he intend to do beyond repealing the ACA and replacing it with something “much better”? KFF distills Trump’s declared intentions into six points, summarized below:
â¢ Health insurance: Trump would completely repeal the ACA including the mandate for individuals to have insurance coverage and for insurers to cover them regardless of pre-existing conditions. Instead, he would create high risk pools for individuals with expensive pre-existing conditions, and, in lieu of premium tax credits, Trump would provide a tax deduction for the purchase of individual health insurance. He would seek to keep individuals’ costs down by allowing insurers to sell plans across state lines, increasing competition which should reduce premiums, and by increasing use of tax-advantaged Health Savings Accounts (HSAs) which incent consumers to shop for the best prices for healthcare.
â¢ Medicaid: Trump and the Republican House leadership would repeal the Medicaid expansion created by the ACA and replace it with block grants to the states for subsidized healthcare for low-income people, which the states could spend as they determined best.
â¢ Medicare: Trump has proposed few specifics beyond repealing the ACA, which has many provisions affecting Medicare including improved prescription drug benefits and cost-saving initiatives, and “modernizing Medicare”. KFF notes that, in policy-speak, this term often refers to increasing the age of Medicare eligibility and/or re-structuring premiums.
â¢ Prescription drugs: Trump supports importation of drugs from overseas that are safe and reliable but priced lower than in the U.S., presumably as a means to create savings for consumers with unaffordable prescriptions and generally hold prices down. He also supports greater price transparency from all health providers.
The last two points in the KFF summary address Trumps positions on the Opioid Epidemic and Reproductive Health, which primarily affect standards of care and social policy rather than the economics of the healthcare industry.
Looking at this through the eyes of the digital health entrepreneurs that I know, I see a couple of takeaways. First, Trump is likely to take some federal money out of the healthcare system by, e.g., by abolishing exchange subsidy tax credits and replacing them with tax deductions. This will reduce the volumes and revenues of providers, particularly hospitals, which will make selling to these markets tougher in the near term. Longer term, it will drive continued initiatives for cost reduction via consolidation and other means, which will create opportunities for startups.