The future of ACA is in doubt but the bipartisan MACRA law is more likely to survive.

Nov. 11—Health policy experts say the movement to value-based physician pay is unlikely to change under President-elect Donald Trump but physician practice consolidation could be another matter.

Provider consolidation and its effect on healthcare costs was on top of the agenda for the Nov. 3 meeting of Congress’s primary Medicare advisory panel, but Donald Trump’s victory in the presidential election a few days later had health policy observers wondering which new direction payment reform would now take.

Even as they caution against too much speculation too soon, health policy experts are trying to match Trump and Republican legislators’ campaign statements—especially those calling for elimination of the Affordable Care Act (ACA)—with possible future actions and policies. Such new policy efforts could include easing the administrative and bureaucratic burdens physicians face, instituting medical liability reforms, and altering the movement toward value-based payments.

If the federal government backs off of payment reform, some policy observers believed states will have to continue with their own efforts to address rising healthcare care costs of public employees and retirees.

The Medicare Payment Advisory Commission (MedPAC) recently spotlighted the economic impacts of healthcare consolidation and scrutinized the way that costs can increase because hospital horizontal consolidation. The ongoing consolidation trend involves hospital mergers and acquisition and vertical consolidation, which involves hospital systems acquiring physician medical groups and then employing the physicians who practiced within them.

“We have to think of consolidation as a fact of life at this point in the health system,” Jack Hoadley, PhD, MedPAC commissioner and research professor at Georgetown University, said at the MedPAC meeting. “And I think our goal is to try to address the downstream effects of that."

How that will be done remains a mystery. But the spotlight on consolidation’s inflationary influence on physician payments may turn it into a bullseye in future discussions on reducing costs.

Consolidation Costs

The share of employed physicians grew by almost 50 percent from July 2012 to July 2015, from 95,000 to 141,000, according to a study by the Physician Advocate Institute.

Similarly, Jeffrey Stensland, PhD, a principal policy analyst for MedPAC, presented research at the Nov. 3 meeting demonstrating that Medicare paid $1.6 billion more for evaluation and management visits billed as a hospital outpatient service rather than an office-based service. In addition, Medicare beneficiaries paid $400 million more in cost sharing in 2015 because they were billed at hospital-based rates.

Consolidation is “a major driver of healthcare inflation and it needs to be looked at,” Robert Berenson, MD, a fellow at the Urban Institute and a former MedPAC commissioner, said in an interview. The GOP is less likely to move aggressively on healthcare anti-trust cases, Berenson noted, but he added that “I don’t think anti-trust will be the major lever.”

Jeff Goldsmith, PhD, a national advisor to Navigant Healthcare and an associate professor of public health sciences at the University of Virginia, said to expect the unexpected.

“I don’t think the issue of consolidation -- from both the provider and payer sides -- is off the table with a Trump administration,” Goldsmith said. “I think he’ll surprise people with his aggression as he goes after costs.”

Gail Wilensky, PhD, a former administrator for Medicare and a former MedPAC chair, predicted one major recent healthcare cost control push will end.

“I would be rather surprised if you see an expansion of price controls,” Wilensky said. “Irrespective of Mr. Trump, we have a Republican Congress that has rejected price controls in the past and has made clear their lack of support for them. I doubt that will change.”

Berenson and Wilensky noted how, for smaller entities -- either hospitals or medical groups -- consolidation is a matter of survival.

Small hospitals don’t join larger systems to gain operational efficiencies, but for access to capital to fund information technology installations and other modernization necessities, Berenson said. Wilensky said that joining a hospital system is a way “to provide cover” for physicians who don’t have the resources to build the infrastructure needed for new payment models.

“Unfortunately for us patients, it’s giving more power to hospitals if they own physicians,” Wilensky said.

John O’Shea, MD, a senior fellow at the Heritage Foundation’s Center for Health Policy Studies, agreed that federal payment reforms are contributing to consolidation because small practices have trouble keeping up with the requirements of both the ACA and the more recent Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

“A lot of the changes with healthcare reform and payment reform are pushing providers to consolidate,” O’Shea said. “A lot of things could be rolled back or timetables could be extended to make it more reasonable -- especially for smaller practices.”

MACRA Models

A tougher issue to predict is how Trump and the Republican Congress will be able to undo aspects of the ACA, which was passed with no GOP support, without disassembling MACRA, which received overwhelming bipartisan support.

“The bigger question is what the Trump Administration is going to do with alternative payment models -- if it continues with them or backs off,” Berenson said.

The Center for Medicare & Medicaid Innovation (CMMI) was created by the ACA and has been targeted for elimination by some Republican lawmakers. But MACRA uses the advanced alternative payment models developed by CMMI as a primary way to pay physicians.

“The law requires some demonstration models around alternative payment models,” said Suzanne Delbanco, executive director for Catalyst for Payment Reform. “So, whether it’s under CMMI or something else, that function should and needs to continue.”

Bob Doherty, senior vice president of government affairs and public policy for the American College of Physicians, said in an interview that without CMMI “the alternative payment side of MACRA won’t work.”

“I don’t think it’s going to disappear,” Doherty said of CMMI. “Though Republicans can take some measures to make it more accountable to Congressional oversight.”

Physician Pay

As the agenda of the Trump administration and the new Congress crystalizes, some have speculated that provider pay cuts may be a way to pay for legislation to restructure the tax system.

But Delbanco and Doherty cite MACRA as a shield against that happening.

“When you talk about ‘pay fors,’ everything is on the table, but I haven’t heard anything that singles out physician payment,” Doherty said.

“It all depends on whose pay you’re cutting,” Delbanco said. “There may be some large hospital systems that could handle it but, if it happens to primary care, all is lost.”

In addition to working against a successful implementation of MACRA, Delbanco said physician pay cuts also would lead to access issues as more physician practices decide staying with Medicare isn’t financially viable.

Doherty said MACRA will keep driving healthcare transformation from volume- to value-based payments, regardless of efforts to undo the ACA.

“Of all the things I could be concerned about, the movement to more value-based payment is not one that I see as under threat,” Doherty said. “They’re going to need to find cost savings without compromising quality. That’s a constant.”

Also, payment reforms and change do not necessarily have to come from government, Delbanco said. For markets dominated by a high-cost health system, Delbanco envisions telehealth providers offering a low-cost alternative that could reduce emergency- and urgent-care utilization while increasing access to primary care.

Andis Robeznieks is a freelance writer based in Chicago. Follow Andis on Twitter at @AndisRobeznieks.



Publication Date: Friday, November 11, 2016