Clinton vs. Trump 2016: Healthcare (Part 4 of 4)
In the previous three blogs we have attempted to set a baseline and then review the basic public policy platform of both Secretary Clinton and Mr. Trump regarding our national healthcare policy going forward.
Based on more than a quarter-century in healthcare we believe that there will be an impact on healthcare as a result of the election. However, we believe that the biggest impact to healthcare will be from things that neither presidential candidate can fundamentally change.
Looking back over the last eight years of President Obama’s term, it was not the Affordable Care Act of 2010 or the HITECH Act of 2009 that had the biggest impact on healthcare, it was actually the year 2011. Why?
The Baby-Boom era began in 1946. If he add 65 years to 1946 we get 2011; so 2011 is the threshold for retirement age of the first baby boomers; a group of 77 million Americans reaching 65 at the rate of 10,000 a day. We see that the master trend in the United States is the “Aging of America,” and with that as the foundation, we believe that certain things are likely to happen.
This fact is now accentuated by the other big news that with the advancement of drugs, diagnostics, and advanced treatment nearly all of us are reaching 70 years of age. An interesting fact is that Mr. Trump was part of that first wave and he reached 70 years old this year and Secretary Clinton will turn 70 next year. With the average lifespan of this generation expected to be in the low to mid 80s, the social, productivity and economic impact are material and why in previous blogs we have predicted that the national health expenditures left unchecked are likely to reach 30% of gross domestic product in the next 25 years.
We believe that regardless of which candidate wins the election, transparency and more competitive pressures will likely prevail. Many states have started this process, led by California. States are pushing for more transparency on cost before care is rendered to consumers.
We expect the next administration will take a more active role in negotiating prices for pharmaceuticals, as well as continue what is been the long-term path for managed care and outcome-based compensation. We have noted that repealing the Affordable Care Act is not likely; however, we admit that the current model is broken, and was broken for the start, so we anticipate major overalls during the calendar year 2017, or we believe we could witness a total collapse before the beginning of calendar year 2018.
We see a explosive growth in managed care, remote treatment bracket (telemedicine), consumer directed care and major investments in how we use technology to connect the patients to the entire care team anywhere and anytime. We see the next evolution in electronic health records (EHR) migrating to entire wellness platforms.
Managed care should do very well regardless of which candidate is elected as Medicare Advantage and Medicaid Managed Care is expanded, as well as Medicaid. We have also noted previously that the state of Florida has effectively completely converted the Medicaid program to manage care.
We believe that with new regulations, such as the release of MACRA last week, consisting of over 2,000 pages of new regulations, the independent physicians are soon going to be an endangered species resulting in major consolidation over the next 25 years. Individual physicians, not allowed by law to negotiate collectively, remain the one of the last cottage industries in the United States.
The Single-Payer system, that many conservatives fear was not possible in 1993 under the plans of Secretary Clinton, then First Lady of the United States, is far more possible today than in 1993 given our emergence from the dark ages of technology, pre-Internet, pre-Google and pre- Facebook and Twitter.
We Baby-Boomers are not like our parents. We respect, but are cautious of authority, and question a great deal, for better or for worse. The Millennials simply tolerate authority, are way more independent, so a push for socialized medicine will be resented from two generations of over 150 million Americans that, for different reasons, will act in unison.
We have emerged from pagers to cell phones to an era were a Tweet can now reach tens of millions of people in a seconds and a Facebook video can go viral in minutes. Can you imagine a mass push to socialized medicine? I know it has been said the Social Security is the third rail of politics, now I think that the socializing of medicine as conceived in the recent past, could break the Internet.
Relative to all the other segments of healthcare, we expected healthcare technology, software, automation, transparency, care coordination, EHR and practice management to be very hot industries going forward. In part, this is because of what begins in 2017, and is a subject for a future blog, is MACRA. This legislation will continue to expand well into the next decade, continuing to connect quality of care with compensation. Providers will risk material reduction in reimbursements as well as material increases in reimbursement based in large part on the outcomes of their patients and the reporting to CMS. We have noted before that it was Teddy Roosevelt who was the first presidential candidate that ran on a platform to reform healthcare. That was 17 presidents ago! We think that the 18th president, whomever they may be, will continue with wrestling with that issue. The major difference was at the turn-of-the 20th century we were a country hungry for expansion and growth. With a population of approximately 80 million. Today we are over 330 million strong, and the reality is that we are also an aging population.
We do not know how much was spent in GDP in healthcare in 1902 but we know that the percentage of GDP spent on healthcare in 1965 was less than 5%. We also know that the average lifespan has increased by 30 to 40 years since 1902 so it is reasonable to suggest that that material increase in health expenditures bears a astrong correlation to the increase average lifespan which provides not only for different and better quality of life, but also material and substantial economic opportunity.
Historically, Democrats have proposed major healthcare regulations such as Harry S. Truman did in his 1948 campaign. Pres. Truman after election had to modify his goals to cover the elderly and it actually took until 1965 under Pres. Johnson that Medicare came to life. We also have historical push for nationalized healthcare that was proposed by then First Lady Hillary Clinton in 1993, and recently by Sen. Bernie Sanders.
It is very interesting that Republicans have, in fact, also made material changes in expansion of healthcare from recent memory of Richard M. Nixon and Ronald Reagan’s creation of the Medicare Managed Care Program and also George W. Bush in the creation of Medicare Part D, drug program.
We believe that 2018 will be very different than 1965 when Medicare was enacted or 2010 when the Affordable Care Act was approved by Congress. The reason is that we are no longer in the times of the great Society with expanding population, expanding technology, expanding productivity of the 1960s driven by the investments by governments and the Space Program and technology combined with the buildup of the Cold War.
Today, we have a country that is approaching $20 trillion in debt, flattening productivity projections and an aging workforce. We believe the next president will put material time and resources toward repairing what is “ObamaCare” and provide continue the incremental changes to the healthcare industry in the United States that is rapidly approaching 17.5% of gross domestic product.
We expect greater emphasis on patient-centered healthcare and we expect the Republicans will work for a solution as Nixon was able to do, as Reagan was able to do and as George W. Bush was able to do.
We think that there will be advancement in the federal government and interstate insurance products as well as telemedicine. We live in the midst of a very mobile society and the Millennials are a mobile generation we believe that the next president will try to find a middle ground in healthcare, and technology in the center of the greatest transition in healthcare we have witnessed in three lifetimes.
We close this series of blogs with our suggestion on what we believe will help no matter who leads our county.
What is the solutions? We think we know what will certainly help.
1. Reducing the cost of care by using more technology to collect, analyze, and make actionable.
2. Engaging the consumer with their own wellness in part by using more health IT.
3. Rewarding consumers for improving their own wellness and reporting their own data.
4. Promoting better care coordination between providers of care and their patients.
5. Advancing a more efficient and transparent system that reduces waste and administration.
6. Adopting a payment model to be more aligned with care, and less to do with visits.
In part 4 of our next blog, we will discuss the summary and expectations for next U.S President.
– Noel J. Guillama, President
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