Under the House’s updated version of the American Health Care Act (AHCA), provider-sponsored plans expect decreased federal funding resulting in many of the people they cover becoming uninsured, and also hospital closures.
For example, one CEO of a provider-sponsored plan said recently at a not-for-profit healthcare investor conference, “The AHCA scares the hell out of me.” (“Provider-Sponsored Health Plans Brace for AHCA,” HFMA Weekly, May 26, 2017)
Another delivery system executive said, “Taking money out of health care the way they are talking about taking it out, given some of the issues we’re facing, is going to have consequences. While I don’t disagree that we’re going to be there to take care of people, there may be fewer hospitals, there may be fewer doctors in some areas because health systems are going to have to react.”
The 31 states that expanded Medicaid eligibility under the Affordable Care Act probably will feel the biggest financial impact. Debt analysts have said the AHCA will make them more hesitant to invest in not-for-profit hospitals in these states and in states that use large provider taxes to fund Medicaid coverage. (“House-Passed AHCA to Leave 23 Million More Uninsured: CBO,” HFMA Weekly, May 26, 2017)
One healthcare executive urged insurers and providers to increase their integration and collaboration to “bring about a better value proposition, better quality, more affordability and better access to care for people who need it. Because of all the uncertainty that is out there right now from a legislative and from a regulatory perspective, there’s one thing I’m pretty confident in saying: There’s not going to be a whole lot more money coming into the system to pay for this stuff.” (“Provider-Sponsored Health Plans Brace for AHCA,” HFMA Weekly, May 26, 2017)
Criteria for Success
The executives noted several important keys to success with provider-sponsored health plans under the AHCA:
- Cautiously expanding participation in the plan
- Striving for at least 400,000 total covered lives in all plan types combined
- For those considering launching health plans, conducting a brutal assessment of whether the organization is focused on population health or whether it is still geared toward driving volume to its hospitals
- Investing the needed capital and expertise
iProtean subscribers, the advanced Mission & Strategy course, When the Dust Settles, featuring Marian Jennings and Dan Grauman, is in your library. Marian and Dan discuss the complexities of moving to a value-based healthcare organization, key features necessary to ensure the board and leadership stay ahead of the curve, the importance of thoughtful and thorough assessment of options available to the organization, the risks inherent in new investments and changes in board recruitment and development.
Coming soon: the advanced Finance Course, Financial Risks & Strategic Implications of APMs, featuring Marian Jennings and Seth Edwards. In this course, Ms. Jennings discusses the importance of social determinants of health in a population health management strategy.
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