President-elect Trump’s vision for U.S. health care and its effect on providers


A few days ago, one of the most virulent, emotional and taxing election cycles in American history came to a surprising and unexpected close with the election of our 45th president: Donald J. Trump. A great deal has been written regarding the effect of this election, historically, socially, politically and more — so we will offer no such commentary here. Rather, it is time to address how the election of President Trump will affect the business of medicine — specifically the effect on health care practitioners in Southern Nevada.

President Trump’s health care policy

The new president’s approach to health care, as set forth in his public policy statements, centers around an expansive deregulation of health care and health insurance, transferring authority and responsibility to states, the private sector and consumers. The “tent pole” reforms designed to accomplish these goals include the immediate repeal of the Affordable Care Act, intrastate health insurance sales, fully deductible personal health insurance premiums, expansion of Health Savings Accounts (HSAs), transparent provider pricing, block granting Medicaid and removing barriers to entry of overseeing pharmaceuticals.

Dramatic private health care insurance reform

The complete repeal of the Affordable Care Act will likely result in the vast majority of those who obtained insurance following its passage (about 20 million Americans; 125,000 in Nevada) losing or abandoning that coverage. Without a mandate or a subsidized option, there simply aren’t adequate economic incentives. While the exit of young, healthy individuals will put upward pressure on premiums, we believe the removal of the requirement to insure those with pre-existing conditions will have the greater effect. The net being a reduction in the risk to insurers and subsequently lowering premiums.

Further, the decreased regulation and expanded tax deductibility will increase competition among private insurers for consumer health care dollars. Greater competition will put downward pressure on premiums and likely signal increased reimbursements to expand networks (to attract choice-conscious consumers) and the return of high-cost “Cadillac” plans.

Federal programs: Medicare and Medicaid

Nevada ranks last in Medicare participation rates with 22.5 percent of Nevada medical doctors opting out of the federally subsidized program. This circumstance is likely due to Nevada’s substantial shortage of physicians. Las Vegas is underserved by more than 2,600 physicians according to recent estimates. This, in turn, leads to larger patient populations per physician — which provides an incentive to reject lower-reimbursement insurances such as Medicare. The improved private health care options will likely expand this trend.

As for Medicaid, with funds being block-granted to the states and Nevada’s reputation for efficient program management under Gov. Brian Sandoval, the likely result is a substantially more efficient Medicaid program in the state. With the sudden increase in the uninsured at lower incomes, Nevada Medicaid will likely need to expand to avoid local emergency rooms bearing the crippling cost of serving the uninsured. Expanded and efficient Medicaid is expected to result in materially better reimbursement from Nevada Medicaid for providers — to ensure high-quality care and adequate participation.

Delayed impact reforms

Some of President Trump’s health care reforms will require substantial time to implement and even longer to have a material effect. They are, however, still important.

Public pricing for health care consumers has long been a popular idea but overlooks the tremendous complexity involved in medical diagnosis, treatment and billing, which most consumers are insulated from. Specialization in medicine has produced some nearly miraculous gains for the public but has come at the cost of exponentially more complex administration. Having a menu at the front counter of your doctor’s office sounds good — but when that menu is more than a hundred pages long and different for each office, the impact will be muted, if impactful at all.

Deregulation of pharmaceuticals is similarly more complex than may be imagined. The Federal Drug Administration is certainly expensive and unwieldy but has provided reliable and safe medicine to the American public for decades. The interests and stakeholders involved represents trillions of dollars and will take time to unseat. The expansion of the market to smaller players should result in increased innovation and may offer benefit to Nevada, which has the space and resources to attract these types of companies, but the runway is long and benefits likely too distant to be considered in the short-to-medium term.

Conclusion

President Trump’s tenure will likely represent a rollback of much of health care industry’s regulatory expansion over the past eight years but provide for even greater growth and better patient service to those who retain health coverage. Health care has become an increasingly important policy issue and the Trump Administration’s privatization and deregulation plans represent significant opportunities for private practitioners and their patients in the years to come.

Glenn H. Truitt, Esq., is a partner with Las-Vegas-based iDeal Business Partners. You can contact him at glenn@iDealBusinessPartners.com.