Health Care Policies under the Trump Administration

Steven T. Parente, Minnesota Insurance Industry Chair, Health Finance, Carlson School of Management, Associate Dean, MBA Programs and  Director, Medical Industry Leadership Institute, University of Minnesota, and Former Health Policy Advisor to Sen. John McCain (R-Ariz.) and Stephanie Carlton, Engagement Manager/Expert, McKinsey & Company and Former Health Policy Advisor to Former Florida Gov. Jeb Bush
Steven T. Parente, Minnesota Insurance Industry Chair, Health Finance, Carlson School of Management, Associate Dean, MBA Programs and Director, Medical Industry Leadership Institute, University of Minnesota, and Former Health Policy Advisor to Sen. John McCain (R-Ariz.) and Stephanie Carlton, Engagement Manager/Expert, McKinsey & Company and Former Health Policy Advisor to Former Florida Gov. Jeb Bush
Steven T. Parente, Minnesota Insurance Industry Chair, Health Finance, Carlson School of Management, Associate Dean, MBA Programs and  Director, Medical Industry Leadership Institute, University of Minnesota, and Former Health Policy Advisor to Sen. John McCain (R-Ariz.) and Stephanie Carlton, Engagement Manager/Expert, McKinsey & Company and Former Health Policy Advisor to Former Florida Gov. Jeb Bush
Steven T. Parente, Minnesota Insurance Industry Chair, Health Finance, Carlson School of Management, Associate Dean, MBA Programs and Director, Medical Industry Leadership Institute, University of Minnesota, and Former Health Policy Advisor to Sen. John McCain (R-Ariz.) and Stephanie Carlton, Engagement Manager/Expert, McKinsey & Company and Former Health Policy Advisor to Former Florida Gov. Jeb Bush
A well-functioning health care market could operate more efficiently, while delivering better care, according to two policy experts who took part in a morning discussion on "Health Care Policies under the Trump Administration."

As Stephanie Carlton, R.N., engagement manager/expert, McKinsey & Company, and former health policy advisor to former Florida Gov. Jeb Bush, told attendees, “There is certainly a lot of room for change. But we need to think about the broader issues in health care.”

Among the issues to consider are putting the right incentives in place for consumers to seek out and use health care when necessary, and greater transparency so they can make value-based decisions, Carlton said. “We also need more transparency between, doctors, hospitals and health care plans,” she added. “That lack of information is one reason health care services are so expensive.”

Steven T. Parente, Minnesota Insurance Industry Chair University of Minnesota, and former health policy advisor to Sen. John McCain (R-Ariz.), said House Speaker Paul Ryan’s “better way” plan incorporates many of the features of the Affordable Care Act (ACA), including guaranteed coverage for pre-existing conditions and coverage for young adults to age 26.  But he cautioned that many Americans might lose their Medicaid coverage, and be unable to afford anything more than catastrophic coverage in the private market.

Emphasizing that neither he nor Carlton was an advisor to the Trump administration, Parente said that it’s instructive to look at the history of health care policy in the United States. “The goal of getting everyone covered has come up five times in Congress in the past 100 years, and we have said no every time,” he said. “Instead, we make changes incrementally, partly because we have such a pluralistic nation. I’m from Minnesota and if our state was a country, we would have had national health insurance back in 1912.” 

Closer in time, 70 to 80 percent concepts of the Democrats’ ACA were embedded in a 1991 Republican bill, Parente said.  Basically, Obamacare was a Republican plan with an extension of Medicaid, he added.

Carlton added that the Republican-controlled Congress in 2015 passed the Medicare Access & CHIP Reauthorization Act (MACRA), which was signed by President Obama. The law’s provisions included new funding for the development of quality measures, as well as data sharing and also established new federal advisory groups.

One of the most pressing concerns with the ACA is that some insurers are withdrawing from state markets or limiting coverage options because of higher-than-expected costs. Carlton said a recent McKinsey study found that in five states, only one carrier was offering coverage. “The clock is ticking for Congress, because June 21 is the deadline for insurers to file their ACA plans in the state markets,” she said.

But Congress should step back and think carefully about quality as well as the cost of health care in moving toward a “repeal and replace” plan, Carlton added. “In recent years, health care productivity has only risen about 6 percent, far below the increases in manufacturing and other sectors of the economy,” she said. “One of the reasons is the relatively slow adoption of technology.”

Parente said that data must become more liquid and flow from one information system to another, including physicians, hospitals, laboratories, pharmacies and health plans.  He added that insurance claims, for example, only measure the process and the costs of care – not the outcomes for patients.

Policy makers should also consider who has access to aggregate patient data, such as academic researchers or commercial companies. “Health plans need access to data to be sure they are insuring medical risks appropriately,” she said. “We also need to invest in ways to engage consumers, give them access to pricing and help them make better decisions about health care.”

Parente agreed, adding that a recent pilot study by the Health Care Costs Institute found that there can be a 200 percent difference in the cost of a knee replacement in the same metropolitan market.  Therefore, greater price transparency for discretionary procedures could help in managing health care costs.

“When consumers are self-paying, they are more motivated by price,” Parente said. “However, it will take many years before physicians think about price in the same way.”

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