Affordable Care Act: Providers

Affordable Care Act: Impact on providersA potential bright spot for providers is the likelihood that Trump and the GOP-controlled Congress will ease regulatory scrutiny on hospital mergers. Under the Obama administration, the Federal Trade Commission held up potential beneficial hospital megamergers and even smaller mergers over anti-trust concerns.

“Trump is a businessman and he is expected to ease up on regulation,” said Anne McGeorge, national managing partner in the U.S. and globally for Grant Thornton’s Health Care practice.

“While there are a number of unknown factors, providers can benefit by focusing on more predictable market trends,” said Erik Shannon, national partner-in-charge, Health Care Advisory Services.

For example, providers should concentrate on the rapid changes in patient engagement, particularly the growth of so-called retail medicine, clinics in nontraditional settings. Some patients prefer these fast, easy-access services, which lately have been used more often than the traditional way of seeing a family physician.

“No matter what happens to the ACA, there are certain strategies that are fundamentally sound,” Shannon said. “From a competitive perspective, these times are an opportunity. If your competition is in a wait-and-see mode, this is an opportunity to go after market share.”

Nevertheless, hospitals, clinics and physician groups are concerned whether changes to the ACA will reduce the number of patients covered by insurance. The nonpartisan Congressional Budget Office projected that as many as 18 million patients could lose coverage in the first year if the ACA is repealed without a viable replacement. The uninsured tend to avoid preventive care visits, which are less costly to provide and tend to only seek medical care when they are seriously ill.

Providers are particularly concerned about possible changes to Medicaid. Under the ACA, the federal government funded the expansion of Medicaid coverage. If Trump fulfills his pledge to shift Medicaid funding to the states, perhaps in the form of block grants, there could be wide variations in how the program is administered, which could result in fewer people being insured.

“What happens to the Medicaid expansion patients? Will they become uninsured again? And will that drive up provider costs?” McGeorge asks.

Whatever happens with the ACA, it is likely that provider reimbursements from Medicare for Medicaid will decrease. Consequently, providers are wise to stay the course on cost-cutting measures and continue to find ways to deliver care more efficiently, while providing service at high-quality standards.