This is the seventh article in our series on the effect of a “slow repeal” of the ACA. This week’s discussion focuses on the potential impact on healthcare technology.

Industry experts are predicting that a slow repeal of the ACA will have very little, if any, negative impact on healthcare technology. Healthcare technology grew at an unprecedented pace under the ACA, in part because the ACA contains provisions which provide healthcare technology with incentives to develop and implement new systems aimed at increasing efficiency. Despite the significant amount of uncertainty with a slow repeal of the ACA for many players in the healthcare industry, healthcare technology appears to be poised for continued growth through value-based care, telemedicine, and the increased need for interoperability.

VALUE-BASED CARE AND MACRA APPEAR AS THOUGH THEY WILL SURVIVE A SLOW REPEAL OF THE ACA

Both private and public payers are concerned with controlling the costs of healthcare. The ACA incents payers to rethink traditional healthcare and transition reimbursement from a fee-for-service structure (more patients and procedures mean more money) to a value-based care approach (payments based off of patient outcomes through population health management strategies). Despite promises by President Trump to repeal and replace the ACA, the current proposals by Republicans to repeal and replace the ACA—the Better Way Forward and Patient Choice Act—do not appear to reverse the push toward value-based care.

The MACRA (Medicare Access and CHIP Reauthorization Act of 2015) legislation passed with unprecedented bipartisan support, receiving a 92-8 vote in the Senate. MACRA eliminated the Medicare Sustainable Growth Rate and implemented the Quality Payment Program for eligible professionals, representing Medicare’s push toward value-based care. Secretary Tom Price, the recently confirmed Secretary of Health and Human Services, voted for MACRA. However, Secretary Price has expressed some concerns about its implementation, so the full effect and timing for implementing MACRA is somewhat in play.  While only Congress can change the timing of the payment adjustments MACRA mandates, CMS, under the direction of Seema Verma, the likely new CMS Administrator, could change the timing of the performance periods and “scoring methodologies” MACRA utilizes to reward better patient outcomes.  Still, the thousands of pages of new requirements for Medicare providers under MACRA convey a central theme – both governmental and commercial payer arrangements are more dependent than ever on healthcare technology, particularly quality data submissions.

TELEMEDICINE IS POISED TO GROW UNDER A SLOW REPEAL OF THE ACA

In the ever increasing focus on value-based care, it is likely that the growth of telemedicine will play a role in generating additional revenue, cutting costs, and enhancing patient satisfaction.  Judging from the abundant flow of investments from venture capital funds to the healthcare IT area (two of the top venture-backed companies are telemedicine firms Teladoc (TDOC) and privately held American Well), it is not surprising that some predict that global telemedicine’s market will grow at a compounded annual growth rate of 14.3 percent through 2020. The U.S. is going to play a significant role in the growth of telemedicine. Telemedicine programs have enjoyed bipartisan support as a way to improve access to care while reducing costs.

Candidate Trump endorsed the use of telemedicine and its potential to deliver healthcare quickly and efficiently for veterans. Although few details emerged from President Trump’s meetings with the Governors on February 26, 2017, or the closed-door meeting with the representatives of Blue Cross Blue Shield, Cigna, Humana, UnitedHealth Group, Aetna, Anthem and Kaiser Permanente on February 27, 2017, it is likely that the administration will view telemedicine as an important use of technology to boost access to care for all Americans while reducing the costs of delivering care.

HEALTHCARE’S NEED FOR INTEROPERABILITY WILL LIKELY CONTINUE UNDER THE TRUMP ADMINISTRATION

Thanks in large part to provisions in the ACA, the healthcare industry is creating and generating a large amount of data. The next big question for healthcare technology is how to utilize all of this data in a manner to further reduce costs and improve care.

The American Recovery and Reinvestment Act of 2009 created the Health Information Technology for Economic and Clinical Health (HITECH), an unprecedented investment in health information technology. HITECH provided tens of billions of dollars in incentives for healthcare providers to implement federally approved IT systems. By 2015, electronic health record (EHR) utilization in hospitals grew from 12 percent to 96 percent under HITECH.

However, EHRs and other medical data largely exist in silos—interoperability between the systems is relatively nonexistent. The West Health Institute published statistics that indicate that interoperability between healthcare technology systems could help the U.S. save $30 billion per year in healthcare costs by reducing redundant testing, manual data entry and transcription errors. If the slow repeal of the ACA contains provisions to encourage and incentivize healthcare technology, it is likely that interoperability will be a key component of these provisions.

A slow repeal of the ACA is unlikely to eliminate the need for interoperability because of the promise that it offers—the ability to reduce costs and eliminate waste. Whether the Trump Administration, or the marketplace will supply the resources to fill this need is yet to be seen.

NEW IMMIGRATION POLICIES COULD POTENTIALLY IMPACT HEALTHCARE TECHNOLOGY TALENT

The technology industry often recruits highly skilled workers from abroad. With the increase of technology’s integration into healthcare, new policies on immigration and trade could have a significant impact on the healthcare technology industry.

Candidate Trump stated that he supported skilled immigration. However, Candidate Trump also expressed opposition to the H-1B specialty nonimmigrant visas—one of the primary routes for skilled immigrants to enter the country. Policies restricting the H-1B programs could impact the supply of talent and/or increase the cost of talent for healthcare technology companies. With the current uncertainty surrounding President Trump’s immigration policies, it is likely that healthcare technology companies will feel an impact in recruiting highly skilled talent.

Healthcare technology will probably not experience the same level of uncertainty of a potential slow repeal of the ACA as the provider and health insurance sectors. In fact, industry experts predict that healthcare technology will continue to thrive despite a slow repeal of the ACA, particularly through value-based care, telemedicine, and the increased need for interoperability.