Notes on Day 4 of the JPMorgan Healthcare Conference

Some interesting presentations on the last day of the JPMorgan Healthcare Conference that concentrated on common themes – the increasing importance of ancillary business line to bolster core business revenue and of filling in holes to achieve scale and full-service offerings.

Genesis Healthcare – The largest U.S. skilled nursing facility (SNF) provider, which also is the largest provider of contracted rehabilitation services, had an interesting story to tell. It reminded me of the endless road trip, where you are trying to appropriately fill the time on the way to your destination, while the kids in the back seat keep asking “Are we there yet?”  For Genesis and, perhaps for the SNF sector, the rainbow at the end of the road is the U.S. demographic pot of golden age seniors.   With Genesis average SNF bed occupancy at approximately 88% over the last 3 years (higher according to Genesis than two large competitors Ensign and Kindred), we continue to see less utilization of SNFs then existing capacity, and beds continue to be taken out of operation. BUT, wait until 2025, when the Baby Boom has fully actualized and when according to Genesis predictions, demand for U.S. SNF beds will outstrip existing capacity.

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The Old and the New – Day 3 Notes from the JP Morgan Healthcare Conference

Day 3 of the JPMorgan healthcare conference was one of striking contrasts between the old and the new. (And, by the way, the rain finally stopped for a day, but it will be back tomorrow to finish off the last day of the conference).

The Old:  Sitting in the Community Health Systems (CHS) presentation and listening to Wade Smith talk about the slimming down of CHS through the 20+ sales completed or in process, the audience could have heard this speech (with a few exceptions about the pending ACA changes) and not known if it was 2006 or 2016.  Very traditional hospital system presentation – admissions and revenue growth (or, as appropriate, losses), hospital market share, number of surgeries, physician recruiting, management of debt and expenses, etc.  All appropriate, but a marked contrast to many of the other hospital presentations this week with their emphasis on moving to risk, population health management, apps and patient engagement and brand.

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Food for Thought (and Health): Day 2 Notes from the JP Morgan Healthcare Conference

Addressing the Social Determinants of Health:  Is the healthcare industry pushing a rock up a hill?  We collectively are trying to provide healthcare with improved quality and reduced cost, but the structure of the nation’s healthcare system remains heavily siloed with the social determinants of health often falling wholly or partly outside the mandate and reach of the healthcare delivery system. Bernard Tyson of Kaiser on Monday noted studies that health is determined approximately 30% by family history and genetics, with the majority of the healthcare impact coming approximately 40% from personal behavior, 20% from environmental factors and 10% from healthcare services.  So, the playing field, if the above numbers are correct, is tilted much more toward nurture, rather than nature.  While we are aware of some hospitals starting to provide housing or other limited services to address the needs of their community and therefore also to address healthcare cost containment, those examples are the exception to date, rather than the rule.

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Looking Forward/Looking Backward – Day 1 Notes from the JPMorgan Healthcare Conference

A large amount of wind, much discussion about the U.S healthcare, and the public getting soaked again – if you were thinking about Washington, DC and the new Congress, you’re 3,000 miles away from the action. This is the week of the annual JP Morgan Healthcare conference in San Francisco, with many thousands of healthcare operators and investors flooding Union Square again only to be greeted by one of the worst storms and floods in the recent history of the Bay Area.  Can’t help thinking about the coincidence of nature providing us with a metaphor for the possible upcoming repeal of the Affordable Care Act.

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Medicaid Demonstration Waivers: A Shorter Path to Increasing State Control Over Healthcare Policy?

Seema Verma’s nomination to head the Centers for Medicare and Medicaid Services (CMS) places Section 1115 Medicaid demonstration waivers into increasing spotlight. This article explores some of the current applications of waiver authority and the role it may play in the new administration.

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Part 3: Exploring “Repeal and Replace”

In Part II of our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, we considered potential healthcare market consequences of a partial repeal of the Affordable Care Act (ACA).  In this Part III, we explore several potential “repeal and replace” scenarios that could unfold under the Trump Administration.

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Part 2: Implications of a Partial Obamacare Repeal

In Part I of our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, we discussed what the healthcare landscape looked like before the Affordable Care Act (ACA), how the law emerged from the healthcare reform policy debates and some of the major industry developments that have occurred since the law’s enactment. Beyond some of those changes, another significant development during the same time period has been the continued effort by many Republican members of Congress to repeal the ACA, an effort that has been stymied by President Obama and Democrats in Congress. With President-elect Donald Trump entering office shortly, Republicans will soon have perhaps their best opportunity to put that effort into law, though Democrats may still be able to prevent a full repeal of the ACA. This begs an obvious question: what if Republicans are only able to repeal certain portions of the law, while leaving in place other significant provisions? What would this mean for the healthcare industry? This Part II of our blog series takes a look at some of the implications of a partial ACA repeal.

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Part I: How We Got Here: President Obama to Obamacare to President-elect Trump

One thing that has become clear since the election of Donald Trump last week is that efforts to repeal or amend the Affordable Care Act (ACA) will be a high priority legislative item for next year’s Congress and the incoming Administration. But to have a better grasp of what the future of health care might look like under the Trump Administration, it is important to understand how the current healthcare landscape came to be. This first post in our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, takes us on a brief stroll down memory lane of how and why the ACA became enacted, and how it has helped lead to the developments and trends we have seen in the healthcare industry.

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Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare

In a November 14, 2016 Forbes article entitled, “Under Trump, Americans Can Finally Put ObamaCare Behind Us,” Sally Pipes wrote, “ObamaCare in a full-on ‘death spiral,’ voters were clearly in no mood for Clinton’s plan to ‘build on’ the president’s healthcare law. Instead, they chose a president who has said that his first order of business following President Trump’s inauguration on January 20, will be to ‘ask Congress to immediately deliver a full repeal of ObamaCare.’”  Notwithstanding Ms. Pipes confidence in a full repeal, in a Wall Street Journal article dated November 11, 2016, “Donald Trump, in Exclusive Interview, Tells WSJ He Is Willing to Keep Parts of Obama Health Law” by Monica Langley and Gerard Baker, Mr. President-elect Donald Trump said that he favors keeping the ObamaCare provisions which prohibit insurers from denying coverage because of existing conditions and which allows parents to provide additional years of  coverage for children on their insurance policies.  “I like those very much,” Mr. Trump is reported as saying.

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“May You Live in Interesting Times” – Some Healthcare Predictions for the Trump Administration’s First Year

The ancient Chinese curse – “May you live in interesting times” – certainly springs to mind these days.  What does the election of Donald Trump mean for the healthcare industry, the Affordable Care Act (ACA) and current healthcare market trends?  Let’s take a quick look at the likely effects of the election, but first let’s set the stage:

Background Data:

  • Per a July 2016 federal Department of Health and Human Services study, it is estimated that 18% of 2016 personal income in aggregate will be spent on healthcare, with 5% of the population accounting for nearly half of the estimated $3.3 trillion 2016 healthcare spending and 50% of the population spending less than $3,000 each.
  • The healthcare cost reduction effect of the Great Recession has dissipated, with an anticipated healthcare cost increase of over 5% per year projected through 2025. The economic drag on the U.S. economy of healthcare spending has returned to almost pre-recession levels, and accountable care organization (ACO) savings to date have been relatively nominal.
  • Once aged in, Medicare will have over 70 million Baby Boomer generation seniors to care for…and with rising life expectancy comes greater lifetime healthcare costs.
  • The United States will have a shortfall of doctors before 2025, with a significant primary care shortfall expected, a significant shortage of doctors available who accept Medicaid and the U.S. ranked as the 24th of 28 countries by the number of doctors per thousand people among the Organization for Economic Development countries.
  • 20 million people were afforded insurance under ACA programs, including over 9 – 11 million (varies depending on source studies) in 2016 through the insurance exchanges and the remainder through Medicaid expansion in 32 states (as of September 2016).
  • Approximately 73 million Americans were covered by Medicaid or CHIP. Federal subsidies for Medicaid expansion are to trend downwards to 90% by 2020.  A growing number of states are moving toward managed Medicaid programs in an effort to contain costs that, in some instances, previously threatened to bankrupt state budgets in the absence of further tax increases.

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