Walking back grand declarations is par for the course in politics, even for an avowed outsider like President-elect Donald Trump. So perhaps, not surprisingly, the nation has been witness to some of that in the last week with respect to a full-scale Obamacare repeal, something the renegade Republican has promised repeatedly during the campaign.
Trump has said that he likes the Obamacare provisions that insurers do not get to deny coverage because of pre-existing conditions and having children up to the age of 26 be covered under their parents’ health insurance.
With the Rise of AI, What IP Disputes in Healthcare Are Likely to Emerge?
Munck Wilson Mandala Partner Greg Howison shared his perspective on some of the legal ramifications around AI, IP, connected devices and the data they generate, in response to emailed questions.
But what of the move to value-based care and accountable care that was accelerated when the Affordable Care Act became law? What of digital health whose adoption was in turn accelerated by Obamacare and the recognition by health systems and payers that technology, when properly validated, can indeed lower costs and improve outcomes?
Would President-elect Trump be an existential threat to digital health?
The consensus from a wide variety of healthcare stakeholders appears to be cautiously optimistic about the future of digital health under a Trump regime, but the path ahead just got bumpier. MedCity News reached out to these people via phone and email and here’s what they had to say
Julie Papanek, pharma and digital health venture capitalist at Canaan Partners, Menlo Park, California:
A Personalized Approach to Medication Nonadherence
At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
The election of President Trump is unlikely to derail the future of digital health. Many of the incentives in the government including the HITECH act as well as value based incentive programs are not all tied to the Affordable Care Act. Republican leaders are in fact supportive of value-based care measurements.
The ACA is the main target for Republicans. As a result, it is possible that investments tied to the public insurance exchanges and plans will have to reassess in the long run. We have to remember that change like this takes time in government to implement, even if the Republican party moves quickly to repeal the law.
The ACA is merely one of the major government initiatives that are driving the adoption of digital health investment. DRGs, bundled payments, Medicare star ratings, quality reporting, population health management and extracting value from EMR data will not go away.
In the next few weeks if Trump nominates someone like Ben Carson to the head of HHS, I’ll be focusing my efforts on his historical voting record.
Andrew Danielson, vice chair of licensing, Mayo Clinic Ventures, Rochester, Minnesota
I am quite confident that any changes to the ACA will have a relatively small impact on the need/enthusiasm/drive for using digital health to improve care and reduce costs. There is too large of a push for this at all levels – patients, payers, providers for it to be meaningfully knocked off course. Companies like IBM, UnitedHealth, Google, Medtronic, and others are making large bets on this space. Providers like Mayo, Cleveland Clinic, and others see digital health as a key initiative.
It is pretty basic math that we cannot continue on the trajectory we are on with regard to healthcare costs – there needs to be big gains in productivity/efficiency around patient management and digital health seems to hold the most promise for this. I would imagine that whatever replaces ACA will take this into account and continue the push for IT efficiency gains in healthcare – one could argue that there may be an even larger push for this in any new approach.
Neil Patel, president and chief operating officer, HealthBox, an innovation consulting firm and venture capital investment manager, Chicago:
The shift from fee-for-service to value has been the biggest driver of innovation in the digital health space. We don’t expect changes the Trump administration makes to the ACA to reverse this trend — the train has already left the station so to speak. With that said, if the Trump administration repeals the ACA and replaces it with legislation that defunds the CMS Innovation Center, we may see a slowdown in further advancement in value-based care payment models because the freedom to experiment within Medicare could be diminished.
The area that concerns us the most is what the Trump administration may do to the previously un- and underinsured and how that may impact the bottom lines of health systems. This uncertainty may lead to more risk aversion on the part of health system customers, placing an increased burden on digital health companies to provide demonstrable improvements to cost and quality. We are also expecting some health systems to push pause on sales conversations with less proven digital health companies until they gain more clarity about what healthcare landscape will look like in the years to come — lengthening an already long sales cycle.
On the investment side, increasing uncertainty in the healthcare space more generally may scare away investors who have not traditionally invested in healthcare as well as friends & family, angels, angel syndicates, and others. This could lead to a slowdown in the growth of new digital health companies while the focus on demonstrated ROI could lead to a culling of the ones in the market today. However, with the shift to value already in motion, many digital health companies will have fertile ground to prove themselves, but the bar may be a bit higher than it has been to date.
All in all, the Trump administration will impact the sector, but whether it is a speed bump or a roadblock remains to be seen.
Raj Prabhu, cofounder and CEO, Mercom Capital Group in Austin, Texas
Since the election, many of President-elect Trump’s campaign promises have already softened. The wall is turning into a fence. The deportation force is disappearing. Repeal and replace Obamacare is now becoming we will keep pre-existing conditions and kids under 26 can be covered on their parents’ insurance. If this same theme continues, the Health IT sector may not be in bad shape.
Areas of concern could be the health insurance exchanges, precision medicine, and value-based payment models. Most providers are already using EHRs, most of the practice-focused technologies are in place, and the consumer-focused technologies like mHealth are unlikely to be affected. Trump has advocated for price transparency, which is good for companies in that space.
Trump must do something symbolically regarding Obamacare to please his base without cutting off 20 million people from health insurance. This is all speculation right now. Trump himself did not think he could win, so everyone is winging it at this point. The wild cards could be Newt Gingrich (who has supported Obamacare and Health IT in the past) and Ivanka Trump’s brother-in-law Joshua Kushner. His health tech insurance company Oscar Health has received over $700 million in funding, so he has the incentive to be an advocate for the industry.”
Sean Duffy, CEO, Omada Health, a digital health company, San Francisco:
Though it’ll be a fascinating time for ACA, the good news is that I think a lot of the market forces (ACA being one) that are driving digital adoption in health care have already progressed past the point of no return or would have been required in any health care policy environment to increase value and reduce spend. As an example, I can’t imagine that private and public plans will not continue to want published evidence, outcomes-based pricing, among other things.
Things like preventing diabetes, and using technology to prevent and address chronic conditions have, previously, been bipartisan initiatives. While we will be dealing with a new administration come January, we look forward to educating, and working with, that administration to find ways to deliver tech-enabled, personalized prevention for those at risk of chronic diseases.
Bijan Salehizadeh, managing director, NaviMed Capital, a private equity firm, Washington, D.C.
I see three potential impacts. One, uncertainty leads to capital paralysis. My short-term worry is that the Affordable Care Act repeal/replace/fix process takes awhile as Republicans focus on what replace means. The longer this takes, the more nervous some investors will become.
Second, there has been talk of eliminating the Center for Medicare and Medicaid Innovation (CMMI). I don’t believe that will happen, but some of the powers there will be neutered. That could have an impact on startups and new models that depend on CMMI demonstrations until the dust settles.
Third, healthcare IT vendors selling to hospitals could have a problem if coverage expansion is pulled back. Bad debt could rise for health systems and that will have a real impact on buying decisions for big-ticket software purchases. This is a big unknown and stock price reaction of for-profit hospitals is showing major market worry about their collective balance sheets if coverage levels fall, exchanges go away, and if Medicaid is weakened. All of this will lead to prolonged sales cycles for healthcare IT companies and sales price cuts at best or hospitals saying no at worst.
Geoffrey Clapp, healthcare entrepreneur and startup mentor, Bay Area, California:
Honestly, I don’t think we’ll see a lot of measurable impact of the administration change for the next two quarters — there’s not going to be a lot of investment in the Thanksgiving/Christmas/New Years corridor anyway, and then we won’t even have the inauguration until January 20th. During that time, hopefully we’ll get clarity on what the “repeal and replace” really means, in policy. But unless I was working on something focused on a CMMI payment initiative, I’m not sure there will be any meaningful impact at all in 2017.
Some venture capitalists may move to the sidelines, but it’s arguable that those folks are using this moment as an excuse to get out of a market that has been more promise than returns so far. Honestly, if you are working in transparency or high-deductible solutions, this will be an excellent time to continue what you are doing.
Photo: BrianAJackson, Getty Images
