The presidential election and its impact on the health care sector
As the November election approaches, discussions about the health care ecosystem have taken on greater urgency in virtual boardrooms in Washington and around the nation. What happens if Joe Biden, the Democratic nominee, wins the White House and Republicans lose control of the Senate? Or if the Democrats lose ground in the House, and President Trump wins?
With the future of health care in the balance, it’s important to consider recent federal actions and the impact that the elections will have, whatever the outcome.
Trump health care priorities
In 2016 and early in his term, Trump campaigned on a promise to repeal and replace the Patient Protection and Affordable Care Act, better known as “Obamacare.” This effort was largely unsuccessful in Congress, and continues to face challenges in court. Now that theme is largely missing from the president’s campaign, suggesting that the broad framework of the Affordable Care Act may remain intact regardless of how the election plays out. As noted above, the president’s agenda, regardless if it is Trump or Biden, is only part of the equation, because court decisions could have a significant impact on “Obamacare.”
This has not stopped the Trump administration from championing several issues and signing executive orders affecting key elements of the Affordable Care Act. These have included:
- Price and quality transparency: The Trump administration continues to argue that providers must make patients’ out-of-pocket costs available for certain shoppable procedures, among other measures aimed at allowing patients to make more informed decisions about how and where to spend health care dollars.
- Telehealth services: Expanding access to health care for rural and Medicare populations, and improving reimbursement by extending beyond the Public Health Emergency the additional telehealth services offered to Medicare beneficiaries. This includes implementing new payment models to encourage high quality, value-based care regardless of where it is delivered.
- Medicare Advantage: An executive order ensured greater choices and flexibility for Medicare Advantage plans.
- Short-term health insurance: The administration sought to allow certain individuals and employers to sign up for or create plans that can last as long as three years and are otherwise not compliant with the ACA.
- Reference drug pricing: The administration is trying to lower prescription drug pricing by using prices paid by other countries as the price that Medicare would be willing to pay for the same drug.
If Trump is successful in his bid for a second term, he will most likely continue to champion these issues.
Biden’s statements on health care
A recent Biden campaign ad signaled his ongoing alignment with President Obama and the Affordable Care Act. His campaign continues to suggest that his administration would look to build on the work done during the Obama years.
Biden has indicated that he is campaigning on a public option, increasing the cost-sharing reductions provided to middle-class Americans and expanding Medicaid, including further subsidies for lower-income individuals and families.
Health care consolidation and the role of private equity
During the Trump presidency, we have seen several consolidations within the health care ecosystem, and we do not expect that to change if he were to win a second term. A Biden presidency might have a more lasting impact on the deal environment over the medium and perhaps long term, particularly given the record of Biden’s running mate, Senator Kamala Harris, a former attorney general of California, who has a “history of health care merger crackdowns” according to Modern Healthcare.
While vice presidents do not directly influence federal antitrust proceedings, Joel Goldstein, a professor at Saint Louis University School of Law, noted in a recent Modern Healthcare article that Biden was given influence over Obama’s pick for attorney general.
While Biden’s vision statements in early September made no mention of health care mergers or consolidations, a task force of Biden and his former rival for the Democratic nomination, Senator Bernie Sanders of Vermont, called attention to what it called the “[concerning] increase in megamergers and corporate concentrations across a wide range of industries, from hospitals and pharmaceutical companies to agribusiness and retail chains.”
The task force went on to commit to directing “federal regulators to review a subset of the mergers and acquisitions that have taken place since President Trump took office, prioritizing pharmaceutical, health care” businesses to assess issues such as market concentration, price increases and the disproportionate impact on marginalized communities.
While it is likely that such a review would cover a relatively small number of deals, such an action could signal the tone of further review and approval of deals in the health care system.
The health care system doesn’t have a clear winner in the race. Stated and inferred plans from each candidate include measures that will be potentially helpful and harmful to the health care system.