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Nov. 10 — Donald Trump’s presidential win probably won’t derail the health-care industry’s transactions train, though it may temporarily slow it down, attorneys who counsel providers about transactions told Bloomberg BNA.
Initiatives spurred by the Affordable Care Act, including value-based care and cost-effective payment models, aren’t going away, even if Obamacare is repealed in whole or in part, Gary W. Herschman, a member of Epstein, Becker & Green‘s health-care practice in Newark, N.J., told Bloomberg BNA.
And, because those developments set the industrywide transactions trend—including consolidations like mergers and joint ventures—in motion, there isn’t any reason to believe it will stop either, he said.
There might be “some uncertainty” leading to a fourth-quarter slowdown in transactions activity, given Trump’s “unpredictability,” Herschman said. Any impact will be short-lived, though. Transactions likely will pick up after January 2017, he said.
Herschman’s partner, Paul A, Gomez, in EBG’s Los Angeles office, said “it’s far more likely than not” the ACA will be repealed, at least in part. But there is a “consensus among” payers and providers “that traditional payment models, fee-for-service and spiraling costs are unsustainable,” Gomez said. That is, the old ways providers got paid simply have become too expensive to continue.
New business models meant to enhance quality, increase provider coordination, improve cost containment and spur innovation “are likely to continue.” They will keep “driving strong transactional activity in the health-care sector,” Gomez said.
Gomez said some new payment models, quality-care requirements, cost-containment initiatives and outcome-based pay principles “that derive their statutory authority from the ACA may go away or be revised substantially.”
But others, like the Medicare Access and CHIP Reauthorization Act (MACRA) and the recently released MACRA final rules, could remain intact, Gomez said. MACRA was passed with bipartisan support, he noted.
Republicans have acknowledged the need to control costs and improve treatment outcomes. Legislation advancing “value-based and alternative payment models,” therefore, “may not face the same threat of repeal or substantial revision” as the ACA, Gomez said.
The ACA and related payment models “contributed significantly” to transactional activity in the industry. But “those developments aren’t the only factors at play,” Gomez said.
“Efficiencies achieved through economies of scale, improved geographic reach, enhancement of patient-care capabilities, greater and more convenient patient access to care, better branding and greater coordination of care” throughout the health-care industry are “factors that will continue to drive strong health-care transactional activity,” he said.
Herschman said he doesn’t expect the ACA’s medical device tax to survive the Republican win, and attempts to rein in drug prices probably will end, he said. Drug industry analysts apparently think so too: Pharmaceutical sector stock prices rose after news of Trump’s win broke.
To contact the reporter on this story: Mary Anne Pazanowski in Washington at email@example.com
To contact the editor responsible for this story: Peyton M. Sturges at PSturges@bna.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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