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Looking Back, Looking Forward

By December 30, 2016Commentary

Every year I dread this review of my inane habit of making a few predictions for the coming year, because it means I should in all honesty review them a year later.  Not so bad this year.  Pretty accurate on some, maybe because I got more general.  I said spending would grow about 5-6%, and it appears to have done so.  I said people would squawk about drug prices but do little, and we saw continued pretty outrageous drug company pricing behavior and not much beyond Congressional hearings to spank the perpetrators in response.  I thought the exchange plans would continue to have problems and it got even worse than I believed possible.  I said the health plan mega-mergers would be blocked and in fact the government has refused to approve them and we are awaiting court decisions.  I thought providers might seek much higher reimbursements; that does not appear to have happened; and I thought that we might see an economic slowdown, instead we stumbled along with the usual 2% or so GDP increase.  And hard to evaluate the notions that regulators would continue being burdensome to plans and providers.

So what for 2017?  Well, for starters, no presidential election–hooray!!  But what will this new administration do in health care?  ACA repeal is a fiction in the sense that the law contained an immense number of provisions beyond the coverage expansion.  Most of those will likely stay in place in one form or another.  Medicaid expansion?  From a federal perspective, there could well be a conversion to block grants and removal of much of the federal oversight, which I think would be a great idea since there is no reason for the feds to be involved at all.  The exchanges and individual mandate?  Exchanges are as much a Republican as Democratic idea, and they are a good idea, but couple with the individual mandate and other provisions, they have operated in typical death spiral fashion, as many predicted.  This is the critical area which requires a redo.  Medicare?  Conversion to premium support, voucher, whatever you want to call it, makes sense.  The MA plans are simply a better way to deliver benefits for the elderly.  Who knows what else will come out of Washington, but lets hope it involves a lot less federal regulation.

And in the midst of all this I do expect per capita health spending to rise at what seem like a modest pace, but one which is just not sustainable for many more years, around 5-6% again.  Drug price action will be more muted, as manufacturers are a little more cautious, but they have already done their damage.  Nothing will be done to limit provider consolidation, which I view as the most pernicious health care trend, and which needs to be not just stopped but reversed.   People will likely be as unhappy with their health coverage, and particularly the cost, at the end of 2017 as they are at the start.  And I still think there is going to be a recession somewhere along here.

Most of all, I wish all of you a good year, one with work and personal satisfaction, less stress and more enjoyment.

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