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Tuesday, 15 November, 2016

Healthy Debate: Wall Street Tackles Trump, Health Care and Market Implications

Below are takeaways from the discussion with Paul Ginsburg, Ph.D., Brookings and USC Schaeffer Center, and panelists Matthew Borsch, Goldman Sachs; Ana Gupte, Ph.D., Leerink Partners; and Sheryl Skolnick, Ph.D., Mizuho Securities USA.
On Election: Uncertainty is an enemy of Wall Street.  Current predictions are the result of a market seeing what it wants.

On ACA: Repeal is guaranteed. Replacement is unclear. There is an opportunity for truly bipartisan health reform.  The Republicans inherit a partisan ACA passed by Democrats.  They will own that and perhaps allow more product flexibility; retain subsidies as tax credits, etc. The panel advised Trump and Congress to act quickly and give the market certainty.

On Insurance Mergers: Mergers are make or break for these companies.  Profit and loss plus tax rates put tremendous pressure on revenue streams.  This creates huge impetus to get better leverage with providers.

On Continued Low-Growth Spending Trends: The panel believes that we may be seeing true change in care.  The increase in high-deductible plans, value-based care and shift away from traditional post-acute models are driving this change.  The market may be anticipating the boom in seniors by attacking utilization with a move to episodic care in order to compress cost. That said, the panel cautioned that there is a cyclical nature to the market.  Spending historically slows in the wake of a recession and we are still recovering from the 2008 recession.

On Trend of Hospital Employment of Doctors: The panel hoped the trend stops as hospitals are not good at managing physicians.  With a Republican Congress and Trump Administration, many of the financial incentives that have driven the trend may go away. Integration to achieve coordinated care and quality will be the remaining drivers along with the goal of keeping health plans from buying physician practices.

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