Trump Puts Hospitals in the ICU.

Just days after the presidential election, a Bloomberg headline told the story:

“Trump Puts Hospitals in the ICU.”

To be fair, there is always a difference between a candidate and an elected leader. And on the same day as the Bloomberg story, Trump announced that he would maintain some provisions of the Affordable Care Act.

For example, Trump said he would keep the prohibition on insurers denying coverage for pre-existing conditions, and that he supported allowing young adults to be covered by their parents’ health plans.

Trump made the announcements following his first post-election meeting with President Obama, the first step in the transition to the Trump Administration. Some analysts contend that Trump is moving away from outright repeal of Obamacare and toward a “revise and reform” stance.

That may not sit well with Trump’s constituency, or the Republican Congress. Some 22 million Americans would be without insurance if the law is repealed. And that could spell trouble for hospitals, who have benefitted from more patients with insurance. The Affordable Care Act has meant a boom for hospitals, and repeal means uncertainty in the years ahead. Hospital stocks, which have outperformed the market in the years of the ACA, declined in the wake of the election.

Obamacare accounted for 10 percent of earnings before taxes, depreciation and amortization (EBITDA) last year, and could be more this year. A rollback of Medicaid, a number of hospitals in states where Medicaid has expanded under Obamacare could be hit hard. Bloomberg reported that Quorum Health has more than 68 percent of its beds in Medicaid expansion states. Universal Health has 40 percent of its beds in states where Medicaid has expanded under Obamacare.

Ilene McDonald, in an article for pointed out that from a political perspective, the newly-empowered Republicans don’t want to see millions of uninsured overnight in the country. The challenge for the new administration is finding a path to transition so that people can stay insured but also access more affordable coverage.

“There will not be a repeal of this without an alternative in place,” lobbyist Michael P. Strazzella told Strazzella is with the firm Buchanan, Ingersoll & Rooney. There needs to be a transition to ensure there is no disruption in the market for those covered and the overall market,” Strazzella said. “The healthcare delivery system was all encompassing in this bill.”

At first blush, this means three initial steps in the wake of the election and its unexpected results:

  • Plan now in anticipation of any and all actions the new administration and the Congress may take.
  • Time to review business models. As Strazzella put it, “I believe people need to take a hard look at their business models, where they fit into Republican proposals driven by Trump.”
  • And, hospitals need to push for financial relief from the government for hospitals that already wrestle with narrow margins. Hospitals will need to spend in order to comply with new policies.

While uncertainty swirls for community hospitals in the wake of the election, it’s not a time for panic, but for preparation for any eventuality.

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