Talk about a New Year’s hangover. Healthcare—17.9% of the nation’s gross domestic product and still growing—will dominate the news in 2018 as it has for much of the past decade. It’s not shaping up as a good news story. Here’s why:
1. The opioid epidemic will remain unaddressed. Drug overdose deaths soared to 63,632 in 2016, with two-thirds of those deaths opioid-related. Despite President Donald Trump declaring a national emergency, no money has been earmarked to fight the epidemic. Looming budget deficits from the new tax law mean little or nothing will be done about it in 2018.
2. Life expectancy will fall for the third straight year. The average life-span fell to 78.6 years in 2016, down from 78.9 two years earlier. While opioid abuse and obesity get most of the blame, income and status inequality (as a famous British civil servant study showed) are also major factors. The new tax law will heighten income and status inequality.
3. Medicare funding will get hit with new cuts. In the wake of the new tax law, the Balanced Budget Act will trigger “pay-go” rules, which will lead to a major political battle over the shape of seniors’ healthcare. Trump will not stick to his campaign promise to leave Medicare alone. He will side with the most conservative elements of the party and back new cuts.
4. The ranks of the uninsured will grow. It won’t show up immediately, given the strong performance by the Affordable Care Act insurance exchanges during this year’s shortened sign-up period. But elimination of the individual mandate will lead to sharply higher individual rates for 2019, even if cost-sharing subsidies are renewed, and a rise in the nation’s uninsured rate.
5. Hospital layoffs and closings will dominatethe news in many parts of the country. Job growth in the sector slowed dramatically in 2017, especially during the second half of the year. The outlook for 2018 is bleak. Admissions and lengths of stay continue to fall as more care moves to outpatient settings. Pressure to keep price increases low remains strong. Margins are narrowing.
6. Drug price sticker shock will pummel payers, providers and patients. Every new advance in personalized medicine will have the unwanted side effect of six-figure and even seven-figure price tags. The drug industry will point to moderate growth in overall drug spending and justify prices using the life-preserving value of each new product. Imagine what seat belts and air bags would cost if the auto industry insisted on similar financial rewards for the deaths prevented by those safety features.
7. Digital health and storefront medicine will remain molehills in the broader healthcare landscape. Apple, Amazon, Google and CVS will be revolutionizing the sector, according to their news releases. But changes in how people access and receive care will be small and incremental. Ditto on progress toward interoperable electronic health records.
8. The growth of value-based reimbursement will slow dramatically. Look for new programs to emphasize go-slow, voluntary approaches.
9. Republicans will make one last attempt toturn Medicaid into a block-grant program.Their thinking is that the cap on state and local tax deductions will heighten pressure in liberal, high-tax states to curb spending. The more likely outcome will be strengthened grass-roots movements in those states for single-payer systems.
10. The November midterm elections will result in Democrats regaining control of theHouse of Representatives. While that will put an end to legislative assaults on the Affordable Care Act, reversing the damage already done will be impossible as long as Trump sits in the White House.