trump healthcare

How President Elect Trump’s Healthcare Changes Will Create Disruption

Posted on Posted in Featured Article

Healthcare is in need of a disruption.  I define disruption as any change within an industry that creates greater efficiency and value for the customer while designating existing methods obsolete.  The disruption then results in an advantage for those players that use it within their business operations.

The healthcare industry desperately needs a disruption to help control runaway costs and improve quality. The US Healthcare industry accounted for 17.8% of our nations GDP in 2015 according to the Centers for Medicaid and Medicare Services (CMS) and still lags behind other countries for quality outcomes.

President-elect Trump promised change to the healthcare industry in the repeal of the Affordable Care Act. This could easily be considered a disruption to the status-quo. In order to truly affect change, the industry needs to have key components and assumptions turned on their heads.

His vision includes:

  • Repeal and replace Obamacare with Health Savings Accounts (HSAs)
  • Work with Congress to create a patient-centered health care system that promotes choice, quality, and affordability
  • Work with states to establish high-risk pools to ensure access to coverage for individuals who have not maintained continuous coverage
  • Allow people to purchase insurance across state lines, in all 50 states, creating a dynamic market
  • Maximize flexibility for state via block grants so that local leaders can design innovative Medicaid programs that will better service their low-income citizens

More detail can be found on the President-elects’s website:

Let’s take a look at first two proposed changes and how they could result in disruption of the industry.

Replace Obamacare with Health Savings Accounts (HSAs)

This is not a new proposal.  It has been pushed by Republican congressmen in recent years.  The idea is a simple one: place the purchasing power for healthcare services into the hands of the consumer.

There are some obvious challenges to this change in that it requires individuals to put personal financial resources towards a health savings account.  Detractors might say this places the less fortunate in a tough spot.  While true, consider that the current access that Obamacare provides requires an individual to clear a significant deductible before coverage kicks in.  In some cases, this deductible can be as high as $7,000 per person.

Create a patient-centered health care system

Duh!  This needs to be the end goal in everyone’s mind.  The healthcare system is a slow-moving behemoth of an industry that for too long has catered to a lot of special interests, except the special interest that really matters: the patient.

For sure, this is a very broad statement, but there are some obvious actions that could help make this a reality.  Allowing more of a free market will help create the “choice, quality and affordability” envisioned in the PEOTUS statement.

Some Potential Innovative Disruptions

In order to make these two changes and affect real change, innovative disruptions need to occur in the industry.  When Apple introduced the iPhone, it took the mobile phone from being a simple communication device to a powerful handheld computer overnight.    Here are a few areas to look for disruptions that would compliment the President-elect’s vision for the healthcare industry:

  • My Health Record is My Own: Creating a truly portable health record empowers the individual with knowledge of their health status.  Knowing is half the battle.  Is there an app yet for that?   A portable health record with a “smart” component providing recommendations on how to live healthier would drive a well-informed patient population.  Mix that concept in with wearable technology and the possibilities for value-creating change are many.
  • Develop Creative Pricing Models:  Insurance should not and can not continue to be the only option for many Americans to receive affordable healthcare. The industry needs a disruption to the delivery model that addresses cost to the average patient.  What does that look like?  Only time can tell.  Some possibilities:
    • An online marketplace work that shops specifics services to patients in need. (Think Priceline, Expedia or even something as complex as Amazon.)
    • A membership model providing preventative medical care on an annual basis for a flat fee. 
  • Price transparency needs to become a reality:  A key factor in using health savings accounts to drive market competition is giving the consumer the power of choice.  This is not possible without informing prospective patients about anticipated out-of-pocket costs and the value they will receive in return.
    • The TrueCar is an app that provides the user with an idea of fair market value in the car buying process. Could a similar model work to drive competition in healthcare?

Disruption will Challenge the Status Quo

By definition, disruption is going to challenge the status quo in the healthcare industry.  There will be risk involved and there are likely going to be some mistakes made.  My hope is that the congressional leadership will have the strength to push forward with confidence that President Elect Trump’s vision will result in an improved, more competitive healthcare system.