Tuesday 13 December 2016

Trump Conundrum for Healthcare IT industry

Health Care industry may probably be the second well connected and lobbied in Washington DC. That could be the reason why any changes to the status quo will take decades to take effect. It all changed when President Obama brought in the Affordable Care Act(will be referred as ACA in the article) and among them few a stand out.

Donald Trump and Tom Price
a.       Patients with pre-existing conditions will get the coverage and  cannot be denied health insurance.
b.      Individual mandate for taking the insurance else penalty.
c.      Coverage for children in their parents plan till age 26
d.      Medicare and Medicaid expansion in states with federal funding.

Now Trump being the president elect and Tom Price to take over the health secretary, it seems very possible that most of ACA could be dismantled or let it go for a slow death.  There is another possibility with Tom Price who in Congress over the years had introduced the bill called “Empowering the patients first Act’. Salient features of Tom Price’s legislation are:

a.       Preexisting coverage will be given for members who’d insurance for previous 18 months.
b.      Medicaid Expansion will be removed from 31 states and DC.
c.       Removal of penalty for uninsured citizens.
d.      Tax free coverage from employers would be 8000 for individual and 20,000 for family

This puts Healthcare IT industry in a tricky spot; it had invested heavily in the changes required for ACA starting from designing products for the Exchanges market and to incorporate the ACA changes with respect to each states mandates. IT folks worked on the Exchanges know it was difficult and draining few months to meet the changes for Federal Mandate. Now either it is going to be dismantled or new legislation might put those changes redundant. This again will require more IT changes with considerable investment. Even then, a new presidential regime can change the policy putting an additional overhead on the IT spending.

So right now, the industry is pushing for any change in policy to take effect in the future at least 3 years from now. IT expenditure for the industry will always be fluid and can change depending on the budget allocation and overall outlook every year. But with federal mandates, it becomes out of control most of the time with man hours and dollars involved.

It will be interesting timings for IT contractors and nervous few months for the Healthcare industry.