State of the Healthcare Industry Post Election: PwC

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Overview

What can the health industry expect from a second Trump administration? Tune in to hear what executives should watch over the next few months and years to come.

Key topics include:

President-elect Trump's healthcare agenda and his focus on deregulation, flexibility and choice, and accessibility
Potential implications for medicare, the ACA and IRA drug negotiations
What to watch in the first 100 days

Topics: Health industry, healthcare, regulatory, election, health policy

Episode transcript

Find episode transcript below.

JENNY COLAPIETRO:

00:00:03:10 Welcome to HRI’s Next in Health podcast. I'm Jenny Colapietro, PwC’s consulting commercial leader and I'm joined here today with Kelly Griffin, who is a leader of our Health Policy and Intelligence Institute. Our Health Policy and Intelligence Institute offers essential insights on significant regulatory developments and their effects on business strategy, operations, and value creation.

00:00:27:03 And today, we are discussing something that's top of mind for everyone, the new healthcare policies and economic implications under the Trump administration. And today I want to explore some overarching strategies, get into some specific potential policy changes, anticipated actions within the first 100 days, and what to expect for the remainder of 2025. So, Kelly, welcome to the podcast.

KELLY GRIFFIN:

00:00:53:10 Thanks for having me.

JENNY COLAPIETRO:

00:00:54:05 All right. Well, let's dive right into it, Kelly. Could you offer an overview of how the political healthcare landscape has shifted since the first Trump administration and how do you think his current approach differs?

KELLY GRIFFIN:

00:01:09:10 Absolutely. As we think through what types of movements to expect from the Trump administration in the coming years, thinking about what has changed for the last presidency is absolutely the place to start, particularly when we're talking about the world of health policy. So, if you're thinking about 2016 in health policy, when the first Trump administration was elected into the White House, the big debate in health policy were these big sweeping changes of should we repeal and replace ACA, are we talking Medicare for all?

00:01:34:09 Thinking 2024, that's no longer quite the conversation that's on the table. Repeal or replace ACA as well as Medicare for all, neither of them really have the same level of support politically or publicly. So instead of talking these big sweeping changes, we're thinking more of tweaking the current marketplace, right? We even have indications of Trump taking ownership for quote ‘Saving the ACA.’

00:01:57:05 That really tells us a lot. So, as we tweak the current marketplace, we're looking at more slight modifications for government intervention, a focus on the budget, more about shifting the marketplace that already exists rather than completely flipping the table and shifting to a repeal or replace ACA or Medicare for all. And then the other big change in the landscape between 2024 and 2016 is the Trump transition team itself.

00:02:19:08 This year, the Trump transition team is extremely well organized. They're coming to the White House with tremendous energy and they're really ready to go. There's even talk of Trump starting to sign the first slew executive orders right at the inauguration.

JENNY COLAPIETRO:

00:02:33:10 That's exciting. So let's delve deeper into the specific policy changes that we can expect under the Trump administration. Kelly, can you outline Trump's key policy shifts and their potential impacts?

KELLY GRIFFIN:

00:02:45:10 So when it comes to healthcare agenda of the Trump campaign, I like to put things in three key buckets. The first one, looking at flexibility and choice to both states and individuals. The second, looking at accessibility to care and the third focus more on deregulation. So starting on the first, flexibility and choice, this is really ACA Medicare Medicaid.

00:03:06:08 When it comes to ACA, we're talking about potential for introduction of risk pools. This is something JD Vance has been very vocal about; pulling beneficiaries into different pools based on their health status. We also are likely to see that through the ACA, having more opportunity for particular plans that have less restrictive requirements, such as short-term duration health plans.

00:03:26:02 As for Medicare, Trump administration has been very clear that they have no interest in changing the eligibility age and no interest in cuts to spending. However, what we might see in shifts in Medicare is a change in approach to the IRA drug negotiations. There's a strong interest in outdoing Biden on bringing down drug prices as part of the campaign to ‘Tackle big form’.

00:03:47:06 Then for Medicaid, when we're thinking about how the Trump administration might approach Medicaid, he's been very quiet on his approach here. This has led to a lot of speculation that there will be potential reform Medicaid, and it might be more on the side of cuts to spending. It might look like block grants or work requirements.

00:04:05:05 These are looking at the idea of instead of allowing Medicaid to have a percentage of federal funding based on beneficiaries and other criteria, block grants would really have a stable set of funding that would go to each state over the years, regardless of circumstances, and allow states to decide what they want to do with this funding.

00:04:26:10 These types of programs could also be used as a pay for for extending the 2017 tax cuts in case of a reconciliation bill. So in the second category, accessibility to care, we see several different topics within the Trump administration and the campaign conversations that fall into this bucket. Thinking about transparency provisions, if you recall, Trump's last administration certainly had big moves in this space.

00:04:49:10 And the traditional GOP is a quite large proponent of introducing more transparency provisions and market-based solutions across the board. The Trump campaign also had a lot of conversations focused on the idea of access to primary care and age in place services. We might see this within Medicare. We might see this within commercial plans, but an interest in really expanding that accessibility, both primary care and age in place.

00:05:13:08 On top of that, we see an interest in addressing worker care shortages, potentially through eliminating disincentives and supporting unpaid family caregivers. And that's likely to go through tax credits. The last one in accessibility would be this focus on chronic disease prevention management. This interest in Make America healthy again, would really come into potentially establishing a special presidential commission to investigate what is causing chronic illness or reforms the FDA or CDC level.

00:05:42:10 But we'll get into those details at a later date. The third category would be deregulation. So we're likely to see a strong interest in overturning Biden error policies, potential to renew the two for one rule we saw in the last term, which required for every new rule and agency introduced, they had to pull two rules in order to get that first rule in place. And we're also likely to see AI oversight to shift to less regulatory control and focus more on self-governance.

JENNY COLAPIETRO:

00:06:10:05 Thank you, Kelly. It's great outlining those themes. And these policy changes seem to highlight the administration's focus on deregulation, fiscal responsibility, and market-driven solutions. Now, let's shift gears and discuss what we can expect in the first 100 days. Kelly, what do you think are the anticipated priorities and actions during this critical period?

KELLY GRIFFIN:

00:06:32:10 So in Trump's first 100 days, we're likely to see a lot of activity. There's going to be a big focus on these big hitter topics; economics, immigration, climate-related regulations, potentially tariffs and Gaza, Ukraine. These are really going to take the bulk of the conversations and what the health sector should really be thinking about is how these topics intersect with the health industry.

00:06:53:04 So for example, we are likely see an executive order directing all agency leadership to take action against inflation and cost of living. This could certainly hit the health industry, whether it's FDA or CMS, HHS or others. Any action around immigration, it's very possible to have a strong impact to the workforce; a challenge the health industry already has prior to the Trump administration.

00:07:14:03 Something to keep an eye on there. And then the repeal of Biden's executive orders and previous Biden rules. It's going to look at repeal of the privacy rules of reproductive health, the AI executive order from Biden, really anything gender diversity related, climate-related policies, as well as potentially health equity policies as well.

00:07:34:10 I think the health sector should keep an eye on all of those things. February 1st is also going to be a big date for the first 100 days. This is going to be the release of the second cycle of selected drugs for IRA drug negotiations. So, it's really a chance for Trump to take action to outdo Biden on drug prices. We might see an announcement, additional details on how Trump is looking to approach drug negotiations and taking on big pharma.

00:07:57:06 In the past administration, Trump put forward the most-favored nation policy that got a lot of attention and it's been battled around for renewal. What it does, instead of having current IRA negotiates drug prices out of CMS, whereas most-favored nation policy bases drug prices on a standard that we see across international countries. So it pulls that assessment from CMS to standardizing across other countries.

00:08:25:03 And so we're really looking to see around February 1st the extent to which the administration clarifies how they want to take on those drug negotiations and what their approach is to take big pharma on. And then the last thing I'll tell you about the first 100 days is we've had a lot of focus recently, a lot of attention on chronic disease and broader public health reform. This ‘Make America healthy again.’ It's likely to continue to make a splash.

00:08:48:10 We're likely to see Trump allies in the first 100 days selected for influential advisory positions, likely ones that don't require Senate confirmation, but certainly with plenty of influence and power. So we'll keep an eye on exactly which roles they take. There's been quite an array of potential priorities floated from large staffing and bureaucratic changes to full agency reform.

00:09:09:03 There's this focus on ultra-processed foods, pharma's influence on the agencies and an interest in investigating chronic illnesses. This can very well impact HHS, FDA, NIH, CDC. Ultimately, it'll come down to this balance of what is within agency control in the executive branch versus what needs congressional support or state and local buy-in.

00:09:31:10 So core activities of FDA, for example, are often dictated by statute and funding for FDA has come up in the conversation. The user fee amendments, for example, these are statutory, they need congressional action to alter. The renewal isn't coming up for the funding of FDA, the UFAS till 2027. The negotiations are starting soon.

00:09:50:07 And so while you're not necessarily going to see immediate shifts in FDA funding, it's possible that the UFA negotiations that come into play here in the near future might be part of the conversation. And any types of advisories that are put into influential positions might be part of those negotiations.

JENNY COLAPIETRO:

00:10:07:02 Thanks, Kelly. Those are really great insights into what to anticipate in the first 100 days. Now, let's shift our attention to the key initiatives that'll be shaped by the broader legislative and political landscape. Can you share some insights here?

KELLY GRIFFIN:

00:10:22:10 Sure. So, while a good deal of Trump's key initiatives they talked about on the campaign trail, are you able to move forward to some extent within the executive branch? Congress is going to play a huge role here in the coming years. Thinking about 2025 specifically, much of the next year is really going to focus on the Tax Cuts and Jobs act over on the hill. And along with this for health policy specifically, is the battle to renew the ACA subsidies.

00:10:45:02 ACA subsidies are set to expire at the end of 2025, and if they do expire, we can see premiums for beneficiaries nearly double. So, on one hand that's not politically advantageous for anyone, but on the other hand, the default here is expiration. So it'll take action from Congress to renew those subsidies.

00:11:03:02 But this means there's going to be a lot of time focused on negotiations and how any tax cuts or subsidies will be paid for throughout 2025. These types of negotiations are very much going to impact how and when Congress approaches other health policy reforms as well as well the cost of living, public sentiment, or economic issues. These are all going to be driving the conversations or talking about policy change throughout 2025.

00:11:26:07 And then focusing more in on the Senate, specifically the GOP did gain four seats in the Senate, so they have a final slim majority of 53. This gives the Republicans control of the confirmation process for political employees, gives them control of committees themselves. So who's going to be chairing a committee, what special committees are formed for investigations, as well as what type of congressional hearings might be convened, and ultimately what bills we brought to the floor for full vote.

00:11:54:06 In control, the Senate also gives them the power to nominate federal judges and confirm any Supreme Court seats. If older justices potentially Alito or Thomas chose to retire.

00:12:05:10 But because the GOP only has a slim majority in the Senate, it can still be slowed down by a filibuster. So keep in mind, while a full vote in the Senate needs 51 votes, you need 60 votes to end debate and move to that full vote. That's the filibuster and gives the Democrats a little bit more control.

00:12:22:10 That said, GOP leaders are likely going to aim to pass, must their agenda through the Senate's budget reconciliation process. So this only requires a simple majority to approve a budget or a tax change and can avoid that filibuster and the need for those 60 votes.

00:12:38:07 The house on the other side of things, what we're looking to watch there is it'll be really interesting to see that balance between the centralist Republicans and the hardliners who might be a little more resistant to spending bills that don't include any deep cuts or policy dictates what they might be requesting to pull in there in order to get that spending bill votes.

00:12:55:07 And then last, I'll say, I'd really be remiss if I didn't mention the number of bipartisan topics that we could see movement in healthcare. So, 340B and PBM certainly get a lot of attention on both sides of the aisle, as does the bio secure act and longer-term physician pay reform as well. Site neutral payments, for example, could also pop up and that would be a pay for for the tax renewals.

JENNY COLAPIETRO:

00:13:15:08 Definitely, sounds like a lot of activity and that Congress will have a big role in the coming years. But looking ahead to the rest of 2025, Kelly, what do you think are the major debates and headlines that we should anticipate and what should our audience be keeping an eye on?

KELLY GRIFFIN:

00:13:31:08 Sure, there are all sorts of things. I mean, top of mind, one of the things I've been looking at is we see there are more states that have the Democratic trifecta now than 2026. So, this is Democratic Governor, Attorney General, and a legislator that are all democratically controlled. So it'll be really interesting to watch how the state-level health policy agenda intersects with the federal policy agenda. So how do states leverage Medicaid, how they leverage their other public health programs and state powers, such as cost controls, direct purchasing of drugs, or prescription drug affordability boards.

00:14:04:05 All of those are going to come up and have an interesting intersection as we see at the federal level, shifting to the right for power. We should also watch how the Trump administration handles the existing court cases. The government has already embedded it. So, we have the IRA drug negotiations being big one as well as the (Unintel Phrase ___00:14:21) stone case, was sent to the Texas District Court and still going to come through the judicial system.

00:14:27:10 The extent to which Trump continues similar defenses as the Biden administration or really shifts their strategy is something to keep an eye on. And along with those court cases, we also have the overall conversation about Chevron deference and that being overturned. All eyes were on Chevron deference. It was overturned this past summer.

00:14:43:03 But now as Trump starts to release new rules this spring, courts can choose to defer to agencies based on level of detail of reasoning, as well as the consistency with historic decisions. These are two very new types of assessments with courts being able to ultimately determine ‘The best interpretation of statute’ and decide the extent to which they're going to support the interpretation of the agency or shift the ability of the agency to interpret statute in that way.

00:15:09:09 And then one last big thing to keep in mind in the weeks and months ahead is truly the selection of agency leadership and policy advisors. Many of the Trump administration's health policy priorities can still be molded in quite significant ways as they're implemented. So, appointees are going to have tremendous power in the world of health policy to shape what direction these policies go and certainly determine what type of policies are even brought to the table.

00:15:34:02 We want to keep an eye out for the backgrounds and experiences of these appointees and this along the length of time, their role is going to really determine their ability to implement change and create influence.

JENNY COLAPIETRO:

00:15:44:05 Kelly, this has been wonderful. Thank you for the insights. Definitely sounds like a lot to keep our eye on in the next month-and-a-half as we close out this year and what to expect as we move into 2025. Thank you for joining us in the podcast.

KELLY GRIFFIN:

00:15:59:10 Thanks so much.

JENNY COLAPIETRO:

00:16:00:03 For more on these topics and other health industry insights driven by policy, innovation, and care delivery changes; please subscribe to our podcast at pwc.com/us/NextinHealthpodcast. And for more insights on regulatory and policy developments in health industries, please subscribe to our Health Policy and Intelligence Institute at pwc.com/us/HPII. Until next time, this has been Next in health.

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