There is still uncertainty about federal funding for the upcoming fiscal year, at least until March 31, the next pending deadline on the federal budget. At the end of December, Congress provided the Children’s Health Insurance Plan (CHIP) with $2.85 billion to keep it funded through March. Will they fully fund CHIP to cover the program for the year or leave it to the states to cover the gap? They have also provided community health centers with $550 million. Will they provide full funding or again leave it to those providers and states to figure it out? Will there be any activity from Congress on reducing drug pricing? Likely not, but the FDA is working to bring lower cost generics to the market in attempts to promote competition. There is also discussion regarding congressional work on entitlements such as welfare, Medicaid and food stamps, but there is not a strong consensus between the House and Senate nor along party lines―particularly with 2018 being an election year. So, we will have to watch congressional activity and await outcomes.
So, with the stalemate we see right now on the policy side at the national level, many private sector players are taking things into their own hands. They have not seen the health care sector transforming as quickly as it needs to, so many private sector players are positioning themselves as intentional disruptors in health care and particularly in the health care delivery system. In the last quarter of 2017 we saw horizontal, vertical, regional, national, large and small scale mergers and acquisitions take place. Many of these mergers appear positioned to shift care away from hospitals in order to reduce medical spending. Will that tactic be the magic bullet? We’ll have to wait and see.