• The Medicare readmission penalty is controversial and has raised concerns that it unfairly penalizes safety net hospitals. A 2016 article in Health Affairs compared readmission rates between safety net and other hospitals, finding that the odds of readmission were higher among safety net hospitals. Also, it has been found that adding community-level socioeconomic data to the model currently used by the Centers for Medicare & Medicaid Services to report condition-specific, risk-standardized readmission rates greatly reduced variation in reported readmission rates. Policymakers should recognize the impact of socioeconomic status on health outcomes and consider a more comprehensive and equitable approach to reducing readmissions.1
  • Solvency remains a concern for Medicare. The program’s long- term fiscal solvency will be on the agenda of the next president and the next Congress, and any budget reform efforts will likely target Medicare spending to help fund other programs or cut the deficit. CMS anticipates that, through a number of different initiatives, including the quality of care initiatives, Medicare costs will be lowered by as much as $260 billion through 2016. The percentage of reimbursement to providers based on quality and value of service is expected to increase. This anticipated increase in 2016 is a clear indication that payers are becoming more serious about making quality and value a part of the reimbursement formula and will cause more consolidation of providers in the health care market.2
  • Nearly 13 million people signed up for the Affordable Care Act’s marketplace policies in 2016. Competition on these exchanges will be diminished next year in various areas of the country when some of the nation’s largest health insurers will sell individual plans in fewer markets. Additionally, 16 nonprofit co-ops have closed since January 2015.3
  • There are 24 states that now mandate that private payers pay for telemedicine, and in 2015 alone there were 100 bills introduced into the state legislatures mandating private payer support or expanding Medicaid coverage of telehealth.4

2017 AHA Environmental Scan

Download the complete 2017 AHA Environmental Scan PDF sponsored by B. E. Smith.


  1. “Mr. G and the Revolving Door: Breaking the Readmission Cycle at a Safety-Net Hospital,” Carolyn Dickens, Denise Weitzel and Stephen Brown, Health Affairs, March 2016 35(3): 540-543
  2. Health Law Reporter Outlook 2016, Bloomberg Law, Bloomberg BNA, Jan. 2016
  3. “Obamacare Marketplace Shakeout Rocks Arizona, Southeast,” Kaiser Health News, Phil Galewitz, Aug. 18, 2016
  4. “Medical Cost Trend: Behind the Numbers 2016,” Health Research Institute, PricewaterhouseCoopers, June 2015