Healthcare Scenarios In a Trump World

Healthcare Scenarios in a
Trump World
The Future of the Affordable Care Act
and Its Impact on Business Strategy

Table of Contents
Introduction 01
Scenarios
Eisenhower Returns 06
The Winter of our Discontent 09
Tech Saves Healthcare 12
The Hunger Games 15

Conclusion 17
Appendix 19
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HEALTHCARE
SCENARIOS IN A
TRUMP WORLD
While Donald Trump’s election victory in November
surprised many, perhaps no sector of the U.S. economy
is more ill-prepared for what comes next than the
healthcare industry. After six years of building their
businesses around the Affordable Care Act (ACA),
health insurers and healthcare providers now face an
extremely uncertain future in which the stability of
markets, the nature of government intervention, costs,
and consumer behavior are all up for grabs.
While there is a high degree of certainty that the ACA
will be repealed – Congressional Republicans have
already begun actions to repeal the act as one of their
first tasks – there is far less certainty about what will
replace it. In our conversations with healthcsare and
health insurance company executives, it is apparent
that this uncertainty has the industry paralyzed.
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Two factors are contributing to this paralysis:
1. When will the ACA actually no longer exist?
While Republicans appear steadfast to repeal
the ACA, it is not clear when the law will no
longer be in force as there is yet a defined,
legislated plan to replace it. Republicans admit
they are hesitant to strip insurance coverage
from the approximately 20 million Americans
who receive insurance under the ACA. The
timing of action and the length of the delay
before an alternative plan is in place makes
it difficult, if not impossible, for healthcare
companiestoplanstrategicallyforthelongterm.
2. Is the ACA in its entirety going away? President
Trump has sent mixed messages about the
extent of the abolishment of the ACA, at
times calling for a complete replacement of
Obamacare, and at other times expressing a
desire to retain popular provisions of the law,
such as ensuring that people with preexisting
conditions can still get coverage and allowing
young adults to remain on their parents’ health
plans until age 26. Insurers and providers don’t
know whether to plan for a future in which
some aspects of Obamacare remain in place.
Complicating matters, Congressional plans for
reforming the country’s healthcare system will not
happen in a vacuum. Common drivers of uncertainty
that muddle any organization’s efforts to plan for the
long term will factor in, including:
• Broad economic conditions
• Political circumstances following the 2018 mid-
term and 2020 presidential elections
• The pace of technology advancement, and
International trade and security developments
Without a clear sense of future conditions, how
can healthcare organizations plan strategically?

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SCENARIO
PLANNING
Scenario planning is a highly effective methodology
for long-range planning amid extreme uncertainty.
Hundreds of leading organizations have used scenario
planning to set resilient and robust strategies while
facing increasingly complex business environments.
To plan in the midst of tremendous uncertainty,
companies that employ scenario planning apply a
disciplined and structured methodology to develop
four or five descriptions of plausible, alternative
future environments in which they may operate. The
rules for scenario development ensure that these
alternative “futures” can actually happen since they
are built from drivers of current uncertainty. Properly
constructed and analyzed, these scenarios ensure that
the firm considers a broad range of future threats and
opportunities.
The organization sets a business strategy for each
scenario, and, through structured analysis, identifies
commonalities across those strategies. These shared
elements form a core strategy, resilient no matter what
future actually emerges. Scenario-based strategies
also deliver continuing strategic flexibility when tied to
early warning programs that enable firms to anticipate
the emergence of new industry developments more
quickly, allowing more time to put contingency plans
in effect. (See the Appendix for a fuller description of
the scenario planning process).
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SCENARIO
PLANNING
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Toaddresstheunprecedenteddegreeofuncertainty
that healthcare and health insurance companies are
facing in the aftermath of the election of Donald
Trump, Fuld + Company – a leader in developing
scenario-based strategies for global organizations
– developed four scenarios looking out to the year
2020. Careful choice of driving factors ensured
that these scenarios capture a range of plausible
future conditions in which healthcare and health
insurance firms may find themselves.
A key requirement for these scenarios was
plausibility – could this future world emerge? We
stayed away from ascribing evaluations of likelihood
to any of the scenarios, as doing so runs counter
to the very underpinning of scenario planning: it
is impossible to predict the future. We believe we
have described four challenging alternative future
worlds for the healthcare and health insurance
industry, all very different from today and decidedly
compelling given the transformation of the U.S.
healthcare system that is about to occur.

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Fuld + Company leadership pulled together a team of scenario planning consultants with experience serving
clients in the healthcare, pharmaceutical, technology, manufacturing, public sector, and consumer products
segments. This team applied our scenario planning methodology to establish the framework for selecting and
developing the four healthcare scenarios offered in this whitepaper. Specifically, this group:
• Applied structured brainstorming and divergent-convergent thinking to identify some 50 independent
variables, or drivers, representing the points of industry volatility today that will define future industry
conditions.
• Grouped these 50 drivers into three categories, or dimensions, to organize the industry’s volatility and
set the boundaries of future industry conditions. For each dimension, we set dichotomous behaviors that
depict in which direction each could behave. Those dimensions and their behaviors are:
• Political dynamic, which could trend toward gridlock or harmony
• U.S. economic conditions, which could trend toward recessionary or robust
• Healthcare industry structure, which could trend toward consolidated or fragmented
• Built a matrix illustrating all possible combinations of dimension behavior, thus offering a total of eight
scenario possibilities.
• From the matrix, selected four scenarios for further development that we believe are mutually exclusive but
collectively exhaustive. These four scenarios are representative of a broad range of future healthcare and
health insurance industry challenges and opportunities. (See the Appendix for a fuller description of the
scenario planning process).
How We Developed the Scenarios
Figure 1: Fuld + Company’s healthcare and health insurance industry scenario matrix. The highlighted
scenarios were selected as the best collective representation of the future of the industry.

EISENHOWER
RETURNS
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January 19, 2021 – America has truly been made
great again. On the eve of President Donald
Trump’s second inauguration, the U.S. economy
is hitting on all cylinders. There is a widespread
sense of security in the aftermath of the crushing
defeat of the Islamic State, unemployment rates
are at 50-year lows, and almost all Americans have
health insurance thanks to President Trump’s most
significant domestic achievement, the Empowering
Patients First Act, passed in 2018.
When he entered office in 2017, skepticism
abounded about the Trump agenda. The new
president quickly made the “pivot” so many had
been expecting and, with a Republican majority in
Congress, moved quickly and rationally to shepherd
in a small-government, low-regulation, market-
based set of economic reforms that touched every
corner of the U.S. economy, not the least of which
was the healthcare and health insurance industry.
Knowing that the stakes were high, Congressional
Republicans at the beginning of the 115th
Congress, despite their pre-election rhetoric, took
a measured and disciplined approach to repeal,
and ultimately replace, the Affordable Care Act.
Working closely with industry, and with blue dog
Democrats that were facing steep 2018 re-election
battles in states that Trump won in 2016, Congress
passed a broad healthcare reform bill in early 2018
that dramatically transformed how Americans
acquired health insurance.

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Resisting the intense political pressure to quickly
dump the ACA, and relying heavily on market-
based levers, Congress crafted legislation that
eliminated the individual mandate, did away with
the state healthcare exchanges, and transformed
Medicaid into state-run block grants to allow
for more focused and efficient distribution of
benefits. Also gone were many regulations on
insurers, including the ability to deny coverage
for pre-existing conditions. The new law relied
heavily on market based incentives to compel
broad participation in the individual markets:
steep premium increases for people who
canceled and then tried to re-acquire insurance,
as well as a plethora of tax-based incentives to
acquire coverage.
Also gone were many regulations on insurers, and
they now had the ability
to deny coverage for
pre-existing conditions.
The new law relied
heavily on market based
incentives to compel
broad participation in
the individual markets:
steep premium increases
for people who canceled
and then tried to re-
acquire insurance, as
well as a plethora of
tax-based incentives to
acquire coverage.
Accompanying the orderly transition away from
ObamacarewasasweepingoverhauloftheU.S.tax
code passed by the 115th Congress in September
2017. The legislation drastically simplified tax rules
and regulations, and today most U.S. tax filers can
fill out a simple postcard, or go online and answer
six questions, and file their taxes. The tax code
reform reduced the number of tax brackets to
just three – 12 percent, 25 percent and 33 percent
-- and eliminated many popular business and
personal deductions to achieve a revenue neutral
reform, insisted upon by the Tea Party wing of
the Republican party. Included in the tax reform
were tax credits that low-income filers could use
as subsidies to purchase health insurance.
Tax reform, combined with an elimination
of most Obama-era business regulations,
caused corporate earnings to surge and the
U.S. economy to enter a prolonged period of
expansion. The Dow Jones Industrial Average
broke the 24,000 mark on October 19, 2018
(ironically, exactly 30 years to the day of “Black
Monday” 1987, when the Dow declined by more
than 22 percent) and the unemployment rate fell
below 4 percent by the beginning of 2018. The
U.S. trade deficit decreased by 12 percent in the
first two years of Trump’s presidency, and U.S.
GDP growth hit 4.2 percent in the second quarter
of 2019. Not surprisingly, Republicans solidified
their congressional majority in the 2018 mid-term
elections, picking up three more Senate seats
and an additional ten House seats.
Health insurance
companies, buoyed by a
strengthening economy
and a surge in capital
reserves, contributed to
the smooth healthcare
reform transition by
accelerating the shift
away from fee-for-
service payments and
doubling down on legacy
Obamacare risk-sharing
and community health
payment schemes with
their provider networks.
As a result, the pace of healthcare inflation
continued to slow as healthcare providers, relying
on economies of scale from continued industry
consolidation and advances in healthcare IT and
dataanalytics,improvedefficienciesandimproved
outcomes for patients.
Throughout 2018 and 2019, the surging economy
created tight labor markets, and employers were
pulling out all the stops to recruit and retain talent.
Fears about Trump’s isolationist trade agenda
failed to materialize, and the U.S. witnessed a
modest manufacturing revival as the pace of
offshore manufacturing slowed. As wages rose
and prices for most consumer items increased,
inflation fears were kept in check by an aggressive
Federal Reserve monetary policy that modestly
increased interest rates while controlling the
money supply.

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Today, it has become the norm for employers to offer
generous healthcare benefits to their employees,
and fears of a spike in the rate of uninsured
Americans after the repeal of Obamacare never
materialized. More than 60 percent of Americans
get health insurance from their employers; for those
who do not, premiums are affordable thanks to tax
credit subsidies for the poor, and a well-balanced risk
pool from the group markets that enable insurers to
manage risk broadly. Only 5 percent of Americans go
without health insurance in 2020.
On the foreign policy front, the world is a calmer,
more secure place thanks to the unprecedented
partnership between the United States and Russia.
Starting with an ambitious military partnership in
Syria in 2017, the two nations have effectively joined
forces to defeat ISIS in Syria and Iraq, keep Chinese
hegemonic expansion in check in Asia, quell fears of
Russian expansion in eastern Europe, and minimize
Israeli-Palestinian tensions following the assassination
of Benjamin Netanyahu in 2018. Global fears of ISIS-
sponsored lone-wolf terrorist incidents have all but
disappeared.
As President Donald Trump is set to embark on his
second term the country rallies around his 2020 re-
election theme, “Keep America Great.”
Political Dynamic U.S. Economy Industry Structure
Harmony Robust Consolidated

THE WINTER
OF OUR
(DIS)CONTENT
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January 19, 2021 – On the eve of the inauguration of
President Ted Cruz, Republicans are eager to erase
any memory of the Donald Trump experiment. With
the economy reeling from conditions resembling
the stagflation of the 1970s – slow economic growth
and high rates of inflation – and the United States
entangled in foreign military conflicts in Syria,
Venezuela, the South China Sea, and Crimea, cries of
“make America great again” have turned into “make
America function again.”
At the start, it all looked so promising. A unified
Republican party fell in line with the Trump agenda
and eagerly rolled back Obama-era policy touching
every corner of the American economy. Trump’s
America-First agenda saw the United States withdraw
from NATO, put an end to NAFTA, and promise to
invest in rehabilitating the American manufacturing
economy. Republicans moved quickly to significantly
increase military spending and passed an enormous
infrastructure bill while also implementing massive
tax cuts.
Living up to campaign promises, Republicans were
quick to repeal what they believed to be the most
egregious parts of the Affordable Care Act in 2017,
eliminating the individual mandate, healthcare
exchanges, and the requirement for larger employers
to provide coverage to their employees. At the same
time, to curry favor with voters, the 2017 Empowering
Patients First Act did not eliminate the parts of the
ACA that consumers liked: requiring that insurers
cover pre-existing conditions, and allowing children
to remain on their parents’ policies until age 26.

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The combination of tax credits, allowing insurers
to compete across state lines, and incentives
for Americans to participate in health savings
accounts,however,werenotenoughtoencourage
the millions of Americans that previously had
purchased insurance on the exchanges to
acquire coverage on the individual market. As
a result, by the beginning of 2018, most insurers
were left with risk pools over-weighted with older
and sicker policyholders. While large players like
Aetna-Humana and Cigna-Anthem were able
to weather what they hoped was a temporary
imbalance in the risk pool, smaller players could
not, and many exited the business.
With the Democrats having to defend ten Senate
seats in the 2018
midterm elections
in states won by
Donald Trump two
years earlier, and
having failed to put
up any meaningful
opposition to the
Trump agenda,
Republicans further
consolidated their
c o n g r e s s i o n a l
majority, picking
up five Senate and
over a dozen House
seats. The deaths
of Supreme Court
Justices Stephen Breyer and Ruth Bader Ginsburg
in 2017, on top of the vacant seat caused by the
death of Antonin Scalia in 2016, gave Trump a total
of three Supreme Court nominations in his first
term that he used to solidify a conservative Court
for the next 20 years, making any challenges in the
judiciary to his roll-back of business regulations a
non-starter.
The United States entered a recession in early
2019, with the recovery hindered by the massive
budget deficits that had resulted from expanded
government spending on infrastructure and
the military, and tax cuts that had reduced
government revenue intake by nearly 15%. With
the United States largely absent from major global
trading blocs, near-shore production of common
consumer items such as wide screen televisions,
furniture, and toys drove prices up and resulted in
a dramatic increase in the consumer price index
and surging inflation rates. 1970s-style economic
malaise returned with a vengeance.
Unable to accept blame for the nation’s
economic woes, Trump attempted to divert the
country’s attention away from its stagflation and
gambled on several overseas military ventures.
The president ordered the U.S. Carrier Strike
Force 7th Fleet to the South China Sea to keep
Chinese saber-rattling in check, leading to
several skirmishes between U.S. and Chinese
fighter aircraft in the summer of 2019. Trump also
launched a naval blockade of Venezuela after the
Madura government was implicated in running a
drug smuggling operation that increased heroin
trafficking to the U.S.
Things hit a new
low, however, when
Washington’s military
partnership with Moscow
in Syria quickly derailed
after U.S. intelligence
determined that Russia’s
victory over the United
States in the 2018
winter Olympic biathlon
was due to use of
performance enhancing
drugs. Trump retaliated
by launching a covert
war in Crimea to end
the Russian occupation.
These foreign adventures destabilized global
oil markets and by the beginning of 2020, crude
prices sat at over $120 per barrel.
Business failures rose significantly starting in
2019. By mid-2019 the unemployment rate stood
at 8.6 percent and most individuals who had lost
their health insurance when they lost their job
could not afford to purchase individual or family
policies. By the end of 2019, more small regional
health insurance players exited the market,
unable to eke out a profit with such unfavorable
risk pools. Larger insurers filled the void, and
with a relaxing of regulations that permitted
them to compete across state lines, the industry
consolidated into several major regional players
that quickly and significantly raised premiums.
By 2020, the rates of uninsured Americans well
surpassed pre-ACA levels.

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Uncertainty prevailed among most healthcare industry
playersbylate2019asfewbelievedthestateoftheU.S.
healthcaresystemwassustainable.Tohedgetheirbets,
large insurers drove another round of consolidation.
UnitedHealth Group announced its intention to
acquire Highmark in 2019, and, with a relaxing of
regulations that allowed insurers to compete across
state lines, many Blue Cross Blue Shield companies
merged to create regional insurance powerhouses. At
the same time, healthcare providers went on a buying
spree, consolidating hospital systems and provider
networks into massive delivery entities that can realize
economies of scale as the rate of healthcare inflation
continues to soar. Today, Partners Healthcare, which
manages providers from Maine to Maryland, is the
nation’s largest healthcare provider.
The 2020 presidential election season kicked off with
theU.S.economystillstruggling,theU.S.militarymired
in seemingly endless foreign interventions, and U.S.
consumer confidence at an eight-year low. Sensing
a massive electoral defeat in 2020, Congressional
leaders unified and coalesced around Ted Cruz to
mount an intra-party challenge to Donald Trump’s
attempt to secure the Republican nomination. With
the writing on the wall, and afraid of publicly losing the
nomination campaign, Trump and Vice President Mike
Pence pulled out of the nomination race in June 2020,
clearing the path for Cruz’s nomination and eventual
election victory over 78-year old Joe Biden.
Harmony Recessionary Consolidated

TECH SAVES
HEALTHCARE
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January 19, 2021 – The resilience of the technology-
fueled growth in the U.S. economy is on everyone’s
mind as President-elect Mark Zuckerberg prepares
to take the oath of office. To be sure, the past four
years saw a roller-coaster ride of hope, promise, and
hard work, but ultimately disappointment as the
hoped-for Trump revolution fell flat. However, a wave
of innovation resulted in the most dynamic American
economy since the 1920s, and today, consumers rely
on technology for virtually all facets of commerce. With
technology solutions creating entirely new industries
by linking buyers and sellers of all sorts of goods and
services, creative disruption is the name of the game
as longstanding companies struggle to find relevance
as new start-ups build revenue and brand loyalty in no
time flat.
The inauguration of President Donald Trump in 2017
ushered in single party government in the U.S. for
the first time since 2007, and expectations were high
that political gridlock would finally come to an end.
The Republican Congress acted quickly to repeal the
Affordable Care Act as its first significant legislative
achievement in 2017, much to the delight of the
Republican base, as well as most of Donald Trump’s
supporters.
However, the Republicans overplayed their hand and
failed to appreciate the importance the electorate
placed on having an ACA alternative at the ready. With
all provisions of the ACA scheduled to expire at the
end of fiscal year 2017, Republicans failed, due to intra-
party divisions, to legislate a replacement in time. The
death blow came when several establishment Senate
Republicans, including Susan Collins of Maine and
John McCain of Arizona, led an effort to delay voting
on the Empowering Patients First act to deny giving
Trump a legislative victory due to his refusal to pursue
aggressive sanctions against Russia for Moscow’s role
in meddling in the 2016 U.S. election and its escalation
of the Syrian conflict and support of President Assad.
As a result, on October 1, 2017, the U.S. healthcare
system returned to its pre-2010 state.

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Republicans’ failure to manage the healthcare
reform process, combined with other legislative
disappointments – especially the 2017 Secure
our Southern Border Act that legislated the
constructionofawallontheMexicanborderfunded
entirely with U.S. taxpayer dollars – caused Trump’s
political base to disintegrate, and prompted
an electoral defeat for Republicans in the 2018
midterm elections. The Democrats re-took the
Senate after winning several contests in states won
by Trump just two years ago. With the Republicans
now the minority party in the Senate again, by a
slim 49-51 margin, two-
party government returned
to Washington.
Despite–ormaybebecause
of – the political gridlock,
the U.S. economy entered a
new era of innovation, and
technology soon became
the solution to many
problems that government
could not solve. The
continued resilience of
the U.S. economy fueled
technological innovation,
and nowhere was this
more apparent than in the
healthcare sector. Today,
technology fuels increased
collaboration, partnerships,
and transparency across
individuals, employers,
care providers, payers, and
pharmacies, supported
by novel platforms and
advanced algorithms
that contribute to better risk management, cost
efficiencies, and improved healthcare outcomes.
Technology giants and innovative start-ups alike
revolutionized the way Americans find, pay for, and
use health insurance, and how they interact with
their healthcare providers. The popularity of tech
start-up InsureMe embodies the new healthcare
world. Started by the founders of Lending Tree
and Mint, the company allows consumers to
enter their personal health actuarial score or
PHAS. This score, similar to a credit score, is
generated automatically by Apple, in partnership
with TransUnion, by mining personal health data
maintained on Apple’s Health app. Consumers
receive competing offers from health insurers
for coverage based on their age, health status,
residence, and other factors.
Meanwhile, many large employers have expanded
the use and popularity of private health exchanges
to provide their employees a competitive market
to compare plans and rates. Combined with
a move toward a defined
contribution model for health
benefits, private exchanges
fueled by Google and eBay
are enabling employees to
save money and plan their
own healthcare expenditures
more effectively. The two firms
announced plans in 2019 to
open private exchanges to
anyone looking to purchase
coverage, whether through
an employer’s plan or on the
individual market.
Meanwhile, there has been
a technology innovation
explosion in healthcare
delivery. That telehealth has
transformed how physicians
diagnose and treat common
maladies is old news; today,
the sharing economy has
impacted how patients find
and contract with physicians.
Uber in 2019 launched
UberHealth, a platform on which individuals can
locate a specialist to treat a variety of illnesses
and conditions, and contract and pay for services
securely online in partnership with their health
insurance provider. Meanwhile, Amazon has
launched EchoMD, an addition to its popular
Alexa virtual personal assistant that can collect
patient samples of blood and urine, conduct basic
diagnostic tests and communicate the results
securely to physicians and nurse practitioners, and
order and have delivered prescription medications
and other medical supplies.

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Amazon has also opened its retail platform to
pharmacies, hospitals, out-patient centers, and other
care providers to create a seamless e-commerce
network that helps patients coordinate care more
effectively. Not surprisingly, these healthcare
technology innovations have dramatically slowed the
rate of healthcare inflation, now at its lowest level in
more than 30 years.
“There has been a revolution in the consumer
experience associated with healthcare” says Rick
Pollack, President and CEO of the American Hospital
Association. “Thanks to the innovation introduced by
Uber, Apple, and start-ups like InsureMe, as well as the
cost savings that have emerged, going to the doctor
– whether in physician’s office or virtually – is actually
something consumers look forward to.” Facebook,
Google, and Cigna are reportedly discussing an
alliance to provide innovative new health insurance
plans to participants in the “gig economy”, and are
in negotiations with Lyft, Airbnb and Task Rabbit to
offer health insurance to their contractors. Cigna is
particularly driven to find new partnerships after the
Department of Justice ruled against its merger with
Anthem in 2018.
It didn’t take long for voters to acknowledge the
role that technology played in transforming multiple
segments of the U.S. economy. And it was no
surprise that when Mark Zuckerberg in a Facebook
post hinted at his interest in running for office, a
coalition of centrist politicians, venture capitalists,
and tech industry leaders launched a third-party
effort to secure his nomination. He beat Democratic
candidate Elizabeth Warren and the incumbent
Donald Trump by more than 10 points, and won the
Electoral College in a 320-146-72 landslide.

THE HUNGER
GAMES
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January 19, 2021 – On the eve of the presidential
inauguration, the story running incessantly on CNN
was hard to miss. The United States now ranks below
Argentina in a study of healthcare outcomes prepared
by The Commonwealth Fund. According to Dr.
Benjamin Chu, the Commonwealth Fund’s Chairman,
“When measured against patient access, wait times,
re-hospitalization rate, morality figures and other
measures of quality and effectiveness, the United
States’ healthcare system ranks just below Argentina.
The Netherlands, once again, ranked best in terms of
healthcare quality compared to per capita costs.”
It’s not hard to see how we got here. With the botched
repeal of the Affordable Care Act in 2017, the U.S.
healthcare system took several steps backward and
today is a case study on soaring costs, inefficiencies,
and poor patient access. President-elect Elizabeth
Warren and all members of Congress agree something
needs to be done, but there is no political consensus
on what that should be.
Exuding overconfidence and misreading public
sentiment, Congressional Republicans in 2017 could
nothavemanagedtherepealoftheAffordableCareAct
more poorly. With a majority of Trump voters claiming
in polling that they wanted the ACA retained if no
alternative was ready at the time of repeal, Congress
pressed ahead with immediate repeal anyway. Intra-
party factions came to the forefront when Congress
attempted – without any help from Democrats – to
draft a bill for an Obamacare replacement. As a result,
the ACA was repealed effective October 1, 2017,
but nothing was legislated in its place. Even though
Congress set the deadlines for the major elements
of the ACA – such as the individual mandate and the
exchanges – to expire several years out, the uncertainty
generated by the lack of an ACA replacement caused
insurance markets to practically collapse.

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Insurers, spooked by not having a clear direction
on regulations for health insurance provisions,
raised premiums dramatically to hedge their bets
against current and future losses. That caused
fewer consumers in the 2018 open enrollment
season to opt for insurance, except for older and
sicker people who could not live without it, and
who were offered some relief by state Medicaid
block grants. Employer costs also skyrocketed,
leading to a surge in the number of large
companies that opted to self-insure,
and in small companies that no
longer provided coverage
for their employees. Most
employers also moved to
a defined contribution
model for health
benefits, raising
employee costs and
risk.
Other legislative
failures, including
the inability of
Congress to raise
the federal debt
ceiling in March
2017 that led to a
U.S. default on its
credit obligations, and
a dramatic increase in
the federal budget deficit
due to the costs of the U.S.
invasion of Syria in June 2017
precipitated the recession that
began in September 2017. The lackluster
economy depressed corporate earnings, and
many high-profile healthcare mergers – including
Anthem-Cigna and Aetna-Humana – were called
off, even though the Department of Justice
dropped its antitrust actions against both.
Obamacare features such as risk-sharing
agreements between payers and providers and
public investments in healthcare technology were
also abandoned as payers again relied heavily on
fee-for-service payments with providers, while
cutting back on technology implementation
costs. Progress made over the past ten years
to improve patient access and to improve care
continuity quickly dissipated. Today, navigating
the U.S. healthcare system is an exercise in
frustration.
For most consumers, this means being stuck
with a barebones health insurance policy offered
either by employers or on the exchanges – both
completewithhighdeductiblesandco-paysand
limited provider networks. Incentives,
including the financial benefits that
come with coordination, are
largely gone for providers to
synchronize care with an
eye toward better patient
outcomes. As a result,
inefficiencies in the
system are pervasive.
As the income
disparity between
rich and poor
continues to widen,
wealthy consumers
can pay professional
healthcare navigators
tohelpcoordinatecare
while middle income
and poor consumers
face countless hours
visiting providers, filling
out forms, and essentially
managing their own care plans.
Now, four years after the advent of the
Trump administration, most sectors of the U.S.
economy are lagging, not the least of which is
healthcare. Manufacturing jobs continue to leave
for Mexico, China and other low-cost offshore
locations, and the nation’s unemployment rate
hovers at 9 percent. Senator Elizabeth Warren’s
populist message railing against corporate
executives and billionaires resonates, and she
defeated Donald Trump in an electoral college
landslide resembling Ronald Reagan’s 49-state
win over Walter Mondale in 1984.

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C O P Y R I G H T © 2 0 1 7
CONCLUSION
The particular conclusions to be derived from the
scenarios presented above ultimately depend
upon the organization as each will have its own
set of goals and market realities. The benefits to
be derived from scenario planning are found not
in the scenarios themselves, but in their analysis
and in the development of strategic plans that
incorporate the critical learnings. Upon reviewing
and scrutinizing these scenarios, a technology
company, for instance, will gain insight and develop
strategic plans that are vastly different from a
healthcare or health insurance provider. A political
leader will find as much value, albeit develop vastly
different action plans.
Scenario planning is a highly effective approach
that an executive can use to capture and analyze the
relevant factors of uncertainty and forge a robust,
flexible strategy for the future. In the case of the U.S.
healthcare and health insurance industry in a Trump
world, one can understand the role of key elements
that will drive an organization’s future: the Trump
Administration’s agenda, extent of Congressional
support, consumer demand, world events, industry
consolidation or fragmentation, to name a few. To
forecast only one or two of these dimensions risks
over-simplification as future industry conditions
will depend on the interrelationship of all of these
trends. The scenarios presented above illustrate
how three major dimensions – Political Dynamic,
U.S. Economy, and Industry Structure – could
interact and serve as fodder for strategic analysis
and discussion among executives, and political
leaders, for that matter, as they consider their
strategies and actions moving forward.

C O P Y R I G H T © 2 0 1 7
Of course, scenarios, while compelling, are a means to
an end and not the solution themselves. Any scenario
planning effort must be focused on identifying
actionable outcomes in the form of a range of
strategic options that conform to the opportunities
and constraints faced by any business. To achieve this
goal, business and political leaders need to debate
and articulate the rationale and detailed explanations
as to why one set of options may be more effective
than another across scenario conditions. These
explanations can then be tied to a set of early warning
indicators, markers that antedate trends and market
movement and that can guide executives as they
continuously modify their actions. These early warning
indicators can be tracked and reported through a
strategic program so that leadership has the best
and most incessant picture of the relevant factors
impacting their organization.
Early warning programs empower business executives
to anticipate external threats and opportunities.
Systematicmonitoringthroughacontinuousframework
enables swift decision-making when, and even before,
the competitive landscape shifts. But building an early
warning program is not easy. It’s one thing to define a
competitor set or to rank specific growth opportunities,
but designing, funding, resourcing, and implementing
an early warning program for all potential eventualities
can seem amorphous, nebulous, and overwhelming
to the point of paralysis. In fact, the Fuld Institute for
Competitive Strategy found that even after successfully
charting their market position and identifying strategic
risks, a majority of firms fail to incorporate monitoring
programs into their strategic plans. The danger of
such a gap is a lack of foreknowledge and diminished
decision-making power.
18

19
C O P Y R I G H T © 2 0 1 7
APPENDIX
Scenario planning provides a structured framework
to develop flexible and robust strategies that are
tested against a broad range of future industry
conditions, and to build and implement a strategic
early warning system. By shaping today’s variables
and points of uncertainty into divergent but
plausible scenarios, executives and political leaders
can link strategic imperatives to on-going market
monitoring for risk/opportunity identification.
Fuld + Company has worked with clients across
numerous industries and government sectors,
using a proven four-step approach to developing
scenarios and establishing successful early warning
processes. The benefit: monitor the market more
effectively.

C O P Y R I G H T © 2 0 1 7
1. DRIVERS & SCENARIO DIMENSIONS
a. Brainstorm a complete set of current industry
variables
b. Group the drivers into three, four or five high
level dimensions – broad categories of related
drivers
c. Assign dichotomous behaviors to each dimension
d. Create a scenario matrix depicting all possible
dimension behavior combinations. Give each
scenario possibility a descriptive name
2. SCENARIO BUILDING
a. Select four or five scenarios from the matrix that
together capture the full range of future threats
and opportunities your organization may face
b. Write rich, descriptive narratives for each chosen
scenario
c. Describe the behavior of key drivers in each
scenario
3. CRITICAL SUCCESS FACTORS & STRATEGY
FORMULATION
a. Determine critical success factors for your
organization within each of the selected scenarios
b. Describe a strategy that will enable your
organization to meet the critical success factors in
each scenario
c. Identify common strategy themes across the
scenarios; this is your “core” strategy likely to be
resilient no matter what actual future evolves
d. Tie scenario-unique strategies to the various
dimensions identified above to form contingency
strategies
4. EARLY WARNING PROGRAM
a. Determine observable and reportable indicators
for each dimension behavior
b. Determine keywords and data sources based on
key indicators
c. Configure monitoring platform(s)
d. Establish reporting vehicle(s) and organizational
responsibilities
e. Evaluate which dimension behavior is occurring
based on your analysis of the indicators, and
revisit relevant contingent strategies for possible
deployment
Learn more about Scenario Planning from
the Fuld Institute for Competitive Strategy
Early Warning Toolkit
20

FOOTNOTES
Photo of Donald Trump by Gage Skidmore used
with permission under CC BY-SA 2.0 license
Photo of Donald Trump sign by Gage Skidmore
used with permission under CC BY-SA 2.0 license
Protest march against Donald Trump by Fibonacci
Blue used with permission under CC BY 2.0 license
Contributing to the Fuld + Company Healthcare
Scenarios in a Trump World were scenario planning
consultants Barbara Reismann, Ben Price, Karl
Varkey, Malini Solanki, Nathaniel Emmons, Robin
Kao, Vineet Vallam, and Varun Naik.

ABOUT FULD
Fuld + Company is a leading competitive strategy consultancy
that helps clients anticipate competitive activity, see beyond
market disruptions, and develop or refine robust business
strategies. Through research, analysis, and strategic consulting
we work with the Global 1000 to identify and solve tactical and
strategic challenges.
With over 35 years of experience, and offices on three continents,
Fuld + Company developed many of the competitive intelligence
and strategic analysis techniques used today. Having completed
thousands of projects, we are recognized as an organization of
thought leaders by publications such as Fortune, Fast Company,
The Financial Times, The Economist and Time Magazine.
US GLOBAL HEADQUARTERS
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+1 617 492 5900
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+44 (0) 20 7659 6999
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Ortigas Center, Pasig, Philippines
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www.fuld.com

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