Joe Versus the Health Care Volcano

Listing President Joe Biden’s health care challenges would be like reading to the end of the Internet – impossible and, after a point, unproductive. Like much else in health care, however, there is no shortcut to understanding them and how difficult meeting them will be. Major health reforms get most of the ink, but incremental progress is a worthy goal here.

If you closely follow these issues in the national press, you will come across excellent reporting on specific things we can do to tackle health care access, affordability, equity, and quality. But these are individual pieces of a Rubik’s Cube. To understand what we face in health care, you need to see all the pieces, and begin learning how they may fit together. This is not the stuff of four-minute online reads with a few links to other studies.

If you’re serious about the topic, a recent piece in the journal Health Affairs is an excellent place to start. “Health Costs And Financing: Challenges And Strategies For A New Administration” was co-authored by seven prominent health experts (see details at the end of today’s post).

Don’t get your hopes up for sweeping changes anytime soon. “Any effort at reform will occur amidst the COVID-19 pandemic, which has placed unprecedented strain on policy makers and public institutions,” the article says. “There will simply not be the same capacity or appetite for sweeping regulatory changes that would have been present in other circumstances.”

The article does stress five sets of more immediate objectives. Its issues and recommendations are direct quotes from the piece. If some points are obscure, Google them for more details. It’s noteworthy that many do not require Congressional approval.

1 – Expand Insurance Coverage

There remains political resistance to expanding coverage through mechanisms set forth in the ACA. Twelve states have not expanded Medicaid, several coverage-related provisions in the ACA have been repealed, and support of the Marketplaces for individual coverage has been uneven. Bipartisan approaches and public-private partnerships are needed.

Sustainable financing presents another challenge. Mechanisms for publicly financing coverage expansion—through deficit spending, new revenue sources, or revenue transfers—come with inherent trade-offs and will require bipartisan compromise. We believe that reallocating the substantial resources spent on care that does not improve health represents an opportunity to expand coverage without sacrificing affordability or quality, but the impact of associated revenue reductions on providers needs to be closely considered.

Recommendations

The HHS [Health and Human Services) secretary should develop alternative pathways to insurance coverage, including strengthening and better supporting the individual insurance Marketplaces and working with Congress to decrease the age of Medicare eligibility to fifty-five.

Governors should also create opportunities for expanded coverage in their states. Optimal use of the Medicaid program offers the greatest opportunity to expand coverage and promote health equity.

2 – Accelerate Transition to Value-Based Care

A central action priority identified in the original Vital Directions initiative was to “pay for value”—specifically, to “drive health care payment innovation providing incentives for outcomes and value.” Since that time, value-based payment has grown notably. According to the Health Care Payment Learning and Action Network, the share of health care payments administered via alternative payment models increased from 23 percent in 2015 to 36 percent in 2018. Although selected models have generated significant savings, the overall impact of new payment models on cost and quality has been mixed.

Recommendations

The CMS [Centers for Medicare & Medicaid Services] administrator should increase the adoption of advanced value-based payment models.

It will also be important for CMS to help stabilize independent primary care providers. COVID-19 has placed significant financial strain on independent primary care providers. This is especially troubling, as these clinicians provide critical access to health care for much of the US population and have been uniquely successful at delivering value-based care.

In addition, Medicare Advantage should be strengthened. More than a third of Medicare beneficiaries are now enrolled in Medicare Advantage plans. The program benefits from strong bipartisan support and has catalyzed the adoption of advanced value-based payment models. Strengthening the program could position it to serve as a chassis for coverage expansion. To achieve this goal, the administrator should continue to increase flexibility for Medicare Advantage plans to design new benefit packages, incentivize healthy choices, and redistribute funding to reduce disparities and improve equity.

3 – Advance Home-Based Care

Improvements in internet, video, and remote monitoring capabilities increasingly allow for the delivery of health care services in more cost-effective, patient-centered settings. Patients now can receive home-based acute care, primary care, and behavioral health services of equal or better quality compared with facility-based delivery, and at a lower cost.

Recommendations

To advance home-based care, the CMS administrator should formalize changes to telehealth reimbursement. Working with Congress where needed, the administrator should make permanent some of the changes to telehealth reimbursement that were instituted under the COVID-19 public health emergency.

The CMS administrator should also develop reimbursement models for home-based care. . . .  and test new payment models for home-based acute, post-acute, and long-term care.

4 – Improve The Affordability of Drugs and Other Therapeutics

Highly effective therapeutics may lower aggregate spending by reducing the need for costly interventions or hospitalizations, but many of these novel medicines command high prices. More challenging is the fact that high prices are not always aligned with value. Prices on existing, branded drugs have increased substantially during the past decade, limiting affordability and access. And even in circumstances where the benefits are unclear or modest, many new therapeutics are still reimbursed at high rates.

With continued innovation on the horizon—including gene therapy—these challenges will become more acute. Broadening the pool of Americans who can obtain and afford high-value therapeutics will require reimbursement structures that align payment with value and balance affordability with the continued need for innovation.

Recommendations

The FDA [Food and Drug Administration] commissioner should expand on recent efforts to reduce barriers to generic and biosimilar development and market entry with the goal of increasing competition, improving access, and reducing prices.

The FDA commissioner also should accelerate efforts to build a robust real-world evidence program and develop rigorous, science-based criteria for how real-world evidence can be used to inform decisions about the safety and effectiveness of new therapeutics. . . . This infrastructure is a prerequisite for any effort at value-based pricing for therapeutics.

The CMS administrator can also play a key role in improving the affordability of drugs by developing value-based reimbursement models for high-value therapeutics.

5 – Develop a High-Value Workforce

The U.S. benefits from a highly skilled health care workforce and is home to premier training institutions. But there are significant and growing workforce shortages in the areas of primary care, behavioral health, and dental care. A coordinated strategy to train, deploy, and support a diverse health care workforce is an essential enabler of access, quality, and value, particularly in under-resourced communities.

Recommendations

Through a partnership with state governments and private payers, the HHS secretary should facilitate the development and deployment of a national workforce of community health workers.

Governors could promote the development of a high-value health care workforce by removing barriers to affordable telehealth access. They should, in collaboration with state licensing bodies, formalize changes to state licensure laws made during the COVID-19 pandemic that reduce or eliminate the barriers facing out-of-state providers who wish to provide telehealth services and coordinate care across state lines.

THE AUTHORS:

Dr. William Shrank, Humana Chief Medical Officer. More: The Check Up: Dr. William Shrank of Humana.

Nancy-Ann Min DeParle, a leading architect of the Affordable Care Act and of CVS Health and HCA Healthcare. More: Present At The Creation: Launching The ACA—2010 To 2014.

Scott Gottlieb, commissioner of the Food and Drug Administration from 2017 until April 2019; director of Pfizer; affiliated with CVS Health. More: Scott Gottlieb discusses coronavirus on “Face the Nation,” January 17, 2021.

Sachin H. Jain, president and CEO of SCAN Group and Health Plan, with 220,000 members and revenues exceeding $3.4 billion. More: Top 10 Healthcare Industry Predictions For 2021.

Peter R. Orszag, CEO of Financial Advisory at Lazard Freres & Co LLC, and former head of the Office of Management and Budget and the Congressional Budget Office. More: Fiscal resiliency in a deeply uncertain world: The role of semiautonomous discretion.

Brian W. Powers, Deputy Chief Medical Officer at Humana.

Gail R. Wilensky, an economist and senior fellow at Project HOPE, and former director of the Medicare and Medicaid programs; a director of UnitedHealth Group and Quest Diagnostics. More: The Next Step In Medicare Reform.