Politics. Regulatory capture has a price. After all the deference has been paid, the rivals eliminated and approvals granted, the federal health care apparatus is left with mediocrity in the best case, incompetence in the worst.
The void created between the need for safe and effective services, drugs and devices and the FDA’s CDC’s and CMS’s ineptitude will and is being filled.
For the last several quarters, UNH has laid out a strategic vision that certainly includes health insurance but is hardly the sole focus as it once was. The company is starting to look more like an operating platform that supports the delivery of health care than a traditional insurer.
What they described last week is a private sector version of the federal government. Using their vast stores of data and advanced computing, they have the capacity to serve as a standards-making body for clinical care.
Their ownership of physicians’ practices could give them a timely feedback loop on drug and device efficacy that is frequently in question with FDA approvals, especially those on the accelerated pathway.
Their genomics division has everything it needs to answer the unanswered questions of safety and efficacy.
The remnants of the health policy apparatus in Washington will portray all this, if it comes to pass, as rationing care. But increasingly, no one cares what they think because that is just the sort of thing that happens when preserving the status quo via regulation instead destroys it.
Policy. The mediocrity that accompanies the ossifying influence of industry priorities – often at odds and but always favoring the status quo – is sprinkled throughout CMS’s recent rulemaking.
The latest example is the request for input on monitoring M&A, consolidation and concentration of health care services. Forget for a minute that CMS has required service providers to update ownership changes as they occur for years, monitoring a symptom such as consolidation hardly illuminates the cause or brings a deeper understanding of the policy pathways.
The proposal, if you can call it that, seems designed to generate headlines about the evils of Private Equity et al., while giving the FTC somethings to chew on. It ignores the pendulum swings of power between providers and insurers and the policies that make it so.
It also ignores the fact that in many instances, the choice is between being acquired and closing. In many cases, terminating a provider is not an option. Former DVA CEO, Kent Thiry referred to it as “the floor” that guaranteed the company’s perpetual existence.
Collecting data and pitching stories to favored reporters about disfavored health care companies is, ultimately, harmless. The status quo is preserved, even if the need for change mounts.
Power. Information is power as they say. The pharmaceutical industry for years has leaned hard on “commercial interests” to prevent disclosure of pretty much everything. That veil was pierced recently by a judge’s decision to require release of documentary evidence in support of FDA’s authorization of PFE’s COVID vaccine.
Service providers and insurers have relied largely on the opaqueness of their rate structures. That mostly comes to an end this month when insurers began to post, in machine readable form, their ASO and non-ASO rates including what they pay for out-of-network services.
Once the data engineers and scientists have been summoned and these files put into some useable form, the unknowable becomes known.
For example, Brunswick, NC’s local government can compare the rates negotiated on its behalf by Blue Cross and Blue Shield of NC with those in Mecklenburg Co. Davidson College can see if it is getting a comparable deal as Duke.
In this form of price comparison, competing business can see if they are delivering the best deal for their employees and, if not, convert some of those benefits into much needed cash wages.
The timing here is important. The anti-trust settlement of Blues Plans is going into effect and for the first time many of them will need to compete on price and quality against other Blues and subsequently, national insurers.
Consolidation is inevitable which we are sure CMS will dutifully record.
Have a great rest of the weekend.
Emily Evans
Managing Director – Health Policy
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