Takeaway: Public Option still a viable policy choice especially during an emergency which seems destined to overstay its welcome; ONEM, OSH, USPH; UNH

Editor's Note: This is a complimentary research note published by Healthcare Policy analyst Emily Evans. CLICK HERE to get COVID-19 analysis and alerts from our research team and access our related webcasts

Don't Get Too Comfortable: A Serious Crisis Should Never Go to Waste  - 12 7 2020 8 35 39 AM


Being Joe Biden isn't easy right now.

He did get elected President of the United States, but his party holds the smallest majority in the House since the 19th century. While, the Senate's balance of power is still unknown pending the Jan. 5, 2020, Senate run-off in Georgia, the best case for Democrats is a probably a 49-51 minority.

With very little evidence the American people were anything but tired of the chaos of a Trump presidency, Republicans on both sides of the Hill are going to press their advantage.

Meanwhile, Biden's friends - and he has a lot of friends - aren’t too much help. The president-elect has been banging around Washington for almost 50 years and has a lot more people to keep happy relative to his old boss. Many of them are emerging from their comfortable sinecures at Washington's many think tanks and universities, ready to stage their triumphant return.

The left, hoping for a few fresh faces is also agitating. In recent days his selections for Treasury (Yellen) and Secretary of State (Blinken) have met with some concern that the top four cabinet positions will lack the diversity Biden promised on the campaign trail. They have a right to be concerned. In an epic troll, Biden has selected Neera Tanden as Director of the Office of Management and Budget. Tanden, President of the Center for American Progress, is well-known for her (now deleted) social media criticism of Sen. Bernie Sanders.

Confirmation of key cabinet positions will not be a simple affair. Selecting a current member of either the House or Senate chamber is not a viable strategy given the thin majorities. The names that emerged last week for Secretary of HHS seemed to be designed to overcome this fraught political landscape. California Attorney General, Xavier Becerra, former Michigan Governor Jennifer Granholm and former Obama official, Sylvia Burwell are all known quantities, if not inspired choices.

If Biden's goal is to deliver a public option, the combination of Neera Tanden at OMB and Sylvia Burwell at HHS, would seem like a winner. Tanden was a senior adviser to former HHS Secretary Kathleen Sebelius during the development of the ACA and was supposedly responsible for the language, subsequently withdrawn, for a public option. Burwell, of course was at OMB during the development of the ACA and all its associated rules. She then moved to HHS in the wake of the exchange fiasco and resignation of Sebelius.

Becerra's defense of the ACA through his leadership on various challenges to the law, probably makes him someone most familiar with the complex statute. We have contended that, given the aggressive rulemaking of the Trump years, creative lawyers can probably twist the ACA's language into a public option via regulation rather than trying to convince Congress of anything. We find that possibility especially viable during a public health emergency. Becerra would be uniquely qualified to make it happen.

Like Tanden and Burwell, Becerra also knows his way around Washington, having served as a Member of Congress for 12 terms. His Hispanic heritage would also seem ideal for appeasing the restless left flank of the Democratic Party.

What makes Becerra most interesting, is his antitrust efforts in health care. His work on the lawsuit against Sutter Health would, if he is nominated, suggest consolidation in the industry will get greater scrutiny. 

Always the bride's maid and never the bride, former Michigan Governor Jennifer Granholm always seems to end up on everyone' short list for everything. Other than a distinguished political and legal career, there is little to recommend her for regulation of America's health care industry. 

Floating the names of Becerra and Burwell suggests, for all our complacency about a Biden administration, the goal of a public option is very much alive and well. Add that brick to the load of headwinds for managed care.

Don't Get Too Comfortable: A Serious Crisis Should Never Go to Waste  - Slide1


While we comfort ourselves with assurances that Biden will return to a status quo, quasi-liberal agenda of the Obama years, the Trump administration continues to finalize regulations which bring with them some of the biggest change since the 1980s.

Last week, CMS finalized rules for physicians and ambulatory surgery centers. We will dive deep into both, as we always do, but some of the highlights are worth visiting in light of the policy priorities shaping up in the next term.

The Physicians Fee Schedule final rule adopts the American Medical Association's new coding for Evaluation and Management Services - the bread and butter of any primary care physician - effective Jan. 1, 2021. The new codes now depend largely on the level of medical decision-making required and the time spent with the patient. Accompanying these changes are revisions to the value of the work associated with these codes. As a result, CMS anticipates that family medicine practitioners, as one example, will see a pay bump of 13%. The law requires these changes to be budget neutral so specialists like anesthesiologists and radiologists will underwrite the change through a reduction in their Medicare payments. 

While the new reimbursement levels only apply to Medicare, the codes and their descriptions will be universal. The American Academy of Family Practitioners, among others, are at work bringing commercial payers in line with the federal approach. The new code descriptions and the work associated with them is the first major overhaul in 30 years and finally shifts the reimbursement balance away from specialists toward primary care. 

The change will be beneficial to $OSH and, eventually, $ONEM as it makes its way into the commercial and self-insured groups. The offsetting reimbursement reductions, assuming they are not overridden by Congress as part of a year-end spending package or COVID relief bill, will hit specialists like chiropractors, anesthesiologists, radiologists and occupational and physical therapists and could be a bit of a headwind for $USPH. The de-emphasis of specialists in the reimbursement system also raises questions about the viability of roll-ups and physician acquisition strategies by IDNs, among others.

The Hospital Outpatient Prospective Payment System and Ambulatory Surgery Center Payment System final rule abandons the 20-year-old "Inpatient Only List" over three years. Starting with about 300 musculoskeletal procedures, physicians will be given discretion on whether to perform the surgery inpatient or in a hospital outpatient department. Additionally, CMS has finalized a proposal to eliminate a number of criteria that determine whether an outpatient procedure can be performed in an Ambulatory Surgery Center. Beginning Jan. 1, 2020, about 300 procedures can migrate, depending on physician preference, to ASCs.

Liberating physicians to decide what they do and where is a very different approach from the top-down centralized decision making of Burwell's HHS during the Obama years. It is not likely a Biden administration would want these, or really most, Trump-era regulations reversed.

It does alter how they might revisit the quest for "value-based" purchasing whose value has proven elusive. Where Obama often made hospitals the central players for most reform efforts - most notably the CJR model - the Trump administration has intentionally degraded their role in favor of a more decentralized system.

It will be hard to put that genie back in the bottle. 


Not to beat a dead horse but this week we were reminded again that public officials' management of the COVID-19 outbreak and its economic consequences, many of them self-inflicted, has been characterized largely by helplessness or, perhaps more accurately, incoherence. We imagined that, once the election was behind us, cooler heads would prevail, and we could get back to rebuilding trust in public health.

That would take a stronger commitment to the scientific evidence especially as it relates to common sources of COVID spread like the three Cs: Closed Spaces, Crowded Places, Close Contact. It would also take a quick divorce between public health measures and political figures whose advocacy for certain actions or prohibitions immediately invokes partisanship, whether intended or not.

It appears neither of those things are likely to happen. Instead, the prospect of more stimulus and the tantalizing authority created by a public health emergency continue to guide many high-profile decisions.

Take for example, president-elect Biden's speech Friday regarding the November jobs report. After lamenting the latest numbers and encouraging bipartisan negotiation on a stimulus package, Biden says: "The fight against COVID won't be won in January alone. To truly end this crisis, Congress will need to fund more testing as well as the equitable and free distribution of the vaccine. We'll need more economic relief as a bridge through 2021 until both the pandemic and the economic crisis are over."

In short, don't look for COVID or the economic fallout to be resolved before 2022.

Mayor Eric Garcetti of Los Angeles gets the Excellence in Medieval Science award. After months of collecting data and developing the ability to full appreciate the risks of certain activities, Garcetti issued a "stay-at-home" order for all but a select group of industries last week.

His order, despite overwhelming evidence that suggests outdoor activities are not only low/no risk but also play a vital role in social engagement and health, prohibits sunbathing on California's beaches, among several bizarre things. He, or at least his public health advisers, seem convinced that COVID is traveling through California via a miasma that knows to avoid television and movie productions facilities.

Governor Charlie Baker's mask mandate issued early last month requires face coverings in public spaces regardless of whether they are indoors or out. In order to ignore the substantial evidence that masks should only be necessary when indoors and when one is unable to keep their distance from others, Baker suggested it was about messaging. That prompted Harvard epidemiologist, Julia Marcus  to say, "“And arbitrary public health rules are a way to break the public’s trust, which is essential to keeping people engaged in public health efforts,” she said. “I think a mandate like this — that people know is arbitrary — is going to do more to reduce trust than it will to reduce infections.”

It is almost as if these poor policy decisions are designed to prolong and exacerbate the situation, or in the great words of former Obama official and the Mayor of Chicago, Rahm Emanuel, "you never want a serious crisis to go to waste."

Nah, that would be too cynical.