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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. |
Politics
Being an attractive internet sensation with a great lip color (Stila Beso!) is no match for the realities of party politics. Last week, Democrats rejected Rep. Alexandria Ocasio-Cortez’s aspirations to serve on the powerful Energy and Commerce Committee by a vote of 46-13 for Rep. Kathleen Rice.
The subtext for this little internecine battle is the future of leadership for House Democrats when the inevitable happens. The Speaker, Majority Leader and Majority Whip are all over 80 years of age, making it well past time for them to cede power to younger members.
The conundrum for House leaders, created by their stubborn refusal to groom enough successors (also known as rivals), is how to effect a generational transfer to, well, the right generation. Having stayed too long, leadership now has a choice between patient Members (~55 yo) who have done their time, faithfully serving the policies and priorities of the party and a new group of rebels (~35 yo) who reject them and many of their ideals.
Nowhere is that contrast more evident than in health policy. The Affordable Care Act is precisely what you might expect from the committee chairs that crafted it, principally Rep. Henry Waxman (now 81) and Rep. Sander Levin (now 89).
It bends a private sector system to the needs of older individuals through narrow age bands, community ratings, and rich benefit mandates for all types of plans.
If you are 55 and over or in poor health, the ACA provided relief from cherry picking insurers. Unfortunately, the cost of that subsidization has been borne by the young whose insurance, assuming they had coverage, skyrocketed with few incremental benefits to show for it. It is little wonder Ocasio-Cortez declared the ACA a failure for her and those she bartended with in New York, making her an advocate for Medicare for All.
From that conflict, and others no doubt, emerges a power struggle that is just beginning. On the one hand the 55-something crowd, acting as a sort of echo to their older sponsors, want to perpetuate policies focused on insurance coverage with some incremental steps toward universal coverage. Meanwhile the Justice Democrats and their ilk are prepared to do what is necessary to accelerate that trajectory, including finding and supporting primary candidates for their recalcitrant elders.
Meanwhile, in the background the market for health care changes. The young and perhaps less politically inclined can enroll in concierge services for medical care like $ONEM, take the children to the $WMT health clinic for vaccinations and get a “better” price for drugs using their $GDRX app.
In one of our era’s many twists of cruel irony, the ACA may be killing the very thing it helped to promote: health insurance.
Policy
As the last gasp of the most selfish generation’s power and influence, the Biden administration and its supporters don’t appear too interested in major health policy innovations.
Floating around the Capitol are a variety of “suggestions” for the incoming administration that tread some familiar paths and offer little meaningful reversal of Trump-era policies favoring deregulation and technological advancement.
Instead, the think tank position papers and policy statement focus on the very thing they have been obsessed with for over two decades, health insurance.
The Kaiser Family Foundation offered 50 regulatory action for the administration including reversal of Trump administration’s rules on short term and association health plans and terminating flexibility for defining Essential Health Benefits in Qualified Health Plans. It also called for rescinding guidance to states on Medicaid work requirements and enrollment verification.
FamiliesUSA offered similar suggestions and added more state and local flexibilities to providing universal coverage, and revisions to tax credits and metal levels.
Everyone appears to be on board with the Biden administration’s tacit extension of the Public Health Emergency with it all its flexibilities and waivers.
In short, not much original thinking going on. Nor an acknowledgement that despite (or actually because of) a trillion dollars or more shoveled into health insurance coverage since 2010, services are less affordable than ever, cost sharing requirements difficult to meet, and insurance policies increasingly irrelevant.
The CMS Office of the Actuary released National Health Expenditures last week and reported that hospital expenditures rose over 6% YoY. That increase, of course translated into higher insurance premiums of one sort or another in 2020.
Notwithstanding the policies and priorities of the Biden Administration and Washington think tanks, the problem is the same as always: prices.
Power
Ironically, one of the Trump policies that is likely to have a radical impact on transformation of the American health system is price transparency. Although codified by the Affordable Care Act, implementation and enforcement went largely ignored until 2018 when President Trump issued an Executive Order requiring it. In 2019, H.H.S issued rules governing the disclosure and presentation of the data.
Jan. 1, hospitals are required to make public their standard charges for all items and services, including a hospital’s gross charges and payer-specific negotiated charges. Hospitals will need to provide price transparency through a comprehensive machine-readable file with all items and services and a display of 300 shoppable services in a consumer-friendly format.
Word around town has been that many hospitals, using the pretext of ongoing litigation, plan to forego compliance, wait to get caught and/or pay the penalty. Another strategy was to presume patients just want to know their out-of-pocket costs. If that is provided, no one will complain. At least that is the theory. Finally, there seems to be some hope that a Biden Administration will reverse the policy to that of the Obama administration.
H.H.S. seems to have thrown some cold water on all that. It announced last week it would begin proactive audits of compliance as well as investigating complaints.
There must be a lot of tin ears in hospital C-suites to think ignoring the price transparency rules will work. Alternative providers like $SRGY have gleefully embraced the idea that they can compete on price and quality. Further, the active troupe of health reporters who have made careers out of highlighting “surprise bills,” a direct result of price opacity, are certain to pounce on lawbreakers. A reversal of the policy, after public disclosure of noncompliance seems like a political loser for the Biden White House.
For or better or worse, more people will understand what their hospital charges for services come 2020. Let the games begin.
