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Category: Health Policy

Thriving in COVID Times

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By KIM BELLARD

These are, no question, hard times, due to the COVID-19 pandemic.  In the U.S., we’re closing in on 180,000 deaths in the U.S.  Some 40 million workers lost their jobs, and over 30 million are still receiving unemployment benefits.  Hundreds of thousands, if not millions, of small businesses are believed to have closed, and many big companies are declaring bankruptcy.  Malls, retailers, and restaurants have been among the hardest hit. 

Yes, these are hard times.  But not for everyone. 

Last week Target announced what CNBC called a “monster quarter.”  Sales for online and stores open at least a year jumped 24% for the quarter ending August 1 – peak COVID-19 days – and profits were up an astonishing 80%.  Its CEO specifically referenced the pandemic, as shoppers sought safe and convenient shopping options.

It is not just Target doing well.  No one should be surprised that Amazon is doing well, as more turn to online shopping and Amazon’s quick delivery, but The Wall Street Journal reports that Bog Box stores generally are doing well, including not just Target but also Walmart, Home Depot, Lowe’s, Costco, and Best Buy.  The efforts they were taking to compete with Amazon, such as increased online sales and curbside pickup, served to help them survive the pandemic’s effects. 

Similarly, if you’re a streaming service like Netflix or Disney+, the pandemic has been great for business.  Video conferencing services like Zoom are booming.  Car dealers are struggling, but not online car sales. 

And, of course, if you’re a cloud computing service supporting all these shifts to online, the world has become even more dependent on you.  “Many customers are scaling beyond their wildest projections,” Carrie Thorp of Google Cloud told WSJ. 

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Physicians Should Lead on Healthcare Reform

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By KEN TERRY

(This is the first in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Even before COVID-19, healthcare reform seemed to be stuck between a rock and a hard place, but there is a rational way forward. This approach, which I call “physician-led healthcare reform,” would engage doctors in building a healthcare system that was safe, effective, patient-centered, timely, efficient, and equitable, to use the Institute of Medicine’s set of foundational goals in its landmark book, Crossing the Quality Chasm: a New Health System for the 21st Century.Primary care physicians, rather than hospitals, would be in charge of the system, and they’d work closely with specialists and other healthcare professionals to produce the best patient outcomes at the lowest cost.

It would take a decade or more to restructure the healthcare system so that this goal could be achieved. Similarly, the transition to a single-payer insurance system needs to be accomplished gradually—although the pandemic might accelerate that timetable. Most people are not yet ready to abandon employer-sponsored insurance, and there’s still a lot of distrust of the government. Providers are more likely to accept changes in how they’re paid over time than all of a sudden. Additional benefits can also be brought online slowly. Ideally, we could transform healthcare financing over a 10-year period while rebuilding the care delivery system at the same time.

That is why implementing Medicare for America—a reform plan devised by the Center for American Progress and embodied in a current House bill–makes more sense than going directly to Medicare for All: it changes the system incrementally while achieving universal coverage fairly quickly. Medicare for America would do this by enrolling the uninsured, people who purchase individual insurance, and those now in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). People would also be enrolled automatically at birth. Companies could enroll their employees in Medicare for America, and employees could opt out of employer-sponsored plans and enroll in the public plan.

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THCB’s Bookclub, August 2020 – UnHealthcare: A Manifesto for Health Assurance

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By JESSICA DAMASSA & MATTHEW HOLT

The THCB Book Club is a discussion with leading health care authors, which will be released on the third Wednesday of every month. And this is the first one!

We kicked off with the new book from Hemant Teneja (VC at General Catalyst who has been writing many big checks lately) and Stephen Klasko (CEO at Jefferson Health System and one of the most unusual hospital system bosses in America). Their book is called UnHealthcare: A Manifesto for Health Assurance which is a how-to for creating a platform for a revolutionary future for health care. You can go buy the book here (eVersion only $6!) It’s an easy read (about 130 pages on your iPad “Books” app).

UnHealthcare is about a new concept called Health assurance– which Tenaja says is “an emerging category of consumer-centric, data-driven healthcare services that are designed to bend the cost curve of care and help us stay well.”

Sitting in on the interview because we can’t get rid of him was Glen Tullman from Livongo (Just kidding, Glen!). He weighed in on how this connects with his new idea of Consumer Directed Virtual Care and the Teladoc-Livongo merger.

This was a great discussion. We had them explain the concept, and pushed them pretty hard on how realistic it was! And you can see it in the video below (and the podcast version will be in our iTunes & Spotify channels very soon)

In September the THCB BookClub will feature Jane Metcalfe with her 2020 book NEO.LIFE

Health Insurers Ride High for Now, But Watch What’s Coming Next

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By KEN TERRY

In the strangest healthcare business story of 2020, the major health insurance companies are thriving despite—or because of—the pandemic. As the second quarter reports of United, Anthem, Cigna and other insurers reveal, their COVID-19-related costs were outweighed by the sharp drop in claims for other healthcare services.

As a result, the second quarter operating gain for Anthem, one of the largest national carriers, jumped 65% from the prior-year period, while the portion of its premiums spent on member benefits dropped to 78%. The earnings of UnitedHealth, similarly, vaulted 98% as the percentage of its premiums spent on health care fell to 70.3%. Such a low “medical loss ratio” has probably not been seen since the 1990s.

At the same time, the big insurers’ membership has been rising, but not among workers covered by employer-sponsored plans. Commercial insurance members served by United, for example, fell by 270,000 to 26.8 million, following a drop of 720,000 in Q1. In contrast, the number of people in United’s Medicaid managed care plans rose by 330,000.

These trends track with the short-time fallout of the pandemic. Families USA reported that 5.4 million workers who lost their jobs from February to May also lost their health insurance. Another study predicted that by the end of 2020, 10.1 million people will lose employer-based insurance tied to someone in their household.

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Healthcare Sings The Non-Profit Blues

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By MICHAEL TURPIN

Powers once assumed are never relinquished, just as bureaucracies, once created, never die.

Charley Reese

As we ponder the 100 day count down to the Presidential Elections, the rhetoric and ranting swirling around the best solution for our nation’s healthcare crisis, is hitting decibel levels not heard since the passage of the Affordable Care Act.  As with any major entitlement legislation, there are commendable elements, inefficiencies, and a host of unintended consequences. The current administration’s obsession with repeal while the ranks of uninsured people grow, begs the question, “what is the blue-print for expanding coverage and reducing waste, fraud and abuse while increasing transparency, quality and overall public health.  Answer: There is no plan and if there was, it would fall well short of achieving many of these objectives given the deeply entrenched stakeholder who actually do not benefit if the cost of healthcare declines.  It a classic NIMBY response: “I’m all for reform as long as I maintain my role and revenue in whatever solution is proposed.”. 

The Affordable Care Act is a solid foundation to build a 2.0 version of a solution to solve for the uninsured and to act as a catalyst for market reforms that will either reshape the misaligned incentives and embedded inequities in our current system or it will lead to voters demanding the expansion the role of Medicare and Medicaid.  70M adults and children are covered under Medicaid – including those who benefited by the passage of the ACA.  Approximately 55M are covered under Medicare resulting in 125M covered under some form of state or federal aid. 155M receive coverage through employers. 

Its estimated by the Economic Policy Institute that 29.8M individuals who received coverage as a result of ACA expansion would lose coverage if no legislation replaced it.  Add in the severe economic dislocation arising from Covid-19 that could result in an additional 14M unemployed and you could see a worst case of uninsured swell from a current 27M to as high as 70M according to Policy Advice, a non-profit industry watch dog.

So how can you change the current market to drive reforms without a legislated intervention?  It starts by enforcing laws already in place and challenging regulators to do their jobs – ensuring that we minimize waste, fraud and abuse.  As of 2020, the average annual cost of family health coverage has eclipsed the cost of a mid-sized economy car. We must tackle the affordability problem by reducing the number of intermediaries who extract profits from the delivery system but do not play properly in the sand box of regulation that is often poorly monitored. We must demand transparency and deconstruct expensive bureaucracies only inflate the cost of care without improving it. It’s impossible to moderate the cost of healthcare without reducing the size of the pie and those feeding on it.

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The Story of an American Mask Distributor

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By SAURABH JHA

Seven weeks before President Trump declared COVID-19 a federal emergency heralding the economic lockdown, Jesse’s customers began cutting their orders. Jesse sells garments and cotton, imported predominantly from India, to wholesalers and retailers, big and small, in malls across the North East corridor.  His business had a good January. December was like any December. But February was different.  His customers, reassuring him that it wasn’t personal, were predicting a falling demand for their products because of COVID-19. They may be over reacting, but better shortage than glut, they felt.

Jesse, who has no medical background, had heard of a virus which quarantined cruise ships, but nothing seemed foreboding back in February. He had tuned out the President, who was being his usual clownish self. It was business as usual in Manhattan, where he lives. He received reassuring messages from public health figures about the novel coronavirus. New York City’s mayor was particularly upbeat, urging New Yorkers to mingle with even more vigor.

Jesse didn’t know how to reassure his customers. A week later, more customers cancelled their orders. By middle of February, the orders halved. Being a businessman, not philosopher, it mattered not to him why his customers had seemingly overestimated COVID-19’s threat. What mattered is that they had. Since his business operated on small margins, the reverberations could be substantial. The first order of the day was reducing the output of his factory in India which was running on all cylinders.

The second order of the day was survival. If his customers’ fears came true, his business would be destroyed. Jesse had no qualms accepting government bailout. But this was long before the federal government announced relief for businesses. The virus had yet to strike Italy. COVID-19, like Chengiz Khan, seemed to prefer the eastern perimeters of the Silk Road.

In his culture, Jesse Singh is an American Sikh hailing from the Punjab – there’s a simple rule. When customers don’t want a certain product, find something else to sell. His family motto is that you should love the act of selling, not the product being sold (the motto sounds better when said by a Punjabi in Punjabi).  

Another Punjabi rule, technically not a rule but part of their cultural RNA, is that Punjabis don’t sit idle. During the partition of the subcontinent, thousands of Sikhs arrived at Delhi train station hungry, battered, penniless, and homeless, after losing their homes and families to the mobs. After feeling sorry for themselves for a couple of days, they started selling tea and biscuits on the railway platforms.

If the panic from coronavirus could shut old businesses it surely could open new ones, Jesse thought. A soaring demand for personal protective equipment (PPE) seemed obvious. Since N-95 supply was regulated, he threw his weight behind surgical masks, believing that they’d be demanded by healthcare workers and eventually the general public. He decided to import a small batch on a trial basis.

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Take Your Mom to Work

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By KIM BELLARD

If you are a working mom, or married to one, or simply know one, you know that it is tough to balance a job and raising a child even under ideal circumstances.  Even if she has a supportive spouse, chances are that it is the mom who ends up providing the most child care, and whose career it impacts the most.

But, of course, these are not ideal circumstances.  Prior to the pandemic, women had made great strides in the workforce; more women had payroll jobs than men, for example (although they continued to be paid less for them).  Those gains quickly came crashing down once the pandemic hit.  It is believed to be the first time that job and incomes losses have hit women harder than men.  Some are calling our pandemic-driven economic downturn a “shecession” as a result.   

That’s bad enough, but the even bigger danger is that the pandemic could set back women’s careers for a generation. 

A recent study by Collins, et. alia confirmed what most might have guessed: in the wake of the pandemic, women are more likely than men to have reduced their work hours to take on additional child care responsibilities due to school/daycare closing — four or five times as much.  

The study found that:

Scaling back work is part of a downward spiral that often leads to labor force exits—especially in cases where employers are inflexible with schedules or penalize employees unable to meet work expectations in the face of growing care demands.  

We are also concerned that many employers will be looking for ways to save money and it may be at the expense of mothers who have already weakened their labor market attachment.

Even more worrying, lead author Caitlyn Collins, a professor at Washington University, says: “Our findings indicate mothers are bearing the brunt of the pandemic and may face long-term employment penalties as a consequence.”  

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The Need for Measuring Clinician-Patient Cost-of-Care Conversations

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By MORENIKE AYOVAUGHAN, NELLY GANESAN, EMMY GANOS, and JOSH SEIDMAN

It is no surprise that beyond COVID-19 health risks, the pandemic has also caused significant disruption to the lives of everyone in America. It has caused exacerbating financial pressures and ongoing job losses. An estimated 42 million people have lost their job since March 2020, which has increased the number of uninsured. The loss of coverage has the potential to yield catastrophic healthcare costs for those seeking care during the period.

It is no surprise that beyond COVID-19 health risks, the pandemic has also caused significant disruption to the lives of everyone in America. It has caused exacerbating financial pressures and ongoing job losses. An estimated 42 million people have lost their job since March 2020, which has increased the number of uninsured. The loss of coverage has the potential to yield catastrophic healthcare costs for those seeking care during the period.

While the pandemic has exacerbated coverage challenges, it also highlights gaps that existed long before the outbreak. Prior to COVID-19, average out-of-pocket costs were on the rise with an estimated 24% of Americans spending over $1,000 per year on direct medical care and surprise medical billing. The pandemic-induced economic disruption reinforces the need for physicians and patients to embrace conversations regarding cost in the clinical setting; avoiding such discussion may result in patients foregoing care and not realizing their options.

Patients should be able to rely on their clinicians to help them understand the costs of their care, including losses associated with the time away from work and transportation expenses for visits. Our past research, and the research of others, has demonstrated that these conversations are valued and can be impactful in helping patients understand their options to address concerns upfront. And yet, the concept of having a Cost-of-Care (CoC) conversation is merely optional. These conversations are not typically supported with access to price information, nor are they consistently viewed as a routine part of practice. Cost conversations are not consistently documented, lack standardization, and structure. Furthermore, physicians have not adequately been trained to address CoC conversations with their patients.  

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How to Pandemic-Proof Our Health Care Payment System

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By AISHA PITTMAN and SETH EDWARDS

The pandemic has focused many policymakers’ attention  on strategies to make the healthcare system better. The obvious answer is one that we know is efficacious, if perhaps not the sexiest: value-based care.

The current healthcare payment system – built around the fee-for-service (FFS) model in which healthcare providers are reimbursed for the quantity versus quality of care – required $175 billion in bailouts and temporary modifications to remain whole during the crisis, a stance that’s unsustainable for both providers and payers.

The Centers for Medicare & Medicaid Services (CMS) admitted as much with its renewed national commitment to value-based care in late June: The movement to value is happening now.

The worth of value-based care models has long been detailed, from more coordinated care to lower costs. In fact, a recent survey conducted by our organization Premier Inc. found that healthcare providers in alternative payment models (APMs) were better positioned to respond to COVID-19 and support reopening plans through the rapid deployment of telehealth, care management and data analytics. These are the types of population health capabilities the industry must focus on spreading – and incenting – in the near future.

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Redefining Values in American Health Care

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By RICHARD HOEHN, MD

Experts claim we could have been better prepared when the COVID-19 pandemic struck in early 2020. With an annual budget of $400-700 million, the Strategic National Stockpile (SNS) is designed to respond to chemical, biological, and other disasters. Its $8 billion inventory included 13,000 ventilators and a limited supply of personal protective equipment, N95 masks, and medical supplies. This left state and local governments scrambling as the COVID-19 pandemic accelerated and the capacity of many hospitals was overwhelmed.

Faced with immediate and visible death and suffering, leaders took drastic steps to contain the virus, “flatten the curve,” and mitigate economic consequences. Trillions of dollars were allocated to recovery and stimulus packages.

This scenario mirrors our general approach to health care: chronic underfunding of public health followed by high costs and loss of life.

While not as shocking as a sudden pandemic, millions of Americans struggle daily with medical and socioeconomic challenges. Our health care system is designed to care for these patients when they have a problem, not to keep them well. This creates a dichotomy where a minority of the population spends most of the health care dollars and little is invested in the remaining majority

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