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What Will Shape Joe Biden’s Health Care Agenda?

I’m thrilled to have health futurist Jeff Goldsmith back on THCB, and given Biden was only confirmed as President-elect this morning, his article on what to expect is extremely timely!–Matthew Holt

By  JEFF GOLDSMITH

The Trump administration’s health care journey began with a trillion dollar near miss–the failed Repeal and Replacement of ObamaCare- and ended with a full-on train wreck, the catastrophically mismanaged COVID epidemic that will have claimed 300,000 lives by the time he leaves office. After four years of posturing and lethal incompetence, it will be a relief to see caring and professionalism return to the White House health policy under President-Elect Joe Biden.   

Like Inheriting a Badly Managed World War

Like Barack Obama, Joe Biden will be saddled at the beginning of his regime with a damaged national economy. He will also walk in the door to the immediate need to manage the greatest public health catastrophe in a century as well as its economic consequences–a deep and enduring recession. Biden will be inheriting the equivalent of a badly managed World War we are presently losing.

Public health professionals who were marginalized by Trump will be challenged not only to craft coherent policy to contain and extinguish COVID  but also to sell it to a frightened and polarized general public, many of whom reject the need for basic public safety measures.    

Controlling COVID and rebuilding the critical public health agencies–CDC and FDA–that have damaged by political meddling will consume the lion’s share of the administration’s health policy bandwidth in its first year. It will be pressed to address a huge readiness gap–from critical PPE supplies to the development and deployment of testing and tracing capability to public health co-ordination and messaging–for the next pandemic. Increasing the presently inadequate level of public health funding (less than $100 billion a year in a $21 trillion economy) seems inevitable.

The inability of Congress to produce a fall round of COVID relief will create pressure on Biden to take immediate action to help struggling sectors of the economy, like airlines, restaurants and hospitals, as well as further help for the long term unemployed. Only a little more than half of the 22 million jobs lost in the spring have returned by November. Twenty million Americans were stranded by the July expiration of supplemental unemployment benefits as well as countless millions more “free agents” and contractors not eligible for traditional unemployment that are losing coverage at the end of the year. Mortgage, credit card and consumer loan forbearance are ending, and unless Congress acts, acres of rotten credit will turn rapidly into a banking and bond market crisis which the Federal Reserve cannot fix by itself.   

State governments face FY21 deficits equaling $500 billion over the next two years , against a current annual spending base of about $900 billion.  Further assistance to state and local governments will almost certainly include an additional increase in the federal match for Medicaid (FMAP), beyond the 6.2% temporary increase passed in March). Medicaid enrollment will likely top 80 million by mid 2021, almost one-quarter of the US population. Some states will have upwards of 40% of their population on Medicaid by mid-2021.

States laboring under severe revenue shortfalls will be unable to afford the expanded Medicaid program that was part of ObamaCare without a further increase in the FMAP rate.  President Trump and Senate Republicans blamed the state and local government fiscal crisis on profligate Democratic mismanagement, and blocked aid to them during 2020. But Texas, Florida, Georgia and other red states have the same problems New York and California do. 

Serious Fiscal Limitations Push the Health Policy Agenda Away from Coverage Expansion

Barack Obama entered office with a FY08 federal deficit of $420 billion. Joe Biden enters with a FY20 deficit of $3.1 trillion and a baseline FY21 deficit of $1.8 trillion, before adding the cost of the likely additional trillion dollar-plus stimulus package early next year. It will be passed over the dead bodies of Republican Congressional leadership suddenly recommitted to deficit reduction after racking up $8 trillion in deficit spending during the four years they controlled the federal government.

Coverage Expansion via Medicare and Public Option Unlikely

That deficit will significantly constrain a further expansion of health coverage. Not only will “Medicare for All” be off the table. Severe fiscal pressures will cause the new administration to “slow walk” a public option (which would require federal subsidies to implement) and Medicare expansion to people over age 60. These expansions were going to be  controversial and politically costly because they would be fiercely contested by hospitals and other care providers concerned about the erosion of their commercial insured customer base (the source of perhaps 130% of their bottom lines) as well as the use of Medicare as a de facto price control lever. 

By the time Biden addresses the first two problems–COVID and the economic crisis–he will probably have expended his limited stock of political capital and be weakened enough to be unable to take on the large messy issues of health coverage expansion and cost control. The Affordable Care Act exhausted Obama’s store of political capital, by early 2010. His administration’s failure to turn the economy cost the Democrats control of the House of Representatives and 20 (!) state legislatures in 2010.

What Can Biden Do in Health that Does Not Require Federal Spending?

Thus, the focus of Biden health policy is likely to be on items not requiring fresh spending.

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Is Wal-Mart Leading the Charge on Health Reform?

ParikhLast Wednesday’s  headline in the Wall Street Journal may have surprised you.  It read:  “Wal-Mart Backs Drive to Make Companies Pay for Health Coverage.”  The article discussed Wal-Mart’s open support for an employer mandate requiring all but small businesses to provide care for its workers, a stance that other retailers have opposed for obvious reasons.

I’ve been following the story of Wal-Mart and health care reform for the past several years.  While some see this move as the company’s way of trying to level the playing field between it and other retailers, it nevertheless has taken several actions over the past decade to make health care more accessible and affordable.

Wal-Mart’s transformation began in 2006, when then CEO Lee Scott shook hands with Andy Stern, the head of the Service Employees International Union. In the past, such a handshake would have been unimaginable.  Wal-Mart had earned a reputation for failing to provide its workers with health care, and the SEIU was one its strongest critics.

That changed with rising health care costs.  Wal-Mart, like labor, recognized the need to provide affordable health care.  The Scott/Stern handshake was a call for affordable care for all Americans by 2012.

This handshake can be seen as a bookend to another handshake decades ago, described by Malcolm Gladwell in a 2006 New Yorker piece.  This first handshake was, like this one, between two powerful men representing labor and industry:

“The president of General Motors at the time was Charles E. Wilson, known as Engine Charlie. Wilson was one of the highest-paid corporate executives in America, earning $586,100 (and paying, incidentally, $430,350 in taxes). He was in contract talks with Walter Reuther, the national president of the U.A.W. The two men had already agreed on a cost-of-living allowance. Now Wilson went one step further, and, for the first time, offered every G.M. employee health-care benefits”

Thus, American health care: –employer based, brokered by private insurers, and provided by doctors on a fee-for-service basis.  The kind of care that has created the fragmented market that most of are a part of today.  The kind that has left 48 million Americans uninsured and millions more underinsured and just one illness away from bankruptcy.   The kind of health care that led Wal-Mart the SEIU and the Center for American Progress to write a letter to the White House today in support of change.

As reported in the Journal, Wal-Mart has taken sincere steps to provide health care to its employees.  Today, as a result of cutting the time of eligibility in half and increasing choices of plans, 52% of Wal-Mart U.S. employees are covered by the company.  That’s compared to 45% of the rest of the retail industry.

Wal-Mart hasn’t just stepped up to increase coverage for its employees–in 2005, it became the first company to offer $5 generic prescriptions–a breakthrough price for people who previously needed to decide between taking their meds or eating dinner.

Wal-Mart has also been in the lead in opening walk-in clinics in its stores. Although the recession seems to have slowed the initial enthusiasm for retail medicine, the idea, in principle, has the potential to offer convenience at a very affordable price for people who have minor ailments like sore throats.

Finally, Wal-Mart has also recently started offering an electronic medical record to doctors.  While it remains to be seen whether it will sell, you have to give credit to the big box retailer for taking the initiative.

Whether you like or loath Wal-Mart (and all of us seem to fall into one or the other category), its efforts to shape up American health care shouldn’t go unnoticed. In fact, I would dare “real” health care groups, like the American Medical Association, to show that they can match Wal-Mart’s initiative and drive to improve health care.  So far, all we’ve seen from the AMA in the past few weeks has been a lot of lip service trying to assure us that they’re on the side of reform while behind closed doors, the Association’s members are still fighting about its future.  And remember, the AMA represents at best 20-30% of doctors in this country, which is one reason why the New York Times’ Nicholas Kristof urged “President Obama, don’t listen to the A.M.A. on this issue. Instead, for starters, call your doctor!”

Commentology

Futurist Jeff Goldsmith’s analysis of issues that could cause problems for any health reform effort that eventually emerges from the foodfight in Washington this summer provoked a wide range of reader replies.   (“No Country For Old Men“)  Goldsmith wrote in response:

“The fun part of this blog is how much you learn about an issue when you post something.  Several learning points: 1) How big a deal this is.  $1.6 trillion sounds like a lot of money, but over ten years, it’s less than 1% of the cumulative GDP over those ten years (which I grew to $16.8 trillion from its present $14t in 2019).  In other words, it’s peanuts.   Cumulative health spending over this time looks like over $40 trillion, so  even $600 billion in Medicare cuts looks like peanuts.   These are small numbers made to look big because of the ten years.  Plus ten year numbers are BS anyway because you never get a linear increase over that type of time span.  $1.6 trillion actually sounds like  Dr. Evil’s ransom demands in Austin Powers. . .”

THCB Reader Margalit offered this response to Dr. Rick Weinhaus’s open letter to former Harvard professor Dr. David Blumenthal, the man charged with masterminding the Obama administration’s ambitious health IT push (“An Open Letter to Dr. David Blumenthal“), urging the administration to rethink support for the current EMR certification process …

“Maybe Dr. Blumenthal should come up with two separate “certification” suggestions similar to the auto industry.

1) A minimal set of standard security and safety items. Nothing too fancy and complicated. Something like car emissions and inspection that products have to pass every year in order to “stay on the road”.  Once the criteria are set, the inspection and certification body should be distributed, just like the inspection centers for cars, and multiple private bodies should be able to apply for the status of “Certification Center”.

2) This should be in the form of funding a Consumer Reports like entity, that is completely and totally unbiased, for evaluating EMRs and other health care applications. The Healthcare Consumer Reports should have very strict regulations regarding who it can receive funding from. Maybe the folks at the real Consumer Reports would like to take this one on. I would be inclined to trust them more than anything else that comes to my mind right now.”

Reader Candida also chimed in on the thread on usability prompted by Weinhaus’s proposed EMR design (“The EHR TimeBar: A New Visual Interface Design“), but posed a slightly more provocative question.

“The HIT and CPOE devices out there are an ergonomic failures and that alone renders them unsafe and not efficacious. But that is not the only defect harbored in these CCHIT “cerified” devices that causes injury and death to patients. There are many that are worse and they are covered up. The magnitude of patient injury and endagerment is hidden. The fact is that these are medical devices and as such, none have been assessed for safety and efficacy. CCHIT leadership, when asked about what it does if they get a report that a “cerified” device malfunctions in the after market and results in death, stated that they do not consider after market surveillance in their domain. One can take this a step further. How is it that medical devices are being sold without FDA approval?”

Dr. Evan Dossia wrote in to challenge critics who blame rising malpractice rates on physician attitudes and – in some cases – their ties to the insurance industry, in the thread on Dr. Rahul Parikh’s post looking at how the American American Medical Association is viewed one hundred and fifty years after the organization’s founding. (“How Relevant is the American Medical Association?“),

“Physicians began to be abandoned by big name insurance companies in the mid-1970’s so instead of “going bare” we started our own companies. As we continued to have ups and downs in the malpractice insurance market, more physician oriented companies appeared. Doctors now prefer companies started by other doctors and run by other doctors because these companies fight for their share holders rather than settle with plantiffs attorneys in order to avoid court room battles.”

Fellow reader Tcoyote agreed with industry analyst Robert Laszewki’s criticism of the rumored exemption that the Obama administration may give to labor unions, exempting them from any tax on health benefits for a period of five years. (“Unions May Get a Pass on Health Benefits Tax.”)

“Of course, this is politics, and the Democrats must throw the unions, whom they are stiffing on the “Employee Free Choice Act”, some kind of bone to get health reform financed. True enough, unionized workers’ after tax income isn’t protected by collective bargaining, but if unions knew it could fall by 5-7% because of a benefits tax, they would have asked for more in wages to cover the cost. I completely agree with the Chrysler/GM analogy. Those gold plated benefits are a major reason why our manufacturing sector is in trouble …”

Sarah Greene of the Group Health Center for Health Studies had this to say in response to Weinhaus’s take on a new and more usable electronic medical record design …

“It’s curious to me that human-computer interaction does not seem to have much traction in the EHR world, and yet in the consumer-centered Personal Health Record community, it is a guiding principle. While some might wonder if this suggests that doctors are super-human compared with patients (grin), it strikes me that the EHR developers of the world could take their cues from patient-focused efforts such as Project Health Design (www.projecthealthdesign.org)”

Unions May Get a Pass on Health Care Benefits Tax

6a00d8341c909d53ef01157023e340970b-pi There is a major bipartisan effort going on in the Senate Finance Committee to reform the health care system.Reportedly, one of the elements of that effort may be a tax on "gold plated" health insurance benefits
above a certain threshold–$17,000 for family coverage is one option
being discussed. The new tax could raise close to $300 billion over ten
years to help pay for a health care bill.

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