TEN TRANSFORMATIVE TRENDS 2021 The Healthcare Policy Year Ahead
After passing at least one major COVID-19 pandemic relief package, what’s next for Congress and the Biden administration? Very possibly, intensifi cation of the shift from volume to value By Mark Hagland
F
ollowing the 2020 elections, the United States saw the election of a new presi- dent from the opposite party to that of the former president. At the same time, the Democrats have now won a new majority in the U.S. Senate, while retaining their major- ity in the U.S. House of Representatives. So with the White House, Senate, and House of Representatives controlled by one party, what might the impact be on healthcare policy development in 2021 and beyond? The answer is not simple, for a number
of reasons. First, all those interviewed for this article agree, the fi rst few months of this year will have been dominated by issues around COVID-19 relief legislation. Indeed, as this article was going to press, President Joe Biden and the Democratic leaders in Congress were working on a COVID-19 relief package that was being prepared for a vote sometime in March. But after that? The biggest two factors in the federal healthcare policy landscape will revolve around potential modifi cations or enhancements to the Affordable Care Act (ACA), and around potential enhancements to value-based contracting, in the context of ongoing increases in total U.S. healthcare expenditures, which the Medicare pro- gram’s actuaries believe could explode from the current approximately $3.6 trillion a year to a potential $6 trillion a year within the next six years or so. In other words, the burning platform for change will provide a live fl ame motivating policy change in potentially key areas of healthcare payment and delivery.
Speaking in January, Blair Childs, senior
vice president for public affairs at the Charlotte-based Premier Inc., predicted that the fi rst six months of the year would focus almost entirely on COVID-19-related issues. But after that? It will be a differ- ent situation. Asked how the Centers for Medicare and Medicaid Services (CMS) might change under the new administra- tion, Childs says, “I defi nitely think this will be much more of a reboot of what was in the ACA, which was about making a competitive marketplace move to value and APMs, [alternative payment models], but much more about brining providers along. The Trump administration was very focused on the payer side. The lat- est Medicare Advantage call letter that
Christopher Kerns
spective. For example, if you’re a physician in Florida, how can you be sure that that snowbird will be your patient or that the patient will be assigned to a physician in New York? Whereas with MA, you know in advance about attribution.” Indeed, Kerns says, “That’s why you’ll
see more elements like those in NextGen [ACO program], where there’s going to be more prospective risk. The big open question is whether they want to make this mandatory for the whole country. And if they start to mandate all sorts of
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got released [in January] was astounding, honestly, in terms of how it advantaged the payers. And I don’t want to sound anti- payer. I think this administration will focus more on bringing providers along.” Christopher Kerns, vice president, execu- tive insights, at the Washington, D.C.-based Advisory Board, says that “I think you’ll see growth in MA [the Medicare Advantage program] and in ACOs [accountable care organizations]. Not all states have equal access to MA, because in some states, they might be dominated by one or two private payers that have no interest in MA, and they like their Medigap plans. So you’ll see all payers pushing more downside risk onto all providers. You’ll see MA growing sig- nifi cantly over the next couple of years. Just remember, with ACOs, you might achieve savings, but it’s not so certain, whereas MA has a lot more certainty, because of the risk adjustment scores, so physicians can more accurately prospectively prepare for their risk, whereas in ACOs, it’s retro-
downside risk, there could be a lot of oppo- sition to that. But if Medicare fi nds itself up against the wall, meaning that it has to cut spending growth, there are things like risk-based payments that would blunt the effect of certain reimbursement cuts or tax hikes. That’s why providers had better hope that risk-based contracting works, because if they can’t generate the savings that Medicare needs through value-based payments, the alternative will be major cuts to reimbursement, which no one will like.” That leads also to the topic of encour- aging a far higher percentage of provider organizations to take the plunge into two- sided risk (see also: trend on risk, page 22). Is it in the cards for Congress and the Biden administration to push providers faster into two-sided risk, given the esca- lating costs of the overall U.S. healthcare system? Seth Edwards, vice president for strategy, innovation, and population health, at Premier Inc., puts it this way: “I think if you look at our current fi nancial position for the Medicare Trust Fund, I’ve seen some really smart people suggest that we could move more rapidly except for some of the pandemic-related challenges. I think it will necessitate Congress and the Administration fi guring out how to shore up the Medicare Trust Fund. And that would actually stimulate more provid- ers to take on risk because of some of the actions that would have to occur.” Indeed, Edwards says, “What I’m
speculating is that, in order to shore up the Trust Fund, there will be likely payment reductions, regulatory movement around site neutrality, and other actions that would
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