The release of several industry studies last week illustrates the urgent need for health reform; and each tee’s up important policy questions:
CBO LONG-TERM FEDERAL BUDGET OUTLOOK: DEFICIT INCREASING
From the latest Congressional Budget Office update released last week: the federal budget deficit will be $1.0 trillion in 2020 and average $1.3 trillion between 2021 and 2030. Projected deficits will increase from 4.6% of gross domestic product (GDP) in 2020 to 5.4%in 2030—higher than any period in history. The economy (GDP) will grow at an annual rate of 1.7% through 2030-less than its historical average.
The policy question: since healthcare spending constitutes 30% of total federal spending and is increasing faster (5.6%/year) faster than the overall economy, how should policymakers address healthcare spending so that it does not stifle overall economic growth?
“The Budget and Economic Outlook: 2020 to 2030” Congressional Budget Office January 28, 2020 https://www.cbo.gov/publication/56020
HEALTHCARE SPENDING HITS LOWER INCOME HOUSEHOLDS HARDEST
RAND researchers found that households spent an average of $9,393 per person, or 18.7% of overall income, on healthcare costs, according to the study. Households in the lowest third spent 33% of their income on healthcare, in the middle third 19.8-23.2% and 16% in the highest income third.
Harvard researchers found anxiety about healthcare costs vary widely by household income:
The policy question: how should policymakers seek to make healthcare more affordable and less a source of anxiety?
Garman et al “Accounting for the burden and redistribution of health care costs: Who uses care and who pays for it” Health Services Research January 27, 2020 https://onlinelibrary.wiley.com/doi/full/10.1111/1475-6773.13258?af=R
“Life Experiences and Income Inequality in the U.S.: January 2020” NPR, Robert Wood Johnson Foundation, Harvard Chan School of Public Health pollIt was conducted July 17 – August 18, 2019, among a nationally representative, probability-based telephone (cell and landline) sample of 1,885 adults ages 18 or older living in the United States
HOSPITAL PRICES vs. MEDICARE REIMBURSEMENT: THE WIDE GAP
RAND examined $13 billion in inpatient and outpatient charges by 1,598 hospitals in 25 states between 2015 and 2017 and found that, on average, relative prices for hospital outpatient services were 293% of Medicare rates in 2017 and 204% of Medicare rates for hospital inpatient services.
The policy question: should employers, consumers and private insurers pay more for the same services that Medicare gets for less?
Chapin White and Christopher Whaley, “Prices Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely” Rand Corp., 2019 https://www.rand.org/pubs/research_reports/RR3033.html.
ISSUES MOUNTING IN LONG-TERM CARE, HOME CARE WORKFORCES
The facts are these:
20 million adults in the U.S. need assistance with daily tasks due to physical, cognitive, developmental or behavioral conditions.
The number of direct care workers increased 52% since 2008 to 4.5 million in 2018. Nearly 90% were women, almost 60% were people of color, and about 1 in 4 was an immigrant, according to a new report from PHI, Bureau of Labor Statistics, Census Bureau.
Hourly wages from 2008 to 2018 for personal care workers have remained flat: personal care workers +10.36% to $11.40/hr., home health aides +3.79% to $11.77/hr., residential aides +2.03% to $12.07/hr., and nursing home aides +3.08 to $13.88/hr. Fifteen percent of direct care workers have incomes below the federal poverty level, while 44% earn under 200% of poverty, PHI report: “Caring for the Future: The Power and Potential of America’s Direct Care Workforce”
There will be 8.2 million job openings in nursing homes, home care and residential care through 2028, according to PHI. Meanwhile, first-year turnover can exceed 80%.
Unpaid caregiving by family members or friends is increasing and is especially burdensome to lower and middle-income households.
The policy question: as the population ages and health disparities put more seniors at risk, what’s the best approach to senior care that’s cost-effective and works?
Meyer “Long-term care providers scramble to hire and retain personal care aides” Modern Healthcare January 25, 2020 https://www.modernhealthcare.com/post-acute-care/long-term-care-providers-scramble-hire-and-retain-personal-care-aides
Wolff et al “Family Caregivers’ Experiences With Health Care Workers in the Care of Older Adults With Activity Limitations” https://jamanetwork.com/journals/jamanetworkopen/article-abstract/2759281
PwC: HEALTHCARE LAGS OTHER INDUSTRIES IN DIGITAL C-SUITE TALENT
21%of healthcare companies employ a chief digital officer, compared with 32% of banking firms and 41%of insurance companies
The policy question: if digital solutions are critical to more efficient and effective healthcare delivery and payments, how should its integration be accelerated? What barriers and incentives should be addressed?
“Top Healthcare Industry Trends in 2020: Will Digital Start to Show an ROI?” PwC Health Research Institute https://www.pwc.com/us/en/industries/health-industries/assets/pwc-us-health-top-health-issues.pdf
INDUSTRY SPENDING FOR FEDERAL LOBBYING INCREASED IN CURRENT ADMINISTRATION
Overall lobbying expenditures targeting federal agencies by 11,862 lobbyists totaled $3.48 billion in 2019. Four of the top 10 biggest spenders were in healthcare: #4 Pharmaceutical Research and Manufacturers of America ($29.3 million), #5 American Hospital Association ($26.2 million), #6 Blue Cross Blue Shield Association ($25.1 million), and #7 American Medical Association ($20.9 million).Note: These figures don’t reflect campaign contributions .
The Policy Question: do trade associations and big companies in healthcare adversely impact the industry’s ability to improve the affordability and accessibility of health products and services by creating barriers to change? Since their innovations are used globally, but priced substantially lower than what U.S. payers pay, should policymakers level the field between U.S. and global prices?
“Trends in Spending” January 2020 https://www.opensecrets.org/federal-lobbying/trends-in-spending
KAISER FAMILY FOUNDATION JANUARY 2020 HEALTH TRACKING POLL: PUBLIC OPTION FAVORED OVER MEDICARE FOR ALL
56% of 1121 adults surveyed favor Medicare-for-all, 68% favor a “public option” that would compete with private health insurance plans and 48% favor both. Among the 17% (5% of total population) who favor a public option but oppose Medicare-for-all, 32% think it will result in more choices. Priorities for Congressional action are lowering prescription drug costs (87%), ensuring the ACA’s pre-existing condition protections continue (83%), and protecting people from surprise high out-of-network medical bills (80%) during the next year. And the administration’s handling of health related issues is rated unfavorably: handling of the Affordable Care Act (35% approve and 56% disapprove),points) costs of prescription drugs (30% approve, 54% disapprove).
The policy question: how should consumers (voters) be educated about reform proposals? Who’s responsible?
“Public Opinion on Single-Payer, National Health Plans, and Expanding Access to Medicare Coverage” Kaiser Family
TRUST IN MEDIA SOURCE
According to the survey of 12,043 U.S. adults conducted Oct. 29–Nov. 11, 2019 by Pew Research Center:
“Republicans’ lower trust in a variety of measured news sources coincides with their infrequent use. Overall, only one source, Fox News, was used by at least one-third of Republicans for political and election news in the past week. There are five different sources from which at least one-third of Democrats received political or election news in the last week (CNN, NBC News, ABC News, CBS News and MSNBC).And in what epitomizes this era of polarized news, none of the 30 sources is trusted by more than 50% of all U.S. adults.”
The policy question: Given that the population self-selects its media sources and healthcare gets scant coverage in most, how can the population be educated about the healthcare system? What strategies, sources and resources are required?
Jurkowitz et al “U.S. Media Polarization and the 2020 Election: A Nation Divided” Pew Research Center January 24, 2020 https://www.journalism.org/2020/01/24/u-s-media-polarization-and-the-2020-election-a-nation-divided/?utm_campaign=2020-01-29+Rundown&utm_medium=email&utm_source=Pew
This week, the Iowa Caucuses, State of the Union address, impeachment and coronavirus will be center stage in news coverage. How the healthcare operates and its future might not get as much attention but it’s no less important. Let’s have that discussion. Let’s start by asking our elected officials and policymakers their views about these questions.