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The Keckley Report

The American Rescue Plan: What’s it Mean for Healthcare?

By February 8, 2021March 1st, 2023No Comments

With last week’s passage of budget reconciliation bills in both the House and Senate, the stage is set for passage of the President Biden’s $1.9 trillion American Rescue Plan along party lines in the next two weeks. It comes as the impeachment trial for former President Trump starts tomorrow in the Senate, Covid-19 vaccinations near 1.1 million per day and government economists caution that economic recovery might be next year or even later if the administration’s package isn’t passed.

Though negotiations between House and Senate lawmakers are ongoing and the specifics in the legislation are not finalized, the plan enjoys the support of the Council of Economic Advisors, the U.S. Treasury Department, 42 of 46 economists polled by Reuters and 68% of Americans including 37% of Republicans surveyed by Quinnipiac last week. Here’s what’s likely to be included in the plan with the caveat that the parliamentarian of the Senate might disallow certain items (like the $15/hr. minimum wage requirement) under rules of reconciliation:

  • Extension of unemployment benefits with a $400 weekly supplement through the end of September (vs. March 31 currently)

  • $1,400 direct payments to individuals targeted to adult dependents that were left out of the earlier rounds, like some children over the age of 17. It would also include households with mixed immigration status, after the first round of $1,200 checks left out the spouses of undocumented immigrants who do not have Social Security Numbers.

  • $20 billion for a national vaccine program, including preparation of community vaccination centers

  • Funding for 100,000 public health workers for vaccination outreach and contact tracing

  • Funding to help address disproportionate impact on people of color, for community health centers, prisons, and jails

  • Extension of the 15% increase in food stamp benefits through September vs. June plus t $3 billion to help women, infants, and children secure food, and $1 billion for U.S. territories in nutrition assistance.

  • Extension of emergency paid leave benefits through September.

  • Aid to renters with unpaid debts to landlords ($25 billion) and moratorium on evictions through September.

  • $50 billion for grants/loans to small businesses

  • Increase Affordable Care Act’s premium subsidies so enrollees don’t have to pay more than 8.5% of their income for coverage.

  • $4 billion for mental health and substance use disorder services and $20 billion to meet the health care needs of veterans

  • Funds to accelerate vaccine deployment and to safely reopen most schools within 100 days

  • $350 billion to help state and local governments bridge budget shortfalls

  • $3,000 per child tax credit to families and $250 per month to millions as part of the relief package. Also allows the IRS to provide $3,600 over the course year for children under 6. The size of the benefit would diminish for Americans earning more than $75,000 per year.

  • $15/hour national minimum wage requirement


The American Rescue Plan will pass amidst the objections of budget hawks who worry the debt will make matters worse, not better, for the U.S. economy long-term. For healthcare, it’s benefit will be indirect: a stronger economy should help stabilize revenues and reduce bad debt. Funding for vaccinations should enable quicker recovery of scheduled tests, visits, and procedures. Programs targeting the working poor and the millions displaced by the pandemic should improve community health status and increase access to needed preventive care. But the direct benefits to healthcare are not significant in the American Rescue Plan. That’s partly because hospitals and other providers received consideration in the CARES Act (March 2020) and Consolidated Appropriations Act of 2021 (December 2020) and partly because this legislation is aimed at helping individuals and families, not the institutions that serve them.

The American Rescue Plan’s most significant impact on healthcare is likely outside its purview: the healthcare industry remains ripe to disruptors seeking advantage in its aversion to transparency and addiction to spending. Nonetheless, its indirect benefits to healthcare outweigh its risks.


P.S. In 2007, Purdue Pharmaceutical pleaded guilty to federal criminal charges that it had misled doctors and regulators about OxyContin’s risks and agreed to pay $8.3 billion and plead guilty to federal criminal charges over its marketing of OxyContin. Subsequently, Purdue declared bankruptcy. According to court documents, McKinsey and Company provided consultative support to Perdue from 2004 to 2019. Last Thursday, the blue-chip consultancy announced a $573 million plea deal with litigants from 47 states, the District of Columbia and 5 territories to settle charges for its role in helping Perdue target “high value” physician prescribers who knowingly over-prescribed pain killers. This story has drawn unflattering attention to McKinsey but stepping back, the real storylines are two: the complex economic relationships between drug manufacturers, distributors, benefits managers, retailers, and prescribers in an industry that spends $7 billion advertise its wares to consumers, and the ethicality of company growth strategies that sometimes cross the line but are nonetheless embraced by company boards and managers. More to come.


“The Economics of the American Rescue Plan”; February 3,2021; Council of Economic Advisors

“Bipartisan Support Grows, Overwhelming Majority Of Americans Support Biden’s American Rescue Plan” February 4, 2021;

Marjorie Bessel MD Op Ed “Working together to keep COVID from breaking the healthcare workforce”; February 8, 2021; Modern Healthcare

Healthcare Resources and Services Administration

John F. McConville, James N. Woodruff, “A Shared Evaluation Platform for Medical Training”; February 6,2021; New England Journal of Medicine

Consumer Health Products Association

“Occupational Handbook” U.S. Bureau of Labor Statistics

“McKinsey Issues a Rare Apology for Its Role in OxyContin Sales”; December 8,2020; New York Times

“States Pressure Drugmakers After McKinsey’s $600 Million Opioid Settlement”; February 4, 2021; Wall Street Journal

“The Pandemic is Replacing People with Tech- threatening the Jobs Rebound”; February 6, 2021; Politico


White House: 100-day Goal Increase to 150 million

Last week, President Biden said his target of administering 100 million Covid-19 vaccines in his first 100 days in office might rise to 150 million if the FDA approvals for new vaccines continue, vaccinations accelerate and at home testing becomes more accessible. Friday, the White House announced a $230 million deal to purchase home tests from Australian diagnostics manufacturer Ellume to make tens of millions of at-home COVID-19 test kits. The tests, approved by the Food and Drug Administration last December, provide results within 15 minutes, with 95% accuracy. As of Friday, 27.9 million shots had been administered, out of 49.2 million distributed since mid-December, according to CDC data. Retail pharmacies will administer vaccines as part of the plan.

“White House to Boost At Home Testing, Vaccinations”; February 5, 2021; MedPage

Study: Telehealth Use Up Varies by Specialty During Pandemic

Researchers analyzed 16.7 million Medicare Advantage and commercial insurance beneficiaries claims from Jan. 1, 2020, to June 16, 2020. Findings:

  • 30.1% of total outpatient visits were provided through telemedicine during the COVID-19 period– a 23-fold increase over the pre-COVID-19 period offset by a decline in outpatient visits by 35%

  • During the COVID-19 period, at least half of clinicians in six specialties used telemedicine at least once: endocrinologists (67.7%), gastroenterologists (57.0%), neurologists (56.3%), pain management physicians (50.6%), psychiatrists (50.2%), and cardiologists (50.0%).

  • Specialties that generally require in-person visits provided at least one telemedicine visit at a relatively low level, including orthopedic surgeons (20.7%), ophthalmologists (9.3%), physical therapists (6.6%), and optometrists (3.3%)

  • Specialties that conducted a larger percentage of total visits via telemedicine had a smaller decrease in total visits per week from the pre-COVID-19 period to the COVID-19 period.,

  • five specialties conducted about half of total visits through telemedicine: psychiatry (56.8%), gastroenterology (54.5%), endocrinology (53.1%), social work (50.8%), psychology (49.1%), and neurology (47.9%).

Patel et al “Variation In Telemedicine Use And Outpatient Care During The COVID-19 Pandemic In The United States”; February 2021; Health Affairs

Study: ED Visits for Mental Health Issues up during Pandemic

This cross-sectional study of 190 million ED visits between December 2018 and October 2020 found that visit rates for mental health conditions, suicide attempts, all drug and opioid overdoses, intimate partner violence, and child abuse and neglect were higher in mid-March through October 2020, during the COVID-19 pandemic, compared with the same period in 2019.

Holland et al “Trends in US Emergency Department Visits for Mental Health, Overdose, and Violence Outcomes Before and During the COVID-19 Pandemic”; February 3, 2021; JAMA Psychiatry


CBO forecasts Economic Recovery in 2024

Last Monday, the Congressional Budget Office announced the unemployment rate fell to 5.3% at the end of the year, down from its 8.4% forecast last July. It expects the economy to grow 3.7% in 2021, and average 2.6% a year through 2025.

“An Overview of the Economic Outlook: 2021 to 2031”; February 1, 2021; Congressional Budget Office

23andMe Announces Acquisition by SPAC, Additional Liquidity

Last week, 23andMe, one of the early and better-known consumer genomics companies, announced it is being acquired by Richard Branson’s special purpose acquisition corporation VG Acquisition in a deal valued at $3.5 billion. Initially, 23andMe entered into a $300M drug development deal with GlaxoSmithKline in 2018 and recently completed a $82.5M Series G funding in December 2020.

“23andMe to Go Public as $3.5B Company via SPAC”; February , 2021; Bloomberg

Klobuchar Introduces Antitrust Bill Raising Bar for Technology Deals

Last Thursday, Sen. Amy Klobuchar (D-MN) the incoming head of the Senate antitrust subcommittee, proposed changes to U.S. antitrust laws introducing legislation that would bar companies that dominate their sectors from making acquisitions unless they can prove their deals don’t “create an appreciable risk of materially lessening competition,” The proposed changes place greater legal burdens on companies with more than a 50% share of a market and include restrictions on acquisitions, companies new antitrust liability and allow DOJ to issue fines.

The bill would authorize a $484.5 million budget for the antitrust division of the Justice Department and $651 million for the Federal Trade Commission. Both amounts are about $300 million more than under the current annual budgets. It also gives the Justice Department the power to seek fines for first-time civil antitrust violations.

Ryan Tracy “Klobuchar Introduces Antitrust Bill Raising Bar for Technology Deals”; February 4, 2021; Wall Street Journal

Hospital Association Takes on Insurers on Site-Neutral

Hospitals are pushing back against new UnitedHealthcare policies that threaten their payments for lab tests and specialty drugs in outpatient settings. Previously, Anthem and Cigna had implemented similar policies. The issue is this: insurers want to lower their costs for diagnostic tests and specialty drugs; hospitals want to be reimbursed at rates to which they’re accustomed.

Tara Bannow “Hospitals fight UnitedHealthcare policies over lab test, specialty drug payments”; February 8, 2021; Modern Healthcare