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The Keckley Report

Will Employers Drive a New Agenda for U.S. Healthcare?

By May 24, 2021March 1st, 2023No Comments

Last Thursday, JPMorgan announced the launch of Morgan Health, its second attempt at reforming the employer-sponsored coverage building on lessons learned in its failed venture with Berkshire Hathaway and Amazon aka Haven. Its initial focus will be its own 285,000 employees but its aspirations extend beyond. Compared to Haven, Morgan Health’s bet is different:

  • Focus: the venture will address ‘accelerating health system improvement, enhancing employee health benefits through strategic initiatives, and promoting healthcare equity.’

  • Funding: it’s being launched with from JPM’s $250 million investment arm.

  • Scale: Morgan Health will focus beyond its employees through partnerships with CVS along with, providers and insurers to build-out its technology and benefits platform.

  • Leadership: the venture will be led by Dan Mendelsohn, the founder and former CEO of healthcare advisory firm Avalere Health who worked in the White House Office of Management and Budget during the Clinton administration. Mendelson brings capitol hill chops and streetwise operational expertise to this role—a sharp contrast from Haven’s C suite led by notary Atul Gawande.

The JPM announcement follows last week’s news from Walmart about its direct-to-employer plans and recent announcements by CVS, Amazon and Walgreen’s Boots Alliance recently who are doing the same.

In post pandemic U.S. healthcare, employers are likely to play a bigger role. The transition back from zoom-world for the post-pandemic workforce poses enormous challenges: employee healthcare benefits cover 157 million Americans. Big companies provide benefits, smaller companies less so. And data from Mercer, Kaiser Family Foundation, and the US Departments of Commerce and Labor offer a compelling snapshot:


  • 61% of companies, including 99% who employ 5000 or more, provide employee health benefits.

Employee Benefits Costs are Projected to:

  • increase at 4% in 2021 and beyond vs. 3.0% projected wage increases, and

  • inflation projected to 2.3% inflation (coming off 1.8% in 2020).

Employee Costs in 2020:

  • $7,470 for single coverage (+4% since 2019) and $21,342 for family coverage (+4% since 2019)

  • For covered workers in small firms, the average premium is similar to the average premium in large firms for single coverage ($7,483 vs. $7,466) but is lower than the average premium in large firms for family coverage ($20,438 vs. $21,691).

  • The average premium for family coverage has increased 22% over the last five years and 55% over the last ten years.

Employee Cost Sharing:

  • 83% of covered workers have a general annual deductible for single coverage that must be met before most services are paid for by their plan.

  • Among covered workers with an annual deductible, the average for single coverage is $1,644, similar to the average deductible last year.

  • The average deductible for covered workers is higher in small firms than large firms ($2,295 vs. $1,418).

  • The average single coverage annual deductible among covered workers with a deductible has increased 25% over the last five years and 79% over the last ten years—higher than wages and inflation.

Self-Insured vs. Full Risk:

  • 67% of Americans are insured in health plans that are self-funded including 23% of covered workers in small firms and 84% in large firms,

Long-Term Trends:

  • From 2015 to 2020, employer premiums increased 22% while employee contributions increased 13%.

  • Employer benefits are expanding to include wellbeing services (behavioral Health, financial wellbeing, nutrition/weight management) and virtual care.


Per Altarum, healthcare spending increased 12.5% in the last 12 months restoring hospital revenues to pre-pandemic levels. The Office of the Actuary in the Centers for Medicare and Medicaid Services (CMS) projects annual spending growth of 5.4% through 2028 reaching $6.2 trillion–that’s 1.1% above even the most optimistic projections for GDP growth and above general inflation, median household earnings growth, food, housing and transportation. Nonetheless, most employers will continue to offer benefits necessary to their workforce needs and compatible with their competitors’ offerings, but their activism in healthcare is likely to increase.

The business community is not a big fan of the status quo in healthcare. They think it wasteful, inefficient and unnecessarily threatened by price transparency. They are open to alternatives: 44% are operating their own clinics or directing their employees away from traditional providers. 4 of 5 is expanding telehealth and behavioral health offerings to address wellbeing and whole person health. They want predictable prices and guarantees for controllable outcomes and they’re unwilling to pay hidden taxes to hospitals and physicians to offset alleged underpayments by Medicare and Medicaid.

For U.S. employers, post-pandemic healthcare is an opportunity to flex their muscles and re-set the agenda. It needs to be taken seriously.



“JPMorgan Chase Launches Morgan Health”; May 20,2021; JPMorgan

Nona Pepper “How JPMorgan’s new venture wants to reform employer-sponsored insurance”; May 20,2021; Modern Healthcare

“National Survey of Employer-Sponsored Health Plans”; Mercer

“2020 Employer Health Benefits Survey”; October 8,2020; Kaiser Family Foundation


CDC: Urban Populations Have Higher Vaccination Rates

COVID-19 vaccination coverage was lower in rural counties (38.9%) than in urban counties (45.7%); disparities persisted among age groups and by sex.

“Disparities in COVID-19 Vaccination Coverage Between Urban and Rural Counties — United States” December 14, 2020–April 10, 2021 Weekly May 21, 2021; CDC

Study: Death Rates in the Pandemic Increased for Drug Overdoses, Homicides and Unintentional Injuries

Researchers analyzed monthly trends from 2015 to 2020 in deaths resulting from drug overdoses, homicide, unintentional injuries, motor vehicle crashes, and suicide in the first 6 months of the pandemic. Findings:

  • From March to August 2020, there were 256,635 all-cause excess deaths and 174,334 COVID-19 deaths. For the study period, Observed to Expected Ratio’s (OERs) for 3 external causes of death were significantly higher than expected (drug overdoses, homicides, unintentional injuries), 1 unchanged (motor vehicle crashes), and 1 lower (suicides).

  • There were 10,443 excess drug overdoses accounting for 12.7% of non–COVID-19 excess mortality, 2014 excess homicide deaths accounting for 2.4% of non–COVID-19 excess mortality, and 7,497 excess deaths due to unintentional accounting for 9.1% of non–COVID-19 excess mortality. There was no significant change in motor vehicle crash deaths overall (725) but fewer than expected motor vehicle crash deaths occurred in April (−523) and significant increases were recorded monthly from June to August (1550). Suicide deaths were statistically significantly lower than projected by 2,432 deaths.

Faust et al “Mortality from Drug Overdoses, Homicides, Unintentional Injuries, Motor Vehicle Crashes, and Suicides During the Pandemic, March-August 2020”; May 21, 2021; JAMA Network


Altarum: April 2021 Health Sector Economic Indicators

From Altarum’s latest report:

  • National health spending in March 2021 was 12.5% higher than one year ago: Since January 2020, before the pandemic-induced drop began, net growth in national health spending was 1.8% through March 2021.Only home health care and hospital spending reaching levels in March 2021 that exceeded their January 2020 levels. The recovery in spending on dental services has lagged all other categories and remains 17.0% below its January 2020 level.

  • The pace of overall Health Care Price Index (HCPI) growth slowed in April, with prices 1.9% higher than a year ago, compared to the 2.5% growth rate seen in March. April’s price growth, while the slowest so far in 2021, is still above the long-term trend seen over the past five years.

  • Hospital prices continue to be the fastest growing major health care category, increasing 4.2% year over year in April. Conversely, prescription drug price growth remains the slowest growing category and is actually negative, falling -1.9% year over year, the seventh month in a row of negative price growth.

  • Outside of health care, economywide price growth, as measured by both the consumer price index (CPI) and producer price index (PPI), continued to accelerate in April, increasing to 4.2% and 6.2% growth, respectively. This is the fastest growth for economywide CPI since 2008.

  • Health care employment fell slightly in April 2021, down 4,100 jobs over the month. Through the first four months of 2021, health care employment is down 29,000 jobs compared to the end of 2020, with gains in jobs in ambulatory care settings more than offset by losses in hospital and nursing and residential care jobs.

“May 2021 Health Sector Economic Indicators Brief”; May 19, 2021; Altarum

AMA Report: Most Physicians Now Employed by Larger Organization

Using data from the American Medical Association’s (AMA’s) Physician Practice Benchmark Surveys, AMA found:

  • 2020 was the first year in which less than half (49.1%) of patient care physicians worked in a private practice—a drop of 5% from 2018 and a drop of 11% since 2012.

  • In 2020, almost 40% of physicians worked directly for a hospital or for a practice at least partially owned by a hospital or health system.

  • The shift toward larger practice size accelerated between 2018 and 2020:the percentage of physicians in practices with at least 50 physicians increased from 14.7% in 2018 to 17.2% in 2020.

  • 50% of physicians were employed, 44.0% had an ownership stake in their practice, and 5.8% were independent contractors in 2020. The employee percentage was up from 47.4% in 2018 and 41.8% in 2012. Female physicians and younger physicians are more likely than male physicians and older physicians to be employed. In 2020, 56.5% of women physicians were employed compared to 46.7% of men. 42% of physicians aged 55 and older were employed compared to 51.2% of physicians aged 40-54 and 70.0% of physicians under the age of 40. Across physician specialty, the percentage of physicians who were employed ranged from less than 40% of surgical subspecialists and radiologists to around 58%of pediatricians and family medicine physicians.

“Recent Changes in Physician Practice Arrangements: Private Practice Dropped to Less Than 50 Percent of Physicians in 2020”; May 2021; American Medical Association

Study: Primary Care Use Declining

Researchers analyzed claims data for 142 million primary care visits by commercially insured adults from 2008-2016. Highlights:

  • Visits to PCPs declined by 24.2%, from 169.5 to 134.3 visits per 100 member-years, while the proportion of adults with no PCP visits in a given year rose from 38.1% to 46.4%.

  • Rates of visits addressing low-acuity conditions decreased by 47.7%:largest decline among the youngest adults (-27.6%), those without chronic conditions (-26.4%) and those living in the lowest-income areas (-31.4%).

  • Out-of-pocket cost per problem-based visit rose by $9.4 (31.5%). Visit rates to specialists remained stable (-0.08%) and visits to alternative venues, such as urgent care clinics, increased by 46.9%.

Ganguli et al “Declining Use of Primary Care Among Commercially Insured Adults in the United States, 2008-2016” Ann Intern Med February 18, 2020; Annals of Internal Medicine

Study: Supply of Primary Care Clinicians Overestimated

While medical schools report about 40% of graduates enter a primary care residency, that later turned into just 22%, according to a study led by Dr. Deutchman published last year in Family Medicine. The research involved 17,509 medical students from 14 U.S. universities who graduated between 2003-14.

The commonly used Residency Match Method predicted a 41.2% primary care output rate. The actual primary care output rate was 22.3%. The proposed new method, the Intent to Practice Primary Care Method, predicted a 17.1% primary care output rate, which was closer to the actual primary care rate.

Deutchman et al. “Contributions of US Medical Schools to Primary Care (2003-2014): Determining and Predicting Who Really Goes Into Primary Care”; 2020; Family Medicine

Edelman: Trust in Healthcare is Under Stress in the US and Globally

In its Spring 2020 Trust Barometer which is based on consumer surveys in 11 countries, Edelman found:

  • Trust in healthcare systems peaked from 68 in January 2020 to 76 in May before declining to 65 in January 2021.The U.S. showed an increase of 18 from January-May 2020 before dropping 10 between May 2020 and January 2021.

  • Globally, changes in key sectors were notable for 2020 to 2021:

    • Hospitals & clinics fell from 70 to 68

    • Consumer health increased from 51 to 54

    • Biotech/Life sciences showed no change: 55

    • Health insurance slipped from 47 to 43

    • Pharma gained from 38 to 47

  • The vaccination-willingness gap in the U.S. is the second largest in the world at 17 points behind the UK at 21 and ahead of France, India, and Ireland at 16.

  • 64% of U.S. health citizens say they will need to understand the science and development process used to create a COVID-19 vaccine before they will fully trust that it is safe. Across the global 27 countries Edelman studied in the 2021 Barometer, the U.S. 64% matches the world’s 27-nation average (one percentage point above Russian consumers).

Edelman Trust Barometer 2021

KLAS: 2021 Market Share for Hospital EHRs, EPIC Still in Lead

Highlights KLAS 2021 Report:

  • Epic has 31% of U.S, EHR market share, followed by Cerner at 25%, Meditech at 16% and Allscripts at 5%.

  • Of the major vendors, Epic was the only EHR company to report a positive net change in acute hospital market share, up 101. Cerner, Meditech and Allscripts all dropped by 19, nine and one, respectively.

  • Cerner secured the most contracts with small standalone hospitals, with 19 total wins, followed by Meditech with nine and Epic with four.

“US Hospital Market Share 2021: EMR Purchasing Continued Despite COVID-19”; May 18,2021; KLAS


CDC 2022 Budget Request 23% above FY2021

During the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies hearing, the CDC’s asked for $8.7 billion for FY2022– a $1.6 billion increase over FY2021. In her opening statement, CDC Director Rochelle Walensky listed four major foci of increased spending: building public health infrastructure, reducing health disparities, using public health approaches to reduce violence, and defeating diseases and epidemics. Also last week, the CDC relaxed its masking guidance for those vaccinated prompting criticisms from skeptics who think it ambiguous or premature.

“Senators Talk Rural Health, Lead Screening During CDC Budget Hearing”; May 19, 2021; MEDPAGE

“Having taken criticism for being overcautious, the CDC tries the opposite”; May 22, 2021; The Economist

Campaign 2022: Look Ahead: Key Stats

Going into the 2022 Campaign cycle, 435 House seats and 34 Senate races will be on the ballot:

  • In the House, Dems hold a 219-211 advantage with 5 open seats; In the Senate, GOP holds a 48-50 with 2 Independents voting with Dems

  • To date, 16 Members of the 117th Congress have announced retirement/they will step down: 11 in House (5 Dems, 6 GOP) and 5 in Senate (4 Dem, 1 GOP)

43 statewide measures have been certified for the 2022 ballot in 21 states so far.