The Biggest Healthcare Trends of 2019 and What’s to Come in 2020

And good morning from Salt Lake City. I want
to spend today, give you a little overview of the journey. We’re going to look at what
to expect going into the 2020 election year. It should be a quiet one compared to previous
ones. That was a joke. Talk a little bit about price transparency and consumerism, financial
performance, as well as two important social issues, the opioid crisis and social determinants
of health. When you look at the top stories for 2019,
at the top of list, politics and reform, Affordable Care Act, prescription drug, transparency,
all were major areas of focus politically. Another area of focus is consumerism and mergers,
ongoing consolidation, the financial status of our healthcare system, hospitals, physicians,
as well as the payer sector, and we will go into some of the financial detail of that.
And then finally, social issues such as the opioid crisis and social determinants.
Sarah, I believe we have a poll question. Okay, let me go ahead and launch that. Okay,
in our first poll question today, we’d like to know, in your opinion, what was the top
healthcare story in 2019? And your options are: number one, Medicare for All, option
two, court challenge to Obamacare, option three, social determinants of health, option
four, the opioid crisis, and option five, consumerism. We’ll give you just a few moments
to submit your responses there. If you joined us late, we are recording today’s session,
you will have access to the slides, so no worries there. And we do encourage you to
submit questions throughout the session today. We will have a Q&A session at the conclusion
of today’s presentation. Okay, people are quick on the draw today.
So we’re going to go ahead and close that poll, and I’m going to share the results.
So it looks like 20% voted for Medicare for All, 11% voted for the court challenge to
Obamacare, 9% for social determinants of health, majority here, 50% with the opioid crisis,
and then 9% with consumerism. How does that line up with what you would expect or what
you think the top story was? I’m surprised. I mean, the opioid crisis is
clearly in the news and it’s clearly a catastrophic challenge for our country, but I would have
put the core challenge to Obamacare and the impact of what that will have on healthcare
and the uncertainty that it will lead to. Moving forward, I’m going to talk about the
political scene. A year ago, we did this talk here and made some projections about politics,
and not all of them came true, but we all need to brace ourselves because there is only
28 days before 2020 election year begins. So let’s see what’s happened in the past and
what we think will happen. The 2018 midterm elections ended a little
over a year ago. We of course had a divided House or divided Congress with the Democrats
controlling the House and Republicans controlling the Senate. What this meant was a tremendous
gridlock. So it meant that the ACA could not be repealed legislatively. It also meant that
the Republican position of repeal and replace was dead on arrival as well. Democrats continue
to focus on preserving consumer protections such as preexisting conditions, improving
the marketplace, the adage the insurance exchanges, and the Democrats came out really charged
up about Medicare for All, and I predicted that the House would actually put a Medicare
for All bill out for consideration and potentially pass it. Of course, it would have been dead
on arrival at the Senate. In the Senate, Republicans focused on other
issues such as telehealth, red tape relief and state empowerment, but what’s most interesting
is a fairly large number of common areas, opioid epidemic, oversight mergers, price
transparency, rural health and prescription drug pricing. So let’s see how some of those
issues worked out after we look at our deadlocks status.
The Affordable Care Act, borrowing from Monty Python, “I’m not dead yet”, the act is continuing,
it cannot be legislated away. Just before we did our presentation last year, the Texas
District Court ruled that the act was unconstitutional. Many legal scholars have questioned the position
of that court ruling. It has been elevated to the Fifth Circuit Court of Appeals, and
oral arguments were heard in July. Interestingly, the Trump administration and the justice department,
who historically has a responsibility for defending a federal act or statute when it’s
challenged in the courts, has chosen to actually support the plaintiffs on this and has come
out in support of repeal of Obamacare. This is why I thought this is the most important
issue of 2019. If the appeal is successful, 21… or it’s unsuccessful, I should say,
and the district court’s opinion is upheld, 21 Americans will lose insurance coverage.
Of course, nothing will happen until the Supreme Court weighs in, and that will not happen
until next year. In the absence of any constructive legislative action, with the deadlock in Congress,
the executive branch continue to pass executive orders, lowering the cost of short term insurance
plans, reducing support for the insurance exchanges, reductions in Medicaid spending,
and expanded use of health savings account. We all can, who you have high deductible plans,
can save more money in our HSAs. One last bullet point that didn’t get included in the
slide deck, but the administration also has banned access to the insurance exchange for
those with illegal immigration status, and that is under court review.
I want to now turn to the topic of Medicare for All. As I said last year, I thought the
House would pass something to support Medicare for All. Going into the midterm elections,
59% of Americans said they supported Medicare for All compared to 38% who oppose. That’s
a 21% delta between the two positions. Today, that difference is only a 4%. The decline
in support for Medicare for All and the increase in opposition to it has been quite traumatic,
and this is going to have a pretty profound impact on the Democratic nomination process.
If you look at this next slide, here’s the candidates’ positions. Those who are faded
out in the slide have already dropped out. Again, the slide’s not up to date. There’s
no rewards in getting your work done early. Governor Bullock dropped out of the race yesterday,
and candidate Sestak dropped out about a week ago. But if we look at this slide, the Democratic
slate of candidates is split almost evenly between for Medicare for All and opposed.
But three of the front runners, Sanders, Warren and Buttigieg are in favor of some version
of Medicare for All, and the only other front runner, Joe Biden, is opposed. So it’s interesting…
Oh, oops, I forgot about one. Bloomberg is running too. Michael Bloomberg is running,
and he falls into the prefer something else other than Medicare for All. So, very interesting.
Now, here’s the other interesting and impactful position. A smaller number of democratic candidates
oppose, essentially, should get rid of private insurance. Sanders and Warren want to abolish
all forms of insurance except a national health plan. Buttigieg is somewhere in between two
extremes of a national plan or sticking with the ACA, and Biden, the other front runner,
is, does not want to see anything done to existing insurance plans. Here we go again.
Yes, you did mess up my slide, Michael. He also is on the moderate side of this split
and does not see any need to get rid of private insurance.
Now, here’s the more interesting thing. These are the people that are going to vote. 55%
of Democrats, or independents who lean Democrat, want to build on the existing Affordable Care
Act or Obamacare, and only 40% believe that Obamacare should be replaced by Medicare for
All. This is going to play out pretty significantly, I believe, in the Democratic nomination process.
And I’m surprised that given where Medicare for All was just a year ago and how it out
in the midterms, that Democratic voters have a much more moderate view of this. And again,
these are the engaged Democrats, and not independents mixed with Republicans. So that’s still a
large percentage who want to see the Affordable Care Act maintained and strengthened.
Another big issue that came out of 2018 was Medicare expansion. A year ago, five states
either passed ballot resolutions calling for Medicaid expansion or elected governors who
were in favor of Medicaid expansion. Of those five States for, Idaho, Maine, Nebraska, and
Utah, all expanded their Medicaid access. Kansas was the other one we expected to flip
over to have include the Medicaid coverage expansion. The governor is pro-expansion,
but that did not get through the legislation in 2019. Another unique example is Wisconsin,
which expanded Medicaid access to healthcare but did not do it under the framework of the
Affordable Care Act. So in a practical standpoint, they’re more like a Medicare expansion state.
There still is legislation pending in Kansas, North Carolina and Wyoming, which has a reasonable
chance of passing in 2020, and three States, Missouri, Oklahoma and South Dakota, will
likely have referendums in 2020. So this is one thing we can predict, is that regardless
of the outcome of the presidential election, regardless of the politics and candidates
running, these ballot proposals are going to move more states closer to adapting the
Medicaid provisions under the Affordable Care Act. And if we look at the Democratic candidates
on Medicaid, they’re unanimous in supporting Medicaid expansion regardless of income. I
did not get a chance to check Michael Bloomberg’s position, but I assume he is supportive as
well. Other big issue was prescription drugs. As
of last Friday when I was reviewing my slides, I thought I was going to tell you we are going
to have some bipartisan prescription drug legislation. The Senate Bi-Partisan Prescription
Drug Reduction Act was sponsored by Chuck Grassley, a Republican from Iowa, and Ron
Wyden. It was approved by the Finance Committee by a 19 to 9 vote. That was a bipartisan vote.
You see in the lower right hand corner of your PowerPoint, Donald Trump is with Chuck
Grassley, and President Trump endorsed the Bi-Partisan Prescription Drug Reduction Act.
There’s a different bill that has gotten through committee but has not come to the floor of
the House that is similar to the Senate bill, but a little bit more progressive in the sense
that it gives health and human services the ability to negotiate drug prices and also
can help private insurances reduce their costs. And then that slide, that graph on the bottom
left, that is what has happened to total prescription drug spending since – it’s long ago, I can’t
read the fine print – since 1980. So this is why this is such an urgent issue as prescription
drug prices get out of hand. I’m amazed, I’m a diabetic, and a bottle of insulin costs
over $1,000 now. Back in 1980, it was in the $25 to $40 range, and when recombinant DNA
insulin came out, it was in the $100 to $200 a bottle range. The cost of insulin, if you
don’t have insurance, is outrageous. I had no idea that the prices had crept up that
quickly. So this is a real issue. However, it came
out in the news on Sunday that the Senate majority leader, Mitch McConnell, is unlikely
to bring the Bipartisan Prescription Drug Reduction Act to the floor of the Senate.
There are still a large number of Republicans that oppose the bill. In the Senate, it would
only take a handful of Republicans to support this to get it over the edge, but McConnell
does not want to run the political risks of Republicans voting against the bill or it
passing, given the lack of unanimity within his own caucus. So that looks like this may
be dead for the current year. Moving along, price transparency. President
Trump issued an executive order last June, and he had already made an executive order
that prices be more transparent prior to this, but this is a bit more aggressive and they
want prices not to be posted as billed charges, but to actually reflect what people pay. It’s
a novel concept. For those of us who are familiar with healthcare finance, we know that billed
charges are almost a fantasy and have very little direct meaning to consumers, unless
they’re uninsured consumers and are self-paying. There’s also a lot of pressure on insurers
to provide clear information about out-of-pocket costs.
These proposals or executive order are posed by both hospitals and insurers. The big concern
among insurers is that if hospital prices are available and people can tell what their
insurance pays for a service, then the ability of insurance plans to negotiate competitive
prices will be undermined because everyone will know what’s the lowest price they’re
willing to pay for, let’s say, an open heart procedure or a total hip replacement and what
they’re willing to pay for their highest price, and every hospital will understand that and
it will make things very competitive. Despite all the gridlock in Washington, D.C.,
Medicare is continuing down the path of supporting alternative payment models, and one of those
models would be the Accountable Care Organizations. In 2018, they launched Pathways to Success,
and that shortened up the transition to downside risk in terms of Accountable Care Organizations.
That led to actual fairly significant drop, 8% decrease in the number of ACOs or ACO contracts.
And you can see this data on the lower left side of your screen, the blue lines are tracing
number of contracts right through the third quarter of 2019, so very recent data, but
the orange line with that nice uptick at the end is reflecting the number of covered lives.
So covered lives actually increased by three million despite 8% of the ACO is dropping
out. Also, interestingly, physician led ACO participate
in at risk ACOs at a higher rate than hospital systems do. In terms of total contracts, the
yellow line in the middle on the graph on the lower right corner is commercial ACOs,
which have continued to climb during 2019. The red line is the Medicare ACOs with that
drop in contracts that I just discussed. So overall, ACO participation has been relatively
flat over the past two years, a slight downtick driven by CMS based ACOs, which have dropped
out due to the risks involved and the potential losses that could happen.
That said, alternative payment models are expanding. Back in 2015, 62% of all healthcare
was provided in a traditional fee for service environment, but 2018, that has dropped to
39%, and that’d be the category one payments. Category two payments are traditional fee
for service, however, they have a care coordination reimbursement or pay for performance aspect
to it. So this would be your hospital value based purchasing would fall in this category,
for example, and we can see that’s increased from 15% to 25% over the last four years.
And the current alternative payment models, which include things like shared savings,
shared risk and bundled payments, as well as population based at risk contracts, those
have increased from 23% in 2015 up to 36%. Interestingly, the learning action network,
which is closely aligned with the insurance industry, has had a set of goal for 2018 for
that category three and four to hit 50%. So still shy of goal, but again, still expanding,
and we can anticipate going into the future that there’ll be more alternative payment
for healthcare delivery, and we expect that category three and four to continue to climb.
It’s certainly consistent with CMS’s policies and certainly is happening on the commercial
side of the equation as well. Bundled payments continue to expand. Bundled
payments are now voluntary since 2018. When the Bundled Payment for Care Initiative Advanced
was launched in 2018, it became voluntary. The second cohort of participants start in
January 2020, and there’ll be additional cohorts going into the future. If you have any plans
to be in the second cohort, you probably should get off this webinar right now and go finish
your application because this is due today. For 2020, there’ll be 31 inpatient and four
outpatient episodes that will be subject to bundled payment, and this does qualify as
an alternative payment model. Currently, they are close to 1300 participants across the
nation, and you can see where they’re located on the map adjacent to this.
So is CMS’s strategy working? If you look at the growth in Medicare spending per beneficiary,
over time, you can see that it’s been relatively stable from 2014 forward when there was a
big push towards increasing the amount of quality-based and at risk contracts. And in
fact, Medicare has done a somewhat better job of managing spending than the commercial
sector or the private health sector. I don’t see any likelihood that CMS will back down
from this position, and certainly, the current administration supports the accountability
and risk associated with the Medicare strategy, as did the previous administration. And for
that matter, these policies began under George W. Bush. And so this has actually been a bipartisan
strategy here around ACO and so on. I’m going to shift gears to consumerism, and
really ask the question out here, are healthcare providers ready to compete? If you look at
this graph, the blue lines are those which senior executives among house healthcare providers
thought that was a high priority strategically and what percent thought they had high capabilities
to achieve them. So we look at the first one, improving customer experience. 81% say this
is a high priority for their organization. 11% of them, however, think they have the
capabilities to do it. And we go down as we move on to other areas like the next
highest priority offering a variety of facility-based access points, 61% see it is high priority,
only 10% believe they have the capability. Using digital tools to engage consumers, 42%
see it as a high priority, only 4% believe they have the capability right now. So the
question really is, are healthcare providers ready to meet customer needs?
If you look at this slide, the dark blue is a consumer friendly offering that allows convenient
access and scheduling. That’s for the slide on the left. So walk in hours – 58% of health
providers do not provide them, save a spot at an urgent care – same thing, 58% don’t
provide, same-day appointments – 63 don’t provide it, online self-scheduling – 67% don’t
provide it, evening and weekend clinics – 68% don’t provide it, 83% don’t allow online self-scheduling
for new patients. Moving to the virtual health side to the right, site to site specialty
care – 69% don’t provide, direct to consumer telephone visits – 77% don’t provide, e-visits
through an online questionnaire – 77% do not provide it. 80% don’t provide direct consumer
video visits and 95% lack offsite kiosks. So a lot of things that consumers are looking
for are unavailable. Telehealth. This is another way to meet consumer
needs, and some of the virtual things we were talking about in the previous slide are included
in telehealth. In 2019, Toby Cosgrove said 2019 will be the year of telehealth, and there
has been growth in the use of telehealth and some true success stories. Jefferson Health
hit the 100,000 telehealth visit milestone in 2019, Stanford Children’s Hospitals – 3,500
telehealth visits in primary and specialty care and home monitors for type 1 diabetic
diabetics and single ventricle patients. Amazon and Sam’s Club are doing virtual clinics and
home visits for their employees, and CMS continues to push telehealth and put pressures on healthcare
to develop programs. In 2019, virtual check-ins were reimbursed
by CMS, remote evaluation of pre-recorded patient information and interprofessional
internet consultations were reimbursable. In 2020, CMS will expand the number of codes
for new telehealth services, and a lot of these are focused on the opioid use. Two additional
states since last year require that private insurers cover telehealth the same as they
cover in-person services. So telehealth is making progress and will continue to.
In terms of financial performance, health system mergers, a lot of hospital actions,
some notable mergers that came out last year, HCA and Mission Health closed a deal in February
of 2019, Community Hospital System sold three Virginia hospitals to Bon Scours Mercy, Sisters
of Charity joined the Cleveland Clinic, big one in Louisiana, Ochsner and Lafayette General
planned a merger for the 33 hospital system, health plan mergers between Priority and Total
Health Care, and another big one, University of Louisville acquired Jewish Hospital from
KentuckyOne in August of 2019, or plan to merger. I don’t think that’s finalized. And
Sanford Health and UnityPoint called off a $11 billion merger, which was big news. 2018,
21 hospitals closed, by June of this year, 11 have closed. So that trend is continuing,
Overall, you can see the number of deals that are happening in the industry over the past
five years and the number of hospitals involved. So there’s continued consolidation of hospital
and health systems. What is more interesting is this disruptive
integration which is taking place. We’ve heard about Cigna and Express Scripts, CVS and Aetna,
Walgreens and Humana, and United Health Group and Davita. These are all sending shivers
up the back of traditional health care providers. So here’s another source of what concerns
healthcare executives. What do they perceive is the risk of these new types of competitive
arrangements? The dark blue is strong threat, the light blue is extreme threat. So in total,
67% of healthcare executives see United as a threat, 66% see the CVS/Aetna merger as
a threat, 56% are concerned about what Amazon is doing in the market, and 39% concerned
about Google and Alphabet, and 38% concerned about what Apple has been doing. So the change
that these organizations could bring to healthcare delivery are certainly creating some angst
in our industry. That said, hospital performance seems to be
improving a bit currently. There’s been stable utilization through 2017, slight uptick in
admits, up 1.5%, hospital days are up about 1.4%, surgeries and births are slightly dipped
down, but outpatient volumes have flattened. So there was a trend there towards outpatient
volumes. They’re at just over 40%, but we could have expected that to be higher had
it not been for this uptick in admissions. Financial challenges exist. Medicare is not
helping any hospitals bottom line with losses approaching 11% in 2018 and 2019. This is
compared to just… Six years ago, losses were about 5%. So that’s a tough financial
impact on the hospital system. Fitch finds that the payer sector is stable and the healthcare
in general is stable, but in their reports, expresses concern about significant risks,
particularly the legal fate of the ACA. If the Affordable Care Act is repealed, it’s
going to create a tremendous amount of reconfiguring of the healthcare delivery system, and the
financial impact on hospitals in particular will be fairly significant as people lose
insurance coverage. Ongoing opioid litigation continues to be a threat to the stability
of healthcare economics. The uncertainty of what will happen in the election will be another
risk. Not for profit hospitals saw their margins
relatively flat between 2017 and ’18 at about 1.7%. And the for profit sector, who reports
their performance every quarter as many of you are aware, is showing really healthy increases
in volumes throughout 2019. Payers seem to be doing well. It was a profitable
year for the individual insurance markets. Rate increases for 2019 were less than 3%
for employers and are expected to be smaller next year, but it was also a land… Oh, I’m
jumping ahead. Employers are doing what they can to reduce health insurance costs. This
is strategic plans offered by Mercer who helps employers manage so much of their benefit
costs. The focus of employers are on monitoring and managing high cost claimants, focusing
on actions to manage costs for specialty pharmacy, big cost drivers for any employer, focusing
on creating a strategy around a culture of health, employee wellness and more empowerment
of patients, going down paths of shared decision making and so on.
This year was a milestone year for the cost of healthcare. A family coverage plan topped
$20,000 in 2019. There was a 5% increase in overall insurance costs. Worker shares increased
by 8% while the employer share increased by 3%. So workers are feeling more pressure to
pay for a larger share of their cost. Employers are trying to keep their costs stabilized,
but they’re still increasing, but 20,000, that was a milestone. Elsewhere in the payer
market, Medicare advantage continues to be strong, added up another 1.6 million new beneficiaries.
Now it represents 34% of the total Medicare population, and 8 large insurers dominate
these markets. So Medicare advantage is continuing to increase. And of course, if you think back
to the Medicare for All discussion, right now, no one’s really sorted out the fact that
a third of all Medicare patients are in private insurance plans through Medicare advantage.
So that will be a challenge for anyone who tries to put together that national health
plan. I wanted to touch on what the 50% of the people
on this call agreed was the most important healthcare issue in 2019. The opioid crisis
is continuing. There’s been some steps taken to address it. I like this graphic. It really
shows us the three waves of the opioid crisis launching back in the 20th century with overuse
of prescription drugs and a wave of overdose deaths due to prescription drugs. Then about
2010, a sharp increase in the number of heroin overdose deaths, now being followed by a wave
of synthetic opiates, particularly fentanyl, causing even greater deaths per 100,000. So
this really is a crisis and far worse than it was when we started talking about it at
the beginning of the century. Back in 2018, Congress, by overwhelming numbers,
passed the Substance Use Disorder Prevention Act, again, sweeping majorities 393 to 8 in
the House and 98 to 1 in the Senate: expanded treatment for substance use disorders, provided
funding for residential treatment programs for pregnant and postpartum women, authorize
CDC to provide grants to states and localities to improve monitoring, expanded the use of
telehealth services, and also helped stop the flow of illicit opiates, especially fentanyl
through the mail. So that was a major change at a national level.
Finally, I’m going to shift towards brief conversation about disparities and social
determinants of health. Many of us recognize that social determinants have an impact on
mortality, morbidity, life expectancy, as well as healthcare expenditures and health
status and functional wellbeing. This slide captures the various factors: economic stability,
neighborhood and physical environment, education, access to food, community context, as well
as the healthcare delivery system. In terms of importance, healthcare is not the leader.
It’s addressing this is going to happen at the community level. Life expectancy in the
United States, we talked about this a year ago, has decreased dramatically. For the first
time, we’re seeing a downward or a decrease in the age at death in the United States,
and for the first time, the current generation is going to live fewer years than their parents,
something that has reversed a long-term trend of increasing life expectancy.
Across our system, we can see some of the significance of those disparities. Back in
2009, the National Academy of Medicine, back then known as the Institute of Medicine, issued
a report on how to collect race, ethnicity and language data, and it launched an era
of meaningful measurement. The data we’re collecting in our clinics, the data we’re
collecting in our health plans, and the data we’re collecting in our hospitals is far richer
today than it used to be. We can see some of these disparities. On the slide on the
left, anywhere from 10% to 22% based on ethnic group, race and ethnicity did not see a doctor
because of the cost, and anywhere between 19% and 35% delayed needed medical care because
of the cost. Those disparities leads to those sad stories about diabetic patients that stop
taking insulin or use less insulin than they need to survive because of the high cost of
those prescription drugs. This is just another example of how disparities impact our health.
The slide on the right, what percentage of patients based on race and ethnicity have
a usual source of care? Ranges from 75% to 87%, depending on your ethnicity. How many
have been in to see a doctor in the last 12 months or a healthcare visit I last 12 months?
A range from 75% to 85% among these five different groups. And those who have seen a dentist,
between 54% and 68%. So it gives us a sense of the opportunities to improve care across
all race and ethnicity categories and the need for better access for the entire population.
So I’m going to wrap up with some to do lists. So given what you’ve learned today and what
you know is going on as well, one thing to think about is plan B. What will you do if
the ACA is repealed? How does this impact your strategic plan? Are you ready for price
transparency? Are you ready for patients shopping whether you’re a clinic, or a hospital, or
ambulatory surgical center, or for that matter, a health plan? Are you ready for patients
shopping for healthcare based on price, something we have not historically done? And how do
a prescription drug prices impact your system and your patients? That’s cost of providing
prescription drugs to your employees, that’s the cost of prescription drugs in the care
of patients. Another question, alternative payment models:
are you prepare for the continued expansion by commercial payers and CMS? And do you have
the capacity to analyze the data to support risk? If you’re not a health plan, you don’t
have the kind of familiarity with health claims data, are you able to calculate risk? Do you
understand claims data feeds and the nuances of calculating per member per month costs
and being able to project what your population, you’re at risk for is going to cost you?
And then finally on the to-do list is to collaborating with community partners to tackle things like
opioid crisis and social disparities. Are you collecting good, accurate race, ethnicity
and language data? Are you using the National Academies of Medicine recommendations on how
to collect that? What kind of work are you going to do within the community that will
impact opioid abuse? And what kind of strategies have you taken locally to reduce the prescription
of opiates to only the minimum necessary amount needed? So that’s the to-do list that we’re
recommending today. Sarah, I think we have another poll question.
All right, let me get that pulled up here. All right, so given everything that Steve
has presented so far today, in this poll question, we’d like to know, in your opinion, what will
be the top healthcare story in 2020? And your options here are: number one, the 2020 election,
option two is the growth of alternative payment models, option three is consolidation and
changing business models, option four is consumerism, and option five is still that continued opioid
crisis. So we’ll give you just a few moments there to go ahead and submit your responses.
People are being pretty quick on this one, so they must have been thinking about it during
your time here, Steve. Okay, we’re going to go ahead and close that
poll and share the results. Okay, so it looks like 57% reported the 2020 election, so that’s
our majority here, probably not a huge shock. 13% reported growth of alternative payment
models, 18% our next highest group, said consolidation and changing business models, 9% reported
consumerism, and then 3% reported the opioid crisis. So again, does that line up with what
you would have expected here? I would suspect the elections are top of mind.
It is interesting to see the opioid crisis dropped to last place in this one after being
the top story of 2019. So we’ll see what the year has to bring for that, huh? Okay, I think
you’re wrapped up then, right? You ready for the Q&A?
I am ready for the Q&A. Okay. Well, we have one final poll question
for you all before we dive into those Q&A questions. We’ll see if we can get that launched
here? Okay. So while today’s webinar was focused on the important healthcare trends that have
shaped our world over the last year in what’s to come in 2020, some of you may want to learn
about the work that Health Catalyst is doing to prepare for this future, or maybe you’d
like to learn about our products and professional services. If you would like to learn more,
please answer this poll question, and then we’re going to go ahead and leave that up
while I pull up our questions here and start passing your questions along to Steve.
Okay, let’s see. That’s pretty maybe quick answer question here from… I’m sorry, I
don’t know how to pronounce your name? The question is, “Don’t we all get Medicare for
All at 65?” Yes, that would be Medicare for those over
65 and older. The Medicare for All proposals are being construed, at the one end, based
on what I’ve seen of Senator Sanders and Senator Warren’s proposals. That would be essentially
a national health plan similar to the Canadian system with a government funded insurance
plan that all Americans would be eligible for regardless of age. Some of the less more
moderate proposals would be Medicare for All with an option of buying into Medicare at
a cost. But you’re correct, everyone 65 or older have access to Medicare.
Okay. Your next question comes from Eric who asks, “Why are most of the states that have
not expanded Medicaid in the South?” So just an opinion question.
That’s an interesting question. I would say that partly… So Medicaid expansion allows
you to expand Medicaid, which is a state administered program, but it includes generous financing
from the federal government. But I think there may be a reluctance because of the potential
cost for the state. I think a lot of it may have more to do with ideology. Republicans
in general are less supportive of Medicaid expansion. The Southern states, with the exception
of two, all the states of the old Confederacy, are without Medicaid expansion, and I believe
that the politics of this might be more important than the cost.
I happen to be from Ohio, and Ohio, the Republican House of Representatives and the Republican
Senate opposed Medicaid expansion, but the Republican governor said, “This is crazy.
It’s money from the federal government, and we’re going to be able to address needs of
our population,” and ended up passing it with Democrat support. So I think that’s a common
challenge. Okay. All right, your next question comes
from Evan, who asks, “Regarding prescription drug prices, there was an op-ed this week
in Salt Lake Tribune advocating against allowing the import of prescription drugs. What are
your observations or expectations of how this part of the issue will proceed?” And he also
noted that the piece was written by a Salt Lake County Sheriff, Rosie Rivera.
Yeah. I actually don’t know the answer to that question and did not get the chance to
read the op-ed. I don’t know of any risk of having medications shipped across international
borders. In other words, I don’t see how it would impact availability and access to medications.
What it would do is allow for lower prices because those countries have negotiated lower
prices. So I don’t know the details of what the opposition would be. Actually, the bipartisan
proposal… not the bipartisan. I believe president Trump has endorsed the concept of
importing drugs from, don’t hold me to this one, but across international borders.
Okay. Your next question, they’re pouring on now, it’s coming from Fred, who asks, “Why
are virtual health offerings not growing despite demand? Is it a lack of competence, lack of
funding reimbursement, lack of technology?” Another opinion question.
My opinion is that it’s probably lack of competency and confidence. The technology is there and
it’s been tested out. I mean, there are some successful organizations providing advanced
telehealth capabilities, but building up the infrastructure, training staff are barriers.
So I don’t think it’s a technology issue and I don’t think it’s a cost issue so much as
it is a capacity, having the skill set to move this forward.
You’re getting some supportive comments. Aaron said, “Telehealth and virtual care, not appropriately
funded. That’s not expanding.” So he also kind of commented on that. And then going
back to your comment before about the importing of drugs, David Crais had mentioned that pharmacists
in the pharmaceutical industry are opposed to interstate drug sales. So that was just
a commentary. So even interstate?
Apparently, according to David. David, if you have any more info on that you want to
submit to provide a little more context, please do. Our next question comes from Chuck, who
asks, “Does the cost of family coverage going over that $20,000 level include an impact
from rising deductibles?” I’d have to go back and look at… That was
a study by the Kaiser Family Foundation. I believe that represented just the… Actually,
I can go back to the slide. Maybe I can… This was based on premiums. So this would
be the amount taken out of your paycheck rather than the deductibles. I’d have to go back
and double check the link and reread the article just to make sure, but I believe it is premiums
only. Okay. All right. Pull these up again.
Which sounds about right, given what insurance costs.
Okay. We’re going to skip down to this question from Dean, who asks, “How are large insurers
able to own provider networks, given that they negotiate the rates of reimbursement?
Isn’t that a form of direct collusion?” I’m going to have to defer to my lawyer on
that one. It’s happening obviously. I don’t know if there are exemptions for certain kinds
of organizations or not, but it is complex and I do not know the answer, so that’s something
I need to research for next year. Okay. The next question comes from Eric, who
asks, “When do you think environmental factors will be a focus in addition to social determinants
of health?” The air we breathe impacts a significant percentage of people with respiratory conditions,
and we’ve obviously heard a lot in the world about climate change this year, the issues
we’re seeing there. That is actually a really good point. Those
environmental factors will emerge as one of the new challenges for healthcare in general.
Impacting that is far more difficult though. And the area of social determinants, we know
that if people have access to good foo, and people have access to good healthcare, and
there is primary care physicians nearby, and they earn a living wage, we know that health,
without doing anything else, will improve, granted air quality varies from market to
market, but it’s more diffused. I mean, it will be a much tougher to reverse, but that
is… When I was doing research for this talk, environmental qualities, global warming, all
came up as significant impact on health. Yeah. Maybe in next year’s, you’ll have more
to say on that. Okay, your next question comes from Dean again, who asks, “How will an ACA
repeal impact current operations relative to anti-competition law and price negotiations?”
I do not know. I just do not know. I’m sorry. It’s all good. Dean will try and get an answer
for you. Our next question comes from Aaron, who asks… Oh, actually this looks like it’s
a comment rather than a question. He just says, “2020 election becomes that catch-all
answer responding to Medicare for All in the ACA court decision and all else.” So I guess
it’s kind of the one thing, the bucket, that everything falls into right now.
Pretty much. Okay. So moving on, the next is from Tricia.
And I do want to call out anyone who’s on the line, it is the top of the hour, the end
of our advertised webinar time. Steve has agreed to go just a couple of minutes over
the top of the hour as we do have a lot of questions still pending. So if you’re able
to stay with us, great. If not, we are recording today’s session and you will be able to hear
the Q&A in that recording. Okay, our next one was again from Trisha,
who asks, “What is the threat from initiatives by large companies?” So the identified ones
on your disruptive slide, Amazon, Google, United Healthcare, all of those. And are they
offering something that the current health system does not, or is it just kind of the
fear of the unknown, I guess? They are offering something that current health
system is not there. It’s all situational. So in the case of United Healthcare, they’re
purchasing physician practices. So they will start providing direct healthcare and they’ll
be providing it to their members presumably at a more competitive cost. If they do it
right, they’ll reduce utilization. So that’s a threat to more traditional fee for service
type providers. We know what could happen. We can look at some of the markets where providers
like Kaiser Permanente provide both insurance coverage and care, and utilization rates will
go down, use of specialists will go down. So that’s one impact.
When Amazon and Sam’s Club are offering virtual visits for employees, that’s going to shift
care away from traditional caregivers. So it’s going to have a financial impact that’s
going to drive down the amount of dollars that are in the healthcare delivery system.
It’s going to impact providers, physicians, hospitals in particular, reduce ED visits,
reduce surgeries. Okay. Well, this next question kind of is
in that same vein, this comes from Andy, who asks, “Google was in the news recently for
its partnership with Ascension Health, which brought up a lot of privacy concerns from
patients and privacy advocates. Should we expect health data privacy legislation in
the new year?” Regardless of what happens in the election,
I suspect we will see more scrutiny of these types of arrangements more oversight by the
federal government. I don’t know if that’s going to result in privacy legislation. I
think these arrangements that are emerging, I’m
sure they’re going to have a very well thought out answer to alleviate those fears.
Okay. We’ll do maybe one or two more questions? That’s fine.
Okay. All right, this question comes from Megan, who asks, “What impact do you believe
that Medicare for All would have on private insurance companies such as Blue Cross Anthem,
United, et cetera?” Well, this is the $64,000 question. Now, you
all know how old I am. If Medicare for All as proposed by Senator Sanders or Senator
Warren was enacted, private insurance companies would be, if I understand their proposals
correctly, would ultimately be phased out of the business. So the impact would be tremendous.
I mean, private healthcare… excuse me, private insurance companies would be left to provide
care for people who were looking for augmentation to the current coverage, or as in places like
Canada and England, there are actually private care delivery, which you pay for. So it will
be a major disruption to all health insurance payers.
All right. I think we’re still just going to do maybe one or two more. This next question
comes from Gerald, who asks, “Do you expect there to be any increased legislative momentum
to have CMS directly negotiate drug pricing?” It’s in the House bill that will be dead on
arrival to the Senate if it passed in the House. That negotiating power has not been
included in the bipartisan Senate bill, but I think if the bipartisan Senate bill fails,
then it goes back to what we said earlier, everything rides on the next election. If
the bipartisan Senate bill does pass, then it may be something that would be worked on
in the future. The biggest argument you hear against any kind of prescription drug price
control is that it would undermine the ability of the large pharma companies to do research
and develop new drugs, but the flip side is, is that every other nation through their national
insurance provisions, unlike Medicare, negotiate bulk discounts on prescription drugs.
All right. I think we’re going to do this last one. We’ll see if you have an answer
to this one or if I stump you on the final one. This question comes from Matt, who asks,
“How do you see CMS direct contracting model impacting the landscape described in your
presentation in the upcoming years? Do you see more organizations embracing these models?”
Yes, I do believe that more organizations will embrace those
kinds of models. I’m not sure that the president will be able to expand this too aggressively
without more support from the Republicans in Congress. And I believe another commenter
was that the president does support direct contracting for prescription drugs, but he’s
not on the same page as the majority of Republicans in the Senate. So those hurdles have to be
overcome. All right. I think we’re going to call it
there. Sounds good.
Yeah. You have lots of questions. Thank you so much for participating.
Yeah. And anyone on the line, if we didn’t get to your questions, we apologize for that,
for running out of time. We’ll still try and get a response back to you though. So we appreciate
you taking the time to submit those. We want to thank Steve for taking the time to present
to us today. We also want to thank all of you for joining us. Please do us a favor and
complete the short survey as you exit the presentation. Your answers will help us to
deliver more valuable content in the future. And as a reminder, by midday tomorrow, you
will receive an email with links to an on-demand recording, the presentation slides and a transcription.
And my email is on the presentation, so do not hesitate to email me.
Well, that’s a generous offer. So any lingering questions, I suppose, that you didn’t submit,
you can shoot them over to Steve and he’ll do his best to get back to you.

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