Ben Isgur, Health Research Institute Leader, PwC, leads PwC’s Health Research Institute, the think tank within the firm that looks at health industry trends that affect pharma, life sciences, payers, providers, and large employers through original research. In this interview, Mr Isgur delves into the recently released 2020 election report and discusses the firm’s findings.
PwC’s Health Research Institute recently released their 2020 election report. Can you talk about the report, what does the report cover and what did it analyze?
One of the things that we did was analyze statements during the campaign, the platforms that were available to us. We also ran consumer surveys in terms of what consumers were thinking about major policy issues and spoke to health policy leaders, many that are at some of the larger health industry associations about what they are seeing. We put all of that together into a blueprint of what we think the industry can expect under President elect Biden’s administration.
Can you talk about what we can expect under a new administration based on the report findings?
I think at a top line, when one looks at a potential Biden administration, what we can see is a continuation of the Affordable Care Act (ACA). No big surprise, President-elect Biden, Vice President at the time, was around for the creation and the implementation of the ACA itself. When one looks at his platform, you can see a focus on strengthening some of those elements of the ACA.
Let me give you a great example of that in terms of coverage, which is becoming an incredibly important issue, because it is now mixed up with the pandemic and the economic recession. One of the ways to reverse the growing number of uninsured is by shoring up the ACA and creating more opportunities for health coverage.
This can often be done through executive orders and actions by the administration. How do you increase the education, the outreach, and the communication around those health insurance exchanges? How do you potentially incentivize some of those states that have not yet expanded their Medicaid program to do that?
When you put all those efforts together, it could be possible to increase the number of insured, and that is incredibly important right now because so many people are losing their employer based health insurance during this economic recession.
That is just one example of a major area under a Biden administration that we would expect to see is, focus on coverage. The implementation of that would be through the ACA itself.
The second example that I’d like to mention is the pandemic itself. We saw many statements in the Biden platform on terms of what could potentially be done around the pandemic. A lot of that begins with resources and creating more stimulus and aid packages for the health industry.
The Coronavirus Aid and Relief Act, the CARES Act, which is funding things like vaccine development and ultimately distribution and medical countermeasures, helping the health organizations obtain and purchase protective equipment, helping them to recoup some of the costs that are associated with serving people during the pandemic.
A lot of our hospitals, health systems, and doctor’s offices have had to bring on extra people. They have even had to undergo some physical changes to their waiting rooms and to their hospital emergency rooms to separate outpatients. There are a lot of costs involved with treating people during the pandemic. Some of that has already been going on.
President elect Biden has been talking about providing even more resources in those areas, especially for testing—making sure that testing is widely available, that supply and demand are meeting each other, and that people have access to quick tests that can give them quick answers.
There is also the challenge of telehealth. We saw a lot of barriers to telehealth being removed during the pandemic. The Biden administration will have to answer the question, will you make some of those permanent, or we go back to some of the ways we saw that before?
Last but not least, he is talking about putting together a task force on racial and ethnic disparities during the pandemic. Our own research has shown that Black and Hispanic communities have been hit much harder than other communities during the pandemic in terms of more people dying, more people in the ICU, more people facing challenges with COVID 19.
Let’s look ahead to the coming years. Based on this report, what do you think the future looks like? Will there be more mergers within the health care system, and how will the cost of care be impacted for all parties involved in health care?
When we look toward the future, one cautionary note that I would put out there is that sometimes it is hard to move ahead to bigger strategic issues when there is so much in the here and now.
For health industry leaders, there is a lot on their plate right now. We’re seeing the pandemic rear its head with cases rising in many parts of the country. I think there’s going to be a lot of blocking and tackling going on right now.
Focus on things like, how do we manage those rising cases? How do we manage a vaccine distribution once a vaccine or multiple vaccines are ultimately approved or at least authorized for emergency use?
There’s a lot of cover I put in the here and now, but if you look a bit ahead and what do we see going forward, there is a question. Would there be a different attitude towards mergers and acquisitions going forward under a Biden administration? There is the power of the federal agencies, who is running those federal agencies, what their purview is going to be, and what they’re being asked to do in terms of any new strategic directions. There might be. Because of that, we could potentially see more scrutiny on deals, especially if those deals potentially result in more consolidation.
The consumer lends in terms of, ultimately, what are they paying for and what are they getting for that? For employers, what are they paying for, and what are they getting for that? It might really come into question.
Again, mainly focus on geographic consolidation and consolidation that might affect consumers negatively or positively as well. Let’s not forget that mergers and acquisitions often result in more resources, more technology being brought into communities. There’s upside and downside that has to be balanced when it comes to mergers and acquisitions.
Going forward, when we think about things like value based care, there are a lot of costs coming into the system right now we as a nation and as a health segment, are not necessarily thinking about those costs long term because we’re dealing with a pandemic right now. The pandemic is the most important thing to put resources into.
At some point, we will have to start looking at the purse again and see what’s coming out of the purse and what that rate is. We do have a relook at value based care. I think we do look again at the growth in health care costs, which has mainly been driven by price, not utilization over the last decade.
I could certainly see a revisit there. We already know some of that is on the table. We have seen over the last few years a focus on drug prices and the cost to consumers and other payers. That is a bipartisan issue.
Even though that is not easy to solve, because the devil is often in the details, it is not an issue that is going to go away because it affects consumers and state pocketbooks. We do not see that going away. I would put surprise billing in that same category.
Again, bipartisan support but the devils in the details, not easy to solve. Really, it is an interindustry fight. Solving surprise billing for consumers is a challenge when you have payers and providers that think very differently about how it needs to be solved.
Everything I am talking about does relate back to one issue that’s going to be the framework that we have to look at health policy changes in for the next few years, and that’s the framework of a divided government. It’s pretty obvious that the Senate and the House are going to be extremely closely divided on partisan lines. What that means is big ticket policy issues are going to either be completely on hold, or there is going to have to be this incredible effort to find common ground where everyone can agree in order to move forward.
What are the areas on which we may find common ground? I would look toward consumer issues that would have the best chance, but I do think we need to keep all of these with a grain of salt in terms of what’s realistic in a time of COVID and in a time of divided government.
You briefly hinted at this, but what are going to be the major challenges of transitioning from the current administration to the new one in terms of health care?
I think a President elect Biden inherits a very different health system than he’s used to. When he was serving as Vice President, we had the passage of the ACA. In many years of implementation of the ACA, that was during a time period when we saw a decreasing number of uninsured, the health system had more and more paying customers. What we’ve seen because of that are providers with less debt. We saw insurance companies with many new opportunities in terms of Medicaid expansions, developing Medicaid managed care plans, developing health insurance exchange plans which in the beginning had a hard time pricing but over time, found their sweet spot and have grown.
This is a very different health system. We now have growing uninsured. We have a lot of economic uncertainty. Of course, we have the pandemic, which is hovering over it all and sucking all the oxygen out of the room. As it should, it’s the most important health issue of our time but it’s a much different health system than a Vice President Biden was used to.
I’ve already talked a bit about divided government. That’s the political aspect of it. When you start to put those things together, I think you have to come up with health changes that are all about blocking and tackling and all about prioritization of what’s the most immediate need. If you go through that list, at the top, it’s the pandemic. It’s getting this public health issue under control as much as possible, which in turn affects the economy.
The second thing, after the pandemic is the issue of coverage. There’s some opportunities there for a Biden administration using the framework of the ACA to start to reverse the course of growing uninsured and get more people coverage.
A third priority would be, how can we advance the health system now that we’ve taken care of some of those basics again? How do we advance it with the continuation of the digitization of the health system, the movement fully to virtual, which, by the way, the pandemic accelerated, the movement to more value based care so that the payers know that they’re getting what they pay for, and consumers know they’re getting a lot of value for what they pay for.
That’s the way that you bridge that gap between what a Vice President Biden was familiar with during the run up of the ACA and implementation of the ACA, and where we are now with a pandemic and a recession, and a lot of issues around coverage.
In conclusion, is there anything else you would like to add?
The one piece I’d like to add—because this is something very personal and important for all of us—is in regard to the challenges around mental health and stress in the population. Employers are seeing this. Obviously, consumers, individuals, and community groups are seeing this.
Everyone is being affected by stress, and the focus on mental health is incredibly important right now. That is a major challenge, and it is a daunting task. I will say one of the things the pandemic has brought us with this acceleration of virtual care is a new way to seek this care through telehealth and virtual health visits.
I don’t want to call it a silver lining because it is never a silver lining to have to deal with these challenges, but what I will say is we are finding that there is a new tool in the toolbox to use during this time. If we can take that out of our learnings right now, then that is something that’s good because it’s permanently changing our ability to deliver mental health care in the American health care system.