Assessing Health Care Policy Reform at the Federal and State Levels

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In addition to coronavirus disease 2019, several other factors will play a major role in health care policy reform for federal and state-level health officials this year, including the transition to value-based care and containment of high health care costs.


In addition to coronavirus disease 2019 (COVID-19), several other factors will play a major role in health care policy reform for federal and state-level health officials this year, including the transition to value-based care and containment of high health care costs.


AJMC®: Hello, I'm Matthew Gavidia. Today on the MJH Life Sciences’ Medical World News, The American Journal of Managed Care® is pleased to welcome Bill Kramer, executive director for Health Policy at the Purchaser Business Group on Health (PBGH).

Great to have you on, Bill, can you just introduce yourself and tell us a little bit about your work?

Kramer: Hi Matthew, thanks very much for inviting me as part of this dialogue today. I'm the executive director for Health Policy at PBGH, which is a consortium of large employers, a not-for-profit organization that's committed to improving quality, cost, and equity for health care across the United States.

AJMC®: To get us started today, as 2020 saw a rise in virtual care and telehealth services amid the pandemic, as well as a greater focus on mental health and social determinants of health, what goals or objectives will have notable influence on employer action in 2021? Will it be more of the same?

Kramer: Well, first coronavirus disease 2019 (COVID-19) has had a tremendous impact, of course, on our entire health care system. One of those has been the acceleration of some long overdue changes in health care. A perfect example of this is the rapid transition to telehealth and other kinds of virtual care.

That's been long overdue, the technology has been available, and now it's being put into place to the benefit of patients and physicians and hospitals. But there are other issues that need to be addressed going forward, in addition to, of course, dealing with the COVID-19 pandemic.

Costs continue to be a serious problem for employers and, of course, their employees and their families who receive benefits through their employers. Costs are through the roof—they continue to be an enormous burden, not only on businesses, but they also crowd out wages. High health care costs have led to a flattening of wage growth over the past 20 years. We need to find ways to contain the cost of health care across the United States in order to strengthen wage growth, strengthen business growth in the United States.

One of the other things we need to do going forward is to strengthen primary care. Primary care has been hit really hard during the COVID-19 crisis, particularly independent primary care practices that were perhaps financially vulnerable, particularly those independent practices that relied a lot on fee-for-service (FFS) revenue.

Now, there have been some steps taken to shore that up, but that's still a very fragile part of our health care delivery system. You need to find ways to preserve primary care, but more importantly, to strengthen it, make it more resilient, because it is the foundation of a high quality, affordable, accountable health care system.

AJMC®: What significance will the transition to the Biden administration have for employers in 2021? ​And what will be the impact of the shift to a Democratic majority in the Senate?

Kramer: There are significant opportunities to work with a Biden-Harris administration on health care policy. The number 1 priority, of course, will be to deal with the COVID-19 pandemic. That's essential for the health of our country and for our economy, but beyond that, there are a number of opportunities.

One is payment reform. Again, this is one of these long overdue reforms that's been needed for a long time to move us away from FFS payment, and toward more value-based payment where physicians, hospitals, and other clinicians are paid for the quality of care that they provide for improving the health of their patients.

We believe we can work with the new administration to not only develop, but also implement more widely these kinds of payment reforms. Along with that, there needs to be an emphasis on accountability. Accountability comes through ensuring that patients are getting the care they need and are getting the health outcomes that are necessary. To do that, we need to have good transparency, we need to have good performance measurement. Again, employers are looking forward to working with the administration on stronger performance measures and accountability tied to payment reforms.

Last, but not least, there needs to be a way to contain health care costs more broadly–not just in Medicare, but throughout the health care system. One of the main reasons for high health care costs has been high prices, not just high utilization, and in many markets, these high prices are driven by dominant health care systems. We need to find a way to either restore competition through stronger antitrust enforcement or prohibition on anti competitive practices, but also to, where necessary, limit the prices that can be charged by these dominant health care providers.

AJMC®: Beyond at the federal level, are there any state-level changes to health care policy that employers should be monitored?

Kramer: Yes, I think there are many opportunities at the state level. Again, the states are also going to need to make COVID-19 a first priority, but beyond that, there are many promising initiatives.

Many states have launched or are considering health care cost containment commissions. Massachussetts was one of the first, but California also has a proposal, Oregon has been developing one—many states have been doing this. Many of them have actually set targets and are monitoring health care costs, looking at the underlying reasons that have been driving up prices, and setting targets to ensure that costs don't exceed a certain limit.

In addition, to strengthen markets, some states have taken steps to strengthen antitrust enforcement, and California is one of those. A real good example of this is what was done to deal with the problem of Sutter Health Care System in Northern California. As you probably know, there was an antitrust suit launched, originally a class action suit led by a labor trust fund and then it was joined by the California Attorney General. That suit is going to be settled and formalized shortly, but it points to both a problem, but also a solution. If we can strengthen antitrust enforcement and make markets work better, we can bring these costs under control.

Finally, other things that states can be doing, and many are are already doing this, development of all-payer claims databases so we have a clearer picture of what the prices and costs are that are being charged, and also initiatives to shore up and strengthen primary care infrastructure, in many cases, investing more in primary care. Again, the most important foundation for a patient-centered, resilient, and cost-effective health care system.

AJMC®: To learn more, visit our website at I’m Matthew Gavidia, thanks for joining us!