Our Take

How Covid-19 will impact U.S. health care policy

20 Minute Read

The Covid-19 crisis has tested our health care system in new and daunting ways, and redefined the government’s health care priorities. Amid this pandemic, candidates have squared off in one of the most contentious election seasons in recent history. The repercussions of Covid-19 will influence regulations, inform political platforms, and raise the stakes for health policy decisions. Advisory Board breaks down what changes are underway and what they mean for your organization.

 

The pre-Covid-19 reality

In February 2020—just weeks before the United States shut down in the face of the Covid-19 pandemic—respondents to a national survey ranked ‘lowering the cost of health care’ as the highest domestic priority for both the President and Congress. This focus on affordability is nothing new; national health expenditure as a share of gross domestic product has been rising consistently since 1960, and now accounts for 17.7% of the GDP. President Nixon addressed Congress about the growing cost of health care back in 1974, and President Obama echoed those sentiments 35 years later when he made health care access a cornerstone of his administration.

With the majority of Americans last year reporting at least one medical financial hardship, candidates for this year’s presidential election had been centering their health care priorities around reducing costs to patients. There are some areas of consensus: both President Donald Trump and former Vice President Joe Biden have spoken out against high drug prices and costly surprise bills.

Coming into this year, the primary disagreement between the candidates was centered on coverage. Biden believes a Public Option—building on the coverage expansions of the Affordable Care Act—is the path to affordable, accessible health care. Trump continues to voice opposition to the Affordable Care Act, and instead favors offering a broad array of health insurance options, including association and short-term health plans, without mandating coverage.

 

Our take

The outbreak of Covid-19 has forced both candidates to reevaluate their health care agendas. Affordability and coverage continue to be major areas of focus, but the pandemic has also highlighted the need to improve the health care system’s ability to withstand major shocks—i.e. to improve the system’s resilience. In recent months, Biden and Trump have sought to clarify their stances on issues such as the government’s role in emergency response, public health, and supply chain, as both seek to assure Americans that the country will be better equipped to confront future crises. Such debates represent a marked expansion in focus from the prior emphasis on coverage affordability.

Major health policy goals in the peri-Covid-19 era

Efforts to increase resilience may complicate the affordability mandate

This newfound emphasis on resilience creates a potential challenge for regulators and lawmakers, who in recent years have been very focused on controlling the rate of health spending growth. Building resilience can be costly: solutions such as increasing spending in public health, stockpiling supplies, and expanding telehealth reimbursement all involve significant investment. While no party is eager to cut health care funding in the acute phase of the crisis, the pressure to rein in expenditures will grow with time. Republicans in particular are sounding the alarm on the unprecedented level of government spending.

Efforts to increase resilience may complicate the affordability mandate

The tension between resilience and spending control will be difficult for policymakers to navigate in the year ahead. Government leaders at all levels—in Congress, the White House, and the Statehouse—must seek out solutions to balance these competing directives.

 

Three key implications

The recent shift toward resilience, amid a continued desire for greater affordability, has tangible implications for the future of health policy.

  • Implication

    The affordability and resilience mandates underscore the importance of Congressional and state races.

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  • Implication

    Medicare’s recent focus on provider relief is a temporary reprieve—not a permanent shift.

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  • Implication

    With limited flexibility, Medicaid’s primary focus will be spending control.

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Parting thoughts

Health organizations need to understand the priorities of government decision makers and take stock of what the institutional impact will be:

  1. Is your state poised for a political shakeup after November’s elections? Are you priorities aligned with those of your current or future state legislators?
  2. Are there board members you can be equipping with talking points to advocate for the things you most want—particularly at the state level?
  3. Have you developed an up-to-date strategy for managing the continued outpatient shift? Do you have partnerships in place to facilitate care in the ambulatory setting or the home?
  4. If you currently take on risk, has that be an advantage or a disadvantage to your organization? Are you tracking that information to inform future valuebased care efforts?
  5. What is the payer mix at your organization? How much would you be affected by potential price-cuts to Medicare or Medicaid and what can to do now to mitigate future impacts?
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