The Stakes are High for Healthcare in the Mid-Term Elections

The latest Wall Street Journal NBC News poll predicts healthcare will be the number one issue in the mid-term elections this November, ranking above the economy, trade and immigration.

Judging from last week’s flurry of federal regulatory activity impacting healthcare, it’s clear DC policy wonks and campaign operatives are gearing up. Consider:

Tuesday, the Medicare board of trustees announced the hospital insurance trust (Medicare Part A that covers hospital, home health services, nursing home and hospice costs) could run out of money by 2026 — three years earlier than projected last year. Part A is funded through employer payroll taxes. The culprit: higher spending on hospitals and lower tax revenues. The report also forecast Medicare Part B premiums, which cover physician services and other outpatient costs are funded through federal appropriations (75%) and enrollee premiums (25%)— should remain stable for the time being. The politics: Medicare is a popular program: tampering with its funding is risky. Dems will argue the GOP wants to cut its funding to sustain its solvency. The GOP will counter it’s an entitlement that needs but avoid using “privatization” as a vehicle.

Wednesday, President Trump signed the VA Mission Act that replaces the Veterans Choice Act providing access to private providers for Veterans facing unusually long wait times for treatment. Of the nation’s 21 million living veterans, 9 million depend on the Veterans Health benefits for coverage. The politics: Dems will argue the GOP wants to privatize the VA against the wishes of veteran’s organizations; the GOP will argue it’s will give veterans more choices and better care.

Thursday, the U.S. Department of Justice announced it will not enforce key elements of the Affordable Care Act including the individual mandate to purchase insurance and a requirement that insurers cover pre-existing conditions for applicants. The politics: Dems will argue the mandate was necessary to stabilizing insurance risk pools and keeping premiums down for sicker and older citizens; the GOP will counter mandates are an infringement on individual rights and unnecessary to a stable insurance environment.

And upon hearing from Majority Leader McConnell that the Senate’s August recess was cancelled, Minority Leader Schumer went on the media circuit last week promising healthcare would be their top legislative focus. The politics: Dems want voters to believe they care about healthcare; the GOP wants voters to think they care about health costs.

Each of the these is a news item worthy of lengthy unpacking. They address complicated issues not easily solved with intended and unintended consequences not readily evident to voters. For example, the DOJ’s decision to disregard the individual mandate is certain to result in higher premiums for sicker and older enrollees under 65 who can afford to purchase coverage and encourage many who are healthy to forego coverage altogether. The concept of risk pools and how insurance works is not readily understood by most Americans; the idea of mandates—whether for them or against them—is.

That healthcare is a vote-getter is no surprise.  That it’s complicated is also not news. That’s why candidates from both parties defer to soundbites and avoid specifics in offering their views about innovation, access, quality, safety, coverage, costs and more. It’s safer to offer platitudes that reinforce the core beliefs of friendly voter blocks than to go too deep on healthcare. And regrettably, much of the media coverage reinforces talking points over substance.

I have studied the U.S. health system since grad school almost 50 years ago. I have worked with officials of the health systems in the U.K., China, Canada, Mexico, Japan, Portugal and Hungary through the years. Each is unique. They’re all complicated. They are all grappling with funding issues in the face of aging populations, epidemic chronic ailments and age and public discontent. What makes ours even more thorny is our structure:

Focus: providing the best medical care in the world for the sick and injured through private hospitals, clinicians and manufacturers of drugs and devices while under-investing in social programs that are the root cause for 90% of its costs.

Funding: 55% of our population are insured through private insurance, 35% through public programs and 10% who go without. And employers play a large and growing role. And health spending, which is 29% of the federal budget, is increasing faster than wages, inflation and revenues accessible to government through its taxes.

Oversight: each sector in our system is governed by a complex combination of federal and state rules and regulations that change frequently consuming enormous resources to be compliant.  

Thus, reforms are difficult and simple promises are popular. Per the Washington Post/Kaiser Family Foundation’s poll last week, 51% of Americans support a single-payer solution, while 43% oppose it. But most Americans are clueless about how a single payer system would work, what it would cost and what it might mean to their health and personal finances.  

Given heightened attention to healthcare in the next 5 months, the implications for the traditional players—insurers, hospitals, drug and device manufacturers, physicians and others-- are clear:

All must expect closer scrutiny from special interests, media and consumer watchdog groups.

All must anticipate that business dealings, partnerships, executive compensation, costs and outcomes will be transparent and subject to independent verification of accuracy and appropriateness.

All should expect a more direct role for states in oversight of their Medicaid, insurance, workforce licensing and social programs that address abortion, opioid addiction and public health as HHS transfers accountability to state legislatures.

All should expect new rules and structures in our marketplaces as CVS-Aetna, Cigna-Express Scripts, Amazon, Apple, Optum and others flex their muscles.

And all should expect healthcare to be front and center in Campaign 2018 and 2020 as candidates for public office try to convince voters they know what’s best for the American healthcare system and who’s responsible for its problems.

Will healthcare be the key issue in the mid-term campaigns? It’s likely. But does that mean our populace is better prepared to vote based on an informed view of how our system actually operates and how it can simultaneously reduce its costs and improve its quality works? That’s unlikely until and unless consumers demand it and media coverage responds.

Paul

P.S. 123 American’s take their own lives daily including 22 veterans and celebrities like Kate Spade and Anthony Bourdain. While we tout our impressive successes in treating heart disease and cancer, might we also pause to reflect on our collective ineffectiveness in treating depression and mood disorders. It’s a systemic issue that deserves urgent attention.