Don’t Rebuild the Health System, Reorient It

This week I got a bit of nice news from my auto insurer. The COVID-19 pandemic has meant fewer people are driving. Fewer miles driven means fewer accidents and fewer auto insurance payouts.

Pending regulatory approval, I am to get a credit for March and April on my insurance premiums. (Regulators, you know what to do.)

The same slowdown is happening in health care spending, but I am not holding my breath for a similar insurance rebate. Instead, I want leaders to seize the opportunity to reorient the health care system that was so ill-prepared for the current crisis.

Since March, there has been an unprecedented collapse in the volume of health care services in the United States. As health providers actually started to act more like a system and gear up to respond heroically to the horrifying toll of the pandemic and mitigate its spread, elective surgeries, diagnostic procedures, and follow-up visits were cancelled. As a result, according to an Altarum Institute analysis of federal reports, March overall health care spending was 5.5% lower than the same period last year, the first decline in 30 years of measurement.

Advocates for health-care-cost curve bending sat up and took notice. Had COVID-19 achieved the impossible and tamed the “confiscatory” beast that is gobbling up public budgets and employer benefits?

But the impact of the activity reduction has been bloody and indiscriminate. Outpatient visits are estimated to have dropped by nearly 60%. Providers with the weakest finances—including those offering needed services like rural health and primary care—have been most affected, with many laying off staff and experiencing serious cash flow problems. The big-guy health care systems are dipping into their sizable reserves.

Federal stimulus money for health care to date has favored large institutional providers, not the most financially vulnerable ones. Pressure has built on commercial insurers—beneficiaries of this drop in spending—to be more active in their support of these providers, who might shut down or get consolidated into larger, more expensive health care systems.

Not so fast. Why the rush to rebuild a health system that is leaving us so vulnerable to this pandemic?

And the effect of this decreased activity on patient health has been uncertain at best. Emergency room visits and pediatric immunizations have declined. On the other hand, it is reasonable to assume that a disproportionate amount of the activity reduction has been in the $200 billion/year of low-value care­—such as nonurgent emergency room visits and duplicative or unnecessary diagnostic testing—the National Academy of Medicine estimated is provided every year. “The coronavirus has done more to reduce low-value care than 10 years of value-based purchasing,” one sage tweeted.

Now, with varied and politically charged efforts by states to open up their economies, attention is focused on reopening up the health care sector and gearing up for all those elective procedures. The push is strong. Providers are eager to restore revenues. Patients want to see real and perceived needs addressed. Political leaders see public morale and jobs on the line.

Not so fast. Why the rush to rebuild a health system that is leaving us so vulnerable to this pandemic? Now is a unique time for policymakers and purchasers alike to use their leverage to push for changes—to help remake a US health care delivery system with the dubious distinction of being the most expensive in the world while delivering declining life expectancies.

Where to begin? In the eagerness to reopen health care, employers, purchasers, and policymakers should prioritize activities that:

1. Help public health officials prevent, monitor, and mitigate infections from the coronavirus and reduce its ongoing toll on the vulnerable and chronically ill. The virus is with us for the foreseeable future. We need a health care system that mitigates its effects, not merely reacts to them. Besides refinancing and restructuring our weak and underfunded public health system, that means supporting primary care and prevention activities like testing, contract tracing, and reaching out to their patients to improve their care. That support can include increased and advanced payments to primary care providers based on lessons learned from Medicare’s primary care payment models to prevent and manage chronic illness.
2. Help states address their yawning budget deficits. As states deal with increased Medicaid enrollment and decreased tax revenues, officials will need to consider not only the obvious cuts in provider payments but prioritizing providers and services that can help meet the needs of the state’s costliest patients—the elderly and disabled. Giving more money to institutional providers will not help; greater support of family and community-based caregiving efforts will.
3. Accelerate the adoption of alternate payment models (APMs). The move to population-based accountability with real budget constraints must happen if we are to address the twin stains of inequitable and diminishing health care outcomes. While APMs are no silver bullet, by aligning provider goals towards a collective outcome, Medicare payment models have shown their savings to be real and persistent. Providers’ resistance to widespread adoption of APMs may likely be weakened by their financial precariousness.

These are public challenges that require coordinated, collective responses. There are important private sector partnerships to be made and roles to played, but we cannot expect employers, providers, and payers—many with deep investments in the status quo—to solve them individually.

There will be worker dislocation and resource reallocation accompanying these responses, but that meteor has already struck. Nearly 1.5 million health care workers lost their jobs in March and April. Public officials are right. We need to get them back into the workforce. But rather than redeploying them back into our treatment-oriented, administratively burdensome delivery system, they can be engaged in the work of prevention, primary care, and community-based services—roles with greater impact on societal health now and in the future.

I am not holding my breath for my health insurance premium discount. Unlike auto insurance, I did not pay the full premium for my health insurance. Unlike auto accidents, many medical services have been deferred, not prevented, especially when providers are paid for each service. But this is not a moment just to rebuild, restore, or reopen health care as it was before. It is an opportunity to reorient our system to the new realities we face with a virus in our midst, as well as the persistent ones of high cost and poor performance. We need to be up to the challenge.