How COVID-19 May Redirect US Healthcare Reform Priorities

April 8, 2020 healthadvances

By Frank F. Zhou, Senior Analyst; Angela Wang, Senior Analyst; Julia A. Gaebler, Ph.D., Partner

Key Takeaways

  • The challenges borne out by the coronavirus pandemic in the US are amplifying many areas of our healthcare system in dire need of reform
  • In light of the unprecedented spike in unemployment, expansion of insurance coverage will likely remain a key topic in the post-COVID-19 era, with greater momentum for reform at the federal, state, and payer levels and intensified calls for universal coverage
  • Other previously neglected deficiencies, such as the need for greater coordination between federal, state, and industry stakeholders, improved public health funding, and leaner regulation may also garner more attention in the health reform debate

Introduction
In October 2019, a coalition of the world’s top health security research groups concluded that the US was the most prepared of any nation to respond to a pandemic. The Global Health Security Index, compiled by the Nuclear Threat Initiative, the Johns Hopkins Center for Health Security and the Economist Intelligence Unit, ranked the US number one for the categories of outbreak prevention, disease detection and healthcare infrastructure. The coalition also afforded the US the number two spot for its emergency preparedness and ability to respond to outbreaks.

Despite this ranking, the novel coronavirus is currently raging its way across the globe and through the United States. The number of COVID-19 cases continues to rise at an ever-growing rate, with total confirmed cases in the US now the highest in the world. Like in Italy, US healthcare systems are overwhelmed, medical supplies such as ventilators and personal protective equipment (PPE) are in critical shortage, and many symptomatic patients continue to report difficulties in receiving testing. The stock market’s volatility has been extreme and unpredictable, statewide lockdowns have forced non-essential businesses to close, and an unprecedented 10 million people have filed for unemployment in the last two weeks of March.

The last few weeks reveal a trail of missteps that significantly hampered the US response to COVID-19. Testing was initially limited to one CDC lab, a restriction that was only lifted on February 29. Testing kits sent out by the CDC were faulty and took weeks to fix. The early message from the White House was both confusing and inaccurate: “The 15 [cases] within a couple of days is going to be down to close to zero,” President Trump remarked. There was little coordinated response from the federal government, in part because the Executive Branch had dismantled the national pandemic response unit in 2018. Without federal direction, underfunded state and local public health departments were left to their own devices, scrambling to prepare for the pending threat whilst attempting to enact a series of reactive containment measures.

In this post, we offer predictions about how these early missteps in the response against COVID-19 may shape the near-term discourse around health policy. First, we assess how the coronavirus outbreak has propelled incremental improvements in coverage, such as Medicaid expansion and increased infectious disease testing, and intensified calls for universal healthcare. Next, we articulate how the conversation in health policy may also transition to topics unrelated to coverage and often neglected, such as the need for increased cooperation between stakeholders, greater funding for public health initiatives, and leaner regulation in times of emergency.

Insurance coverage will remain a key topic for healthcare reform, with new attention to incremental change and stronger calls for universal healthcare.

As the nation reels from COVID-19 and gears up for this year’s presidential elections, health insurance reform will remain a key topic in the political dialogue of our country. The novel coronavirus does not discriminate, and the public is only as well-protected as its weakest link. As such, the outbreak has exposed various weaknesses in a system where many rely on their employer for insurance coverage and others remain uninsured or underinsured. Many patients recently furloughed or laid off may already have lost employer-sponsored insurance, with many more on plans with high cost-sharing arrangements. These same patients may then choose to forgo COVID-19 testing. As a result, public health agencies cannot effectively track the disease and isolate relevant cases, placing the greater society at risk.

As the pandemic continues its path throughout the US, federal agents, state legislatures, and individual payers have offered incremental coverage changes to expand access to healthcare during these uncertain times. These stop-gap measures highlight stakeholders’ abilities to react to sudden obstacles and relieve patients from undue burdens, setting new precedents that could be leveraged in the future. Below are examples of measures the government and commercial insurers have taken in response to COVID-19.

  • Federal initiatives to reduce barriers to receiving care. Congress has recently mandated that all payers cover COVID-19 testing with no cost-sharing. In addition, Congress has set aside $1 billion to cover the cost of testing uninsured patients. While it is difficult to generalize from such a unique event as the coronavirus crisis, the bipartisan willingness to rapidly legislate on coverage decisions for both public and private payers could represent a potential model and precedent for reform going forward. For example, the next administration might be more willing to waive cost-sharing on other tests with public health implications, or cover additional costs for uninsured patients in an effort to protect public health.
  • State initiatives to improve coverage, particularly for Medicaid. A renewed interest in expanding coverage to select populations could also prompt states to bolster their Medicaid programs. The populations served by state Medicaid programs are particularly susceptible to the coronavirus, given that many Medicaid beneficiaries already suffer from existing medical conditions. Expanding Medicaid coverage in the 14 states that have yet to do so may lead to better health outcomes for many at-risk Americans. For example, in Alabama, which has not yet expanded Medicaid, the state legislature has recently introduced two new proposals to achieve expansion for new mothers and other additional populations eligible under the Affordable Care Act. As the COVID-19 outbreak continues, we expect to see increased momentum for expanded coverage at the state level.
  • Payer initiatives to improve access to testing and telemedicine. Commercial payers have introduced measures to improve coverage for COVID-related care. While federal legislation only requires COVID-19 testing costs to be waived for patients, many payers such Aetna, Cigna, and UnitedHealthcare have also waived cost-sharing for COVID-19 testing and treatments. Payers have also waived out-of-pocket expenses on telehealth appointments both related and unrelated to the coronavirus, as shelter-in-place and social distancing policies are temporarily limiting face-to-face interactions with clinicians and patients. Following the lead of commercial payers, Medicare has also become more accepting of telemedicine. In mid-March, the Centers for Medicare and Medicaid Services (CMS) ruled to temporarily reimburse clinicians for telehealth services for all beneficiaries. CMS later expanded its ruling to cover 85 additional services both related and unrelated to COVID-19. These changes could thus potentially set the stage for greater telemedicine coverage in the post-COVID era. In a recent blog post, Health Advances Partner Andrew Matzkin further explores the prospects of telemedicine and digital health.

While these changes may encourage speedier and broader insurance reform in the future, they will not defuse calls for universal health coverage. Current incremental adjustments to coverage have not yet succeeded in closing the uninsured gap, particularly for low-income or unemployed individuals. Millions of Americans have already lost their jobs, with a record 10 million new jobless claims in the last two weeks of March alone. Additional job losses are also predicted, with some economists estimating that unemployment will reach 15-20% in the next two months. Many who once relied on employer-sponsored insurance are now scrambling to find other options.

Government response to this new unemployment crisis has been splintered. Although unemployment benefits include health insurance, state unemployment agencies are overwhelmed with the number of claims they have received. Some states are offering special enrollment periods on state-facilitated Affordable Care Act (ACA) marketplaces, during which unemployed people may sign up for an individual ACA plan. Other states, which rely on federal-facilitated marketplaces, are unable to offer such an option. The Trump administration, which has spent a considerable effort to repeal the ACA, decided not to reopen enrollment during this time.

These fissures will undoubtedly incite further calls for universal healthcare coverage, a well-tread political debate. In 1993, President Bill Clinton made universal healthcare coverage the cornerstone goal of his first term, a proposal that ultimately failed. In this year’s Democratic presidential nomination process, Bernie Sanders and Elizabeth Warren championed single-payer “Medicare for All” as a key policy proposal, bringing the issue of universal insurance coverage back into the spotlight.

Though Sanders has lost ground in his bid to secure the Democratic nomination for the presidential election, “Medicare for All” likely will remain front and center this election cycle. The coronavirus pandemic has presented sudden new challenges to our healthcare insurance system, revealing longstanding rifts and areas for immediate improvement.

Other policy issues will receive new attention, such as greater coordination between stakeholders, increased public health funding, and leaner regulation.

There are also important challenges related to COVID-19 that are not directly related to insurance coverage. With the impending presidential election, the political debate on healthcare reform may begin to now focus on other gaps in our healthcare system surfaced by the global pandemic. Specifically, missteps in attempting to control the virus highlight lack of coordination between public and private health systems, scarce funding for state public health departments, and cumbersome regulatory hurdles that impede emergency decision-making. These issues may become not only new talking points on the campaign trail, but also new priorities that Americans will want resolved.

  • Greater coordination between federal, state, and industry stakeholders. As the disease first began to spread in the US, the federal response was sluggish, in part because the White House downplayed the threat. Some states then acted swiftly to fill the void with social distancing requirements and business and school closures, while other states were indecisive at best. The result was a patchwork of localized responses against an invisible viral threat that transcends geographical boundaries. Furthermore, unlike nations such as Taiwan, the US government did not act early to mobilize private industry in the production of medical supplies. In light of these shortfalls, some have suggested that the White House could have engaged state governors in consensus-building, and that Congress could have created financial incentives for states to follow national guidelines. In the coming months, national discourse on these issues will likely continue to grow.
  • Increased funding for public health initiatives. In 2017, public health represented only 2.5% of overall health spending. In the last decade, the CDC, the nation’s leading public health agency, lost 10% of its funding (adjusted for inflation). Furthermore, the Public Health Emergency Preparedness Cooperative Program, the sole federal program which helps local health departments prepare for public health emergencies, has lost more than a third of its funding since 2002. Such constrained resources have likely hindered the ability of public health agencies to deploy effective surveillance, testing, and containment protocols, forcing various health department leaders to request emergency funding in the fight against COVID-19. We expect that the case for public health funding as vital to a coordinated, sustained public health response will be sharpened by the effects of COVID-19, and that new investments in public health preparedness will become central to health policy reform discussions.
  • Leaner regulation in times of emergency. Since COVID-19 was declared a public health emergency in early February, the FDA has implemented policies to expedite approvals for diagnostic tests and other products. To date, the FDA has granted emergency use authorizations (EUAs) for 25 tests produced by commercial manufacturers, the CDC, and state public health departments. The FDA has also begun issuing EUAs for drugs such as hydroxychloroquine and chloroquine, two anti-malaria agents, to treat patients with severe COVID-19 illness despite limited clinical evidence. However, most of these EUAs were only granted after COVID-19 had already spread significantly and testing shortages were already widespread. Learning from COVID-19, regulators may therefore be more willing to take earlier action on EUAs in the event of future public health crises.

The global coronavirus pandemic poses an extraordinary public health challenge for the US and has exposed significant shortfalls in the nation’s preparedness. As the US presidential election approaches, healthcare reform in the context of COVID-19 will likely be a major theme. We predict that expansion of insurance coverage, greater coordination between stakeholders, increased public health funding, and leaner and more nimble regulations will be key debate topics. Given this momentum, we hope that health policy reform measures will enhance patient well-being and better safeguard the US from subsequent infectious disease threats.

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About the Authors

Frank F. Zhou is a Senior Analyst in the Health Advances Newton office, Angela Wang is a Senior Analyst in the Health Advances Hong Kong office, and Julia A. Gaebler is a Partner in the Newton office and Head of the Health Advances’ Global Market Access and Policy Strategy practice.

 

About Health Advances Global Market Access and Policy Strategy Practice

Health Advances’ Global Market Access and Policy Strategy practice provides biopharma, device, diagnostics, and digital and health IT and non-profit clients with foundational perspectives and insights on national and supra-national health and regulatory policy issues that inextricably inform and influence company, product, and portfolio strategies. These insights in turn inform targeted and harmonized advocacy solutions.

 

 

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