Earlier this month, the President’s secretaries of Health and Human Services (HHS), Treasury and Labor issued a joint report which identifies their perspective on how to improve U.S. healthcare – focusing on four key areas:
- Healthcare Workforce – Increase the supply of providers by easing rules on the scope of services they can provide, increasing funding for graduate medical education, and providing models for reciprocal licensing by the states. The report encourages easing the rules on non-MDs providing lower levels of care and emphasizes the value of telemedicine as low-cost and effective care delivery. The report cautioned that provider consolidation reduces competition which increases cost, encouraging vigilance in the review of proposed transactions.
- Healthcare Markets – Ease state-based regulation on provider payment models such as value-based or risk-based contracting, and site-of-care neutrality in determining reimbursements. Encourage data exchange and electronic medical records.
- Health Insurance – Facilitate consumer choice by reducing government mandates. Encouraging states to eliminate “any willing provider (AWP) or pharmacy” rules which reduce the ability of insurance carriers to negotiate lower costs. Reform the Affordable Care Act (ACA) by reducing the burden of “network adequacy” requirements, eliminating or reducing certain mandated coverage and modifying Medical Loss Ratio (MLR) rules which may provide incentives for higher premiums.
- Consumer-Driven Healthcare – Expand the power of the consumer in controlling cost by promoting Health Savings Accounts (HSAs), reference-based pricing and cost transparency to facilitate price shopping. The report suggests sensibly tying HSA eligibility to plan actuarial value (AV) (e.g. any plan with an AV of 70% or lower), instead of it being tied to specific benefit levels, and then expanding preventive care to include chronic condition treatment.
The report asserts that educated consumer choice allows for improved quality and lower cost, comparing Lasik surgery costs (down by 25%) and cosmetic procedure costs (which grew at less than half the rate of general inflation) not typically covered by healthcare in contrast to overall healthcare costs (which grew at twice the rate of general inflation). It cites lack of cost transparency and distinguishes “shoppable” versus “non-shoppable” costs indicating that only 6% of costs are incurred in an emergency department and therefore more consumerism can be imposed.
This report provides some easy-to-implement (and some not-so-easy) suggestions, and I have made many of these same recommendations right here on this blog. Although the joint report was only just released three days ago, I was surprised at how little press attention it received. Hopefully we will see some progress.