August 23, 2021
Center for a Healthy America
Center for a Healthy America Overview
August 23, 2021
In the United States, the healthcare system exposes serial and chronic policy failure like almost no other area of governance. This is largely because its incentives are all wrong. Rather than improving health and health outcomes for Americans, the healthcare system is directed toward the benefit of well-connected firms, special interests, and big government. The U.S. leads the world in medical and scientific innovation, which benefits Americans and the world, but our healthcare system is fractured (Roy, 2020). The America First Policy Institute’s Center for a Healthy America seeks to realign incentives toward the primary outcome our healthcare system should deliver—a healthier America that values individuals, choices, and liberty at its core.
WHERE IS AMERICA NOW
The high cost, limited choices, and variable quality of healthcare in the U.S. are significant concerns for both the health and economic wellbeing of the American population.
In a telling Gallup Poll conducted from December 14, 2020—January 3, 2021, 70% of Americans believed the cost of healthcare is moving in the “wrong direction” and viewed the cost of prescription drugs similarly (Witters, 2021). Further, only 28% of voters were optimistic that the Biden Administration and Congress would be able to enact policies that reduce the cost of healthcare, while 49% were pessimistic (Witters, 2021). More than a decade after the passage of the Affordable Care Act (ACA), the persistently high cost of healthcare in the U.S. is not a partisan issue but an American issue.
Spending on healthcare as a percent of the U.S. Gross Domestic Product (GDP) has increased over the past five decades, from 6.9% in 1970 to 17.7% in 2019, and it is projected to be up to 19.7% by 2028 according to the National Health Expenditures released by the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary (Kamal et al., 2020; Keehan et al., 2020; Martin et al., 2020). Since first asked by the Gallup Poll in 1991, Americans have reported that they or a family member put off medical care because of the cost, with a subset delaying care for a serious condition (Saad, 2019). In 2019, 33% of Americans surveyed reported delaying care, which tied the previous high from 2014 and was up from 22% in 1991 (Saad, 2019). From 2010-2020, the average premium for family coverage increased 55%, from $13,770 to $21,342 (Kaiser Family Foundation, 2020). In that same period, the average general deductible for single coverage increased 111%, from $646 to $1,364 (Kaiser Family Foundation, 2020). In the individual health insurance market, premiums more than doubled between 2013 and 2017 and increased another 27% in 2018 (Centers for Medicare & Medicaid Services, 2018). Two-thirds of Americans worry about being able to afford unexpected medical bills. That, along with being able to afford health insurance deductibles and prescription drug costs, make up three of the top four concerns of general household needs—above paying for rent/mortgage, monthly utilities, and food (Kaiser Family Foundation, 2018). Indeed, the Foundation for Government Accountability poll in September 2020 found that 87% of voters support healthcare price transparency as a way to help control costs and increase access for their families (Foundation for Government Accountability, 2020).
In addition to affecting family budgets, the high cost of healthcare has also impacted state and federal budgets. A recent PEW study found that, altogether in fiscal year 2017, states spent 17.1 cents of every state-generated dollar on providing Medicaid coverage (Rosewicz et al., 2020). This is a 4.9 percentage point increase from 2000. In a comparable study in fiscal year 2016, the Medicaid and CHIP Payment and Access Commission found that states spent 15.9% of their budget (absent federal dollars) on Medicaid, compared to 24.5% on elementary and secondary education and 13.7% on higher education (Medicaid and CHIP Payment and Access Commission, n.d.). When federal spending is included, Medicaid is the largest budget item for states. Because statutory requirements on Medicaid coverage limit spending flexibility for state policymakers, the increase in Medicaid as a share of the state budget means less funds are available for other priority areas like public education, workforce development, public safety, housing, transportation, tax cuts, and more. At the federal level, the Congressional Budget Office estimates that the Hospital Insurance Trust Fund, which pays hospitals and post-acute services providers under Medicare Part A, will become insolvent in 2026 (Congressional Budget Office, 2021).
While costs have risen over the past decade, Americans’ choices in care and coverage have decreased with the consolidation of healthcare insurance markets. An October 2020 update of the American Medical Association’s study on U.S. health insurance markets found that nearly three-quarters of markets are now highly concentrated, with an upward trend in concentration from 2014 to 2019 (American Medical Association Division of Economic and Health Policy Research, 2020). High concentration leads to less competitive markets—a single insurer’s share was at least 50% in 48% of markets in the 2020 update—which means fewer coverage choices resulting in potentially limited access to preferred providers, premiums above competitive markets, and healthcare provider payments below competitive markets (American Medical Association Division of Economic and Health Policy Research, 2020).
Approximately 90% of the $3.8 trillion in annual health expenditures are used to treat people with chronic and mental health conditions (National Center for Chronic Disease Prevention and Health Promotion, 2021). The Milken Institute found that, in 2016, the national average total cost of chronic diseases per person was $11,201 (Waters & Graf, 2018). 60% of Americans have at least one chronic condition and 40% have two or more chronic conditions, with the percentage of those with multiple chronic conditions increasing to 81% amongst those aged 65 years and older (Buttorff et al., 2017). Additionally, 5% of the population accounts for 50% of the healthcare expenditures and 50% of the population accounts for 97% of expenditures (Sawyer & Claxton, 2019). With the U.S. Census Bureau expecting the number of adults aged 65 years and older to increase from about 49 million in 2016 to nearly 95 million in 2060, the U.S. can anticipate a continued increase in the burden of chronic disease on the population’s physical and economic health unless new solutions are implemented (U.S. Census Bureau, 2018). Despite the significant healthcare expenditures in the U.S., only half of Americans receive recommended care, and quality of care varies across conditions, populations, and communities (McGlynn et al., 2006). The COVID-19 pandemic shed new light on the critical importance of addressing the prevalence and proper management of chronic conditions in the U.S., particularly in vulnerable populations (Bosworth et al., 2021; Office of the Assistant Secretary for Planning and Evaluation, 2020). Giving Americans choice and control in their care can potentially help prevent chronic disease, leading to significantly improved physical and financial health for individuals and the country.
In addition to concerns about the costs, choices and quality of care, the COVID-19 pandemic has highlighted gaps in the U.S. healthcare delivery and public health systems that have been present and worsening for decades. In contrast, the pandemic also demonstrated America’s ability to provide the best innovation and medical care in the world and has made Americans more invested in the intersection of health and everyday life.
WHY AFPI IS ESSENTIAL
There is stark contrast in the two potential directions of healthcare in the U.S.—Americans can be controlled or be in charge. Decisions about what, how, and where care is received should be made by patients and doctors, not by politicians and bureaucrats in Washington, D.C., state capitals, and industry. AFPI brings something invaluable to the table: total independence from the well-connected firms, special interests, and big government that have been prioritized above American workers and families for too long. Americans need to be first in healthcare decisions, and the AFPI team has experience in doing exactly this. AFPI will create healthcare policies and educate stakeholders to put the patient and doctor in control, dignify life, promote better health and health outcomes, improve access, and lower costs for Americans. This is critically important, as the health of Americans is essential for a thriving and prosperous country.
BUILDING ON A TRANSFORMATIVE AGENDA
The previous administration provided Americans with more healthcare options to put patients and doctors back in control. Americans were given more control over their healthcare dollars by repealing the individual mandate and expanding access to health savings accounts and health reimbursement arrangements. To create more flexibility across the board, the administration implemented affordable health plan options for individuals and families and issued over one dozen waivers to states to manage their individual markets. Through deregulatory efforts during the public health emergency, the administration championed an expansion of telehealth services to millions, accelerating the technological revolution of healthcare delivery seemingly overnight. President Trump signed legislation to end surprise medical billing and delivered hospital price transparency, which together, when fully implemented, will give patients important tools to regain control and optimize their health.
AFPI’s Center for a Healthy America works to create policies that give all Americans full agency in decisions that affect their health and well-being. The Center for a Healthy America’s policy priorities and implementation and strategic approaches are outlined below.
The primary policy goals will be broken into three categories of better care, more choice, and lower costs.
• Protect people with pre-existing conditions—educate stakeholders on policy proposals to ensure patients with pre-existing conditions have access to the care they need and address fear of catastrophic spending.
Drive patient control over medical records—promote full implementation of interoperability final rules and ensure patient health information is fully portable between providers.
Promote innovations in treatment for complex and common medical conditions— support continued investment and advancement in medical research and innovations, including the ongoing opioid crisis and increasing mental health needs.
Enhance access to trusted doctors and appropriate care when and where needed— educate stakeholders on improved access to innovative arrangements like direct primary care and technology solutions; address tight networks, high deductibles, and overly restrictive prior authorization.
Enhance pandemic preparedness—utilize lessons learned from the COVID-19 response to improve preparedness at every level—local, state, federal, and international—particularly rapid development of diagnostics, therapeutics, and vaccines for novel pathogens, wise utilization of public health dollars, and empowerment of individuals and families with accurate information and freedom to make personal health decisions.
Educate stakeholders on affordable health plans and alternative forms of coverage— promote access to health coverage tailored to individual needs, not a one-size fits all option determined by government bureaucrats in Washington, D.C., and increase understanding that coverage is not equivalent to care.
Promote individual control of healthcare dollars—educate stakeholders on financial assistance to people, not insurance companies; explore how to equalize the tax preference for employer-sponsored insurance and allow everyone to have Health Savings Accounts (HSAs); examine options to convert government spending into direct subsidies/vouchers; review alternatives to supplement the role of employers and government in helping individuals negotiate health coverage.
Expand telehealth for millions—allow Medicare beneficiaries to maintain increased access to care through virtual visits with medical providers regardless of where they live.
Support Exchange flexibilities – educate stakeholders on the benefits of policies that give states the flexibility to lower premiums for individual and family health insurance plans purchased on the public health exchanges, while still protecting pre-existing conditions.
Increase value-based care—increase plan options from private and public payers that pay for improved health and health outcomes.
• Lower prescription drug prices—educate stakeholders on policies that ensure American patients and American seniors are put first over pharmaceutical companies and middlemen.Promote transparent, upfront pricing—encourage full implementation of hospital and insurer price transparency final rules; model legislation for states based on research and policy.
End surprise billing—engage with stakeholders to ban balance billing and out-of- network cost sharing unless certain conditions are met for individuals, such as appropriate notice and consent.
Align market incentives—research and work with stakeholders to perform case studies on the impacts of aligning incentives on desired outcomes.
Understand impacts of consolidation on the practice of medicine and explore solutions—perform research, education, and engagement on:
o marketsdominatedbyalimitednumberoflargehospital/healthcaresystems o verticalintegrationdiscouragingnewentrantsandsmallbusinesses
o large hospital systems acquiring physician practices or causing physician
consolidation as counteraction
o high student debt discouraging providers from starting their own
• Evaluate government policies that impede competition and promote free-market
solutions—participate in policy development addressing: o scopeofpractice
o limits on access to HSAs, Health Reimbursement Arrangements, and other
consumer directed health plans
Cut waste, fraud, and abuse—promote program integrity in Medicare and Medicaid; support site neutrality policies; and improve quality measurement.
Enhance preventive care—educate stakeholders to improve preventive care to decrease future cost of untreated/poorly managed chronic conditions.
Through education and research, the Center for a Healthy America will work to return healthcare back into the hands of the American people through: Bold, evidence-based solutions to well-known problems that have been ignored for too long.
Implementation of transparency in the costs of care and insurance to avoid unexpected medical bills.
Individual agency and full control of how personal healthcare dollars are spent.
Improved and actionable healthcare quality measurement, reporting, and
Impactful partnerships with stakeholders to study and inform model policies based
Innovation hubs to facilitate private sector resource development based on free-
market principles and on free-market regulations implemented over the past four years, such as linking medical records and pricing tools in apps.
In order for America’s healthcare system to return to its primary mission of improving the health and health outcomes of Americans and to reach its full potential, research and policy development must focus on putting patients first to improve the individual and population health of America.
Federal policy: For federal policy matters, including proposing new legislation and/or regulations based on research and policy, the AFPI Center for a Healthy America engages with healthcare leaders and stakeholders to advance shared goals.
State policy: The Center for a Healthy America devotes significant time and resources to educating state and local stakeholders on legislative and regulatory policies based on research that put patients first. Model policies based on our research can then be applied in multiple states.
Private sector: A key aspect of the Center for a Healthy America’s prioritization of America’s patients is the fostering of American innovation and ingenuity, much like that which allowed a COVID-19 vaccine to be developed in only eleven months through Operation Warp Speed. We will support private sector development and execution of free-market policy solutions to address long-standing market failures in healthcare delivery. Further, we will work to advance the research and development of life-saving medications and technologies and support scientists by removing unnecessary bureaucratic barriers.
Public engagement: The Center for a Healthy America educates Americans through events and initiatives that show rather than tell how our policies will tangibly impact their daily lives and benefit the health of individuals, families, communities, states, and the nation.
APPLYING A TREATMENT PLAN FOR AMERICANS
Whether it is one’s personal health, family’s health, employer benefit package, cost of medication, length of time to see a physician, or impact of the latest public health guidance, healthcare is often top of mind for Americans. It makes sense then that healthcare system reform consistently tops the list of the greatest public policy concerns of Americans. Unfortunately, the country’s decades-long debate on healthcare has too frequently maintained the status quo rather than promoting policies that put Americans first. As a result, specific populations and sectors have seen their agency and control stripped away and replaced with onerous mandates and regulations. With this is mind, the Center for a Healthy America has applied a customized assessment and treatment plan, much like the tools used by physicians during an office visit (using a medical “SOAP” note—subjective, objective, assessment, and plan—format), to four key groups—patients, doctors, employers, and states—in order to facilitate targeted interventions.
Subjective/Objective: In addition to the rising costs and decreasing choices discussed previously, the persistent rise of chronic conditions in the U.S., specifically cancer, stroke, diabetes, chronic kidney disease, Alzheimer’s disease, and chronic lung disease, indicates that our healthcare system is not fulfilling its primary goal of improving the health of Americans (Partnership to Fight Chronic Disease, n.d.). There is both underutilization of preventive care, with only 8% of U.S. adults aged thirty-five and older receiving all of the high- priority, appropriate clinical preventive services in 2015, and vast overutilization of medical services, with a 2017 survey of physicians finding that 21 percent of medical care was unnecessary (Borsky et al., 2018; Lyu et al., 2017).
Assessment: It is critical for the U.S. to comprehensively shift away from a healthcare system that is incentivized to treat illness to a system that is incentivized to deliver improved individual and societal health by implementing innovative solutions to the complex interplay of the economic, behavioral, social, and biological factors that contribute to overall health.
Plan: The Center for a Healthy America prioritizes restoring the mission of the U.S. healthcare system to one that improves the health of Americans above all else. To give Americans more agency in how they interact with the healthcare system, we must address the high costs that keep patients from seeking care, particularly those with chronic conditions, and the limited choices they encounter when they do seek care. As a result, Americans will be empowered to improve their health and feel that the healthcare system works to their benefit as originally designed.
Subjective/Objective: In 2020, amidst working through a global pandemic, 42% of physicians reported they were burned out, with 55% of physicians reporting that too many bureaucratic tasks contributed most to burnout (L. Kane, 2020). The following underlying issues often contribute to bureaucratic tasks: Paperwork: A 2016 study showed that for every hour of direct patient care, clinicians spend an additional two hours on paperwork (Sinsky et al., 2016). During the Trump Administration, CMS addressed this through the “Patients Over Paperwork” initiative, which resulted in estimated savings of $6.6 billion and 42 million burden hours to the medical community through 2021 (Centers for Medicare & Medicaid Services, n.d.). Importantly, the finalization of two rules by the U.S. Department of Health and Human Services in March 2020 created interoperability for medical records, empowering patients with more control to ensure their doctors and care teams can always access needed information in a timely, secure manner, which improves their ability to provide high quality care (U.S. Department of Health and Human Services, 2020).
Prior Authorization: In a December 2019 survey by the American Medical Association, 86% of physicians reported that prior authorizations are a high burden in their practice and had increased over the last five years (American Medical Association, n.d.).The Trump administration proposed a rule in December 2020 that would streamline processes for prior authorization, but system-wide implementation must occur before physicians will see the benefits (Centers for Medicare & Medicaid Services, 2020).
Trend Towards Physicians as Employees and Large-group Practices: In 2018, for the first time, more physicians were employees than were owners of healthcare practice sites (C. K. Kane, 2019). Large group medical practices continue to grow amidst the changing healthcare landscape, with a rapid shift from 2013-2015 (Muhlestein & Smith, 2016).
Workforce: According to the U.S. Bureau of Labor Statistics, the healthcare and social assistance sector is the fastest growing sector of the economy at a projected growth of 14.6 percent from 2019 through 2029, with the aging population, longer life expectancies, and an increasing number of individuals with chronic conditions contributing to the rising demand (U.S. Bureau of Labor Statistics, 2020). A 2013 report from the Health Resources and Services Administration projected a shortage of 20,400 primary care physicians in 2020, with the potential to reduce the shortage to 6,400 primary care providers if nurse practitioners and physician assistants were increasingly integrated in health care delivery systems (Health Resources and Services Administration, 2013).
Assessment: The impacts of the COVID-19 pandemic on the healthcare workforce landscape remain to be determined, but it is likely to only increase the need to lessen bureaucratic burdens to allow clinicians to return their focus to caring for patients.
Plan: The Center for a Healthy America recognizes that restoring the foundational relationship between doctors and patients is an essential element of improving the health of Americans. AFPI seeks to address policies and misaligned incentives that overburden clinicians, takeover the decision-making and business practice, and limit the entirety of the healthcare workforce from working together to best meet the needs of Americans in diverse settings.
Subjective/Objective: The increasing costs of healthcare have significantly impacted employers in America.
Employer contributions to premiums for family coverage increased from an average of $9,773 in 2010 to an average of $15,754 in 2020 (Kaiser Family Foundation, 2020).
The Society of Human Resources Management estimates another 5.3% increase to
their health benefits costs in 2021 (Miller, 2020). From 2008 to 2018, employer premium
shares increased 51% while workers’ wages increased only 26% (Rae et al., 2019).
The Affordable Care Act’s requirement for firms with 50 or more full-time employees to provide health insurance is a greater burden to smaller firms, as costs are about one-third more per worker than the costs for firms with more than 10,0000 workers
(Council of Economic Advisers, 2021).
The National Bureau of Economic Research found that between 28,000 to 50,000
business nationwide eliminated an estimated 250,000 positions to avoid being subject to the employer mandate (Mulligan, 2017).
Assessment: The ability of employers, particularly small businesses, to offer jobs as well as offer competitive health benefits and worker wages has been adversely impacted by rising healthcare costs.
Plan: The Center for a Healthy America is committed to promoting innovative solutions for America’s employers, especially small businesses, to serve the best interests of their employees in both promoting their health and their economic prosperity. Taking good care of employees is a core value for American businesses and ensuring a healthy America is key to their continued success.
Subjective/Objective: As discussed previously, rising Medicaid expenses generally means state policymakers have less funds available for other priority areas like public education, workforce development, public safety, housing, transportation, tax cuts, and more. Additionally, the Affordable Care Act expanded the role of the federal government in healthcare and encroached on states’ rights. Court cases challenging the law’s constitutionality created important protections for state self-governance, specifically with the Medicaid expansion decision in National Federation of Independent Businesses (NFIB) v. Sebelius (Focus on Health Reform, 2013).
Assessment: Rising healthcare costs and expansive federal government impedes the principle of federalism in healthcare policy and limits the ability of states to govern effectively and innovatively.
Plan: The Center for a Healthy America celebrates the diversity of states and their populations as the core fabric of America. Therefore, policymaking that serves the unique needs of each state is an integral part of the vision to put Americans first and improve health of individuals and populations in our country.
The Center for a Healthy America is invested in improving the health of Americans now and for generations to come. As the U.S. emerges from the COVID-19 pandemic, it is critical to collectively work towards a healthcare system that achieves a core mission of improving the health of all Americans while continuing to be at the forefront of medical innovation and scientific discovery. We believe this is best achieved by putting healthcare back into the hands of the American people and working every day to deliver better care, more choice, and lower costs. In the long-term, this will empower all Americans—no matter their background, income level, race, or ethnicity—to live healthy lives in order to fully realize their potential and achieve their dreams.
Former Governor Bobby Jindal is Chairman of the Center for a Healthy America at the America First Policy Institute.
Heidi Overton, M.D., is Director of the Center for a Healthy America at the America First Policy Institute.
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