Will AI-Based Automation Replace Basic Primary Care? Should It?

By KEN TERRY

In a recent podcast about the future of telehealth, Lyle Berkowitz, MD, a technology consultant, entrepreneur, and professor at Northwestern University’s Feinberg School of Medicine, confidently predicted that, because of telehealth and clinical automation, “In 10-20 years, we won’t need primary care physicians [for routine care]. The remaining PCPs will specialize in caring for complicated patients. Other than that, if people need care, they’ll go to NPs or PAs or receive automated care with the help of AI.”

Berkowitz isn’t the first to make this kind of prediction. Back in 2013, when mobile health was just starting to take hold, a trio of experts from the Scripps Translational Science Institute—Eric Topol, MD, Steven R. Steinhubl, MD, and Evan D. Muse, MD—wrote a JAMA Commentary arguing that, because of mHealth, physicians would eventually see patients far less often for minor acute problems and follow-up visits than they did then.

Many acute conditions diagnosed and treated in ambulatory care offices, they argued, could be addressed through novel technologies. For example, otitis media might be diagnosed using a smartphone-based otoscope, and urinary tract infections might be assessed using at-home urinalysis. Remote monitoring with digital blood pressure cuffs could be used to improve blood pressure control, so that patients would only have to visit their physicians occasionally.

More recently, in an interview for my new book, Peter Basch, MD, an internist and health IT expert at MedStar Health in Washington, D.C., told me his colleagues believed that between 10% and 70% of patient encounters with primary care physicians could be done via telemedicine. “There are visits that are necessary—new patients, people with new episodes of a condition, or who have belly pain or chest pain. But what fills up most of my days as an internist are routine follow-ups for hypertension and diabetes and so forth. I need to see your BP and your blood sugar, and if there’s a question, come in.”

But Berkowitz went well beyond these prognostications in his podcast interview. He told his interviewer, non-physician Jessica DaMassa, “A lot of primary care can be commoditized: it’s routine and repeatable. I could teach you how to do it. An AI robot could tell the patient when they need to see a doctor.”

In fact, Berkowitz, added, a computer can do a better job of routine primary care than the typical doctor does, because the computer is less likely to overlook something.

Referring to the pressure on physicians to see more patients, he said, “Let’s automate base-level care; then doctors can focus on patients who really need their help.”

That remark reminded me of my old friend, Joseph Scherger, MD, a family physician and a longtime thought leader in health IT. Many years ago, Scherger was emailing routinely with his patients–at a time when that raised eyebrows among his colleagues—so that he’d have more time to spend with those who really needed to be seen in person.

When I asked Scherger what he thought of Berkowitz’s future vision of primary care, he said, “While this area [of telehealth] will grow and the generation under age 50 will welcome the convenience of getting care this way, it ignores the importance of the relationship with a primary care physician as people age and develop chronic health problems.  That role for FPs will endure.  Also, parents with children, especially under age 10-12, will want a physician most of the time.”

Scherger doesn’t view telehealth as operating in isolation from the doctor-patient relationship, as it would if “basic-level care” were automated. “When you already have a deep relationship with a patient, telehealth can be used for even more than minor stuff,” he said. “The more accessible the communication, the more reinforcing of the relationship it is. It’s much like communicating with your loved ones by email or FaceTime.”

In Eric Topol’s latest book, Deep Medicine, Scherger added, Topol argues strongly in favor of building on the doctor-patient relationship, but with better technology-mediated intelligence. The subtitle of the book: How Artificial Intelligence Can Make Healthcare Human Again.

While AI algorithms can be used to help doctors pinpoint a diagnosis or navigate a medical decision in some cases, it’s unclear how safe or effective they are when flying solo. As Hans Duvelt, MD, pointed out in a blog post entitled “Medicine is Not Like Math,” what a doctor does cannot be easily compared to a quantifiable, standardized endeavor like manufacturing. What a doctor runs through in his head in seconds when he sees a patient is based on experience and subtle symptoms that an algorithm “seeing” a patient on a telehealth hookup might miss.

As a patient, I find Berkowitz’s thesis troubling in other ways: If I were receiving automated care for symptoms that I thought were serious, how would I feel if the algorithm told me that my stomach pain didn’t rise to the level where I needed to see a clinician? How could I be confident that this conclusion was accurate?

Would the algorithm grasp that, with my particular chronic condition, I should be reminded to do certain things or seek particular kinds of care that had nothing to do with the reason I had contacted my doctor’s office?

If I were a patient who was likely to follow a doctor’s advice to say, quit smoking, would I do the same thing if a computer told me to? If I was a noncompliant type of patient, would the AI robot be able to persuade me that this time, I should really take my blood pressure medication regularly? Would I be able to explain that I couldn’t afford the drug, and perhaps the physician should prescribe something less expensive?

The questions are endless. But anyone who has spent time dealing with tech support chatbots will sympathize with my view that we’re already too much at the mercy of automated systems that don’t recognize our humanity and don’t care about our pain.

Berkowitz’s argument that telehealth should be used more widely and that it can help relieve physicians of some routine tasks is well taken. While we’re still not at the point where we can trust the accuracy of most home monitoring devices, they can help alert doctors to trends that might prove dangerous to a patient’s health. But if and when the technology becomes more reliable, we’ll still need to consult physicians who know us and have our best interests at heart.

Ken Terry is a journalist and author who has covered health care for more than 25 years. His latest book, Physician-Led Health Care Reform: A New Approach to Medicare for All, was recently published by the American Association for Physician Leadership.

New Technologies Drive Cost Growth Over Time

By KEN TERRY

(This is the eighth and final installment in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Medical technologies include drugs, devices, tests, and procedures. Considered as a whole, these technologies are the key driver of growth in health costs, according to Georgetown University professor Gregg Bloche and his associates.

Bloche, et al., view insurance coverage as the chief enabler of these technological innovations. In a 2017 Health Affairs Blog post, they said,Drug and device developers, clinical researchers, and their financial backers anticipate coverage for new tests and treatments with little concern for whether they add substantial therapeutic value, and they make research and development decisions accordingly.”

In an interview, Bloche further explained, “If you’re a technology developer, you can reasonably anticipate that if your product achieves a low but significant health gain, insurers are going to be under pressure to pay for it.”

Insurers do cover most new drugs, although they may make it difficult for patients to access the ones that they deem to be low-value, notes Peter Neumann, director of the Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center in Boston.

“It’s hard to find a payer who says we’re not paying for that thing because it’s not cost-effective,” he says. “Instead, they put restrictions on products based on the strength of the evidence, probably influenced by the cost-effectiveness and certainly by the clinical effectiveness. You can get that expensive new drug for multiple sclerosis or rheumatoid arthritis, but you have to fail all the cheap drugs first.”

Despite these cost control efforts, the proliferation of new technologies is a bigger cost driver than all the waste and fraud in the system, says Amitabh Chandra, a professor of public policy and business administration at the Harvard Kennedy School. “The number one reason why insurance premiums increase is these medical technologies that have dubious or small medical effectiveness,” he says.

Technology and Prices

Health policy experts assign different weights to the role of prices and technology in cost growth. In the famous article “It’s the Prices, Stupid,” by the late health economist Uwe Reinhardt and his colleagues, and a 2019 follow-up piece by the surviving coauthors, the health economists argued that high U.S. prices explain most of why our health costs are so much higher than those in other advanced countries.

The other major contributor to cost growth, they acknowledged, is “service intensity,” which includes technology. However, they said, it’s hard to define service intensity or separate it from price.

Bloche agreed that other countries have lower health costs than the U.S. does principally because their national health systems can negotiate lower prices with providers. But, even if the U.S. had a single-payer system, he noted, it would only be able to get a one-time cost-reduction by bargaining with providers. After that, he said, cost growth would resume at about the same rate as in other advanced countries because of new technology.

However, it’s difficult to distinguish the impact of technological advances from price growth. As the availability of technology increases, so do the prices charged for care. In 2015, for example, the United States had 39 MRI units per one million people, compared to the Organisation for Economic Co-operation and Development (OECD) median of 12.6. Similarly, the United States had 41 CT scanners per million in 2015, compared to the OECD median of 17.8. American providers use those machines routinely, ordering expensive imaging tests far more often than do their peers in other OECD countries.  And as it happens, our overall health costs are much higher than in those other nations.

New procedures also increase costs, partly because they don’t always replace older procedures. After angioplasties and stents came along, for example, millions of people had those procedures, but there was no decrease in the number of coronary artery bypass graft procedures. Other minimally invasive procedures have replaced open surgeries, but have resulted in more people getting the laparoscopic operations.

[Terry K. Rx for Health Care Reform. Nashville: Vanderbilt University Press;2007:283]

Changing practice patterns have also increased spending on some drugs. For example, statin drugs have benefited many people at risk for heart disease, but over time, changes in clinical guidelines have expanded the eligibility of patients for these cholesterol-lowering drugs. A recent analysis suggested that statin use in low-risk patients has little value and wastes healthcare resources.

It has also been suggested—usually by drug companies—that some new technologies save money because they prevent hospitalization or detect disease at an early stage, when it can be treated more cheaply. This is frequently true in individual cases. But when experts analyze the impact of technology on population health costs over time, they find that it increases costs more often than it saves money.

“New technologies tend to increase overall costs,” says Neumann. For example, he notes, genomic tests are being developed to determine which medications a particular patient will respond to best. Such tests might reduce the amount of wasteful drug spending, but any savings that accrued from the use of this technology, Neumann says, would be overwhelmed by the number of people having their genomes sequenced and getting those tests.

Ken Terry is a journalist and author who has covered health care for more than 25 years. He tweets @kenjterry.

Obstacles to Value-Based Care Can Be Overcome

By KEN TERRY

(This is the seventh in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Even in a healthcare system dedicated to value-based care, there would be a few major barriers to the kinds of waste reduction described in this book. First, there’s the ethical challenge: Physicians might be tempted to skimp on care when they have financial incentives to cut costs. Second, there’s a practical obstacle: Clinical guidelines are not infallible, and large parts of medicine have never been subjected to rigorous trials. Third, because of the many gaps in clinical knowledge, it can be difficult for physicians to distinguish between beneficial and non-beneficial care before they provide it.

Regarding the ethical dimension, insurance companies often are criticized when they deny coverage for what doctors and patients view as financial reasons. Physicians encounter this every day when they request prior authorization for a test, a drug, or a procedure that they believe could benefit their patient. But in groups that take financial risk, physicians themselves have incentives to limit the amount and types of care to what they think is necessary. In other words, they must balance their duty to the patient against their role as stewards of scarce healthcare resources.

On the other hand, fee-for-service payment motivates physicians to do more for patients, regardless of whether it’s necessary or not. In some cases, doctors may order tests or do procedures of questionable value to protect themselves against malpractice suits; but studies of defensive medicine have shown that it actually raises health costs by a fairly small percentage. More often, physicians overtreat patients because of individual practice patterns or because they practice in areas where that’s the standard of care. As long as doctors believe there’s a chance that the patient will benefit from low-value care, they can justify their decision to provide that care.

The Institute of Medicine (IOM), in its book Crossing the Quality Chasm, neatly encapsulated the contrasting incentives of fee for service and prepaid or budgeted care.

Under fee for service, there is a potential for overuse of services by increasing the intensity of care and treating more patients. Also, since the method is based on individual units of care or service, it can be difficult to coordinate payment across the many members of a care team….

The advantages of a budgeted approach are that it provides an incentive to control costs and produce care efficiently, and can encourage innovation in cost-reducing technologies, use of lower-cost settings of care, and investment in health promotion and disease prevention….Disadvantages include the potential for risk selection to avoid patients who might be high-cost users of care, and the potential to provide insufficient or reduced quality of services to minimize costs and stay within budget.

[Institute of Medicine. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington, DC: National Academy Press; 2001:186-188]

Risk adjustment can eliminate the temptation to shun higher-risk patients, and the use of data analytics—which hardly existed when the IOM book was written—can help at-risk groups stay within their budgets without skimping on care. To be successful, the primary care groups in the physician-led reform model would have to incentivize their doctors to provide high-quality care, first and foremost. Kaiser Permanente’s physicians, for example, receive salaries and are not directly incentivized to cut costs. Instead, the group culture has internalized efficiency.

“Separating clinical decision making from actual payment is what drives quality,” Richard Isaacs, CEO and executive director of the Permanente Medical Group, told me. “That’s patient-centered care, where you’re doing what’s best for the patient.”

Wasteful vs. Beneficial Care

One reason waste is hard to eliminate is that it’s often difficult to detect. In the book The Hippocratic Myth, M. Gregg Bloche, MD, a professor of law at Georgetown University, says that while up to 30% of healthcare might be wasted, “we don’t know, until after the fact, which care is pointless under what conditions.”

While one might expect that experienced physicians know how to distinguish between beneficial and non-beneficial care, that assumption presupposes that they’ve been able to keep up with the latest studies, Bloche said in an interview. Moreover, he noted, “the majority of clinical scenarios are not situations that have been studied and analyzed in a randomized controlled fashion. Even when there have been randomized controlled trials, the inclusion criteria required to make such studies effective statistically are pretty narrow. That’s great from the perspective of doing a good study. But the more you narrow the inclusion criteria, the less relevant your study is to patients in the wild.”

Nevertheless, there are many common scenarios where doctors know perfectly well whether care is being wasted. That’s why three of four U.S. physicians said in a 2017 survey that the frequency with which doctors order unnecessary medical tests and procedures is a serious problem for the health system.

Meanwhile, busy doctors can’t keep up with the flood of new evidence, and many of them prescribe drugs pushed by sales reps brandishing biased studies. Even when physicians follow guidelines based on rigorous trials, some of their patients don’t respond well to what those guidelines recommend. Hence, if a group requires its doctors to follow agreed-upon protocols, they must be given the freedom to deviate from them.

Despite all these caveats, however, it’s physicians who provide, order, or supervise most of the care that patients receive. Consequently, they are the only healthcare players who can significantly reduce the waste in the system. But they’re not going to do it under external pressure. Rather than being buffaloed by insurance companies, as many doctors are today, they should take the buffalo by the horns and manage care themselves. Because physicians have a trust relationship with their patients, they also have a unique ability to persuade patients that more care isn’t always better care. If our country is going to make a real effort to cut waste enough to make healthcare affordable, physicians are the ones to do it.

Ken Terry is a journalist and author who has covered health care for more than 25 years. He tweets @kenjterry.

Slow Walking to Value Based Care: Why Fee for Service Still Rules

By KEN TERRY

(This is the second in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

In January 2015, then Health and Human Services Secretary Sylvia Burwell announced lofty goals for the government’s value-based payment program. By the end of 2016, she said, 85% of all payments in the traditional Medicare program would be tied to quality or value, and 90% would be value-based by the end of 2018.

The government planned to tie 30% of Medicare payments to alternative payment models by 2017, according to Burwell, and hoped to reach the 50% mark by 2018. In March 2016, HHS said it had reached the 30% goal a year ahead of schedule, mainly because of the Medicare Shared Savings Program (MSSP).

More recent data on the value-based-care movement comes from the Health Care Payment & Learning Action Network (LAN), a public-private partnership launched in 2015 by the Department of Health and Human Services. The LAN reported in October 2018 that public and private payers covering 226 million lives, or 77% of insured Americans, had tied 34% of their payments to value-based care. According to the organization, only 23% of total payments had been value-based in 2016.A deeper analysis of the LAN data, however, shows that the vast majority of value-based payments—both in Medicare and in the larger healthcare system—were still limited to pay for performance, upside-only shared savings, and care management fees paid to patient-centered medical homes.

More recently, the Catalyst for Payment Reform, a nonprofit firm funded by payers, found that 53% of commercial payments to hospitals and doctors in 2017 could be classified as value-oriented. However, the report said, 90% of value-oriented payments were built on fee for service and just 6% involved downside financial risk—about the same as in 2012.

Without downside risk, most observers agree, providers will not significantly cut costs.Evidence to support this viewpoint can be found in data from the MSSP. In 2016, for example, ACOs in two-sided risk models accounted for only 10% of the ACOs in the MSSP, but generated almost 30% of the total savings. “The average ACO in a one-sided risk model saved $1.3 million against its benchmark,” noted an article about this trend. “The average ACO in two-sided risk models saved $4.5 million—over three and a half times greater savings.”

Stuck on Fee for Service

What is the evidence that the healthcare industry is moving from fee for service to risk-based arrangements? David Blumenthal, MD, president of the Commonwealth Fund, replies, “As I listen to people in the healthcare sector talk about the future of payment, most accept the premise that value-based payment and risk sharing are going to grow in prevalence. But the evidence for risk sharing is not as strong as the evidence for pay for performance. So, I think it’s an open question.”

David Muhlestein, chief strategy and chief research officer for Leavitt Partners, has studied ACOs and the evolution of risk. He says there has been an increase in the number of providers who are taking downside risk, either through two-sided shared savings or capitated models. “But for the vast majority of providers, this is still a small minority of their total revenue. Even if you’re fully capitated for 5% of your revenue, and the other 95% is fee for service, you’re going to optimize [how you do business] around the fee-for-service component, not on that 5% capitation. And that’s what we’ve seen: very few organizations have sufficient revenue through any level of risk that justifies making changes that cannibalize or in some other way hurt their fee-for-service revenue, which dictates their profitability.”

Slow Walking to Value-Based Care

In the view of Grace Terrell, MD, the former CEO of Cornerstone Medical Group in North Carolina and a board member of the American Medical Group Association, hospitals and healthcare systems across the country are “slow walking” toward value-based care. “Some hospitals are very good at fee-for-service medicine,” she notes. “It’s really hard to do these changes, and the slower it goes, the easier it feels to them.”

She offers a startling example of how some hospitals have reacted to CMS’s Value-Based Purchasing program. A hospital chief medical officer privately told her that it was not financially worthwhile to reduce readmissions. “He said, ‘We’ll take the risk of the 30-day readmissions penalty [from Medicare], because we’ll make so much from our continuous churn [of inpatient beds] that it’s not worth bothering with.’”

Healthcare consultant Michael La Penna is not surprised by this story. Although such a sentiment would never be voiced in public or at a hospital board meeting, he says, hospitals’ financial decisions tend to be based on how a particular course of action affects their throughput and occupancy rate. If they have to make a choice between hiring two new ER doctors to increase admissions or hiring nurses to manage high-risk patients at home, for example, they’ll choose the ER physicians, he points out.

Hospitals are slow walking to value-based care, he says, because they need to fill beds, and the potential rewards from shared savings or risk contracts aren’t enough to make up the difference if they reduce their admissions.

Muhlestein agrees that hospitals are taking their time in transforming their business model. “There’s the view that the future belongs to these risk-based models, where you need to manage patients appropriately,” he explains. “Then there’s the present reality that fee for service dictates whether you keep the lights on. The health systems talk about better ways to manage high-cost, high-risk patients, but at the same time they continue to play the fee-for- service game they’re good at.”

Despite the pressure from some payers to assume risk, he adds, “It’s just a reality that lowering average length of stay while improving your daily census and negotiating better contracts with payers is what moves the needle in the short-term, and that’s where the focus is.”

Ken Terry is a journalist and author who has covered health care for more than 25 years.

Physicians Should Lead on Healthcare Reform

By KEN TERRY

(This is the first in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Even before COVID-19, healthcare reform seemed to be stuck between a rock and a hard place, but there is a rational way forward. This approach, which I call “physician-led healthcare reform,” would engage doctors in building a healthcare system that was safe, effective, patient-centered, timely, efficient, and equitable, to use the Institute of Medicine’s set of foundational goals in its landmark book, Crossing the Quality Chasm: a New Health System for the 21st Century.Primary care physicians, rather than hospitals, would be in charge of the system, and they’d work closely with specialists and other healthcare professionals to produce the best patient outcomes at the lowest cost.

It would take a decade or more to restructure the healthcare system so that this goal could be achieved. Similarly, the transition to a single-payer insurance system needs to be accomplished gradually—although the pandemic might accelerate that timetable. Most people are not yet ready to abandon employer-sponsored insurance, and there’s still a lot of distrust of the government. Providers are more likely to accept changes in how they’re paid over time than all of a sudden. Additional benefits can also be brought online slowly. Ideally, we could transform healthcare financing over a 10-year period while rebuilding the care delivery system at the same time.

That is why implementing Medicare for America—a reform plan devised by the Center for American Progress and embodied in a current House bill–makes more sense than going directly to Medicare for All: it changes the system incrementally while achieving universal coverage fairly quickly. Medicare for America would do this by enrolling the uninsured, people who purchase individual insurance, and those now in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). People would also be enrolled automatically at birth. Companies could enroll their employees in Medicare for America, and employees could opt out of employer-sponsored plans and enroll in the public plan.

Gerald Friedman, a University of Massachusetts Amherst economist who crunched the numbers for Bernie Sanders’ 2016 Medicare for All bill, objects to Medicare for America because it includes a major role for private health plans; however, an approach like this could gradually move us away from private insurance and could morph into a single-payer system over time. If so, the taxes required to support the system would have to be raised. Nevertheless, private insurance premiums would go away and insurance costs (or health taxes) for individuals would become income-related, greatly increasing affordability. Whatever gap that left in healthcare financing could be filled by raising taxes on the wealthy and corporations.

The big debate would be over how much to increase benefits. Should they be limited to the “essential” health benefits required of plans on the ACA insurance exchanges? To what extent should vision, hearing, dental, and behavioral healthcare be covered? How much long-term care should the program encompass? Should coverage of long-term care exclude institutions such as nursing homes, as Sanders proposes? Should there be any cost-sharing?

Other countries with national health insurance have faced the same challenges and have found their own solutions. Cost-sharing barely exists in Canada, but 12% of Canadians have private insurance that covers vision and dental care, prescription drugs, rehab services, home care, and private hospital rooms. In the United Kingdom, similarly, about 10% of residents buy private plans that primarily allow them to avoid long waits for elective surgery. In Germany, more than 90% of the population is in the statutory health insurance system (those with higher incomes can opt for expanded private coverage), but personal outlays on drugs, nursing homes, and other items accounted for 13% of health spending in 2014. The French have coinsurance of 20% for inpatient care, 30% for doctor visits, and 30% for dental visits. They also pay out of pocket for dental and vision services.

Cost-sharing and some limitation on benefits could get us on the path to financing the extra costs of national health insurance if we don’t favor large increases in taxes. High out-of-pocket costs or poor benefits, however, would limit access to healthcare.

We don’t have to wait for care delivery reform before implementing universal coverage. To control costs, though, our very inefficient, fragmented system needs major renovation work while we’re in the process of covering everyone. In addition, we must find a way to reduce the costs of drugs and new technologies without stifling innovation. If we do all of this properly, we could have national health insurance within a decade, along with a care delivery system designed to control healthcare costs in a way that patients and providers could accept.

A number of health policy experts have pointed out recently that healthcare providers would be weathering the pandemic far better if they’d moved from fee for service to value-based payments. If they’d been capitated, for example, they would have received guaranteed monthly payments instead of seeing their fee for service income plunge. But unless doctors are willing to take a fair amount of financial risk—which, so far, most of them have been unwilling to do—this vision cannot come true. Whether they will do so in the future depends on how much the pandemic breaks them financially and whether a future government is willing to remove the obstacles in their way.

Ken Terry is a journalist and author who has covered health care for more than 25 years.

Health Insurers Ride High for Now, But Watch What’s Coming Next

By KEN TERRY

In the strangest healthcare business story of 2020, the major health insurance companies are thriving despite—or because of—the pandemic. As the second quarter reports of United, Anthem, Cigna and other insurers reveal, their COVID-19-related costs were outweighed by the sharp drop in claims for other healthcare services.

As a result, the second quarter operating gain for Anthem, one of the largest national carriers, jumped 65% from the prior-year period, while the portion of its premiums spent on member benefits dropped to 78%. The earnings of UnitedHealth, similarly, vaulted 98% as the percentage of its premiums spent on health care fell to 70.3%. Such a low “medical loss ratio” has probably not been seen since the 1990s.

At the same time, the big insurers’ membership has been rising, but not among workers covered by employer-sponsored plans. Commercial insurance members served by United, for example, fell by 270,000 to 26.8 million, following a drop of 720,000 in Q1. In contrast, the number of people in United’s Medicaid managed care plans rose by 330,000.

These trends track with the short-time fallout of the pandemic. Families USA reported that 5.4 million workers who lost their jobs from February to May also lost their health insurance. Another study predicted that by the end of 2020, 10.1 million people will lose employer-based insurance tied to someone in their household.

The majority of the newly uninsured will eventually be covered by a family member’s plan, Medicaid or Obamacare if they don’t go back to work. Most Medicaid recipients are covered by private plans, and commercial insurers joust with each other for members on the state and federal insurance exchanges. So everything is coming up roses for the health plans, right?

Wrong.

First of all, insurers will inevitably raise their rates in the fall, in advance of the 2021 enrollment period. It’s unclear how steeply those rates will rise, but the trends that are currently holding down medical costs cannot last for long. In the pandemic’s early stage, elective surgeries fell by substantial margins, but more are being performed as state bans have disappeared and the need to do these procedures has become more pressing. Also, while office visits were down by 30% in late May and are still down significantly, patients will return to offices and ERs as their medical needs and emergencies increase.

How big a wave this may be is demonstrated by a new study of “excess deaths” in the U.S.—deaths that are more numerous than expected. In just March and April of this year, the researchers found, about 505,000 deaths were reported, of which 87,000 were excess. In the latter group, about 56,000 (65%) were attributed to COVID-19. In 14 states, including California and Texas, more than 50% of deaths were attributed to causes other than COVID. This suggests that a lot of people who desperately needed care avoided it in the initial stage of the pandemic. However, as unmet medical needs mount, more people will seek care in the future.

Knowing that to be the case, and knowing that they’ll probably have to continue covering the total cost of COVID testing and treatment, it’s likely that insurers will present hefty rate hikes to employers and individuals. The fees that self-insured employers pay insurance companies for administrative services may not rise as much, but their claims payments will.

Early indications from the nation’s health insurance exchanges are that next year’s premiums will be up only slightly or even down in some cases. But many of the health plans surveyed by the Kaiser Family Foundation were not factoring in their COVID-19 costs in 2021. Moreover, in states like New York and Connecticut, some big plans are asking for rate increases of 10%-12% for their exchange plans, according to filings in those states.

Enter Joe Biden. If the former Vice President wins the November election, he’s going to be  dealing mainly with the COVID-19 emergency for the first year of his presidency. But his platform includes a “public option” that other Democrats—especially those in the party’s progressive wing—are likely to hold him to. That government health plan would be open to employees of companies that offer insurance, individually insured people and the uninsured.

Under the Biden program, the public plan would bargain with hospitals and other providers to hold down costs. If a sufficient number of people joined the plan, it would have a fair amount of leverage—not as much as Medicare for All would, but enough to undercut private insurers. That is why they opposed a public option so fiercely in the runup to the Affordable Care Act.

So here’s what the big insurers are looking at in 2021: a pandemic that’s likely to go on at least through the end of next year, with continuing high costs for COVID-19 care; the political imperative to keep on paying their members’ share of those costs; a major drop in their commercial insurance membership and revenues; and a rise in less lucrative Medicaid and insurance exchange business. Meanwhile, if and when Biden’s health program is enacted, some employers are likely to bail on the insurers when they realize it’s less expensive to give their employees money to join the public plan than to pay private insurance rates for them.

Where will all of this lead? Eventually, if healthcare financing becomes more unstable, the number of uninsured people rises, and there’s a stampede to the public plan, there will be an overwhelming demand for Medicare for All. We were always going to get there eventually, because our healthcare financing system is unsustainable. As a result of the pandemic and the likely election of Joe Biden, however, we’re probably going to reach that goal much sooner. So insurance companies have plenty to worry about as they go into next year.

Ken Terry is a journalist and author who has covered health care for more than 25 years. His latest book, Physician-Led Health Care Reform: A New Approach to Medicare for All, was recently published by the American Association for Physician Leadership.Ò

Collective State Action Is Needed to Fight This Pandemic Right Now

By KEN TERRY

As COVID-19 cases soar across the country, the federal government has lost control of the situation. Amid the Trump Administration’s happy talk and outright dismissal of the crisis, the U.S. is experiencing a forest fire of contagion and hospitalizations, and an upsurge in COVID-related deaths has already begun.

Other countries like Taiwan, South Korea, Germany, Australia and New Zealand have controlled their outbreaks, which is why their COVID-19 infections and deaths have been minimal or trending downward in recent months. To replicate those nations’ strategies of testing, contact tracing and quarantining, the U.S. Congress would have to appropriate about $43.5 billion, according to one estimate. But as we know, Senate Republicans won’t pass such a bill without Donald Trump’s prior approval—and that’s unlikely as long as his main focus is on reopening the economy.

We can hope that electoral victory by the Democrats in November will change this equation, but Joe Biden won’t take office until January if he wins. Meanwhile, the coronavirus is chewing up America. We can’t afford to wait six months to blunt the impact of this horrible disease. However, there is a solution that doesn’t depend on federal leadership: states can form compacts that would form the basis for collective action to get us out of the trap we’re in.

Interstate compacts are very common in the U.S. Various pacts cover everything from clean water and clean air to medical licensure, mental health and interstate transportation. For example, under the Middle-Atlantic Forest Fire Protection Compact, which includes Ohio, West Virginia, Virginia, Pennsylvania, New Jersey, Delaware, and Maryland, member states assist one another in fire prevention and suppression and firefighter training.

Altogether, there are more than 200 active interstate compacts. Twenty-two of them are national in scope and more than 30 are regional.

Article 1 of the U.S. Constitution specifically allows states to enter into multistate agreements for their common benefit. Congress doesn’t have to approve interstate compacts unless they would increase the states’ political power in a manner that would encroach upon the federal government’s power.

Such is not the case with the coronavirus crisis. If states joined together to fight the pandemic, they’d be fulfilling their mandate to protect the public health. While it might be argued that the federal government should be coordinating these efforts, collective state action would not trespass on that authority if Washington shirked its duty, as it is doing today.

New York Governor Andrew Cuomo pointed to the need for this collective action after New York’s COVID-19 crisis had passed its peak. Acknowledging that his state didn’t require as many ventilators as initially projected, Cuomo in mid-April said he was sending 100 of the machines in the New York stockpile to Michigan, 100 to New Jersey and 50 to Maryland. 

Now some other states are in crisis. Hospitals in Texas, Arizona, Florida and California are running out of ICU capacity as their COVID case counts continue to rise. Across the country, desperate measures are being considered or carried out, including triaging patients by their likelihood of survival. In the richest nation on earth, with one of the most extensive healthcare infrastructures, the idea of having to leaving some patients out in the cold is beyond crazy.

There are workarounds, of course. Some hospital wards can be repurposed as ICUs. Field hospitals can be set up in convention centers and parks, as they were in New York City. But all of this takes time. In the short term, neighboring states could enter compacts that obligate their hospitals to take some of the overflow of COVID patients if other states run out of ICU space. They could share ventilators and PPE, instead of bidding against each other for the equipment. States with lower rates of COVID infection could encourage some of their health workers to travel to more hard-hit states, as some clinicians did when New York was in need.

Beyond fighting the pandemic in hospitals, compact member states could also form learning collaboratives to find out which approaches to mask-wearing, social distancing, contact tracing and quarantining work the best. Moreover, they could pool their resources to scale up the requisite number of tests, as suggested in a recent New York Times op-ed.

If compact members wanted to go further, they could agree to require the wearing of masks in public places and/or follow the guidelines of the White House Coronavirus Task Force on reopening their economies. States that refused would be excluded from compacts that might help them cope with the pandemic.

All state governors are facing a common challenge—which is why they should cooperate with each other, regardless of their political philosophy. Those that reopened their economies too early have learned a painful lesson. Some of these states have had to pause their reopening schedules or are on the verge of new lockdowns. Whether or not their governors have recognized their earlier mistakes is open to question. Still, it’s clear that the only way to reopen successfully is to contain COVID-19 and maintain social distancing until a vaccine is available.

Interstate compacts are not a panacea. For one thing, the Senate has not taken up the House-passed Heroes Act, which includes emergency funding of state and local governments, and it’s unclear whether those funds will be included in the compromise package being worked out. Without this money, the states would be unable to meet their obligations under compacts. Also, the compacts would be only a partial substitute for a rational, comprehensive national policy to combat COVID-19. For starters, the federal government’s help is still needed to provide adequate supplies of equipment for testing and treatment of patients and protection of clinicians.

For now, however, collective state action is desperately needed so that the states most badly hit by this pandemic can receive timely aid from the other United States.

Ken Terry is a journalist and author who has covered health care for more than 25 years. His latest book, Physician-Led Health Care Reform: A New Approach to Medicare for All, will be published this month by the American Association for Physician Leadership.