|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Another heavyweight bout on healthcare in Houston
The debate field was cut in half, but the discussion of how to reform America’s ailing healthcare system was no less brief last night in Houston, as leading Democratic Presidential candidates met for the third in their series of debates. With frontrunner and former Vice President Joe Biden coming face-to-face for the first time with his two leading rivals, Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT), the moderate-versus-progressive divide between the candidates was on full display. Biden argued that the price tag for the Medicare for All (M4A) proposal favored by Sanders and Warren, at $30T over 10 years, would be impossible to pay for, while Sanders maintained that keeping the existing system would cost more than $50T over the same time period. Other candidates jumped at the opportunity to oppose M4A, with Sen. Amy Klobuchar (D-MN) saying “I don’t think it’s a bold idea, I think it’s a bad idea,” and South Bend, IN Mayor Pete Buttigieg adding his support for a more moderate public option, saying he trusts Americans to “choose what makes the most sense for you.” The debate over coverage expansion has dominated the early months of the Democratic primary campaign and is sure to feature prominently in the next debate on October 15th. We continue to believe that M4A is unlikely no matter who gets elected in 2020—the politics are simply too difficult, let alone the economics. More likely, in the event of a Democratic sweep, is some form of Medicare buy-in, probably built around Medicare Advantage. But whatever the merits of giving Medicare coverage to every American, the idea surely makes more sense than the one floated by businessman Andrew Yang, who announced plans to give ten randomly selected voters $12,000 each, to showcase his proposal for a universal basic income. (Although at least that would cover the estimated $8,200 the average, non-elderly family pays out of pocket for healthcare each year.)
A first-in-a-decade rise in the uninsured
Meanwhile, new data released by the Census Bureau this week show an increase in the percentage of Americans without health insurance—the first overall rise in the uninsured rate since the passage of the Affordable Care Act (ACA) in 2010. In 2018, the number of uninsured Americans rose to 27.5M, or 8.5 percent of the population, up from 25.6M, or 7.9 percent, the year before. Most of the increase appears to be driven by a decline in Medicaid enrollment, as well as a decrease in the percentage of insured children. Several factors likely contributed to the increase, including tighter requirements for Medicaid enrollment in some states, greater scrutiny of eligibility as part of the Trump administration’s effort to crack down on “public charge” coverage, the end of the individual mandate for coverage, and (ironically) the continued growth of the economy. Rising employment and wage levels may have left some Americans ineligible for Medicaid, even though their employers might not provide coverage. The uninsured rate actually decreased in three states (Wyoming, South Carolina and New York), but rose in eight others. Texas continues to have the highest proportion of uninsured residents, at 17.7 percent, while Massachusetts has the lowest rate at 2.8 percent. The overall rise in the uninsured will likely fuel additional interest in coverage expansion efforts, like those being debated in the Presidential campaign, and will probably spur more states that haven’t yet expanded Medicaid eligibility to consider doing so.
More North Carolina doctors look to opt out of hospital employment
Seven primary care physicians announced their intent to leave Gastonia, NC-based CaroMont Medical Group and join Tryon Medical Partners, an independent practice formed when nearly 90 doctors split from Charlotte-based Atrium Health last year. CaroMont Health indicated it would enforce the doctors’ noncompete agreements, leading the seven doctors to file a lawsuit asking the court to declare the agreements unenforceable. Tryon plans to open its first primary care clinic to the west of Charlotte in growing Gaston County, in early December. With the addition of the CaroMont doctors, the group appears to be positioning itself as an aggregator of doctors looking for an alternative to health system employment. This move is just the beginning of Tryon’s expansion, CEO Dr. Dale Owen told Gist Healthcare in an interview today. He said within the next couple years, “We will have progressed outside of Mecklenburg County, probably throughout a good bit of the state.”
Owen said the group is also looking to partner with other practices to expand its direct primary care offering for employers, which started earlier this summer. Doctors from across the country have been reaching out to Tryon, Owen said. And the group is offering ways to work with them that don’t necessarily include formally joining the practice. “We can consult with a single physician entity or multiple physicians,” said Owen. “We can manage them through a managed service organization that we have.” Should the North Carolina lawsuit prove successful, it could spark a new wave of physician “secession” efforts. Health systems that believe integrated care creates value for patients will be forced to navigate the uncomfortable boundaries of physician autonomy and, working with physician leaders, clearly define what it means to be a “member” of the integrated group—or risk losing doctors to payers and independent groups who can provide an established platform for small groups of doctors to quickly plug into, lowering the bar for “going independent”. [Hear more of our interview with Dr. Owen on next Monday’s Gist Healthcare Daily.]