|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
House Democrats formally propose a single-payer health plan
On Tuesday, Rep. Pramila Jayapal (D-WA), along with 106 co-sponsors, introduced the Medicare for All Act of 2019 in the US House of Representatives. The bill is the most aggressive single-payer proposal yet to be advanced by Congressional Democrats, envisioning a two-year timeline to transition the American healthcare system to universal, government-run coverage and promising to cover all hospitalizations, doctor visits, prescription drugs, dental and vision services, and maternity and newborn care with no out-of-pocket cost to individuals. Jayapal’s bill is even more sweeping than the 2017 single-payer plan proposed by Sen. Bernie Sanders (I-VT), extending coverage to include long-term care for the elderly and disabled, a feature originally included in the Affordable Care Act (ACA) of 2010 but later axed due to its price tag. The new bill would eliminate private, employer-sponsored coverage, but would allow current participants in the Veterans Health Administration and Indian Health Service to keep their current coverage. Notably absent from the legislation is any recommendation for how to pay for the coverage scheme, although Jayapal suggested that new taxes would be proposed later.
The new bill is expected to amplify the growing debate over “Medicare for All” (M4A), an emerging centerpiece of Democratic policy as the 2020 Presidential election takes shape. Fault lines have already emerged within the Democratic party between progressives like Jayapal, Sanders and other early Presidential hopefuls Sen. Cory Booker (D-NJ), Sen. Kamala Harris (D-CA), Sen Elizabeth Warren (D-MA), and more moderate Democratic leaders who worry that demands for M4A will prove too radical for voters to support. House Budget Committee chairman Rep. John Yarmuth (D-KY), for example, was quoted this week telling proponents of M4A to “get over it”. Republicans, meanwhile, are pointing to the new legislation as evidence of a hard-left turn in the Democratic Party, with Vice President Mike Pence calling the bill and the larger M4A movement socialism in the making. Insurance and hospital industry lobbyists were sharply critical of the new bill as well. Notably, however, it does not entirely eliminate the role of insurers, who would be permitted to cover services not included in the government-run plan—allowing private care to be paid for by private insurance outside the single-payer program. While the bill may not even see the light of day on the House floor, and will certainly not pass in the current Congress, it does stake out what will likely be the left-most guardrail in our national debate over M4A.
Grassley renews scrutiny of tax-exempt hospitals
Senate Finance Committee Chair Chuck Grassley (R-IA) this week increased his scrutiny of nonprofit hospitals’ tax-exempt status. In a letter to the head of the Internal Revenue Service (IRS), Grassley questioned whether nonprofit hospitals are in compliance with charity care and other requirements upon which their tax-exempt status is conditioned. The letter emphasized his ongoing interest in hospitals’ debt collection practices: “As chairman of the Senate Judiciary Committee, I oversaw an investigation into the billing practices of the Mosaic Life Care hospital. That investigation resulted in debt relief of almost $17 million for thousands of low-income patients. This issue is still just as important to me now that I am chairman of the Senate Finance Committee.” Grassley asked the IRS to respond to specific questions about its compliance review practices and results by April 1st.
Grassley’s letter comes as a bipartisan Senate effort looks to gather data and develop policies to address surprise hospital billing. Other lawmakers have introduced legislation to clamp down on hospital mergers in the face of rising prices. Meanwhile, new data released by the Medicare Payment Advisory Commission (MedPAC) show that hospitals’ total margins continue to rise even as their Medicare margins decline, indicating an increase in commercial pricing. Given this confluence of issues—rising hospital prices and profits in the face of unsustainable individual spending on care—it’s not surprising that hospitals, who account for the greatest portion of healthcare costs, are in legislators’ crosshairs. With state and Federal spending on healthcare reaching unsustainable levels, and constituents voicing ever-louder concerns about the impact of health spending on household budgets, we’d expect to see even tougher scrutiny of hospital pricing, billing, and charity care in the months ahead.
A worksite clinic provider goes virtual
Crossover Health, a provider of onsite and near-site employer-based clinics, announced this week that it will acquire virtual primary care start-up Sherpaa in an attempt to create an integrated employer health offering. Operating 20 clinics in six states, Crossover provides worksite healthcare to large companies, including Visa, Comcast-NBC Universal, Facebook and Microsoft, and gained national attention when it partnered with Apple to operate that company’s onsite employee clinics. To date, Crossover’s service portfolio has been based around physical care sites, but the acquisition of Sherpaa is a signal that the company believes that much of worksite healthcare could be delivered virtually, and that large employer partners will demand a fully-integrated telemedicine offering. Case in point: Comcast, which has been aggregating its own platform of health and wellness solutions, recently partnered with telemedicine provider Doctor on Demand.
Companies with fewer than 1,000 employees in a single location are often reticent to invest in onsite or near-site clinics, as we’ve learned in our work with them. Adding virtual care capabilities allows providers to tap into new categories of employers, and also reduces the cost of staffing clinic sites. Sherpaa’s model is particularly intriguing for the employer market. Since its inception the company has focused on providing a virtual care solution that moves beyond single-serve visits by supporting asynchronous communication and ongoing interactions with the same provider. Sherpaa also maintains a network of “preferred” specialists and can directly schedule appointments with those doctors. The combination of Crossover and Sherpaa could create a compelling employee health offering that provides more comprehensive care, ongoing management of chronic conditions and a concierge-like connection to high-value specialists.Success will depend on their ability to integrate services into a single, seamless consumer-focused health and wellness platform.