3 Issues to Watch in the 2020 Election:
Implications for Providers


With the final results of this week’s election still uncertain, so too remains the future of U.S. healthcare delivery. With the U.S. House of Representatives on track to sustain a Democratic majority and the Senate a Republican majority, all eyes are on the Presidential race.

Should we see sustained Republican control of the White House, we can expect a continuation — and potentially an acceleration — of the current movement away from a strong federal role facilitating care access, regulation, financing, and health infrastructure. And we can expect a move towards greater state, local, non-profit, and private sector responsibilities. Should we see Democratic control of the White House paired with continued Republican control of the Senate, we can expect an emphasis on a stronger federal role in healthcare — but a position that is tempered and unlikely to produce dramatic policy change. [1]

In the piece below, originally published October 27, we explored how the election outcome may potentially affect three of the most pressing healthcare delivery challenges facing the nation and its healthcare providers. [2]

In this article, we reference Scenario 1 for a Republican White House and Senate Majority and Scenario 2 for a Democratic White House and Senate Majority. We now know that the latter Scenario 2 is unlikely, with Republicans sustaining Senate control. The commentary below on Scenario 2 will likely be moderated given the continued Senate Republican majority, even if Biden wins the White House.

Responding as a nation
to COVID-19
Meeting the challenge of access
and affordability
Addressing health disparities and
moving towards health equity

Responding as a nation to COVID-19

The nation is currently experiencing the early stages of a potential major resurgence of COVID-19. While the U.S. pursues the ultimate goal of managing COVID-19 comprehensively through systemic mass rapid-testing, broad-based deployment of proven effective treatments, and implementation of an ongoing widespread vaccination program – the nation’s approach to prevention, control, and management of the disease over the next 12 to 18 months will likely vary significantly based upon the election’s outcome.

If both the White House and Senate remain in Republican control, we would likely continue to see a deemphasized federal role in the standard-setting, education, management, coordination, and regulation of a national COVID-19 programmatic strategy and approach. We also would likely see a continued narrow stance in terms of providing fiscal stimulus and support. The current deference to state and local decision-making has resulted in significant variation in terms of how states are attempting to control the spread (Figure 1). This variation — which, unfortunately, has been amplified by some degree of politicization of the pandemic — may lessen following the election. But it also may likely continue and pose a further challenge to getting the current public health crisis under control.

Figure 1: State Variability in Pandemic Response: Non-Essential Business Closures


Source as of October 27th 8am CST. For live data visit:
KFF: State Data and Policy Actions to Address Coronavirus


Potential Provider Impact: Scenario 1
With a Republican President and Senate majority, the COVID-19 response approaches would continue to vary widely by state and municipality. Providers would likely both bear the charge to treat greater numbers of COVID-19 patients and the continued challenge of shouldering the public health requirements around patient education, pandemic management, and vaccine adoption and distribution. These responsibilities would likely be borne without consistent commensurate funding across all providers.

Should Democratic leadership emerge from the election, we would expect a strong federal assertion of influence to establish national standards and controls, along with a centralized management and coordination of public health infrastructure. A more structured and centrally driven response would most likely lead to a lowering of COVID-19 incidence rates more quickly. With a Democratic victory, we might also expect accelerated direct and indirect federal funding into the healthcare delivery ecosystem and supporting public programs.

Irrespective of the election outcome, health systems should expect to exercise an even greater community leadership role in the COVID-19 response than has been asked of them so far.


Potential Provider Impact: Scenario 2
In this scenario, providers will likely benefit from lower disease incidence and greater organized federal public health support and funding for patient education, pandemic management, and vaccine adoption and distribution. However, there also may be secondary detrimental economic impacts for communities as a result of a more restrictive pandemic response. Such economic impacts could result in corresponding downstream implications for providers.

Irrespective of the election outcome, health systems should expect to exercise an even greater community leadership role in the COVID-19 response than has been asked of them so far.

Provider roles are likely to include:

In any event, providers will likely find themselves at the forefront of leading the public response.

Finally, while the dual systems of care that most health systems already have established should be able to manage the fluctuations in COVID-19 incidence without requiring large-scale suspension of elective services, continued organizational agility will be essential to both adeptly navigate the emerging treatment options evolving almost daily and flexibly adapt capacity in response to any rolling peaks in volume that may present. Organizational sustainability will require effective operating models to flex ICU capacity, decant low-acuity capacity, and maintain a level of service for ambulatory and elective access through surge periods. It also will require intentional incorporation of digital care modalities, including hospital-at-home and other virtual access options.


Meeting the challenge of access and affordability

Both political parties have articulated support for issues impacting affordability of care among insured populations — such as drug pricing, price transparency, and surprise medical billing. No matter the election outcome, providers can anticipate attention on addressing healthcare costs and value. That said, the election has the potential to shape fundamentally different pathways for the levers used to tackle affordability, as well as the federal government’s role in addressing access to care for low-income and other vulnerable populations.

In any election scenario, providers will continue to see their payor mix deteriorate as the pandemic drives a loss of commercial insurance coverage nationally. Even individuals who maintain commercial insurance coverage are more likely to end up under-insured, as more individuals opt for lower premium, high-deductible options and are increasingly challenged to afford their portion of healthcare costs. Medicaid enrollment increased 4.8 percent nationally over the initial COVID-19 period of February through June. [3] Meanwhile, declining state tax revenues will pressure state budgets to handle such increased demand for Medicaid coverage. Every state across the union will face a growing Medicaid burden with increasingly limited resources. How each state manages this burden will vary significantly based upon who is in office at the federal and state level. The Supreme Court ruling in the California v. Texas case will also be watched closely; fully striking down the Affordable Care Act would, of course, have significant consequences for states that expanded Medicaid with federal funding availed by this law.


The election will materially impact where each market lands with respect to Medicaid enrollment, uninsurance and under-insurance — and with respect to the funding and mechanisms available to address access to care —and the impacts will vary widely by state.

Potential Provider Impact: Scenario 1
A Republican President and Senate majority would likely result in the continued diminution of federal support for uninsured and low-income populations. We also might expect continued latitude for more limited insurance products (e.g., Association Health Plans) as a pathway to affordability — potentially resulting in increased under-insurance rates. As a result, this pathway will likely place an even greater obligation upon providers to manage an ever-more challenging cross-payor subsidization model in an increasingly market-based healthcare economy. This scenario will require aggressive cost management of a greater managed risk portfolio — and will likely result in a further stratification of care delivery across the American populace.

In any election scenario, providers will continue to see their payor mix deteriorate as the pandemic drives a loss of commercial insurance coverage nationally.


Potential Provider Impact: Scenario 2
Meanwhile, a Democratic President and Senate majority would likely expand the use of federal policy, regulatory, and budgetary levers to increase insurance coverage and access, particularly for low-income populations. This would likely result in greater provider access and care management requirements and a pronounced emphasis on population-health in a value-based-care context. Material cost reduction will be necessary in this scenario as well — but would likely be accompanied by federally supported infrastructure investment. Finally, even with Democratic control, there would be many hurdles to overcome that would make a “Bidencare” health plan challenging to pass. Still, were a public option to ultimately avail, this could lessen employer-sponsored private insurance coverage, which could have challenging implications for provider finances.

In all scenarios, for the many health systems experiencing a deteriorating payor mix, caring for financially challenged communities and individuals will require strategic approaches to, and partnerships within, the health and social safety net. This may span a range of endeavors — from working with FQHCs to collaborating with safety net providers on care management and distribution to addressing compounding factors, such as food insecurity and unstable housing.


Addressing health disparities and moving towards health equity

Myriad factors have led to heightened awareness of pervasive health and healthcare disparities extant across the U.S. healthcare delivery landscape.

Two of the most recent, COVID-19’s disproportionate impact on people of color (see Figure 2) and the multiple high-profile events exemplifying structural racism — including the tragic killings of George Floyd, Breonna Taylor, and Ahmaud Arbery — have prompted an unprecedented level of focus on the inequities in care and access experienced by people of color. Multiple healthcare organizations, health systems, professional health associations, and health publications have declared racism to be a public health crisis. While racial health inequities are by no means a new issue, the level of attention on the intersection of race and health disparities has increased notably in the past several months.

Figure 2: COVID-19 Mortality Rates by Race/Ethnicity, as of October 13, 2020


Source as of October 13th. For live data visit:
APM: THE COLOR OF CORONAVIRUS: COVID-19 DEATHS BY RACE AND ETHNICITY IN THE U.S.


The election outcome will most certainly shape the way in which the government frames and focuses attention, funding, and policies with relevance for health and other racial disparities. While both political parties acknowledge racial health disparities, they vocalize different perspectives on the causes — and solutions required — to resolve these gaps.

With a Republican President and Senate majority, we would expect a continuation of current leadership approaches focused on policies that generate economic benefits for Black Americans, such as expanding Opportunity Zones, providing funding for minority-owned small businesses, and decreasing unemployment rates. Alternatively, Democratic leadership in the White House and the Senate — at minimum through its COVID-19 approach and commitment to provide federal healthcare funding support — would likely bring greater focus on and attention to the role of systemic racism in contributing to health disparities in our communities. Beyond that, Democrats have outlined a comprehensive plan around racial equality that spans issues ranging from healthcare access to housing and education and from the economy to policing and criminal justice.

Sadly, and irrespective of the outcome of the election, the complexity of factors driving racial health disparities will not be easily addressed from Washington or policy and regulatory intervention alone. It will require strong and visible local community leadership, commitment, and resources. The goal is too large, the challenge too great, and the drivers too embedded for any single organization to meaningfully advance against them. It will require the collective efforts of all players across the healthcare landscape — and those within the social fabric of our communities who are dealing with the contributing social determinants of health — to work in a coordinated manner against a common set of objectives.

Potential Provider Impact: Scenarios 1 and 2
Health system leadership will be essential to these efforts. No other entities will be able to bring to bear the scope, resources, or reach necessary to facilitate such efforts. Under a continuation of the current administration, provider leadership should expect little direct federal programming or funding support on this front. Instead, they can expect to see greater focus on federally sponsored economic development initiatives intended to contribute to an alleviation of health disparities. Under a Democratic administration and Senate, providers can expect direct and indirect supports to local efforts addressing health disparities. But they should not expect such supports to take the place of the imperative for local leadership.

Conclusion

We will soon know which path we will be taking forward. Whatever the path, the challenges for health providers will be significant — as will the strategic, programmatic, clinical, operational, and financial implications. As the path forward becomes known, we look forward to sharing a more in-depth analysis in our Chartis State of the Union 2021.

Sources


1 A final option, with a Republican president and Democratic majority in the Senate, is highly unlikely.

2 The following discussion reflects Chartis analysis of a range of primary and secondary sources.

3 https://www.kff.org/coronavirus-covid-19/issue-brief/analysis-of-recent-national-trends-in-medicaid-and-chip-enrollment/


Authors

Ken Graboys
Chief Executive Officer
[email protected]

Anneliese Gerland
Principal, Vice President of Practice and Segment Operations
[email protected]

Greg Maddrey
President, Chartis Consulting
[email protected]


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3 Issues to Watch in the 2020 Elections:… - The Chartis Group