5 Big Questions on Health Care and COVID-19

For the third U.S. presidential election in a row, health care is among the most hotly contested issues. The future of health care in the United States could change dramatically depending on who wins in November, with one side vowing to replace the Affordable Care Act and the other discussing ways to expand it. Why does the U.S. have such an unusual health care system, and how has it truly changed since the advent of the Affordable Care Act? 

For answers, we turn to Darden Professor Vivian Riefberg, who holds the David C. Walentas Jefferson Scholars Chair. Riefberg spent more than three decades at McKinsey & Co., holding senior leadership positions including head of the public sector practice for the Americas and co-leader of the U.S. health care practice. Her health care work spanned issues of strategy, organization and operations in the private, public and non-profit sectors. Riefberg recently spoke on a number of health care-related topics, including the Affordable Care Act and the government’s response to COVID-19. 

We frequently hear that health care in the U.S. costs the most in the world while outcomes tend to be somewhere in the middle. What are the primary drivers of this disconnect? 

There are a range of things that drive up our costs in the United States. Among the drivers of this disconnect are high rates of obesity, high degrees of variability in health care treatment, a payment system that, while changing toward value,  still rewards volume. And while the amount an individual pays has gone up dramatically, there are still agency issues — that is, much of the costs are paid by other third parties — the government and employers. Also, we have a mindset toward “more is better” and not enough direct links between safety, efficacy and economics.  

We have among the most obese — if not the most obese — populations in the world, and obesity is linked to a wide variety of health issues including cancer, which in turn drives up health costs.  If we want to address health care cost we must address obesity. 

The amount of variability in treatment is astonishingly high. We would never allow that variability in the safety maintenance of our airplanes, but we allow massive variability in the guise of “the doctor knows best.” We resist well-regarded checklists and standardizing protocols. We allow, in my mind, unexplained variability to go on in the system. 

We have a long history of rewarding volume and payment on a fee-for-service basis. Right now, there are many actions driving us toward a new system of pay-for-value, but the transition to that approach is just really getting going.  This is particularly important for all forms of outpatient care, which has been growing the fastest. 

And, we have a long history of not wanting to put any form of economic considerations into our regulatory systems. For example, many other countries include economics in their approval of a new drug or device. We have a focus exclusively on safety and efficacy without regard to price or economic impact. Therefore, while we do often get access to drugs when they are first are made available; we are often paying the highest prices in the world for those drugs and products. 

Although I could go on, the last things I would mention is an individual’s role in the system. Today, there is often a mindset in America that “more is better.” There are cases where more is clearly not better, and yet we pay for that “more is better” mentality. While the out-of-pocket payments in the forms of co-insurance, co-pays and deductibles has been growing massively and impacting individual’s choices, government and employers still pay a lot of the costs for decisions on activity over which they have very little influence. 

Health care was a key topic in the U.S. presidential election before the COVID-crisis. Do you think the last 7 months have done anything to shift the narrative around health care? 

I think a few narratives have started to gain some traction that were not as highly and broadly visible as before. 

First, understanding of what preexisting conditions means has been around at least a decade since the debate on the Affordable Care Act.  But the importance of this issue — both for how it impacts outcomes for COVID, as well as how it might be impacted by future government decisions — has been heightened.

Secondly, the fact that there are broader social reasons for the circumstances that people find themselves in, health care-wise — what we call the social determinants of health — is now part of the conversation. That concept was discussed by health care professionals, social workers and academics, but the disparities that we see was not a widely appreciated situation. In the context of COVID-19 and the focus on social justice, the issues of disparities have started to gain some important strength. 

The third item is mental health and overall well-being. We still have in this country a crisis of coverage, care and ability to address mental health needs. This is true for everyone, including our health care providers at every level who are under particular strain in the COVID-19 world. 

Finally, whether they love or hate our health care system, I think people have come to appreciate just how fragmented our health care system is and that the structure matters. Right now, there are communities whose hospitals are overwhelmed and ICU beds are not available, and there are differences in how each individual is able to access care and treatments. We will see this fragmentation issue going forward when it comes to distributing a vaccine for COVID-19. We will have to make all parts of this fragmented system work together. 

How did the advent of the affordable care act shift the nature of the industry in the U.S.? 

One of the most important things it did is diminish penalizing people for their underlying condition or preexisting conditions. It also provided an option for people whose income did not qualify for Medicaid and did not have employer-based health insurance. And, between the marketplace or exchange and the Medicaid expansion in many states, it massively expanded the number of people who got coverage. 

It also ushered in a lot of innovation through the Center for Medicare and Medicaid Innovation with value-based payments. There was more innovation around value-based payments and more questioning of the fee-for-service model. And that seems to have remained bipartisan — and I hope will remain so. 

The ACA is once again before the Supreme Court. If the law is struck down, do you have a sense of the immediate impact in the United States? 

It depends on what you believe would be the alternative and whether you believe the law can be struck down in pieces  — that is, it is severable —  or would be struck down overall. I think many people forget the impact this law has had. Let me run through some examples: 

  1. Roughly half the population under the age of 65 have preexisting conditions, so they could see their coverage going away or could be paying substantially more. That’s one aspect.
  2. Millions of people who buy insurance through the marketplace or as a result of Medicaid expansion, most would be at real risk of being uninsured, as states could not fund the subsidies that are provided by the federal government.
  3. The opioid epidemic would also be impacted. There are about 800,000 people getting treatment through Medicaid for opioids. The ramification of loss of coverage for those people could be substantial not only on themselves, but on their communities.
  4. Lifetime limits on out-of-pockets costs could go away. There used to be limits on how much employers would pay over the course of a year or the course of a lifetime. While there could be companies who put in lifetime limits, we don’t know what would happen there.
  5. Children staying on their parents insurance until 26 — I have two children who benefit from this. This could go away.
  6. Even rules for calorie labeling — getting back to concerns about obesity — could be impacted. 

So some key questions:  Can the court take the whole thing down or a piece of it down?  If you take a piece of it down, is that a vicious circle for the Affordable Care Act or is it okay being severed? Then, how would it work? These are just some of the open questions. 

You co-teach a course on managing through COVID-19. Can you summarize the lessons? 

Leadership matters. Leadership matters. Leadership matters. That is lesson one, two and three. 

Lesson Four:  Getting the economy to recover is linked to ensuring people feel safe and their health care needs are addressed. The economic crisis is public health driven. 

Lesson Five:  Many elements of uncertainty can be bounded, and thus allow people and organizations to continue to make decisions and not be paralyzed. 

Finally, we can impact our destiny. I visited a very moving memorial that the mother of one of our full-time students has put up in Washington, D.C.   

It reminds me that while we are not New Zealand — we don’t have a small population and we’re not an island — but we did not have to have this outcome in the U.S. and leaders in every community can help shape our future.

 




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