Curing What Ails Healthcare Markets Conference Proceedings

November 30-December 1, 2022
First Annual Schaeffer Healthcare Markets Symposium

Proceedings Summary

Motivated to find ways to make U.S. healthcare markets efficient and value-driven for patients, the Schaeffer Center for Health Policy & Economics convened a diverse group of public and private-sector leaders for the first annual Schaeffer Healthcare Markets Symposium: Curing What Ails Healthcare Markets. The participants spanned political thought, parties, and backgrounds. The convening aimed to foster discussion, with the goal of informing a research agenda useful to leaders as they design and implement both public policy and private-sector solutions.

Aspects of healthcare markets were described by various participants:

• The current healthcare system is highly regulated, with high costs and limited freedom for patients and doctors to make decisions. Notably, the high cost of labor inputs needs to be reduced. The market structure in healthcare currently conspires against entrepreneurship and innovation.
• HIPAA modernization could be of great help in a world we live in, given the Act’s introduction in 1996, and the rapid technological change we have seen since then.
• There are significantly different reimbursement rates between primary and specialist care.  A potential solution could limit commercial insurance payment relative to Medicare or Medicaid, taming provider networks that drive up costs.
• The U.S. has chosen a decentralized approach to healthcare, which has led to administrative complexity, high prices, and frustration among patients. Some experts argue that a market-based approach, in which government and private sector work together and prices are transparent, could solve some problems in the healthcare system.
• There is a role for government in addressing market failures and setting bounds in the healthcare market. The current system does not work because healthcare costs are supposed to grow at a rate exceeding inflation, which is not sustainable.
• Medical product regulation and the challenges of evolving technologies are important for the future, but the regulatory framework is lagging.
• The Inflation Reduction Act (IRA) may have a negative impact on the R&D activity, especially in cancer. Some believe that the impact of the IRA will be significant, with the number of drugs lost due to the act likely being higher than estimated by the CBO.

There are different insurance design options that could be fostered.

• The ACA was the result of strong ideology and destroyed the notion of catastrophic insurance which was a useful way to lower input costs for entrepreneurs.
• Solving long-term care and the increasing burden placed on the Medicaid program is critical and further compounded by the decline of the long-term care insurance market. Policymakers might consider France’s robust private insurance market for long-term care as a model. Employer-sponsored plans cover about 150 million Americans, yet their quality and other parameters differ considerably. Data analytics are important to understand key differences and possible room for improvement.
• New models of care delivery, which integrate in-person and virtual health and wellness services, are likely to improve outcomes and the ability to manage chronic conditions and navigate care. Other opportunities include home diagnostics and plans that disrupt traditional carrier coverage, particularly among the self-insured.

The clinical trial system in the U.S. needs to be reformed.

• There is a need for a national strategy to address the broken clinical trial system in the US. Technology and digital tools can make trials more efficient, and we need innovation in the clinical trial process.

Discussion, fostered through moderated conversations and panels followed by audience reactions, identified specific areas for future research that would fill gaps in evidence currently available to policymakers and private-sector leaders. Suggestions include:

The Centers for Medicare and Medicaid Services could be leveraged.

• CMMI is looking into broader models that can be applied at a state level and that involve more payers.
• Coding takes away from innovating patient care delivery and other important areas. The ACO REACH model attempted to curb coding by implementing caps on coding intensity. However, this may have unintended consequences and counteracts incentives to enroll underserved populations. It is an important question and problem that needs to be addressed.
• Researchers can help CMMI by exploring what makes models successful and spreading and scaling these lessons. Researchers can also help CMMI by looking into how to measure transformation instead of just certification.

New payment models are needed.

• To steer the healthcare system towards a value-based model, new payment models need to be developed that align incentives and focus on producing better and lower cost care, rather than relying on the traditional model.
• Tying reimbursement to post-market surveillance could improve the effectiveness of value-based payment. 
• Innovative payment models may be designed to close equity gaps, e.g. in lowering HbA1c in diabetes patients, but services that include more than just healthcare (such as social workers and nutrition specialists) may need to be included.
• There is a need to evaluate ways to reduce advertising in the pharmaceutical industry and other areas to reduce the negative impact on the cost of life-saving remedies.
• Unpaid care provided by family members has several challenges, including significant drop-out rates. Possible solutions for study include different types of support to informal caregivers.

We are still learning from the policy decisions during the pandemic.

• There is a need for rigorous scholarly analysis of policy decisions during the pandemic to inform future decisions and emphasizes the need for investment in biodefense and private-public partnerships.
• There is a need for a study on modeling the impacts around diversity of thinking in economics and public health, looking at fear of retribution and its impacts on pandemic response. Understanding could inform universities’ performance in the next pandemic.

Big data and digital health are opportunities for improving equity, but improving equity isn’t a given.

• The use of machine learning alone does not result in more or less equity on its own – we need to study the effects of individual machine learning models and algorithms and consider possible upsides and downsides.
• The lack of data collection outside of medical records prevents the identification of risk factors (such as genetics and socioeconomic factors) that could help improve the timeliness, quality and efficiency of care delivered to individual patients.

The complete proceedings of the symposium are available here and a list of participants here. The Schaeffer Center will hold the second Annual Schaeffer Healthcare Markets Symposium, in partnership with the Healthcare Markets and Regulation Lab at Harvard Medical School, in late 2023 or early 2024.