January 19, 2021

2021 Health Policy Priorities: Bipartisanship the Only Path to Success for Large Employers

Beginning on Jan. 20, Democrats will hold a “trifecta” – control of the White House, Senate and House of Representatives – for the first time since Barack Obama’s first term in 2009.

Democrats have signaled that they intend to pass major health care legislation this year. While health care legislation has been the flashpoint of major partisan battles in recent years – most notably the passage of the Affordable Care Act in 2010 and its attempted repeal in 2017 – there is a real window for bipartisan support on legislation focused on reducing health care costs and improving quality. Over the past decade, the rate of inflation for medical services has averaged nearly 3% annually – roughly twice the rate of inflation for all other products and services. Unsurprisingly, recent public polling demonstrates that lowering the cost of care for individuals is the most popular health policy among voters. As the largest purchasers of health care, large employers know well the impact of the relentless increase in health care costs on their businesses and on their employees.

Post-COVID 2021 Policy Priorities for Large Employers

Like policymakers, employers are focused right now on stemming and ultimately defeating COVID-19. Once the pandemic is largely over, they will look to policymakers to pivot quickly to directly tackle high health care costs, inadequate quality and stubborn inequity in health care. But that does not mean it will be easy. Truly addressing the underlying problems in our health care system means directly challenging entrenched interests that perpetuate the broken status quo. That’s why taking on these issues can and should be bipartisan in nature.

Large private employers and public health care purchasers will be watching the actions of the Biden administration and new Congress with special focus on the following issues:

  1. Broken Health Care Markets

Our health care system is rife with economic distortions, including inadequate competition, opaque pricing, uninformed consumers and a lack of actionable measures of quality. Large employers are interested in the changes policymakers will make to strengthen competition and transparency. Where markets have failed entirely or where there is no market, federal policymakers have a responsibility to directly manage prices, with an emphasis on strengthening competition via:

In highly consolidated health care markets, where dominant health systems have already driven up prices, it may be impossible to reinstate healthy competition. This may be particularly true in rural areas with very limited numbers of hospitals and physicians. In such cases, the federal government should directly set or constrain prices for all purchasers at fair and reasonable levels.

For pharmaceuticals with no effective competition (including many brand-name drugs under patent and/or market competition) the federal government should negotiate fair and reasonable prices available to all payers, as well as institute caps on inflation for prescription drugs currently on the market.

  1. Rapid Acceleration of Payment Reforms from Fee-For-Service to Value-Based Models

Policymakers have long recognized that the fee-for-service payment system promotes higher volumes of care without accountability for the quality of care or patient experience. It is time for leaders to insist on the rapid adoption of value-based payment models for both public and private payers.

Population-based payment models, as described in the Health Care Payment Learning and Action Network’s framework, are the best way to provide flexibility to physicians and health systems while ensuring accountability for the total cost of care. The payment models must also include accountability for quality, patient experience and equity.

In the wake of the pandemic and the rapid rise of and need for remote care options, it is important to note that population-based payment models provide the right incentives for the expanded and appropriate use of telehealth services.

  1. Adoption of Robust Performance Measurement with Focus on Health Equity

The ability of our health care system to deliver higher quality outcomes depends on the adoption of standardized and mandatory performance measures. Such measures are essential to the widespread adoption of value-based payments.

Performance measures should include clinical outcomes, patient-reported outcomes, appropriateness and equity. And they should be standardized and required for all physicians, hospitals and other clinicians to provide useful comparable information to patients, consumers and purchasers.

For too long, however, health care quality measures have failed to address underlying racial, ethnic and other disparities in health care. Performance measures should include the capture of racial and ethnic identification data. Further, quality improvement initiatives should focus on areas of greatest disparities, such as maternal and infant care and COVID.

Each of the policies described has enjoyed bipartisan support in the past. With just 50 Senators caucusing with Democrats and a five-seat majority in the House, the most viable path toward legislative success rests on bipartisanship.

For more on what large employers are prioritizing in 2021, read 7 Large Employer Health Care Priorities to Watch in 2021.