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Gary Young, director of Northeastern University’s Center for Health Policy and Healthcare Research, sheds some light on problems facing the health care industry.
The fatal shooting of a health care executive in New York City this month touched off a fierce debate about the systemic problems in health care, and the bigger-picture role of health insurance companies.
But that debate, while fresh in our minds, has been playing out for decades.
Northeastern Global News spoke with Gary Young, director of Northeastern University’s Center for Health Policy and Healthcare Research, to get some insight into the industry and the problems it faces.
His comments have been edited for brevity and clarity.
This shooting — while obviously tragic — is drawing attention to several health care-related issues. One is that there is concern about service and claim denials. Right now, UnitedHealthcare is a defendant in a class-action lawsuit for service denials, so we have that in the backdrop.
Another problem is that we have rising health care costs, which are starting to return to a level of inflation that we haven’t seen in quite some time, greatly outstripping general inflation and putting more pressure on people in terms of the affordability of health care. Premiums have gone up, and I think a lot of people are getting a splash of cold water on their faces now as we go through open enrollment season.
We also have an issue going on in Congress right now ahead of the new administration around subsidies and those who participate in the [Affordable Care Act] marketplace. Some people believe those subsidies need to be recalibrated and reduced for individuals who are at the higher end of the income spectrum.
Others don’t agree with that, and are saying that, given the overall cost of health care today, those subsidies need to be maintained. Of course, we have also had in the news the controversy around Anthem Blue Cross Blue Shield’s decision around limiting anesthesia for surgical procedures, which they’ve already reversed course on. That really caused quite a backlash.
Well, constituencies will be activated around this issue, so I think you’ll see lawmakers bring it up on their priority lists a little higher. We may see more hearings around these issues, particularly around service denials. I think that is quite likely.
If there is one issue that the administration is already trained on it’s the issue around subsidies. They’ve already suggested that they feel that subsidies in the ACA marketplace should be cut back a bit. So, they’re going to have to think about the subsidy issue and make a decision over the next year.
As far as health care costs, I don’t think we have a really good sense of what the Trump administration might do. The first Trump administration, of course, was intent on repealing the ACA. That failed, so I don’t think they’ll try that again. They may try to make changes within the ACA, and, again, that might be cutting back on subsidies. Another issue they’re going to have to grapple with is Medicare Advantage, but that’s not necessarily going to control health care costs.
Incidentally, Medicare Advantage has also been a point of controversy for the federal government because about half of Medicare beneficiaries are now enrolled in Medicare Advantage plans versus original or traditional Medicare. While that was always viewed as something that would control health care costs, the evidence doesn’t suggest that. In fact, the Biden administration was taking action to reduce payments for health plans that participated in Medicare Advantage.
At the same time, I think the Trump administration is likely to reverse course on Biden because there’s always been a view, particularly among Republicans, that Medicare Advantage offers a pro-competitive approach to health insurance, whereas original Medicare is almost an entirely government-run arrangement. So, the Trump administration may begin to reverse some of the payment reductions that the Biden administration took up from Medicare Advantage, but that’s not necessarily going to help control health care costs unless you believe that they can somehow stimulate more competition.
I think some of the consolidation in the health insurance market is behind that. But we’ve also seen very substantial increases in utilization, and that is certainly a major factor. And underlying that is the cost of labor. Hospitals have been struggling with higher labor costs, particularly in the nursing sector, and the pandemic really exacerbated that. So, we’re seeing higher utilization, higher costs that are being passed on to the health insurance plans by the hospital and physician service sector.
What’s behind the increase in utilization? Some people think there is still deferred utilization coming in from the pandemic. Of course, during the pandemic many people held back on getting services that they may have otherwise had at that time. Some of that may be true.
Obviously we worry about service denials such as those that have exposed UnitedHealthcare to a great deal of scrutiny. But we also worry about rising health care costs. This is an issue we’ve been dealing with for decades, but we’ve never figured out how to strike an appropriate balance. That’s really what we have to try to think through as a country. We don’t want a high rate of service denials, but we also want affordable health care, and so we have to do a better job figuring out when services are appropriate. Something’s got to give.
Here at Northeastern, for example, we’ve done studies looking at lower back pain. The evidence on lower back pain is that when somebody presents to a clinician with low back pain, they shouldn’t be referred for expensive diagnostic imaging. But we see that continuing to occur. We do need to figure out how we make decisions about appropriate health care when services that we may want to have actually may not add any clinical value — and that’s a difficult conversation to have.
We have been doing a considerable amount of what we refer to as low-value care. There’s some evidence that that’s getting better, but clinicians and patients often opt for services that have very low clinical value. Then the pressure is on the insurance company to deny that; it never makes them popular.
And, of course, we’re also concerned about insurance companies going into situations where they are denying services that are, in fact, not low value. Striking that balance and ensuring that people are getting the kind of care they should get — I mean, you’ve got patients, you’ve got providers, you’ve got the insurance companies. How do those tensions get resolved? We haven’t really figured out how to do that properly.