Concord Coalition Weighs U.S. Deficit Against Pandemic’s Effect on Health Care Policy

WASHINGTON – With over 10.5 million Americans so far infected with COVID-19, the U.S. health care system’s focus has understandably been on strategies for combating the virus. Yet when the nation is finally able to shift back to handling longer-term health care issues, The Concord Coalition worries about the pandemic’s effect on policy options and the federal debt.

The non-partisan fiscal lookout organization believes that pre-existing conditions of the nation’s ailing health care system — coverage, quality, and costs — will need to be addressed, even as pandemic ramifications continue and the nation falls further into debt. 

“We can’t expect the budget situation to improve until the economy improves, and we can’t expect the economy to improve until we get COVID-19 under control,” said Robert L. Bixby, executive director of The Concord Coalition. 

Describing the deficit as the “termite in the basement” which doesn’t get quite as much attention as COVID, “the wolf at the door,” Bixby asserted that the budget, already on a rising debt track before COVID-19, suffered a major setback caused by four bills passed aimed at treating the virus and its economic effects. 

“Our budget problems don’t end when COVID does,” Bixby said. “COVID’s hangover in the budget affects the economy… [and the] long term health of the budget is very much tied to long term spending on health care.”

One problem is future care. COVID has caused the whole range of clinical preventive services to be down 60%, with a dramatic reduction in elective surgeries as well. Failure to detect issues in the short term due to these missed opportunities for prevention could have long term consequences, and will almost definitely be more expensive in the long run. And with the aging of the population and health care cost inflation, “implications could be quite substantial,” according to Dr. Ken Thorpe, chair of the Department of Health Policy & Management in the Rollins School of Public Health of Emory University and former deputy assistant secretary for Health Policy in the U.S. Department of Health and Human Services under Clinton.

He said that what may be a short term fight against coronavirus, combined with the long term structural issues of health care cost, quality, and access, should cause the United States to “rethink [the] public health infrastructure.” 

“We need to put forth a more agile system with autoresponse … to any type of public health emergency,” Thorpe suggested, proposing first the widespread use of new tech, like heated air filter systems and mechanical kill sprays, to aggressively exterminate the COVID-19 virus while waiting for a vaccine.

As for a national health care response, Thorpe predicts that President-elect Biden’s focus will be on making primary care universally available. To do this, he’ll need to build up the primary care workforce and expand coverage to the uninsured. 

He will need to place a big focus on drug prices and value-based purchasing, both of which have broad impacts on the nation’s overall spending, and could reduce individuals’ out of pocket costs, especially if co-pays didn’t exist for medications critical to managing chronic conditions. Thorpe also believes there will need to be a migration away from fee-for-service payments into bundled payment options. 

But reducing the number of uninsured remains the primary goal and one that the Affordable Care Act aimed to remedy. Now, in the absence of a monetary penalty for individuals failing to participate in the ACA insurance marketplace, Biden may need to incentivize with increased subsidies. 

Thorpe said Biden will likely also prioritize making the public option available when purchasing insurance through exchanges. “This will be controversial… because Medicare pays less than existing private plans on exchanges… and could drive private insurance out of business,” he explained. “But over time, [this] could make an impact on the per-capita rate of growth of healthcare spending.” 

And that’s a lot of spending. In April, Centers for Medicare and Medicaid Services (CMS) reported that national health care spending reached $3.81 trillion in 2019 and would increase to $4.01 trillion in 2020, a number reached before any coronavirus treatments or after-effect care was even included. That’s a large portion — about 18% — of overall GDP.  

“For people who worry about the government spending too much money, this was an unprecedented crisis,” Bixby said. “But I say, it’s ok, fellow budget deficit hawks, if we have to spend a bit more… We have to save the economy before we can save the budget… There are advantages and opportunities. It could be that once we get beyond the pandemic phase, we might be able to establish working coalitions that would translate to gains in broader health care reform.”