Gary Young, director of Northeastern University's Center for Health Policy and Research, sheds light on the issues facing the healthcare industry.
The shooting death of a health care executive in New York City this month has sparked a heated debate about systemic problems in health care and the role of health insurance companies more broadly.
But while this debate is fresh in our minds, it has been going on for decades.
Northeastern Global News spoke with Gary Young, director of Northeastern University's Center for Health Policy and Healthcare Research, to gain insight into the industry and the issues it faces.
His comments have been edited for brevity and clarity.
First, what do you think are the main challenges facing the healthcare industry today?
This mass shooting, while obviously tragic, has brought attention to several health-related issues. One is that there are concerns about service and billing denials. That's why UnitedHealthcare is currently the defendant in a class action lawsuit over denial of service.
Another problem is the rising cost of health care. Health care costs are starting to return to inflation levels we haven't seen in a while, and are well above general inflation, putting additional pressure on people in terms of health care affordability. . Insurance premiums are going up, and with open enrollment season upon us, many people are probably getting cold water thrown in their faces.
Additionally, there are currently ongoing issues in Congress regarding subsidies and people participating in the Affordable Care Act market ahead of the new administration. Some believe these subsidies should be rebalanced and reduced for individuals at the higher end of the income spectrum.
Is all this chatter putting pressure on the incoming Trump administration to take action? What does this mean for Obamacare and other existing programs?
Others disagree, arguing that given today's overall health care costs, these subsidies should be maintained. Of course, the controversy surrounding Anthem Blue Cross Blue Shield's decision to restrict surgical anesthesia has also been in the news, but they have already reversed course. It actually caused quite a bit of backlash.
Well, the constituency will be activated around this issue, so I think we'll see MPs taking this issue a little higher on their list of priorities. There may be more hearings on these issues, especially regarding denial of service. I think that possibility is quite high.
If there's one issue that the administration is already trained on, it's that of subsidies. They have already indicated that they feel subsidies in the ACA market should be reduced a little. So they will have to consider the subsidy issue and make a decision over the next year.
I don't think we have a good idea of what the Trump administration will do when it comes to health care costs. Of course, the first Trump administration was intent on repealing the ACA. It failed so I don't think they will try it again. They may try to make changes within the ACA, which could still result in subsidy cuts. Another issue they have to deal with is Medicare Advantage, which doesn't necessarily keep health care costs in check.
By the way, Medicare Advantage is a controversial topic for the federal government. That's because about half of Medicare beneficiaries are currently enrolled in a Medicare Advantage plan rather than Original or Traditional Medicare. It was always seen as containing health care costs, but the evidence does not suggest that. In fact, the Biden administration had taken steps to reduce payments for health plans that participate in Medicare Advantage.
At the same time, I think the Trump administration is likely to reverse course against Biden. That's because there has always been a perception, especially among Republicans, that Medicare Advantage offers a pro-competitive approach to health insurance, whereas original Medicare is almost entirely government-sponsored. orchid arrangement. So while the Trump administration may begin to roll back some of the payment cuts that the Biden administration introduced from Medicare Advantage, it won't necessarily help contain health care costs unless it believes it can somehow stimulate more competition. It doesn't necessarily help.
When it comes to premiums, you mentioned that many people experience some kind of shock when they try to enroll or renew a plan. What's behind the rise?
I think this is partly due to consolidation in the health insurance market. But usage has also increased significantly, and that's certainly a big factor. At the root of this is labor costs. Hospitals have been struggling with rising labor costs, especially in nursing, and the pandemic has only made that worse. As a result, we are seeing increased utilization and costs of the health insurance system by hospitals and physician services sectors.
What is behind the increase in usage? Some people think that usage is still being postponed due to the pandemic. Of course, during the pandemic, many people were hesitant to receive services that might have been available to them at the time. Some of that may be true.
Clearly, UnitedHealthcare is concerned about the kind of denial of service that has come under intense scrutiny. However, we are also concerned about rising medical costs. This is a problem we've been grappling with for decades, but we've never found a way to strike the right balance. That's really something we have to think about as a country. We don't want high denial rates, but we also want affordable health care. So you need to be better able to decide when service is right for you. Something has to give.
For example, here at Northeastern University, we've done research on lower back pain. The evidence regarding low back pain is that if someone presents to a clinician with low back pain, they should not be referred for expensive diagnostic imaging. But we see that it continues to occur. We need to understand how we make decisions about appropriate care when the services we want may not actually add clinical value, and that's a difficult conversation.
We've been doing a fair amount of what we call low-value care. Although there is some evidence of improvement, clinicians and patients often choose services with very low clinical value. That puts pressure on the insurance company to deny it. It never creates popularity.
And, of course, we're also concerned that insurance companies will end up denying services that are actually of low value. It's about keeping that balance and making sure people get the kind of care they deserve, which means you have patients, you have providers, and you have insurance companies. How will those tensions be resolved? We still don't know how to do it properly.
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