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Covid-19 - Fallout for the U.S. Healthcare System

The new coronavirus pandemic has triggered four intertwined health crises that expose and exacerbate fundamental problems in the US healthcare system.However, the pandemic points the way to reforms that can improve our ability not only to deal with potential future pandemics, but also to meet the basic health care needs of Americans.

Crisis and its origins

Insurance coverage

The pandemic has severely undermined health insurance coverage in the United States. The sudden rise in unemployment, to more than 20 million workers1, has caused many Americans to lose their employer-sponsored insurance. A recent Commonwealth Fund survey showed that 40% of respondents or their spouses or partners who have lost a job or been approved have lost job insurance. 2 Although many will continue to have employer coverage or be eligible for Medicaid or Marketplace plans, many will likely be uninsured. 3.4 Even workers who keep their jobs may find their coverage declined or decreased as financially distressed employers cut costs. These developments will add to 31 million uninsured and more than 40 million underinsured before the outbreak. 5.6

This new coverage crisis has at least two causes. The first is our continued reliance on employer-sponsored insurance to cover nearly half of Americans against the cost of illness. The second is that the current law is not strictly enforced. By design, ACA helps people who lose employer-sponsored insurance by offering benefits to purchase individual insurance in ACA markets, by expanding Medicaid eligibility, and by requiring private insurance coverage for pre-existing conditions and basic benefits package. . However, while states with their own markets have recently alerted the unemployed of their potential eligibility for subsidized plans, 7 the federal government has not undertaken a parallel effort. It did not educate the newly unemployed about their immediate eligibility outside of the subsidized insurance open enrollment periods in the federally administered ACA markets and did not open special enrollment periods for those who wanted to enroll even if they had no coverage before. Additionally, 14 states have chosen not to expand Medicaid.

Significant financial losses for service providers

For the first time since the Great Depression, crippling economic losses threaten the viability of large numbers of hospitals and clinics, especially those that were already financially weak, including rural service providers, safety nets, and primary care practices. 8 The direct cause of this unprecedented financial crisis is large and unexpected changes in the demand for health services. On the one hand, a new infectious disease has increased the demand for specialized acute care that has overwhelmed some hospitals and imposed unexpected costs on many others. On the other hand, the sharp drop in demand for routine services has resulted in lower revenues for service providers. Office-based practices saw a 60% decrease in the volume of visits in the first months of the crisis and, according to their own estimates, hospitals will lose an estimated $ 323.1 billion in 2020. 9.10 Employment in the system of health has declined further. More than a million jobs during the month of May. one

The vulnerability of providers to these fluctuations in demand raises a fundamental question about how we currently pay for healthcare in the United States. Service providers operate as companies that charge for services in a market where payment for service predominates. When the market for well-paid services collapses, so do healthcare providers.

This system has a number of harmful effects at normal times. They create incentives for price and volume increases, the scarcity of low-paid services such as primary care and behavioral health, and the insufficient supply of services in less attractive rural and economically impoverished communities. But in the extreme circumstances of the epidemic, a new question arises: Is health care an essential national resource that guarantees secure financing beyond what the current fee-for-service system offers?

Major racial and ethnic disparities in the healthcare system

Blacks represent 13% of the US population, but represent 20% of Covid-19 cases and more than 22% of Covid-19 deaths, as of July 22, 2020. Hispanics, that represent 18% of the population, represent almost 33% of new cases nationwide. 11 Nearly 20% of counties in the US are disproportionately black, and these counties have accounted for more than half of Covid-19 cases and nearly 60% of Covid-19 deaths nationwide. 12

These racial and ethnic disparities pose a new crisis that exacerbates the long-standing failure of our health care system to provide adequate care for people of color. The causes begin with a system that disproportionately fails to protect people of color from the cost of illness, a problem that has been reduced but not eliminated by the ACA. 13 Lack of coverage reduces access to care, leading to higher prevalence and lower control of chronic diseases among people of color. These diseases make them more vulnerable to the ravages of Covid-19. 14

Another reason is that people of color are more affected by non-medical threats to health, including food and housing insecurity, and they also tend to have more dangerous jobs during epidemics, such as providing home care and care facilities. long-term. 15 Once ill, people of color are more likely to be cared for in safety net facilities flooded with increases in the demand for acute care.

Disparities in health access and outcomes are deeply ingrained features of the United States health care system. 16 reflects a history of racism and discrimination that permeates society at large.

A public health crisis

The United States has 4% of the world's population, but as of July 16, there were nearly 26% of Covid-19 cases and 24% of Covid-19 deaths. 17 These alarming figures reflect a profound crisis in our public health system.

Simply put, this system was unable to quickly recognize and control the spread of the new coronavirus. The United States did not make the tests widely available in the early stages of the pandemic, delayed the imposition of physical distancing guidelines, and has not yet been widely implemented as needed. 18 National guidance on managing the epidemic was inconsistent and lagged. Many states are now abandoning strict physical distance guidelines without paying particular attention to the public health measures necessary to prevent a resurgence.

While inadequate leadership and excessive partisanship can influence these deficiencies, other factors also play a role. Public health is an essential government function, collectively undertaken for the common good at the national, state, and local levels. In part because many Americans distrust the government, public health jobs have historically been under-resourced. 19 The trained personnel needed to trace contacts, a traditional public health function that has long been applied to long-standing diseases such as tuberculosis and sexually transmitted diseases, is now in short supply. Frankly, there is no national public health information system, electronic or otherwise, that allows authorities to identify regional variation in demand and supply of the resources necessary to manage and supply Covid-19. Without this information, authorities will have no means to direct vital resources from surplus areas to areas of scarcity. It is no exaggeration to say that the United States currently lacks an effective national system for responding to epidemics.

Responses to crises

Opportunities for Federal Policy Reform

National trauma can change national psychology and create opportunities for major reform. Whether the novel coronavirus will do so remains uncertain, but even if it doesn't, the pandemic may open the way for significant incremental changes that are generally difficult for our deeply divided political and partisan institutions to achieve. Major reforms in the public health arena may be feasible, as recent events have clearly demonstrated shortcomings.

We focus here on policy solutions at the federal level, both for reasons of space and because the pandemic has illustrated the critical role - and absenteeism - of federal leadership in our healthcare system. The expected changes will naturally require additional federal spending. The amounts are difficult to predict because some, such as planned provider payment reforms, can generate savings in the medium and long term by reducing health care costs. Expenses can be met by adopting other cost reduction policies, such as adjustments to the way Medicare pays for drugs. However, paying for these reforms, and other important federal programs approved to combat the economic turmoil caused by the pandemic, could also require reversing some of the tax cuts enacted in 2017.

Insurance coverage

The United States has been fiercely debating for nearly a century whether and how to protect Americans from the cost of disease. 20,21 This debate has generated steady and incremental progress recently that, through the ACA, reduced the number of uninsured Americans to a record low of 28.6 million in 2015. 22 Does the sudden increase in the number of Americans will uninsured create the political will to expand coverage? again ?

If so, advocates of extended coverage have multiple policy options to choose from, ranging from a single government-funded payment system like Medicare for All to reforms based on existing law. 23 One of the many arguments in favor of a single payment system is that it would unravel work and health insurance. If recent events have upset Americans and their employers about employer-sponsored insurance, the transition to an increasingly public insurance system may become more politically attractive.

However, it seems equally or more likely that our national preference for gradation favors reforms that preserve employer-sponsored insurance while compensating for its deficiencies. That has the big advantage of keeping the total costs of insuring Americans - the 10-year projected $ 34 trillion - out of the federal budget at a time of already balanced federal deficits. 24 In this context, harnessing and fully implementing the current powers of the ACA can ensure near-universal health coverage. 24 The first step may be to get the federal government to absorb all the costs of expanding Medicaid, thereby encouraging resistance states to take this step. Another reform could include expanding and strengthening subsidies to cover the ACA market. Yet another possibility is a generic option available to people with business owner plans. Achieving universal coverage under this progressive approach will require a strong individual mandate or automatic enrollment mechanism.

Secure financing for our health system

Just a few months ago, US healthcare providers seemed, if anything, overcompensating. So far, many of the richest and most prestigious healthcare institutions and practices in the country will likely absorb and exceed the immediate losses caused by Covid-19.

However, the pandemic is also showing that some hospitals and healthcare professionals are highly vulnerable under current financial arrangements, and the failure of these service providers can leave large gaps in critical healthcare services. This raises clear questions about whether the United States needs a financing system that preserves essential health services in the face of market disruption.

Part of the solution may be to adopt payment models that break the link between compensation and the volume of services provided. The most promising way to ensure more secure financing for the healthcare industry is to set a price, as the provider receives future monthly payments to provide all necessary care to patient groups. Medicare Advantage plans actually operate under this scheme.

There are many variations on this theme, including the price of selected services (for example, primary or specialty care) or a combination of service fees for certain types of care (for example, preventive services) that may not be available or relevant. Special value. For hospitals, the ceiling can be a potential annual budget to provide all necessary hospital services to patients in certain geographic areas.

There is no ideal approach to compensating service providers. An advantage of determining partial or full capital and prospective budgeting is that it provides hospitals and healthcare professionals with an expected stream of revenue that is unrelated to the volume of services provided. Capitation could have protected many service providers from the serious short-term losses they suffer as a result of Covid-19, reduced the need for immediate federal subsidies (now totaling hundreds of billions of dollars), and provided time to consider. their quantity and distribute them in more. Take care. Global advance payments offer service providers the flexibility to innovate. For example, they can replace virtual care with personal care without worrying about how telemedicine is compensated under fee-for-service rules.

Payment models such as the capital system will not fully stabilize the financing of vital health services. If volumes and associated costs for service providers are consistently lower than expected, advocates will insist on reducing capital levels when existing agreements expire. However, service providers will have more time to plan and adapt to such cuts than in the first months of the pandemic. If, however, low prepayments threaten the availability of critical services, additional public policies may be necessary to support service providers whose losses may endanger the health of communities. All forms of receipt of payment must include quality and competence measures to ensure that health professionals and health institutions do not provide adequate services and that compensation is proportionate to the value provided.

Another part of the financing puzzle is ensuring that essential services that were not sufficiently subsidized in fee-for-service markets before the pandemic are sufficient in the future. This means public policies to support primary care services, behavioral health care, safety net providers, and rural health care services. The pandemic has demonstrated the limitations of insufficiently planned markets to serve Americans, both in normal times and in emergency situations.

Racial and ethnic differences in health care

The obvious disparities in the impact of the pandemic on communities of color highlight systemic racism in healthcare. The health system cannot solve this problem on its own. The social determinants of health that partly explain the growing vulnerability of people of color to the new coronavirus emerge outside of health care, in differential access to education, work, housing, and justice.

However, the pandemic is refocusing attention on how the health system can mitigate health inequalities. Universal coverage will improve access to primary and preventive care services, which in turn can reduce the prevalence and severity of chronic diseases that exacerbate the health impacts of disasters of all kinds. Although expanded health coverage under the Health Care Act (ACA) lowered the uninsured rate across all groups, racial and ethnic minorities saw the greatest gains in coverage and access to care. 26

Increased support for safety net facilities and small community service providers, including in-house and rural hospitals, and community health centers, can improve access to basic and advanced services for populations of color. These service providers will also need support to make the transition to values-based care.

The education and certification of healthcare professionals may be required to include anti-bias training. Additionally, all health care organizations may be required to compare the quality of care for patients of different races and ethnic groups and report this data to local and national health authorities as a condition of eligibility for Medicare funds. and Medicaid. Informing is the starting point for reconciliation with inequality in our health system.

Strong public health capacity

The new coronavirus is unlikely to be the last pandemic we face. 27 To control Covid-19 and prevent unnecessary suffering and economic damage from future pandemics, the United States must improve its ability to act collectively to protect public health.

This begins with developing the capacity of state and local public health authorities to implement basic disease control measures, such as testing, contact tracing, and isolating infected people. Because states often lack the means to build these capabilities, federal support and guidance will be required. Because microbes do not respect state borders, containment of infections depends on coordination between countries. Only the federal government can reliably lead such cooperation between states.

Currently, the federal government lacks all the necessary powers to perform this role effectively. This leadership vacuum leaves the country unprepared to mount an effective and unified response to emerging infectious threats. Of all the issues highlighted by Covid-19, establishing federal command capacity may be the most challenging. Some Americans simply have an aversion to central authority of any kind. The increased federal role is likely to shift the balance of power between Washington and state governments.

However, it is difficult to imagine an effective approach to containing epidemics that does not involve a national orientation. As long as a state or territory continues to harbor contagion, the nation as a whole remains at risk.

New federal legislation is needed to clarify and strengthen the federal government's ability to intervene decisively and quickly, especially by requiring states and localities to implement important health measures that currently fall to states but are vital to health and the welfare of people in other countries. This legislation will have several objectives. First, it will allow the federal government to create a national public health information system that provides real-time data on the prevalence and incidence of disease, as well as the availability of vital resources to treat infected patients. This system should link government and local health departments with each other and with private healthcare providers and requires the involvement of private healthcare facilities, laboratories and manufacturers to provide a complete picture of available resources. Second, it would allow the federal government to spend federal funds, without prior approval from Congress, on emergency responses, including the development and distribution of new diagnostic tests, new treatment methods, new vaccines, and the hiring and training of personnel. necessary to track and contain epidemics at the local level. Third, it would allow the federal government to require states to take steps to contain the spread of the infection. In particular, the legislation can facilitate the federal government's use of its constitutional powers to regulate interstate commerce by forcing states that have not complied with critical infection control measures to stop engaging in interstate travel and commercial activities. The fourth would allow the federal government to regulate the distribution of new vaccines and antimicrobial agents. Fifth, the federal government grants emergency powers to require states to allow licensed healthcare professionals to participate in telehealth services in all states. The use of some of these powers may be conditional on a presidential declaration of a public health emergency and may be limited in time unless extended by Congress.


The COVID-19 pandemic once again recalls the old truism attributed to Winston Churchill: No one should let the crisis go to waste. Now we may have a chance to fix a flawed healthcare system that has made the new coronavirus more damaging in the United States than it should have been.