Policy snapshot: Health care
INSIGHT ARTICLE |
Joe Biden is the projected winner of the presidential election, while control of the Senate will be won only by a slim margin following runoff elections for Georgia’s two seats in January. What does a divided government mean for the middle market? RSM is looking at the policy implications and key issues for various industries. This is one in our series of industry-focused outlooks for a Biden administration.
According to Joe Biden’s plan:
Biden will want to strengthen and expand the Affordable Care Act; however, he could face Senate opposition or risk expansion, through executive orders, that could be undone by a later administration. While we won’t have the Supreme Court’s opinion for months, the candor of the oral arguments suggest the law will largely survive its latest legal challenge. The outlook for Biden’s cornerstone public option, which would allow Americans to buy into a Medicare-like program as early as age 60, also seems unlikely to pass a divided Congress. The Biden administration and congressional Democrat caucuses are also likely to continue the bipartisan push to address so-called surprise medical billing practices and prescription drug costs.
What a closely divided Senate means for health care:
The Medicare public option is not likely to pass a divided Congress; we are more likely to see executive orders and perhaps, at minimum, proposed legislation on surprise billing and drug pricing. These potentially quicker wins for Biden and the Democrats may have significant repercussions throughout the health care ecosystem. Additionally, we expect increased federal antitrust oversight of health care mergers and acquisitions. Vice President-elect Harris’s history as Attorney General of California suggests she may make a point to scrutinize such deals, which some research suggests leads to higher prices for patients. We may also see expanded scrutiny of private equity’s investment in health care providers. President Trump and his administration have been pushing a value-based care model in Medicare since they took office. We are unsure this will be an emphasis for Biden’s administration; however, value-based care is one area with general bipartisan support.
What room for growth or evolution exists in health care?
Drug and procedure costs, price and quality transparency and the future of telehealth regulations and reimbursement are issues for the incoming administration to address. Both Democrats and Republicans have largely agreed that health care in America costs too much. The Republican strategy has been to provide patients with the information they need to make their own health care decisions through initiatives like pricing transparency and short-term health coverage. We expect the Biden administration and congressional Democrats to push for lower costs; however, the strategy will center less on patient choice and more on leveraging the power of the federal government to negotiate or mandate change.
Questions that frame the path forward:
- What could significant shifts in a payer mix, from commercially insured to Medicare, mean for different groups of providers?
- What role will investors have in health care provider subsectors? Will they continue to provide capital in this space?
- What is the future of virtual health care in the industry and how will policy continue to shape it?
- As health care moves to virtual environments and integrates with wearable and other alternative data, have providers mitigated risks and addressed burgeoning cybersecurity challenges?
- How will the pandemic continue to affect the industry and what will be the additional long-term effects on the workforce, operations, patient care and more?
You may also be interested in
How might the 2020 presidential election impact your business? RSM provides tax, policy and regulatory insights for the middle market.
From price transparency to healthtech investment, health care’s next normal is one of great transformation amid ongoing uncertainty.