We interrupt our regularly-scheduled blog on the Blockchain in artificial intelligence (A.I.) to review the possible impact on healthcare, post-midterm elections in the United States.
First, we write this blog from the epicenter of election controversy in Palm Beach County, Florida. It is hard for anyone who has paid attention to the U.S. midterm elections to not know that there are major efforts underway for a recount of votes in this county (where President Trump is a part-time resident) specifically in the U.S. Senate race and for governor of the state of Florida. There are two takeaways from this situation. First, the U.S. electorate is nearly equally divided in philosophy, and second, the total incompetence that has placed Palm Beach County again in the middle of the election; it was too close to call.
However, the key take-away from the U.S. elections is that the number one concern of Americans as surveyed, is not the economy. The economy in the United States is roaring. If you don’t believe me you can ask the Federal Reserve Open Market Committee, who has been raising interest rates, and expects to continue raising interest rates at least through 2019. It is not concerned over terrorism, security, politics, or the headlines of Russian collusion in the 2016 elections. It was, by a large margin, concerns over healthcare. By some reports, 70% of those surveyed after they voted, believe that the U.S. healthcare system needs dramatic change.
Many Democrats ran on protecting the “pre-existing protection” part of the affordable care act of 2010 (ACA) also commonly referred to as Obamacare. We totally agree that the single best thing of the ACA was the protection of pre-existing conditions.
Another concern of Americans is the sky-high drug prices. That subject we have written about extensively in these blogs, and we agree with consumers. What many do not know is what is yet to come about healthcare cost in the United States. Over the next few years there are a number of highly specialized gene-based drugs that will be entering the marketplace in America. Some of these drugs, or better yet treatments, could cost $250,000 to $1 million to materially treat or put in remission major debilitating diseases.
Based on the results of the election, we can categorically say that the ACA will not be repealed with the Democrats in control of the U.S. House of Representatives, or what other countries call the lower chamber. We do expect that the President will use his executive powers to limit even more of what is left of the ACA, if no bipartisan agreement is reached. This will likely mean that even more cases will be destined for review and interpretation by the U.S. Supreme Court.
It is possible that in a new unexpected compromise, both houses and the President could take up modest action to stabilize the ACA in the private insurance markets. The premiums are expected to increase modestly in 2019; however, they have stabilized at very high rates.
One thing that nearly all parties agree on though is Americans, employers, and the government are paying too much for prescription drugs, and particularly when referenced to the same drug cost in Europe and other developed countries. If drug price reform or restrictions are placed in narrow legislation, we predict that it will receive bipartisan support, and the President’s support. It is also likely that if it is part of a complicated wide-reaching legislation, that includes drug issues, it is likely to be blocked in the U.S. Senate, and will never reach the President’s status for signing.
Another issue of unity is a subject of in-network and out-of-network charges for those that are insured today. In many cases, patients have no way to know who is in their network and who is not. A patient undergoing surgery could be treated by a doctor that is in their network and have an anesthesiologist or pathologist, whom they do not know, be out-of-network and providers will routinely bill for out-of-network balance billing. That gap, or balance billing, could range in the thousands of dollars for a procedure, such as surgery. This is unexpected and very confusing to consumers. It is also unfair and should be illegal. I can feel the pain personally because it has happened to me on more than one occasion. Nearly every American has experienced it, generally in emergency situations.
Because of referendums at the state level, it is guaranteed that the Medicaid program will be expanded, taking advantage of the existing ACA opportunity. This, along with potential changes to fix the ACA, could actually inspire other states that have not participated in Medicaid expansion, to adopt a “new ACA,” and those actions could materially expand coverage to millions of Americans.
In this blog, we have never advocated replacing the ACA – only materially modifying it. By a large margin, that seems to be what most Americans want, and politicians on both sides of the political spectrum have noticed it.
We also expect material movement on price transparency of healthcare cost to consumers. We operate in a dark pool in healthcare cost, because in most cases consumers have no idea what the cost is going to be. Providers generally charge what is referred to as a usual and customary, and never did they receive that payment from state and federal programs. I have yet to see an insurance company pay that usual and customary charge. It is the customers, who are without insurance, that pay most of the time the usual and customary charge. This modification will be difficult and hard-fought. In the interim, American innovation and ingenuity may impact this segment of healthcare, by providing technology solutions, where consumers will know exactly what they will pay for care, before the care is provided. This is a new concept and one that has been applied in nearly every consumer facing industry in America, today.
In line with price transparency, a new federal law takes effect on the first day of 2019, forcing hospitals to list usual and customary prices on their websites. We expect that to be the beginning of material transformation and transparency in healthcare cost. Hospitalization accounts for over one third of all healthcare expenditures in the United States.
In summary, we expect more Americans to have healthcare insurance by 2020, just in time for the presidential elections in November 2020. We expect healthcare cost to go up 6-7% over the next two years, and maybe even as much is 8% by 2022. We are still as a country dealing with healthcare insurance and coverage, and not fundamental changes in healthcare cost. We think that with better use of technology and more consumer control of their healthcare cost (who is also economically benefitted to stay healthy) will reduce the overuse of healthcare, along with paying providers to keep patients healthy, will be collectively the only cure for the U.S. healthcare system.
-Noel J. Guillama, President