An Industry in Flux: What to Expect for the Healthcare Industry Under a Biden Administration
A Conversation with Jeb Bush, Former Governor of Florida, and Brian Kelly, EVP and Head of PNC Healthcare
Click here to view the webinar recording
With only a few weeks to go before President Elect Joe Biden’s inauguration, healthcare industry leaders are turning their attention to potential changes that could impact their organizations.
Biden has already spoken at great length about his plan for reforming the industry. As a well-known proponent of the Affordable Care Act (ACA), he has talked about increasing access to healthcare for more Americans, minimizing complexity in the healthcare system, and lowering overall costs.
However, exactly how much Biden can expect to accomplish will likely depend on which party takes control of the Senate. With Georgia set to vote on the remaining Senate seats on Jan. 5, 2021, it remains to be seen exactly what policy changes Biden has a realistic chance of tackling. But it is still likely his energy will be directed toward healthcare to make some progress on fulfilling campaign promises.
On Dec. 9, Buchanan Ingersoll & Rooney and PNC Healthcare co-hosted a webinar featuring former Florida Governor Jeb Bush, Executive Vice President and Head of PNC Healthcare Brian Kelly, and Buchanan Healthcare Shareholder Pamela Hepp. The group discussed their perspectives on what issues Biden will turn his attention to and what changes could be on the way for the healthcare industry, framing the discussion around expected actions on key areas of access, choice, and costs.
Below are the top six takeaways from their conversation:
1. The Uncertain Expansion of Telehealth
The COVID-19 pandemic quickly and vastly expanded the authorization of telehealth services for a large range of healthcare providers across the U.S. In many respects, this authorization was well overdue as telehealth can help increase access to healthcare in rural areas and decrease total costs. When he becomes president, Biden will likely continue facilitating the use of telehealth. However, state licensing laws that restrict providers from delivering care to patients across certain state lines have hindered telehealth’s growth. Even with Biden’s support for expanding telehealth, these state jurisdictions will likely remain a hurdle. Despite its many benefits to providers and patients, telehealth’s future role in the market remains to be determined.
2. The Future of the ACA and a New Public Option
Biden has repeatedly voiced his support for the Affordable Care Act ever since the law was passed under his jurisdiction as Vice President in 2010. As President, he has vowed to protect the ACA and even expand on it by creating a public option in hopes of increasing access to healthcare. But questions remain around the potential impact of Biden’s plan.
“When a healthcare system hears [about] government mandated cost controls or a shift from commercial insurance into uninsured or Medicaid or Medicare, that translates to a health system viewing that as lower revenues,” Kelly said during the discussion. “Those revenues are designed to support investment in services, access, innovation, and ultimately choice. As healthcare systems across the country continue to look to M&A as a way to solve those issues, it could result in less choice [and] less competition.”
Reaching agreement on how to fund such an option also remains a critical challenge for the Biden administration. With public support for such a proposal unclear and a potential Republican-controlled Senate, it would remain difficult for Biden to meaningfully expand the ACA in this way.
3. A Continued Focus on Drug Pricing and Billing Transparency
President Donald Trump long vowed to take on pharmaceutical companies and lower drug prices. In November, the U.S. Department of Health & Human Services finalized its proposal to lower drug costs by targeting backdoor rebates and encouraging direct discounts to patients. However, the Trump administration wasn’t able to implement this plan. Biden will likely pick up where Trump left off by imposing similar mandates that seek to lower drug prices for all Americans. However, the vitriol directed at drug companies has somewhat softened more recently given advances on a COVID-19 vaccine.
“Big pharma is not the favorite of Washington, even though that could change with the vaccine,” Bush said. “Pfizer used to get beat up pretty bad, but I think a lot of people are pretty happy Pfizer is around today, so there may be a change because of the vaccine.”
Trump also took on medical bill transparency during his time in the White House by signing an executive order aimed at providing greater price transparency and increasing competition among all hospitals, group health plans, and health insurance issuers in the individual and group markets. Biden has similarly called for a reduction in “surprise billing.” Specifically, Biden hopes to bar healthcare providers from charging patients out-of-network rates when the patient doesn’t have control over which provider they see, as sometimes happens in hospital settings.
“On price transparency, there’s broader acceptance that [this type of action] is appropriate,” Bush said. “Consumers need to know what prices are.”
4. A Heightened Regulatory Focus on M&A Transactions
It’s no secret that healthcare organizations have been engaging in a high rate of mergers and acquisitions over the last several years. These deals have been driven in large part by providers seeking cost and operational efficiencies amid an evolving landscape created primarily by national and state healthcare reform initiatives.
President Trump paid little attention to antitrust issues around merging healthcare organizations. This is one aspect that could change under a Biden administration. Depending on who Biden taps to be attorney general, healthcare M&A could be one issue that comes under an intense spotlight in 2021 and beyond as regulators attempt to keep a level competitive playing field.
“I think we’re reaching the point where if you have an aggressive attorney general looking at antitrust across the board, this could be a place that is ripe for action,” Bush said.
5. Getting the Pandemic Under Control
The COVID-19 pandemic has led to great financial and operational strain at hospitals and healthcare groups across the nation. Biden has indicated he plans to make mitigating the pandemic a top priority once inaugurated.
“You can see that there’s a change in tone already,” Bush said. “The president elect considers this the number one priority, and I believe it is too.”
Among his initial plans includes asking all Americans to wear masks for 100 days and facilitating an efficient and seamless vaccine rollout. While the President’s actual powers are limited when it comes to mandating Americans’ behavior, there’s an opportunity to encourage the public to heed warnings from health officials and encourage safer actions. Keeping infection rates down as vaccines continue to roll out will reduce stress on hospitals and allow the industry as a whole to get back to normal.
Bush also mentioned that Biden will need to acknowledge and build on the success of Operation Warp Speed in rapidly developing a COVID-19 vaccine. Bush credited Trump for the effort’s success and called on Biden to do everything he can to build trust in the vaccine and convince Americans to take it so that the nation can move past the pandemic.
6. More Game-Changing Innovation
Between advancements in robotics, artificial intelligence, telehealth, big data, and health records technology, the healthcare industry has been innovating at a breakneck speed over the last several years. These developments are leading to extraordinary results in public health, at-home care, diagnostics, and preventative care nationwide. Hopefully, a President Biden will recognize these advancements and do all he can to continue this innovation. It is critical that the incoming administration does not get in the way of these developments by implementing sweeping policy change that hinders the industry’s ability to introduce new technological and operational efficiencies designed to deliver superior health outcomes for patients.
“By allowing our healthcare providers to continue to innovate rather than trying to pick losers and winners with a heavily regulated, mandate-oriented healthcare system from D.C., I think we can prevent diseases,” Bush said. “To me, that’s the ultimate thing we need to focus on.”
A changing of the guard
With inauguration day approaching, Biden’s specific course of action on healthcare reform remains to be seen. Biden has already tapped California Attorney General Xavier Becerra as his HHS Secretary, but he has yet to select heads of other important regulatory bodies like the FDA, CDC, and CMS. Until election results come in from Georgia and control of the Senate is determined, it is unclear exactly how much Biden can hope to accomplish. Until then, the attorneys and government relations professionals at Buchanan Healthcare will be keeping pulse on how continued changes in Washington, D.C., will impact the healthcare industry.