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Transcription

Richard: Hello, and welcome Avalere’s fifth episode in a series of podcasts focused on COVID-19. I am Richard Hughes, managing director and leader of our vaccines team at Avalere, and I am joined today by my colleagues, Matt Kazan, a principal in the Policy practice, and Chris Sloan, an associate principal who is also in the Policy practice. In today’s episode we will discuss how the COVID-19 pandemic could potentially shift the healthcare landscape and policy debate.

Chris and Matt, why don’t we just jump in? We are following developments around the public health response to COVID-19. We are seeing a lot of disruption in healthcare with questions about prevention, treatments, and screenings for COVID-19. I want to give a sense of what is going on in the healthcare policy landscape and the recent activity in Congress over a stimulus package for COVID. So why don’t we hear from both of you on what is going on?

Matt: I am happy to start. Congress has shifted their attention dramatically away from drug pricing, surprise billing, and some other issues to directly respond to the COVID-19 crisis. Congress has passed legislation and continues to look at further legislation to directly respond to the crisis. In a direct way, in terms of policy, it incentivizes testing or lowers treatment costs. But Congress is also looking at indirect impacts on healthcare providers and the economic impacts on businesses and individuals. Congress generally does not react quickly, but they have been trying to move as fast as they can given the events on the ground.

Richard: And Chris, why don’t you share your perspective here as well?

Chris: Thanks, Richard. I am watching what is happening to the other big priority issue we were focused on prior to COVID-19’s outbreak in the US, and that is drug pricing. This was one of the top issues about a month and half ago, around the political election and Presidential election for 2020. Healthcare always rises to the top areas of concern, and now a lot of the action is being taken up by the stimulus package that Matt was talking about. A lot of the action being taken up by Congress is to determine what will happen to the economy in the next few months. For me, this raises a lot of interesting questions:

• What are we going to see happen to drug pricing, if we even see anything in 2020?
• What will happen if drug pricing gets pushed to 2021?

We could be in a very different political environment than we are right now. We could have a new president from a different political party, and this could change bipartisan support on drug pricing or even a introduce a different package.

We would see a different pressure from the White House in 2021 if drug pricing reform is pushed back, so it is interesting to see the ancillary effects of the outbreak on what was a big topic in the Presidential 2020 election and what is generally on voters’ minds.

Richard: Why don’t we look ahead a bit, as you were, Chris. We have an election this year and big impacts on the stock market. There have been a lot of questions on what this means for healthcare long term in transforming the system. What do we expect to happen? What do we expect the impact of COVID-19 to be on the economy, short and long term? What is the impact on the Presidential election? And, ultimately, where might we be on a lot of these current topics in healthcare policy debates in 2021?

Chris: I can talk about some of the economics and some of the changes in coverage for people in the US. And Matt can share more of the political part. But one thing we are watching—and this is still to be determined on the short- and long-term effects of COVID-19—is what happens to healthcare when a recession happens. We have the 2008 recession as somewhat of a guidepost, but it was under very different circumstances. What we saw were that many patients lost their source of health insurance coverage or switched into other forms of healthcare, and that has a lot of fallout effects on patients’ ability to get care and on the industry. If patients are moving into public programs out of commercial insurance, it usually means lower reimbursement rates for providers.

We could also see different health plans offering different types of coverage. So here’s what I am watching:

• With the increase of people unemployed, where are they going to get their coverage? In 2008, we saw a big jump in the number of uninsured. In 2020, it is post Affordable Care Act, and many states have far more generous safety programs in the form of Medicaid, where states have expanded coverage, or in the form of subsidies to purchase individual coverage on the exchanges. Of the people who are unemployed by the shutdown and some of the economic effects that drag on longer, where these individuals get coverage is going to impact stakeholders across the healthcare spectrum.
• The increase in cancellations of elective procedures. There are patients who are not able to maintain their routine doctor visits and pharmacy refills. I am looking at what that can do to a patient’s health. Additionally, I’m looking at utilization of care services once out of this dip in terms of patients’ health and diagnosis rates for specific conditions.

Whether you are a manufacturer, health plan, provider, or patient, there are a lot of puzzle pieces moving in the healthcare system right now. Some effects would happen in a normal recession, but they are happening more quickly with the COVID-19 pandemic, and it will be some time before we see data on how things have shaken out.

Richard: Thank you, Chris. So, Matt, do you want to touch on a bit about the broad economic impact? Also, how that can impact the election and potentially the healthcare policy debates in 2021, and moving forward?

Matt: Yes, absolutely. It will be interesting to see how voters think of the administration’s and Congress’ response to the COVID-19 crisis, and if the current administration will be rewarded for their response. Or will voters feel it was not adequate, and vote as such? This will continue to play out between now and the election in November. There will be areas of public health related policy that will be front and center on the agenda, which may not have been in the light under different circumstances. In terms of access to coverage, prevention and public health will be topics that voters will have at the back of the mind as they decide which candidate to support. The general state of the economy always has an impact on elections. So the question now is how deep is the current downturn and will it last until November? If so, what impact will it have on the election? I think there are some parallels to be drawn from the financial crisis of 2008–2009. While that situation occurred relatively quickly, maybe not as quick as we are seeing now, the 2008 election centered a lot on that issue, and people did not anticipate that happening a couple years beforehand. So with the situation now, these are new issues candidates will be forced to talk about, and voters are going to react to it. This will all hold over into next year’s policy agenda, where in 2021 we could be focusing on public health issues that were not anticipated prior to the COVID-19 outbreak.

Richard: Great. These have been helpful perspectives from each of you. Is there anything else you would add, Chris or Matt?

Chris: To reiterate Matt’s point, there is a lot that is still up in the air. One thing we have been talking about at Avalere surrounds questions of shifts in coverage or changes where people get their insurance and how it plays on the long-term effects from an economic perspective. Also, the subsequent political downstream impacts. We have been looking at some of our models and projections around differences in a V-shaped recovery, where things get back to normal relatively quickly, versus a U-shaped recovery, where recovery takes a little longer. There are aspects that are more drawn out to ramp up to where we were. Those recoveries will have very different impacts as well on the factors we talked about today. All to say, there is still a lot in the air and worth monitoring, and this is not the last time we will be talking about these downstream effects.

Matt: In closing, the only thing I would add is that going into this year, we only had 1 or 2 healthcare legislative packages at most, but I think we have already seen 3 and potentially more this year. Events on the ground related to the crisis will dictate how many times Congress is going to act. And each time Congress acts is an opportunity for members to include priorities and other legislative actions unrelated to COVID-19 each time a bill is passed. This is certainly something to watch for as Congress continues to navigate this space.

Richard: Thank you so much, Matt and Chris, for your time and expertise. You both have brought insightful perspectives. For our listeners, if you would like to get more information, feel free to visit our website. We have a COVID-19 intel center, which you can access at www.avalere.com/covid-19. Thanks so much for listening, and tune into the next episode!

Listen to other podcasts in this series

E1– Get the Facts on COVID-19: Vaccination Affordability and Access

E2 – Get the Facts on COVID-19: Patient Out-of-Pocket Costs

E3 – Get the Facts on COVID-19: A Comparison to Other Outbreaks

E4 – Get the Facts on COVID-19: The Future of Healthcare Delivery