Top Policy Trends 2020: Healthcare

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Shifts in 2020

The debate around universal healthcare will continue to dominate the narrative in 2020, with little movement on the legislative front. But driving down the cost of care for consumers (and employers) will be waged in incremental policies in 2020—lowering healthcare costs is one of the few areas that has created consensus amongst policymakers. Meanwhile, 79% of Americans say the cost of prescription drugs is unreasonable, according to a poll by the Kaiser Family Foundation.

Regulation and guidance on pricing transparency and drug pricing reform will challenge business models of health industry players. Thirty-seven percent of executives surveyed in a PwC poll said they prefer drug pricing transparency policies over other drug pricing controls like Medicare-negotiated pricing or an international pricing index.

62% of COO respondents rank healthcare among the top three policies most impactful to their business.

Source: PwC Election 2020 Poll, November 2019

The five influencers

Digital therapeutics

New entrants, along with biopharmaceutical and medical device companies, will bring to market new digital therapies and connected health services that can help patients make behavioral changes, give providers real-time therapeutic insights and give insurers and employers new tools to more effectively manage beneficiaries’ health.

These products will also allow companies and consumers to develop a more complete digital picture of the state of health. This will bring real-world data into greater focus and may make it easier to construct value-based contracts or other outcomes-based financial models with payers and providers. Interoperability rules recently proposed by the Trump administration will likely lead to greater data sharing and will fuel development of these tools. As digital therapeutics and connected devices transitioned from concept to reality, investors poured a staggering $12.5 billion into digital health ventures in 2017 and 2018. As this space evolves, many of these apps and services are going to require clearance from the Food and Drug Administration (FDA).


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President Donald Trump

While the Trump administration is unlikely to get any healthcare reform changes through the highly partisan atmosphere in Washington, expect executive orders from the Oval Office that call for further pricing transparency, as well as drug pricing reform—particularly as we get further down the road to the 2020 election. In June 2019, President Trump issued an executive order that recommends that the Department of Health and Human Services (HHS) develop policies that would make drug pricing more transparent, allowing consumers to “shop around.” The order has since been held up by the court system, illustrating how difficult it is to create change on this issue.

The president is also said to be mulling over orders that could lower the price of drugs for Medicare and another that could mandate that the price of prescription drugs in the United States be no higher than what is charged in the country paying the lowest price for that drug.

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High-level Democrats

High-ranking members of Congress and other prominent members of the blue party (particularly those hoping to be our next president) are going to impact healthcare in a profound way. The party has formed consensus around making healthcare more affordable and we expect to see this camp trying to move the needle forward, regardless of who takes the candidacy.

Two bills cleared the House in October 2019 that would require drug companies to disclose more of the discounts they give to pharmacy benefit managers (PBMs). Rep. Abigail Spanberger (D-VA)’s measure would require the Centers for Medicare and Medicaid Services (CMS) to publish certain payment information regarding PBMs’ discounts and rebates for prescription drugs, as well as generic drug dispensing rates. A bill from Rep. Buddy Carter (R-GA) related to the disclosure of rates for drugs covered by Medicaid and the Medicare prescription drug benefit also cleared the House. The aim of both bills is to obtain more data about how certain parties are contributing to high drug prices.

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US Courts

The court system has been particularly active regarding healthcare regulation, often ruling against new policies. The Trump administration, mainly through CMS rulemaking, has tried to address the prices of hospital services and drugs over the past three years. CMS has focused on several areas of reform, including the 340B drug pricing program, physician-administered drugs and hospitals’ efforts to buy up physician-owned clinics to access higher reimbursement rates. But the agency’s efforts to bring reform to those areas have been stalled in the courts, throwing hospitals in limbo as they await answers.

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Employers across industries are taking action, banding together to provide better, more efficient or more cost-effective care models. Through business groups, employers are able to influence large issues like “Medicare for All” and smaller regulations around pricing transparency and surprise billing—focusing on the areas in which they can apply leverage, such as overall cost and quality.

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62% of respondents are “very actively” looking to shape healthcare policy.

Source: PwC Election 2020 Poll, November 2019

How to prepare for the shift

Try not to get caught up in the back-and-forth of policymakers trying to win the nomination. While it’s likely that we’ll hear a lot of healthcare proposals as the 2020 election approaches, it’s going to be important to sort out which policy proposals will matter come 2021. Shift focus to the policies that will impact costs to the business.

Put systems in place that will help employees manage their health. Digital apps can help provide incentives to employees, keeping costs down for consumers and increasing their productivity in the office.

PwC’s HRI projects 2020’s medical cost trend to be 6%. This is up over the flat trend seen in 2018 and 2019, with revised estimates coming in at 5.7% for both years. To drive the medical cost trend down, employers are taking a more active role in managing healthcare costs. For example, they're negotiating contract prices themselves, setting up provider networks and even building a parallel health system to take care of employees at more manageable costs.

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Alison Kutler

Principal, Strategic Policy Leader, PwC US

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