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2021 Policy & Political Impacts to Healthcare

Michael Capofari

Senior Manager, Healthcare Business Consulting, EPAM Continuum
Blog
  • Healthcare

The outcome of the 2020 U.S. presidential election has already begun to significantly influence the future of healthcare as we know it. The Biden-Harris administration has made it clear that one of their key focus areas is improving access to quality, affordable healthcare for Americans, as evidenced by re-opening enrollment to the health insurance marketplace. Couple these actions with new and enhanced rulings from the U.S. Centers for Medicare & Medicaid Services (CMS) and we can expect to see major changes and impacts to the healthcare landscape in 2021 and beyond. 

Expanding Health Insurance Coverage & the Affordable Care Act

One of the first executive orders of the Biden administration was centered on strengthening Medicaid and the Affordable Care Act (ACA). Following that order, significant funding for healthcare in the American Rescue Plan (the U.S. stimulus package to address the effects of the pandemic) was introduced. As the first federal assistance program for health insurance in over a decade, this bill temporarily increases government subsidies to health insurers for individuals who have purchased insurance through the ACA’s marketplace.

With these subsidies set to expire at the end of 2022, the debate surrounding the expansion of public coverage will certainly continue, but now the question seems to be “when” not “if.” While staunchly opposed by providers (who would see significantly reduced fees paid to hospitals and doctors), there’s no doubt that the system will look vastly different as changes need to be made to alleviate National Health Spending—which is projected to continue growing at an average annual rate of 5.4% for 2019-2028, reaching $6.2 trillion by 2028.

The recent federal announcements have painted a clear picture of the Biden administration’s intention of inching toward a true version of “coverage for all” in one fashion or another; however, more decisions about how exactly to enhance coverage are forthcoming. The continued expansion of the ACA will further push both providers and payors to stabilize costs of operating health coverage and will drive increasing investment in technology to bring down administrative costs.

Interoperability Is Here

Interoperability, a topic with no shortage of coverage, will make significant strides as the first regulations that were finalized last spring will be implemented this year. The focal point of these regulations is requiring payors to make patient data available electronically in a standard format and enabling members to have access to their electronic health records. This will allow third-party applications and APIs to access and control patient health data, providing better coordination across the various healthcare silos and delivering a seamless user experience for members. With the increase in telehealth visits during COVID-19, it’s more important than ever for all healthcare organizations to have access to patient data to provide better, more effective care. With these regulatory changes, we can expect to see a significant boost in the development, maturity and usage of digital health tools to address these needs.

Continued Maturity of Value-Based Care

Without hesitation, it is safe to say value-based care (VBC)—the idea of reimbursing providers based on the outcome of the care a patient receives—is here to stay. The only question is what new reimbursement models will be introduced and what specific preexisting models will carry forward. Driving maturity of VBC, a priority for the CMS under the Trump administration, will continue to be a focus of the Biden administration and its increased emphasis on cost savings.

With VBC models at the forefront, providers have shifted focus to make healthcare more proactive, instead of reactive, to prevent ailments before they exist. The primary benefits of the VBC model are twofold: Patients gain better overall care with less hospitalizations and readmissions, while it also offers more stable, consistent reimbursement for providers during times with fewer elective procedures by removing vulnerability and volatility in changes in demand. With this change from quantity to quality, healthcare organizations need to prioritize managing and improving their quality metrics, so they can continue to prepare for VBC adherence moving forward.

2021 has already started to become a pivotal year for healthcare. The industry is beginning to turn a corner and bounce back from the pandemic and from both a political and regulatory perspective, big changes are on the horizon that will dramatically enhance the patient experience. These market shifts will put pressure on payors and providers to adopt a streamlined, digital approach in their way of working—if they haven’t already—to meet these new expectations. As the year progresses, organizations need to not only stay up to date on these changes but also continue to challenge themselves to proactively utilize regulations to better their product and service offerings, ultimately improving the lives of patients everywhere.

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