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Look Ahead

5 Things to Watch in Health Care in 2022

There are real opportunities for reforms on behalf of patients in commercial sector and drug pricing, and renewed efforts possible for payment reform, Medicare, and better caring for the dual-eligibles population.

Arnold Ventures’ health care team is excited about the array of opportunities to improve care delivery and lower costs coming up in 2022. Here are some of the key developments that they’ll be focused on this year in commercial sector prices, drug prices, provider payment incentives, Medicare sustainability, and complex care.

#1 Commercial Sector Prices: Opportunities for Addressing Consolidation and Anticompetitive Behaviors

Over the last several decades, health care markets have become increasingly consolidated — driving up health care prices without improvements in quality. Rising prices mean higher health care costs for consumers, employers, and taxpayers — leading policymakers to increasingly scrutinize health care market competition. Simultaneously, anticompetitive practices used by dominant hospitals and powerful provider groups to maintain market power and raise prices are coming to light following litigation against Sutter Health in California and media coverage highlighting other hospitals’ business tactics. 

State and federal policymakers have already taken steps and indicated interest in addressing health care consolidation, and there are emerging opportunities to advance antitrust and competition policies in 2022. Such policies — including strengthening merger notification and review, allowing FTC oversight over nonprofit hospitals, and banning anti-tiering and anti-steering clauses in plan-provider contracts — have bipartisan interest and are supported by consumer and employer groups. 

#2 Drug Prices: Reauthorization of the Prescription Drug User Fee Act and the Build Back Better Act

The Prescription Drug User Fee Act, which provides roughly half the Food and Drug Administration’s budget to review the pharmaceutical industry’s requests for marketing approval, is up for renewal this year. 

Since its inception in 1992, each reauthorization window has provided an opportunity for the pharmaceutical industry to make questionable tradeoffs between the speed of approval and quality standards. It’s imperative that Congress right-size drug approval standards and ensure transparency and representativeness (by criteria such as age and racial and ethnic background) in clinical trials so the U.S. health care system only pays for those drugs with an established clinical benefit for patients — not those approved using poorly designed trials that can obscure safety concerns that place Americans at risk for the sake of profits. 

Congress also has a critical opportunity to limit the cost of prescription medications this year. The House-passed version of the Build Back Better Act includes provisions to empower Medicare to negotiate lower prices, penalize manufacturers for raising prices faster than inflation, and reform Medicare Part D to ensure life-saving medications don’t bankrupt Americans. Passing these reforms will be critical to relieving the burden high drug prices have on American taxpayers and families.

#3 Provider Payment Incentives: Renewed Opportunities to Advance Payment Reform Efforts

There is renewed momentum to transform the way we pay for care and engage in delivery system reform. 

In 2021, the Center for Medicare and Medicaid Innovation (CMMI) laid out its future strategic direction for payment reform. It signals their interest in focusing on fewer, more effective models (particularly population-based models such as ACOs, or Accountable Care Organizations, which are groups of doctors, hospitals, and other providers that offer coordinated high-quality care to their Medicare patients), advancing health equity, exploring more mandatory models for providers, improving multi-payer alignment, and engaging a broader range of provider types (e.g., safety net providers). 

The high level of interest in payment reform among policymakers presents an important opportunity to improve health care costs, quality, and equity.

#4 Medicare Sustainability: Pressing for Reforms to Improve Medicare’s Financial Sustainability

The Medicare program faces significant fiscal challenges. Rising per capita health care costs and the aging of the baby boomer generation are straining the Medicare program and putting pressure on the federal budget. Medicare’s Hospital Insurance trust fund is projected to be insolvent just four years from now, at which point Medicare will not be able to fully cover spending for hospital and post-acute care services. 

There is an urgent need for policymakers to consider reforms to the Medicare program. The new year presents new opportunities for Congress to make progress toward improving Medicare’s financial status, including by considering policy proposals that reduce overpayments and enhance competition among Medicare Advantage plans, ensure efficient payments to traditional Medicare providers, and strengthen Medicare financing.

#5 Complex Care: Progress in Creating Integrated Medicare-Medicaid Models

As the COVID-19 pandemic continues, one of the hardest hit population remains the low-income older adults and people with disabilities who are dually eligible for Medicare and Medicaid coverage. Among this population are frail elders, many who need supports to age at home and avoid the need to move into a nursing home. One clear solution for addressing the needs of this population and reducing the fragmentation in care delivery is to expand the availability of integrated Medicare-Medicaid models. 

We have seen the number of integrated offerings increase each year, with 741 counties offering fully integrated Medicare Advantage Special Needs Plans in 2021 and 771 counties offering such plans in 2022. But only about half of all people who are dually eligible for Medicare and Medicaid have access to a truly integrated model.

In 2022, policymakers at both the state and federal levels will have a variety of opportunities to meaningfully expand integrated models and improve care delivery for this vulnerable population. In fact, federal regulators started 2022 with a bold pronouncement of support for integrated models and simpler, person-centered systems in a proposed rule that would affect health plans serving dual-eligible beneficiaries.