Improving access to health care can reduce long-term health care costs.
Seeking to address growing concerns about U.S. health care costs, policymakers in many cases are turning to patient access restrictions in efforts to reduce spending and, as such, control costs.
Cost-containment objectives are undoubtedly necessary to pursue. But policies that seek to advance those objectives by imposing barriers to individuals’ access to care can actually increase costs, rather than reduce them, by discouraging or rendering out of reach medically appropriate care and services.
In developing legislative and regulatory initiatives, it is important to consider the potential effects of how such policies are designed and implemented—and to consider ways to address rising costs by improving access, not restricting it.
Since the enactment of the Patient Protection and Affordable Care Act (ACA) in 2010, the number of uninsured individuals in the United States has dramatically decreased—from 49.9 million, or 16.3 percent of the total U.S. population, in 2010 down to 28.1 million, or about 8.8 percent of the total U.S. population, in 2017.
Nearly halving the number of uninsured individuals in this country in less than a decade reflects significant and meaningful progress. But even for people with health insurance, a fundamental—and critical—question is whether their coverage provides adequate and affordable access to appropriate care.
A recent study by the Commonwealth Fund found that, compared to 2010 when the ACA was enacted, “fewer people today are uninsured, but more people are underinsured.” Specifically, approximately 87 million out of 194 million U.S. adults from ages 19 to 64 were “inadequately insured” in 2018, according to the study. These individuals often are unable to afford care due to health insurance coverage limitations or exclusions and out-of-pocket costs in addition to their premiums—such as deductibles, copayments, and coinsurance.
Coverage restrictions often are framed as cost-containment measures designed to discourage unnecessary care. Frequently, however, they result in individuals, particularly those with chronic conditions, forgoing or delaying appropriate and necessary care. That result, in turn, leads to deteriorating health conditions, exacerbation of diseases and symptoms, and reductions in preventive care—all of which increase overall costs to the health care system, as noted by Anuradha Jetty of the Graham Center, among others.
Dr. Margaret Hamburg and former U.S. Senator William H. Frist (R-Tenn.), co-chairs of the Health Affairs Council on Health Care Spending and Value, have observed that areas of care with particularly high levels of unmet needs include “prevention, mental health and substance abuse care, and chronic disease management.” In these and other areas, forgoing or delaying needed care creates heightened risks of poor health outcomes, with harmful consequences from both a clinical and cost-containment perspective.
Efforts to reduce medication costs and spending, for example, have led to policies and proposals under Medicare Part D, state Medicaid plans, and other programs that allow increased use of coverage restrictions and requirements, such as prior authorization, step therapy, increased cost-sharing obligations, and other forms of utilization management.
In many cases, however, the medicines subjected to these restrictions are complex therapies that are not interchangeable and that often cause very different reactions in patients. As Stephen Soumerai stated, focusing on “essential drug classes with heterogeneous patient responses and side effects could reduce appropriate care, adversely affect health status, and cause shifts to more costly types of care.”
In November 2018, the Centers for Medicare and Medicaid Services (CMS) proposed changes to its regulations under Medicare Advantage—also known as Medicare Part C—and the Medicare Part D Prescription Drug Benefit program. A number of the proposals focus on mechanisms for increasing the use of access restrictions such as formulary exclusions, prior authorization, and step therapy. According to CMS, the proposed changes would “support health and drug plans’ negotiation for lower drug prices and reduce out-of-pocket costs for Part C and D enrollees.”
Analysis by the Pew Charitable Trusts, however, noted that absence “of adequate access to medications can in some circumstances increase costs to other Medicare programs through increased hospitalizations from complications or increased physician visits to manage medications.” Similarly, the Congressional Budget Office has found that appropriate use of medicines under Part D can “offset” spending for other non-drug medical services by “improving or maintaining an individual’s health,” or helping to “avert hospital admissions and thus reduce the use of medical services.”
In other areas of medical spending, too, researchers have found that improved access to appropriate services—as opposed to increased access restrictions—leads to better outcomes from a clinical and overall cost perspective.
A recent report from the Center on Budget and Policy Priorities examines Medicaid demonstration projects—often called waivers—that CMS has approved under Section 1115 of the Social Security Act. The authors of the Center’s report conclude that waiver programs restricting access and imposing coverage penalties often do not achieve the desired outcomes and can harm beneficiaries. These include programs that impose coverage-related penalties to try to encourage certain positive behaviors, or that prevent or terminate Medicaid coverage for beneficiaries who do not fulfill certain requirements, such as engaging in work or work-related activities.
A number of lawsuits have challenged CMS’s approval of “work requirement” waivers and related agency guidance. CMS has stated that these waivers advance Medicaid’s objectives because they “seek to improve beneficiary health and financial independence” but also “allow states to maintain the long-term fiscal sustainability of their Medicaid programs and to provide more medical services to more Medicaid beneficiaries.”
Organizations such as the National Health Law Program, however, argue that CMS’s guidance underlying these waivers is “procedurally and substantively flawed” and “entirely ignores the wealth of literature regarding the negative health consequences of work requirements.” Litigation remains ongoing in connection with a number of states’ work requirement waivers.
These examples—among many others—reflect the significant challenge and tension inherent in the need to balance appropriate access to care with effective cost containment. Legislative and regulatory responses to this challenge are varied and often contentious. As issues of uninsurance and underinsurance persist, research suggests that a holistic view of the relationship between access and costs is necessary. Appropriate access to care is not antithetical to cost-containment goals; it plays an essential role in achieving them.
This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and the receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The content therein does not reflect the views of the firm.
This essay is part of a 12-part series, entitled What Tomorrow Holds for U.S. Health Care.