What you need to know about the forces reshaping our industry.


December 30, 2019

The 10 biggest health care stories of 2019

Daily Briefing

    1. 'Medicare for All' went mainstream

    This year's pool of Democratic candidates has put one issue front and center in their debates: Medicare for All. While Sen. Bernie Sanders was once the lone champion of single-payer systems, this year we saw a significant shift among Democrats: Nearly every declared Democratic challenger to President Trump has gotten behind some version of Medicare for All, if only in concept. That's in part because the public has grown more open to single-payer or public-option solutions as they've grown increasingly frustrated with the health care system. Some states such as Washington and Colorado have already begun to test public option programs, and the successes and failures of those programs could set the tone for the future health care reform debate.

    2. New price transparency rules could force hospitals to disclose their 'secret' prices

    In November, the Trump administration dropped two highly anticipated price transparency rules that drew instant pushback from provider and insurer groups. The rules will require hospitals and insurers to publicly post their private—and currently secret—negotiated rates for at least 300 "shoppable" services. Hospitals already have filed a lawsuit challenging the final rule and insurers could take similar legal action. That's in part because the rules will require investments of time and resources, particularly for health systems that have yet to invest in a patient-facing price transparency tools, and it remains unclear if HHS has the authority to force the disclosure of negotiated rates. But even as the lawsuit progresses, hospitals and insurers would do well to begin their preparations in 2020, as CMS will begin enforcing the payer-negotiated rate policy in 2021.

    3. After decades of progress, US life expectancy continued to fall

    This year brought confirmation that the United States is facing a public health crisis, as new research showed U.S. life expectancy had fallen for three consecutive years after 2014. Much of the decline is being driven by so-called "deaths of despair," which represent deaths that stem from alcohol, drugs, or suicide. CDC data show that deaths of despair have more than doubled since 1999, with more than 150,000 Americans dying from alcohol and drug-related deaths in 2017. The United States' opioid epidemic has been a key contributor to the uptick in drug-related deaths. Last year, more than 1,000 Americans died from synthetic opioid overdoses every two weeks. Other issues driving death rates among middle class Americans include obesity, injuries, and organ-system diseases—including Alzheimer's disease, diabetes, heart and lung diseases, hypertension, and stroke.

    4. Big employers experimented with new ways to rein in health care costs

    While employers in recent years have sought to lower health care spending by shifting more workers to high-deductible health plans, research in 2019 suggest many are now taking a new approach. PwC Health Research Institute report released in June found more employers are contracting directly with health systems to negotiate better prices for high-cost procedures. Walmart has been a leader in this strategy for several years. About six years ago, Walmart launched its Centers of Excellence (COE) program, through which Walmart covers the full cost of travel and treatment for employees seeking certain cancer evaluations, organ transplants, and common surgeries such as heart, hip, knee replacement, and spinal procedure, provided they seek care at one of the companies so-called Centers of Excellence. These are health care facilities that Walmart has deemed provide quality care—and officials involved in the program say it has been a resounding success.

    5. A mysterious, vaping-linked illness swept the nation

    Another pressing public health issue dominated headlines during the second half of 2019: vaping-linked illnesses. This past summer, physicians began alerting CDC to an unknown illness that was affecting young and otherwise healthy individuals. Physicians said patients presented with symptoms such as abdominal discomfort, coughing, fever, and shortness of breath. Standard treatments, including antibiotics and oxygen support, in some cases did not stop the symptoms, and some patients experienced respiratory failure and were placed on ventilators. As of Dec. 17, CDC has confirmed 54 deaths and 2,506 hospitalizations associated with the illness. Physicians and CDC early on determined a link between vaping devices and the new mysterious illness, dubbed EVALI. But to date, CDC has yet to officially determine a cause of the illness.

    6. Congress nearly passed a 'surprise billing' fix—then backs down, for now

    While the problem of so-called "surprise" billing is nothing new, it gained renewed attention this year in part because of journalistic projects such as Kaiser Health News' and NPR's "Bill of the Month" series and Vox's deep dive into ED billing practices. Toward the end of the year, it seemed like Congress had agreed on a bipartisan legislative package to address the problem, but opposition from physician groups and private equity firms (which spent over $30 million on ads opposing the legislation in a single month this past August), and competing priorities in the House, led lawmakers to table the debate until 2020. It remains to be seen whether any final bill will use benchmark payment rates, arbitration, or some other combination of the two to address the problem.

    7. Congress (still) didn't act on prescription drug prices

    Also this year, the House, Senate, and Trump administration all offered proposals that sought to cap out-of-pocket costs for seniors, cap drug price increases that outpace inflation, and redesign Medicare Part D. While there were some big areas of disagreement (Democrats wanted Medicare to be able to negotiate prices, which Republicans oppose; and the Trump administration wants to tie drug prices to those overseas, which Democrats support but Republicans oppose) there was enough overlap that it seemed likely a compromise deal could be reached by the end of the year. But, as with surprise billing, progress on a unified bill stalled amid House Democrats' impeachment inquiries. At the close of 2019, three bills are now in the running (one from House Democrats, one from House Republicans, and one from Senate Republicans, which has the White House's support) , and the debate is expected to continue in the ramp-up to the 2020 presidential elections.

    8.  More providers became eligible for MACRA—previewing the future of payment reform

    For Medicare providers, 2019 brought new opportunities to participate in CMS' Quality Payment Program. In the Merit-based Incentive Payment System (MIPS) track, CMS expanded the definition of eligible clinicians to include new provider types: physical therapists, occupational therapists, clinical social workers, and clinical psychologists. This meant that beginning in 2019 more providers were eligible for incentives and penalties under the program. Many organizations were concerned about how to support these providers to be successful in MIPS. What Advisory Board has seen is that the majority of providers participate in MIPS as a group, and often allowed these new provider types to join in their existing MIPS initiatives with minimal additional effort. As the year progressed, the conversation shifted from MIPS eligibility to the future of the program and CMS’s goal to redesign MIPS over the next few years.

    9. The ACA lives on… for now

    Compared to previous years, 2019 was relatively quiet for the Affordable Care Act—until mid-December, when a three-judge panel of the U.S. Court of Appeals for the Fifth Circuit in a 2-1 ruling struck down the Affordable Care Act's (ACA) individual mandate as unconstitutional. The appeals court sent the case back to the lower court to determine whether the rest of the law could survive without the mandate. Many experts believe the case will ultimately land before the Supreme Court, which means a final decision could be months or years away.

    10. The disparity between private and public payer rates drew increased scrutiny

    In May, RAND released a headline-grabbing report highlighting exactly how much private health plans pay hospitals compared to Medicare. RAND found that on average, private plans paid hospitals 241% of Medicare rates. In the most extreme cases, hospital payments were nearly 400% of Medicare rates. While this isn't the first—and surely won't be the last—report to highlight major pricing discrepancies, it stands out as one of the biggest reports of 2019 for two key reasons. First, the RAND report named names for nearly 1,600 hospitals and health systems, providing one of the clearest windows into price variation across providers that we've seen yet. Second, the timing of this report was critical. From scrutiny over surprise billing to the ongoing Medicare for All debate, the unaffordability of health care has been the central theme of 2019. The RAND report provides hard data to show price differences across and within payers, continuing to fuel the conversation. At a time when purchasers, policymakers, and the public are all demanding greater affordability, this report is a must read for hospital and health system leaders.


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