2023 Halftime Report — Retail Healthcare, Price Transparency, Evolution of Medicaid Programs

Editors note: This story was featured in the July 2023 issue, originally covering six hot topics in healthcare, but has been broken into two parts. Below is the second part covering three topics and developments. This half has been edited for clarity.

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Spread pricing. Medicaid best price rules. Rising retail health. They have been fodder for healthcare headlines, hashtags and tweets so far this year. They are also likely to have some staying power during the second half of 2023 and spillover into 2024. Here’s a look at three topics and developments in healthcare and how they might play out over the next six months and beyond.

4. Pulling back the curtain on prices

François de Brantes, M.S., MBA, senior partner at High Value Care Incentives Advisory Group and a member of the Managed Healthcare Executive editorial advisory board, says we’ll look back in a decade and say that now through 2024 will be seen as a turning point for U.S. healthcare, with transparency replacing opacity when it comes to prices. As of July 1, 2022, group health plans had to begin posting pricing information for third parties, with additional milestones in 2023 and 2024. “The intent of the legislation is clear: Can we arm consumers with the information they need to make more informed choices?” de Brantes says.

Related: 2023 Halftime Report — Price Negotiation, PBM Legislation, Med Shortages

The next 18 months are vital, given the long cycle for health plans and employer contracting. There is a latency between when employers publish their requests for proposals, get carrier quotes and implement those contracts. Last year, consultants had difficulty making sense of the large amount of plan data. Going into this fall, de Brantes says, they are more prepared.

“(For decades), employers have been unable to understand the differences in the price of healthcare. That means no control or accountability around rate increases,” he said, adding that the law will continue creating appropriate tension in the market, including for employers. “It’s based on the realization that (employers and employees) are getting a raw deal. And (although) people kind of know it, if it’s not in your face, you can choose to ignore it. But when it’s in your face, it’s public and it’s made simple and useful. As an employer, you can’t ignore it. I think the difference between where we are today and where we will be a year from now is going to be quite significant.”

5. Retailization of healthcare

The increasing reach of retail primary healthcare is a trend worth watching the rest of this year and beyond, according to industry observers who point to CVS Health’s recent acquisitions of Oak Street Health and Signify Health. Oak Street Health is a primary care company, whereas Signify Health is a home health company.

CVS’ retail pharmacy chain rival, Walgreens Boots Alliance, is the majority owner of VillageMD, a primary care provider with several hundred locations that has made some major acquisitions, including the purchase of Summit Health-CityMD, a large provider group and urgent care company. Amazon shut down its Amazon Care, its virtual care unit, last year, but the company has acquired One Medical, a concierge medical business.

“Patients want high-quality care, but they also want care on their terms,” says Brad Younggren, M.D., chief medical officer for 98point6, a former virtual care provider that is now a software-as-a-service company.

The retailer-turned-primary-care-provider could further fragment U.S. healthcare delivery, Younggren warns. “If you show up in the emergency department at 2 in the morning with hypertension, it’s probably not because it’s an emergency; it’s probably because you got a higher reading and you just didn’t know what to do with it, and there’s nowhere to go but the ED.”

One benefit that retail health offers is more digital health options, which can lead to a better patient experience. Younggren’s company currently provides services to health systems. He anticipates that in the next two years many of the larger ones will be putting greater emphasis on the digital patient experience to ensure that they don’t become disintermediated from their traditional patient populations.

Virtual care is one type of digital healthcare, which is something that gained greater acceptance during the COVID-19 pandemic. As the pandemic wore on and the public health emergency ended, many health systems decreased the numbers of virtual care cases for a variety of reasons, Younggren says.Yet, at the same time,health system executives accept that they need a digital strategy to compete, in Younggren’s opinion. “There’s no going back to a nondigital approach to managing your regional population.”

Health systems are trying to determine how to integrate digital technology with brick-and-mortar assets. That might include using technology to help doctors more efficiently chart, or to provide more comprehensive patient background before clinician visits. Digital tools can potentially enhance both the patient and provider experience, including administrative aspects.

For a whole set of interlocking reasons, health systems are feeling the pressure to improve the patient experience, including competition from One Medical and Carbon Health, a primary and urgent care company that emphasizes technology. “Health systems are now talking about patient experience, almost like a technology company would,” Younggren says.

6. Medicaid best price and prescription digital therapeutics

The PBM legislation isn’t the only game in town when it comes to federal legislation.

One bill that Colborn and others are keeping an eye on would codify the existing Medicaid best price rules that were revised to allow Medicaid programs to enter value-based contracts for drugs. “The goal of that is to incentivize further use of value-based contracting for high-cost medicines in Medicaid programs,” Colborn says. Although the issues involved are important to Medicaid programs and pharmaceutical companies, they are technical and unlikely to garner little, if any, attention from interest that aren’t affected. The Medicaid Valued-Based Purchasing for Patients Act has bipartisan support and was voted out of committee a month after it was introduced.

The Access to Prescription Digital Therapeutics (PDT) Act of 2023 is another bill that has bipartisan support and important consequences but is of limited interest to those not directly involved. The bill would create reimbursement categories for PDTs to be covered by Medicare. PDTs have been developed to treat insomnia, substance use disorders and attention-deficit disorder, although at this point they are new and don’t have much of a track record behind them.

“Now Medicare can’t cover them at all; there’s no benefit category. It doesn’t fit into any existing nondrug categories,” Colborn says. Proponents of Medicare coverage note that commercial plans can choose to cover PDTs, leading to possible disparity between commercial payers increasing access to PDTs without a similar coverage under public plans.

Colborn acknowledges that the IRA is taking up most of the healthcare political bandwidth these days. “The main thing everyone is thinking about is the IRA implementation. It’s probably 90% to 95% of what we hear about.”

Deborah Abrams Kaplan writes about medical and practice management topics for Managed Healthcare Executive and other publications.