Biden To Ban Medical Debt in Credit Scores, Costco Enters Virtual Care

September 27, 2023 - In this episode, we cover federal efforts to diminish the impact of rampant medical debt and retail initiatives to reach into the healthcare space.

The Biden administration shared its plans to ban medical debts from showing up in credit scores. The plan charges the Consumer Financial Protection Bureau with assessing the cost and process that this policy would entail. Meanwhile, in the retail space, Coscto announced a partnership that will allow it to offer virtual care, including virtual mental healthcare. 

Additionally, the Federal Trade Commission (FTC) has intensified its scrutiny of mergers and acquisitions. FTC went after major Texas anesthesiologist practices by suing a private equity firm that has been accused of enabling greater consolidation in the field. Lastly, the Texas Tech University Health Sciences Center will launch an institute dedicated to improving rural healthcare by enabling access to telehealth and virtual care.

Hello and welcome to Healthcare Strategies, Headlines Edition. Today's episode: Biden administration takes on medical debt. CMS pauses Medicaid disenrollment. FTC is taking on a large anesthesiology practice. Costco offers members online health visits and a new institute to take on a rural healthcare access. This is Kyle Murphy, Vice President of Editorial Xtelligent Healthcare Media, and as always, I'm joined by senior editor and multimedia manager, Kelsey Waddill. Kelsey, how are you?

Kelsey Waddill:

Hi. Good. That's all I got.

Kyle Murphy:

Did you have a good weekend? Was it wet? Because it's been wet.

Kelsey Waddill:

It was very rainy, yes.

Kyle Murphy:

Yeah, today it's mildly sunny and I'm remote, so I get to enjoy this beautiful view. But Kelsey's locked in a closet, aka the TechTarget podcast studio. So without further ado, let's get into it.

All right. So the Biden administration, Kelsey, has announced plans to develop federal rules preventing unpaid medical bills from impacting patients' credit scores. Vice President Kamala Harris stated that the new measures aimed to help Americans invest in their future. During a recent press call, she said, "Right now in our country, one in three adults, some 100 million Americans, struggle with unpaid medical bills. They just can't afford those bills. A disproportionate number are black, Latino, or live in rural areas. Many of the debts that people have accrued are due to a medical emergency--a student with a burst appendix, a grandmother who took a nasty fall--and years later, they're still paying off tens of thousands of dollars in bills that they didn't plan to have." Shocking. That's reality. The Consumer Finance Protection Bureau is tasked with developing these rules, and while its proposals have garnered support from patient and consumers groups, they're most certainly likely to face potential opposition from the healthcare and debt collection industry. So, Kelsey, this should surely come as a relief to healthcare consumers, but we all know that the increased popularity of high deductible plans means debt, or at least healthcare costs, aren't going anywhere, likely the debt either.

Kelsey Waddill:

Yeah. Yeah. I mean, there's a lot of ways that debt accrues and that people just get stuck in a cycle. I think HDHPs are a great example of that. They have those low monthly premiums that are so attractive and everybody is so excited about, and then a third of HDHP enrollees have been harassed by medical debt collectors. It's a multi-layered issue, and a policy like this could definitely address one aspect of the widespread medical debt that is going on, but we have to deal with the thing that's underlying that which, like you said, is the high healthcare costs, and that's not easy to do.

Kyle Murphy:

We're dealing at a federal level with canceling student debt. If medical debt is so pernicious, one has to wonder--this debt isn't going anywhere, it's just not being held against you when it comes time to do other things in your life. Don't really know that it's addressed the problem so much as kind of shifted the impact on the consumer side a little bit, but bills still need to get paid.

Kelsey Waddill:

Right. Yeah. And then you wonder how healthcare organizations are going to respond to that.

Kyle Murphy:

That's healthcare for you.

Kelsey Waddill:

But in more federal and policy-related news, the saga of the public health emergency unwinding continues. CMS has now ordered 30 states to pause their redetermination process, which for those who are not aware, the redetermination process is what states use to evaluate whether Medicaid enrollees are still eligible for coverage. For context, as part of the return to normal, CMS has been rolling back the policies from the early days of the COVID-19 pandemic, including continuous enrollment in Medicaid, which kept anybody from getting kicked off of Medicaid during the pandemic's height.

But the problem now is that a lot of Medicaid beneficiaries are being dis-enrolled as we go through this recheck of eligibility due to errors that have nothing to do with their actual eligibility. In [the] case of these 30 states, a lot of the disenrollments are due to auto-renewal system errors. CMS has ordered that these states should reinstate those beneficiaries who've been disenrolled while they all figure out how to fix the issue.

I mean, we knew that this was going to be not an easy process, but I mean, I wonder if there's a silver lining to this. Do you think that this process might spur any changes in how we approach Medicaid or health insurance eligibility?

Kyle Murphy:

I would hope, but the political divide is pretty strange on this one. We know that Medicaid expansion, which is the precursor to all this, did a fantastic job of really mitigating some of what would've been some awful health outcomes during the pandemic. A lot of folks [in the] Medicaid population [tend] to be poor, young facing a whole host of issues, not just medical ones. But sadly, it's become a political issue, even though Medicaid is really a partnership between the federal government and states. We do know from data that folks with coverage tend to have better health and wellbeing, and we've seen what has happened. Folks can just Google [the healthcare journal] Health Affairs for a lot of research and a really growing body of research about how Medicaid expansion has really helped improve population health.

So I hope these states that have been resistant, or these states that have made it a little bit more challenging to qualify for Medicaid, will really look at it as: if you don't pay for it this way, you're going to pay for it some other way. So you still have to pay for it, but in some instances, paying for it upfront tends to be a little bit more cost-effective. But that's healthcare. That is healthcare.

Let's get on to other wrinkles in healthcare. How about the Federal Trade Commission taking a large anesthesiology practice to court? So everything is bigger in Texas, right, Kelsey?

Kelsey Waddill:

That's what I've heard.

Kyle Murphy:

And now the US anesthesia partners and private equity firm, Welsh, Carson, Anderson, and Stowe--the more names you have in your private equity firm, the more successful you are--face an FTC lawsuit, accusing the two firms of systematically acquiring nearly every large anesthesia practice in the state, engaging in price setting agreements with remaining independent practices, and making arrangements to sideline significant competitors. That sounds like a monopoly to me, but I haven't played the game in a while. "This conduct," and I quote from the FTC, "has resulted in egregious price increases for patients and their employers on the order of tens of millions of dollars or more each year," the FTC asserted.

USAP claims the lawsuit is without merit. I mean, what else are you supposed to say? "The FTC civil complaint is based on flawed legal theories and a lack of medical understanding about anesthesia. Our patient-oriented business model and our level of care for patients in Texas," said Board Member Dr. Derek [inaudible 00:06:32], meaning we care that you pay.

Kelsey, it's interesting to see the FTC going after provider organizations after some major mergers and acquisitions have gone untested. What's your gut telling you about this one?

Kelsey Waddill:

Yeah, I mean, I think we were talking just last week briefly about the fact that earlier this year, FTC and the Department of Justice was starting to get tougher on antitrust rules related to mergers and acquisitions in general, which obviously a lot of major healthcare organizations that really want to pick up some more steam on mergers and acquisitions are not super happy about. So I wonder if this is just going to be more the norm, or maybe this is just them testing the waters with that. I don't know.

Kyle Murphy:

It being almost the Halloween season, mergers and acquisitions becomes murders and inquisitions. It's about time. It's about time. Yeah. It's very macabre. All right, what do we got next?

Kelsey Waddill:

So Costco is taking the plunge into telehealth. Who doesn't love a good Costco run?

Kyle Murphy:

Or a good hot dog. Good hot dogs. Those hot dog prices-

Kelsey Waddill:

Or a good hot dog. Yeah. I mean, now you can get your hot dogs and your healthcare in the same place!

Kyle Murphy:

You just came up with a new marketing campaign.

Kelsey Waddill:

Yeah. Oh, no. Yeah. I don't know if that really goes with the healthcare theme, but you get it all through your Costco membership. Apparently, they're partnering with Sesame, which is a healthcare marketplace platform....

Kyle Murphy:

And a way to open things.

Kelsey Waddill:

And a way to open things.

Kyle Murphy:

Open sesame.

Kelsey Waddill:

Wow, that one took me too long.

Anyway, ...to offer outpatient healthcare services and virtual care. The partnership is going to give Costco members access to virtual primary care, health checkups, and that includes both your standard lab and your virtual follow-up, virtual mental health therapy. And in true Costco form, it's all discounted. So folks will also receive 10% off of the other Sesame services, which encompasses quite a lot: dermatology, mental health, pediatrics, urgent care, women's health.

Sesame's not going to accept insurance, which the company has said actually keeps costs lower, which I thought was an interesting comment.

Kyle Murphy:

It is true though. You know that billing and insurance related costs are quite exorbitant. They account for a large portion of administrative waste.

Kelsey Waddill:

Yeah. Sesame is banking on that, and the partners are hoping that this increases access to care for Costco members.

I don't know, it seems like this theme of retail health partnerships is really sticking around. What do you think about the trend?

Kyle Murphy:

I mean, some place, some people, there are Costco people, there are BJ's people, they're quite loyal, and if they're going to be there, one-stop shopping has largely kind of... It's taken over and it's mostly in the online space.

But I think this is encouraging. I think anytime you eliminate the obstacles in the way of care access, and if Costco just becomes the place where a Costco member goes for everything that's integration, but just not the integration that we were thinking about.

It does beg the question of, if they're receiving these services and they have a PCP, are we creating more fragmentation? But I'd rather people receive care than not care at all and reduce their disease burden. So I think it's interesting.

We've been waiting a long time for competition in the healthcare space. It seems like we're getting it. We just weren't expecting it from these types of players.

Kelsey Waddill:

Coming from a very different angle. Yeah.

Kyle Murphy:

All right. Another positive bit of news: we have a new institute coming to tackle rural healthcare access.

The Texas Tech University Health Sciences Center is launching the Institute of Telehealth and Digital Innovation, aiming to improve rural healthcare access through a hub and spoke model using digital technology such as telehealth, artificial intelligence, and blockchain. The goal is to provide predictive, precision and preventive healthcare services.

For those who don't understand the hub and spoke model, it's a central facility, the hub, serving as the main point for specialized medical expertise and is connected to multiple remote locations, the spokes, that do not have the same level of expertise. The institute will focus on research and workforce training in digital healthcare.

The center has a history of providing virtual care services originally launched in 1989. Fantastic. Wasn't that the year that Taylor Swift was born?

Kelsey Waddill:

Yeah.

Kyle Murphy:

It was a very important year. Something like that.

So Kelsey, how's that for optimism?

Kelsey Waddill:

Yeah, I mean, I'm excited. I think telehealth and digital health have already gone pretty long way in closing some of the gaps in rural healthcare, obviously we still have a lot left to do, but stuff like this makes me excited.

Kyle Murphy:

That has been today's show. For more headlines, check out all we have to offer across the Xtelligent Healthcare Media Network. This has been Healthcare Strategies Headlines.

Kelsey Waddill:

See you later.