Health Care Stocks Review | The regulatory review

In a discussion with The regulatory review, Allison K. Hoffman, Associate Dean and Professor of Law at the University of Pennsylvania Carey School of Law, offers her thoughts on the complexities surrounding health care access, the dynamics of state and federal policy, and the involvement of the private sector in health care delivery.

Hoffman emphasized the importance of federal intervention to improve access to care through better funding for long-term care services provided in nursing facilities or at home. She also highlights the limitations of state ballot initiatives in addressing systemic health care issues, especially in the wake of the COVID-19 pandemic.

Hoffman also notes the differences between states that did and did not expand Medicaid to lower-income populations under the Affordable Care Act, shedding light on the impact of policy decisions on vulnerable populations’ access to health care. She discusses the Medicaid gap in so-called non-expansion states, outlines the implications of allowing Medicaid opt-outs, and provides a critical perspective on private equity firms in health care.

Hoffman’s research and publications focus on the legal and policy landscapes of health care, health insurance regulation, and policy formation. Hoffman’s work has been published in respected law reviews and peer-reviewed medical and health journals, and she provides commentary on health law and policy issues in media such as The hill, New York Times, The Philadelphia Inquirerand The Washington Post.

Before becoming a professor at the University of Pennsylvania School of Law, Hoffman taught at the UCLA School of Law and was a Petrie-Flom Fellow at Harvard Law School. She gained private practice experience in health law at Ropes and Gray LLP. and has worked as a strategic consultant at Bridgespan Group and Boston Consulting Group.

The regulatory review is pleased to share the following interview with Alison Hoffman.

The Regulatory Review: In a recent article in The regulatory review, you and your co-author discussed the limitations of state ballot initiatives to improve access to care in the absence of federal action. What do you think is the most important federal action that could improve access to care across the country?

The most important action is something we did not address in this article, namely creating adequate funding for long-term care that can be used flexibly. This funding should allow care in nursing homes or at home, as well as care provided by a professional carer or family. The lack of a cohesive and adequately funded public insurance program for long-term care creates crushing obligations for family and friends. Almost a decade ago, I wrote about the need for policy solutions to long-term care needs that adequately consider the risk informal caregivers face. Since coming to Penn seven years ago, I have collaborated with colleagues here to bring attention to what is driving the lack of collective commitment to long-term care funding, including the horrific damage to nursing homes during the COVID-19 pandemic.

TRR: Like you noted in your recent essay in The review, all but ten US states have adopted the Medicaid expansion under the Affordable Care Act (ACA). How would you characterize access to health services and how it affects health in containment versus expansion states, particularly for vulnerable populations?

We note in our essay that in seven states, voters used referendums to expand Medicaid, despite the inaction of their legislatures and governors to allow all low-income residents to enroll in the program. But referendums are not possible in most of the remaining countries without enlargement. The tragedy in these states is that they have left millions of their poorest residents without proper access to medical care. These states, which are mostly in the South and include Texas and Florida, create a Medicaid gap where people who earn below the federal poverty level cannot access health insurance, while those who earn more than the federal poverty level can to access federal subsidies to purchase a policy in the ACA marketplace.

This problem is compounded by the ongoing “unwinding” of Medicaid. During the COVID-19 pandemic and until this March, states were not allowed to exclude people from Medicaid. In return, they received a boost in funding for their programs from the federal government. That ban fell in March, and now millions of people are losing Medicaid coverage. Some find themselves with no other options if they live in a non-expansion state.

The larger problem that both non-expansion and relaxation highlight is the inequity created when health coverage for the poorest people is left to the discretion of states.

TRR: The acquisition and consolidation of health care systems and provider groups by private equity firms has sparks considerable controversy. The Chairman of the Federal Trade Commission, Lina Khanrecently expressed concern about this trend as part of an intergovernmental an investigation private control of health care. Do you think private sector players, such as private equity firms, bring value to healthcare?

I am skeptical that we will see benefits for patients resulting from the entry of private capital into health care, a phenomenon that has accelerated significantly in recent years. Private equity investment is not the first form of corporate investment in health care delivery. It began decades ago with the rise of for-profit hospitals and the increased role of private insurance companies. I am writing about this trend now in an upcoming book chapter, showing how the trend has been shaped by the medical profession and in turn has shaped the profession and the medical care we all receive. Growing evidence shows that private investment in health care has resulted in profits for industry without sufficient benefit for patients. Recent studies show, for example, that after a private equity buyout, hospitals have more errors and nursing homes have more deaths.

The irony is that the government, through the proliferation of value-based payment reform models over the past decade, has accelerated incentives for enterprising private investors who understand these complex models and can maximize payments under them. In effect, the Department of Health and Human Services created the conditions to accelerate this trend, and now—with other agency partners—must deal with the consequences.