March 09, 2022 • By The UCI Paul Merage School of Business
Several industry experts spoke about health equity, policy and the business of health care earlier this month as part of the 31st annual Health Care Forecast Conference by the Center for Health Care Management and Policy at The UCI Paul Merage School of Business.
During the three-day virtual event, speakers delved into a lack of diversity in clinical trials, how government officials are dealing with skyrocketing hospital costs and the use of private equity financing to help solve the innate inequities in the U.S. health care system, among other topics. Keynote speakers included Norman J. Ornstein, Ph.D, Meena Seshamani, M.D., and Ipsita Smolinski, MBA.
“We must look at everything we do through the lens of health equity,” Seshamani said during her presentation. “When the system doesn't work, it's those individuals with complex health and social needs who fall through the cracks.”
Underrepresentation in clinical trials
Though minority communities predominately suffer from disease, they are largely underrepresented in clinical trials to develop treatments for illnesses.
Esther Krofah, executive director of FasterCures of the Milken Institute, said at the conference that this fact is indicative of the longstanding systemic and unethical treatment of minorities in the U.S.
“When we look across different disease conditions and the clinical trial enterprise, a vast majority of participants in clinical trials are still underrepresented from the minority perspective,” Krofah said. “When we look at the F.D.A. drug snapshot from 2015 to 2019, 78% of those participants in the U.S. population were white.”
Health equity has become an important topic over the last two years as the COVID-19 pandemic further revealed disparities in minority communities. Krofah pointed out during her presentation that the disproportionate impact of COVID-19 on minority communities exemplified the need for clinical trials for potential vaccines to include people of varying ethnic and racial backgrounds.
In response to the inequities, the U.S. government told companies that were working on vaccines to include a more diverse array of patients in their drug trials.
“The concern of course was if we did not include more minority participation in those clinical trials, if those clinical trials did yield vaccines or therapeutics that were safe and efficacious, there would be concerns in terms of their uptake among those populations who did not see themselves necessarily represented in those clinical trials,” Krofah said.
Krofah said that clinical trials often do not represent the populations that bear the burdens of the disease that is being researched. According to data from the F.D.A., Black people accounted for only 5% of the patients involved in five of seven diabetes drug trials before 2017. However, 13% of Black people in the U.S. have diabetes.
Krofah outlined a host of strategies for addressing the inequities in clinical trials, including identifying the communities that lack accessibility to clinical trials and funding expansions of community clinical trial sites, federally qualified health centers, health care clinics and medical centers.
“Everybody has a role to play, whether it’s interviewing issues such as implicit bias, whether it's reviewing issues such as providing patient advisory councils to inform the design of a clinical trial or working on issues such as infrastructure and how we start new clinical trial sites,” Krofah said. “All of these can really help address this issue of diversity in clinical trials.”
Soaring hospital prices and government regulation
During day three of the conference, Leemore Dafny, professor of business administration at the Harvard Business School and Harvard Kennedy School, highlighted what government officials are doing to regulate soaring hospital prices.
“Our private health insurance is just becoming very, very expensive,” Dafny said, adding that private health insurance costs for patients is growing faster than Medicare and Medicaid.
According to research Dafny showed during her presentation, private health insurance costs for patients has increased about 50% since 2008, compared to about 30% for Medicare and about 20% for Medicaid. Dafny said these price increases aren’t indicative of any added or improved services at hospitals.
“There is no good evidence that these price increases are accompanied by quality improvements, so that would be harm to consumers,” she said.
A few states have enacted measures to address the pricing increases, including Montana, Oregon, Washington, Colorado and Nevada. Many of their strategies include pricing caps based on Medicare rates. This has required a lot of political pressure to get health providers to agree to the terms, Dafny said.
Montana capped state employee health plan payments for inpatient and outpatient hospital services at 234% of Medicare rates and Oregon has a cap on state employee health plan payments for inpatient and outpatient services at 200% of Medicare rates for in-network services and 185% for out-of-network services.
Dafny noted that caps have downsides, including possibly impacting a hospital’s ability to retain staff with higher salaries and limiting hospitals from recruiting top talent.
“Something that I've also heard,” Dafny said, “is that if we're capped but other states don't cap, then we're not going to be able to attract the same kinds of physicians because we won't be able to afford the same kinds of technology or salaries.”
Using private equity to solve diversity problems in health care
Adaeze Enekwechi, operating partner at Welsh, Carson, Anderson and Stowe, provided a presentation on the health care industry from a private equity perspective. In her view, hospitals need to do a better job of providing accessible treatment to people to address the “innate inequities” in the country’s health care system. Venture capital and private equity investment in technology in health care will help solve this problem, she said.
“We are not going to brick-and-mortar our way through that problem,” Enekwechi said. “…One of the reasons for this relentless investment at the venture capital level and at the private equity level is that tech transformation is at the core of what needs to happen in health care for us to realize better outcomes.”
Enekwechi also discussed increased investment to better understand how social standing can influence health. On a positive note, she mentioned there is a lot of interest in women’s health, with topics spanning a broad age range including fertility care, puberty and menopausal care and behavioral health.
“For an area that had been long ignored—51% of the population, go figure—there's a lot of interesting stuff going on there,” she said.