HSC's 13th Annual Wall Street Comes to Washington Conference

Originally published as a Conference Transcript by the Center for Studying Health System Change (HSC), 2008. HSC's 13th Annual Wall Street Comes to Washington Conference. HSC was a nonpartisan policy research organization funded principally by the Robert Wood Johnson Foundation.

The 13th Annual Wall Street Comes to Washington Conference, held in late 2008, convened equity analysts from major financial firms alongside health policy experts to analyze health care market developments and their policy ramifications. Paul Ginsburg, HSC president, moderated the discussion. The conference was organized around two panels: the first addressing health insurance market trends and the second focusing on health care provider markets.

Panel One: Health Insurance Market Trends

The first panel explored the potential impact of the 2008 presidential election on health care reform, the trajectory of Medicare Advantage enrollment with particular attention to the growing role of private fee-for-service plans, insurance premium trends in the commercial market, employers' and health plans' increasing focus on wellness and prevention initiatives, and the state of consumer-directed health plans. Panelists included Christine Arnold, formerly of Morgan Stanley, and Robert Laszewski, president of Health Policy and Strategy Associates, among others.

The discussion of Medicare Advantage centered on the rapid growth of private fee-for-service (PFFS) plans, which had enrolled large numbers of beneficiaries by offering richer benefits without requiring provider network contracts. Analysts debated whether the incoming administration would move to cut PFFS payments, which exceeded traditional Medicare costs, and what that would mean for plan participation and beneficiary enrollment. The panel also examined the trend toward consumer-directed health plans, noting that while enrollment in high-deductible plans linked to health savings accounts continued to grow, these products remained concentrated among higher-income workers and had not yet proven their ability to slow spending growth in a meaningful way.

Panel Two: Provider Markets and the Economic Outlook

The second panel examined trends among hospitals and physicians, including the acceleration of hospital mergers and acquisitions, the financial pressures facing community hospitals as the recession deepened, and the growing physician shortage in primary care. Hospital consolidation was a particularly active topic, with analysts noting that large for-profit hospital chains were acquiring community hospitals at an increasing pace, attracted by opportunities to improve operational efficiency and negotiate higher rates with commercial payers.

The panel discussed how the worsening economy was beginning to affect hospitals through declining admissions, rising bad debt and charity care, and tighter credit markets that constrained capital spending. On the physician side, the impending retirement of baby boomer doctors combined with declining interest in primary care among medical graduates was creating workforce concerns that could intensify access problems, particularly in underserved communities. The panelists debated whether health reform proposals under discussion in Congress would adequately address these supply-side challenges or primarily focus on expanding insurance coverage.

Health Reform Prospects in a New Administration

With the 2008 election approaching, the conference devoted substantial attention to the health reform proposals of both presidential candidates and the likelihood that a new administration would prioritize health care legislation. The panelists assessed which elements of reform -- coverage expansion, cost containment, insurance market regulation, payment reform -- were most likely to advance and which would face the strongest political opposition. The Wall Street analysts were particularly interested in how various reform scenarios would affect the earnings and growth prospects of publicly traded health insurers, hospital companies, and pharmaceutical firms. The policy experts cautioned that ambitious reform timelines would be complicated by the economic crisis then unfolding and by the difficulty of achieving consensus on how to pay for expanded coverage.

Sources and Further Reading

This transcript was from HSC's 13th Annual Wall Street Comes to Washington Conference, moderated by Paul Ginsburg. Panelists included equity analysts from major financial institutions and health policy experts. The conference series was designed to bring Wall Street health care analysis to bear on health policy questions, drawing on HSC's research on health care market dynamics in 12 communities tracked through the Community Tracking Study.