Marketplace Pulse: The Bermuda Triangle of COVID-19 Testing
The Marketplace Pulse series provides expert insights on timely policy topics related to the health insurance marketplaces. The series, authored by RWJF Senior Policy Adviser Katherine Hempstead, analyzes changes in the individual market; shifting carrier trends; nationwide insurance data; and more to help states, researchers, and policymakers better understand the pulse of the marketplace.
From the beginning, our health care system has shown itself to be poorly suited to the COVID-19 pandemic. We lack universal coverage and, even among the insured, high out-of-pocket costs create barriers that dissuade people from seeking care. The onset of COVID-19 required successive waves of executive orders, emergency regulations, and voluntary actions to remove cost-sharing requirements so that people could receive testing and treatment. The fact that we had to quickly rewire our system to adapt to the first surge of demand for care from COVID-19 did not bode well for the future.
At that time, the focus was on identifying and treating sick people and relatively little thought was given to the potential need for ongoing testing of those who were asymptomatic. Now we are in a different situation. While the pandemic persists, with approximately 50,000 new cases per day and a predicted 150,000 additional deaths by the year's end, there is broad agreement that widespread surveillance screening is essential until the development of an effective vaccine. While testing has increased considerably, to roughly 4.5 million per week as of early August, we are far from our recommended goal of 30 million per week by October. The goal is for the screening of asymptomatic people to greatly outnumber diagnostic testing of patients with symptoms. In fact, the recommendation is that ratio should be approximately five to one. And this regime will be required for quite some time. Until there is a vaccine this is a best case scenario and, in the absence of widespread surveillance screening, economic recovery will be difficult if not impossible.
While our system of health insurance revealed itself to be poorly suited to addressing the individual needs of sick people during a pandemic, it has so far been completely unable to meet the demand for widespread surveillance screening. This need, while critical for public health and economic recovery, has fallen into a financial and logistical Bermuda Triangle, since there is no "wallet" to pay for it and no distribution model to implement it. The impediments to scaled up screening are technological as well as financial, and the two are interrelated. A cheap home test that is as simple as tooth brushing will, at least in theory, be far easier to distribute and implement than the system we have now which requires specimen collection and sometimes multi-day waiting for results. But both the supply and accuracy of antigen tests are currently in question. The technology lag is likely related to the financial incentives in our system, and the prioritization of reimbursement for individual medical tests may have hindered progress toward a low-cost, universally available home test.
Health insurers have argued that surveillance screening, which is not medically necessary for individual patients, does not belong in their remit. There is some logic to that. Using traditional health insurance reimbursement models would be both expensive and inequitable. An AHIP study estimated testing at a jaw-dropping annual figure of $25B. At a unit cost of $100, hitting our recommended level of testing would cost $30B weekly. At a unit cost of $100, weekly tests for one employee would rival the annual premium for single coverage. Further, many people who may need frequent testing for work are covered by the policy of a family member that works elsewhere. And of course, millions of people are not even insured.
Yet while surveillance screening may not be medically necessary, it is socially imperative. Currently there is a void where there should be a system and, in the absence of an alternative, consumers and employers are trying to find their own solutions. Some employers are contracting for weekly testing for workers at unit costs that are likely unsustainable. Other employers are not testing, perhaps checking temperatures and hoping for the best. Individuals that can afford to are getting tested at urgent care clinics, doctors' offices and hospitals, paying prices that range from $50 to more than $500. But this ad hoc set of individual efforts does not come close to meeting demand, and it is highly inequitable.
It makes sense to see surveillance screening as a job for public health and there have been many cogent arguments for federal action, including use of the Defense Production Act. The CARES Act included $25 billion for testing, and the Rockefeller Foundation has released a plan that calls for an additional $75B in the next COVID-19 relief bill. Regardless of whether or when this funding materializes, widespread testing is undoubtedly a public responsibility, and strategies for cooperative purchasing and distribution should be rapidly developed to accelerate the pace. A number of municipalities have provided some limited, free testing. Several states, including New Jersey, have offered some free screening with relatively rapid results. In a promising development, a growing group of states is banding together, with support from the Rockefeller Foundation, to cooperatively purchase as many as 500,000 rapid antigen tests each.
More creative strategies to purchase and universally disseminate testing at the population level are urgently needed. The purchasing power of the federal government would have the biggest impact. At the state level, a cooperative purchasing approach using an assessment on covered lives (including the self-insured) may be one way to quickly raise funds and organize distribution. Some states use not for-profit Vaccine Associations to jointly purchase child immunizations. Employers should be part of planning efforts too, since many need large amounts of testing to safely resume operations. Working together will reduce competition for supply and increase equity in distribution. Our health care system prioritizes individual access to care and uses health insurance as a gatekeeper. We need to work against type to address this public health emergency together.
COVID-19 and the Individual Market