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A group of 20 dollar bills and a five dollar bill stacked together. Photo: Justin Sullivan/Getty Images

The next big battle in health care will almost certainly be about costs, and right now it’s largely confined to industry infighting and finger-pointing. But mounting frustration from employers and employees could put cost controls on the table faster than you might think.

The big picture: Frustration over health care costs is one thing. But the greater threat to the health care industry is one that’s just starting to percolate — concern that we’ve already maxed out the existing tools to control those costs.

Driving the news: Lawmakers in California recently proposed moving the state to an all-payer system — giving the state more control over the rates that doctors and hospitals can charge private insurance plans.

  • Only one other state — Maryland — has an all-payer system.

And yet, I 100% agree with this take from Reason magazine's Peter Suderman:"The all payer rate setting debate is basically the Red Wedding of health policy. All the deep nerds have know it's coming for years and are very excited to finally talk about it with everyone else."

The big question: Are we really going to have a debate about all-payer? Is this one of those times when California is the wacky outlier state, or one of those times when it’s a trendsetter?

What they’re saying: Once employers reach the end of their rope on health care costs, the cost-control debate is going to ratchet into a higher gear. That may or may not mean a debate over all-payer in every state, but government intervention will probably be on the table, at least in some states.

  • “The cost-containment debate is coming, because policymakers won’t want to put too much new revenue on the table,” Democratic health care strategist Chris Jennings tells me. “And that means there will be a focal point on the two areas paying the most — the private sector and Medicare.”

Costs have risen modestly over the past few years, and private insurance has responded, in large part, by shifting more of those costs onto consumers through higher copays, deductibles and coinsurance.

  • But “it appears we’re at the precipice of what the market will bear” on cost-sharing, Jennings says.

The bottom line: This is a scary position for providers. If employees are at their breaking point on cost-sharing, and employers reach their breaking point on cost growth, expect political systems to get serious about cutting those costs themselves.

Go deeper

1 hour ago - Health

CDC panel recommends Pfizer boosters for high-risk individuals, people 65 and up

Photo: Marco Bello/Anadolu Agency via Getty Images

A key panel at the Centers for Disease Control and Prevention on Thursday recommended the Pfizer-BioNTech coronavirus booster shots for people 65 years old and older, as well as those at high risk of severe COVID-19.

Why it matters: The approval is the near-final step in making the booster shots available to tens of millions of Americans, and comes a day after the FDA approved Pfizer boosters for the two groups. CDC director Rochelle Walensky is expected to accept the recommendation.

DHS temporarily suspends use of horse patrol in Del Rio

U.S. Border Patrol agents watch as Haitian immigrant families cross the Rio Grande from Mexico into Del Rio, Texas on Sept. 23, 2021. Photo: John Moore/Getty Images

The Department of Homeland Security on Thursday temporarily suspended the use of horse patrol in Del Rio, Texas a DHS spokesperson confirmed.

Why it matters: The suspension comes after images showing border patrol agents whipping at and charging their horses at migrants surfaced earlier in the week, prompting widespread criticism of the Biden administration's handling of the crisis at the border.

Southwest drought is worst on record, NOAA finds

In a stark new report, a team of NOAA and independent researchers found the 2020-2021 drought across the Southwest is the worst in the instrumental record, which dates to 1895.

Why it matters: They also concluded that global warming is making it far more severe, primarily by increasing average temperatures, which boosts evaporation.