COVID-19 Unintended Consequences: Unflattering Attention to the Gap between “Haves” and “Have Nots”

The coronavirus has exposed major flaws in the U.S. health system: our lack of pandemic preparedness and the vulnerability of our entire economy are now apparent to all.

On Friday, Robert Redfield, the director of the Centers for Disease Control and Prevention, said that all of the dozen forecasting models that his agency monitors are predicting that the death toll will reach 100,000 by June 1st may reach 150,000 by August, well-above earlier estimates. That assures the coronavirus will linger in the public’s consciousness for weeks and months to come.

No doubt, lessons will be learned, and economic recovery will be slow. But underlying these will be the harsh reality that the coronavirus exposed massive, systemic inequity in our society. It’s evident in two widely accepted facts:
 
Job Losses
The facts are these: Since March, 36.5 million jobless claims have been filed. According to the Federal Reserve, 39% of households with income below $40,000 lost their jobs; but only 13% of those above $100,000. Goldman Sachs indicates the unemployment rate could hit 25% before the year is over, up from 14.8% today. That means the economic harm of the coronavirus will hit lower income households hardest and well into 2021 and beyond.
 
Covid Deaths
As of this morning, 89,564 have died in the U.S. as a result of the coronavirus. To date, persons from lower-income households have been hit three times harder than higher income households. Their risks are higher. Only one in five can work from home. They live paycheck to paycheck and as they age, more chronic disease. And they are more likely to be persons of color: for each 100,000 Americans (of their respective group), 42.8 Blacks have died, 18.4 Asians, 19.1 Latinos and 16.6 Whites. Black Americans’ COVID-19 mortality rate across the U.S. has never fallen below twice that of all other groups. New York Times columnist Charles Blow observed “in the real world, this virus behaves like others, screeching like a heat-seeking missile toward the most vulnerable in society. And this happens not because it prefers them, but because they are more exposed, more fragile and more ill.”
 
Household income is a key predictor of health status. Those in lower income populations have higher levels of chronic conditions and, not surprisingly, greater susceptibility to infectious diseases like the coronavirus. “What’s happening to the health of wealthier people is that it’s remaining relatively stagnant, but the health of the lowest income group is declining substantially over time,” according to Frederick Zimmerman, the  lead author of  and a professor at the UCLA Fielding School of Public Health

Per the Census Bureau, 94 million Americans live in poverty in the U.S. ($51,402 for a family of four) including 17 million in deep poverty (income of $12,850). Relevant studies by Pew Research, Kaiser Family Foundation, JD Power and Gallup are annotated elsewhere in this report. The bottom line: those who have lower income believe the health system is stacked against them. They can’t afford health insurance and they can’t afford not to work, even if it threatens their health. They live sicker and die younger: it’s a fact.
 

MY TAKE

The correlation between income and health status is no surprise to healthcare insiders. Before the term “social determinants of health” was popularized, clinicians considered “risk factors and co-morbidities” in their patient assessments. In 2011, the CDC launched its Social Vulnerability Index to assess county-level conditions. 61% of Americans believe income inequality is a major issue in our society: fixing it is complicated. The job losses expose its significance in our economy; the coronavirus death rates expose its reality in our health system.

The coronavirus is a tipping point for our country. How the health system responds is key to our nation’s economic recovery, but for those most adversely impacted, those who have lost jobs or family members, it’s more personal.

Healthcare leaders must recognize and respond to the widening gap between “haves” and “have nots” in our communities and workforces.

Paul
 
 
P.S. Recovering elective procedures is a critical focus for every hospital and medical group. Tune in tomorrow May 19th, from 12-1 pm et to gain valuable insights from the likes of NYU Langone and Brigham and Women’s on how they are re-opening safely and efficiently. Register for the free event here: https://fs27.formsite.com/Medtel/8pgbaism0j/index.html
 
 
 

RESOURCES

Philip Schellekens, Diego Sourrouille “The unreal dichotomy in COVID-19 mortality between high-income and developing countries” Brookings May 5, 2020 https://www.brookings.edu/blog/future-development/2020/05/05/the-unreal-dichotomy-in-covid-19-mortality-between-high-income-and-developing-countries/ 

Charles M. Blow “Social Distancing Is a Privilege: The idea that this virus is an equal-opportunity killer must itself be killed.” New York Times April 5, 2020 https://www-nytimes-com.cdn.ampproject.org/c/s/www.nytimes.com/2020/04/05/opinion/coronavirus-social-distancing.amp.html

“Views of economic inequality” Pew Research Center January 2020 https://www.pewsocialtrends.org/2020/01/09/views-of-economic-inequality/

Economic Policy Institute https://www.epi.org/

“The color of coronavirus:COVID-19 deaths by race and ethnicity in the U.S” APM Research Labs May 12, 2020 https://www.apmresearchlab.org/covid/deaths-by-race
 

CORONAVIRUS NEWS

Covid-19 Dashboard (As of May 18, 2020)

• Total infections: 4.730 million global, 1.49 million U.S. (Johns Hopkins Center for Health Security)

• Total deaths:315,482 global, 89,564 U.S. (Johns Hopkins Center for Health Security)

• Jobs: 36.5 million jobless claims since March; 1.4 million in healthcare (503,000 in medical practices, 243,000 in dental practices and 205,000 in other outpatient settings) (U.S. Bureau of Labor Statistics)

• US Economic Relief Status to Hospitals/Health Systems/Providers: $72.4 billion of $175 billion in CARES Act distributed as of May 15, 2020.

Gallup: Coronavirus Fear Lessening

The percentage worried about each has declined 10% since the week of April 20; half remain worried:

• Worried about the availability of coronavirus tests: down from 64% April 6-12 to 48% May 4-10, 2020

• Worried about availability of hospital supplies/services: down from 60% April 6-12 to 52% May 4-10

“U.S. Concerns About Hospitals, COVID-19 Tests Declining” Gallup May 15, 2020 https://news.gallup.com/poll/311093/americans-concerns-hospitals-covid-tests-declining.aspx
 

Strata Decision Technologies: Deferred Procedures Shrink Hospital Revenue by $60B/month

Strata Decision Technology analyzed 2 million visits from 228 hospitals in 51 health systems. Key findings:

• 55% fewer Americans sought hospital care over the past two months resulting in a $60.1 billion average monthly revenue loss across all U.S. hospitals.

• Inpatient decreases: 99% knee replacement, 81% spinal infusions, 79% hip replacements and 38% fracture repairs.

• Outpatient decreases: 67% decrease in diabetes, 57% decrease in cardiology, 55% decline in breast health, 37% decrease in oncology, 37% decrease in hypertension.

• Payer mix: the number of self-pay patients increased by 114% and the number of uninsured increased from 7% in January to 15% in May.

Strata Decision Technology “NATIONAL PATIENT AND PROCEDURE VOLUME TRACKER” May 11, 2020 https://www.stratadecision.com/wp-content/uploads/2020/05/National-Patient-and-Procedure-Volume-Tracker-and-Report_May2020.pdf

Fair Health: Large Hospitals Impacted more than Smaller, especially in Northeast

FAIR Health compared private insurance claims submitted by facilities in the first quarter (January to March) of 2020 with the first quarter of 2019. Findings:

• In general, there was an association between larger facility size and greater impact from COVID19. Nationally, in large facilities (over 250 beds), average per-facility revenues based on estimated allowed amounts declined from $4.5 million in the first quarter of 2019 to $4.2 million in the first quarter of 2020. The gap was less pronounced in midsize facilities (101 to 250 beds) and not evident in small facilities (100 beds or fewer).

• Facilities in the Northeast experienced a greater impact from COVID-19 than those in the nation as a whole.

• In both the nation and the Northeast, the decrease in facility discharge volume from March 2019 to March 2020 was greater on a percentage basis than the decrease in revenues based on estimated allowed amounts

• From March 2019 to March 2020, the outpatient share of the distribution of estimated allowed amounts by settings decreased relative to the inpatient share.

“Illuminating the Impact of Covid-19 on Hospitals and Health Systems” Fair Health May 12, 2020  https://www.fairhealth.org/                                     

Social Determinants: Religiosity and Deaths of Despair Inversely Correlated among Healthcare Workers

In this cohort study of 66,492 female registered nurses and 43,141 male health care professionals in the US, attendance at religious services at least once per week was associated with a 68% lower hazard of death from despair among women and a 33% lower hazard among men compared with never attendance. In 2018, 76% of American individuals reported a religious affiliation, 50% regarded religion as very important, and 32% attended religious services in the past week.

Ying Chen, ScD1,2; Howard K. Koh, MD, MPH3,4; Ichiro Kawachi, MD, PhD5; et al Michael Botticelli, MEd6; Tyler J. VanderWeele, PhD1,2 “Religious Service Attendance and Deaths Related to Drugs, Alcohol, and Suicide Among US Health Care Professionals”JAMA Psychiatry. May 6, 2020. doi:10.1001/jamapsychiatry.2020.0175
 

Kaiser Family Foundation: Health Insurance Coverage Forecast

Per KFF, nearly 26.8 million people have lost employer-based health coverage and become uninsured. 12.7 will be eligible for Medicaid; 8.4 million will be eligible for subsidized coverage through ACA exchanges and 5.7 million do not qualify for subsidized coverage and will bear the full cost of their insurance, or go without. By January 2021, when unemployment benefits run out for most people, more people will be eligible for subsidized coverage: 16.8 million of those uninsured would be eligible for Medicaid, 6.2 million would be eligible for a marketplace subsidy and 3.8 million will be ineligible for any public assistance or unqualified for Medicaid coverage.

Rachel Garfield, Gary Claxton, Anthony Damico, and Larry Levitt “Eligibility for ACA Health Coverage Following Job Loss” Kaiser Family Foundation May 13, 2020 https://www.kff.org/coronavirus-covid-19/issue-brief/eligibility-for-aca-health-coverage-following-job-loss/

Kaiser Family Foundation: Hospitals with More Market Power Received More Relief in CARES Act Distribution than Smaller

KFF analyzed distribution of the first $50 billion distributed in the CARES Act and found that “Hospitals in the top 10% based on share of private insurance revenue received:”

• Generated more than double the revenue per hospital bed ($44,321 vs $20,710)

• Were less likely to be teaching hospitals (10% vs 38%) and were more likely to be for-profit models (33% vs 23%).

• Had larger operating margins (4.2% vs -9.0%)

• Provided less uncompensated care relative to operating expenses (7.0% vs. 9.1%).

……when compared to the bottom 10% of hospitals generating the least amount of private payor revenue.

Karyn Schwartz , Anthony Damico “Distribution of CARES Act Funding Among Hospitals” Kaiser Family Foundation May 13, 2020 https://www.kff.org/health-costs/issue-brief/distribution-of-cares-act-funding-among-hospitals
 

Health Affairs: Social distancing, Shelter-In-Place Orders Reduce Coronavirus Spread

Researchers evaluated the impact of these measures on the growth rate of confirmed COVID-19 cases across US counties between March 1, 2020 and April 27, 2020. Their Findings:

• Adoption of social distancing measures reduced the daily growth rate of new Covid-19 infections by 5.4% after 1–5 days, 6.8% after 6–10 days, 8.2% after 11–15 days, and 9.1% after 16–20 days.

• Holding the amount of voluntary social distancing constant, these results imply 10 times greater spread by April 27 without SIPOs (10 million cases) and more than 35 times greater spread without any of the four measures (35 million).

• The data is inconclusive about the advisability of school closures. The researchers noted children are less likely to become infected, more inclined to recover without complication and “schools are only slightly more dangerous than parks and playgrounds for COVID-19 transmission” based on Google mobile monitoring data.

Charles Countenance et al “Strong Social Distancing Measures in The United States Reduced The COVID-19 Growth Rate” Health Affairs May 14, 2020 doe: 10.1377/ hlthaff.2020.00608 HEALTH AFFAIRS 39, NO. 7 (2020):
 

IMPORTANT INDUSTRY NEWS
 

MA Plans Slow to Add Supplemental Benefits though Star Ratings Improve When They do

In the Medicare Advantage (MA) program, which enrolls 34% of Medicare beneficiaries, private plans are paid per capita to cover enrollees’ needs. The Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2018, gave plans new flexibility to offer Special Supplemental Benefits for the Chronically Ill (SSBCI), which address enrollees’ social needs.

There is evidence that addressing enrollees’ social needs may be associated with positive outcomes and cost savings. However, plans have been slow to adopt new benefits:

• In 2020, 139 of 3052 plans (4.6%) offered an SSBCI. Pest control (66 plans [2.2%]) was most frequently offered, followed by produce (63 [2.1%]) and meal delivery (55 [1.8%])

• Health maintenance organizations (130 plans [6.2%]), plans rated 4 to 4.5 stars (90 [5.4%]), dual (26 [7.5%]) and chronic (27 [24.3%]) special needs plans, and plans created from 2006 through 2013 (57 [5.7%]) were most likely to offer a new SSBCI.

• Health maintenance organizations, older plans, and plans with higher ratings more frequently offered new benefits.

David J. Meyers, PhD, MPH; Emily A. Gadbois, PhD, MS, MA; Joan Brazier, MS2; et al Emma Tucher, BA1; Kali S. Thomas, PhD, MA1,2,3 “Medicare Plans’ Adoption of Special Supplemental Benefits for the Chronically Ill for Enrollees With Social Needs” JAMA Netw Open. May 12, 2020;3(5): e204690. doi:10.1001/jamanetworkopen.2020.4690
 

Pew: Income Inequality Persists

In 2018, households in the top fifth of earners (with incomes of $130,001 or more that year) produced 52% of all U.S. income, more than the lower four-fifths combined, according to Census Bureau data. In 1968, by comparison, the top-earning 20% of households brought in 43% of the nation’s income, while those in the lower four income quintiles accounting for 56%. Among the top 5% of households – those with incomes of at least $248,729 in 2018 – their share of all U.S. income rose from 16% in 1968 to 23% in 2018. And the disparity is notably apparent in comparing ethnic groups: the median household income for white households is $84,600 and for black households $51,600—a 39% difference that has persisted for since 1970.

“Views of economic inequality” Pew Research Center January 2020 https://www.pewsocialtrends.org/2020/01/09/views-of-economic-inequality/
 

CMS:  1.6% increase for 2021 Medicare Hospital Inpatient Reimbursement

In its announcement last week, CMS announced the 2021 increase for Medicare inpatient hospital services would be 1.66%, or about $2 billion. The Inpatient Prospective Payment System, or IPPS, rule increases operating payments to hospitals 2.5%-3.1% reduced by uncompensated care payments, add-on payments for new technologies and capital payments. The rule also proposes a new DRG for CAR T- Cell cancer Therapy.

”FY 2021 IPPS Proposed Rule Home Page” CMS   https://www.cms.gov/medicare/acute-inpatient-pps/fy-2021-ipps-proposed-rule-home-page

 
HCCI: Childbirth Costs in Employer-Sponsored Plans Varies Widely by State

Childbirth is the most frequent reason for an inpatient admission in the United States, and Cesarean-section (C-section) is the most common operating room procedure in an inpatient hospital stay. Among people who get insurance through an employer, the combination of labor, delivery, and newborn care makes up nearly one in six dollars spent on inpatient care. Childbirth accounts for an estimated four out of every five dollars spent on maternal-newborn health care. The Health Care Cost Institute analysis of 351,272 employer insurance claims in 2016-2017 released last week found…

• Spending on a childbirth admission for individuals with employer-sponsored insurance averaged $13,811 – the sum of insurer and out-of-pocket payments to the facility and all other providers. Average cost varied widely across states with the average cost in New York more than double the average cost in Arkansas.

• The average total cost of vaginal birth was as low as $7,507 in Arkansas to $17,556 in New York. Out-of-pocket costs for childbirth also ranged from an average of $1,077 in Washington, D.C. to $2,473 in South Carolina.

• Nationally, 33% of the births were C-sections and the remaining 67% were vaginal births (C rates in OECD countries is 28% and 10% in WHO organization)

William Johnson, Anna Milewski, Katie Martin, Elianna Clayton “Understanding Variation in Spending on Childbirth Among the Commercially Insured” HCCI May 13, 2020 https://healthcostinstitute.org/in-the-news/understanding-variation-in-spending-on-childbirth-among-the-commercially-insured

 
AARP: One in Five Households Provide Unpaid Caregiving

This report by AARP is based on nationally representative quantitative online surveys with 1,392 caregivers ages 18 and older. Key findings:

• 21.3% (53 million) of Americans provide care to an adult or child with special needs at some time in the past 12 months—up from 43.5 million caregivers in 2015.

• 19% are providing unpaid care to an adult with health or functional needs.

• 24% are caring for more than one person up from 18% in 2015.

• 26% have difficulty coordinating care up from 19% in 2015.

• 26% are caring for someone with Alzheimer’s disease or dementia up from 22% in 2015.

• 23% say caregiving has made their own health worse up from 17% in 2015.

• 61% of family caregivers are also working.

AARP and National Alliance for Caregiving. Caregiving in the United States 2020. Washington, DC: AARP. May 2020. https://doi.org/10.26419/ppi.00103.001

 
J.D. Power: Confidence in Insurers Low

J.D. Power released its 2020 U.S. Commercial Member Health Plan Study based on responses from 31,283 commercial health plan members January through March 2020. Findings:

• 25% of those surveyed view their health plan as a “trusted partner in their health and wellness”

• 60% say their health plan has failed to reach out and provide COVID-19 related information since the pandemic began.

”2020 Commercial Member Health Plan Study” JD Power May, 2020 https://www.jdpower.com/business/healthcare/commercial-member-health-plan-study

 
UCLA study: Gap in Health Equity by Race Improving but Widening for Low Income Households

Researchers analyzed data for adults 5.5 million U.S. adults age 18-64 for the period from 1993 to 2017 using the Centers for Disease Control and Prevention’s Behavioral Risk Factor Surveillance System to assess trends. The researchers focused on two questions from the survey recommended by the CDC as reliable indicators of health: Over the last 30 days, how many healthy days have you had? On a scale of 1 to 5, how would you rate your overall health?

Key finding:  Across all groups, Americans’ self-reported health has declined since 1993. The black-white gap showed significant improvement. However, measures of health equity and health justice declined over time, and income disparities worsened. Overall, white men in the highest income bracket were the healthiest group.

Frederick J. Zimmerman, Nathaniel W. Anderson, “Trends in Health Equity in the United States by Race/Ethnicity, Sex, and Income, 1993-2017” JAMA Netw Open. 2019;2(6): e196386. doi:10.1001/jamanetworkopen.2019.6386