Looking Ahead: The Pivot to Healthcare Politics and what to Expect

This week, 31 states will re-open parts of their economies. Daily Coronavirus briefings by governors and federal officials will be shorter and audiences smaller. The possibility of a second surge, limitations on social gatherings and lingering effect of the 8-week shutdown of our economy will be constant reminders that a return to normal is unlikely.

Looking ahead, the realities are these:

• As of 8 April 2020, the global COVID-19 vaccine R&D landscape includes 115 vaccine candidates of which 78 are confirmed as active (73 are currently at exploratory or preclinical stages and 5 are in late stage development); mRNA-1273 from Moderna, Ad5-nCoV from CanSino Biologicals, INO-4800 from Inovio, and LV-SMENP-DC and pathogen-specific aAPC from Shenzhen Geno-Immune Medical Institute. At the earliest, a vaccine will be ready early next year. Until then, social distancing will be the norm.

• Gilead’s Remdesivir, which received emergency approval by the FDA, is the only drug currently approved for treatment of Covid-19 infections.

• The 8-week shutdown cost 30 million jobs, added $5.8 trillion to the federal deficit and drove consumer confidence to its lowest level since 2014.

• 90% of the $2.684 trillion in Federal relief grants and loans to businesses and households has been disbursed. The availability of funds for small businesses (through the Payroll Protection Program) and households has been short of demand and a focus for anticipated additional appropriations.

• The stock market, an important source of capital for business and pensions for workers, is down 32.7% in less than 90 days. Though the Dow has recovered from its March 16 low of 19,898 to close Friday at 23,724, recovery will be slow; and a retest of March lows is entirely plausible.

• And the projected death toll from the coronavirus in the U.S. is now expected to top 100,000.

That’s the backdrop for our elections in 176 days. Voters will choose officeholders for the White House, 35 Senate seats, 435 House seats, 13 Governors and legislators in 86 of the 99 legislative bodies. As a result of the coronavirus and its disruption of our national normalcy, the future of the U.S. healthcare system is certain to be on voters’ minds. Here’s why:

Before the pandemic, registered voters rated healthcare access and affordability as their top concerns (53%). Since the pandemic, voter intensity about each has magnified. The public’s afraid. The direct connection between personal livelihood and public health has imposed itself in the public psyche as never before.

As Election Day approaches, media coverage and voter attention will widen from vaccines, drugs, social distancing, and relief funds to flaws exposed in our response to the coronavirus. Our lack of pandemic preparedness. Disproportionately low spending for preventive health and high spending for specialty care. The lack of integration between public health programs and local delivery systems. The slow progression of clinical research for needed vaccines and drugs and patent protections that limit competition. The disadvantages that face the old, poor and persons of color in accessing care when needed. The willingness of suppliers to price gauge in a time of soaring demand. The impact of social isolation, layoffs and anxiety on our collective emotional health and wellbeing. The distinctions between “not for profit” and “investor-owned” healthcare and many more.

So, looking to the 2020 elections, here are my predictions:

• Republicans will blame China for the coronavirus outbreak, tout their decisive response, take credit for lives saved and promise full economic recovery next year. Democrats will challenge the veracity of each claim.

• Democrats will assert healthcare as a fundamental right compromised by corporate greed and corruption. They’ll ‘name and shame’ prominent companies that took advantage of relief funds and demonize insurers and drug companies in the same soundbites. Republicans will counter that “government run healthcare” is not the answer and blame “Obamacare” for the health system’s problems.

• Both will promise to protect Medicare benefits for seniors and avoid touchy issues like lifestyle habits that add to avoidable costs.

• Both will say healthcare is too expensive and promise to make it more affordable.

• Republicans will focus on expanding private insurance vis a vis healthcare marketplaces, Medicare Advantage and Managed Medicaid while bashing the Affordable Care Act.Democrats will counter with repairs of the Affordable Care Act and expanded coverage vis a vis a public option and Medicare Advantage for All.

• And both parties will claim their views are in line with the majority of the American people.

MY TAKE

The politics of healthcare in the U.S. will be center stage as we pivot past the coronavirus. The solutions to the system’s flaws and defining its future are not the exclusive domicile of either party or any sector that considers itself the occupant of the moral high ground. Lest we forget:

• The majority of Americans care about the healthcare system. It matters.

• The majority don’t know how it works or how much it costs. They only know what they personally experience in their households and families.

• The majority are open to changes that make their lives better.

• And the majority are worried about the coronavirus. They’re afraid.

That’s it.

The coronavirus tanked our economy and altered our politics for years to come. Board oversight of the organizations and companies in our industry must recognize that the future of the system is unlikely a return to its past.

Paul

P.S. As hospitals and clinics and struggle to recover, solutions that save money without compromising patient safety are key. Processes that benefit from technology innovation are likely targets, like translation services. Turns out it’s simply a cost of doing business for most providers, so cheaper, better, approaches are worth attention. Here’s one: VOYCE Global. It’s an app that connects caregivers to translators in 235 languages/dialects via Video Remote Interpretation (VRI) saving 30% of translation costs compared to what’s normally done. VOYCE is offering a free trial. Visit their website for more information: https://www.voyceglobal.com/; and contact Andrew.Royce@voyceglobal.com for further inquiries.
 

CORONAVIRUS UPDATE: SPENDING, COSTS, & UTILIZATION

CBO Budget Forecast: deficit to increase $5.8 trillion in ‘20,’21

Last week, the Congressional Budget Office issued its updated forecast through the end of 2021. Highlights
In the second quarter, 2020:

• Inflation-adjusted gross domestic product (real GDP) is expected to decline by 12% during the second quarter, equivalent to a decline at an annual rate of 40% for that quarter.

• The unemployment rate is expected to average close to 14% during the second quarter.

• Interest rates on 3-month Treasury bills and 10-year Treasury notes are expected to average 0.1% and 0.6%during that quarter.

For fiscal year 2020:

• The federal budget deficit is projected to be $3.7 trillion in 2020 and $2.1 trillion in 2021 (17.9% of GDP in 2020 and 9.8% of GDP in 2021 vs. 4.6% in 2019).

• The deficit relative to GDP is projected to be 13% higher in 2020 and about 5% higher in 2021 than in CBO’s March baseline projections.

• Federal debt held by the public will be 101% of GDP by the end of fiscal year 2020 and grow to 108% of GDP at the end of 2021 vs. 79% at the end of fiscal year 2019.

• Debt relative to GDP is projected to be 20% higher at the end of 2020 and 26% higher at the end of 2021 than in CBO’s March baseline projections

Long-term Outlook for 2021:

“After a sharp contraction in the second quarter, economic growth is expected to average about 17 %at an annual rate in the second half of calendar year 2020. Increases in consumer spending are expected to more than offset further declines in business investment during that period. In 2021, real GDP is projected to grow by 2.8% on a fourth-quarter-to-fourth-quarter basis. Under that projection, real GDP at the end of 2021 would be 6.7% below what CBO projected for that quarter in its economic outlook produced in January 2020.”

“CBO’s Current Projections of Output, Employment, and Interest Rates and a Preliminary Look at Federal Deficits for 2020 and 2021” https://www.cbo.gov/publication/56335?utm_campaign=Federal%20Insights%20Newsletter&utm_medium=email&_hsmi=87111215&_hsenc=p2ANqtz-9Y-BN-ipG0jJ8wWWyW9Vj7l-485t8nn9ihOdlyJvM34Oxaux5Vk7CnyGHDycFrEt6Pok6h&utm_content=87111215&utm_source=hs_emai

 
Impact of Coronavirus on Health Spending: increase to 21.4% of GDP likely

In late March 2020, the Centers for Medicare & Medicaid Services (CMS) released projections of US national health spending that predicted growth from the 2019 level of 17.8% of gross domestic product (GDP) to 19.7% over the next 10 years. The combination of additional health spending resulting from the coronavirus (+10%) and decreased economic productivity (-8.7%) means health care spending will increase by 3.7%from 17.7% of GDP to 21.4% of GDP this year.

FAIR Health Inc. The Projected Economic Impact of the COVID-19 Pandemic on the US Healthcare System. Published March 25, 2020. https://s3.amazonaws.com/media2.fairhealth.org/brief/asset/COVID-19%20-%20The%20Projected%20Economic%20Impact%20of%20the%20COVID-19%20Pandemic%20on%20the%20US%20Healthcare%20System.pdf

Glied, Levy “The Potential Effects of Coronavirus on National Health  JAMA April 27, 2020. doi:10.1001/jama.2020.6644

Axios’ Hospital Funding Database

Last week, Axios announced the creation of a database to track which hospitals and health systems have received bailout funds thus far.

For a quick overview of funding guidelines, visit:
https://www.axios.com/hospitals-coronavirus-bailout-funds-database-8c909d0a-57f7-4d4b-8e2d-a68bea2d0fc1.html

To view the list of hospitals receiving bailout funds, visit:
https://docs.google.com/spreadsheets/d/1x213oZPLQ8SOHmgBj12oKC9K70LNx1pIUIdtZtI837M/edit#gid=0
 

Utilization: Komodo Studies Show Decline in Diagnostics

Komodo analyzed billing records for 320 million patients across the U.S. between March 19 and April 20, and compared data to that of the preceding 11 weeks and a similar period last year. They found cervical cancer screenings dropped by 68%, cholesterol panels by 67% and blood sugar tests for diabetes by 65% nationally. The greatest declines were found in areas hit the hardest by the pandemic, such as Manhattan, where A1c blood tests for diabetes were down by more than 90%; in Massachusetts, where cholesterol testing fell 80.5%; and California, where screening to detect cervical cancer dropped by 76.3%.

“Exclusive: U.S. Medical Testing, Cancer Screenings Plunge During Coronavirus Outbreak-Data Firm Analysis” New York Times April 28, 2020 https://www.nytimes.com/reuters/2020/04/28/us/28reuters-health-coronavirus-usa-screenings-exclusive.html

Coronavirus Update: Polling

Episode 47: Bipartisan Policy Center 2020 HEALTH CARE PRIORITIES PRESENTATION
https://bipartisanpolicy.org/podcast-episode/episode-47-2020-health-care-priorities/

Morning Consult Poll:  79% expect a second surge

Morning Consult’s weekly coronavirus survey tracker, based on 2,200 surveys of U.S. adults. The latest survey was conducted April 24-26, 2020:

• 60% of Southerners approve of their state government’s response, while 29% disapprove vs. 69% approval and 19% disapproval in mid-April—a net negative approval shift of 19%. By contrast, in the Northeast, where the coronavirus outbreak has hit the hardest and where governors have tended to enact tighter restrictions, 77% approve and 15% disapprove.

• 79% of adults say it’s either very or somewhat likely there will be a second wave of coronavirus cases in the next year vs. 9% who say it’s somewhat or very unlikely there will be a second wave. Republicans and older voters are less concerned about the coronavirus than others, but Republican voters are more concerned about the economic impact of the coronavirus compared to other groups.

• 73% say Americans should continue social distancing as long as is needed to curb the spread of the virus, even if it damages the economy —down slightly from 76% last week.

“Amid Public Health Crisis, Americans Battling an Array of Downstream Challenges” Morning Consult Poll May 1, 2020  https://morningconsult.com/form/coronavirus-outbreak-tracker/

Urban Institute Poll: Half of Population Directly Impacted by Coronavirus

Urban Institute’s Health Reform Monitoring Survey (HRMS) of nonelderly adults conducted between March 25 and April 10, 2020:

• 42% reported that their families have lost jobs, work hours, or work-related income because of the coronavirus outbreak.

• 31% reported that their families reduced spending on food, 43% put off major purchases, and 28% drew down savings or increased credit card debt.

• Among adults in families that lost work or income, 47%percent reduced spending on food, 58% put off major purchases and 44% tapped savings or increased credit card debt.

• 31% reported that their families could not pay the rent, mortgage, or utility bills, were food insecure, or went without medical care because of the cost during the last 30 days. Among adults in families that lost work or income, the share experiencing these material hardships was 42% over the same time period.

• 69% of adults with family incomes below the federal poverty level and over 45%of black and Hispanic adults reported that their families experienced one or more hardships in the last 30 days.

“Looking ahead to the next month, adults are most likely to be worried about being able to work enough hours (39%) and pay their debts (33%) and more than one-quarter worry about paying for housing, utility, and medical costs and having enough food to eat. “

Karpman et al “The COVID-19 Pandemic is Straining Families’ Ability to Afford Basic Needs” Urban Institute Health Reform Monitoring Survey April 28, 2020 https://www.rwjf.org/en/library/research/2020/04/covid-19-pandemic-was-already-straining-families-ability-to-afford-basic-needs-by-early-spring-with-low-income-and-hispanic-people-hardest-hit.html?cid=xem_other_unpd_ini:hrms_dte:20200428_des:covid%20hrms

Gallup: Trump Approval of Coronavirus Handling Slipping

Results for this Gallup poll are based on telephone interviews conducted April 14-28, 2020, with a random sample of 1,016 adults, aged 18 and older:

• 50% approve, 48% disapprove of Trump’s handling COVID-19 situation (Approval of his handling of the COVID-19 crisis is down 10% from last month, including a 10% decline among independents and a 16% decline among Democrats)

• President Trump’s Overall job approval rating now at 49% the same as in a March 13-22 poll but higher than his reading of 43% in an April 1-14 survey

“Americans Divided on Trump’s Handling of COVID-19 Situation” Gallup April 30, 2020 https://news.gallup.com/poll/309593/americans-divided-trump-handling-covid-situation.aspx

Axios-Ipsos Week 7 Poll: Anxiety Increasing

Results are from the 7th wave of the poll, conducted April 24-27, and include responses from 1,021 U.S. adults.

• 12% of Americans know someone who’s died of COVID-19

• 26% said they know someone who has tested positive for the novel coronavirus, and 15% said they know someone who tried to get tested but was turned away.

• 24% said they were “extremely” concerned and another 24% said they were “very” concerned about their community reopening too soon.

• 26% said they were not willing to risk their health or their families’ health and well-being to return to their life before the coronavirus pandemic.

• 61% report being “extremely” or “very” concerned about the U.S. economy collapsing during the pandemic.

• 43% said that they wear a mask at all times when leaving the house; 67% said they are maintaining a distance of at least 6 feet from other people.

“Americans Adapting to the Coronavirus Pause” Axios-Ipsos Poll April 28, 2020 https://www.ipsos.com/en-us/news-polls/axios-ipsos-coronavirus-index

Pew: Public Assessment of the U.S. Economy Plummets

According to Pew most recent poll of 4917 U.S. adults conducted April 7-12:

• 23% of Americans now rate economic conditions in the country as excellent or good, down sharply from 57% at the start of the year.

• Most now say the economy is in either only fair (38%) or poor (38%) shape. In January, just 9% of Americans said economic conditions were poor.

• 88% say the $2 trillion economic aid package passed in March was the right thing to do, including identical majorities of Republicans and Democrats 89% each. More than three-quarters (77%) think it will be necessary for the president and Congress to pass legislation providing additional economic assistance.

• Majorities of Americans say the aid package enacted last month will do a great deal or a fair amount to help a range of actors, including large businesses (77%), small businesses (71%), state and local governments (67%) and unemployed people (68%).

• 49% expect it to benefit self-employed people, while 46% think it will help their own household a great deal or fair amount. In part, this reflects the fact that lower-income adults are far more likely than more affluent people to say the aid package will benefit them. A

• 59% of those in lower-income households believe the federal aid will help them, compared with just 22% in upper-income households.

• 71% say the economic problems resulting from the outbreak will last for at least six months, including 39% who say they will last a year or more and 29% expect these problems to last six months or less.

• 55% expects that economic conditions in the country as a whole will be better a year from now than they are today, while 22% say they will be worse and 22% expect conditions to be about the same as they are now.

“Positive Economic Views Plummet; Support for Government Aid Crosses Party Lines” Pew Research April 21, 2020 https://www.people-press.org/2020/04/21/positive-economic-views-plummet-support-for-government-aid-crosses-party-lines/?utm_campaign=2020-04-29+Rundown&utm_medium=email&utm_source=Pew

Majority Want Absentee Voting Option

81% of voters want to see polling places kept open in next selection along with 76% who think voters should also have the option of absentee voting.  82% of Democrats, 76% of independents and 70% of Republicans supported that dual option — and it was most popular with voters 65 and older

Fabrizio Lee poll of 1000 voters April 17-20 released April 29, 2020  https://www.documentcloud.org/documents/6880238-Fabrizio-Lee-National-Poll-Memo.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top
 
 
 

IMPORTANT INDUSTRY NEWS

Gottlieb, Slavitt Proposal:’ Create an Army to do Contact Tracing’

Scott Gottlieb, former FDA Director and Andy Slavitt, former CMS Director in DC circles have teamed to propose a bold coronavirus solution: the federal government should spend  $46.5 billion effort to hire an army of 180,000 contact-tracers ($12 billion), book blocks of vacant hotel rooms ($4.5 billion) so Americans sick with Covid-19 can self-isolate, and pay sick individuals to stay away from work until they recover ($30 billion).

I respect Scott and Mark and have worked with both of them through the years. Before discounting their proposal through traditional partisan lenses, their solutions for mass tracing and surge capacity should not be dismissed. They’re worth pursuing.

“A bipartisan group of former health officials seeks to sell a $46.5 billion coronavirus plan to the White House” April 29, 2020 https://www.statnews.com/2020/04/29/gottlieb-slavitt-coronavirus-plan-white-house/?utm_source=STAT+Newsletters&utm_campaign=f3e6bb82c2-MR_COPY_01&utm_medium=email&utm_term=0_8cab1d7961-f3e6bb82c2-151199453

Optum to Acquire Remote Mental Health Provider AbleTo for about $470 Million

UnitedHealth’s Optum division is in talks to acquire AbleTo, a New York based tele-mental health provider, for $470 million, or around 10X forward revenue. “Virtual therapy providers like AbleTo are seeing booming growth as the coronavirus forces people indoors and leads to skyrocketing unemployment and emotional insecurity. “AbleTo raised money last year from Optum and Bain.

“Optum eyeing $470M acquisition of digital therapy provider AbleTo: report”  Fierce Healthcare April 27, 2020 https://www.fiercehealthcare.com/payer/optum-eyeing-470m-acquisition-remote-mental-health-provider-ableto-report

Supreme Court Rules Congress Bilked ACA Insurers for Risk Corridor Obligation

Last Monday, U.S. Supreme Court ruled that the federal government acted unlawfully when it reneged on a commitment to shield Affordable Care Act insurers from heavy financial losses per Section 1342 of the Affordable Care Act (risk corridor protections). In its 8-1 decision, SCOTUS ruled that health insurers are owed $12 billion for 2014-2016.

Keith “Supreme Court Rules That Insurers Are Entitled To Risk Corridors Payments: What The Court Said And What Happens Next” Health Affairs April 28, 2020 https://www.healthaffairs.org/do/10.1377/hblog20200427.34146/full/

JAMA Meta-Analysis: Lifestyle Impact on Chronic Disease Prevalence

In a multicohort study of 116 043 participants, a statistically significant association between overall healthy lifestyle score and an increased number of disease-free life-years was noted. Of 16 different lifestyle profiles studied, the 4 that were associated with the greatest disease-free life years included body mass index lower than 25 and at least 2 of 3 factors: never smoking, physical activity, and moderate alcohol consumption. Comparing the best with the worst lifestyle score was associated with approximately 9 additional years without chronic diseases. A 1-point advantage in healthy lifestyle score was associated with an almost 1-year increase in years spent without type 2 diabetes, coronary heart disease, stroke, cancer, asthma, and COPD.”

Nyberg et al “Association of Healthy Lifestyle with Years Lived Without Major Chronic Diseases” JAMA Intern Med. Published online April 6, 2020. doi:10.1001/jamainternmed.2020.0618

Ward, Dasgupta “Regional Variation in Rates of Total Knee Arthroplasty Among Medicare Beneficiaries” JAMA Network Open April 28, 2020. 2020;3(4): e203717. doi:10.1001/jamanetworkopen.2020.3717 https://jamanetwork.com/

Readmission Data from Medicare Advantage Plans Under-Reports Actual Readmissions, Smaller MA Plans More Likely to Under-Report

The Brown University research team analyzed Medicare Advantage encounter data for 1,175,341 enrollees in 441 plans with a specific focus on 30-day hospital readmissions—a key metric in star ratings awarded plan sponsors.  “We found that readmission rates were statistically significantly higher in encounter data than in HEDIS data. This difference was associated with the underreporting of index admissions in HEDIS. Notably, the readmission rates of underreported admissions were approximately 2 times greater than the readmission rates of those included in HEDIS data. The proportion of underreported index admissions in HEDIS varied widely across MA contracts. Medicare Advantage contracts with the most complete reporting were penalized in rankings compared with contracts with less-complete HEDIS data.

Kim et al “Assessment of Completeness of Hospital Readmission Rates Reported in Medicare Advantage Contracts’ Healthcare Effectiveness Data and Information Set” JAMA Netw Open. April 28, 2020;3(4): e203555. doi:10.1001/jamanetworkopen.2020.3555

CMS Makes Concessions to ACOs

Last Thursday, CMS issued two rules widely supported by industry groups: 

• State-approved Medicare providers can now order COVID-19 serology tests, and Medicare will pay providers to collect specimens for COVID-19 testing under the physician fee schedule and outpatient prospective payment system.

• New exceptions for the hospital value-based purchasing program, delayed reporting requirements for post-acute care facilities and a one-year delay of some requirements for the merit-based incentive payment system, or MIPS.

• Allowance for ACOs to carry over their current level of risk for an extra year. Note: ACO supporters were asking for more including “providing a one-time incentive to two-sided risk ACO entities and a MACRA bonuses to all clinicians in those ACOs and They’re also asking for a 2021 application period for new ACOs/a partial 2021 performance year for ACOs as the healthcare industry stabilizes.

Brady “CMS delivers key win for ACOs in emergency rule” Modern Healthcare April 30, 2020 https://www.modernhealthcare.com/payment/cms-delivers-key-win-acos-emergency-rule?utm_source=modern-healthcare-am-friday&utm_medium=email&utm_campaign=20200430&utm_content=article1-readmore