More than 27 million tuned in to President Biden’s address to Congress Wednesday night—the smallest audience for a President’s first address since 1993.
He outlined his administration’s ambition to pass the $1.8 trillion American Families Plan on the heels of his $2.3 trillion American Jobs Plan aka ‘infrastructure’ bill introduced in late March and $1.9 trillion American Rescue Plan aka ‘Covid-relief’ bill that passed March 11th.
The American Families Plan includes $1 trillion in investments and $800 billion in tax credits for American families and children over 10 years of age for the next 10 years. It expands the social safety net beyond Medicare, Medicaid and Social Security by adding funds for expanded childcare tax credits ($200 billion), children’s nutrition ($25 billion), paid sick leave ($225 billion), universal pre-school ($200 billion), free community college tuition ($109 billion), direct subsidies to help 13 million low-income households afford health insurance, and much more. It’s a companion to the $1.9 trillion American Rescue Plan passed March 11 extending many of its programs and adding particularly focus on rural communities where “21% of children live in poverty.”. And it comes at a time when Americans are looking past the pandemic and the stock market is soaring, especially Big Tech.
Partisans jumped on the American Family Plan began immediately: Republicans characterized it as ‘radical socialism’ and ‘reckless spending, while Democrats countered that its price tag is justified by the pandemic-induced economic despair facing low- and working-class families. And media pundits called out contrasts between the Trump administration and the Biden administration’s first 100 days. But two distinct similarities in the two have escaped notice:
Dependence on Deficit Spending
The Trump administration added $8 trillion to the federal debt including $3.5 trillion for 5 Covid relief bills including the CARES Act. By the end of 2020, the U.S. debt reached $26.7 trillion– a 36% increase from 2017 and all-time high debt-to-GDP ratio of 129%. To address the deficit, the Trump team predicted annual GDP growth of 4-6% through corporate tax cuts that would raise wages by an average of $4000 per worker but results fell short. In 2018 and following, companies used their profits for share repurchases and acquisitions instead of higher wages for their employees, and the pandemic then shut down much of the economy in 2020. The Biden administration also anticipates deficits: its trifecta (Rescue, Jobs, & Family) will likely add $6 trillion or more to the debt. But unlike the Trump strategy, funding for these is based on tax increases on companies and high-income individuals who are encouraged to “pay their fair share”. Thus, both administrations made/plan their Big Bets based on deficit spending.
Lack of Direct Support to the Healthcare Delivery System
In the President’s address Wednesday night, “jobs” were mentioned 160 times but “healthcare” only 3 times (ironic in that healthcare is the largest private sector employer in the U.S. economy). Like the Trump administration, the Biden administration has signaled its intent to leave the current private health system in place, instead focusing efforts and resources on expanding access to underserved populations and rural communities. In the administration’s American Jobs Plan, infrastructure investments include broadband, semiconductors, climate emissions and electric cars alongside repairs to rail, roads and bridges to improve U.S. competitiveness against China but little about health facilities. In the American Family Plan, there’s funding for health insurance coverage, nutrition and social supports to working families but not much about accessibility and affordability for middle income households and those with special needs. These bills have essentially overlooked the hospitals, physicians and other providers that are still reeling from the pandemic and millions of Americans who do not qualify for the expanded safety net programs though they’re insecure about their healthcare.
MY TAKE
In Morning Consult polling conducted ahead of the President’s address to a joint session of Congress last Wednesday, 57% of voters approved of his job performance, up 3% since surveys conducted immediately after he took office on Jan. 20. On average, voters give President Biden a “C+” overall for the first part of his term, slightly better than the “C-” that President Trump received in his first 100 days of 2017. But notably, both administrations falter on healthcare. Though the Biden administration gets high marks for its handling of the pandemic, it gets a C on its handling of healthcare issues overall compared to President Trump’s D+. And even among their faithful followers, neither fares well on healthcare: Biden gets a B among Democrats and Trump got a C+ among Republicans. Not surprisingly, then, that healthcare was a minor theme in Wednesday’s address to Congress.
The Biden administration has signaled its intent to advance center-left policies to bolster economic security for low-and- middle income American families. It has addressed health insurance access and affordability vis a vis increased subsidies in its proposed Jobs and Family legislation but essentially left-in-place the ways the delivery and insurance systems operate today. That leaves the door wide open for privately funded innovators to disrupt the system at the urging of employers and consumers who are increasingly disgusted by the status quo. And it misses the opportunity to develop policies that could more effectively modernize the U.S. health system to the benefit of every American.
The performance of the system is a concern to every American. It’s not confined to the under-served for whom the administration is appropriately targeting its efforts. It’s a start, but the America’s Family Plan misses the mark on ‘building back better’ the health system of the future we need.
Paul
RESOURCES
“Biden Is Off to a Strong Start in Office. But Now Comes the Hard Part”; April 28, 2021; Morning Consult
CORONAVIRUS NEWS
CDC Update: 132M First Doses
According to the CDC, as of April 19th over 132.3 million people have received at least one dose of a Covid-19 vaccine, including about 85.4 million people who have been fully vaccinated by Johnson & Johnson’s single-dose vaccine or the two-dose series made by Pfizer and Moderna. Nationally, the 7-day average of new COVID-19 cases has declined to 54,400, a 21% drop last week and deaths are down from 5.6%.
U.S. Centers for Disease Control and Prevention
Study: Pediatric Admissions Down During Covid
Researchers conducted a retrospective study of admissions for children aged 0 to 18 years in 42 US freestanding children’s hospitals between March 15 and August 31, 2021. Highlights:
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Weekly all-cause hospitalizations decreased in the spring from a median of 12,830 to 7033 in 2020 and in the summer from a median of 11,697 to 9,178 in 2020.
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The largest decrease in weekly condition-specific hospitalizations occurred in spring 2020 with 296 with respiratory failure in 2017-2019 to 87 in 2020.
Gill et al, “Reasons for Admissions to US Children’s Hospitals During the COVID-19 Pandemic”; April 27, 2021: JAMA Network
Study: Internal Medicine Applications Increased During Covid
UCSF researchers evaluated the number of applicants and number of applications per applicant to IM residency and subspecialty fellowships for 2021 vs. the 5 prior application cycles. Highlights:
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For IM residencies, the number of applicants increased every year, from 21,947 applicants in 2016 to 24,509 applicants in 2021.
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The annual increase from 2020 to 2021 (from 23,121 to 24,509 applicants; 6.0% increase) was more than twice the rate of annual increase in any prior year. Substantial increases were noted in 2021 for infectious diseases (17.0%), geriatric medicine (13.0%), HPM (20.5%), and pulmonary/critical care medicine (6.6%). Of note, gastroenterology was the only fellowship with fewer applicants in 2021 (−0.3%).
Huppert et al “Trends in US Internal Medicine Residency and Fellowship Applications During the COVID-19 Pandemic vs Previous Years”; April 28, 2021; JAMA Network
INDUSTRY NEWS
Kaufman Hall Hospital Report: March Results
Kaufman Hall’s analysis of hospital utilization changes through March 2021: (2021 year-to-date (YTD) and last 12 months (LTM) March 2020 to March 2021):
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Adjusted discharges: -7.4% YTD, +11.9% LTM
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Adjusted patient days: -0.8% YTD, +17.2% LTM
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ALOS: +8.3% YTD, +4.1% LTM
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Discharges: -8.2% YTD, +1.8% LTM
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ED Visits:-19.2% YTD, -3.0% LTM
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Operating room minutes: +3.1% YTD, +43.9% LTM
Kaufman Hall Flash Report April 2021
CMS Weekly Update: Change to Price Transparency Guidance, Add-on Payments for Covid
Last Tuesday, CMS proposed eliminating its requirement that providers disclose their contract terms with Medicare Advantage insurers in its Hospital Inpatient Prospective Payment System rule. Other items in the announcement:
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$2.5 billion increase in Medicare fee-for-service payments for acute care inpatient hospitals and long-term care hospitals including $300 million/yr. for 5 years earmarked for medical residency positions.
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Continuation of add-on payments for new COVID-19 treatments.
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Changes the Hospital Readmissions Reduction Program, Hospital-Acquired Condition Program and Hospital Value-Based Purchasing Program to ensure that hospitals wouldn’t get penalized by the agency for COVID-19 affected quality measures.
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Allows accountable care organizations in the BASIC track of the Medicare Shared Savings Program to opt out of advancing to a higher level of risk for the 2022 performance but keeps the 2023 performance year in place.
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Last Wednesday, CMS updated its Hospital Star Ratings applying its new methodology (reduction the number of measures to 48 and reduced measure groups from 7 to 5):
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45% of hospitals received the same star rating as before while 22.7% of acute-care hospitals, had worse ratings.
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Overall, more hospitals scored 4 and 5 stars on the scale; 45 fewer hospitals received 1 star compared to the last update using the latent variable methodology. An additional 59 hospitals received a 5-star rating.
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Critical-access hospitals saw a more dramatic shift in star ratings. Previously, 94.3% of these hospitals received 3 or more stars. Only 76.3% scored 3 or higher under the new methodology.
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Last Thursday, CMS’ Center for Medicare and Medicaid Innovation announced extension of the Comprehensive Care for Joint Replacement (CCJR) model through the end of 2024 for hospitals in its 34 mandatory metropolitan areas.
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The final rule changes the definition of an episode to include outpatient hip and knee replacements including procedures in hospital outpatient departments, modifies how the agency calculates target prices based on the most recent year of claims data versus three prior years and reduces the number of reconciliation periods from two to one.
Last Friday, CMS released a second payment notice for 2022 marketplace coverage:
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CMS will lower maximum out-of-pocket costs by $400 on insurance marketplace plans.
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The final annual limitation on cost sharing for 2022 is $8,700 for self-coverage and $17,400 for coverage of others.
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The final limitation on cost sharing for enrollees with incomes that fall between 100 and 200 percent of the federal poverty level is $2,900 for self-coverage and $5,800 for coverage of others.
Also on Friday, CMS published its Notice of Benefit and Payment Parameters for 2022, which establishes rules of conduct for group and individual health insurers, including self-insured employers. Not included in the notice was clarity around the use of copay coupons or co-pay accumulators by insurers.
Centers for Medicare and Medicaid Services
Study: Accuracy in Internal Medicine Diagnostics Problematic
Researchers surveyed 553 internal medicine practitioners at outpatient clinics in 8 US states to estimate the probability of disease for 4 scenarios common in primary care (pneumonia, cardiac ischemia, breast cancer screening, and urinary tract infection) and the association of positive and negative test results with disease probability from June 1, 2018, to November 26, 2019. Highlights:
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Pneumonia after positive radiology results, 95% estimate vs. evidence range, 46%-65%.
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Breast cancer after positive mammography results, 50% estimate vs. evidence range, 3%-9%.
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Cardiac ischemia after positive stress test result, 70% estimate vs. (evidence range, 2%-11%.
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Urinary tract infection after positive urine culture result, 80% estimate vs. evidence range, 0%-8.3%.
Morgan et al “Accuracy of Practitioner Estimates of Probability of Diagnosis Before and After Testing”; JAMA Network; April 5, 2021
Study: Large Employers Think Health Costs Excessive
The Pacific Business Group on Health and Kaiser Family Foundation surveyed C suite leaders in 302 companies with 5000+employees in December 2020 and January 2021. Highlights:
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Health benefits make up 7.3% of employee compensation for private-sector employers.
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77% think the cost of health benefits is excessive.
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53% blame fee-for-service payments, 55% blame provider consolidation, 56% blame drug prices, and 51% blame unhealthy behaviors.
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56% believe that employers collectively can change health care costs to a moderate extent and another 29% think that employers can change costs to a considerable or large extent.
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87% of respondents believe that the cost of providing health benefits to employees will become unsustainable in the next 5 to 10 years 85% believe that there will need to be greater government roles in providing coverage and containing costs.
“How Corporate Executives View Rising Health Care Cost and the Role of Government”; April 29, 2021; KFF
Telehealth Update: Workload for Nurses Examined, Congressional Hearings Focused on Access
Last Wednesday, the House Ways and Means Committee Subcommittee on Health heard testimony about the future of telehealth with several questioning whether expanded availability of telehealth services could lead to overutilization of healthcare services, open more vulnerabilities to fraud and abuse, and exacerbate racial, gender, income and other disparities seen in healthcare today.
Related: Nurses performed about twice as many activities with telehealth patients compared to in-person patients, according to University of Missouri researchers’ analysis of nearly 800 nursing activities performed for Type 2 diabetes and hypertension patients. While in-person visits led to follow-ups about once every three months, the patients using telehealth submitted their blood glucose and blood pressure levels multiple times a week.
That helped improve their health through medication adjustments and lifestyle changes, but it also resulted in more work. There was an average of 14.1 nursing activities for home-based patients and 7.3 for the in-person cohort over a 12-week span, according to the study.
“Ways & Means reps. bullish on telehealth, but say questions remain”; Modern Healthcare
“A Scoping Review of Telehealth-Assisted Case Management for Chronic Illnesses”; April 23, 2021; Western Journal of Nursing Research
2020 Census Report: Population up 7.4%, Shifting to Low Cost of Living States
On Monday, the U.S. Census Bureau released apportionment counts based on the 2020 census:
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Six states—Texas, Colorado, Florida, Montana, North Carolina, and Oregon—gained seats in the U.S. House. Texas gained two, and the rest gained one.
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Seven states—California, Illinois, Michigan, New York, Ohio, Pennsylvania, and West Virginia—each lost a seat.
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The resident population of the United States as of April 1, 2020, was 331,449,281– a 7.4% increase over the population according to the 2010 census. Texas, the only state to gain more than one congressional seat, added nearly 4 million residents between 2010 and 2020, reaching 29,145,505.
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Each member of the U.S. House now represents an average of 761,169 residents each.
Study: Lowering Medicare Eligibility to 60 would Reduce Spending in Hospitals, Medical Practices
Researchers analyzed claims data for covered medical services from both large employer plans and traditional Medicare to assess the potential spending effects of using Medicare payment rates in lieu of higher rates paid by employer plans to cover enrollees aged 60-64. Highlights:
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Average health care spending per person per month for enrollees ages 60-64 in large employer plans ($1,061) is 38% higher than average monthly spending for traditional Medicare beneficiaries ages 65-69 ($770).
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Average monthly health care spending for large employer plan enrollees ages 60-64 is similar to that of traditional Medicare beneficiaries in their early 70s, who tend to use more health care services than people in the younger age cohort.
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“If private plans paid the same rates as Medicare, their spending would decrease by 41%, or over $350 billion in 2021.”
“Health Spending for 60-64 Year Old’s Would Be Lower Under Medicare Than Under Large Employer Plans”; April 27, 2021; KFF
