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The Keckley Report

Implications: AHA Opines on Vaccines

By July 26, 2021March 1st, 2023No Comments

Last week, the American Hospital Association Board approved this Policy Statement on Mandatory COVID-19 Vaccination of Health Care Personnel:

“To protect all patients, communities and personnel from the known and substantial risks of COVID-19, the American Hospital Association (AHA) strongly urges the vaccination of all health care personnel….The AHA also supports hospitals and health systems that adopt mandatory COVID-19 vaccination policies for health care personnel, with local factors and circumstances shaping whether and how these policies are implemented.“

It’s timely as the Delta variant poses a major risk to the public’s health and potential hit to hospital finances in low vaccination hotspots like Texas, Missouri, Florida and others. It’s also a major concern to financial markets as the Fed meets this week to address growing anxiety about transitory inflation and consumer prices.

A Covid-19 vaccine mandate is a tricky issue: the FDA’s vaccine approvals to date (Pfizer, Moderna, Johnson & Johnson) are emergency authorizations only. If and when full approval is granted, vaccine mandates and passports will be a different story. Until then, the battle being waged between hospitals and hesitant workers will intensify. To the surprise of many, only 1 in 4 hospital workers is currently not vaccinated even as the deadliness of the Delta variant to the unvaccinated population is recognized.

For hospitals, the threat posed by the Delta variant and employee vaccine hesitancy adds to the storm clouds gathering. Consider:

  • The Biden administration and many in Congress seem inclined to rein in hospitals, imposing spending cuts, constraints on vertical and horizontal consolidation, price transparency penalties and removal of drug discounts to name a few. The Senate’s bipartisan G22 committee negotiating the infrastructure bill do not view hospital investments as critical infrastructure. And leftover Cares Act funds originally earmarked to hospitals may end up elsewhere.

  • The public’s sensitivity to health affordability is peaking. Household medical debt ($140 billion) is at a 40-year high hitting low-and-middle income households hardest. 18% of households have an unpaid medical bill. Per the June Commonwealth fund survey last month, 34% of consumers experienced income decline during the pandemic and 38% (including 36% with health insurance coverage) report problems paying their medical bills. And most of their bills are surprises: Nearly one-third of people with above-the-median total annual health care spending (plan plus out-of-pocket spending) incurred half of their annual out-of-pocket spending in just one day. Sticker shock from hospital bills occurs more frequently than reactions to bills for physician services and even prescription drugs. That’s why hospital price transparency (above) has widespread public support.

  • Economic growth seems to continue, undeterred by recent delta variant and inflationary concerns. There’s always a bullish or bearish story/metric/name out there that draws investor bias, but to what end? This week could be a potentially large indicator of investor sentiment as mega cap names like Tesla, Apple, Microsoft, and other behemoths report earnings. And of course we can’t forget the Fed’s 2-day meeting starting tomorrow where the focus will be front and center on their tapering plan. It’s hard to tell if the Fed will catch a break with the delta variant seeming to take precedence over open market operations. Broader market conditions cannot be ignored.

  • And if we drill down further into the private markets, investments in healthcare ventures are siphoning revenue from hospitals. A record $1.7 trillion was invested in healthcare last year by venture capital and private equity funds: and many, better-healed not for profit health systems are direct investors, intensifying regulatory scrutiny of not-for-profit status and community benefit obligations. Sure, the private landscape is often characterized by large health tech platform deals, but the physician practice management space continues to crank out record deal volume, and new specialties are now joining the roll up party.

  • Physicians and health insurers are increasingly antagonistic toward hospitals. Hospitals employ half of the physicians in the U.S. As a business strategy, it makes sense: by ‘controlling’ referral sources, revenues are predictable, and care coordinated more effectively. But as the AMA alerted Congress last week, pending physician pay cuts of up to 9.75% will erode medical care. Hospitals will be a convenient target of physician frustration, especially where board compensation committees pay their C suite team well. And the détente between insurers and hospitals is over: friction is mounting as 2022 plans are designed. The latest: contract disputes between Common Spirit and Blue Cross, Dignity Health and Anthem exposed in media coverage last week.


As the American Hospital Association convenes its leadership summit this week, the landscape for U.S. hospitals and health systems is more complicated and challenging than ever before. What happens in the next 6 months will change the sector’s trajectory for at least the next decade.

To begin, the AHA is spot on in support of a “No vaccine, No Work” policy for its members. As Alabama Governor Kay Ivey said over the weekend, it’s “common sense.” And quite frankly, I’m embarrassed that my home state of Tennessee- a place known for its healthcare- has one of the lowest vaccination rates nationwide, workplace or not. Ironic? Idiotic? Selfish on the part of the unvaccinated? I’d say so. We’ve all heard the arguments on both sides, but at the end of the day, just do some actual research that doesn’t involve “scholarly sources” like social media, pick a vaccine, and get it done.

Second, hospitals must make a new case for public support. That requires every sacred cow be on the table and full transparency the starting point. The messaging war has turned against hospitals despite pandemic heroics.

And last, the AHA board should update its strategic plan, Advancing Health in America, to address fundamental changes in the structure of the healthcare ecosystem, its sources of capital and its long-term sustainability.

It’s not business as usual. And there’s no time to waste.


P.S. Last Wednesday, a group of 13 state attorney generals agreed to a $26 billion settlement with three dominant prescription drug distributors ($7 billion each from AmerisourceBergen, Cardinal Health and McKesson in 18 payments over 17 years) and $5 billion from Johnson & Johnson —in the ongoing opioid litigation. It is the second largest product safety judgement in history dwarfed by the tobacco settlement ($206 billion in 1998). $23.9 billion will go directly to “abatement” of the opioid epidemic with the rest covering legal fees.

This deal does not include states, including (New York, Ohio et al) and pending litigation with drug manufacturers Purdue Pharma and Teva and pharmacy operators including Walgreens Boots Alliance, Walmart Inc, Rite Aid Corp and CVS Health

In the U.S., 1.6 million Americans struggle with Opioid Use Disorder (OUD) and nearly 500,000 people have died from opioid overdoses since 1999. According to the U.S. Centers for Disease Control and Prevention, 2020 was a record year for drug overdose deaths (93,331, up 29% from 2019); of these, opioid deaths accounted for 69,710 (75%) vs. 50,963 in 2019.

As part of these settlements, hospitals should be aggressive in state advocacy efforts to secure funding for OUD abatement programs for patients and employees and standardize methods for diagnosing and treating newborns with Neonatal Abstinence Syndrome—both are urgently needed.


Joudrey et al “Methadone Access for Opioid Use Disorder During the COVID-19 Pandemic Within the United States and Canada”; July 23, 2021; JAMA Network

Morden et al “Racial Inequality in Prescription Opioid Receipt — Role of Individual Health Systems”; July 22, 2021; NEJM

“Cash-Laden Companies Are on a Mergers and Acquisitions Spree”; July 3, 2021; Wall Street Journal

Sara R. Collins, Gabriella N. Aboulafia, and Munira Z. Gunja, “As the Pandemic Eases, What Is the State of Health Care Coverage and Affordability in the U.S”; July 16, 2021; Commonwealth Fund

Kluender et al “Medical Debt in the US, 2009-2020”; July 20 2021; JAMA Network

New CDC Resource: “County Vaccination Coverage and COVID-19 Case Rates”


Covid-19, Delta Variant Update as of July 23, 2021 (CDC, Johns Hopkins, WHO)

  • COVID-19 fatalities increased 48% in the past week to a daily average of 239.

  • Hospitalizations now average 3700/day–a quarter of the January peak.

  • 99.5% of COVID-19 deaths and 97% of possible hospitalizations are among the unvaccinated

  • 83% of new cases are Delta variant, up from 50% at beginning of July.

  • Of 55,132 new cases reported on July 22, 40% came from 3 states where vaccination rates are low: Florida (48%), Texas (43%) Missouri (40%).

  • Total cases: 34,368,072

  • Total deaths: 610,356

  • Total doses administered: 341.8 million

Axios Poll: 30% Defiant Against Vaccination

  • 39% of Americans say returning to their pre-coronavirus life right now poses a large or moderate risk to their health and well-being—up 11% from the end of last month, and a return to the levels of perceived risk from late May.

  • 93% of vaccinated adults say it is at least somewhat likely they would get a booster if their doctor recommended it.

  • 30% of U.S. adults said they haven’t yet gotten the COVID-19 vaccine — half of these say they’re not at all likely” to take it.

“Americans growing more concerned about COVID-19, yet unwilling to take additional safety precautions or change behavior”; July 20, 2021; Axios-Ipsos

NCHS: U.S. Life Expectancy declines due to COVID, Drug Overdoses; Income Accumulation Improves Longevity

According to research by the National Center for Health Statistics (NCHS), overall life expectancy in the U.S. declined 1.5 years in 2020 versus 2019, from 78.8 to 77.3 — the biggest decrease in a single year since the Second World War (between 1942- 1943, life expectancy declined 2.9 years). By ethnicity:

  • 3 years for the Hispanic population, to 78.8 years

  • 2.9 years for the non-Hispanic Black population, to 71.8 years

  • 1.2 years for the non-Hispanic white population, to 77.6 years

  • Hispanic men drop, 3.7 years.

The 2020 figure was the lowest since 2003. COVID-19 accounted for 74% of the decline.
Related study: In this cohort study of 5414 participants in the Midlife in the United States study, those who had accumulated a higher net worth by midlife had significantly lower mortality risk over the subsequent 24 years.

National Center for Health Statistics

Finegold et al “Association of Wealth with Longevity in US Adults at Midlife”; July 23, 2021; JAMA Health Forum

AHIP Study: Price Gouging for Covid Tests Increasing

AHIP surveyed 17 commercial plans representing 80% of total enrollment. Key findings:

  • On average, a COVID-19 test in the commercial market costs $130. In contrast, out-of-network test providers charged significantly higher (more than $185) prices for more than half (54%) of COVID-19 tests in March 2021—a 12% increase since the beginning of the pandemic. The share of most egregious charges (more than $390) decreased from 12% to 7% during the same period.

  • 27% of COVID-19 tests in March 2021 were administered out-of-network—a 6% increase since the beginning of pandemic.

  • The share of COVID-19 tests at high-cost locations (hospitals and emergency departments) declined from 18% in the first quarter to 5% in the fourth quarter 2020.

“New Data Shows Continued Evidence of COVID-19 Testing Price Gouging” July 20, 2021; AHIP

Study: Covid Impact on 2022 Marketplace Insurance Premiums Minimal

Peterson KFF analyzed 2022 premium rate filings for 75 Marketplace-participating individual market insurers in 13 states and the District of Columbia. Findings:

  • 13 say the COVID-19 pandemic will have an upward effect on their costs, with most of those stating that the impact would be less than 1%. Reasons cited are costs related to ongoing COVID-19 testing, treatment, and vaccinations (8 insurer filings), and anticipated vaccination boosters (7 insurer filings).

  • 37 say the pandemic will have no net impact on their 2022 costs. The remaining insurers either did not specify a COVID-19 cost impact or redacted it.

Ramirez et al “Insurer filings suggest COVID-19 pandemic will not drive health spending in 2022” July 19, 2021; KFF

Disinformation Profile: Mercola

The New York Times featured Joseph Mercola as a powerful vaccine disinformation source yesterday, “The activity has earned Dr. Mercola, a natural health proponent with an Everyman demeanor, the dubious distinction of the top spot in the “Disinformation Dozen,” a list of 12 people responsible for sharing 65% of all anti-vaccine messaging on social media, said the nonprofit Center for Countering Digital Hate.

Sheera Frenkel, “The Most Influential Spreader of Coronavirus Misinformation Online”; July 24, 2021; New York Times


Altarum June Health Economic Indicators


  • Growth in the overall Health Care Price Index (HCPI) remained steady again in June, with prices 1.9% higher than they were a year ago, compared to the 2.0% growth rate seen in May.

  • Physician services and hospital prices continue to be the two fastest growing major categories, increasing 3.3% and 2.9% year over year respectively, while prescription drug prices remain the sole major category with decreasing prices (-2.5%) in June.

  • Outside of health care, economywide price growth, as measured by both the consumer price index (CPI) and producer price index (PPI), continued to accelerate, with those measures increasing to 5.4% and 7.3% in June. This is the fastest growth for economywide CPI since 2008 and the fastest ever in the series for PPI.

“July 2021 Health Sector Economic Indicators Briefs”; July 22, 2021; Altarum

Report: Significant Increase in Physician Practice Acquisitions in Q2

Solic Capital Management tallied total transaction value of $126.1 billion in the three months ended June 30, which the firm characterized as a “staggering” increase over the $12.9 billion announced during the same period in 2020. Private equity-backed transactions accounted for 63% of activity in the sector. Most of the deals were small add-ons for their respective platform companies, gaining traction in various markets around the country. Highlights:

Solic tallied 542 transactions in the second quarter of 2021, a 58% uptick from the 344 deals announced in the prior-year period. The 2021 period was down 11% from the first quarter of 2021, in which there were 611 transactions announced.

“Healthcare Services- Second Quarter 2021”; July 2021; Solic Capital

Second Quarter 2021 Economy Hot, Expected Slower Growth Rest of 2021

Economists surveyed this month by the Wall Street Journal estimate that the economy expanded at a 9.1% seasonally adjusted annual rate in the April-to-June period– the second-fastest pace since 1983, exceeded only by last summer’s rapid rebound. Respondents see growth cooling to a 7% pace in 3Q and 3.3% rate in the 2Q of 2022. Highlights:

  • The economy is expected to grow 6.9% this year, measured from the fourth quarter of last year to the same period of 2021, then declining to 3.2% next year and 2.3% in 2023.

  • Inflation measured by the department’s consumer-price index will be down to 4.1% in December from a year earlier and 2.5% by the end of 2022.

“Red-Hot U.S. Economy Expected to Cool From Here”; July 18, 2021; Wall Street Journal

Study: Pre-Pandemic, African Americans Had Less Access to Physicians, Outpatient Services than Whites

Researchers pooled data on adults 18 years or older from the 2015 to 2018 Medical Expenditure Panel Survey (MEPS) civilian US population.

  • Black individuals had low visit rates (vs White individuals) to most specialties (23 of 29 [79.3%]; 17 of 29 [58.6%].

  • Black: White disparities were particularly marked for dermatology, otolaryngology, plastic surgery, general surgery, orthopedics, urology and pulmonology.

  • Black individuals had higher visit rates to nephrologists and hematologists and similar visit rates to internists, geriatricians, and oncologists.

  • For Hispanic and Asian/Pacific Islander individuals, visit ratios (compared with White individuals) were lower than 1.0 for 26 of 29 and 26 of 27 specialties (96.3%), respectively, and significantly lower for 20 of 29 (69.0%) and 21 of 27 specialties (74.1%).

Cai et al “Racial and Ethnic Disparities in Outpatient Visit Rates Across 29 Specialties”; July 19, 2021; JAMA Internal Medicine


Administration Takes Aim at Hospitals in 340B, Price Transparency Announcements

Last week the Biden administration issued two policy announcements reflecting its concerns with the hospital industry:

Last Monday, HHS announced it will keep the 29% Trump-era pay cut for 340B drugs administered by physicians, Hospitals are challenging the policy in court proceedings potentially all the way up to the Supreme Court.

Also last week, CMS officials announced a crackdown on hospitals’ non-compliance with the Trump administration’s rules requiring them to publicly post their prices (only 6% are fully compliant). The Biden administration suggested hiking the max annual penalty for violating the rules from the original $109,500 per hospital to more than $2 million for large hospitals Specifically, the agency has proposed increasing the minimum fine for violations of the hospital price transparency rule to $300 per day for hospitals with 30 or fewer beds. Hospitals with more than 30 beds would have to pay $10 per day for each bed up to $5,500 daily. Hospitals could face annual fines of $110,000 to more than $2 million, depending on their size.

“CMS Proposes Rule to Increase Price Transparency, Access to Care, Safety & Health Equity”, (CMS-1753-P) July 19, 2021; CMS

Study: Most Clinical Trials Failed to Meet U.S. Transparency Requirements for Recently Approved Drugs

A new analysis found that only 26% of drug makers made results publicly available for all studies used to win approval for their medicines during a recent two-year period. The total rose to 67% when examining trials that were conducted in patients for indications approved by the Food and Drug Administration. But just 58% of the trials met legal requirements for registering and disclosing results for drugs that were approved in 2016 and 2017. And 11% of the drugs did not have any trials for which results were legally required to be reported at the time of their approval.

Axson et al “Clinical trial transparency and data sharing among biopharmaceutical companies and the role of company size, location and product type: a cross-sectional descriptive analysis”; July 2021; BMJ