This week, Uvalde TX will bury the 21 victims of last Tuesday’s slaughter at Robb Elementary School—the 27th school shooting this year. State, local and federal officials will promise policy changes and members of Congress back home on their Memorial Day break will pledge Congressional action. Sound familiar?
There have been 214 mass shootings in the U.S. this year including two over the weekend in Oklahoma and Tennessee. The FBI reported 61 “active shooter episodes” last year—up 50% from 2020 and gun violence replaced car accidents as the leading cause of death among U.S. youth per the CDC. That’s where we are.
Salvador Ramos, the shooter in Uvalde, Texas, legally purchased two AR-15 rifles and 375 rounds of ammunition just days after his 18th birthday. He shared his plan to kill his grandmother and attack a school online, and died from 12 gunshot wounds 72 minutes after entering the school. Media coverage about his actions has now shifted to his access to assault weaponry with the storyline pitting second amendment advocates vs. proponents of restrictive access. The mental health issues that played a major role in this incident have gotten less attention. That’s because mental health is more complicated.
Mental illness involves mood, stress, substance abuse and anxiety disorders and impacts children and adults. Mental illnesses are more common than cancer, diabetes, or heart disease in the U.S. but its been treated as a second-class citizen in the U.S. health system for decades. The facts are these:
Prevalence: 26% of all Americans over the age of 18 meet the criteria for having a mental illness—the highest of industrialized nations.
o 5.6 million (14.2 million) have a severe mental illness.
o 40 million have a substance use disorder (SUD) including 2.7 with opioid use disorder (OUD). 11% received medication for OUD in the past year and 8% of those hospitalized died within 1 year of discharge.
o 10.6 million considered suicide (the tenth leading cause of death in the U.S. and the second among adults 10- 34).
o 31% of workers say their mental health has declined over the past year—up from 24% at the end of 2020; 84% experienced at least one mental health challenge over the past year.
Among youth, mental illness is pervasive and increasing:
o Half of all mental health conditions start by 14 years of age but most cases go undetected and untreated.
o 15.08% of youth experienced a major depressive episode in the past year, a 1.24% increase from last year. In the bottom-ranked states (including Texas), up to 19% of youth ages 12-17 experienced major depression.
o Over 2.5 million youth in the U.S. have severe depression, and multiracial youth are at greatest risk. 10.6% of youth in the U.S. have severe major depression (depression that severely affects functioning).
o 7.74% of U.S. adults and 4.08% of youth had a substance use disorder in the past year. Substance use increased 0.07% for adults and 0.25% for youth over last year’s report.
Access to Care: Access to mental health treatment is significantly harder for lower income and in non-white populations, and varies widely from state to state.
Among whites, 22% saw a mental health provider (psychiatrist/psychologist) in the last year vs. Asian youth (8.3%), Black youth (9.4%) and Hispanic youth (9.5%). And in non-white cohorts, most who get care are treated by non-specialty providers (nurse practitioners, FQHCs, primary care clinics, hospital emergency rooms) rather than those trained to diagnose and treat mental health problems.
In Texas, over 60% of its citizens and three-fourths of its youth with major depression do not receive any mental health treatment. Texas ranks 50th in the country for access to mental health services, 41st in the prevalence of mental illnesses in its school age population. In April, the Governor and Legislature cut $211 million from its mental health programs in the state’s budget submitted in April.
Impact: The financial impact of mental illness is a tsunami: the pandemic has exacerbated costs. A Milliman study found that, while only 27% of those in its study had a behavioral health condition, the cohort accounted for 56.5% of the total annual health care costs. The vast majority of that spending went toward physical and surgical health care services despite the fact that behavioral health conditions were a major cost driver. Individuals with mental illnesses have more health problems and shorter life expectancies than the general population.
According to Precedence Research, the U.S. behavioral health market was estimated at US$ 90.5 billion in 2020 and is expected to reach US$ 132.4 billion by 2027, growing at a CAGR of 5.3%. That’s on par with estimates of overall health spending growth but completely out of sync with escalating demand for mental health and substance abuse treatment.
In 2021, emergency department (ED) visits for drug overdoses and suicide attempts were 36% and 26% higher, respectively, compared to the same time period in 2019. Overdose deaths rose more than 20% in the first year of the pandemic. And the incidence of mental illness is growing exponentially in workplaces and local communities.
Though the rationale for increasing attention to mental illness is compelling, mitigation has been disappointing. Two unique issues are root causes:
The stigma of mental health: It’s widespread and real. Family members, clergy, health professionals, law enforcement, employers and educators often play contributing roles.
The National Alliance of Mental Illness reports that 8 out of 10 workers say shame and stigma prevent them from seeking help. In some religious communities, mental health issues are treated as signs of member’ weak faith or spiritual warfare. In some medical communities, psychiatry (M.D.) and psychologists (Ph.D.) are treated as second-class citizens. And even in the ranks of behavioral health delivery, intramural conflicts between psychiatrists and psychologists and lack of collaboration between community mental health centers and local hospitals confuse patients and lend to inaction.
The behavioral health community has a history of circling its wagons and shooting in: it is its own worst enemy. It is partly responsible for the stigma. The Board of the American Medical Association includes 21 clinicians: none is a psychologist or psychiatrist– perhaps an innocent oversight or possibly a subtle reflection of the stigma.
The behavioral health community has not effectively made the case for a coherent mental health policy agenda: Since 1843 when the American asylum movement led by Dorothea Dix emerged, the behavioral health community has created whiplash in its strategy to mainstream mental health alongside physical medicine:
The asylum movement was followed by the mental hygiene movement inspired by Clifford Beers in 1908, then the deinstitutionalization movement sparked by Action for Mental Health in 1961, then the community support movement that led to the CMCH Act of 1975, followed by the Mental Health Parity and Addiction Equity Act (MHPAEA) in 2008 and so on.
Mass casualty events like Robb Elementary (Uvalde) and Tops (Buffalo) tend to spark regulator interest: Last week, the Senate Finance Committee advanced legislation to extend telemental health access beyond the pandemic public health emergency (PHE) and the House Energy and Commerce Committee passed Restoring Hope for Mental Health and Well-Being Act (H.R. 7666) reauthorizing more than 30 mental health, suicide prevention and substance use disorder programs. Governor Abbott (TX) pledged to revisit the state’s mental health programs and the U.S. Department of Justice announced it will investigate law enforcement’s handling of Uvalde. But the reality is this:
In most communities, investments and efforts in cancer, heart disease, new technologies and novel drugs that replace old ways of treating medical problems at considerable profit to their investors will flourish while mental health gets crumbs: the combination of low reimbursement and restrictive coverage by health insurers, the stigma around mental health that’s pervasive in many communities and the ineptitude of the behavioral health community to rally around a coherent national strategy with one unified voice means things are unlikely to get better.
My take:
What’s needed is a mental health moonshot. Nothing less. A comprehensive, long-term plan that once- and-for-all de-stigmatizes mental illness, aligns local, state and federal resources and private investment in effective solutions to quality and access and holds lawmakers, public officials and health professionals accountable for implementation. At a minimum…
· It must engage schools, employers, health professionals, lawmakers, social media and clergy. Engineering the lunar landing without active input from private investors, school, public health officials and clergy will result in incremental recommendations with little chance of meaningful impact.
· It must prioritize the integration of physical and health in every setting of preventive and primary care, and link its surveillance to a national registry for those most at risk. That includes clinics in schools, workplaces, retail settings, emergency rooms and practitioner offices.
· It must standardize coverage as a basic benefit in health insurance plans and become a mandatory requirement in not-for-profit hospital community benefit plans.
· It must include a comprehensive mental health workforce overhaul to align demand and access to treatment in every community.
· It must facilitate the integration of state and local public health programs (like community mental health centers) with local hospital systems and the medical community.
· It must be funded adequately through public and private sources.
· It must include a robust public education campaign to reverse bias against mental health treatment.
Last week will be remembered for the slaughter of 21 innocents at Robb Elementary in Uvalde, TX—the same week the National Rifle Association and American Psychiatric Association held their annual meetings in Houston and New Orleans. Predictably, the urgency to address mental health programs has taken a backseat to gun control i.e. topics like a national Red Flag law, universal background checks et al.
My grandson Owen starts school this fall. I have 3 pictures of him on my desk and imagine his future every day. Last week, 19 sets of grandparents had their Owen-dreams shattered. The response to Uvalde for Owen is incomplete unless both gun violence and mental illness are addressed. The mental health moonshot is long overdue.
Paul
Resources
The 2022 State of Workforce Mental Health www.corporatewellnessmagazine.com/article/the-2022-state-of-workforce-mental-health
Demyttenaere K, Bruffaerts R, Posada-Villa J, Gasquet I, Kovess V, Lepine JP, et al. (June 2004). “Prevalence, severity, and unmet need for treatment of mental disorders in the World Health Organization World Mental Health Surveys”. JAMA. 291 (21): 2581–90. doi:10.1001/jama.291.21.2581. PMID 15173149.
Mental Health America The State Of Mental Health In America www.mhanational.org/issues/state-mental-health-america
Why America should make it harder to buy guns The Economist May 23, 2022 Weekly Edition www.economist.com/leaders/2022/05/25/why-america-should-make-it-harder-to-buy-guns
The effect of mass shootings on daily emotions is limited by time, geographic proximity, and political affiliation National Academy of Sciences May 31, 2021 https://doi.org/10.1073/pnas.2100846118
CDC www.cdc.gov
John Cassidy How to Prevent Gun Massacres? Look Around the World May 26, 2022
Hospitals
Lown Institute study: hospitals across the U.S. performed 106,474 unnecessary procedures in first year of pandemic: Per LI’s analysis of Medicare claims data, the most prevalent procedures were coronary stent implants, back surgeries, hysterectomies, spinal fusions, Inferior vena cava filters, carotid endarterectomy, renal stents and knee arthroscopy.
Lown Institute www.lowninstitute.org
Healthcare Spending
Study: healthcare spending slowly back to pre-pandemic level but long-term impact on low-income households problematic: Researchers analyzed health spending by households during the pandemic. Findings:
· Families deferred healthcare during the COVID-19 pandemic and may not have fully caught back up. The number of families with out-of-pocket healthcare spending decreased by nearly 50%at its lowest point in April 2020. Both the number of families incurring healthcare spending, and the amount those families spent per week decreased, contributing to the overall depression in mean healthcare spending.
· Healthcare spending decreased most in more discretionary categories of dentist and vision but took longer to recover in essential categories of hospital and doctors’ offices. The number of families with out-of-pocket healthcare spending decreased the most in more discretionary categories like dentist and vision, with each depressed by more than 70% at their lowest point. Decreases in incidence of more essential healthcare categories were less pronounced—50% for doctors, 24% for hospitals—but recovered more slowly, remaining depressed until spring of 2021.
· Large healthcare expenses can continue to impact families’ finances for a year or more after the event. Following a month in which healthcare spending exceeds $400 and 1% of family income, checking account balances decline and remain roughly 2% depressed 12 months later, regardless of how the family paid the large expense. For families who financed the expense via their credit card, statement balances reach a new steady state of 8 to 10% elevated for the 12 months following the event, with no sign of further decrease.
· Large healthcare expenses pose a financial risk, especially for lower-income and Black and Hispanic families. Following a month in which healthcare spending exceeds $400 and 1% of family income, low-income families fared worse than their higher-income counterparts, experiencing sustained depletions in their cash balances, which remained 5% depressed a full year after the initial expense.
Greig, Fiona, Erica Deadman. 2022. “Healthcare spending through the Pandemic: the impact of high-cost medical events on household finances”. JPMorgan Chase Institute. May 2022 https://www.jpmorganchase.com/institute/research/healthcare/spending-during-the-pandemic
Study: Child Tax credit reduced food insecurity during pandemic: Researchers analyzed the impact of the Child Tax Credit (CTC) during the COVID-19 pandemic provided on food security and children’s dietary intake after three months of expanded CTC payments. Findings: From before to midway through the CTC expansion, very low food security decreased from 12.7% to 5.6%, and simultaneously, food security increased from 57.4% to 66.4%. The CTC expansion was also associated with decreases in children’s consumption of added sugar, sugar-sweetened beverages, and sweetened fruit beverages. No changes were observed in children’s intake of other dietary components.
Patterns Of Food Security and Dietary Intake During the First Half of The Child Tax Credit Expansion Health Affairs May 2022 https://doi.org/10.1377/hlthaff.2021.01864
McKinsey American Opportunity Survey: pessimism about economic opportunity increasing especially among young adults: American are pessimism increased 5% this year especially among 18–34-year-old adults. “Concerns about accelerating inflation, rising gas prices, and the conflict in Ukraine seem to mask signs of recovery such as rising wages, a glut of available jobs, and an unemployment rate that is close to a 50-year low. “
· Among 18–24 age group, 48% say they are able to afford health insurance
· 46% without a high-school diploma say they can afford necessary transportation.
· 17% of all jobless respondents (equivalent to about 1.2 million Americans) cite MH as a reason they are unemployed, up from 13% in 2021. Highest: those aged 18–24 (28%) and 25–34 (20 %).
For many Americans, economic opportunity seems increasingly out of reach McKinsey May 18, 2022 www.mckinsey.com/industries/public-and-social-sector/our-insights
Prescription Drugs
CVS Walmart suspend prescriptions for controlled substances: CVS Health Corp. CVS 0.77%▲ and Walmart Inc. WMT 1.84%▲ will stop filling prescriptions for controlled substances ordered by clinicians working for Cerebral Inc. and Done Health, the broadest curbs yet by major pharmacies against the telehealth companies following scrutiny of their prescription practices.
Of special interest to investigations of the 2 tele-prescriber companies: medication to treat attention-deficit hyperactivity disorder. Like Schedule 2 drugs like Adderall.
Fast growth for Cerebral and Done coincided with increasing demand for online health services and stimulants such as Adderall. Prescriptions of the medication dispensed in the U.S. jumped to 41.4 million last year, up 10% from 2020, according to Iqvia Holdings Inc., a data and research-services provider for the pharmaceutical industry.
In targeting all controlled substances from the telehealth startups, CVS’s change will affect medication used to treat opioid addiction—the one type of medication that Cerebral has planned to continue prescribing and that has been a growth opportunity for the company. As part of its halt, CVS will no longer fill Cerebral’s prescriptions for suboxone, a schedule 3 controlled substance used to treat such addictions.
Walmart, CVS to Stop Filling Controlled-Substance Prescriptions for Cerebral, Done Wall Street Journal May 25, 2022www.wsj.com/articles/cvs-will-stop-filling-controlled-substance-prescriptions-for-cerebral-done
FDA chief: Food safety oversight lax in FDA: In a five-hour hearing before House Energy and Commerce Committee’s Oversight and Investigations Subcommittee last week, U.S. Food and Drug Administration Commissioner Robert Califf blamed outdated technology and coordination breakdowns for delays in responding to warnings about infant formula safety. He called the safety lapses at Abbott Laboratories’ Surgis Michigan baby formula plant “shocking”. The discovery of bacteria at the plant by the FDA was prompted by a 34-page report by a whistleblower in October alleging a host of unsanitary conditions at the Abbott factory but seen by the FDA’s deputy commissioner for food policy Frank Yiannas four months later. Abbott, Reckitt Benckiser Group and Nestle SA produce most of the formula sold in the U.S.
FDA Chief Takes Aim at Abbott Laboratories as He Signals Potential Reforms to Food Safety Division Wall Street Journal May 25, 2022 www.wsj.com/articles/baby-formula-makers-and-fda-to-discuss-shortage-with-lawmakers
Physicians
MGMA: Physician Compensation up Slightly In 2021: Compensation among most physician specialties increased slightly in 2021 compared to the previous year, according to new data from the Medical Group Management Association. Compensation plateaued in 2020 as providers dealt with the onset of the COVID-19 pandemic and a decline in nonessential healthcare services. Surgical specialists, who saw the one of the largest pay declines in 2020, experienced a median 4% compensation increase that raised median income to $517,501 last year. Median primary care physician compensation rose 2% to $286,525 in 2021. Doctors coming out of residency had median earnings 7%-10% higher in 2021 than in the prior year.
MGMA DataDive Provider Compensation Data www.mgma.com/data/benchmarking-data/provider-compensation-data
Healthcare Investing
CB Insights: healthcare investment market likely to slow in 2022: “Last year’s filing frenzy means roughly 280 SPACs will face deadlines in Q1’23. Poor performance of companies that have merged with SPACs plus a weak market for public exits overall may leave creators without a deal — putting SPAC sponsors at risk of losing $1B+ early next year.
· US venture funding is projected to drop 13% in Q2’22, while deals are expected to decline by 22%. US companies are on track to raise $61B this quarter, the lowest total since 2020.
· Mega-rounds (deals worth $100M+) are projected to account for $61B of funding by the end of Q2’22, which would mark an 18% drop QoQ.
· Global funding for retail tech is on pace to drop by 50% in Q2’22, with fintech and digital health showing a QoQ decline of 28% and 25%, respectively.
· The total number of companies going public in Q2’22 is projected to reach 92, marking a 9-quarter low and a 34% drop QoQ. US-based startups are expected to account for 20 of these IPOs, down 13% QoQ.
· In the US, where M&A deals are on pace to fall by 25% QoQ.
CB insights May 26, 2022 /www.cbinsights.com/research/report/mid-q222-report
Eyecare market investing shifting to addon’s: Last year, 45 of 51 PE transactions—or 88%—were add-ons. In each of the past three years, add-ons have accounted for at least 75% of deal flow representing $765.6M. Add-ons often involve smaller practices that can provide a geographic toehold for the PE-backed platform.
PK Note: Like other healthcare specialties, ophthalmology is a fragmented market that can benefit from a centralized structure and scale in growing revenues and negotiations with health insurers. For most medical and surgical specialties, the majority of PE deals in 2022 and 2023 will be add-ons to increase penetration in targeted markets.
US Ophthalmic Market: A Wave of Consolidation https://vectormedicalgroup.com/blog/us-ophthalmic-market-a-wave-of-consolidation
Investing: Healthcare potential target for additional PE investing: Per Pitchbook, private equity funds have $1 trillion “dry powder” to invest even as market volatility has driven returns down. “Having deep subsector expertise, understanding sweet spots, and forecasting where disruption will come from in a particular sector have never been more important for sponsors. GPs will need to quickly assess how profit pools are shifting, cost structures are developing, consumer behaviors are changing, and supply chain needs are evolving to pick the winners in a subsector…This could push PE firms to rotate out of consumer-facing businesses as a recession beckons and into more defensive assets such as energy, and healthcare.”
How PE Firms Will Navigate Today’s Complex Macro Environment Pitchbook May 31, 2022 www.pitchbook.com
Demography
Census Bureau: Big city population growth outside South and West slowed in pandemic: Per the latest Census report:
· Populations of cities and towns in the South and West regions of the United States experienced the most growth from July 2020 to July 2021, with the top 15 fastest-growing cities or towns located in these regions.
· The cities with the largest numeric drop in population had a combined loss of nearly 609,800 a year into the pandemic, compared to about 102,700 between 2018 and 2019
· Small towns with populations of less than 5,000 experienced uneven growth across U.S. regions: Northeast: – 0.2%, Midwest: no change, South: + 0.4%.West: + 1.1%.
Big Population Shifts in Cities and Towns One Year into Pandemic US Census Bureau May 26, 2022www.census.gov
