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The Keckley Report

Healthcare Strategic Plans must Address Three Emergent Issues

By June 20, 2022March 1st, 2023No Comments

Summer starts in the Northern Hemisphere tomorrow morning at 5:14 a.m. Eastern. It’s the longest day of 2022. And June 2022 may be the ‘longest month’ for healthcare in modern history based on the enormity of activity slated this month:

·        The January 6 Congressional Hearings on the Capital insurrection will wrap up and a referral made to the Justice Department. There are 2 more scheduled this week.

·        The Supreme Court will issue its opinion in Dobbs v. Jackson Women’s Health Organization which bans abortions after 15 weeks of fetal viability in Mississippi. In anticipation, the Supreme Court is closed to visitors and Justices have been granted round the clock security. And Governors in at least 13 states are expected to implement “trigger laws” outlawing/limiting abortion services in their states.

·        The Bipartisan Senate Committee will recommend gun control legislation as mass shootings continue: 18 already in June including Sunday night’s DC altercation that left 1 dead and 3 injured. Expectations are low for sweeping legislation.

·        Pfizer and Moderna will begin administration of vaccines for kids from 6-mos to 17 after approval by the FDA and CDC last week based on each state’s protocols.

·        The FTC will open its investigation into the business practices of Pharmacy Benefits Managers.

·        The Fed’s inflation hedge will have immediate impact on summer borrowing and spending: At its June 14-15 Open Market Committee (FOMC), the Fed raised its target for the federal funds rate (FFR) to a range of 1.50% to 1.75%.  At its March, May, and June meetings the Fed raised rates by 25, 50, and 75 basis points, respectively. And it expects to raise the rate 3 more times in 2022 to slow inflation.

Like last week’s American Medical Association House of Delegates, these topics will dominate discussion in June meetings of the Healthcare Financial Management Association Annual Conference, America’s Health Insurance Plans Annual Institute and World Healthcare Congress. And healthcare organizations finalizing FY 2023 budgets and strategic plans are re-visiting planning assumptions as events unfold.

Contingency planning is often an afterthought: it’s frequently framed against a worst-case scenario in the event of a black swan event, like another pandemic or unanticipated Executive Order from the White House of a Governor. In this planning cycle, contingency plans should consider the likelihood that…

The anti-consolidation activism of the Federal Trade Commission and Anti-Trust Division of the Department of Justice will dramatically expand to vertical integration activity by insurers (who own medical practices and PBMs), hospitals (that employ physicians and insurance plans), big pharma (that own promising bio-tech and exclusive access to formularies), retail chains (that own plans, medical practices and channel dominance) and others.  The FTC’s current inquiry into PBMs is a case in point: the 4 biggest PBMs are owned by 4 insurers and control 88% of the U.S. PBM market.

Volatility in the healthcare private equity market. Fund raising and deal-making by the biggest PE sponsors is robust in 2022 thus far, but funds with less experience in healthcare, SPACs that have not completed acquisitions and venture-capital late-stage fund-raising are increasingly problematic. Solvency issues may prompt sponsors to sell to another sponsor and de-stabilize partnerships, alliances, and operating assumptions. And the long-game being played by strategics will accelerate as lower valuations present opportunities.

Public pushback: Public opinion about the U.S. health industry is trending negative. The combination of mounting medical debt, lack of price transparency, higher insurance premiums and overall anxiety about household finances lend to apprehension and potential activism.

In the next 12-18 months, U.S. healthcare faces an existential threat as economic conditions change and markets re-set their longer-term plans. Unless strategies by healthcare’s established incumbents seriously account for contingencies and balance lag indicators with non-conventional lead indicators, they’ll be relics of healthcare’s past. Regretably, many organizations in our system are stuck in the past. As Yogi Berra said: the future aint what it used to be.


P.S. Yesterday was Juneteenth—a national holiday recognizing the Emancipation of slaves in the Civil War. Studies show the health system is guilty of systemic racism like many industries in society. A McKinsey study found 3% of white patients think their race influences the quality of care they receive from clinicians vs. 10% of Hispanic and 15% of Black patients. We have a long way to go. My Dad would remind his sons “God made the world in living color; man made it black and white”. So true.

What Black and Latino consumers want healthcare stakeholders to know McKinsey May 4, 2022


KHN-NPR study: a third of American Households have medical debt:  KHN-NPR analysis was based on a survey of 2,375 US adults conducted Feb. 25 through March 20, 2022 augmented by credit bureau and credit data analyses by the Urban Institute and JP Morgan Chase Institute. Findings:

·        In the past five years, more than half of U.S. adults report they’ve gone into debt because of medical or dental bills.

·        A quarter of adults with health care debt owe more than $5,000, 1 in 8 owe $10,000 or more and 1 in 5 (18%) with any amount of debt say they don’t expect to ever pay it off.

·        1 in 7 people with debt said they’ve been denied access to a hospital, doctor, or other provider because of unpaid bills. An even greater share ― about two-thirds ― have put off care they or a family member need because of cost.

·        Half of U.S. adults don’t have the cash to cover an unexpected $500 health care bill.

·        58% of debts recorded in collections were for a medical bill– 4 times as many debts attributable to telecom bills, the next most common form of debt on credit records.

·        50 million adults ― roughly 1 in 5 ― are paying off bills for their own care or a family member through an installment plan with a hospital or other provider; such debt arrangements don’t appear on credit reports unless a patient stops paying.

·        One in 10 owe money to a friend or family member who covered their medical or dental bills, another form of borrowing not customarily measured.

·        1 in 6 adults are paying off a medical or dental bill they put on a credit card.

·        The typical credit cardholder’s monthly balance jumped 34% after a major medical expense.

·        Nearly half of Americans in households making more than $90,000 a year have incurred health care debt in the past five years.

·        6 in 10 working-age adults with coverage have gone into debt getting care in the past five years, a rate only slightly lower than the uninsured.

·        Characteristics of the those more inclined to have medical debt: women more than men, households with children, the poor and uninsured, residents in the South, Blacks and Hispanic adults, residents in predominantly minority communities, those with high out of pocket requirements in their health plans,

KFF Health Care Debt Survey

Gallup-West Health poll: seniors reduced spending on necessities during Covid: Per the survey of 6,663 U.S. adults conducted in September and October 2021:

·        26% of 50–64-year-olds said they or a member of their household recently did not seek treatment because of its cost; 12% of adults 65 and older said the same. 

·        18% of Americans aged 50-64 and 11%of Americans aged 65 and older said they or a family member skipped prescribed medication in the last year to save money. 

·        Seniors 65+ adults cut back on at least one basic need to pay for healthcare: food (9%), over-the-counter drugs (13 %), utilities (6%) and clothing (19%). 

·        Among adults 50-64, reduced spending for necessities: food (14 %), over-the-counter drugs (15%), clothing (26%) and utilities (8%). Black Americans aged 50-64 are more likely than white Americans to report forgoing at least one basic need asked about in the survey (38% to 29%).

·        48% said COVID-19 made their view of the U.S. healthcare system worse; larger the younger the age group, with 58% of those under the age of 30 vs. 38% 65+.

West Health-Gallup 2021 Healthcare in America Report

Gallup-West Health poll: seniors reduced spending on necessities during Covid: Per the survey of 6,663 U.S. adults conducted in September and October 2021:

·        26% of 50–64-year-olds said they or a member of their household recently did not seek treatment because of its cost; 12% of adults 65 and older said the same. 

·        18% of Americans aged 50-64 and 11%of Americans aged 65 and older said they or a family member skipped prescribed medication in the last year to save money. 

·        Seniors 65+ adults cut back on at least one basic need to pay for healthcare: food (9%), over-the-counter drugs (13 %), utilities (6%) and clothing (19%). 

·        Among adults 50-64, reduced spending for necessities: food (14 %), over-the-counter drugs (15%), clothing (26%) and utilities (8%). Black Americans aged 50-64 are more likely than white Americans to report forgoing at least one basic need asked about in the survey (38% to 29%).

·        48% said COVID-19 made their view of the U.S. healthcare system worse; larger the younger the age group, with 58% of those under the age of 30 vs. 38% 65+.

West Health-Gallup 2021 Healthcare in America Report

University of Michigan’s consumer sentiment index drops to 50.2 from 58.4 in an early June:  the lowest level since regular monthly data collection began in the late 1970s and below the median forecast of 58.1 from economists surveyed by Bloomberg. Findings:

·        The index for current economic conditions deteriorated to 55.4 from 63.3, while the measure for consumer expectations sank to 46.8 from 55.2. Not only have Americans had it with today’s economy, they aren’t very hopeful that things will get better.

·        46% of surveyed consumers linked their pessimism to elevated inflation– up from 38% in May and the second-largest share since 1981, when inflation last trended so high. 

·        Half of surveyed consumers mentioned pricier gas during the university’s interviews, up from 30% in May and just 13% in June 2021.

Surveys of Consumers (

Morning Consult: trust in healthcare companies in U.S. lower than other countries:  64% of US adults trust healthcare companies some/a lot–#3 on list of 19 company categories. Other findings:

·        Of 10 countries, US ranks 8th above China (53%) and Japan (54%) in healthcare company trust; India was highest (86%).

·      Trust in government in the U.S. is 42%– #7 of the 10 tied with France 42%, above Italy 36%, Canada 35% and the UK 37% 

SPECIAL REPORT A national and global look at the Most Trusted Brands of 2022 Morning Consult June 2022

Economist: Household savings strong but slipping: Per the Economist’s normalcy index activity in America is at nine-tenths of pre-pandemic levels, a new high.

“As life is returning to normal, Americans’ unusually-high saving rate of the past two years is coming back down to earth. Personal savings amounted to just 4.4% of disposable incomes in April, a new low. The rate has been sliding since December 2021, when Americans saved 8.7% of their disposable incomes. April’s figure was the lowest since September 2008, in the midst of the global financial crisis, when the personal-savings rate dropped to 4.3%.

Americans are saving less than at any point since the financial crisis The Economist June 17, 2022 www,


Courts: hospitals lose on low-income compensation formula, win on 340B challenge:

On A federal court rejected 200 acute care hospitals’ challenge to Medicare’s compensation formula for treating low-income patients citing the formula did not fully account for care provided to patients eligible for Supplemental Security Income benefits, which is used by HHS as a proxy for care provided to low-income patients. The court granted summary judgment to the HHS, ruling that the formula was consistent with the statute and reasonable, and denying the hospitals’ claim for recalculation of their compensation for fiscal years 2006-2009.

On Wednesday, the Supreme Court sided with hospitals in American Hospital Assn. v. Becerra (20-1114) involving the Trump administration’s Medicare pay cuts for discounted drugs in the 340B drug discount program. The Court ruled unanimously that HHS can’t lower its payment rates only for a certain subset of hospitals without conducting a survey first. The justices also held that courts have the right to review HHS decisions on Medicare pay rates. In 2017, the Trump administration cut its pay for discounted drugs administered by physicians by 28.5%. If reversed, some hospitals could see pay cuts — particularly for-profit hospitals that aren’t eligible for the discounts.

Supreme Court sides with hospitals on Medicare drug pay dispute Stat  June 15, 2022

Health insurance

Study: High-deductible health plans may delay detection of cancer: The study compared 345,401 people with HDHPs to 1,654,775 people with low-deductible plans. Both groups had a one-year baseline period where all were enrolled in a low-deductible plan. Finding:

There was no observed difference in time to metastatic diagnosis at the baseline, but people with HDHPs saw a 4.6-month delay to their first metastatic cancer diagnosis.

High-deductible health plans linked to delays in metastatic cancer detection Healio June 13, 2022

Pitchbook: Insurtech funding stable but share prices down: “In Q1 2022, insurtech companies globally raised $2.6 billion in VC across 154 deals, representing a 13.4% decrease in QoQ deal value—the lowest amount of invested capital since Q3 2020. The three largest deals of the quarter:, a health insurance marketplace, raised of the quarter $211.5 million Series C, and reached unicorn status ($1.031B). Chile-based Betterfly, an employee benefits platform, raised a $125.0 million Series C at a $1.0 billion post-money valuation…The trends within late-stage insurtech financings mirror the public markets, in which the stock prices of many newly listed public insurtech companies are down over 75% over the past year.”

Insurtech Report Pitchbook Q1 2022

Study: Medicaid enrollment in pandemic among those who lost insurance coverage:  In this cohort study of 16,231 adult workers employed at baseline and followed up from 2019 through 2020, increases in Medicaid enrollment associated with job loss were more frequent in states that expanded Medicaid eligibility vs non-expansion states.

“New unemployment was associated with an increase of 2.9% in the proportion of uninsured adults in Medicaid expansion states and an increase of 10.7% in non-expansion states. Workers were 5.4% more likely to enroll in Medicaid after a job loss if they lived in a Medicaid expansion state compared with workers experiencing job loss in non-expansion states.”

Joseph Benitez Comparison of Unemployment-Related Health Insurance Coverage Changes in Medicaid Expansion vs Nonexpansion States During the COVID-19 Pandemic JAMA Health Forum. June 17, 2022;3(6): e221632. doi:10.1001/jamahealthforum.2022.1632

Medicaid expansion associated with lower adult suicide rate: Suicide is the 10th leading cause of death in the US and the second leading cause of death in people aged 10 to 34. Comparing suicide rates in Medicaid expansion states vs. non-expansion from 2015-2018:

“Although suicide rates increased from 2000 to 2018 across all states in this cross-sectional study, a statistically significant attenuation of −0.40 suicides per 100 000 people was found in Medicaid expansion states compared with nonexpansion states, translating to 1818 fewer suicides from 2015 to 2018.”

Patel et al Association of State Medicaid Expansion Status With Rates of Suicide Among US Adults JAMA Netw Open. 2022;5(6):e2217228. doi:10.1001/jamanetworkopen.2022.17228

STAT analysis: 12 of 32 Blues plans paid no federal taxes: STAT reviewed four years’ worth of audited financial statements for 32 nonprofit BCBS insurers and identified 12 that haven’t paid any net federal taxes since the calendar flipped to 2018, right after Republicans in Congress and former President Trump overhauled the corporate tax system. The government has refunded more than $6.6 billion, collectively, to those dozen insurers.

Bob Herman Many Blue Cross Blue Shield plans aren’t paying taxes — and instead are swimming in refunds June 15, 2022

Yale study: single payer system would have saved $439 billion in 2020:

In 2020, Yale researchers estimate that more than 131,000 COVID deaths and 78,000 excess non-COVID deaths would have been averted with broader nationwide coverage. Projected to March, 2022, the total number of U.S. COVID deaths resulting from incomplete insurance coverage to nearly 339,000.

“If Medicare rates had been applied to all COVID hospitalizations, for instance, the country would have seen $39.4 billion in hospitalization savings in 2020 and $105.6 billion in hospitalization savings through March 12, 2022”

Researchers noted that the U.S. COVID death total surpassed 1 million reported deaths in May. –16% of the world’s documented COVID mortality though the U.S. population is 4% of the global population.

Galvani et al Universal healthcare as pandemic preparedness: The lives and costs that could have been saved during the COVID-19 pandemic June 13, 2022

Public Health

CDC: increase in firearm deaths during pandemic associated with poverty: Per the CDC Vital Signs report. the firearms homicide rate per 100 000 increased from 4.6 in 2019 to 6.1 in 2020—the highest rate since 1994. Communities disproportionately affected by poverty, systemic inequity, and structural racism incurred the heaviest loss of life due to rising gun violence.

Note: Firearms is the leading cause of both homicides and suicides in the US: US suicide rate remained steady at about 8 per 100 000 between 2019 and 2020 but rose in some subgroups. Black, American Indian, and Alaska Native communities experienced the highest rates and increases in firearm homicide.

“Poverty appeared to be a key driver of increased firearm violence and growing disparities between communities. Areas with the highest poverty rates experienced the greatest loss of life from both forms of gun-related deaths.”

Rising US Firearm Deaths During Pandemic Linked to Poverty JAMA June 14, 2022 2022;327(22):2183. doi:10.1001/jama.2022.9111

Prescription Drugs

Study: 340B expansion disproportionately connected to pharmacies in affluent areas: Starting in 2010, 340B institutions could contract with an unlimited number of pharmacies. In this study of annual cross-sections, pharmacy participation in socioeconomically disadvantaged neighborhoods was analyzed. Researchers measured the number and demographics of 91,740 pharmacies contracting with at least one 340B institution annually from 2006 to 2019. Findings:

·        The percentage of pharmacies contracting with a 340B institution pre-expansion (2006-2009) grew minimally (1.2% to 1.7%); post-expansion (2011-2019) growth accelerated overall (5.9% to 29.9%) and among retail (5.7% to 32.6%), specialty (5.3% to 24.7%), and mail-order (4.5% to 20.5%) pharmacies. In 2019, retail pharmacies comprised 92% of 340B pharmacies.

·        From 2011 to 2019, the share of 340B retail pharmacies in socioeconomically disadvantaged and primarily non-Hispanic Black and Hispanic/Latino neighborhoods declined.

·        Although the percentage of 340B pharmacies in the lowest income neighborhoods declined by 5.6%, the percentage of non-340B pharmacies in the same neighborhoods increased by 1.3%. In contrast, though the percentage of 340B pharmacies in the highest income neighborhoods increased by 5.0%, the percentage of non-340B pharmacies in the same neighborhoods increased by 1.5%.

Lin et al Assessment of US Pharmacies Contracted With Health Care Institutions Under the 340B Drug Pricing Program by Neighborhood Socioeconomic Characteristics JAMA Health Forum. June 17, 2022;3(6):e221435. doi:10.1001/jamahealthforum.2022.1435

Care Management

Study: state policies on colonoscopy screening related to long-term outcomes: The Affordable Care Act requires that several colorectal cancer (CRC) screening modalities be covered with no cost-sharing for eligible individuals with average risk. However, cost barriers remain for some individuals with a positive test that requires a follow-up colonoscopy.

Researchers compared CRC screening and receipt of a colonoscopy among individuals who received a CRC screening other than colonoscopy in Oregon vs Idaho and Washington and in Kentucky vs Indiana, Tennessee, and West Virginia between 2012 and 2019: “State-specific policies and recent federal guidance have eliminated cost-sharing for follow-up colonoscopy.”.

Barthold et al Comparison of Screening Colonoscopy Rates After Positive Noninvasive Testing for Colorectal Cancer in States With and Without Cost-Sharing JAMA Netw Open June 14, 2022;5(6):e2216910. doi:10.1001/jamanetworkopen.2022.16910

Study: Age discrimination prevalent:  In this cross-sectional study of 2035 US adults ages 50 to 80 years, everyday ageism was prevalent (93.4%), experienced at differing levels by population sociodemographic characteristic, and associated with multiple indicators of poor physical and mental health.

These findings suggest that everyday ageism may warrant further attention and prioritization as a topic for additional research and as a preventable potential health hazard as people age.”

Allen et al Experiences of Everyday Ageism and the Health of Older US Adults JAMA Netw Open June 15,2022;5(6):e2217240. doi:10.1001/jamanetworkopen.2022.17240


CDC: BA.4 and BA.5 cases increasing: The new strains that evade immune protections causing breakthrough infections now account for more than 21% of total COVID cases in the U.S. and accounted for 105,000 new daily cases last week. The BA.2 and BA.2.12.1 lines that dominated the disease map this spring now account for about 78% of cases. Overall cases are still declining in the Northeast but increased elsewhere in the past week. The regional mix is now 30% from the South, 29% West, 22% Northeast and 20% Midwest.


FDA authorizes vaccine for children 6-month to 17 year olds: Last Tuesday, the independent advisers agreed that the benefit of increasing those options outweighed any risk the vaccine poses to children in the two age groups, 12- to 17-year-olds and 6- to 11-year-olds. The agency authorized the Pfizer-BioNTech vaccine for children aged 6 months to 4 years of age, and the Moderna shot for those aged 6 months to 17 years old. Per the CDC, as of April 30, 29% of U.S. children ages 5 to 11 were fully vaccinated, compared with 56% of 12- to 15-year-olds and 67% of 16- and 17-year-olds.

Friday, the FDA cleared for use Covid-19 vaccines from Pfizer Inc. and BioNTech SE and from Moderna Inc. in 20 million children as young as 6 months up to 5 years. In anticipation, supplies of the shots have been sent to hospitals, retail pharmacies and other vaccination sites though Florida Governor Ron DeSantis has discouraged their use.



FTC pursuing PBM action: Last week, the Federal Trade Commission voted unanimously (5-0) to adopt a new policy specifically targeting rising insulin prices, but also putting drug companies and the PBM middlemen on notice that paying rebates and fees to exclude cheaper generics can violate competition and consumer protection laws. It follows a June 17 letter from Republican lawmakers seeking transparency about interactions between pharmacy benefit managers and drug companies, commercial health plans, state Medicaid programs, and pharmacies. At issue are various rebates and fees that pharmacy benefit managers charge, which critics say add to the cost of prescription drugs despite a lack of transparency.

Ed Silverman Lawmakers ask GAO to probe pharmacy benefit managers over their role in drug pricing StatNews June 17,

FTC probes Cerebral: June 1, the Federal Trade Commission announced an investigation into mental-health startup Cerebral Inc. marketing practices as part of an investigation into possible violations of the Controlled Substances Act. At issue: business practices that made opt-out difficult for patients wishing to disenroll.

Mental-Health Startup Cerebral Investigated by


US equities market down 8.17% last week: energy -10.94%, materials -10.09%, utilities -10.00%. Healthcare was -7.19%, 3rd lowest drop of 12 sectors.

Simply Wall Street June 17, 2022

Markets fall as economic uncertainty mounts: Friday, the S&P 500 and Dow Jones Industrial Average had their worst weeks since 2020: the S&P 500 rose 8.07 points for the day, or 0.2%, to 3674.84, while the Nasdaq Composite gained 152.25 points, or 1.4%, to 10798.35. The Dow fell 38.29 points, or 0.1%, to 29888.78.

All three finished the week with sharp losses. The S&P 500 fell 5.8% for the week, its largest decline since the Covid pandemic roiled markets in March 2020. The Dow fell 4.8% for the week, its biggest drop since October 2020.

S&P 500 Notches Worst Week Since March 2020Wall Street Journal June 17, 2022

C Suite recession fear mounts: 60% of CEOs expect a recession in their geographic region in the next 12 to 18 months, according to a May, 2022 survey of 750 C-suite executives released Friday by the Conference Board. An additional 15% think the region of the world where their company operates is already in a recession. In late 2021, 22% of CEOs surveyed by the firm reported seeing recession risk. That total was down from 39% a year earlier.

Likewise, the Financial Times poll of economists found 70% expect the US to be in a recession in 2023 as the country grapples with inflation.

The US will tumble into a recession as inflation soars, 70% of top economists say Business Insider June 13, 2022

SPACs: activity slowing: YTD down Per CB Insights, 2021 saw a whopping 638 SPAC filings, garnering a combined $143B, far surpassing 2020’s 246 filings and $73B raised. Nearly half of these arrived during the first quarter of 2021, before an SEC statement in April 2021 — stipulating new accounting rules for SPACs — sent companies scrambling to double-check their financial statements for errors. Updated performance indicators:

·        In the first 2 months of 2022, the average redemption rate for a SPAC merger reached 80% — meaning 4 out of 5 shares were redeemed before the target was acquired — up from about 50% in 2021 and just 20% in 2020. The average share price for completed SPACs in 2020-2021 clocked in at just $8.70, a 13% decline from the average $10 starting price, despite the stock market as a whole finishing 2021 strong.