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The Keckley Report

In Campaign 2024, Healthcare will be on the Ballot

By March 7, 2023March 12th, 2023No Comments

This week, some will be watching reports from the Commerce and Labor Departments for a sense of the economy’s near-term future. Some will be paying attention to Fed Chair Jerome Powell’s Congressional testimony for signals of interest rate increases in coming weeks. Some will be watching Sunday’s NCAA announcements of the 68-team “March Madness” brackets for national championships in Men’s and Women’s college basketball. And a few will be watching coverage in the race for the Presidency in 2024: as of this morning, 4 Republicans have announced plans to run (Trump, Haley, Pompeo, Ramaswany) while speculation mounts about possible Dem challengers to President Biden.

The field will certainly grow along as political wannabees test their appeal with donors and primary voters. And, the politics of healthcare will be on full display.

For Republicans seeking higher office, the basics are these:

  • Attack waste, fraud, inefficiency and lack of price transparency across the board, with special emphasis on hospitals and drug companies. Promise savings.
  • Attack profits and greed in healthcare. Target private equity’s role and raise questions about what “not for profit” means. Promise limits on ill-gotten gain.
  • Attack access gaps for the working poor and disenfranchised populations. Promise innovation.
  • Attack the Affordable Care Act and promise to replace it with something better that’s NOT government run. Details to follow.

For Democratic aspirants, the basics are these:

  • Healthcare is a right, not a privilege for those that can afford it. Inequity is the health system’s original sin.
  • Healthcare is unaffordable to most: its insiders (drug companies, hospital operators, private equity investors, insurers) prioritize their profits above population health through consolidation, obfuscation and self-serving advocacy. Promise regulatory reforms and legal challenges.
  • Healthcare is structurally flawed. Too little is spent on primary and preventive care (at every stage of life) and special interests control lawmakers and protection of the status quo.
  • And Medicare’s long-term sustainability can be achieved by imposing higher taxes on high-income individuals and corporations: Fairness is missing in the current system.

In both playbooks, campaigners will carefully avoid details about how they’d make changes they espouse and default to personal experiences as the basis for their insights. Physician criticism is off limits. Changing incentives from fee for service to value avoided. Integrating public health and community primary care services a potential pothole and major reform to Medicare a non-starter. Steer clear on these.

By contrast, campaigns can double down on fraud and waste-reduction, price transparency and competition and assert the system as the world’s best though its most expensive.

As a result of these views, healthcare will be cast in a negative light in Campaign 2024. That means every organization will be subject to heightened scrutiny and complaints about inadequate funding dismissed.

Get ready. Healthcare is on the ballot in 2024!



Quotable: commentary from industry notables last week:

Re: proposed Novant deal in NC: “If the same thing happens with [this deal] as it did with the last Novant acquisition, the quality of care is going to go down, and the cost of care is going to go up…This is like an onion: The more you peel, the more you cry. These hospitals … at every turn, it’s profits over patients.”

Dale Folwell, NC State Treasurer on proposed Novant acquisition of hospitals from Community Health Bob Herman In North Carolina, a small hospital deal poses big antitrust questions Statnews March 6, 2023


Re: data ownership, control: “In all of the National Treasure movies, the FBI goes after the guys trying to steal our nation’s secrets. In real life, our health data secrets have a new enforcer in town — the Federal Trade Commission (FTC)… The FTC is definitely busting down health information doors lately, with the GoodRx fine of $1.5M for illegally sharing patient data with advertisers, and a stern warning to Amazon to keep personal health information private after it acquired primary care practice chain One Medical. The agency’s latest announcement, though, is the biggest deal yet — the FTC convinced Teladoc-owned BetterHelp, an online therapy service, to pay $7.8M (which needs to be approved by a federal judge) to settle allegations that it shared consumers’ sensitive mental health information with advertisers (like Facebook, Snapchat, and Pinterest)..”

Julie Barnes Maverick Health Policy March 3, 2023

Re: investing in health IT: “Although there is a rocky road ahead for healthcare IT companies, there are bright spots. Vendors that can demonstrate an immediate ROI through increased revenue, decreased costs, or workforce augmentation—and that have a clear path to positive cash flow themselves—will catch health systems’ attention. And the ambulatory and payer end markets are broadly showing resilience.”

Launch Report: Healthcare IT Pitchbook March 2, 2023

Re: Gender pay gap: “The gender gap in pay has remained relatively stable in the United States over the past 20 years or so. In 2022, women earned an average of 82% of what men earned… These results are similar to where the pay gap stood in 2002, when women earned 80% as much as men.”

Gender pay gap in U.S. hasn’t changed much in two decades Pew Research March 1, 2023 /

Re: consumerism and value: “Higher Ed Dive has found a staggering 87 colleges, nearly all focused on the liberal arts, that have either closed entirely or been merged into a bigger neighbor since 2016 — including nine just in Massachusetts. There are two main forces at work here.

  • First is rising prices, driven by the fact that it’s hard to make productivity improvements in English Literature courses. That just makes it more expensive to go to college — in a world where the burden of having large student loans is now (thankfully) broadly understood.
  • The second is the rising opportunity cost of going to college. Employers no longer require a college degree for many jobs — which significantly increases the amount of money you can expect to make when otherwise you’d be earning nothing at college.

Capitalism has caught up with the academy.”

Axios Markets March 4, 2023

Re: declining trust in the U.S. system: “No health economy stakeholder group (i.e., individual providers, major health systems, academic institutions, health insurers, local health agencies, life sciences, federal agencies) has been immune to the trend of waning American trust and general dissatisfaction with U.S. healthcare… The combination of declining consumer trust in an increasingly unaffordable healthcare system is yet another foreboding sign for the health status of Americans and the financial health of America.”

The COVID-19 Pandemic Amplified Feelings of Mistrust in and Frustration with the U.S. Healthcare System Sanjula Jain Trilliant Health March 4, 2023

Re: not-for-profit hospital Boards: “Many nonprofit hospitals spend less on charity care than for-profit hospitals, even though they receive sizable tax breaks for providing community benefits. Prioritizing charitable care to low-income neighborhoods, often communities of color, may lead to financial losses, a tension between purpose and profit that boards help navigate. If boards better reflected the communities their hospitals serve, this tension may be navigated differently.”

Nonprofit hospitals are failing Americans. Their boards may be a reason why Statnews February 27, 2023

Re: hospital price transparency: “A complete understanding of compliance is a necessary prerequisite for properly enforcing the price transparency rule. CMS’s rose-colored conclusions likely explain the agency’s meager enforcement so far. It has fined just two hospitals nationwide out of the thousands that aren’t following the rule. Yet even this limited response demonstrates the power of financial penalties. These two hospitals quickly came into compliance, posting exemplary price files.”

New analysis: CMS vastly overestimates hospital price transparency efforts Statnews March 2, 2023


Novant proposes CHS acquisitions: “The latest local hospital transaction came last week from Novant Health, a not-for-profit conglomerate in North Carolina that registered $7.6 billion of revenue in 2022. For $320 million, Novant is buying two hospitals in Iredell County — Lake Norman Regional Medical Center and Davis Regional Medical Center, which are about a 25-minute drive away from each other. It’s also buying all affiliated physician clinics. The for-profit chain Community Health Systems currently owns the facilities.”

This area is just north of Charlotte, where Novant owns several other nearby hospitals. From Lake Norman, Novant has a facility 20 minutes to the south, another that is a half-hour south, and a third that is 40 minutes to the east. Another Novant hospital is less than a half-hour from Davis, which is being turned into an inpatient rehab hospital.”

Bob Herman In North Carolina, a small hospital deal poses big antitrust questions Statnews March 6, 2023

Presbyterian-Unity Point sign LOI to create new parent organization: Last Thursday, New Mexico-based Presbyterian Healthcare Services and Midwest-based health system UnityPoint Health® announced a signed a letter of intent to combine the organizations allowing the legacy organizations to keep their trusted brands and “while collectively achieving administrative efficiencies under a parent organization.

“As a not-for-profit health system, we must pave a sustainable path forward to continue serving our communities with care and coverage. While we’ve done that successfully independently, we know that partnering with like-minded health systems will allow us to accelerate our efforts,” says Dale Maxwell, president and CEO, Presbyterian Healthcare Services. “UnityPoint Health shares in our commitment to keeping healthcare delivery local and creating a culture where the workforce thrives which will serve as foundational elements as we embark on this journey.”

Combined, UnityPoint Health and Presbyterian will operate 40 hospital facilities, employ 40,000 including 3,000 physicians and advanced practice clinicians and have revenues of $11 billion.

UnityPoint Health and Presbyterian Healthcare Services announce intent to form new healthcare organization UnityPoint Health March 2, 2023

Study: ED, office visits billed at higher rates: Peterson researchers analyzed claims data for visits to emergency departments and physicians’ offices: Findings:

  • The overall number of claims at the highest two levels of complexity in outpatient settings such as office, urgent care, and emergency departments grew from 22% in 2004 to 43% in 2021.
  • For the emergency department it grew from 33% in 2004 to 60% in 2021.
  • Moderately complex claims accounted for 54% of emergency department claims and 67% of all outpatient office claims for UTIs in 2004. Higher complexity claims made up 26% and 14% in those settings, respectively.
  • Moderate complexity UTI claims accounted for only 31% of emergency department claims and 57% of outpatient office claims in 2004. The number of higher complexity claims in those settings jumped to 66% and 37%, respectively, by 2021

Outpatient visits billed at increasingly higher levels: implications for health costs Peterson Health System Tracker February 27, 2023

Kaufman Hall: hospital finances improved in 4Q 2022: Early 2023 Performance Promising, but Still Lags Behind 2021 and 2020

  • Hospitals realized stronger financial performance in January 2023 compared to the previous year, as the start of 2022 coincided with the Omicron variant surge. The median year-to-date (YTD) operating margin index for hospitals was -1% in January 2023, compared to -3.7% in January 2022. The 2023 YTD operating margin index was still lower than that of 2021 at -0.1%, and 2020 at 3.1%.
  • Hospital operating margins in January 2023 were down slightly from -0.7% in December 2022 to -1% in January 2023 following the trend of persistent negative margins throughout last year.

Kaufman Hall National Hospital Flash Report: Highlights.

Nursing Homes, Hospices

Study: Nursing home staffing levels vary widely: Researchers examined the proportion of nursing home revenues spent on nursing and staffing levels in 2019. Findings:

  • Nationally, the median proportion of revenues spent on nursing staff was 33.9%, and median nursing staff levels were 3.67 hours worked and 4.08 hours paid per resident day.
  • Facilities with higher shares of Medicaid residents spent a larger share of revenues on nursing staff but had lower staffing levels.
  • States varied significantly with respect to median spending on nursing staff (26.8–44.0% of revenues) and median nursing staff levels (3.2–5.6 hours worked and 3.6–5.7 hours paid per resident day).

Bowblis et al Understanding Nursing Home Spending And Staff Levels In The Context Of Recent Nursing Staff Recommendations Health Affairs February 2023

Study: Accessibility, quality of nursing homes eroding:  In this cross-sectional study, the supply of nursing home beds per 10 000 adults aged 65 years or older per county declined from 2011 to 2019 in 86.4% of US counties, by a mean of 129.9 beds from 552.5 beds in 2011. The share of 4- and 5- star beds also decreased, likely driven by an increasing number of low-quality beds where bed supply increased.

Miller et al Trends in Supply of Nursing Home Beds, 2011-2019JAMA Network Open March 1,  2023;6(3):e230640. doi:10.1001/jamanetworkopen.2023.0640

Study: family caregivers see differences between FP and NFP hospices: In this cross-sectional analysis of national Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey data from 653,208 caregiver respondents, reflecting care received from 3107 hospices, family caregivers reported worse care experiences at for-profit hospices compared with not-for-profit hospices from 2017-2019. Almost one-third of for-profit hospices scored 3 or more points below the national hospice average; in contrast, only one-eighth of not-for-profit hospices scored that poorly.”.

Anhang Price et al Association of Hospice Profit Status With Family Caregivers’ Reported Care Experiences JAMA Intern Med. Published online February 27, 2023. doi:10.1001/jamainternmed.2022.7076

Health Insurers

Study: MA profitability compared to other products: KFF used financial data reported by insurance companies to the National Association of Insurance Commissioners (NAIC) to analyze at medical loss ratios and gross margins in the Medicare Advantage, Medicaid managed care, individual (non-group), and fully insured group (employer) health insurance markets from 2018-2021. Findings:

  • MA plans averaged gross margins of $1,730 per enrollee in 2021, more than doubling those in the individual ($745), fully insured group ($689), and Medicaid managed care ($768) markets.
  • Higher average costs and higher premiums are associated with MA plans because they cover an older, sicker population, which contributes to the higher gross margins.
  • MA plans reaped over twice as much value as other insurance markets by the end of 2021,
  • As utilization of medical care rebounded following the early stages of the COIVD-19 pandemic, MA gross margins per enrollee returned to pre-pandemic levels while commercial markets fell behind, researchers found.

Ortaliza et al Health Insurer Financial Performance in 2021 Kaiser Family Foundation February 28, 2023

Population Health

Study: diabetes, obesity rates increasing: From 2009 to 2020, in this serial cross-sectional study of 12,924 adults aged 20 to 44 years, “there were increases in the prevalence of diabetes (from 3.0% to 4.1%) and obesity (from 32.7% to 40.9%), no improvement in the prevalence of hypertension (from 9.3% to 11.5%), and a decrease in the prevalence of hyperlipidemia (from 40.5% to 36.1%) from 2009-2010 to 2017-2020. Black young adults had the highest rates of hypertension over the study period, and increases in hypertension were observed among Mexican American and other Hispanic adults, while Mexican American adults experienced a significant rise in diabetes. Blood pressure control did not significantly change among young adults treated for hypertension, while glycemic control remained suboptimal throughout the study period.”

Aggarwal et al Cardiovascular Risk Factor Prevalence, Treatment, and Control in US Adults Aged 20 to 44 Years, 2009 to March 2020 JAMA March 5, 2023. doi:10.1001/jama.2023.2307

McKinsey: impact of loneliness: “About 33% of people worldwide feel lonely. And loneliness doesn’t merely cause mental distress and discomfort—it can have implications on your physical health as well. Research shows that loneliness and social isolation can be as damaging to an individual’s health as smoking 15 cigarettes per day, and the National Academies of Sciences found that loneliness among heart failure patients was associated with around a four times increased risk of death and a 68% increased risk of hospitalization.”

Loneliness is bad for your health—here’s what to do about it McKinsey Health Institute March 3,

Capital Markets

Pitchbook: PE returns for 2022: “Market headwinds effectively ended the decade-long bull run for the industry, and big PE managers were not immune to the market squeeze”:

  • KKR’s annual PE return sagged to -14%, the lowest of the group, but still came out ahead of the S&P 500 and MSCI World Index, which were -18.1% and -17.7%, respectively.
  • Overall, PE performance was slightly upbeat in Q4 for the big six public alt managers: Apollo and Blackstone both turned around from negative returns in Q3 to reach 5.4% and 3.8%, respectively, and TPG, Carlyle, and Ares also marked positive performance, while KKR was flat.
  • For the trailing twelve months (TTM), all big-six public alt managers fell short of the double-digit returns the PE industry has become accustomed to, with the median TTM return at 5.2%. KKR’s TTM return was an outlier from the group at -14%, possibly due to a relatively greater allocation to late-stage venture and PE growth investments, which would have been hit the hardest with the fall of IPO markets. KKR also noted that the firm deployed more capital into PE in 2022 than in 2021, meaning they are earlier in driving returns.

Public PE Roundup 2022 Pitchbook


SEC: Added transparency for Exec Comp required: For the first time, public companies are revealing how much compensation their CEOs are actually poised to get, by tabulating gains and losses in the stock awards that make up much of their pay packages.

The new measure of compensation, dubbed “compensation actually paid” under Securities and Exchange Commission rules, is designed to move executive-pay disclosure beyond the moment-in-time snapshots that investors have considered for years.

The old approach, still in use, requires companies to show pay for top executives as it was valued when they received it. Now, alongside the old measure—typically in annual proxy statements—companies are revealing changes in value over the course of the year, starting with fiscal years ending in late December 2022. At least 65 companies had disclosed the new measure through Friday evening, including 23 in the S&P 500.”

Theo Francis What Is a CEO’s Pay Actually Worth? Wall Street Journal March 5, 2023

House Committee launches probe of PBMs: Last week, the House Oversight and Accountability Committee sent letters to CVS Health Corp.’s CVS Caremark, Cigna Group’s Express Scripts and UnitedHealth Group Inc.’s OptumRx—the largest pharmacy-benefit managers—seeking documents about the drug-price rebates they negotiate, fees they charge and their relationships with Zinc Health Services, Ascent Health Solutions and Emisar Pharma Services, (group purchasing organizations that the PBMs formed to help negotiate rebates). The committee also said it has sent requests to the Centers for Medicare and Medicaid Services and other federal agencies asking for their contracts with the PBMs.

The requests come after the Federal Trade Commission launched an investigation of PBM practices and several state governments began probes.

Congress Investigates How Pharma Middlemen Affect Drug Prices March 1, 2023