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The Keckley Report

Economic Indigestion for U.S. Healthcare is Reality: Here’s What it Means in 2024

By January 15, 2024No Comments

By the end of this week, we’ll know a lot more about the economic trajectory for U.S. healthcare in 2024: it may cause indigestion.

  • Digesting deal announcements and industry prognostics from last week’s 42nd JPM conference in San Francisco. Notably, with the exceptions of promising conditions for weight loss drugs, artificial intelligence and biotech IPOs, the outlook is cautionary for providers and inviting for insurers and retail health. Expanded conflicts in Ukraine and Gaza loom as threats. The U.S. trade relationship with China and its growing tension with Taiwan poses an immediate threat to the U.S. healthcare supply chain for raw materials in drugs, OTC products, disposables. U.S. public opinion about its institutions is arguably shaped in part in social media: TikTok is owned by Chinese internet tech company ByteDance and operates in 150 countries. The 16 not for profit health system presentations at JPM sounded a chorus in unison: ‘our core business—hospital care– is not sustainable. We need deals with private capital to stay afloat.’ By contrast, national insurers and retailers sang a different tune: ‘the market is receptive to our products and services that are cheaper, better and more easily accessed through digital platforms. The status quo is outdated’.
  • Digesting results from today’s Iowa GOP Caucus which serves as a gatekeeper for Presidential candidate wannabes. In the run-up to Campaign 2024, polls show voters interested in abortion rights and affordability. But specific health system reforms have not surfaced to date in this election cycle and understandably: per the November 2023 Keckley Poll, 76% of U.S. adults agree that “Most politicians avoid healthcare issues because solutions are complicated and they fear losing votes” vs. 6% who disagree. Thus, the Iowa results might narrow the President contestant pool, but it will do little to clarify U.S. health policies in 2025 and beyond.
  • Digesting takeaways from the World Economic Forum (WEF) in Davos. The annual confab draws world leaders and big-name consultancies and bankers who want to rub elbows with them. It’s notable that the WEF pre-conference Global Risk Survey indicated growing concern about a looming “global catastrophe” and its agenda includes sessions on women’s health, misinformation and artificial intelligence—all central to healthcare’s future. The world is small: 8 billion inhabitants in 195 countries. There’s growing global attention to healthcare and recognition that the integration of social services (nutrition, housing, transportation, et al) and elimination of structural barriers that limit access are necessary to the effectiveness of their systems. The U.S. lacks both though it’s the world’s most expensive system. Thus, U.S.-based solutions to enhance clinical efficacy for specialty care are accessible to global markets at prices significantly lower than what U.S. taxpayers pay because their government’s refuse to pay U.S. rates.
  • Digesting where Congress lands this week on the fiscal 2024 budget. A deal was reached tentatively yesterday on a short-term funding bill that would avert a partial government shutdown this Friday. The $1.6 trillion continuing resolution funds the government through March 1 and March 8 and includes $886B for defense and $704B for other total discretionary programs. While payments for social security and Medicare are not impacted, most other federal health programs are impacted and therefore caught in the Congressional crossfire between budget hawks wary of the ballooning federal deficit ($34 trillion) and progressives who think the federal government spends too much on the ‘have’s’ and not enough, including health and social services, on its ‘have not’s.’ And this deal is TENTATIVE!

My take:

The cumulative effect of these events in economic indigestion for the entire U.S. economy and especially for those of us who work in its healthcare industry. So, for the balance of 2024, the realities for U.S. healthcare are these:

  1. Public support for the health system is eroding. Trust and confidence in the U.S. health system is low. No sector in U.S. healthcare is immune though some (community hospitals, public health programs, independent physicians) are more favorably viewed than others. Confidence in government agencies (CDC, FDA, CMS) is fractured due to misinformation and disinformation. ‘Not-for-profit’ designation is a meaningful distinction to some but secondary to characteristics more readily understood and valued.
  2. Federal policies toward healthcare are increasingly antagonistic. They’re popular and in most cases, bipartisan. Federal policies that expand price transparency (drugs, hospitals, health insurance), constrain on consolidation (horizontal) and private equity investing, expose/reduce conflicts of interest, address workforce resilience (compensation, work-rules) and protect consumers will be prominent. Beyond these, court actions and budgetary negotiations will define/refine federal health policies. Notably, the rumored DOJ antitrust action against Apple will be a closely watched barometer as will the government’s attention toward Microsoft given its leading role in ChatGPT and AI platform Copilot et al.
  3. The big players enjoy advantages over smaller players. It’s a buyer’s market for them. The corporatization of U.S. healthcare has rewarded big operators in each sector and punished smaller, independent operators. More regulation, higher operating costs, escalating administrative complexity and shifting demand require capital that’s increasingly unaffordable/inaccessible to less credit-worthy players. In 2024, in every sector, bigger fish will eat the smaller as readily-accessible private capital is deployed to welcoming sellers. But mechanisms whereby ‘independents’ are protected and growing disparity in how care is financed and delivered will be a prominent concern to policymakers.

Regrettably, an off-the-shelf Pepto-Bismol is not available to the U.S. system. It is complex, fragmented, inequitable and expensive, but also profitable for many who benefit from the status quo.

So, the conclusion that can be deduced from the four events this week is this: economic indigestion in U.S. healthcare will persist this year and beyond because there is no political will nor industry appetite to fix it.  Darwinism aka ‘survival of the fittest’ is its destiny unless….???


PS: Today is the 38st national observance of Martin Luther King Day. The Novel Prize awardee would be 95 years old today but his life was cut short April 4, 1968 by assassin James Earl Ray. His call for racial equity is unfinished business in the U.S. including the health system.


This Week’s Healthcare Trends – Amazon Tries Again – – Mail ( January 12, 2024

JPM 2024: 10 takeaways for providers, insurers, digital companies | Modern Healthcare

World Economic Forum risks report sees a ‘global catastrophe’ within 10 years | CNN Business

World Economic Forum Annual Meeting 2024 | World Economic Forum (

Quotables: JPM, Industry Round-up

Re: JPM: “Nonprofit health systems plug their strong cash reserves at JPM — a very different pitch than they make elsewhere. Nonprofit health systems need to sell investors on their message of strength and resilience. And since they certainly can’t do that by focusing on patient care — an area where they’re barely breaking even or losing money — cash and investments is the way to do it.”

At JPM 2024, hospital systems pitch financial strength to investors ( January 12, 2024

Re: JPM: “If you learned anything about nonprofit hospitals on the first day of the J.P. Morgan Healthcare Conference, it’s that they’ve all but abandoned the prospect of making significant profit on patient care. Instead, they’re fully throwing their weight into other ways of making money — things like developing drugs or selling insurance.

Making money outside of patient care — or “revenue diversification,” if you prefer industry jargon — has always made appearances on hospital slides at the annual investor conference in San Francisco. This year, though, hospital executives are projecting a sense of urgency around growing profit in other areas to make up for losing money on their bread and butter: taking care of patients in hospitals.”

Tara Bannow “Hospitals try a new pitch to investors: other ways of making money” StatNews January 8, 2024

Re: Amazon announces Health Condition Programs at JPM: “Amazon Health Condition Programs matches consumers with a personalized care plan based on their online searches and shopping history, and allows them to first check whether their employer or health plan covers the program. The program will appeal to consumers who don’t want to go to a doctor or hospital, and should compel healthcare executives to take a closer look at their virtual care and digital health offerings. The service gives consumers a virtual link to a personalized care team to help manage their health.


Re: hospital solvency: “Medicare Reimbursement Hits Historic Low: While Medicare has historically reimbursed hospitals below the cost of providing care to patients, new data shows that Medicare payment levels hit record lows in 2022. According to AHA data collected from hospitals and health systems, Medicare paid just 82 cents for every dollar spent by hospitals caring for Medicare patients in 2022…This resulted in $99.2 billion in Medicare underpayments that year alone, nearly two and a half times the amount in 2012. The Medicare Payment Advisory Commission (MedPAC), an independent organization that advises Congress on Medicare policies, recently noted that hospitals’ overall fee-for-service Medicare margin declined to a record low in 2022. MedPAC also projected “hospitals’ low fee-for-service Medicare margins to persist” in 2025.

The AHA Infographic noted that 67% of hospitals negative operating margins in 2022, and This is done by multiplying each hospital’s gross charges by each hospital’s overall cost-to-charge ratio, which is the ratio of a hospital’s costs (total expenses exclusive of bad debt) to its charges (gross patient and other operating revenue).:

Infographic: Medicare Significantly Underpays Hospitals for Cost of Patient Care | AHA

Re: Agilon, value-based care platforms: “…agilon essentially lied to investors’ faces for half a year. Throughout the commentary and responses, there’s a tone of confidence and superiority, when in reality, the curtains hadn’t yet been pulled back. Now, with its back against the wall, agilon’s reputation is on the line. With significant embedded EBITDA (and profitability) expected to come online for the MA enablement firm in 2024, It’s now or never for agilon……To other value-based care players, the message is clear. Do your blocking and tackling. The Goldilocks era of value-based care is at its end, and utilization is here.”

Blake Madden Hospitalology January 9, 2024

Re: distinction between a fad and trend: “A Trend describes a deep social and cultural movement forward for at least a decade out. It cuts across multiple realms of the consumer’s life and a wide swath of societies and marketplaces. It expresses primal human needs and aspirations and predicts what their needs will be. What it’s not is almost as important as what it is:  It’s not a fleeting a short-lived phase or passion. In other words, it’s not a fad.”

TrendBank | Faith Popcorn’s BrainReserve

Re: pharmacists as primary care providers, FDA role: “…With the average wait time to see a primary care physician currently at 26 days and an estimated shortage growing to 48,000 primary care clinicians by 2034, better using the more than 300,000 pharmacists who practice at more than 60,000 pharmacies–including more than 20,000 independent pharmacies–is essential. Long the object of domestic policy curiosity and a reality in other countries such as Australia, a new behind-the-counter drug pathway would deploy pharmacists to serve as “learned intermediaries” facilitating access to chronic disease treatment in partnership with primary care physicians…

…now is the time to think differently, given unresolved challenges in drug pricing and access, inefficiencies in clinical operations driven by a lack of labor productivity growth, and the millions of Americans experiencing medical and financial harms from long-term combustible tobacco use. FDA regulatory policy offers a dynamic tool for a dynamic world.”

An Innovation-Driven Future for The Food and Drug Administration | Health Affairs January 11, 2024

Re: Amazon Clinic marketing: “Say hello to Amazon Clinic: Virtual healthcare that fits into your life. When common health problems pop up, we’ll help you handle them without travel, appointments, or insurance.

Choose a concern (like COVID-19erectile dysfunction, or anti-aging ) and we’ll connect you with an online doctor or nurse practitioner who can assess your condition, prescribe necessary medications, or renew a prescription within hours. Plus, you’ll know the price of a visit upfront—no bills later.”

Online ad for Amazon Clinic “Ready to meet you…wherever you are” January 11

Re: healthcare investment strategy: “Healthcare-focused private equity managers were less active in 2023 than years prior, and they’re likely to maintain caution in 2024. From its 2021 peak to the end of 2023, total healthcare-related PE deal value fell 60.4%—reaching its lowest point since 2016… As the industry moves into the new year, analysts anticipate a further decline. Healthcare deals as a share of global PE deal count peaked at 13.7% in 2020, but, by the end of 2023, that figure fell to 10.8%…While analysts expect PE healthcare managers to continue to deploy capital into current portfolio companies and into lower-middle-market acquisitions, they also note that the nature of PE healthcare investing is changing. The number of traditional physician practice management roll-ups—where PE managers combine multiple portfolio companies—declined in 2023.
Following the Federal Reserve’s interest rate hike campaign, it became more challenging for PE firms to pile on debt to contribute to the inorganic growth of their platforms. Add-ons, which typically require debt financing and are the bread-and-butter strategy of PE healthcare players, grew less and less feasible. The shift away from add-ons is also, in part, a product of labor cost inflation.”

Healthcare PE investors proceed with caution in 2024 | PitchBook January 11, 2024

Re: JPM: “JPM’s inattention to the importance of making space for women is indicative of the health care industry’s failure to give women opportunities to occupy positions of power… This might sound a bit like a personal complaint, but it’s much bigger than just me. JPM is the industry conference. Its lack of planning is indicative of the health care industry’s failure to give women opportunities to occupy positions of power. In 2019, the year after STAT called out JPM for having more Michaels presenting than women, 90% of presenters were still men.”

Tara Bannow “Pumping milk at JPM was a nightmare. It’s part of a bigger problem in the industry” StatNews January 11, 2024

Re: weight management market: “Weight management is a journey, not a destination. By embracing a high-quality, comprehensive strategy that prioritizes integrated personalized care, digital health, education and community support, the narrative can shift around weight management from short-term fixes to lifelong well-being. It’s time to empower individuals on their journey to a healthier and happier self. “

Glen Tullman, CEO Transcarent Guest Post World Economic Forum

Re: interoperability and data access: “Two major issues became apparent early in the pandemic. First, the lack of data interoperability and effective analysis impeded the delivery of real-time insights to those making critical decisions. Second, the slow exchange of patient data severely limited treatment efforts. In a situation where a rapid response was essential, accessing comprehensive electronic records from different providers was crucial…

Our findings suggest an urgent need for a complete overhaul: the development of a unified, efficient public health data system. A healthcare data infrastructure resilient to future pandemics requires a focus on data interoperability, streamlined reporting processes, and uniform standards. Enhancing electronic data exchange capabilities and providing additional support for rural and under-resourced hospitals are critical.”

Our Healthcare Data Infrastructure Is Abysmal | MedPage Today January 9, 2024

Re: Health system transformation: Despite spending more per capita on health care than any other country, the United States lags behind other high-income countries on crucial health outcomes, including life expectancy and maternal mortality. In addition, disparities based on race, ethnicity, and income persist. Although nearly half the burden of disability and death in the United States may be associated with modifiable risk factors, misaligned economic incentives in the U.S. health system lead to an emphasis on individually focused interventions that respond to acute needs, rather than community-based prevention. There is currently no mechanism that provides incentives or rewards for improving population health in entire communities…

These gaps are in part the result of fragmentation among payers. Accountability for health care costs and health outcomes for members of even a single county may be divided among numerous entities (Medicare Advantage plans, traditional fee-for-service Medicare, Medicaid managed-care plans, Tricare and the Department of Veterans Affairs, direct-purchase plans, fully insured employer plans, and self-insured employers). Payers and accountable care organizations may therefore be more likely to invest in relatively inefficient individual-level interventions for the patients they cover than in whole-population health improvement or health systems change…

New approaches to financing illness prevention are desperately needed. Too often, despite the existence of data on what works, the U.S. health care system fails to deliver effective interventions to the people who need them most because of a lack of incentives for implementing prevention-focused approaches.”

Transforming Population Health — ARPA-H’s New Program Targeting Broken Incentives | NEJM January 10, 2024

Re: self-diagnostics: “Their (full-body MRI scans) growing popularity suggests that our relationship to medicine has continued to evolve. Increasingly, patients are not passive recipients of care, but active customers. Trust in medical leaders keeps falling; these days, a Kardashian post is worth a thousand academic studies… Too often, the future of medicine isn’t equally distributed. The people who pay for health information may be least likely to need it; they get it to feel good.”

Will a Full-Body MRI Scan Help You or Hurt You? | The New Yorker January 12, 2024


Study: Value of e-consults between PCPs and Hospitalists: “In this systematic review of the association of e-consultation with access to hospital care and the avoidance of hospital referrals (in 72 studies), results indicated that the use of e-consultation has greatly increased over the years. Although e-consultation was associated with improved access to hospital care and avoidance of hospital referrals, it was hard to draw a conclusion about these outcomes due to heterogeneity and lack of high-quality evidence (e.g., from randomized clinical trials). Nevertheless, these results suggest that e-consultation seems to be a promising digital health care implementation, but more rigorous studies are needed; nonrandomized trial designs should be used, and appropriate outcomes should be chosen in future research on this topic.”

Peeters et al “Family Physician–to–Hospital Specialist Electronic Consultation and Access to Hospital Care: A Systematic Review” JAMA Network Open January 12, 2024;7(1):e2351623. doi:10.1001/jamanetworkopen.2023.51623

Study: Physician vacation usage and burnout: Researchers analyzed the association between vacation days taken and working while on vacation associated and physician burnout. Results:

“In this cross-sectional study of 3024 US physicians, 59.6% took 3 weeks of vacation or less per year, and 70.4% worked while on vacation on a typical vacation day–both associated with higher rates of burnout. Full electronic health record inbox coverage was associated with lower rates of working while on vacation and with lower burnout.”.”

Sinsky et al Vacation Days Taken, Work During Vacation, and Burnout Among US Physicians JAMA Network Open January 12,2024;7(1):e2351635. doi:10.1001/jamanetworkopen.2023.51635

Study: Financial ties of physician influencers: Researchers analyzed the extent and types of financial ties to industry of U.S. based task force members of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, fifth edition, text revision (DSM-5-TR), published in 2022. Findings:

“After duplicate names had been removed, 168 individuals were identified who served as either panel or task force members of the DSM-5-TR. 92 met the inclusion criteria of being a physician who was based in the US and therefore could be included in Open Payments. Of these 92 individuals, 55 (60%) received payments from industry. Collectively, these panel members received a total of $14.2m (£11.2m; €13m). One third (33.3%) of the task force members had payments reported in Open Payments.”

Conclusions: Conflicts of interest among panel members of DSM-5-TR were prevalent. Because of the enormous influence of diagnostic and treatment guidelines, the standards for participation on a guideline development panel should be high..”

“Undisclosed financial conflicts of interest in DSM-5-TR: cross sectional analysis” BMJ 2024; 384 doi: (Published 10 January 2024)Cite this as: BMJ 2024;384:e076902


CEO Survey: 2024 expectations: “A majority of CEOs (57%) among the 210 we polled in December 2023; said they expect the Dow Jones Industrial Average to end 2024 within the 35,000 to 40,000 range—unchanged from its current average of around 37,000. Only 28% of CEOs predict the Dow will end the year lower than 35,000, a better forecast for this year than you had last year, when 37 % of CEOs predicted the Dow would end 2023 below 35,000

After hitting its highest levels in over a decade—9-plus percent in 2022—the rate of inflation slowed significantly in 2023, falling to 3.1 percent at year-end. Now, 64% of CEOs predict it will continue to subside in 2024, most likely gradually. And even though 29% of CEOs predict inflation will stay the same, just 7% forecast inflation getting worse.”

In New Poll, CEOs Predict Trump Victory And A Mild Recession In 2024 (

USNWR Jobs Outlook 2024:. US News & World Report, the global authority in rankings and consumer advice, today announced the 2024 Best Jobs:. Highlights:

“Health care workers are critical to our overall well-being. Nurse practitioner rose to the No. 1 spot as this year’s best job. The 10-year outlook for the occupation is strong with one in three of the top 100 jobs being in health care – an increase from one in four in the 2023 rankings. Future growth and a high median salary make this career sector appealing as well. Following nurse practitioner in the overall ranking is financial manager at No. 2, software developer at No. 3, IT manager at No. 4 and physician’s assistant at No. 5

STEM fields and health care support jobs also continue to rank high among the Careers With the Most Job Security, with these industries capturing all of the list’s top 10 jobs. Of the six STEM positions noted in the top 10, nurse practitioner took the No. 1 spot, statistician landed at No. 2, software developer came in at No. 4 and information security analyst came in at No. 5. These have a median salary between about $99,000 and $128,000.”

U.S. News & World Report Announces the 2024 Best Jobs January 9, 2024

Pitchbook: capital outlook for 2024:

  • An abundance of continuation funds: “Over the first 11 months of 2023, PE firms completed 71 exit deals structured through continuation funds. This year will likely see the tally of continuation vehicles surpass 100, given that GPs face a growing pressure to return capital to their investors.”
  • Extended hold times the median time of how long a portfolio company has been in a PE fund is expected to reach 4.4 years by the end of this year, an all-time high… As of the end of Q3 2023, US PE funds held their existing assets for a median period of 4.2 years, the highest since 2012. PE funds divested even their well-performing assets at a slower pace last year. Of PE-backed companies that were sold in 2023, the median holding period before exit was 6.4 years… the first time this figure topped the six-year reading since 2015.
  • Fundraising conundrum: The total value of PE-backed exits dropped by 26.6% year-over-year to $574.2 billion, the lowest since 2012…Throughout last year, PE firms raised $556.1 billion globally across 593 vehicles, the lowest fund count since 2012, the preliminary data compiled by PitchBook shows.

What PitchBook analysts predict for PE for 2024 | PitchBook January 9, 2024

Re: AI investing: CB Insights: Median valuations for 2023 VC backed deals:

Stage Seed Series A Series B
Non-AI deals $15.4M $50.2M $118.6M
AI deals $18.6M $69.7M $188.8M

“Valuations for early-stage AI companies in 2023 were substantially higher than non-AI startups.

This holds true into the mid-stages as well — AI startups raising Series B rounds notched valuations over 1.5x higher than their counterparts.

AI advances, such as the emergence of generative AI, have fueled investors eager to capitalize on the trend. Meanwhile, corporate attention to AI has skyrocketed, with big tech and incumbents scrambling to harness its potential — another factor in the AI valuation premium.”

The AI premium: AI startups raise at much higher valuations – CB Insights Research January 9, 2024


Study: diagnostic errors in treating hospitalized patients: “In this cohort study of 2428 patient records, a missed or delayed diagnosis took place in 23%, with 17% of these errors causing temporary or permanent harm to patients…among the 1863 patients who died, diagnostic error was judged to have contributed to death in 121 (6.6%). In multivariable models examining process faults associated with any diagnostic error, patient assessment problems and problems with test ordering and interpretation had the highest opportunity to reduce diagnostic errors; similar ranking was seen in multivariable models examining harmful diagnostic errors.”

Auerbach et al “Diagnostic Errors in Hospitalized Adults Who Died or Were Transferred to Intensive Care” JAMA Intern Medicine January 8, 2024. doi:10.1001/jamainternmed.2023.7347

Study: Hospital at home results: “The Medicare launched the Acute Hospital Care at Home waiver program was launched in November 2020 to ease the hospital burden by Covid-19 patients. Since then, thousands of patients from 300 hospitals in 37 states have been treated in their homes after the program was expanded through this year. A new analysis in Annals of Internal Medicine reports the results include low death rates (0.5%), less use of skilled nursing facilities (3%), and lower need for rehospitalization (6%) among the socially vulnerable and medically complex patients it followed from July 2022 through June 2023.

Acute Hospital Care at Home in the United States: The Early National Experience | Annals of Internal Medicine ( January 9, 2024

Kaufman Hall: Hospital margins in November 2023: Highlights:

  • The median calendar year-to-date operating margin index for hospitals in November was 2% slightly below pre-pandemic 2020 and 2021.
  • Year-over-year inpatient and outpatient revenues for November 2023 increased by 5% and 9%, respectively, while total expense adjusted discharges fell.
  • Hospital operating margins jumped 20% year over year in 2023 through the month of November, and operating EBITDA margins were up 9%. However, compared to 2020, operating margins and operating EBITDA margins are down 9% and 10%, respectively.
  • Revenue is up compared to 2020, with net operating revenue per calendar day jumping 21% from three years ago and gross operating revenue per calendar day climbing 30%. There is also a clear shift from inpatient to outpatient, with outpatient revenue per calendar day up 43% while inpatient revenue per calendar day jumped just 15%.
  • The total expense per calendar day jumped 20% from 2020, with labor and supply expenses per calendar day up 20% and 23%, respectively. The average length of stay is flat while emergency department visits were up 19% overall compared to 2020.

National Hospital Flash Report.

Study: Hospital liquidity: KFF used S&P Global days of cash on hand for 274 nonprofit hospitals and health systems representing more than half of all nonprofit hospitals and two thirds of nonprofit beds in the country for the period of 2019-2022. Findings:

  • In 2022, most nonprofit hospitals and health systems analyzed (73%) had at least “strong” days of cash on hand, though about one in ten (9%) had “vulnerable” or “highly vulnerable” levels.
  • The majority of nonprofit hospitals and health systems with negative margins in this analysis (60%) had at least “strong” days cash on hand. As might be expected, most nonprofit hospitals and health systems with “vulnerable” or “highly vulnerable” days cash on hand in this analysis (81%) had negative operating margins.
  • The average days of cash on hand among nonprofit hospitals and health systems analyzed was similar in 2022 (218 days) to pre-pandemic levels (225 days in 2019).
  • The financial reserves (unrestricted cash and investments) of nonprofit hospitals and health systems analyzed increased early in the pandemic before falling in 2022; the latter trend coincided with decreases in the value of stocks and other investments that have likely stabilized or increased with 2023 market improvements.
  • The total share of non-profit hospitals and health systems with “vulnerable” or “highly vulnerable” levels of days cash on hand may be larger, since the as the S&P data analyzed underrepresents groups that are more likely to face financial challenges, such as small and rural hospitals.

Most Nonprofit Hospitals and Health Systems Analyzed Had “Adequate” or “Strong” Days of Cash on Hand in 2022, Though About One in Ten Did Not January 9, 2024

Study: residential addiction program access: “In the US, using the Substance Abuse and Mental Health Services Administration’s treatment locator and search engine advertising data, we identified 160 residential addiction treatment facilities that treated adolescents with opioid use disorder as of December 2022. We called facilities while role-playing as the aunt or uncle of a sixteen-year-old child with a recent nonfatal overdose, to inquire about policies and costs. Eighty-seven facilities (54.4%) had a bed immediately available. Among sites with a waitlist, the mean wait time for a bed was 28.4 days. Of facilities providing cost information, the mean cost of treatment per day was $878. Daily costs among for-profit facilities were triple those of nonprofit facilities. Half of facilities required up-front payment by self-pay patients. The mean up-front cost was $28,731. We were unable to identify any facilities for adolescents in ten states or Washington, D.C. Access to adolescent residential addiction treatment centers in the United States is limited and costly.”

Adolescent Residential Addiction Treatment in the US: Uneven Access, Waitlists, And High Costs | Health Affairs

Population Health

Study: cancer mortality trends in ethnic patient populations: Duke researchers assessed cancer mortality rate ratios and absolute differences between Black and White individuals for female breast, prostate, lung and bronchus cancer from 2000 to 2020. Findings:

“In 2000, the rate was 251.7 per 100 000 population among Black individuals and 199.7 per 100 000 population among White individuals, decreasing to 166.8 per 100 000 population and 149.3 per 100 000 population, by 2020. Between 2000 and 2020, declines in cancer mortality were observed for each cancer type for both groups. However, Black individuals consistently experienced higher mortality than White individuals for all cancers except female lung and bronchus.”

Trends in Cancer Mortality Disparities Between Black and White Individuals in the US, 2000-2020 | Health Policy | JAMA Health Forum | JAMA Network January 12, 2024

CMS: dialysis center inequity:  The Centers for Medicare and Medicaid Services is penalizing some dialysis facilities that disproportionately serve patients who are low-income or people of color for failing to provide in-home treatment.

An observational study of nearly 2,200 dialysis facilities participating in the agency’s End Stage Renal Disease Treatment Choices model found safety-net facilities serving mostly Black and Hispanic patients more frequently experienced CMS reimbursement cuts as high as 5% in the first year of the payment model for not moving more treatment to the home. The results of the study by researchers at five universities were published Tuesday in JAMA Network.

Researchers assigned scores to dialysis centers based on a number of social risk features: the proportion of patients who were Black or Hispaniclived in highly disadvantaged neighborhoods, were uninsured or were covered by Medicaid. They found nearly half the facilities had no risk features, while approximately a quarter had two or more.

The study found facilities with higher risk scores tended to have lower home dialysis use, which more frequently resulted in payment cuts. Those facilities with the highest risk scores saw the highest reimbursement cut of 5% and were also less likely to receive the highest bonus payment of 4%.

Regulator Reports

Bureau of Labor Statistics (January 11): The uptick in inflation (BLS) was more than the 0.1 percentage point rise economists had forecast Stubbornly high-and-getting-higher housing prices are to blame for the swell in inflation in December, continuing a months-long trend. Shelter costs contributed over half of the increase in the CPI. Food prices also rose, but all other prices only bumped up slightly. Inflation is still on a relatively steady path of deceleration from its 40-year-high of 9.1% in 2022.

Senate HELP Committee:  Last Monday, Chairman Bernie Sanders (I-Vt.) and several Democratic colleagues on Monday sent letters to the four biggest manufacturers of inhalers: AstraZeneca, Boehringer Ingelheim, GlaxoSmithKline and Teva requesting information about their pricing strategies.

Sanders in a statement said that GSK charges $319 for Advair HFA in the United States and just $26 in the U.K. Boehringer’s Combivent Respimat is $489 here but only $7 in France.

The senators say 25 million Americans with asthma and 16 million with chronic obstructive pulmonary disease use inhalers, and that high prices have forced some patients to skip or ration doses.

AI Coalition announces NFP venture: A group of academic hospitals and technology companies will form a new nonprofit venture to oversee a nationwide network of laboratories to test artificial intelligence tools designed for use in health care.

The nonprofit, begun in December 2022, will establish the laboratories at Mayo Clinic, Duke, Stanford, and other major universities and institutions around the country. Its goal is to create a system to certify and register AI models, and publish details about their performance before they are widely adopted. The labs are expected to begin operating within the next few months.

The nonprofit’s launch, unfolding amid rapid innovation and investment in AI, is an attempt at industry self-policing as increasingly powerful — and opaque — algorithmic models begin making their way into medical settings.

Casey Ross “Backed by Mayo Clinic and Microsoft, a nonprofit forms to test AI tools used in health care” StatNews January 8, 2024

NAACCOS to CMS: recommendations to CMS re: ACOs: “As CMS begins considering changes for the CY 2025 Medicare Physician Fee Schedule, CMS must consider approaches that will maintain and expand existing ACOs. While new growth is also essential, we are concerned that the current environment could lead to a retreat from the model… To ensure that ACOs remain a fiscally strong option for providers and patients, CMS should:

  • Correct the Benchmark Ratchet.
  • Leverage its authority to create strong nonfinancial incentives.
  • Improve Quality Requirements.
  • Improve Beneficiary Notifications.
  • Support next generation innovation.
  • Offer Primary Care Hybrid Payment.
  • Offer “Enhanced Plus”

Letter to Honorable Chiquita Brooks-LaSure Administrator Centers for Medicare and Medicaid Services re: proposed changes to the ACOs “NAACOS Recommends Improvements to the Medicare Shared Savings Program January 9, 2024”

CDC: Transportation as a health indicator: Per the CDC,

  • In 2022, 5.7% of adults lacked reliable transportation for daily living in the past 12 months. Women (6.1%) were more likely than men (5.3%) to lack reliable transportation.
  • The percentage of adults who lacked reliable transportation was lowest among Asian non-Hispanic adults (3.6%) compared with other race and Hispanic-origin groups.
  • Lack of reliable transportation decreased with increasing education level and family income.
  • Adults living in the West North Central region of the United States (7.5%) were more likely to lack reliable transportation than the national average (5.7%), while adults in New England (4.1%) were less likely.

Products – Data Briefs – Number 490 – January 2024 (

Labor Department (January 11, 2024): the Consumer Price Index rose 0.3% in December vs. .0.1% increase in November. The overall CPI was up 3.4% over the last 12 months, compared to 3.1% in November. An underlying gauge of inflation, core CPI — which excludes energy and food costs — rose 0.3%, matching the prior month’s pace. In the year through December, it’s up 3.9% — down from the 4% rise in November.

FTC: Online protections for children: The Children’s Online Privacy Protection Act (COPPA) gives parents control over what information websites can collect from their kids and how they use and share that information. The FTC now proposes changes that would enhance those protections and aim to ensure that parents — not companies — are in charge. For instance, one suggested update would require targeting advertising to be off by default. Another would prevent companies from nudging kids to stay online unless parents consent to the companies’ use of nudges.

Children’s online privacy: Tell the FTC | Consumer Advice January 11, 2024

FDA: No link found between GLP-1 drugs and suicidal ideation: Last Thursday, the FDA determined that there was no clear link between GLP-1 drugs (Novo Nordisk’s Ozempic and Wegovy and Eli Lilly’s Mounjaro and Zepbound) to suicidal thoughts and actions. The FDA said it can’t definitively rule out that a small risk may exist, though, and so it’s continuing to investigate these reports and will share final conclusions. The agency has also been reviewing reports of hair loss and aspiration, in which food or liquid enter the airway, among people using the treatments. The European Medicines Agency has also been studying instances of suicidal thoughts. It said last month it hasn’t found a link to the drugs, but will continue to investigate and talk to drugmakers.

Elaine Chen “GLP-1 drugs not linked to suicidal thoughts in FDA’s early review” StatNews January 11, 2024

Enforcement: drug prices control in court: “Pharmaceutical companies’ efforts to scuttle President Biden’s signature health care achievement, empowering Medicare to negotiate prescription drug prices, will soon face their first big tests…. The first round of readouts could come in the cases brought by Merck, Bristol Myers Squibb, Johnson & Johnson, and AstraZeneca. Those companies have asked for summary judgments, which means the government and pharmaceutical manufacturers agree the facts of the case aren’t in dispute, and they are asking the judge to rule on the legal arguments without a full trial. Generally, those decisions come faster. In all four, both sides have finished their first stage of filings, meaning decisions could come any day…Perhaps more consequential than those four cases, however, is the suit filed by the U.S. Chamber of Commerce. A decision in that case could apply to more than one company, as the plaintiff is a trade group, but the two sides have not yet finished the first round of briefing. The deadline for that is Jan. 31…”

Rachel Cohrs “Courts will decide the future of Medicare’s power to negotiate drug prices within months” StatNews January 11, 2024

FDA: change in classification of marijuana: “In newly disclosed documents, federal researchers find that cannabis may have medical uses and is less likely to cause harm than drugs like heroin.

Marijuana is neither as risky nor as prone to abuse as other tightly controlled substances and has potential medical benefits, and therefore should be removed from the nation’s most restrictive category of drugs, federal scientists have concluded.

Background: Since 1970, marijuana has been considered a so-called Schedule I drug, a category that also includes heroin. Schedule I drugs have no medical use and a high potential for abuse, and they carry severe criminal penalties under federal trafficking laws…. The documents show that scientists at the Food and Drug Administration and the National Institute on Drug Abuse have recommended that the Drug Enforcement Administration make marijuana a Schedule III drug, alongside the likes of ketamine and testosterone, which are available by prescription.”

Federal Scientists Recommend Easing Restrictions on Marijuana – The New York Times ( January 12, 2024

Study: Effectiveness of CMS’ CPC+ model: Researchers analyzed the association between CMS’ Comprehensive Primary Care Plus (CPC+) model and spending, utilization and quality of care. Results:

“CPC+ was associated with no discernible changes in the total expenditures and with increases in expenditures including enhanced payments. Among secondary outcomes, CPC+ was associated with decreases in emergency department visits starting in year 1, and in acute hospitalizations and acute inpatient expenditures in later years. Associations were more favorable for practices also participating in the Medicare Shared Savings Program and independent practices. CPC+ was not associated with meaningful changes in claims-based quality-of-care measures….

Positive interaction between CPC+ and the Shared Savings Program suggests transformation models might be more successful when provider cost-reduction incentives are aligned across specialties. “

Network December 15, 2023

OIG: The Office of Inspector General (OIG) started 2024 with a flurry of activity by issuing four new Advisory Opinions on January 3, 2024. In one of these Advisory Opinions, the OIG approved a vendor’s referral program that offered gift cards to physician practices that are existing customers in exchange for recommending the vendor’s services to prospective physician customers. In doing so, the OIG adopts a position that directly contradicts the position that the Department of Justice (DOJ) espoused in multiple False Claims Act (FCA) settlements involving similar referral programs offered by electronic health record (EHR) vendors in which the DOJ alleged these programs violated the federal Anti-Kickback Statute (AKS).

Office of Inspector General Approves Vendor Gift Cards Offer (