In Healthcare, Near-Sightedness is “Normalcy”

Like everyone else, I am thankful the election end is in sight and a degree of “normalcy” might return. By next week, we should know who will sit in the White House, the 119^th Congress and 11 new occupants of Governors’ offices. But a return to pre-election normalcy in politics is a mixed blessing.

“Normalcy” in our political system means willful acceptance that our society is hopelessly divided by income, education, ethnic and political views. It’s benign acceptance of a 2-party system, 3-branches of government (Executive, Legislative, Judicial) and federalism that imposes limits on federal power vis a vis the Constitution.

Our political system’ normalcy counts success by tribal warfare and election wins. Normalcy is about issues de jour prioritized by each tribe, not longer-term concern for the greater good in our country. Normalcy in our political system is near-sightedness—winning the next election and controlling public funds.

Comparatively, “normalcy” in U.S. healthcare is also tribal: while the majority of U.S. adults believe the status quo is not working well but recognize its importance, each tribe has a different take on its future. The majority of the public think price transparency, limits on consolidation, attention to affordability and equitable access are needed but the major tribes—hospitals, insurers, drug companies, insurers, device-makers—disagree on how changes should be made. And each is focused on short-term issues of interest to their members with rare attention to longer-term issues impacting all.

Near-sightedness in healthcare is manifest in how executives are compensated, how partnerships are formed and how Boards are composed. Organizational success is defined by 1-access to private capital (debt, private equity, strategic investors), 2-sustainnable revenue-growth, 4- scalable costs, 4-opportunities for consolidation (the exit strategy of choice for most) and 5-quarterly earnings. A long-term view of the system’s future is rarely deliberated by boards save attention to AI or the emergence of Big Tech. A vision for an organization’s future based on long-term macro-trends and outside-in methodologies is rare: long-term preparedness is “appreciated” but near-term performance is where attention is vested.

It pays to be near-sighted in healthcare: our complex regulatory processes keep unwelcome change at bay and our archaic workforce rules assure change resistance. …until it doesn’t. Industries like higher education, banking and retailing have experienced transformational changes that take advantage of new technologies and consumer appetite for alternatives that are new and better. The organizations winning in this environment balance near-sightedness with market attentiveness and vision.

Looking ahead, I have no idea who the winners and losers will be in this election cycle. I know, for sure, that…

• The final result will not be known tomorrow and losers will challenge the results.
• Short-term threats to the healthcare status quo will be settled quickly. First up: Congress will set aside Medicare pay cuts to physicians (2.8%) scheduled to take effect in January for the 5^th consecutive year. And “temporary” solutions to extend marketplace insurance subsidies, facilitate state supervision of medication abortion services and telehealth access will follow quickly.
• Think tanks will be busy producing white papers on policy changes supported by their funding sponsors.
• And trade associations will produce their playbooks prioritizing legislative priorities and relationship opportunities with state and federal officials for their lobbyists.

Near-term issues for each tribe will get attention: the same is true in healthcare. Discussion about and preparation for healthcare’s longer-term future is a rarity in most healthcare C suites and Boardrooms. Consider these possibilities:

• Medicare Advantage will be the primary payer for senior health: federal regulators will tighten coverage, network adequacy, premiums and cost sharing with enrollees to private insurers reducing enrollee choices and insurer profits.
• To address social determinants of health, equitable access and comprehensive population health needs, regional primary care, preventive and public health programs will be fully integrated.
• Large, organized groups/networks of physicians will be the preferred “hubs” for health services in most markets.
• Interoperability will be fully implemented.
• Physicians will unionize to assert their clinical autonomy and advance their economic interests.
• The federal government (and some states) will limit tax exemptions for profitable not-for-profit health systems.
• The prescription drug patent system will be modernized to expedite time-to-market innovations and price-value determinations.
• The health insurance market will focus on individual (not group) coverage.
• Congress/states will impose price controls on prescription drugs and hospital services.
• Employers will significantly alter their employee benefits programs to reduce their costs and shift accountability to their employees. Many will exit altogether.
• Regional integrated health systems that provide retail, hospital, physician, public health and health insurance services will be the dominant source of services.
• Alternative-payment models used by Medicare to contract with providers will be completely overhauled.
• Consumers will own and control their own medical records.
• Consolidation premised on community benefits, consumer choices and lower costs will be challenged aggressively and reparation pursued in court actions.
• Voters will pass Medicare for All legislation.

And many others.

A process for defining of the future of the U.S. health system and a bipartisan commitment by hospitals, physicians, drug companies, insurers and employers to its implementation are needed–that’s the point. Near-sightedness in our political system and in our health, system is harmful to the greater good of our society and to the voters, citizens, patients, and beneficiaries all pledge to serve.

As respected healthcare marketer David Jarrard wrote in his blog post yesterday “As the aggravated disunity of this political season rises and falls, healthcare can be a unique convener that embraces people across the political divides, real or imagined. Invite good-minded people to the common ground of healthcare to work together for the common good that healthcare must be.”

Thinking and planning for healthcare’s long-term future is not a luxury: it’s an urgent necessity. It’s also not “normal” in our political and healthcare systems.

Paul

 

Resources

“Common Ground, Common Good” David Jarrard https://email.jarrardinc.com/common-ground-common-good

 

Sections on today’s Report

• Quotables
• Alternative Payment Models
• Corporate News
• Courts
• Economy
• Employers
• Hospitals
• Insurers
• Investors
• Physicians
• Prescription Drugs
• Public Health
• Regulation
• Workforce

 

Quotables

Re: Public opinion and campaign 2024: “By the time the polls close on Tuesday, more than a hundred and fifty million Americans will have voted. Billions of dollars have been spent trying to convince them about whether Donald Trump or Kamala Harris is the superior candidate, and yet, despite feverish efforts, the latest polls aren’t significantly different from those conducted when Harris first joined the race. According to the Times’ national polling average, the candidates have never been more than four percentage points apart. It’s all a testament, among other things, to how difficult it is to change people’s minds.”

Why Facts don’t Change our Minds New Yorker November 3, 2024 https://link.newyorker.com/view/5be1980cf543e648d1026aa9m7r7k.34cn/5eab0888

Re: completeness in ACO disclosures: “Hidden information is bad for the public and bad for public policy. The easiest solution, of course, is comprehensive, voluntary disclosure. Health insurers, which regularly extol their pro-consumer orientation, know how each local MA plan is performing; they should share that information with members. The same rule for full disclosure of everything a consumer would want to know applies to those who control ACOs.

Absent a sudden spurt of voluntarism, however, public protection demands legislation or regulation. The CMS National Quality Strategy promises to “engage individuals and communities to become partners in their care.” Questionable or absent information about care quality and financial incentives is no way to treat a partner.”

Medicare’s hidden information hurts people, policy November 3, 2024 https://link.newyorker.com/view/5be1980cf543e648d1026aa9m7r7k.34cn/5eab0888

Re: Careerism and corporate ladder climbing: “As the fever of careerism breaks, they can no longer rely on the shiny promise of a promotion to get people to devote themselves to roles that are boring, or toxic, or unfulfilling, or badly managed. But if they make sure that the jobs they offer are enjoyable and meaningful in their own right, employees are prepared to give it their all. The carrot of corporate climbing may be vanishing. But that doesn’t have to spell the end of American industriousness.”

Stepping off the corporate ladder Business Insider November 3, 2024 https://www.businessinsider.com/careerist-corporate-ladder-decline-promotions-work-ethic-american-dream-2024-

Re: physician-patient communication: “In a recently published study I found that patients are right to worry: Doctors do judge patients negatively based on the accuracy of what they say.

My colleagues and I surveyed more than 200 primary care doctors, giving them hypothetical questions about patients who shared beliefs of varying correctness. We found that doctors viewed patients more negatively the more incorrect their beliefs…

Instead of only encouraging patients to be more candid with their doctors, which my collaborators and I show may come at a cost, doctors need to change their mindset to focus on empathy and education. That way, patients can share freely without being penalized for it.

Resisting the impulse to judge is hard, but empathy can counteract it. Empathy is also a skill that can be taught, as educational interventions with doctors have shown…

Enabling patients to share their beliefs freely without judgment could help them avoid self-diagnosing with Dr. Google…

Doctors must remember that patients are seeking out their professional opinion and should not hold patients to a professional standard of knowledge…

The doctor-patient relationship is an asymmetrical one from the start, especially when a fully clothed doctor walks into a room where a patient is vulnerably exposed in just a gown. Patients’ experiences shape how they interpret what doctors tell them, but it is not enough to tell patients to be forthcoming. Doctors need to recognize that ultimately patients are not experts and that to err is human — for patients too.”

Doctors can be awfully judgmental about patients’ beliefs | STAT

Re: site neutral payments: “The cost of a procedure in a physician office is often doubled if performed in a hospital outpatient department (HOPD), due to the facility fee billed by the hospital. Under Traditional Medicare, patients and taxpayers share the facility fee cost burden (patients typically pay 20% cost-sharing for outpatient services). These cost differentials drive up costs for patients and also increase incentives for provider consolidation, driving up hospital ownership of non-hospital care settings such as physician offices. Consolidation reduces patient choice among providers and drives up overall health care costs for patients in highly consolidated markets. Further, evidence suggests that the payment differences between these settings are not based on differences in care quality, and often create distorted incentives for providers to bill services in the highest-cost setting. The Centers for Medicare & Medicaid Services, the Government Accountability Office (GAO), and the Medicare Payment Advisory Committee (MedPAC) have all found that for many low-acuity procedures, these different reimbursement rates do not reflect real differences in the quality of a procedure or the provider’s cost of performing a procedure.”

LOWERING HEALTH COSTS FOR SENIORS FRAMEWORK https://www.cassidy.senate.gov/wp-content/uploads/2024/10/Site-Neutral-Policy-Framework-Final

Re: Gen Z workforce: “Gen Z workers are expected to outnumber baby boomers in the U.S. workforce this year. If only their bosses could understand them.

Companies find their youngest employees the most difficult to work with, surveys show. Now executives are making efforts to engage them more. They are arranging mentorship for employees who entered the workforce remotely during the pandemic; they are giving guidance on how to communicate and when to keep their thoughts to themselves; and they are offering new kinds of perks, like an on-site therapist.

Each new generation coming up in the workforce tends to confuse corporate management, at least initially. Members of Gen Z—generally defined as born between 1997 and 2012—are no exception.”

Young People Are Taking Over the Workplace, and That’s a Problem for Bosses – WSJ

Re: Affordable Care Act: “Healthcare is suddenly front and center in the final sprint to the presidential election, and the outcome will shape the Affordable Care Act (ACA) and the coverage it gives to more than 40 million people. .

Besides reproductive rights, healthcare for most of the campaign has been an in-the-shadows issue. However, recent comments from former President Donald Trump and his running mate, Sen. JD Vance (R-Ohio), about possible changes to the ACA have opened Republicans up to heavier scrutiny…

The two parties’ tickets hold starkly different goals for the ACA, a sweeping law passed under former President Barack Obama that set minimum benefit standards, made more people eligible for Medicaid, and ensured consumers with preexisting health conditions couldn’t be denied health coverage…

In the end, the ability of either candidate to significantly grow or change the ACA rests with Congress. Polls suggest Republicans are in a good position to take control of the Senate , with the outcome in the House more up in the air. The margins, however, will likely be tight. In any case, many initiatives, such as expanding or restricting short-term health plans, also can be advanced with executive orders and regulations, as both Trump and Biden have done.”

Presidential Election Puts the Affordable Care Act Back in the Bull’s-Eye | MedPage Today

Re: executive compensation: “The approaching EU Pay Transparency Directive will “upend” how companies manage and explain pay..

As pay transparency legislation becomes more prevalent, companies are facing increased pressure to adapt their practices, invest in pay equity strategies and prepare for complex pay transparency requirements…

For instance, with the upcoming EU Pay Transparency Directive, 47% of companies with major operations in Europe expressed concerns about how the legislation will affect their organization…

In a survey of 400 HR and total rewards leaders worldwide, only 1 in 8 organizations said they’re fully prepared for pay and career transparency alike. HR leaders identified inconsistent pay decisions as a core reason their organizations are unprepared, the report found. About 24% of respondents said they regularly stray from policies when making pay decisions. “

Companies express concerns about growing pay transparency pressures HR Dive October 31, 2024 https://www.hrdive.com/news/pay-transparency-pressures/731604/

Re: Change Healthcare cybersecurity breach: “In a breach affecting approximately 27.4% of the U.S. population, the recent cyberattack on Change Healthcare compromised the sensitive data of over 100 million individuals. This incident is among the largest healthcare data breaches in history, exposing a vast array of personal health information, financial data, and medical records. Initial findings reveal that the breach stemmed from vulnerabilities in Change Healthcare’s server security, leaving healthcare providers and patients vulnerable to significant risks such as identity theft and fraud.”

Jose Bolanos Cybersecurity News October 30, 2024 https://nimbuskey.substack.com/p/38b-change-healthcare-cyberattack

Re: Misinformation: “Rising vaccine hesitancy and rampant health misinformation may be facts of American life now, but former President Trump’s embrace of anti-vaccine activist Robert F. Kennedy Jr. means that conspiracy-laden skepticism of the health system may be about to have a powerful seat in the U.S. government.

Why it matters: Misinformation has become much more than an emerging trend; it has gained such a foothold in American life over the last four years that one of its top purveyors may become one of the country’s top decision-makers.

The pandemic ushered in widespread mistrust of vaccines, public health agencies and even scientific consensus — in some specific cases, fairly so. But outright misinformation’s foothold in government has generally been limited to a few congressional hearings, and that may be about to change.

The impact on research, the pharmaceutical regulatory process, government messaging and even the structure of U.S. health agencies could be enormous.”

1 big thing: The empowerment of health misinformation Axios Future of Health Care November 1, 2024https://www.axios.com/newsletters/axios-future-of-health-care

Re: Opinions about the economy: “Voters say that they are very focused on the economy as they head to the polls, yet surveys suggest that they feel relatively glum about its recent track record…

The lingering pessimism is also something of a puzzle. The job market has been chugging along, although more slowly, overall growth has been healthy and even inflation is more or less back to normal. Inflation data released on Thursday showed that prices have increased by a mild 2.1 percent over the past year.

Confidence has crept back up as inflation has cooled, but it remains much lower than it was the last time the economy looked as solid as it does today. That is true for both the University of Michigan’s confidence index and a separate measure produced by the Conference Board, an organization that conducts business and economic research.

There’s a simple reason that many people still feel iffy about the economy: sticker shock.

Although prices are now climbing much more slowly, costs for necessities like groceries and housing are much higher today than they were a few years ago. Many households still feel that burn when they go to pay the bills.”

Inflation Is Basically Back to Normal. Why Do Voters Still Feel Blah? New York Times October 31, 2024 https://www.nytimes.com/2024/10/31/business/economy/inflation-prices-economy.html

Re: trust in government: “Trust in government has plummeted over the past few decades. Part of the reason this happened is that Americans increasingly view their elected leaders as unethical. This is a fairly recent phenomenon. Twenty years ago, only about one in four Americans rated the honesty of members of Congress as low or very low. Most Americans rated the honesty of their elected officials as average, and one in five rated it as above average. Today, most Americans do not believe members of Congress are honest or ethical. In 2023, seventy percent of the public rated the honesty and integrity of congressmembers as low or very low. That’s a massive change and it has profound implications on the voting decisions Americans make. If elected officials are viewed as universally dishonest, then integrity is no longer a useful metric in assessing their worthiness for public office.”

What Trump Has Done to Our Politics American Enterprise Institute Daniel Cox October 31, 2024https://www.americansurveycenter.org/newsletter/what-trump-has-done-to-our-politics

Re: Big Tech: “For tech’s biggest players, this earnings season is starting to feel like a scene from the movie Jerry Maguire — and the “show me the money” demands aren’t working out any better than they did for Tom Cruise. Some analysts are even dubbing this the “show me the money” quarter, as Wall Street’s patience with massive AI spending begins to wear thin.

A tech stock selloff deepened Thursday as investors confronted the mounting costs of Silicon Valley’s artificial intelligence ambitions. Microsoft (MSFT) stock plunged 6% and Facebook parent Meta (META) tumbled 4% after the companies reported earnings late Wednesday. And in after-hours trading Thursday following their own earnings releases, Amazon (AMZN) stock dropped more than 3% and Apple (AAPL) fell 2% — despite all four companies reporting strong quarterly profits. (Some of the stocks were edging back up in pre-market trading on Friday.)

Almost two years after ChatGPT kicked off Silicon Valley’s AI gold rush, this week’s tech earnings revealed both the promise and the staggering price tag of the AI revolution. While companies reported significant gains from AI initiatives —Meta’s ad prices up 11%, Google Cloud revenue surging 35% to $11.4 billion, Amazon’s AWS growing 19% to $27.5 billion — their warnings about future spending sparked a broad market retreat.”

Wall Street to Big Tech: Show us the AI money Quartz November 1, 2024 https://qz.com/microsoft-meta-apple-amazon-google-ai-tech-stocks-

Re: Hospital dilemma in abortion debate: “Josseli Barnica grieved the news as she lay in a Houston hospital bed on Sept. 3, 2021: The sibling she’d dreamt of giving her daughter would not survive this pregnancy.

The fetus was on the verge of coming out, its head pressed against her dilated cervix; she was 17 weeks pregnant and a miscarriage was “in progress,” doctors noted in hospital records. At that point, they should have offered to speed up the delivery or empty her uterus to stave off a deadly infection, more than a dozen medical experts told ProPublica.

But when Barnica’s husband rushed to her side from his job on a construction site, she relayed what she said the medical team had told her: “They had to wait until there was no heartbeat,” he told ProPublica in Spanish. “It would be a crime to give her an abortion.”

For 40 hours, the anguished 28-year-old mother prayed for doctors to help her get home to her daughter; all the while, her uterus remained exposed to bacteria. Three days after she delivered, Barnica died of an infection….”

A Texas Woman Died After the Hospital Said It Would be a “Crime” to Intervene in Her Miscarriage ProPublica https://www.propublica.org/article/josseli-barnica-death-miscarriage-texas-abortion-ban?

 

Alternative payment models

CMS’ MSSP ACO report for 2023: Highlights:

• The Medicare Shared Savings Program (MSSP) accountable care organizations program generated $5.2 billion in savings in 2023
• 453 ACOs reconciled results: 69% had Performance payments of $3.08 billion vs. $2.5 billion in 2022.
• Medicare saved $2.1 billion, the largest yearly savings in program history, in 2023

Primary care provider-led ACOs generated higher net per capita savings than those with fewer primary care clinicians. As of January 2024, there were 480 Shared Savings Program ACOs–up 5.3% from the 456 participants at the start of 2023 but below 2020 peak at 517.

Performance Year Financial and Quality Results CMS October 29, 2024 https://data.cms.gov/medicare-shared-savings-program/performance-year-financial-and-quality-results

 

Corporate News

Starbucks, Boeing, Nike: “As the two CEOs addressed investors and employees in recent days, they used some of the same language and emphasized familiar concerns.

“First, we need a fundamental culture change in the company,” Ortberg wrote to Boeing staff on Wednesday. A day earlier, as Starbucks suspended its financial guidance and disclosed weak results for its fourth quarter, Niccol said in a video message: “We need to fundamentally change our recent strategy… Both executives have said solutions will come by focusing on the front line—whether in an aircraft plant or behind an espresso machine.”

At Boeing and Starbucks, Different Problems but Similar CEO Messages – WSJ

Novo Nordisk and Eli Lilly are asking the FDA to block compounders from making copies of their blockbuster weight-loss drugs, arguing that such versions could be unsafe. It also may mean tighter margins for telehealth companies like Ro and Hims & Hers, although both also sell branded versions of GLP-1 drugs.

Axios Vitals 10/29/24

Oracle to launch new EHR system: “Oracle is releasing a new AI-powered EHR system.  Oracle’s new EHR system will come with cloud and AI features that make it simpler to use and set up, according to the company. The system has no menus or drop-down screens — clinicians can find the information they need just by speaking. Oracle said it hopes this will reduce the time clinicians spend looking through records, freeing them up to focus more on patient care. According to Ms. Verma, Oracle has been developing this new EHR since acquiring Cerner, but it was not created on Cerner’s original platform. As a result, current Cerner users will need to decide if they want to switch over to this system. Oracle acquired Cerner for $28.4 billion in June 2023. Last year, Cerner contributed $5.9 billion to Oracle’s total revenue. “

Oracle to launch new EHR system

Third Q 2024 Big Tech earnings releases last week:” The trillion-dollar giants of Big Tech reported earnings this week, beating estimates and committing billions to AI. The big winners: Those able to signal a strong return on that investment

• Alphabet: Google’s cloud business benefited from AI adoption, posting a 35% year-over-year increase in revenues, while CEO Sundar Pichai said more than a quarter of the company’s new code is now created by AI. The core advertising business held strong despite growing competition from the likes of OpenAI, Reddit, and more.
• Amazon: The retail and cloud giant smashed expectations, sending the stock soaringon Friday. It also benefited from AI adoption, as cloud unit AWS posted a 19% increase in revenues. A strong performance in retail, where execs said shoppers were buying cheaper items at higher volumes, and a sharp focus on cost control had investors cheering.

 

• Apple: Apple beat revenue and profit estimatesoverall, but a year-over-year decline in revenue in China left investors underwhelmed. All eyes are now on demand for the iPhone 16 and whether new Apple Intelligence features help juice sales.
• Meta: Meta beat estimates, though user growth came in below expectations. Mark Zuckerberg promised to keep spending on AIand flexed Meta’s huge cluster of Nvidia H100 chips.
• Microsoft: Microsoft also beat estimates, but concerns around capacity constraints in AI and the return on its investments in the spaceled the tech giant’s stock lower across the week.

All about AI, all the time Business Insider November 3, 2024 https://l.businessinsider.com

 

Courts

Notable health decisions on Supreme Court’s 2024-2025 docket:

• Gender Affirming Healthcare: in United States v. Skrmetti , the Supreme Court will review Tennessee’s law restricting gender-affirming treatments for minors and transgender youth, and determine whether the law violates the 14th Amendment’s guarantee of equal protection.
• Vaping and E-Cigarettes: In FDA v. Wages and White Lion Investments , the Supreme Court will review whether the FDA acted arbitrarily in denying market authorization for flavored e-cigarettes, like “Jimmy the Juice Man Peachy Strawberry” and “Suicide Bunny Mother’s Milk and Cookies.” The FDA determined that the companies failed to demonstrate that the potential benefit of flavored products for adult smokers outweighed the risk to youth. The 5th Circuit  held that the FDA did not properly consider the manufacturers’ marketing plans to prevent underage access and abuse.
• Firearm Safety: In Garland v. VanDerStok , the justices will examine whether ATF overstepped its bounds in regulating “ghost guns” — kits purchased online and assembled at home without serial numbers to trace their possession and use. During oral arguments on October 8, most justices appeared inclined to uphold ATF’s regulation, possibly because the ATF was not banning a firearm but simply requiring its licensure.
• DSH Reimbursement Calculation:” At the heart of Advocate Christ Medical Center v. Becerra is a question of how the DSH adjustment is calculated. After years of disputes between hospital systems and HHS on reimbursement amounts, the court has decided to hear the case. Hospitals argue the existing formula does not adequately reflect the financial strain in serving vulnerable populations. Specifically, they contend the DSH formula should include all Medicare-eligible patients enrolled in the Supplemental Security Income program. The current DSH formula only includes patients who receive a cash payment from supplemental income programs  during their hospital stay.”
• Environmental Health (Public Health): “The Environmental Protection Agency’s (EPA) power to issue rules and reduce pollution will once again come under judicial scrutiny. This term, in San Francisco v. EPA, the justices will decide whether the limitations in the permit issued to San Francisco for discharge of wastewater into the San Francisco Bay are too vague. In heavy rains, the aging sewer system can overflow and discharge pollutants into the Pacific Ocean.”

Public health is on the chopping block once again Lawrence O. Gostin, JD, LLD, and Adi Radhakrishnan, JD October 28, 2024 A Look at the Supreme Court’s Upcoming Term | MedPage Today

 

Economy

Fed: interest rate cut likelihood: “On Thursday, the Fed’s policymakers, led by Chair Jerome Powell, are on track to cut their benchmark rate by a quarter-point, to about 4.6%, after having implemented a half-point reduction in September. Economists expect another quarter-point rate cut in December and possibly additional such moves next year. Over time, rate cuts tend to lower the costs of borrowing for consumers and businesses.

The Fed is reducing its rate for a different reason than it usually does: It often cuts rates to boost a sluggish economy and a weak job market by encouraging more borrowing and spending. But the economy is growing briskly, and the unemployment rate is a low 4.1%, the government reported Friday, even with hurricanes and a strike at Boeing having sharply depressed net job growth last month.”

Federal Reserve is set to cut rates again while facing a hazy post-election outlook

Last week’s government  economicreports:

Tuesday: Bureau of Labor Statistics’ Jobs Report: There were 7.4 million unfilled jobs on the last day of September, a drop from August’s revised tally of 7.86 million openings. The largest drop-offs in openings were in industries that have driven much of the job growth in recent years: health care and social assistance, and government. At the end of September, the total number of hires rose to 5.56 million from 5.44 million and layoffs jumped to 1.83 million from 1.67 million. The “quits rate,” — a gauge of employee confidence as well as an indicator of future wage growth– dropped to 1.9%. Outside of 2020, that’s the lowest quits rate since the summer of 2015.

 

Wednesday: Commerce Department: The U.S. economy expanded at an 2.8% annual rate in the July-through-September quarter propelled forward by robust consumer spending, which rose at a strong 3.7% annual rate in the third quarter, up nearly a full point from the prior quarter. Exports also surged, rising at an 8.9% annual rate —well above the 1% in the second quarter. Federal government spending also picked up, rising at a 9.7% annualized rate (compared to the 4.3% in the second quarter). Higher imports of goods suggest resilient demand, but they act as a drag on economic growth in GDP calculations. Housing was also a drag: activity fell at a 5.1% annual rate versus the 2.8% drop in the second quarter

 

Thursday, Employment Cost Index Summary (BLS):

• Compensation costs for civilian workers increased 0.8%, seasonally adjusted, for the 3-month period ending in September 2024.Wages and salaries increased 0.8% and benefit costs increased 0.8% from June 2024.
• Compensation costs for civilian workers increased 3.9% for the 12-month period ending in September 2024 and increased 4.3% in September 2023. Wages and salaries increased 3.9% for the 12-month period ending in September 2024 and increased 4.6% for the 12-month period ending in September 2023.
• Benefit costs increased 3.7% over the year and increased 4.1% for the 12-month period ending in September 2023. Compensation costs for private industry workers increased 3.6% over the year. In September 2023, the increase was 4.3%.
• Wages and salaries increased 3.8% for the 12-month period ending in September 2024 and increased 4.5% in September 2023. The cost of benefits increased 3.3% for the 12-month period ending in September 2024 and increased 3.9% in September 2023.

Friday: Labor Department: The U.S. economy added 12,000 jobs in October vs, 110,000 economists expected. Disruptions from hurricanes and labor strikes (-46,000 jobs) limited job creation, but the unemployment rate held at 4.1%. The Labor Department said employment in September was revised to 223,000, roughly 31,000 fewer jobs than initially estimated. Jobs growth in August was revised down by 81,000 to 78,000. Average hourly earnings rose 0.4% over the month, or 4% for the past 12 months.  Total nonfarm payroll employment was essentially unchanged in October (+12,000), following an average monthly gain of 194,000 over the prior 12 months. In October, employment continued to trend up in health care and government. Temporary help services lost jobs. Employment declined in manufacturing due to strike activity. Health care added 52,000 jobs in October, in line with the average monthly gain of 58,000 over the prior 12 months. Over the month, employment rose in ambulatory health care services (+36,000) and nursing and residential care facilities (+9,000). Employment in government continued its upward trend in October (+40,000), similar to the average monthly gain of 43,000 over the prior 12 months. Over the month, employment continued to trend up in state government (+18,000).

 

Employers

Survey: Employers fear rising health costs could force trade-offs with wages, salaries: Per the National Alliance of Healthcare Purchaser Coalitions survey of 188 employers:

• 74% said they feel healthcare costs drive trade-offs for wage or salary increases, with 38% saying they “strongly agree” that this is the case.
• 74% said they believe that rising costs will force them to shift more expenses to workers.
• 99% said they believe drug prices in particular are a “significant threat” to affordability.
• 84% said the same about high-cost claims, and 79% said that they believe hospital prices pose a “significant threat.”
• The average premium in fully insured plans was $8,435 for individuals and $23,968 for family coverage. About a third (34%) of those surveyed said this was higher than average, while 33% said these costs were on par with their average.
• 52% of those surveyed said they are considering a switch in which pharmacy benefit manager they contract with in the next one to three years. 72% were clients of one of the industry’s “big three” companies: CVS Caremark, Express Scripts or Optum Rx.
• 55% said they’re looking to reduce the risk of claims for the neonatal ICU, taking steps like rolling out new fertility benefits or managed maternity care options.

Pulse of the Purchaser 2024 Survey Results October 25, 2024 Home | National Alliance of Healthcare Purchaser Coalitions

 

Hospitals

KLAS: Hospital EHR competition: “Small acute care organizations face unique challenges—such as financial constraints and limited internal resources—that impact or even delay their EHR purchase decisions. As a result, according to KLAS’ 2024 acute care EHR market share report (which tracks all hospital EHR wins and losses), 42% of the small independent hospitals (1–200 beds) still use legacy systems. … between 2021 and 2023, KLAS validated go-forward EHR decisions made by 184 such hospitals (almost 14% of the market) Key findings:

• Future Buying Energy Coalescing around Epic Community Connect, MEDITECH Expanse & Oracle Health
• Majority of Oracle Health & TruBridge* Respondents Would Not Buy Solution Again
• MEDITECH Highlighted for Few Unanticipated Costs; Epic Customers Find Value in Broad Functionality
• Though Critical to Reducing Clinician Burnout, Initial & Ongoing Training Not Prioritized by Vendors or Provider Organizations”

Context: From KLAS 2024 report published May 16, 2024: “Epic continues to dominate market share; they now cover over half of all acute care multispecialty beds in the US. Epic’s wins mostly come from organizations wanting to achieve better integration, consolidate systems, and benefit from the strong customer experience offered by the vendor.

Oracle Health saw their largest net hospital loss on record due to multiple large multispecialty organizations choosing to leave. Additionally, the general lack of decisions by small organizations greatly impacted Oracle Health, whose primary source of market share wins since 2016 has been small standalone hospitals. “

Small-Hospital EHR (1–200 Beds) 2024 | KLAS Report

US Acute Care EHR Market Share in 2024 – Klas Blog

New rule: weekly reporting of respiratory illness:  Friday, CMS’ rule requiring hospitals to report admission information related to respiratory illnesses, including capacity, to the CDC took effect. Under the new rule, the majority of hospitals are required to submit day-by-day data for the prior week. Failing to report the required information may result in the termination of a hospital’s Medicare and Medicaid participation.

Updated Hospital Reporting Requirements for Respiratory Viruses | NCIRD | CDC

 

Insurance

JAMA analysis: MA vs. original Medicare affordability: “The affordability of health care services has become a major issue for insured Americans because of limitations on coverage. Despite their guaranteed public coverage, people with Medicare also face affordability concerns. A full 19% of Medicare beneficiaries are considered underinsured, meaning they spend at least 10% of their income on health care expenses other than premiums. Indeed, of the apparent reasons for the popularity of Medicare Advantage (MA) plans, which now enroll more than half of Medicare beneficiaries, is that they promise to make care more affordable for their enrollees. With the majority of beneficiaries enrolled in MA today being individuals with a low income, the affordability of care in MA is even more important. However, several recent surveys raise questions about whether MA is succeeding in this regard

MA plans assist with the affordability of care through several mechanisms. Unlike traditional Medicare (TM), MA plans must cap out-of-pocket expenses under Parts A and B of Medicare. They must also use their federal rebates to reduce enrollees’ expenses, either directly through lower premiums and cost-sharing or indirectly by providing supplemental benefits that could reduce the costs of dental, vision, and other services that TM does not cover. Together with extra payments for quality, favorable selection, and intensive diagnostic coding, these additional payments result in MA plans costing the federal government approximately $2500 more per beneficiary in 2024 than what it would have cost to cover similar beneficiaries in TM.

However, multiple surveys of Medicare beneficiaries indicate that the proportion of beneficiaries who find their care affordable is no greater in MA than in TM….”

How Affordable Is Medicare Advantage? | Health Care Economics, Insurance, Payment | JAMA | JAMA Network August 28, 2024

Study: Use of Hearing Services in Medicare, MA: Researchers analyzed data for 2019-2021 for adult beneficiaries (aged ≥65 years) into 5 mutually exclusive categories based on presence of additional coverage: TM only, Medicaid, employer sponsored, MA, and Medigap. Use of hearing services (routine hearing examinations, hearing aid fittings, purchase of hearing aids) within the past year was derived from the Hearing Utilization Events survey. Findings:

“Compared with beneficiaries with only TM (10.9%), MA beneficiaries (28.6%) had similar estimated adjusted percentages of hearing service use, including routine hearing tests (TM, 4.2% [95% CI, 3.3%-5.1%]; MA, 5.3% [95% CI, 4.8%-5.9%]), hearing aid fittings (TM, 3.2% [95% CI, 2.4%-4.0%]; MA, 3.6% [95% CI, 3.1%-4.1%]), and hearing aid purchases (TM, 2.1% [95% CI, 1.5%-2.7%]; MA, 2.4% [95% CI, 2.0%-2.9%]) (Table 2). The sensitivity analysis limited to beneficiaries with self-reported hearing loss or hearing aid use had greater use of routine hearing examinations in MA (TM, 7.1% [95% CI, 5.5%-8.7%]; MA, 9.9% [8.9%-10.9%]).”

In this cross-sectional study, Medicare beneficiaries with MA plans and TM used hearing services at similar rates overall, but MA beneficiaries with hearing loss or hearing aid use were more likely to receive hearing examinations. Further research is needed to better understand the use of hearing services in MA and other categories of Medicare coverage.”

Use of Hearing Services in Traditional Medicare and Medicare Advantage | Health Policy | JAMA Health Forum | JAMA Network October 25, 2024

Medicaid managed care: “State officials are skeptical of Medicaid managed care company claims that payment rates are falling short this year.”

25 of 41 states surveyed increased Medicaid capitation payments for fiscal 2024 and fiscal 2025 to reflect rising acuity in the aftermath of mass eligibility redeterminations..

42 states have Medicaid managed care programs. By paying insurers flat monthly fees, states sought stable and predictable spending on Medicaid, one of the largest line items in their budgets.

Health insurance companies in California, Colorado, Michigan, Minnesota, New Mexico, New York, Pennsylvania and Virginia contend that CMS needs to intervene to ensure states are using up-to-date cost trend data to calculate rates.

Note: 74% of Medicaid enrollees are covered by private Medicaid managed care plans.

10 Things to Know About Medicaid Managed Care | KFF

Individual market reinsurance impact: “A record high 21.4 million individuals in the US now obtain health coverage through the Health Insurance Marketplaces created by the Patient Protection and Affordable Care Act (ACA).¹ The Marketplaces, such as healthcare.gov, are centralized platforms for people without employer-sponsored insurance, Medicaid, or Medicare to purchase individual private health plans. Premium subsidies are available only to Marketplace enrollees with sufficiently low incomes, which were increased with the passage of the American Rescue Plan in 2021…

We urge CMS and states proposing reinsurance programs to consider how reinsurance affects the roughly 20 million people that rely on subsidized individual market coverage in 2024…Substantial alterations of reinsurance programs or policies that offset subsidized enrollment losses, such as additional targeted subsidies or separation of on- and off-Marketplace risk pools, may be necessary to avoid net enrollment losses.”

The Unintended Consequences of Individual Market Reinsurance: JAMA Health Forum. 2024;5(10):e243188. doi:10.1001/jamahealthforum.2024.3188

 

Investors

Per Pitchbook’s US PE Breakdown for Q3 2024:”The value of PE exits for Q3 has grown by an estimated 50.5% year-over-year as private equity firms largely traded their most valuable assets first.  By the end of September, sponsor-to-sponsor exits surpassed the pre-pandemic average for the first time in nine quarters.”

PE sells best assets first in exit value revival – PitchBook

Blackstone direct lending fund: “Blackstone closed its first semi-liquid US direct lending fund Tuesday on $22 billion, as institutional demand for exposure to private credit persists. Blackstone Senior Direct Lending Fund surpassed the firm’s $10 billion target. The close includes the evergreen fund and its related vehicles and brings Blackstone’s direct lending AUM to over $123 billion. The fund’s size is indicative of sustained limited partner demand for exposure to direct lending, as private debt instruments continue to produce historically high returns. In 2023, direct lending funds returned 11.1% net-of-fees, trumping buyout fund returns and most other private market strategies.

H1 2024 Global Private Debt Report.

 

Physicians

Proposed legislation to “fix” physician pay cut: “Lawmakers from both sides of the aisle are trying to block proposed 2.93% cuts to Medicare physician payments next year.

The Medicare Patient Access and Practice Stabilization Act, introduced Tuesday by Reps. Dr. Greg Murphy (R-N.C.) and Jimmy Panetta (D-Calif.), would eliminate cuts included in the 2025 final rule and provide a small payment increase to account for inflation.”

Note: The pay cut is the fifth consecutive annual reduction to the “conversion factor” that sets the fees Medicare pays doctors. The conversion factor in 2025 will be 2.83% less than in 2024.

The Medicare physician fee schedule is calculated using three factors: Relative value units, which are based on the cost of procedures; geographic price indices, which adjust RVUs using local cost data; and the conversion factor, which translates those numbers into dollar amounts. The conversion factor has to be recalculated annually based on the previous year’s conversion factor, then adjusted to keep it budget-neutral.

Medicare Patient Access and Practice Stabilization Act October 29, 2024 https://murphy.house.gov/media/press-releases/murphy-introduces-bipartisan-legislation-protect-medicare-physicians

 

Polling

Study: Medicare enrollee affordability: The National Institute on Aging study analyzed Medicare beneficiaries who would face financial precarity if exposed to the Medicare Part A hospital deductible ($1600). Findings:

• 45% of Medicare beneficiaries can’t afford 1 hospital stay
• Between 34.6% and 50.7% of Medicare beneficiaries with modest incomes (100-400% of the federal poverty level) may lack sufficient to cover a hospital stay out of pocket.

Risk for Financial Precarity from Hospitalization: Implications for Targeting Financial Assistance in Medicare Annals of Internal Medicine October 29, 2024 https://www.acpjournals.org/doi/10.7326/ANNALS-24-00787

Public Fear: Per the Chapman University’ Fear survey conducted online via the SSRS Opinion Panel of 1,008 adults conducted from March 21 to April 1, 2024.

1. Corrupt Government Officials (65.2%)
2. People I Love Becoming Seriously Ill (58.4%)
3. Cyberterrorism (58.3%)
4. People I Love Dying (57.8%)
5. Russia Using Nuclear Weapons (55.8%)
6. Not Having Enough Money for the Future (55.7%)
7. S. Becoming Involved in Another World War (55.0% — TIED)
8. North Korea Using Nuclear Weapons (55.0% — TIED)
9. Terrorist Attack (52.7%)
10. Biological Warfare (52.5%)

THE CHAPMAN UNIVERSITY SURVEY OF AMERICAN FEARS HAS BEEN CHANGING HOW SOCIOLOGISTS THINK ABOUT THE IMPACT OF FEARhttps://news.chapman.edu/2024/10/01/what-scares-you/#fear

 

Prescription Drugs

Study: Misleading Opioid evidence: “It is widely recognized that pharmaceutical marketing contributed to the ongoing US opioid epidemic, but less is understood about how the opioid industry used scientific evidence to generate product demand, shape opioid regulation, and change clinician behavior. In this qualitative study, we characterize select scientific articles used by industry to support safety and effectiveness claims and use a novel database, the Opioid Industry Documents Archive, to determine notable elements of industry and non-industry documents citing the scientific articles to advance each claim. We found that 15 scientific articles were collectively mentioned in 3666 documents supporting 5 common, inaccurate claims: opioids are effective for treatment of chronic, non-cancer pain; opioids are “rarely” addictive; “pseudo-addiction” is due to inadequate pain management; no opioid dose is too high; and screening tools can identify those at risk of developing addiction. The articles contributed to the eventual normalization of these claims by symbolically associating the claims with scientific evidence, building credibility, expanding and diversifying audiences and the parties asserting the claims, and obfuscating conflicts of interest. These findings have implications for regulators of industry products and corporate activity and can inform efforts to prevent similar public health crises.”

The opioid industry’s use of scientific evidence to advance claims about prescription opioid safety and effectiveness H Health Affairs Scholar, Volume 2, Issue 10, October 2024 https://doi.org/10.1093/haschl/qxae119

Study: Drug shortages: “Of 104 reports of supply chain issues with dozens of drugs, meaningful shortages were 40% less likely to occur in Canada than in the U.S. and the difference was largely attributed to the approach taken by the Canadian government to the problem.

Between 2017 and 2021, regulators in the U.S. and Canada received the same number of reports about actual or potential shortages for the same 96 medicines. Within a year, 49% of the 104 related reports received by the U.S. Food and Drug Administration were associated with a meaningful shortage, but only 34% of the reports for the same drugs filed with Health Canada reached that stage. Drug-related reports of supply chain issues were 40% less likely to result in meaningful drug shortages in Canada compared with the US. These findings highlight the need for international cooperation between countries to curb the effects of drug shortages and improve resiliency of the supply chain for drugs.”

Differences in Drug Shortages in the US and Canada JAMA October 31, 2024 https://jamanetwork.com/journals/jama/article-abstract

WSJ: Implication of Biosecure Act: “U.S. drugmakers and biotechs have come to rely on Chinese partners for manufacturing, research and ingredients. Now, some of them are looking for alternatives as geopolitical tensions rise.

From big pharmaceutical companies such as AstraZeneca to small biotechnology firms like Amicus Therapeutics of New Jersey, which is looking for a non-Chinese company to supply raw materials for its rare-disease treatment, the companies say it is time to reduce China risk.

Industry officials say one consequence could be slower drug rollouts and higher costs in the U.S. because the shift takes time and money…

One driver of the shift is the Biosecure Act, which passed the House in September with overwhelming bipartisan support. The legislation would bar companies that receive government funds or contracts from doing business with a list of Chinese companies of concern.

The prospects for the Biosecure Act in the Senate are uncertain this year, and the current version gives companies until 2032 to cut ties with the targeted Chinese companies. “

U.S. Drugmakers Are Breaking Up with Their Chinese Supply-Chain Partners Wall Street Journal November 1, 2024 https://www.wsj.com/health/pharma/china-manufacturing-astrazeneca-supply-chain

Re: drug repurposing in Covid 19: “The success of dexamethasone, tocilizumab, and baricitinib in providing clinicians with life-saving therapies for patients with moderate to severe COVID-19 highlights the incredible potential of drug repurposing. These drugs were not originally designed to combat a novel virus; rather, they were existing treatments with established safety profiles and mechanisms of action that were effectively leveraged for new uses. Often, the best solutions are already within our reach, waiting to be re-discovered.

The COVID-19 pandemic provided a powerful reminder of the effectiveness of repurposing, but its implications extend far beyond this single virus. There are thousands of diseases, affecting millions of people, for which no approved, effective treatments currently exist. This highlights the untapped potential of drugs that are already sitting on pharmacy shelves, and underscores the importance of unlocking new uses for existing medicines. We’ve already seen how AI can be a powerful partner in such efforts to analyze global biomedical knowledge and uncover previously unseen connections, and we’re working to harness this power  to identify the most promising drug repurposing opportunities.”

 

Public Health

NBC News: Water fluoridation: “Robert F. Kennedy Jr. said Saturday that a Trump administration would, on its first day, “advise all U.S​. water systems to remove fluoride from public water.

Kennedy linked fluoride to various illnesses, despite major medical associations supporting water fluoridation, which they say is safe and a benefit to public health…

Major public health groups such as the American Dental Association, the American Academy of Pediatrics and the Centers for Disease Control and Prevention support water fluoridation, citing studies showing that the mineral helps fight cavities. Health groups also emphasize that the practice is safe.”

RFK Jr. says a Trump White House would immediately push to remove fluoride from waterhttps://www.nbcnews.com/politics/2024-election/rfk-jr-trump-white-house-remove-fluoride-water-rcna178543

Study: Medicaid ED discharge effectiveness: Researchers examined ED treat-and-release visits among adult Medicaid beneficiaries (18-64 years old) in Washington state from 2009 to 2017.

“A shorter time to follow-up visit was associated with a lower HR of 30-day ED revisit; however, a minority of Medicaid beneficiaries (37.3%) completed a follow-up visit within 30 days. This modest yet consistent effect size suggests follow-up visits alone may not reduce ED revisits and that more intensive interventions (e.g., to mitigate adverse social risk) are needed. Key limitations are generalizability outside of Washington state; administrative data without clinical severity or social risk, which may increase follow-up and ED revisits; and censoring due to frequent ED revisits. Our finding that more than half of Medicaid beneficiaries did not complete follow-up visits within 30 days of ED discharge suggests substantial potential to improve access to care and reduce ED revisits.”

Ambulatory Follow-Up Visits After Emergency Department Discharge Among Medicaid Beneficiaries | Health Policy | JAMA Network Open | JAMA Network

Climate change and Public Health: Per the Lancet Countdown on Health and Climate Change annual report:

• Heat-related deaths last year in people over age 65 increased by 167% globally above levels seen in the 1990s — nearly three times more than what would have been expected if temperatures had not changed.
• People were also exposed to an average of 1,512 hours of high temperatures that posed at least a moderate risk of heat stress when doing light exercise such as walking or cycling — a 27.7% increase on the 1990-1999 yearly average.
• Conditions were ripe for the spread of more deadly mosquito-borne infectious diseases, with dengue cases reaching an all-time high of over 5 million infections reported in more 80 countries and territories in 2023.

The Lancet Countdown on health and climate change

 

Regulation

Final rule from CMS released last week (to be published in Federal Register November 27):

• Telehealth: The final rule extends Medicare coverage of audio-only telehealthvisits when patients aren’t able to or prefer not to use video platforms. In addition, the regulation allows telehealth providers to continue reporting their office locations when providing service from their homes.
• Expanded coverage: The final rule creates payment codes and regulatory flexibilities for clinicians who treat patients at risk of overdose or death by suicide, including for certain audio-only services for substance use disorder treatments, payment options for new substance use disorder medications and separate payments for safety planning interventions and follow-ups after discharge.
• Accountable care organizations: CMS finalized its proposalsto offer high-performing Medicare Shared Savings Program ACOs an advance cut of the savings they generate. The proposals let ACOs in the Shared Savings Program, which just reported record savings, use their prepaid shared savings to invest in practice improvements or reduce cost-sharing that could further reduce spending.

Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs, including the Hospital Inpatient Quality Reporting Program, etc. Federal Register November 27, 2024 https://www.federalregister.gov/public-inspection/2024-25521/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical

FTC looking at cross market mergers: “Federal and state regulators’ push for more information on potential cross-market hospital mergers is setting up a showdown that could slow or potentially scuttle the increasingly common combinations.

Regulators are asking for more information from insurers and employers that work with organizations pursuing transactions between hospitals that are at least 50 miles apart, merger and acquisition advisers said. In many cases, the Federal Trade Commission has worked with state regulators to suss out the potential effects of cross-market hospital consolidation, the advisers added.

The information requests from the FTC, combined with new state laws bolstering oversight of healthcare deals, have delayed transaction closing dates. However, the agency has yet to formally intervene on such proposals…

Cross-market hospital combinations are increasingly common. More than half of the 1,500 hospitals targeted by health systems between 2010 and 2019 were in a different region than the acquirer, according to a 2022 study published in Health Affairs…

Both the Justice Department’s and the FTC’s updated merger guidelines and the FTC’s revised premerger notification form include information requests on the labor market impacts of such deals. The updated guidelines and form also reference organizations that have made multiple acquisitions, which can apply to large health systems seeking scale across multiple geographies…

More than a dozen states over the last two years have implemented merger notification laws, some of which authorize state attorneys general to conditionally approve or veto certain transactions.”

source

 

Workforce

Violent Crime in healthcare settings: Per the review in eClinicalMedicine.

• Verbal threats or physical assault against doctors, nurses and other health workers typically come from patients’ family or friends, or from patients themselves.
• Health care and social services account for 73% of the 57,610 nonfatal workplace violence incidents requiring employees to miss work in 2021 and 2022, per the most recent data from the Bureau of Labor Statistics.
• Data shows 14.2 cases of workplace violence in the health care sector in each year per 10,000 full-time workers.
• “Private industry overall had 2.9 cases per 10,000 workers. CoviID-19 worsened the issue. The pandemic and the fierce debate over the response helped sow distrust in the health system, with workers’ reports of harassment on the job more than doubling in 2022 compared with before the pandemic.”

Tracking Workplace Violence over 20 Years