Volume 12
This week, we examine what a newly divided Congress might mean for healthcare policy and how the unwinding of the COVID public health emergency will impact insurance coverage. We also look at flu and COVID trends, ER wait times, hospital bottom lines, what private equity means for patient billing, and the “Amazon-fication” of virtual health.
Thank you for reading. Happy Thanksgiving!
#1: The Newly Divided Congress
Big Synopsis: A divided Congress will not stop work at federal executive branch agencies. Indeed, U.S. Department of Health and Human Services (HSS) Secretary Xavier Beccera said his focus during the 118th Congress will be to fully implement the No Surprises Act and Inflation Reduction Act, which set new mechanisms for drug pricing.
So What’s The Big Deal: With control of the Senate remaining in the Democrats’ hands and Republicans in charge of the House by only a slim margin, HHS will continue slow implementation of the No Surprises Act and other key HHS initiatives. (HHS’ hands would have been tied if Republicans had taken the Senate and won more seats in the House.) For provider groups, the No Surprises Act has become an increasing drag on the balance sheet since thousands of cases are sitting in the queue for arbitration.
So What’s Next: Five House races still have not been called, but we know Republicans have the 218 seats necessary for a majority. Even if Republicans win each of those last five races, their margin will only be 11 seats. It will be tough to pass any legislation through the House, much less the House and Senate. With the legislative agenda hamstrung, look for executive branch agencies to step up their policymaking.
#2: Polar Opposites To Lead HELP Committee
Big Synopsis: In the 118th Congress, Sens. Bernie Sanders (I-Vt.) and Bill Cassidy (R-La.) are expected to be the chairman and ranking member, respectively, of the key Senate Health, Education, Labor and Pensions (HELP) Committee, which oversees healthcare. The two men could not be more different.
So What’s The Big Deal: Sen. Sanders, a proponent of Medicare-for-all and federal drug pricing negotiations, will likely push for greater healthcare expansion. With narrow control in the Senate and a Republican House, it’s unclear how much Sen. Sanders will be able to do without bipartisan support. If Sen. Cassidy, a physician, gets his way he will likely push for greater oversight of the implementation of the No Surprises Act. This should make provider groups happy since many believe HHS’s regulation and implementation of the law did not follow congressional intent. Sen. Cassidy also has proposed legislation on telehealth and improving cybersecurity. These issues are bipartisan and could provide the committee with some wins.
So What’s Next: Two things: First, Georgia’s run-off results. If Sen. Raphael Warnock (D-Ga.) wins, Democrats will not need a power sharing arrangement with Republicans on committees. If he loses, partisan gridlock could be a bit worse, slowing progress on many (or any) bills. Second, Sen. Cassidy has led several bipartisan healthcare initiatives. Can he win over Sen. Sanders on some issues? Only time will tell.
#3: Unwinding the Public Health Emergency - A Risk to Medicaid Enrollment
Big Synopsis: When the COVID-19 Public Health Emergency ends, 5-14 million Americans could lose Medicaid coverage. People who have moved since the start of the pandemic, those with limited English proficiency, and people with disabilities are at the greatest risk.
So What’s The Big Deal: Keeping people insured keeps people healthy. At 8 percent, the United States currently has its lowest uninsured rate ever. If the PHE ends without protections for continuous enrollment, millions will lose coverage. This outcome is problematic not only for patients, but for healthcare providers and hospitals. As uninsured rates rise, revenues decline. With already-growing financial challenges, further revenue declines will affect services and access.
So What’s Next: During the lame-duck session of Congress, Democrats hope to propose a “pay-for” for continuous Medicaid enrollment for at-risk groups. The cuts would likely come from allowing states to end the PHE early.
#4: BQ.1 and BQ.1.1 Become the Dominant COVID Variants
Big Synopsis: Half U.S. COVID cases are now due to the BQ.1 and BQ.1.1 variants, and we know little about these variants. Their severity and duration seems similar to other omicrons, but milder than other variants. And treatments designed to prevent and treat infection in the immunocompromised won't work against BQ.1 and BQ.1.1.
So What’s The Big Deal: While U.S. COVID cases have remained relatively stable over the past few months, some areas of the country are seeing cases rise. One reason might be that scientists believe that BQ.1/BQ.1.1 have growth advantages over BA5 with properties of immune evasion that are possibly causing more severe illness. For immunocompromised individuals, this means some of the monoclonal antibody treatment may not be as effective.
So What’s Next: Get vaccinated with the bivalent booster. Pfizer’s bivalent vaccine offers strong protection against BA.5, BQ.1, and BQ.1.1 with results indicating the new boosters prevent severe disease and protect against the new variant. Moderna also reported strong results as well.
#5: Welcome to the ER. Your Wait Will Be 8 Hours.
Big Synopsis: Clinician shortages are hitting patients in one of the places it hurts the most: the ER. Readers might be familiar with the term “boarding.” It’s when a patient is admitted to the hospital, but waits hours, or even days, for an actual bed. That’s happening in ERs now. So much so that 33 provider groups recently penned a letter to President Joe Biden alleging the issue of ER boarding “has become its own public health emergency” for adult and pediatric care.
So What’s The Big Deal: Boarding is a major patient safety concern and public health issue. As hospital capacity shrinks due to staffing challenges, patients are waiting for inpatient beds or transfers to other facilities in the ER. This bed backlog prevents new patients from being seen, leading to long wait times. The issue is not only about wait times, however. Several studies have demonstrated that ICU patients who wait for beds in an ER have worse outcomes than those who are transferred quickly to an inpatient unit. From a financial perspective, provider groups see rising “walk-out” rates (i.e. lost revenues) from a lack of bed availability and a mismatch of provider capacity and patient volume. This further complicates an already complicated balance sheet.
So What’s Next: We will need to see if there will be regulatory action taken by HHS and the Biden administration (if any).
#6: Should Rural Hospitals Convert to Rural Emergency Hospital Designation?
Big Synopsis: Rural hospitals are struggling with financial and staffing issues. To help, the Centers for Medicare and Medicaid Services (CMS) established Conditions of Participation (COPs) and other payment and structural parameters for rural emergency hospitals (REHs). The goal is to help struggling facilities stay afloat by allowing them to shed their inpatient beds and continue to operate with lower administrative costs.
So What’s The Big Deal: Some rural hospitals already have been shedding their beds and their ERs. Under the new REH designation, however, Medicare would boost payments to encourage hospitals to keep their ERs afloat, providing a critical safety net for rural communities. The regulation also provides “flexibility” regarding who staffs the ER, be it physicians, nurse practitioners, or otherwise. While many physician organizations have requested that qualified emergency physicians staff departments 24/7, CMS has allowed for some “flexibility” with this model.
So What’s Next: States will need to pass laws certifying and designating hospitals as a REH. Also, rural hospitals will need to balance the financial benefits and safety risks associated with this new model. Some studies suggest that few hospitals would want to make the jump. With growing financial concerns, however, some may not have much choice.
#7: Clinicians Are On The Brink
Big Synopsis: A new Commonwealth Fund study makes it clear how much clinicians are suffering from the fallout of the pandemic. For example, half of older physicians said they would stop seeing patients within the next three years. Patients are feeling the effect of burnout too. Physicians who experienced stress, emotional distress, or burnout were more likely to report providing worse quality of care.
So What’s The Big Deal: More studies are highlighting what we already know about physicians and burnout: we have a major and worsening problem. But the problem is not just here in the United States. As burnout worsens, the safety of physicians and the safety of patients could be compromised all over the world and the United States also will be unable to attract labor from around the globe.
So What’s Next: Lawmakers around the world must address the toll the current pandemic and work conditions have on the physician workforce. With a contracting workforce and burnout worsening, patient access and outcomes will continue to suffer.
#8: PE Firms and Banks Create “Loans” for Patients Who Can’t Pay
Big Synopsis: Is private equity profiting off patients? According to an investigation by Kaiser Health Network, millions of people are paying high interest on medical debt. Kaiser said, “Even with lower rates than a traditional credit card, the interest can add hundreds, even thousands of dollars to medical bills and ratchet up financial strains when patients are most vulnerable.”
So What’s The Big Deal: In the past, many hospitals offered no-interest “loans” or payment plans to patients, but they lost money waiting for repayment. While hospitals and provider groups get reimbursed for care delivered under these new services, patients are increasingly burdened. As employers face greater challenges with increased medical costs, cost-sharing and high deductible plans are growing and patients’ responsibility for financing their own healthcare is growing. And with 1 in 5 Americans already financing their medical bills, the medical debt problem is likely to worsen.
So What’s Next: Some will see third party healthcare loans as a growing business opportunity. Adding debt-on-debt transactions will harm patients, however, and could worsen inequities. That mix is a recipe for federal and state policymaker oversight.
#9: Amazon Launches Virtual Care Clinic
Big Synopsis: First it was books, then it was fast fashion and groceries, and now it’s telehealth. Amazon recently launched Amazon Clinic, a virtual platform where patients in 32 states will be able to connect with healthcare providers who can help treat common ailments like allergies and skin conditions.
So What’s The Big Deal: Amazon is expanding its healthcare footprint by “leaning into'' what it knows: retail platforms. In this virtual care model, Amazon allows the patient (consumer) to identify their condition and connect with a physician or provider via their platform. This model is somewhat different from other consumer-based healthcare models out there. Instead of hiring physicians or creating a virtual health/telehealth platform directly, they are a storefront for providers in various states. Patients can simply identify the condition, choose the state, and see if a provider is available. With their purchase of One Medical, Amazon already has the infrastructure and skills needed for a scalable telehealth and primary care clinic.
So What’s Next: Amazon and other retails will likely continue down the path of consolidating critical parts of the healthcare ecosystem. Walmart, CVS, Walgreens, and others will continue to control multiple components of healthcare in an effort to reduce costs and increase profits. The question remains: is this better for patients?
#10: Insufficient Funds: Hospitals Get A Bump in Pay from CMS, But Is It Enough?
Big Synopsis: CMS has set final payment rates for hospitals that meet applicable requirements for quality reporting at 3.8%. Additionally, CMS will reimburse hospital outpatient departments for providing remote behavioral health care in the home.
So What’s The Big Deal: While this final rule is slightly better than what was initially proposed, the payment amount is less than what is needed to address the continued challenges for hospitals.
So What’s Next: Hospitals will continue to experience financial strain and losses into 2023 as labor shortages continue, supply chains remain challenged, and reimbursements decline.
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