January 14, 2022

The Weekly Gist: The ARISE, ORATE, ADIEU Edition

by Chas Roades and Lisa Bielamowicz MD

If this weekend finds you looking for a distraction from the snow, ice, and (shudder) “wintery mix” that many of us will be dealing with, you could join the growing ranks of the cognoscenti who’ve developed a daily Wordle habit. Yes, you too could be one of those people tweeting out a mysterious grid of black, gold, and green squares to boast about your latest score. Wordle’s a lightweight word game modeled on the classic Mastermind, that gives you six tries to guess a five-letter word. Developed by a software engineer (named Wardle, just one letter off) for his sweetheart, the game is a once-a-day treat—but don’t spoil it, since we all get the same word to guess each day. Let us know what your favorite starting word is; we favor AROSE, but you may be one of those ADIEU or ORATE people instead. The perfect way to take your mind off SLEET!

THIS WEEK IN HEALTHCARE

What happened in healthcare this week—and what we think about it.

  1. Biden administration’s vaccine mandate for healthcare workers is a go, but its mandate for large employers and at-home testing plan face roadblocks. The US Supreme Court ruled Thursday that the vaccine mandate for the nation’s healthcare workers at facilities participating in Medicare and Medicaid can go forward while lower courts hear legal challenges. But it said that the Occupational Safety and Health Administration (OSHA) did not have the authority to enforce the broader vaccine-or-test mandate for businesses over 100 employees, which would have covered more than 80 million private sector workers.

Meanwhile, private insurers are required to begin covering eight at-home tests per beneficiary per month starting tomorrow. The roughly half of Americans with private insurance coverage stand to benefit, if they’re lucky enough to get their hands on rapid tests, which have been in increasingly scarce supply.

The Gist: Health systems that were early to issue vaccine mandates will have a leg up on others who paused requirements amid ongoing legal challenges. Lagging facilities now have a little over a month to start enforcement amid troublesome staffing shortages. Also, the use of the private insurance system to cover at-home tests not only excludes nearly 40 million seniors on traditional Medicare, as well as the uninsured, but means that the cost of tests will ultimately be borne by consumers and employers through higher insurance premiums.

  1. Medicare proposes limiting Aduhelm coverage to Alzheimer’s patients in clinical trials. The Centers for Medicare and Medicaid Services (CMS) expressed concern about the safety and efficacy of the drug, which was approved last year by the Food and Drug Administration (FDA) despite evidence of serious side effects during initial trials. Pharmaceutical companies and Alzheimer’s patient advocacy groups panned the preliminary decision, arguing that requiring participation in a CMS-approved clinical trial will limit access to those who live near, or can afford to travel to, research institutions.

The Gist: The highly unusual move inverts the traditional roles of CMS and the FDA, as the latter normally decides if a drug is safe and effective, and the former determines whether to pay based on whether it’s reasonable or necessary. Some health systems and commercial payers have already declined to use Aduhelm due to its unproven clinical benefit and sky-high price tag, which manufacturer Biogen recently lowered amid sluggish salesIf Medicare’s decision stands, commercial payers will likely follow suit, further limiting access.

  1. Aledade acquires an advance care planning company to reduce end-of-life care costs. The primary care enablement company announced this week that it has acquired Iris Healthcare, a provider of advance care planning solutions. With the acquisition, Aledade’s first, the company is establishing a new healthcare services arm as it continues a period of significant growth that has seen its footprint expand to 37 states.

The Gist: Advance care planning reduces unnecessary care, ultimately lowering costs, while increasing patient and family satisfaction. Despite these clear benefits, policymakers have shied away from proposing solutions, and there has been little investment from the start-up community. With high levels of trust, physicians are best situated to have end-of-life discussions as part of an ongoing patient relationship, which bodes well for Aledade’s success in integrating these capabilities into their primary care physician-led care model.

  1. Payers discuss Medicare Advantage (MA) misses at JP Morgan healthcare conference. Large insurers Humana and Cigna, along with “insurtech” startups Bright Health and Alignment Healthcare, all lowered expectations for their MA membership growth after missing 2022 enrollment targets. The companies blamed fierce competition for the nation’s estimated 29.5M MA lives, and highlighted a focus on diversifying revenue through other business arms like healthcare delivery and service sales.

The Gist: Insurers’ missed expectations are leading some to question whether the MA market is beginning to weaken, but these concerns are overblown, with last fall’s enrollment affected by the pandemic, which hindered brokers’ ability to reach seniors. Some MA-focused startups are finding challenges in their attempts to scale, and their stock prices will continue to retreat from the lofty valuations that drove their public offerings. Insurers still have plenty of running room to grow their MA books of business, but will face increasing scrutiny of their ability to manage patients and control costs for the aging population.

Pluswhat we’ve been reading.

  1. Patients “with COVID” who are admitted for other reasons still strain hospitals. Some pundits claim that current reporting on COVID hospital admissions is overly pessimistic, failing to account for a distinction between patients admitted explicitly “for COVID”, and those admitted for other reasons who also, incidentally, have COVID. The latter now comprise up to half of some health systems’ COVID patients. In an article in The Atlantic this week, reporter Ed Yong rejects this dichotomy, on the grounds that it ignores both the significant number of people for whom COVID exacerbates underlying chronic conditions, as well as the challenges any patient with COVID poses to hospitals. As he points out, those patients still require isolation and special safety measures, further worsening the burden on an already-strained staff.

The Gist: For hospitals, dealing with endemic COVID will mean establishing strategies to manage COVID-positive patients without postponing much needed non-emergency care, and without overly taxing a stretched workforce. Downplaying the burden of “incidental COVID” is not helpful, but sustaining operations while on perpetual crisis footing will prove untenable.


INTERMISSION

A recommendation from our weekly diet of music, movies, TV, and other good stuff.

Listening to Kenny G—A fun new documentary takes a look at the smooth jazz pioneer everyone loves to hate (but secretly loves). Features extensive interviews with the curly-haired Pied Piper of Suck, withering commentary from the pompous jazz police, and an embarrassingly familiar, and nauseatingly enjoyable, soundtrack. Watch out, Kenny’s making a comeback among irony-hungry twentysomethings!


GRAPHIC OF THE WEEK

A key insight or teaching point from our work with clients, illustrated in infographic form.

Healthcare workers are hospitals’ greatest concern

As COVID hospitalizations surge to new highs, healthcare workers have become the rate-limiting factor for most hospitals’ ability to deliver care. Using self-reported data collected by the Department of Health and Human Services, the graphic below shows that hospital staffing concerns reached an all-time high this month, with nearly one in three hospitals reporting a critical shortage. (Anecdotal evidence from our conversations with hospital leaders suggests that the actual number in crisis may be even higher, with every system we’ve spoken to in the past month reporting severe staffing challenges.) During previous surges, COVID hospitalizations and reported staffing shortages have ebbed and flowed together. However, staffing challenges and case numbers became decoupled during the Delta surge, as the percentage of hospitals reporting staffing shortages did not go down as the Delta wave subsided.

With a growing number of nurses and other staff choosing early retirement or looking for jobs in other sectors, health systems are navigating the Omicron spike with a smaller pool of workers. And now the high transmissibility of the Omicron variant is forcing healthcare workers to quarantine in droves. As shown on the map, this is playing out both in highly vaccinated states like Vermont and California, and less-vaccinated places like West Virginia and Wyoming. That’s leading some state health officials and health systems to allow COVID-positive staff who are asymptomatic or experiencing mild symptoms to continue working—a policy which is being sharply criticized by nursesWhile the end of the Omicron surge should bring some relief, longer-term staffing challenges will surely remain for most health systems.


THIS WEEK AT GIST—ON THE ROAD

What we learned this week from our work in the real world.

Looking ahead to a year of belt-tightening

We’ve been having “year ahead” discussions with our health system members over the past few weeks, although it’s been difficult for some to carve out time for planning in the midst of the Omicron surge. One common theme is that, from a financial perspective, 2022 is expected to be a more difficult year. For many systems, despite the trying COVID situation, the past two years have been financial record-setters. In 2020, systems benefited from a massive infusion of COVID relief funding from the government, and in 2021, they continued to enjoy enhanced reimbursement due to COVID, plus had a resurgence of volume as patients sought care that was previously postponed. 2022 looks to be a more “normal” year—meaning a return to the financial pressures of pre-pandemic times. Those include mounting price compression from payers, an accelerating shift of care from inpatient to outpatient settings, and increasing competition for patients from disruptors and others. At the same time, patient acuity will continue to rise, with patients presenting sicker and with more comorbidities. The cost of caring for those patients will escalate, as the workforce shortage drives labor costs higher and supply chain woes persist. We’d anticipate a year or more of belt-tightening among many health systems, as they adjust to the post-pandemic environment.


THIS WEEK AT GIST—ON THE PODCAST

All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

Hospitals across the country are struggling to attract and retain critical staff. On last Monday’s episode, Janelle Lee, VP of Talent Services at St. Joseph, MO-based Mosaic Life Care, discussed how the system is trying to compete for talent by experimenting with shorter nursing shifts, allowing more employees to work from home, and expanding non-salary benefits.

Coming up this Tuesday, we’ll join Alex in the studio to chat about the healthcare trends we’re watching for 2022, including the next phase of the COVID pandemic, the challenge of rising labor costs, surging investment in digital health, and the shifting demographics of Medicare.

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The end of another Weekly Gist, and the start of the first holiday weekend of 2022! Thanks for taking time to read our work, sharing it with your friends and colleagues, and encouraging them to subscribe, and listen to our daily podcast. Get in touch—we love hearing from our readers!

Please let us know if there’s anything we can do to be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com