|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Reopening with a wary eye on troubling virus trends
With most states either reopening or planning to reopen shortly, the coronavirus showed few signs of loosening its grip on the US this week. Daily death totals continued to hover near 2,000, with more than 77,000 Americans having succumbed to COVID-19—a statistic that almost surely undercounts the true toll of the virus. While the situation continues to improve in “hot-spot” areas hit early like New York City and Detroit, the number of newly confirmed cases is still rising in other parts of the country, including in many of the states that have already begun to reopen. In testimony before the House appropriations subcommittee on Wednesday, a senior infectious disease researcher from the Johns Hopkins Center for Health Security said that no state now reopening meets recommended benchmarks for declining cases, sufficient testing and contact tracing, and adequate protective equipment for healthcare workers. The White House sent mixed signals this week in response to states’ efforts to reopen ahead of the gating criteria it set in its Opening Up America Again plan, delaying the release of detailed CDC guidelines designed help businesses returning to work, denying the validity of leaked internal projections showing the likelihood of increasing infections and deaths, and oscillating between sidelining, and then refocusing, its coronavirus task force.
However, there was some good news this week in the battle with coronavirus. There are now 108 candidate vaccines under investigation, with a handful in clinical trials. One, a messenger RNA-based vaccine developed by drug company Moderna, was approved by Food and Drug Administration (FDA) to enter Phase 2 trials on Thursday. Coronavirus testing, critical to the country’s ability to reopen safely, continued to ramp up as well, and the closely-watched “positivity rate” (an indicator of how widespread testing is—lower is better) fell nationwide. After last week’s FDA emergency use authorization for Gilead Sciences’ promising antiviral drug remdesivir, the company began ramping up production, although frustration mounted after only about two dozen hospitals were chosen by the government to receive scarce existing supplies. Meanwhile, the federal government began to share data on which providers have received bailout money from CARES Act funding—relief sorely needed given the massive economic hit caused by the shutdown. With the release of April unemployment numbers on Friday—showing a staggering 14.7 percent unemployment rate—the disastrous impact of the virus on the healthcare industry became more apparent. The sector lost 1.4M jobs last month, mostly on the ambulatory side. With each passing week, it becomes clearer that the recovery from the coronavirus’ assault on America will be lengthy, uneven, and difficult.
United to provide $1.5B in premium rebates
Health insurers have so far escaped unscathed from the impact of the coronavirus on the broader economy. As a result, UnitedHealthcare announced Thursday that it will provide over $1.5B in direct financial relief through premium rebates for beneficiaries in its individual and small group employer plans, and through cost-sharing waivers for its Medicare Advantage (MA) plan beneficiaries. The 8.2M employer and individual members enrolled in United’s fully-insured plans will receive a premium credit of between five and 20 percent on their June billing statement. For MA beneficiaries, all cost sharing for primary care and specialist physician visits will be waived at least through the end of September. The sudden drop in the volume of medical care being delivered—particularly for elective procedures—is more than offsetting the cost of coronavirus testing and care, for UnitedHealthcare and many other payers.
Under the Affordable Care Act, insurers are required to give consumers rebates at the end of the year if they spend less than 80 percent of premiums on medical costs for fully-insured employer plans, and less than 85 percent for individual health plans. Instead of waiting until then, UnitedHealth Group CEO David Wichmann stated the company’s desire to “get as much of this back in the hands of people as quickly as possible.” Several other national insurers are taking similar steps, all with the goal of helping maintain coverage and slow erosion of their commercial business. As the national unemployment rate continues to rise, insurance companies will likely continue to roll out incentives to prop up employer-sponsored insurance through any means possible. Beyond providing accelerated payments, it may behoove insurers to find ways to support struggling hospitals and physicians as well.
Colorado shelves contentious public option plan
In the midst of the coronavirus crisis, legislators in Colorado’s General Assembly announced this week that they were withdrawing a controversial bill to create a “public option” insurance plan for the state. The bill to implement the “Colorado Health Care Option”, which had drawn sharp opposition from the state’s hospitals, would have created a low-cost insurance option on the state’s individual insurance marketplace, forcing hospitals to participate in the plan’s network at rates set by the state government. Colorado hospital leaders argued that the plan, which was a marquee initiative of Democratic Gov. Jared Polis and the centerpiece of the legislative session, would have led to unsustainably low reimbursement, and caused some providers to go out of business. The bill had already passed its first committee vote in early March, just as the coronavirus was ramping up in the state.
But in the weeks since, hospitals’ financial fortunes have dramatically worsened, as non-emergency visits and surgeries were cancelled and attention turned to dealing with a spike in COVID-19 cases. Colorado hospitals are projected to lose more than $3B in revenue by year’s end. One plan sponsor said of Colorado’s provider community, “The very people we need to work with on [the public option bill] are obviously focused on other stuff. We can’t give them one more thing to do right now.” Legislators expressed optimism that they could return to the effort next year, depending on where things stand with the coronavirus. The pullback on the public option plan illustrates the difficult balance that many states will face in coming months, as they look to help healthcare providers recover economically and continue to provide access to care, while helping waves of unemployed and uninsured citizens find affordable insurance coverage, and finding solutions to keep state budgets in balance. A perfect example of the challenges presented by the pandemic for healthcare politics and policymaking.