|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Hot vax summer is turning out to be a damp squib
With US COVID case counts hitting levels not seen since February, hospitalizations climbing rapidly in many states—topping the number seen nationally during last summer’s surge—and mortality figures beginning to edge worrisomely upward, it’s increasingly clear that talk of a “hot vax summer” was premature at best. While this week the nation crested President Biden’s July 4th goal of 70 percent of Americans getting at least one dose of the vaccine, attention has now turned in earnest to the need to dramatically accelerate vaccinations the face of the highly contagious Delta variant. Of particular concern: a report from the Centers for Disease Control and Prevention (CDC) suggesting that vaccinated people who become infected with the variant may be able to spread the disease at a greater rate than previously thought. Although it’s clear that we’re largely experiencing a “pandemic of the unvaccinated” at this point, it wasn’t reassuring to learn that the CDC has been citing pre-Delta data (from January to July) on hospitalizations to bolster its reassurances to vaccinated Americans about the low numbers of “breakthrough” cases in hospitals, nor to hear (as we have, anecdotally) from hospital leaders that vaccinated patients now account for 15 percent of COVID admissions. Attention has rapidly turned to the need for booster shots, with the Food and Drug Administration (FDA) reported to be readying a plan for early September, focused on the over-65 population and those whose immune systems are compromised. Already, Zuckerberg San Francisco General Hospital has begun supplemental mRNA boosters for those who received the one-dose Johnson & Johnson shot earlier this year. Meanwhile, in an attempt to reassure those still harboring concerns about getting an “experimental” vaccine, the FDA is fast-tracking its full approval process for Pfizer’s vaccine, which can’t come soon enough. The ticking clock: students of all ages, vaccinated or otherwise, return to school in less than a month. Will we be ready?
Medicare finalizes its hospital payment policy for next year
The Centers for Medicare & Medicaid Services (CMS) issued its final payment rule for inpatient hospitals for FY22 this week, giving providers a 2.5 percent pay increase, and implementing a number of other regulatory changes. Of particular note, the rule puts in place a requirement for hospitals and long-term care providers to report on COVID vaccination rates among their workers, amid growing calls for healthcare organizations to mandate vaccines. The final rule will also extend additional payments to hospitals for delivering COVID care until the end of the public health emergency is declared. On top of a number of changes to quality reporting programs aimed at reducing the adverse impact of the pandemic on hospital metrics, CMS also used the final inpatient rule to begin acting on the Biden administration’s stated desire of improving health equity by adding a maternal morbidity measure to hospital quality reporting requirements. The measure will require hospitals to report whether they participate in initiatives to improve perinatal health, an area in which unequal treatment has led to disproportionately adverse outcomes for women of color. In what will surely be welcome news for hospitals, CMS will no longer require disclosure of the contract terms providers strike with Medicare Advantage insurers, which was a key provision of Trump-era transparency regulations. Nevertheless, based on earlier proposed changes to physician and outpatient surgery payment rules, and the President’s recent executive order on competition policy, we’d anticipate the Biden administration will continue to boost efforts to increase transparency of provider pricing. First things first, however: there’s a pandemic to get through, and this final inpatient payment rule should largely come as good news to hospitals who are increasingly feeling the strain of a fourth surge of COVID cases.
Morgan Health makes its first investment in healthcare disruption
JPMorgan Chase has agreed to invest $50M in the primary care startup company Vera Whole Health, the first investment by its newly launched healthcare venture arm Morgan Health. A new fund created by JPMorgan in the wake of shuttering its ill-fated Haven joint venture with Amazon and Berkshire Hathaway, Morgan Health aims to identify and invest in “disruptions” to the traditional system of employer-sponsored healthcare. Vera Whole Health, based in Seattle, provides subscription-based primary care services for employers across ten states, centered around an “advanced care” model that provides virtual access, care coordination, and health coaching services. Founded in 2008, the startup is majority-owned by private equity firm Clayton Dubilier & Rice, and its employer clients include Seattle Children’s, Baylor College of Medicine, and Blue Cross & Blue Shield of Kansas City. In addition to the $50M investment, JPMorgan will offer Vera’s services to its own employees as an optional benefit, with an early focus on the Columbus, OH market, where the bank has a large technology hub and Vera has a partnership with the large independent Central Ohio Primary Care group. As one of Vera’s first big corporate clients, it will be interesting to watch how the rollout of services to JPMorgan’s employees goes, and where the bank looks to invest next with its disruption-focused strategy. Already, they’ve accomplished more than the much-heralded Haven was able to do during its brief, star-crossed turn on the healthcare stage.