August 6, 2021

The Weekly Gist: The Nice Guys Finish Last Edition

by Chas Roades and Lisa Bielamowicz MD

As the Olympics draw to a close this weekend, it’s worth taking a moment to appreciate just how special they’ve been. Despite all the COVID-related challenges and complications, these Games have been a welcome respite from the news of the day, a chance to revel in the unvarnished joy of watching men and women give everything they’ve got to their chosen pursuits. Amid all the inspiring stories of perseverance (and there have been plenty), it was one of the unlikeliest that brought tears to our eyes this week: the last-place finish of Ecuadorian racewalker Claudio Villanueva Flores in the men’s 50km walk. Crossing the finish line more than an hour after the gold medal winner, and a full 20 minutes after the rest of the field had finished, Villanueva’s race ended with only a smattering of spectators and staff cheering him on. Watching him gut it out for those last 20 minutes, in obvious agony and all alone on the course, was one of the most gripping sports spectacles we’ve seen—a perfect example of what makes the Olympics special. It’s a silly looking event, with an awkward pack of duck-walking competitors waddling 25 times around a few city blocks—so unloved that the competition is being discontinued after this year. But try telling that to Villanueva, who gave it everything he had and then collapsed in sobs at the end. Simply extraordinary, and an apt reminder of how important it is, even in the most difficult times, to just keep going.


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.


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

Healthcare hacking on the rise

From the largest global meat producer to a major gas pipeline company, cyberattacks have been on the rise everywhere—and with copious amounts of valuable patient data, healthcare organizations have become a prime target. The graphic below outlines the recent wave of data attacks plaguing the sector. Healthcare data breaches reached an all-time high in 2020, and hacking is now the most common type of breach, tripling from 2018 to 2020. This year is already on pace to break last year’s record, with nearly a third more data breaches during the first half of the year, compared to the same period last year. Recovering from ransomware attacks is expensive for any business, but healthcare organizations have the highest average recovery costs, driven by the “life and death” nature of healthcare data, and need to quickly restore patient records. A single healthcare record can command up to $250 on the black market, 50 times as much as a credit card, the next highest-value record. Healthcare organizations are also slower to identify and contain data breaches, further driving up recovery costs. A new report from Fitch Ratings finds cyberattacks may soon threaten hospitals’ bottom lines, especially if they affect a hospital’s ability to bill patients when systems become locked or financial records are compromised. The rise in healthcare hacking is shining a light on many health systems’ lax cybersecurity systems, and use of outdated technology. And as virtual delivery solutions expand, health systems must double down on performing continuous risk assessments to keep valuable data assets safe and avoid disruptions to care delivery.


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

Vaccination shortfall making it harder to fully staff hospitals

With vaccine mandates on the rise among healthcare organizations, including many of the health systems we work with, we’ve begun to hear a new argument in favor of getting staff vaccinated—one that weighs against the worry that mandates will drive scarce clinical workers away. With staffing already stretched, some systems have been concerned that implementing mandates could worsen shortages and force an increase in the use of costly agency labor. But, some executives are now telling us, so could not vaccinating staff. As the highly contagious Delta variant continues to sweep through unvaccinated populations, clinical workers who haven’t gotten their shots are especially susceptible to contracting the virus. That’s driven a sharp increase in unvaccinated nurses and other workers calling out sick with COVID symptoms, which has made a difficult staffing situation even worse. Some of the high-profile reports of hospitals running out of beds in the face of the Delta variant are actually driven by running out of staff to keep those beds in use—making it even more critical to ensure that frontline workers are protected against the virus. As a growing number of hospitals and other care facilities mandate that their workers get vaccinated, we’d hope this unwelcome pressure on an already stretched workforce begins to wane.

Vaccine mandate reveals staff in domestic violence situations

When one of the systems we work with mandated the COVID vaccine last month, its leaders were surprised to have some employees raise a concern about getting vaccinated that they had not anticipated. A small number of women confidentially disclosed that they wanted to receive the vaccine, but were hesitant because of threats and intimidation from their spouses or domestic partners. They had been told to “not come home”, or in some cases worse, if they got the shot. One employee hoped to find a way to get the shot—and keep her much-needed job—but be able to signal to their spouse that she had avoided the mandate. A handful of staff facing these threats shared their stories directly with the CEO, who was rounding through the system to get staff reactions to the mandate, and who, to her credit, quickly mobilized the system’s domestic violence resources to connect with these women, and informed leaders and managers to be on the lookout for other associates in similar situations. Encouraging one-on-one conversations with trusted team members, with whom staff can reveal private feelings and situations, is critical, in addition to holding larger group forums and town halls to discuss vaccine policy. “We were kicking ourselves for not anticipating this,” the CEO shared. “But if we can help even one woman leave an abusive situation as part of this process, it will be a tremendous blessing.”


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

Alex is back! Coming up on next Monday’s episode, we’ll hear from Eric Passon, CEO of data strategy consulting firm Ancore Health, about recent trends his firm has been watching in physician compensation. He outlines the need to update physician pay approaches to keep pace with the changing economics of health system medical groups.

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Give this a spin—you might like it.

One of the best breakout artists of 2019 was Yolanda Quartey, a Black country-soul singer from the outskirts of Bristol, England, who transplanted herself to Nashville after two decades grinding it out as a session vocalist and songwriter. Quartey, who performs under the name Yola, struck up a partnership with Black Keys frontman Dan Auerbach after she arrived in Music City, producing a debut album (Walk Through Fire) that garnered massive critical acclaim and earned her four Grammy nominations. Now Yola is back with her sophomore album, Stand for Myself, and it fully delivers on the promise of her first record. Channeling Dusty Springfield, Mavis Staples, and even Dolly Parton, the new release combines the torch song ethos of 70s country with the upbeat sound of 80s-era pop-soul, resulting in an album full of potential chart toppers. Yola’s powerful, four-octave voice is perfectly pitched to deliver her emotionally raw lyrics, which provide a window into her rags-to-riches musical journey. “Now I’m alive/It’s hard to explain/It took this much time/And it took this much pain/You can get here if you’re willing,” she sings on the title track, the album closer. Look for Quartey in Baz Lurhmann’s upcoming biopic Elvis, in which she’ll portray the rock and roll pioneer Sister Rosetta Tharpe—the perfect role to showcase Yola’s incredible chops, and a fitting set of shoes for her to fill. Best tracks: “Diamond Studded Shoes”; “Starlight”; “Stand for Myself”.


Stuff we read this week that made us think.

A helpful accounting of why there aren’t enough workers

Like almost every other employer in America, health systems have been struggling with a workforce shortage this year, as they attempt to sustain normal operations in the face of a fourth COVID surge. As with most things, a partisan debate has emerged over the causes of the economy-wide staffing shortfall, with those on the right blaming over-generous unemployment benefits, and those on the left pointing to safety-net issues like childcare to explain why workers aren’t returning to jobs. A new piece from Bloomberg this week provides a helpful, balanced “explainer” that puts the current labor situation in broader context and reviews the evidence for all the drivers at play. At the heart of the issue is what economists call the “labor participation rate”—essentially, the share of the population who are employed or actively looking for work. It’s been declining steadily since the turn of the century, but unsurprisingly took a sharp dive last year, and it’s now lower than at any time since the late 1970s. As with many things, COVID accelerated a trend that was already underway before the pandemic. Among the root causes: early retirements among Baby Boomers who were already eyeing the exit before the virus struck; an uptick in the use of automation (think about how often you use QR codes today compared to even a couple of years ago, for example); and the depressingly pervasive effects of the opioid epidemic, which got a lot worse last year and is leading a growing number of applicants to fail pre-employment drug tests. Not that the partisan debate is entirely off base: women exited the workforce at higher rates than men over the last year, as childcare issues became acute. And the “reservation wage”—how much a hypothetical worker requires to participate in the workforce—was clearly impacted by richer unemployment benefits. The conclusion? There are no quick fixes to the current labor shortage. It’s just another feature of our “new normal”, in the late- and post-COVID era.

Thanks for taking the time to read our thoughts this week…we love our loyal Weekly Gist readers! If you have a moment, please get in touch. We’d love to hear your feedback and suggestions, and what you’re seeing out there. And don’t forget to share this with friends and colleagues, encourage them to subscribe, and to listen to our daily podcast. There’s much more to come!

In the meantime, 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

Lisa Bielamowicz, MD
Co-Founder and President