|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Settling in for a long fight against coronavirus
As of Friday, the number of confirmed cases of the novel coronavirus, or COVID-19, has surpassed 100,000 worldwide, with over 3,400 deaths. In the US, there have been 250 confirmed cases and 14 deaths reported so far—although the actual number of cases is certainly many times higher, with testing yet to be widely available and many patients exhibiting only mild to moderate symptoms. Vice President Mike Pence, who was put in charge of federal response efforts last week, conceded Thursday that the country does not yet have enough coronavirus tests to meet demand, and the administration will not meet its goal of having 1M tests ready by the end of the week; perhaps the $8B emergency funding package approved by Congress will help expedite efforts. Public worry and concern among officials hit new levels, with the Director-General of the World Health Organization warning that time to contain the virus may be running out, and expressing concern that countries may not be acting fast enough. New levels of containment effort have begun to take shape. Schools shut down in areas of the country most affected by the virus, including Seattle and some New York City suburbs. All told, the New York Times reports that 300M students are out of school around the world. Companies began to cancel conferences and other large gatherings—next week’s Health Information and Management Systems Society (HIMSS) conference was called off despite a planned appearance by President Trump, given rising cancellations and vendor exits.
Hospitals around the nation have rallied to prepare for a growing wave of patients that has yet to hit. Experts expressed concerns about whether hospitals have enough open capacity, but even more critical will be gaps in the supply of staff and equipment—especially the ICU beds and ventilators necessary for critically ill patients, and the nurses and respiratory therapists needed to care for them. The vast majority of hospitals report having a coronavirus action plan in place; however, a recent survey of nurses suggests that critical information may not be making its way to frontline clinicians. Only 44 percent of nurses reported that their organization gave them information on how to identify patients with the virus, and just 29 percent said there is a plan in place to isolate potentially infected patients. Worries about patient financial exposure to the costs of diagnosis and treatment intensified, with fears that individuals could be held accountable for the cost of government-mandated isolation. Most patients with high-deductible plans saw their deductibles “reset” at the beginning of the year, raising concerns that individuals might refrain from seeking treatment. The heightened worry is palpable as we connect with hospital and physician leaders around the country, and we are deeply grateful for their around-the-clock efforts, and the willingness of doctors, nurses and other caregivers to put their own safety at risk to provide the best possible care to patients under increasingly difficult circumstances.
Two candidates remain: Mr. Medicare for All and Mr. Public Option
The past week in Presidential politics has been momentous—but not clarifying—for determining both the eventual Democratic nominee and the healthcare platform of the party. Between the first ballots cast in South Carolina and the last votes counted in California, the field of viable candidates for the nomination has been winnowed to two: Vermont Sen. Bernie Sanders and former Vice President Joe Biden. The coming weeks will feature a knock-down, drag-out fight for delegates in the run-up to what is likely to be a contested convention in Milwaukee in mid-July, pitting Biden’s “establishment” wing of the party against Sanders’ “progressive” wing. On the healthcare front, that means a continued debate between defenders of the Affordable Care Act (ACA), who want to extend coverage, as Biden does, using a government-run “public option” plan, and supporters of single-payer, “Medicare for All” (M4A) coverage, which Sanders advocates. That’s the same argument Democrats have been having since the campaign started, and while healthcare remains the top issue of concern for primary voters, polls indicate that both plans are popular with the electorate.
We continue to believe that the public option plan is a far more likely outcome than M4A, but only if the Democrats win control of the Senate—a prospect which appears more possible given billionaire Mike Bloomberg’s post-Super Tuesday endorsement of Biden, and plans to devote his substantial campaign resources to support Democratic candidates across the ballot. Some of that money will surely be spent in Montana, where Gov. Steve Bullock is poised to announce plans to run against incumbent Sen. Steve Daines (R-MT), in a critical race that could be the most expensive Senate contest in history. And for an indication of how the politics of a public option would play out, look no further than Colorado, where the Democratic legislature moved forward with its version of the plan this week, over the objections of the hospital and insurance lobbies. Finally, looming over the general election campaign will be the pivotal Texas vs. California case, which the Supreme Court agreed to take up in this fall’s term. That case will ensure that healthcare will remain the centerpiece of American political debates regardless of who leads the Democratic ticket. Buckle up.
Employee benefits platform Accolade files to go public
Accolade, a Seattle-based health benefits company, filed last week to raise up to $100M in an initial public offering (IPO). The company uses mobile apps, machine learning and artificial intelligence to help its clients’ employees navigate health benefits and access care. Accolade aims to reduces employers’ healthcare spending by targeting high-cost employees with dedicated health assistants, mobile and online messaging, a fully integrated benefits center, and member activation campaigns. According to its S-1 filing, Accolade serves more than 1.5M employees across 53 employer customers, the majority of whom joined within the past year. Like several other recent healthcare startups, Accolade derives a significant portion of revenue from its largest handful of customers. Comcast Cable, its largest customer, accounted for nearly half of its revenue in fiscal year 2019. The company also recently deepened its partnership with Humana, one of its investors, developing a joint solution for a broader base of fully-insured and self-insured clients. While Accolade touts impressive employee engagement and net promoter scores, it reports a wide range of customer outcomes and impact—from reducing inpatient length of stay to increasing telehealth use. As it grows, Accolade will need to do more than deliver on its early value proposition of providing high-service concierge functions for its customers’ employees. Its future success will be determined by its ability to lower healthcare costs and grow its customer base at a pace the public markets will demand.