|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Amid a worsening pandemic, hope
We are now in uncharted and dangerous new territory in the coronavirus pandemic, with the US recording a record-high 2,800 deaths on Thursday, along with 200,000 new cases—the second highest daily total of the pandemic so far. More than 100,000 Americans are now hospitalized with COVID-19, occupying more than 10 percent of the nation’s hospital beds, and creating capacity constraints at hospitals around the country. With the impact of Thanksgiving travel—which was the heaviest since March—yet to be seen in the numbers, and with hospitalizations and deaths lagging new case counts by several weeks (as an epidemiological rule of thumb, 1.7 percent of new cases will result in reported deaths from COVID after 22 days), we are almost certainly headed for a grim winter holiday season.
But the light at the end of the tunnel grew brighter this week, with the United Kingdom becoming the first Western country to approve a COVID vaccine. (China and Russia both rolled out vaccines prior to Phase 3 trials being completed.) Doctors and hospital staff in the UK will begin to administer Pfizer’s vaccine next week, and the US Food and Drug Administration (FDA) is expected to approve the same vaccine for emergency use on or shortly after an outside panel of experts convenes on December 10th. Moderna, whose vaccine is similar to Pfizer’s, submitted an application for emergency use this week, and it will be evaluated on December 17th. In the meantime, a group advising the Centers for Disease Control and Prevention (CDC) held a public meeting this week to craft recommendations for which populations should be prioritized to receive the new vaccines, settling on healthcare workers and residents of long-term care facilities as first in line. While state public health officials will make the final decisions about who gets vaccinated, most are expected to follow the CDC’s guidelines. The two priority groups represent about 24M people, most of whom could be immunized by the end of this month if all goes according to plan. The end of the pandemic will not come quickly, or easily, but it will come—we are near the beginning of the end.
A partial, reassuring reveal of the Biden healthcare team
With the pandemic raging, and the country gearing up for the complex rollout of vaccines that will ultimately bring it to an end, all eyes have been on the Biden team to see who gets picked to lead the healthcare agenda for the new administration. While (as of this writing) we do not yet know who the new Secretary of Health and Human Services (HHS) will be—a decision that seems overdue and has spilled into a public squabble over potential candidates—other choices have been revealed, and they’re quite reassuring. Dr. Vivek Murthy, who has been one of Biden’s key health advisors throughout the campaign, will return to his Obama-era role as Surgeon General, in which he was highly regarded as a skilled public health communicator. Dr. Anthony Fauci, who has been a beacon of calm rationality and trusted medical advice through the pandemic, will continue in his role at the National Institute of Allergy and Infectious Diseases, and will be a key health advisor to the new White House. Dr. Marcella Nunez-Smith, a Yale-based expert in issues of health equity and another Biden advisor on COVID, will lead the administration’s efforts to address racial disparities in the pandemic’s impact. And Jeff Zients, who led Obama’s National Economic Council, after being called on to rescue the botched rollout of Healthcare.gov, has been tapped to be the coordinator of the Biden administration’s coronavirus response. We admire the expertise and reputations of Murthy, Fauci, and Nunez-Smith, and can personally vouch for the extraordinary leadership abilities of Jeff Zients, with whom we share a former employer and have had the pleasure of working for (albeit many years ago). As any number of fellow alumni can attest, Jeff is a “get sh*t done” guy, who will not let a single, critical detail slip past. He’s one of the most effective managers we know, and his appointment gives us great confidence in the face of the complex and challenging months ahead.
Implementing a final round of Medicare reforms for 2021
Racing to complete its work before the clock runs out on the Trump administration, the Centers for Medicare and Medicaid Services (CMS) unleashed a flurry of regulatory changes this week. As part of its overdue final rule on how Medicare will pay for outpatient and ambulatory surgery in 2021, the agency began an anticipated phase-out of the longstanding policy of only paying for certain services—mostly surgeries—if they are performed as part of an inpatient stay. The move is expected to accelerate the shift of care from inpatient hospitals to ambulatory surgery centers, and to lower prices for many surgeries—a key component of Medicare’s strategy to create “site neutrality” in how it pays for services. That change, along with loosened restrictions on physician ownership of specialty hospitals, and a reduction in hospitals’ ability to take advantage of discounted pharmaceutical pricing, drew the ire of hospital industry lobbyists, who called the changes “misguided” and “short-sighted”.
There was plenty of discontent to go around, however, with physician specialty societies reacting negatively to the release of Medicare’s physician fee schedule for 2021. As part of that rule, CMS finalized changes to how payment is calculated for doctors, which will result in higher pay for some primary care physicians and medical specialists, but reduced payment for many proceduralists. Other changes to the fee schedule for 2021 seemed less controversial: payment for telehealth visits to “evaluate and manage” Medicare patients will now be available permanently, and payment for emergency telehealth consults will continue on a temporary basis, until the end of the COVID emergency. Some COVID-related “scope of practice” loosening—allowing non-physicians to deliver clinical services to Medicare patients—will also be made permanent. The many adjustments to Medicare payment rules, coming on the heels of other recent changes intended to promote price transparency and modernize legal restrictions on hospital-physician collaboration, seem aimed at cementing the Trump administration’s broader policy goals for Medicare, as the Biden team prepares to take over. We’d expect most of these changes to remain in place, as the new administration is likely to continue to emphasize reforms that result in greater “value”, lower cost, and greater convenience for Medicare beneficiaries.