|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
Vaccine rollout draws closer as the pandemic worsens
Right on cue, this week the nation found itself in the grips of a post-Thanksgiving surge in coronavirus cases, hospitalizations, and deaths. Across the week, new cases have been 28 percent higher than two weeks before, and Wednesday saw a new daily record of at least 3,000 deaths from COVID-19. More than 160,000 Americans are now hospitalized with the virus, and new data released by the Department of Health and Human Services (HHS) shows that hospitals in many parts of the country are running short of ICU capacity. In remarks made Thursday, Dr. Robert Redfield, the director of the Centers for Disease Control and Prevention (CDC) made a grim prediction for the coming months: “We are in the timeframe now that probably for the next 60 to 90 days we’re going to have more deaths per day than we had at 9/11 or we had at Pearl Harbor,” Redfield said.
As Britain began inoculating the elderly and key healthcare workers this week, a panel of outside experts recommended that the US Food and Drug Administration (FDA) grant authorization for emergency use of the vaccine developed by Pfizer and its partner BioNTech. In its discussion, the expert panel raised concerns about reports that two early vaccine recipients in the United Kingdom experienced severe allergic reactions, and questioned whether the vaccine is safe for pregnant women and children under age 16. Nevertheless, FDA approval was expected by the weekend, or perhaps as early as Friday evening (given reports that the White House has threatened to fire FDA commissioner Dr. Stephen Hahn if a Friday deadline is not met). Whether real or not, the perceived politicization of the approval process likely contributed to new survey results, which show that only about half of Americans plan to get the vaccine when it becomes available. Upon approval, 2.9M doses of the Pfizer vaccine are set to be shipped to healthcare providers, out of a total of 100M doses comprising the US allotment from Pfizer. Once the initial vaccinations of high-risk recipients is done, one issue to watch will be the potential for a springtime shortage of vaccines, given that Pfizer is also committed to supplying other countries, it and AstraZeneca have faced manufacturing delays, and Sanofi suffered a major setback this week in clinical trials likely to push its vaccine rollout into the second half of 2021. Despite those concerns, it’s important to remain focused on the bigger picture: help is on the way. As soon as next week, the nation will begin its long journey of recovery from the worst public health event in its history.
Biden’s healthcare team gets a quarterback, and a key player
This week President-elect Biden named Xavier Becerra, California’s attorney general, as his choice for HHS Secretary, in a surprise choice that capped off weeks of speculation about who would get the top healthcare job in the new administration. If confirmed by the Senate, Becerra will become the first Latino to hold the position, and is expected to focus on health equity and access as he has during his tenure in California, and in his House of Representatives career before that. While Becerra is not a healthcare expert, and has not worked in a healthcare role before, he was involved in the passage of the Affordable Care Act (ACA) in Congress, and has led the legal battle to protect it from court challenges by Republican state attorneys general and the Trump administration. He will take the helm of the massive 80,000-employee department, and its $1T budget, at a critical time, overseeing the approval and rollout of coronavirus vaccines, and the shoring up of Medicare, Medicaid, and ACA insurance coverage for tens of millions of Americans amid a faltering economy. In addition to defending the ACA in court, Becerra has also been a tough critic of the hospital industry, suing the massive Sacramento, CA-based Sutter Health for anticompetitive practices that he said led to high prices for care, resulting in a half-billion-dollar settlement with the chain. While Becerra will not have direct responsibility for healthcare antitrust issues as HHS Secretary, we’d expect him to build a team and pursue regulatory approaches informed by his skeptical view of provider consolidation.
Biden also announced his choice for one of Becerra’s key deputies, naming Massachusetts General Hospital infectious disease chief Dr. Rochelle Walensky to be the new CDC director. The Walensky pick was widely hailed by the medical community, among whom she is well-respected as a brilliant physician and public health expert. Walensky faces the challenge of rebuilding the reputation of the CDC, which has been diminished by the politics of the coronavirus pandemic, even as she deals with the most significant public health crisis of the past century. Expect an early focus on more forceful, consistent public communication on masking, social distancing, and other protective measures, and a greater role for the CDC in addressing the COVID crisis. Biden has named a strong team of leaders to drive the healthcare agenda in the new administration—with one key position yet to be filled. Look for Biden’s choice of administrator of the Centers for Medicare and Medicaid Services (CMS) in the weeks to come, which will tell us a lot about future plans to address another ongoing crisis: the high and rising cost of care in the US.
Sanford, Intermountain call off merger after CEO’s departure
This week Sioux Falls, SD-based Sanford Health announced that it would suspend merger discussions with Salt Lake City, UT-based Intermountain Healthcare. Discussions around the planned combination, which was announced in late October and would have created a combined $15B, 70-hospital system, are on hold indefinitely. The news comes in the wake of the abrupt departure of Sanford’s longtime president and CEO Kelby Krabbenhoft following a controversy about mask use. A quick summary of the drama: Krabbenhoft made national headlines after sending an email to Sanford employees stating that he refused to wear a mask after contracting COVID-19, as doing so would be a “symbolic gesture” that sends an “untruthful message that I am susceptible to infection or could transmit it”. Several Sanford senior leaders responded with a joint message to staff disavowing Krabbenhoft’s position; Krabbenhoft and the Sanford board “mutually agreed to part ways” less than a week later. Bill Gassen, formerly Sanford’s Chief Administrative Officer, was installed as CEO. In discussing the reasoning behind pausing the merger, Gassen stated, “With this leadership change, it’s an important time to refocus our efforts internally as we assess the future direction of our organization.” We were intrigued by the combination of these two innovative systems, which would have brought not only their care delivery assets but also two large health plans to the deal, with the promise of creating value for patients and consumers. The abrupt halt is a reminder that any successful merger is built on a foundation of cultural and leadership compatibility, which may be even more important than the more tangible assets the parties bring to the table.