October 30, 2020

The Weekly Gist: The Spooky Election Edition

by Chas Roades and Lisa Bielamowicz MD

Maybe it’s the prospect of being stuck inside with a giant bowl of fun-sized candy, hastily sanitizing our hands after carefully doling out each treat to the neighborhood kids. (At least you don’t have to yell at trick-or-treaters to put their masks on.) Maybe it’s flipping back and forth between the news and Nightmare on Elm Street, and having trouble deciding which one is the horror movie. Or maybe it’s full-blown 2020 overload. But here’s the spooky thought in our Skittle-addled heads: what if we combined Halloween and the election? Should you vote for the gaunt, creepy skeleton with the rattling bones, or the giant orange jack-o’-lantern with the flaming mouth? Talk about a nightmare.

Whatever your choice… Please. Vote.


THIS WEEK IN HEALTHCARE

What happened in healthcare this week—and what we think about it.

The virus doesn’t care about November 3rd

As the “third wave” of coronavirus continued to gain steam across the US this week, the nation passed another grim milestone, with more than 9M Americans now having tested positive for the virus, and the seven-day average number of new cases hitting a pandemic record of almost 72,000 new diagnoses daily. In states that we’ll surely be discussing a lot in the next week, cases were up 33 percent in Pennsylvania, 25 percent in Michigan, 23 percent in Wisconsin, 21 percent in Florida, and 16 percent in Arizona. In a sign that the magnitude of case growth is not just an artifact of more testing, hospitalizations for COVID have risen 46 percent since the beginning of October, and are up 12 percent just this week. Nevertheless, as part of its “closing argument” to voters, the Trump administration this week touted “ending the COVID-19 pandemic” as one of its signature first-term accomplishments, although new polling data from Axios/Ipsos show that 62 percent of Americans believe the federal government is making the recovery worse, and 46 percent say the response has gotten worse since the first surge of cases in March and April. Dr. Anthony Fauci, the talismanic director of the National Institute of Allergy and Infectious Diseases, told CNBC this week that “if things do not change, if they continue on the course we’re on, there’s gonna be a whole lot of pain in this country with regard to additional cases, and hospitalizations, and deaths.”

In separate remarks, Fauci pulled back from earlier predictions for the timing of a safe and effective vaccine against the coronavirus. In comments made Thursday, he said he now expects a vaccine to be available to those in high-priority groups “by the end of December or the beginning of January.” The CEO of drug maker Pfizer, which is among the furthest along in vaccine development, urged patience as its Phase 3 trial nears full enrollment, and researchers prepare to review and submit safety data to the Food and Drug Administration. He again assured investors that the vaccine timeline would remain apolitical, stating “This is not going to be a Republican vaccine or a Democratic vaccine. It would be a vaccine for citizens of the world.” AstraZeneca, also ahead in development of a coronavirus vaccine, reported promising results regarding immune responses among participants in its clinical trials, being conducted jointly with Oxford University. With the Presidential election just a few days away, it remains clear that neither the virus nor the scientific community’s efforts to combat it are conforming to the best-laid plans of political leaders. The outcome of the looming political battle, however, will surely determine the context in which the larger fight against this pandemic takes place. Again, please vote—it’s a matter of life and death.

Russian hackers planning cyberattacks on US hospitals

This week, three government agencies warned US hospital leaders that they had become aware of a “credible threat” from Russian hackers to engage in widespread ransomware attacks across the coming weeks. First tipped off by Hold Security, a private firm that specializes in protecting against cyberattacks, officials from the Federal Bureau of Investigation, the Department of Health and Human Services, and the Department of Homeland Security warned that the hackers intended to create “panic”, at a time when the country is experiencing a dramatic rise in COVID-related hospitalizations. At least nine hospitals were reported to have experienced ransomware attacks by the Russian hacking groups, known as “UNC1878” and “Wizard Spider”, including facilities in Oregon, Vermont, New York, and Minnesota. Ransomware attacks involve the deliberate encryption of critical data, such as patient health records, which can only be unlocked if monetary demands are met. Since the pandemic began, cybersecurity experts report a 700 percent increase in ransomware attacks nationwide, including a notable episode last month that crippled the information systems of Universal Health Services (UHS), which operates 400+ hospitals, clinics, and behavioral health facilities across the US and the United Kingdom. It is unclear whether UHS ultimately paid ransom to regain access to its data, but hackers often demand payments into the millions of dollars, frequently in the form of bitcoin, to release maliciously encrypted data. Healthcare organizations have long been reported to lag other companies in their investment in data protection and cybersecurity, although the number and extent of cyberattacks against hospitals, physician groups, and other facilities has spiked in recent years. Federal agencies have published extensive guidance to assist in protecting against ransomware attacks, which have become a top security concern for US hospitals. With the health information environment becoming increasingly decentralized, as telehealth services increase and hospital employees work from home in greater numbers, the danger to American healthcare—and to patients—will surely continue to increase.

A new healthcare giant in the interior West

In the latest sign that consolidation in the hospital industry has not been slowed by the COVID pandemic, the largest health systems in Utah and the Dakotas this week announced their intention to merge. Salt Lake City-based Intermountain Healthcare, which runs 24 hospitals and 215 clinics in Utah, Nevada, and Idaho, will combine with Sioux Falls, SD-based Sanford Health, with 46 hospitals and 210 clinics, and operations across 24 states. The combined entity, which will be headquartered in Salt Lake City and helmed by Intermountain CEO Dr. Marc Harrison, will have annual revenue of more than $15B, including from each system’s fully-owned health plans. In a joint call, Harrison and Sanford’s CEO Kelby Krabbenhoft indicated that their vision is to continue to expand the reach of what will be one of the largest health systems in the Western US. “We believe there are going to be hospitals and systems across the interior West of the US that are going to want to join the team,” said Harrison, adding, “We are looking for strong organizations.” Although corporate and back-office synergies are a common rationale for mergers of non-overlapping hospital systems, which typically do not offer duplicative services in any one geography, the two CEOs said they do not anticipate layoffs following the completion of the merger, targeted for mid-2021.

Intermountain Healthcare has long been regarded as a national leader in clinical quality, and its integrated payer-provider approach is often cited as a model for US healthcare. Sanford Health, which was recently stymied in its attempt to merge with Iowa-based UnityPoint Health, has deep expertise in delivering healthcare services in rural areas, and through a recently acquired subsidiary, is also the largest not-for-profit provider of senior housing services in the nation. Sanford’s health plan boasts about 210,000 enrollees, with $1B in revenue, while Intermountain’s Select Health insurance division is a $4B company with more than 900,000 members—ensuring that the combined health plan operations of the new system will be a formidable player in the Western US. As we have written before, our view is that the burden of proof is on health systems to demonstrate that mergers will create value for patients and consumers, despite a large body of academic work indicating otherwise. We’d be willing to bet with these two innovative systems, but we’ll be watching closely to better understand their plans for improving care and reducing cost.


GRAPHIC OF THE WEEK

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

What’s at stake in the ACA case

Since the Affordable Care Act (ACA) was signed into law a little more than a decade ago, it has fundamentally reshaped the American healthcare system. As the graphic below highlights, the far-reaching law expanded insurance coverage, increased consumer protections, led to new payment models, established minimum coverage standards, reformed the Indian Health Service—and even gave us calorie counts on menus, among myriad other things. The fate of the ACA is once again in the Supreme Court’s hands—and the nine Justices, now including Amy Coney Barrett, are scheduled to hear arguments starting November 10th. Eighteen states with Republican leadership are asking the court to determine whether the individual mandate is constitutional without a financial penalty, and whether the mandate is severable from the rest of the law.

The process of unwinding a law that touches nearly every facet of the US healthcare system would mean a confusing and financially detrimental road ahead for many. Although we believe it’s unlikely that the entire law will be ruled unconstitutional, if it is—and no replacement legislation is passed—the effects could be devastating. An estimated 21 million people would be at serious risk of losing their health insurance. This risk is magnified for Hispanic and Black Americans, who are also hardest hit by COVID-19. As many as 133M people with pre-existing conditions could face insurance disqualification or significantly higher premiums. The lost coverage would result in a significant revenue hit for doctors and hospitals. While the impact would vary by state depending on Medicaid expansion terms, an Urban Institute report projects that total uncompensated care would grow an average of 78 percent for hospitals and 68 percent for physician services if the ACA is struck down. Although the Court is not expected to rule on the fate of the law until mid-2021, the direction and pace of future health reform legislation will be set by the ruling, under either a Trump or Biden administration.


THIS WEEK AT GIST—ON THE ROAD PHONE

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

Facing a third-wave workforce crisis

Over the past week, as coronavirus cases have spiked and COVID hospitalizations have grown to alarming levels, we’ve been keeping a close pulse on the situation at our member health systems in markets across the country. Here’s what we can report: admissions are rising on a curve that looks increasingly vertical. The ICU is less of a problem than inpatient beds, and while no one wants to cancel non-emergent procedures again, having just worked through the backlog of cases that were postponed in late spring and early summer, discussions about reallocating capacity are starting again. Some are considering shifting more surgeries to ambulatory centers, others are planning to dedicate more space to COVID-positive cases in an attempt to segregate the “hot zone”, and still others are exploring home-based care for certain medical admissions. Fortunately, the supply of PPE feels sufficient for the time being, as does testing capacity.

The number one concern among everyone we’ve talked to: staffing. Because of the high level of community spread, many are now losing nurses and other key staff to COVID isolation, with one system reporting that 35 percent of its critical care nurses at a key hospital had tested positive or were in quarantine after exposure. Staff are burned out, exhausted from the past eight months, and turnover rates are spiking. Because the third wave is so widespread, it’s become harder to find nurses from other markets who can temporarily relocate to help with a surge of cases. And the rates being charged for “agency” nurses—stopgap staff hired on a temporary basis—are going through the roof. The staffing issue may prove to be the biggest crisis of the third wave of COVID, given how difficult it is to solve; there’s no Defense Production Act or National Guard supply chain for nurses. At best, hospitals will find themselves cobbling together a solution by cross-training staff, paying extra for temporary workers, and asking their already-overtaxed workforce to weather yet another storm. We’re eager to hear any creative approaches to solving the staffing challenge as winter approaches, and we’ve dedicated a senior member of our team to tracking the workforce crisis. Let us know what you’re seeing.

Bridging the “last mile” of virtual care delivery

Undoubtedly, rising consumer expectations for convenient access will be one of the lasting effects of the COVID-19 pandemic for the healthcare industry. This week we hosted a member webinar on the future of access, featuring the CEOs of two primary care disruptors who have built new primary care platforms to meet consumer demand for convenient access. Dr. Jeremy Gabrysch, CEO of Austin, TX-based Remedy, described how they are bringing primary care directly to consumers via a combination of telemedicine, in-person and home-based visits. Portland, OR-based Zoom+Care, led by CEO Torben Nielsen, is built around a consumer-centric urgent care model with a highly efficient clinic design, coupled with provider chat and telemedicine support.

Both companies have grown during the pandemic, expanding into new markets across 2020. And while telemedicine has exploded (and provided a way to gauge demand in potential expansion markets in the states where they’re licensed), in-person and home-based urgent care visits now exceed pre-COVID levels. For Zoom+Care, the ability to offer a scheduled, predictable and efficient visit has bolstered consumer confidence in returning to urgent care. And Dr. Gabrysch outlined how the pandemic has only strengthened Remedy’s home care value proposition. Their providers have found that in 30 percent of virtual encounters, telemedicine alone can’t solve a patient’s problem. But by supplementing the virtual visit with a handful of services brought to the patient’s home, Remedy can manage 98 percent of patient needs. Whether it’s extending fiber optic cable to your house for high-speed internet service, or delivering a package from Amazon, bridging the “last mile” of a direct-to-consumer service is often the most complex part of the process. For healthcare, seamlessly connecting telemedicine to convenient in-person follow-up, whether in the home or a clinic, is the critical “last mile” that doctors and health systems must create, to ensure comprehensive access solutions that are truly differentiated.


THIS WEEK AT GIST—ON THE PODCAST

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

On last Monday’s episode, our podcast team visited a Walmart Health Center outside of Atlanta, GA. Uninsured patients there said they love the center’s transparent pricing and affordable, comprehensive primary care, and a local provider described Walmart’s offering as welcome ‘co-opetition’.

Coming up next Monday, Alex will take a deeper dive into the future of the Affordable Care Act, as open enrollment begins and as the case challenging the law goes before the Supreme Court. And on Tuesday, we’ll be joining Alex for a special Election Day episode, to talk about what to look for in the coming months and years, depending on who wins. Tune in, you won’t want to miss it—the ideal listen as you wait in line to vote!

[Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.]


ON THE GIST TURNTABLE

Give this a spin—you might like it.

First things first: there’s plenty of cowbell. Forty-eight years after their self-titled debut, 44 years after topping the charts with the cowbell-laden, stone-cold classic “(Don’t Fear) The Reaper”, and almost two decades since they last left the studio for a lengthy stint as a nostalgic touring act, Blue Öyster Cult are back, baby! Band co-founders Donald “Buck Dharma” Roeser and Eric Bloom, along with their long-standing road band, took the opportunity of being forced off the classic rock circuit to record and release The Symbol Remains, to the delight of Öysterheads everywhere. It’s easily the most eclectic of their 15 studio albums, a kind of “greatest hits” of the evolving sound of BÖC over the years. The “hard rockers” moniker doesn’t really do justice to the band, and the tracks reflect that—there are tips of the cap to glam, boogie-woogie, metal, and alt-rock here, all with the brainiac lyricism and deft musicianship of Dharma and Bloom. You can hear a whole pantheon of other bands that influenced, and were influenced by, BÖC over the years—Thin Lizzy, T.Rex, Iron Maiden, Van Halen, Def Leppard, and a bunch of other 70s and 80s rock and metal acts that blanketed the airwaves back when “classic rock” was just…rock. Most of all, it sounds like a Blue Öyster Cult record, and easily takes its place among Agents of Fortune and Fires of Unknown Origin as among the band’s best. For a couple of dudes in their mid-70s (!!!) Dharma and Bloom still rock hard. For the fever dream that has been 2020 so far, the only prescription is more cowbell. Best tracks: “That Was Me”; “The Alchemist”; “Box in My Head”.


GIST IN THE NEWS

We said it, they quoted it.

Michigan Hospitals Turn to $15 Minimum Wage to Fill Job Openings
Michigan Radio; October 26, 2020

“[H]ospitals must ‘double down’ on hiring for lower-wage jobs, as they face competition from other sectors seeking workers during the pandemic, including personal grocery shoppers, delivery personnel, and others, said Chas Roades, cofounder and CEO of Gist Healthcare, a Washington-based advisory firm that works with health systems. ‘The hiring market has become pretty difficult at the entry level,’ he said. ‘Amazon has been hiring like crazy. Walmart is hiring, and a lot of big-box retailers are hiring. And as the world of COVID goes on, people are wondering, “Is it even safe for me to work in health care?”’ Additionally, the existing workforce in health care is exhausted and transitioning to those other fields, Roades said.

Roades said something else is at play: a renewed interest this year in addressing social inequities, including low pay among people of color and women, groups that are often overrepresented in these jobs. The COVID surge highlighted that many low- and mid-range hospital workers were carrying out some of the most essential, high-risk tasks—cleaning rooms and laundry for patients with COVID, or delivering their meals. ‘A lot of the people at the bottom end of the pay scale in health care are minority workers and I think there’s a concerted effort among [hospitals] to make sure that they’re providing fair and equitable pay to them,’ Roades said.”


WHAT WE’RE READING

Stuff we read this week that made us think.

Taking a dim view of the Medicare innovation center

This week Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma penned an op-ed in Modern Healthcare, in which she delivered a dour assessment of the performance of the value-based payment models. Verma cast doubt on the success of payment pilots, which are the cornerstone of the work of the Center for Medicare and Medicaid Innovation (CMMI). Of the 54 payment models piloted by CMMI, she wrote, only five have delivered statistically significant savings, and just three have met the bar for national expansion. Verma signaled that major changes may be in the works for CMMI, saying that her team has been evaluating what is necessary to “turn CMMI around”, on the theory that voluntary, upside-only models are unlikely to deliver savings, and that the spending benchmarks calculated for some ACO and bundled payment programs may have been inaccurate, leading CMS to overpay provider participants.

What has worked, in Verma’s assessment? Increased regulatory flexibility, including waivers enabling state-level Medicaid reform, loosening of Stark restrictions, and moves to increase transparency and interoperability have made for easier provider collaboration around value. In a second Trump term, Verma promises that the agency will support changes to risk-based payment models that more aggressively shift to downside risk and continue to loosen regulatory restrictions. One wild card to watch: some of CMMI’s recent marquee reforms, including 1332 and 1115 waivers that enable state insurance market and Medicaid innovation, are inextricably intertwined with the ACA—and could be in danger should the Supreme Court rule the entire 2010 law unconstitutional.

There won’t be a COVID vaccine in Santa’s stocking

In other federal COVID policy news, the Department of Health and Human Services (HHS) announced it will halt a $250M ad campaign to promote vaccination, leaving thousands of Santa Claus impersonators without access to COVID-19 vaccines in advance of the holiday season, according to a Wall Street Journal report. In addition to envisioning public service announcements featuring a list of well-known celebrities (who ultimately proved difficult to recruit), the plan also categorized Santa performers as essential workers, and guaranteed them access to the first round of COVID vaccines in exchange for promoting vaccination. (HHS should get plaudits for its inclusivity, as the plan would have also covered actors who perform as Ms. Claus and elves.) The campaign was the brainchild of controversial HHS assistant secretary Michael Caputo, who told Ric Erwin, chairman of the Fraternal Order of Real Bearded Santas (which is, evidently, a real thing), that vaccines would likely be approved by mid-November, and be made available to essential workers, including the Santas, before Thanksgiving. (The WSJ article features audio from their calls, which we highly recommend for a bit of pre-season levity.) Although the hopes of Erwin and his fellow Santas have been quashed, holding fewer events that bring together scores of unvaccinated parents and children for the chance to sit on (even a vaccinated) Santa’s lap seems like the prudent choice as COVID cases continue to rise. Ho-ho-hope you’re wearing a mask.


That’s all for this week. Hard to believe that the next time we meet here, the long-awaited 2020 election will be in the rear-view mirror (we hope). Thanks for taking the time to read our work, and for sharing your feedback and suggestions. We always love hearing from you, and we’re so grateful when you share this with a friend or colleague, and encourage them to subscribe, and to listen to our daily podcast.

Most of all, we’re eager to hear how we can be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com