The Weekly Gist: The Stones’ Rock Edition

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

Finally, full FDA approval for a COVID vaccine

According to a recent Kaiser Family Foundation poll, 31 percent of unvaccinated Americans say that full approval of the COVID vaccines by the Food and Drug Administration (FDA) would likely convince them to get the shot. This week, at long last, the FDA called their bluff. On Monday, the agency granted full approval to Comirnaty, the vaccine developed by Pfizer and BioNTech, for people aged 16 and older. (The brand name, Comirnaty, is a portmanteau derived from the terms “COVID”, “mRNA”, and “immunity”.) Separately, Moderna applied to the FDA for full approval of its COVID vaccine on Wednesday—no word yet on expected timing of approval (or branding). Whether or not vaccine skeptics are convinced by the FDA’s action remains to be seen; what’s already clear is that many employers who were waiting for full approval to implement vaccine mandates for their employees are now moving forward with those policies. They were urged on by President Biden this week, who said, “If you’re a business leader, a nonprofit leader, a state or local leader, who has been waiting for full FDA approval to require vaccinations, I call on you now to do that—require it.” While some have followed that lead, other leaders have continued to push back against mandates, including Texas Governor Greg Abbott, who this week banned COVID vaccine mandates—regardless of whether the vaccine is fully approved—in his state, which is currently in the grips of a massive surge of COVID-related hospitalizations. The good news is that vaccination rates have been rising recently, because of concern over the Delta variant, but the increase has thus far been insufficient to fend off a wave of new cases, hospitalizations, and deaths that continues to approach last winter’s peak. The saying has taken on a numbingly grim familiarity: we may be done with the pandemic, but it’s not done with us.

Virtual mental health sees a big merger announced

Two of the best-known companies in the virtual mental health space announced plans to merge this week, creating a $3B player poised to dominate this fast-growing segment of healthcare demand. Headspace, a direct-to-consumer provider of app-based “mindfulness” meditation programs, will combine with Ginger, which sells text- and video-based coaching and therapy services to employers and insurers. Between them, the two companies claim to serve over 100M users worldwide. Headspace is best known as a consumer-focused app, while Ginger largely serves business and payer clients. The combined company, to be called Headspace Health, will surely look to consolidate offerings into a comprehensive mental health service for employees, targeting a benefits market that is rapidly becoming overwhelmed with startup providers of virtual point solutions. Behavioral health telemedicine utilization skyrocketed during last year’s COVID surge, and has been the one area of virtual care not to fall back to earth since—we’ve learned that virtual is often a superior approach for many mental health services. Two questions arose in our minds after the Headspace/Ginger merger was announced. First, does the combined company bring a broad enough value proposition to overcome employer frustration with a highly fragmented market, or will the new Headspace Health eventually need to be part of a larger insurer platform to capture the opportunity in front of it? And second, does “mindfulness” even work? The academic evidence is decidedly mixed, but the popularity of Headspace and other meditation apps, especially among Millennial consumers, might make that question moot. The mindfulness “wrapper” on more traditional mental health services may prove to be very popular with employees, and could become a must-have element of employers’ benefit packages.

Routine diabetes screening now recommended at age 35

On Tuesday the US Preventive Services Task Force (USPSTF) recommended that routine screening for type 2 diabetes should begin at age 35 for all overweight or obese adults. The new recommendation lowered the screening age by five years, drawing on research showing that the incidence of diabetes rises sharply beginning at age 35, and evidence showing that early intervention can prevent serious complications. (The previous guidance would have missed over 60 percent of potentially positive patients in the younger age group.) A 2019 study from the Blue Cross Blue Shield Association found that older Millennials (aged 34 to 36) had higher rates of chronic disease and mental health disorders, leading to a 40 percent higher risk of mortality compared to Gen X individuals at the same age. Given their poorer overall health status, it’s likely that the Millennial generation will be a target for population health and care management strategies earlier than expected—and managing these younger patients with chronic disease will create a new value proposition for direct-to-employer offerings. But to reap the benefits of earlier screening, Millennials—a third of whom do not have a primary care doctor—must first be engaged in a system of care.

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

Shortage of healthcare workers amid high demand for jobs

The US now has more job openings than any time in history—and the mismatch in workforce supply and demand in the broader economy is even more acute in the healthcare sector. While the industry saw significant job losses in April 2020, employment in many healthcare subsectors quickly rebounded to slightly below pre-pandemic levels, according to data from the Bureau of Labor Statistics. While ambulatory and hospital employment has mostly recovered, employment in nursing and residential care facilities has continued to decline. Healthcare’s sluggish return to pre-pandemic employment levels is not for lack of demand. The number of job listings has grown nearly 30 percent since the second quarter of 2020, to nearly 4.5M openings, while new hires have flatlined, resulting in over half of healthcare job listings remaining unfilled as of Q2 2021. In a recent McKinsey & Company survey of over 100 large US hospitals, health system executives ranked workforce shortages among nurses and clinical staff as their greatest barrier to increasing capacity. Amid the current COVID surge, many systems are offering sizeable bonuses to attract new employees. These strategies will be critical across the next year, as systems look to reduce spending on costly travel nurses, manage COVID surges while continuing to offer elective care, and forestall further burnout. But longer term, rethinking job functions, integrating new technology and finding ways to educate and upskill critical clinical talent will be key to winning the war for talent.

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

Private equity as an enabler of Boomer doctor retirements

There’s been a lot of hand wringing over the ongoing feeding frenzy among private equity (PE) firms for physician practice acquisition, which has caused health system executives everywhere to worry about the displacement effect on physician engagement strategies (not to mention the inflationary impact on practice valuations). While we’ve long believed that PE firms are not long-term owners of practices, instead playing a roll-up function that will ultimately end in broader aggregation by vertically-integrated insurance companies, a recent conversation with one system CEO reframed the phenomenon in a way we hadn’t thought of before. It’s all about a demographic shift, she argued. There’s a generation of Boomer-aged doctors who followed their entrepreneurial calling and started their own practices, and are now nearing retirement age without an obvious path to exit the business. Many didn’t plan for retirement—rather than a 401(k), what they have is equity in the practice they built. What the PE industry is doing now is basically helping those docs transition out of practice by monetizing their next ten years of income in the form of a lump-sum cash payout. You could have predicted this phenomenon decades ago. The real question is what happens to the younger generations of doctors left behind, who have another 20 or 30 years of practice ahead of them? Will they want to work in a PE-owned (or insurer-owned) setting, or would they prefer health system employment—or something else entirely? The answer to that question will determine the shape of physician practice for decades to come…at least until the Millennials start pondering their own retirement.

Is the perception of safety in healthcare settings declining?

When COVID volumes waned in the spring and early summer, most health systems “de-escalated” dedicated COVID testing and triage facilities. But with the Delta variant surging across the country, consumers are now once again looking for services like drive-through testing, which is perceived as more convenient and safer. One physician leader told us patients in the ED are asking why the hospital got rid of the “COVID tent”, which provided a separate pathway for patients with respiratory and other COVID symptoms—and a highly visible signal that the rest of the department was as COVID-free as possible. Another system is now fielding questions from the media about whether they’ll bring back their dedicated COVID hospital: “We spent a lot of time last year convincing the community that the dedicated hospital was key to safely managing care during the pandemic. Now we’ve got almost as many COVID admissions spread across our hospitals.” Over the past year, providers have learned how to safely manage COVID care and prevent spread in healthcare settings—but consumers may perceive the lack of dedicated facilities as a decline in safety. Unlike last year, hospitals are full of non-COVID patients, as those who delayed care reemerge. And with the current surge likely to continue into flu season, emergency rooms will only get more crowded, necessitating a new round of communication describing how hospitals are keeping patients safe, and reassuring patients that healthcare settings remain one of the safest places to visit in the community.

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

On last Monday’s episode, we heard from Elizabeth Mitchell, President and CEO of the Purchaser Business Group on Health, about the influx of digital health apps flooding the employer market. She says companies are awash in a sea of “health management” options, and are urgently looking for integrated solutions.

Although COVID surges in the South have been making headlines, hospitals in the Pacific Northwest are now also struggling to handle the influx of patients. On Monday’s episode we’ll hear how National Guard troops are helping one Oregon hospital inundated with COVID patients and short on staff.

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

We would’ve worked harder, but we watched this instead.

A perfect end-of-summer binge for those left with vacation envy or retrospective FOMO after a summertime that didn’t come off quite as planned, The White Lotus has surely been the show of the season. Now available to watch on HBO in its full, six-episode glory, the biting social satire from writer/director Mike White (Enlightened, School of Rock) is this year’s Show that Launched a Thousand Think Pieces, with some of the darkest, funniest moments you’ll see on TV in 2021. It’s a dystopian Fantasy Island, bringing together a superb ensemble cast to explore the foibles of rich vacationers at a Hawaiian resort, and the wreckage they leave among local residents and hospitality workers. Self-absorbed Boomers, power-tripping Gen Xers, trust-fund Millennials and uber-woke college students are all on full display, bringing drama and dysfunction to the idyllic island getaway. Built around a “body in a box” conceit—we know from the start that one of these people will not survive the week—the fun of the show is both rooting for, and dreading, the eventual demise of one of the players. Beautifully filmed (during lockdown) at the Four Seasons resort in Maui, the cinematography is drenched in a sickly yellow hue, perfectly capturing the vibe of an Instagram filter cranked to 11. There are Emmy-worthy performances from Jennifer Coolidge (Legally Blonde, American Pie), Connie Britton (Friday Night Lights, Nashville), and the revelatory Murray Bartlett (Looking, Tales of the City), who plays manic host to the miserable assortment of guests. Before this hot/not vax summer winds down, check into The White Lotus for one last spa treatment—a full-body mud bath of deliciously dark comedy.

Stuff we read this week that made us think.

Recognizing the importance of aerosol transmission

Droplets, fomites, aerosols…these terms describing the kinds of particles which can spread virus particles rose to the top of our lexicon last year. Initially we focused on fomites, infectious particles deposited on surfaces, and worried that touching our groceries and mail could spread the coronavirus. Scientists were convinced that most COVID transmission occurred via droplets, large respiratory particles exhaled in a cough or a sneeze that traveled only a short distance from an infected person, which led to the guidance that staying six feet apart would keep us safe. But worrisome case reports of a single individual passing the virus to a roomful of people, and the mitigating effects of ventilation, began to hint at aerosol transmission, a much more insidious type of spread in which the virus is transmitted through much smaller particles, which travel longer distances and can linger in the air for hours. Aerosol spread is not only worrisome because it makes a pathogen more contagious, but smaller aerosol particles can be inhaled more deeply into the lungs, potentially causing more severe illness. A new review in Science evaluates the current data on COVID transmission and the advances made over the past year in understanding airflow and aerosol spread, making the bold statement that aerosol transmission is not only the main mechanism for COVID-19 spread, but is likely the primary mode of transmission for the vast majority of respiratory diseases.

Today, our lack of attention to ventilation, air purification and other means to reduce aerosol spread means that we are woefully unprepared for children to return to school—and underscores the need for extensive masking to mitigate transmission. But in the long run, better understanding the mechanisms for preventing airborne transmission could allow us to reduce susceptibility to a host of respiratory diseases. Take complications from asthma, which dropped dramatically during the pandemic—leading researchers to posit that viral infections, rather than environmental triggers, could be the more common cause behind exacerbations. Harnessing this new knowledge will require further research to quantify the effects of spread and mitigation—and the willingness to invest in preventive measures in schools and other public spaces, yet another domain in which bolstering public health could have a meaningful long-term impact on our lives.

Most importantly, 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
chas@gisthealthcare.com

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