The Weekly Gist: The Ultimate Boss Button Edition

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

1. Public health expert Dr. Ashish Jha to replace Jeff Zients as COVID czar. Next month Jha, an internist and dean of the Brown University School of Public Health, will take over as White House COVID coordinator, as the administration seeks to shift its COVID focus to managing an endemic virus. President Biden’s decision to replace Zients, instead of eliminating the position and shifting accountability back to the Department of Health and Human Services, signals that the administration intends to keep pandemic management centered in the White House.

The Gist: Zients, who demonstrated his operational leadership skills in spearheading the rework of the Obamacare insurance exchange, played a vital role in managing the immense logistical challenge of getting millions of vaccines, tests, and masks to Americans. But during his tenure, the administration’s coronavirus response team has struggled with issuing clear and consistent public guidance. This is where Jha, a familiar expert voice during the pandemic, shines. His calm, incisive communication skills, combined with his medical background and public health experience, make Jha a solid choice to lead the country through the next phase of the pandemic—provided the Biden administration is able to secure the funding needed to maintain the federal response effort as early signs indicate the US could be heading into another surge in cases.

2. Pfizer and Moderna ask regulators to authorize a fourth COVID vaccine dose. While a fourth shot is already recommended for immunocompromised Americans, Pfizer is now asking the Food and Drug Administration (FDA) to expand that recommendation to include all adults over 65, and Moderna is asking for a broader expansion for all adults. The drugmakers are relying on data from Israel, which has administered fourth doses to healthcare workers and seniors. The FDA hasn’t signaled whether it will approve Pfizer’s request, but the agency’s top vaccine regulator recently said that, barring a surprise variant, they are planning for an additional COVID booster and seasonal flu shots to be combined.

The Gist: The “fourth shot” messaging already seems muddled. Pfizer CEO Albert Bourla has said in recent interviews that a third shot is “good enough” against hospitalizations and death, but a fourth shot could help decrease infections. After a months-long, halting, third-dose rollout across the summer and fall, it would be wise for the administration to ensure a well-planed rollout and education campaign is ready to go in advance of any FDA decision. Paging Dr. Jha?

3. Millions risk losing Medicaid coverage. With the impending end of the public health emergency, states are preparing to resume eligibility checks for the more than 84M Americans enrolled in Medicaid or the Children’s Health Insurance Program (CHIP). In exchange for extra federal funding, states paused disenrolling beneficiaries because of changes in income, address, health status and other circumstances during the pandemic. The Centers for Medicare and Medicaid Services (CMS) has recommended states take at least a year to notify beneficiaries and complete coverage redeterminations, in order to avoid errors and allow time for those who might be disenrolled to seek other sources of insurance.

The Gist: The impact of these coverage redeterminations will vary by state. An estimated 8 percent of West Virginians on Medicaid could lose coverage, whereas a third of Medicaid beneficiaries in Hawaii could fall off the rolls. 40 percent of Utah children with CHIP lost coverage when the state restarted eligibility determinations last year. The redetermination process will be painful for many Americans, and will increase the nation’s uninsured rate at a time when many people are just now seeking care for conditions that went untreated during the worst of the pandemic—with more COVID surges possibly in the offing. 

Plus—what we’ve been reading.

4. Making the case for continued collaboration among hospitals. A recent article in Harvard Business Review demonstrates how multi-system quality collaborations in Michigan have improved outcomes and lowered costs, benefiting patients statewide. The authors draw on Steven Covey’s framework of “scarcity vs. abundance” thinking, using hospital collaboration on quality improvement projects as an example of the potential for “win-win” collaboration among players that might otherwise be in direct competition.

The Gist: Increased collaboration between hospitals has been a silver lining of the COVID crisis—and one that we hope stays. Systems have been banding together to harness their competitive advantages in order to solve shared problems, such as ensuring a steady supply of low-cost, commonly-used medications (Civica), aggregating and utilizing patient data (Truveta), and most recently, addressing workforce challenges (Evolve Health Alliance). These partnerships allow systems to deliver some of the benefits of greater scale without pursuing costly, and possibly anti-competitive, mergers.

A recommendation from our weekly diet of music, movies, TV, and other good stuff.

Uncovered, Vol. 2: Florence B. Price by Catalyst Quartet—The long-overdue rediscovery of this early 20th century American composer continues. Price was the first Black woman to have her work played by a major orchestra, and interest in her work will surely continue to grow with this delightful release of string quartets and piano quintets. In addition to four world-premiere recordings, the Catalyst collection includes moving renditions of Price’s arrangements of several traditional Negro spirituals. A recovered gem.

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

Medical supply costs hit new highs amid supply chain disruptions

As if rising labor costs weren’t enough of a concern, disruptions in the medical supply chain are adding to the increasingly unsustainable financial profile for health systems. Tracking international trade prices over the last three years, medical supply prices were up a whopping 46 percent at the end of 2021, compared to 2019. The manufacturing of these imports tends to be concentrated in only a few areas (mostly in China and Southeast Asia), and lack of competition makes finding alternative sources difficult. Thirty percent of medical supplies are manufactured abroad—and the number impacted is likely higher, as many supplies “manufactured” in the US still contain foreign components.

As a result, supply cost growth has outpaced even labor expense growth for hospitals since July, according to data from Kaufman Hall. During the early days of the pandemic, masks, gloves, and other personal protective equipment were in short supply, driving the initial spike in prices. But we’re now seeing large price increases across a range of medical supplies, as illustrated in the graphic below. Crutches and medical gauze, for example, now cost over ten percent more to import than they did in 2019. While some of the drivers of these cost increases, including worker shortages and shipping delays, may resolve across this year, other drivers, like the reduced stock of raw materials, seem more intractable. In our conversations with health system leaders, they stress that they don’t expect their group purchasing organizations to save the day, and are instead proactively reevaluating suppliers and distribution partners for their most critical supplies.

(Check out our latest Gist Insights piece for more on the supply chain crisis, as well as advice on solutions health systems can pursue.)

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

Supporting new grads entering their first clinical roles

As we’ve worked with leaders to understand the root causes of the healthcare workforce crisis, it’s become clear that hiring and retaining early-career nurses may be the most critical near-term challenge to solve. Toward that goal, many health systems have built new pipelines into nursing schools and other training programs, and have hired a record number of new graduates across the past year. They’re grateful to have the new recruits on board and are optimistic about the future pipeline, as medical and nursing school applications have shot up during the pandemic. But one nursing leader shared that this class also brings new challenges: “These new grads are really eager, but many are arriving with little to no hands-on clinical experience, since so many clinical rotations were lost during the pandemic. It’s the most unprepared group we’ve seen. We’re spending time teaching them how to start IVs…practical skills that should’ve been learned in school.” Limited practical experience is compounded when starting work in today’s hospital environment, understaffed and still managing through COVID, which can undermine young nurses’ confidence and worsen turnover.

While they’ve always been important, nursing residencies, mentorship and other support programs are now critical in boosting the confidence of new nurses, and making sure they’re equipped to deliver the highest-quality care: “We’ve heard from new grads that the thing that makes them most likely to leave is feeling that they’re not equipped to do their job. We’ve got to make up for what they missed in training.” Physician leaders have also seen some of the same challenges with graduating medical students. As one CMO shared, “This year’s new interns will have done the entire clinical portion of medical school in the pandemic. They’ve undoubtedly missed out on some things, but also have the experience of being thrown into the fire during COVID. I guess we’ll see how that shakes out in June!”

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

On last Monday’s episode, Alex wrapped up our four-part series on the growing interest and investment in healthcare platforms. As Seth Joseph, managing director of consultancy Summit Health, told us, investment in platform businesses is on fire, growing 1,900 percent in the last five years. But quick success is not guaranteed.

On Monday’s episode, we’ll revisit a conversation with Dr. Taki Michaelidis, Medical Director of UMass Memorial Health’s Hospital at Home Program, to learn how the system is rapidly scaling its program to assist with capacity challenges.

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And please let us know 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