October 9, 2020

The Weekly Gist: The “Who Was That Unmasked Man?” Edition

by Chas Roades and Lisa Bielamowicz MD

Boy, are we glad to be back! As delightful as it was to be back “on the road” with our members over the past couple of weeks, we can’t really recommend traveling right now. Just too nerve-wracking, especially if you’re one of those people who worries about catching the virus. You know, a sane person. We could share lots of alarming anecdotes from the last two weeks, but this one captures the COVID-travel zeitgeist pretty well: having thoroughly wiped down our airline seats and settled in for a two hour flight, we overheard a passenger behind us loudly sharing with his seatmate how much he hates wearing a mask, and boasting that he’d figured out a way around the airline’s mandate to wear one when not eating and drinking. He just brings along a bottle of soda and sips it continuously throughout the flight. “It’s the only way around it,” he said. “This way, they can’t make me put the damn thing on.” When we glanced back to see who this paragon of social responsibility was, guess what? He was an airline pilot, catching a ride back home.

Next time we’ll drive.


THIS WEEK IN HEALTHCARE

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

A high-profile reminder of the importance of therapeutics

Along with the many political and public health questions raised by President Trump’s recent and very public bout with COVID-19 is the issue of when the public might have access to the same monoclonal antibody therapy that he received from doctors last week. Having seen the President tout the benefits of Regeneron’s experimental antibody cocktail, COVID patients have reportedly been asking physicians about participating in clinical trials of the therapy, which is only available on a “compassionate use” basis outside of ongoing studies. On Wednesday, Regeneron announced it had submitted a request to the US Food and Drug Administration (FDA) for an Emergency Use Authorization (EUA) for the treatment, claiming that early data from ongoing trials showed promise in moderating coronavirus symptoms. Eli Lilly, which is developing a similar antibody therapy, also announced plans to apply for an EUA, saying its drug has shown the ability to reduce hospitalizations among those infected with the virus. The US government has already paid Regeneron $450M to access up to 300,000 doses of the therapy, and on Friday a spokesman for the Department of Health and Human Services (HHS) said the government would acquire up to a million doses from Regeneron and Eli Lilly by the end of the year, which it will allocate to hospitals in a similar approach to the way it has distributed Gilead Science’s antiviral drug remdesivir, which the President was also given last week.

News on the availability of potentially effective therapies to mitigate the impact of COVID-19 is welcome, particularly as the timeline for COVID vaccines appears to be lengthening. In guidance released this week, the FDA said it would require pharmaceutical companies to submit two months’ worth of data on vaccine safety and efficacy after patients received their final dose, as part of the EUA application process. The data requirement effectively means that, despite repeated promises from the White House, none of the vaccine candidates being developed will be available before the November 3rd Presidential election. The head of the government’s vaccine program said separately this week that he expects data on vaccines being developed by Pfizer and Moderna to be available by December. As many have predictedit will take months beyond that for a safe and effective vaccine to be distributed and administered to a majority of Americans. Challenges will abound: ensuring sufficient manufacturing capacity, managing a complex supply chain, setting up specialized distribution and vaccination centers, and tracking those vaccinated (especially if two shots will be required). A massive public education campaign will also be needed to overcome vaccine hesitancy and ensure widespread immunization. And all of that will take time, and money. President Trump’s recent and unfortunate illness underscores the importance of paying equal attention to the development of therapies and treatments—which are essentially a holding maneuver to get us through the coming winter and spring, and eventually to the promise of immunity that lies beyond.

A strong rebound allows HCA to pay the government back

Investor-owned hospital chain HCA Healthcare announced this week that it plans to return all of the approximately $6B it received in financial assistance under the CARES Act, including Provider Relief Fund payments of around $1.6B and roughly $4.4B in accelerated payments from Medicare. The company reported strong financial performance for the third quarter, with same-facility revenue for overall admissions up 15 percent compared to last year, despite a 9 percent drop in total admissions, and emergency department (ED) volume that is down 20 percent from the same period last year. “We greatly appreciate the CARES Act funding,” said HCA’s CEO Sam Hazen in a press release. “As the initial immediacy of the emergency has passed, and with more information and more experience managing our operations during the pandemic, we believe returning these taxpayer dollars is appropriate and the socially responsible thing to do.” The company reported having implemented a number of cost-control measures in the wake of the drop in elective procedures and visits during the lockdown period, as well as steps to quickly return to normal operations during reopening. At the same time, an increase in patient acuity and a more favorable payer mix drove revenues higher. We’ve heard from many health systems that the CARES Act funding helped stem massive financial losses during the height of the pandemic, turning otherwise negative margins into breakeven performance or better. Whether others follow HCA’s lead in refunding the government remains to be seen. In general, volumes are at or slightly ahead of budgeted levels at many systems, although ED visits continue to lag at about the same level as reported by HCA. The longer-term question for hospitals—as for much of the rest of the economy—is what the “new equilibrium” for volume and revenue will be. Our guidance: plan for a “90 percent future”, and build an economic model less reliant on the ED as an intake engine, with greater investment in convenient, distributed physical and virtual access points—delivered at lower cost.

A formidable player in Medicare Advantage takes shape

Open enrollment for Medicare starts in less than a week, and just in time to capture a piece of the booming Medicare Advantage (MA) market, the nation’s largest retailer announced plans to participate in a big way. Walmart, which has been a constant object of speculation regarding its designs on the healthcare industry, is launching Walmart Insurance Services LLC, an insurance brokerage licensed in all 50 states. It will market MA plans from UnitedHealthcare, Humana, Anthem, Wellcare (Centene), and Amerigroup, along with Medicare Part D prescription drug plans and Medicare Supplemental plans. Notably absent from the lineup is Aetna, now part of CVS Health, whose new HealthHUB clinics have been integrated into Aetna’s benefit plans, and with whom Walmart’s own health clinics are directly competitive. Intriguingly, Walmart’s new brokerage will also sell MA plans from startup insurer Clover Health, with whom it recently launched a joint-venture MA product in the eight Georgia counties where Walmart Health clinics are located. It’s been a busy week for Clover Health, one of the new-breed, technology-powered MA startups, which this week announced plans to merge with a special purpose acquisition company (SPAC) and go public in a deal valued at $3.7B. Clover anticipates significant growth from MA enrollment, as well as from its participation in Medicare’s “direct contracting” pilot program. The “Clover Powered, Walmart Enhanced” product is a zero-dollar, zero-copay PPO plan, which includes prescription drug, dental, vision, and hearing benefits, along with $400 of rebates on purchases at Walmart stores—sure to be attractive to the fixed-income Medicare beneficiaries it targets. We’ve long viewed health insurance as the missing piece to Walmart’s healthcare puzzle, and believe that to fully realize the promise of combining its pharmacy and clinic operations to deliver lower-cost care, it will need to capture the premium dollar, not just provider revenues. Short of an outright acquisition of an insurance company (Humana? Centene?), this week’s flurry of announcements is surely the latest sign of healthcare’s sleeping giant awakening.


GRAPHIC OF THE WEEK

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

Approaching a “new normal” for healthcare volumes?

Eight months into COVID-19, national healthcare volumes are still lagging pre-pandemic levels. The graphic below shows highlights from Strata Decision Technology’s recent analysis of volume data from 275 hospitals nationwide between March and August, and reveals that inpatient, and especially emergency department, volumes are still well below 2019 levels. This isn’t surprising. Consumer confidence in healthcare facilities hasn’t changed much since April, with many still reporting feeling unsafe in emergency care and hospital settings. Even some outpatient providers are still seeing lags compared to last year. While outpatient volume as a whole has rebounded, critical outpatient diagnostics, including mammographies and colonoscopies, are still down significantly, leading to reduced downstream oncology and surgical volume as well, at least in the short-term.

COVID-19 is also accelerating the outmigration of high-margin surgical procedures like total knee replacements. Comparing a two-week period in August to the same period last year reveals that inpatient knee procedures are down by nearly 40 percent, while similar outpatient procedures are up over 80 percent. As Strata Executive Director Steve Lefar said in a recent conversation with Gist Healthcare Daily’s Alex Olgin, these data expose “an elasticity of demand the healthcare industry never even knew existed” and that “the demand curve for healthcare services may be permanently adjusted because people are just changing their behaviors.” While we expect volumes will ebb and flow over coming months in step with the local severity of COVID-19, health systems should plan for a longer-term “new normal” with volume below pre-pandemic levels.


THIS WEEK AT GIST—ON THE ROAD PHONE

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

Virtual visits have declined, but the emails haven’t

While telemedicine visits have decreased sharply since their early pandemic peak, we’re hearing from providers across the country that patient demand for email communication has persisted. Many patients have missed meaningful in-person interactions with their doctors. But once they sign up for the portal and realize they can email, they don’t want to go back to spending time on hold or scheduling a visit to get a prescription refill or the answer to a simple question. Email and messaging saves patients a lot of time, but the sheer amount has quickly become unmanageable for many doctors. “Last year I got half a dozen emails per week from patients,” one primary care physician told us. “Now I’m spending two hours a day answering MyChart messages, and I’m still not keeping up.” And as many are quick to point out, there is little to no compensation for time spent emailing. Health systems and physician practices can’t “roll back” this service—removing this satisfier would expose them to losing patients altogether. In the near term, systems must invest in the staff and infrastructure to create a centralized process to triage messages. And longer-term, they must align physician compensation and payment models away from visit-based economics and toward comprehensive patient communication and management.

Into the COVID fray again, or for the first time

While it sometimes seems like the coronavirus has been with us forever, it’s worth remembering that there are still parts of the country that are only now experiencing their first big spike in cases—that’s the nature of a “patchwork” pandemic working its way across a vast country. One of our health system members in the Midwest, with whom we recently spent time, is in just this situation: they’re seeing their highest inpatient COVID census to date, just this month. As they shared with us, there are advantages and drawbacks to being a “late follower” on the epidemic curve. The good news is that they’re ready. Back in March, like most systems, they stood up an “incident command center”, and began preparing for a wave of COVID patients, designating a floor of the hospital as a “hot zone”, creating negative pressure rooms, cross-training staff, developing treatment protocols, stockpiling protective equipment, and securing a pipeline of critical therapeutics and testing supplies. There was a moderate but manageable number of cases across the late spring and summer, but never to an extent that stressed the system.

Eventually, recognizing that they couldn’t ask their doctors, nurses, and administrators to stay on high alert indefinitely, they “stood down” to a more normal operational tempo, only to watch with dismay as the surrounding community seemingly forgot about the virus, and lessened precautions (masking, distancing, and so forth), wanting life to return to “normal”. And now, the post-Labor Day, post-return-to-school spike has arrived. The challenge now is getting everyone, inside and outside the system, to stop talking about COVID in the past tense, as though they’ve already “gotten through it.” The preparations they’ve made are paying off now. Hospital operations continue to run smoothly even with a high COVID census, but the workforce is exhausted, and citizens aren’t stepping outside to bang gratefully on pots every night anymore. Asking the team to return to war footing is no easy task, given the fatigue of the past seven months. A question looms: what is the trigger to restart “incident command”? As cases begin to increase again in some of the original COVID hot spots—New York, New England, the Pacific Northwest—healthcare leaders there will need to learn from the experiences of their colleagues in the newly-hit Midwest, about how to take an already virus-weary clinical workforce back onto the battlefield.


THIS WEEK AT GIST—ON THE BLOG

What we’ve been writing about lately on the Gist Blog.

Talking with Contessa Health, a hospital at home trailblazer

Recently, Gist Healthcare Daily host Alex Olgin spoke to Travis Messina, CEO of Contessa Health, about the surge of interest in the “hospital at home” care model due to COVID-19. They discussed the nuts and bolts of how health systems partner with Contessa, the benefits provided to patients, and how systems can gain physician support for the model. Check out parts one and two of our podcast interview to hear more. On our blog, we’ve published the full interview with Travis, including details on the financial and workforce implications of hospital at home. Worth a read!


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 we heard from Leslie Walker, senior producer of health policy podcast Tradeoffs. She explained how Arkansas’ case against pharmacy benefit managers, heard by the US Supreme Court this week, could impact the ability of all states to enact a variety of health reforms, including those targeting surprise billing and price transparency.

Coming up on Monday’s episode, we’ll hear from Ashok Subramanian, co-founder and CEO of health insurance startup Centivo. He says the recession caused by COVID is already pushing some companies to seek out new and lower-cost health insurance options. Make sure to tune in, you won’t want to miss it!

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


BINGE WATCH ALERT

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

If you’re like us, by this point in the pandemic you’ve worked your way through the entire collection of nature documentaries available to stream, and spent countless hours in the calming presence of Sir David Attenborough. If you’re ready for a break from watching him whimsically narrate yet another round of cheetah versus gazelle, but still need your daily escape from human affairs, don’t miss My Octopus Teacher, a new documentary on Netflix. It’s the creation of Craig Foster, a veteran of the genre, who found himself burnt out and depressed after years of chasing footage in exotic locations. Returning to his native South Africa, he takes to skin diving in the frigid waters at the tip of the continent, exploring the kelp forests off the rocky coastline. There, he encounters a common octopus (Octopus vulgaris), and has a revelation after witnessing a bit of unexpected cephalopod behavior—what if he came back the next day to see what the octopus was up to? And the next day as well? And every day for a year? What could he learn from being a constant presence, and not just a camera-toting tourist? What follows is the story of a friendship between man and octopus, and the profound lessons Foster learned about creativity, resilience, and the ability to meet an “other” on their own terms. Gaining the creature’s trust, he watches her hunt, explore, play, and do battle with her most fearsome enemies, the pyjama sharks that populate the kelp forest. Across the course of a year—nearly 80 percent of the animal’s life—he becomes part of her world. The photography is breathtaking, and Foster’s discoveries about the life of this most alien creature, and resulting meditations about his own, make My Octopus Teacher an exceptional addition to the nature-doc lineup.


WHAT WE’RE READING

Stuff we read this week that made us think.

A compelling link between severe COVID and immune system response

One of the most perplexing elements of the novel coronavirus is its variability. It’s common knowledge that while many infected people will experience mild symptoms, those who are older, male and have underlying chronic disease are at much higher risk of severe disease and death. Two recent papers published in Science provide some of the most compelling evidence behind the impaired immune response seen in severely affected patients—and a potential link to the gender disparities in outcomes. Both papers are centered on the role of Type I interferon, an immune protein that provides a first line of defense in viral illness. The first study analyzed the DNA of over 650 patients with severe COVID to assess mutations in the genes that code for interferon-1. Some 3.5 percent of patients with life-threatening COVID carried mutations, but these were found in none of the control patients who only had mild disease. The second paper evaluated the presence of antibodies to the patient’s own interferon, finding that 14 percent of patients with severe disease had these “auto-antibodies”, which are extremely rare in the general population. Interestingly, 12.5 percent of severely ill men had the antibodies, compared to just 2.6 percent of women with severe disease. Previous work linked poor interferon response to the X chromosome, highlighting the potential increased risk for men. Taken together, these studies indicate that impaired Type I interferon could contribute to 1 in 7 severe COVID cases. Scientists are hopeful this work could lead to new diagnostics that estimate a patient’s risk of poor outcomes. This growing body of work, with new insights published every week in Science and other journals, underscores the rapid advances being made in understanding and treating this novel and complex disease.

America’s most prestigious medical journal makes a political statement

For its first 208 years, the New England Journal of Medicine has never endorsed a political candidate. But this week the journal published an editorial outlining its political position in the upcoming Presidential election, signed unanimously by all editors who are US citizens. The editors did not explicitly endorse former Vice President Biden, but rather offered a scathing condemnation of the current administration’s performance during the COVID pandemic: “Reasonable people will certainly disagree about the many political positions taken by candidates. But truth is neither liberal nor conservative. When it comes to the response to the largest public health crisis of our time, our current political leaders have demonstrated that they are dangerously incompetent. We should not abet them and enable the deaths of thousands more Americans by allowing them to keep their jobs.” (Formally endorsing Biden last month, Scientific American also made the first political endorsement in its 175-year history.)

Much of the media coverage of the NEJM statement has centered on the question of whether medicine should involve itself in politics, or “live above it”. Medicine has been drawn into political disputes before, but now the nature of the involvement has changed. In the past, debates largely centered around regulation, payment or policy—but now the science itself has become a fundamentally political issue. The very nature of the coronavirus has become a matter of political belief, not just an indisputable scientific fact. Public trust in both scientific institutions and the government, and their ability to work together, has been damaged. We fear this will lead to poorer health outcomes regardless of who wins the upcoming election.


That’s it for this week! Never thought we’d say it, but it sure is good to be back in our basements, and ending the week sharing our thoughts with you. Thanks so much for reading the Weekly Gist—now let us know what you thought! We love hearing your feedback and suggestions, and we’re so grateful when you share our work with a friend or colleague and encourage them to subscribe (and to listen to our daily podcast).

Most of all, we hope you’ll let us know if 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