Chart of the Week
Congress.
Holiday Week. Members were back in their districts for the week, save those working on infrastructure negotiations. On the infrastructure front, a big ask from the White House has been better funding for Home and Community-based Services. Primarily a Medicaid service, it has proven to produce better outcomes than skilled nursing facilities.
A major driver of the political agenda in this regard has been the Service Employees International Union which has organized workers in California and other union-friendly states. Their involvement has made Republicans suspect, of course. A bigger problem is where the workers are going to come from. See labor reports below.
Hearings Next Week. Mostly budget related.
House Committee on Ways and Means: The President's Proposed Fiscal Year 2022 Budget with the Department of Health and Human Services Secretary Becerra | Tuesday, June 8, 2021 at 10 a.m.
Senate Committee on Appropriations: Subcommittee on Labor, Health and Human Services, Education and Related Agencies: Hearing on the President’s Fiscal Year 2022 Budget Request for the United States Department of Health and Human Services | Wednesday, June 9, 2021 at 10 a.m.
House Committee on Foreign Affairs: Subcommittee on International Development, International Organizations, and Global Corporate Social Impact : United States Leadership in the International Response to the COVID-19 Pandemic| Wednesday, June 9, 2021 at 3 p.m.
Senate Committee on Finance: The President’s FY 2022 HHS Budget | Thursday, June 10, 2021 at 10 a.m.
The White House.
Budget. The White House budget released last week was mainly a regurgitation of the priorities established by the American Jobs Plan and the American Families Plan. The budget barely addressed the solvency issue in Medicare except to suggest, as we have reiterated multiple times that Medicare Advantage plans offer budgetary offsets.
Progressives dislike MA and so it will be an easy way to appease that wing of the party if the White House gets behind changes like risk adjustment validation. That idea will probably get stopped in the Senate but be prepared if the White House tries.
Federal Trade Commission Still Hates PBMs. In response to a Congressional request, the FTC released its report on “rebate walls.” The report was – no surprise – critical of the practice where brand name manufacturers may withhold rebates if a PBM includes in its formulary or in the same tier of a formulary a competing drug.
This practice can “wall off” competition and may be an exclusionary practice. The FTC did not make any promises to sue – they wouldn’t – but they did refer to ongoing litigation as templates for later action.
Regulatory Agenda.
Medicare Rule-A-Rama. The second tranche of Medicare payment rules are pending at the White House’s Office of Management and Budget. These are:
- Physicians Fee Schedule for 2022 and “other revisions to Medicare Part B”
- CY 2022 Home Health annual payment update
- CY 2022 ESRD annual payment update
- CY 2022 Hospital Outpatient annual payment update
Add to that:
- Patient Protection and Affordable Care Act; Updating Payment Parameters and Improving Health Insurance Markets for 2022 and Beyond Proposed Rule (CMS-9906)
The and beyond part looks interesting. As everyone should know by now, the White House is focused on making the ACA plans better and more popular.
The Occupational Safety and Health Administration rule on pandemic workplace standards is also pending. The head of the AFL-CIO, Richard Trumpka has choice word for President Biden today on Bloomberg TV about the delay. Meanwhile, the Centers for Disease Control and Prevention continues to issue guidance that bodes well for a return to normal activities like college. The question forming is whether or not OSHA standards are needed. Is abatement of the crisis moving faster than the bureaucracy?
Other Stuff.
Health Care Employment. Overall, health care employment improved in both the ADP and BLS reports this week, although more the former than the latter. There are still about 500,000 workers missing from the health care workforce since the pandemic began. There are now 1.2 million job openings, down from 1.4 million last month but still near the all-time-highs.
Given how much money has been made available to providers from federal sources, one must wonder if an enduring labor shortage will yield more productivity solutions.
Women employees remain scarce and appear more willing to return to the ambulatory setting than to hospitals. It will probably be after Labor Day before we know if the shift can be reversed or does the “new normal” in health care involve less workers.
Wage and hours worked data from April suggests that hours worked is moderating after an intense fall and winter. It could be burnout, time-off or, given the shortage of workers, a permanent reality for the industry.
An area of focus this week after ABT’s guidance has been laboratory testing. The May data released this week suggests that laboratory testing employment continues to grow which supports our thesis that there are going to be winners and losers. Unlike most areas of health care CLIA labs experienced an increase in capacity during COVID as more labs were approved and more Point of Care tests systems were installed.
Nursing facilities finally arrested their precipitous drop in employment post-COVID. That isn’t saying too much as the gain was a mere 1,000 employees. Meanwhile, home health continues its growth.
A possible contribution to the labor shortage is the continued growth in Life Science research. Hundreds of billions of dollars have flooded DoD, DoE and NIH to continue vaccine, therapeutics and diagnostic research. There are only so many trained scientists and medical professionals to go around, not to mention technicians.
SPAC and S-1 Corner.
SPAC Corner.
Mr. Chamath Palihapitiya filed S-1s on another four, as in 1-2-3-4 SPACs dedicated to the biotechnology industry. We certainly cannot argue with the fact that with all the money that has flooded into research (see employment data above) makes it a good place to look for opportunity. We just wonder how good a former Facebook employee is going to be at picking the good from the bad.
You can access the updated SPAC spreadsheet here.
If you are investing in SPACs but not super familiar with health care, hit and we can help.
Emily Evans
Managing Director – Health Policy
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