Chart of the Week
Congress
Reconciliation. House Energy and Commerce Committee, a key committee of jurisdiction for health care, released a summary of expected provisions in their report. These include:
- The contents of H.R. 3, the Elijah Cummings Lower Drug Costs Now Act, which are: mandates price negotiation between HHS and manufacturers for highest and most commonly prescribed drugs including insulin; requires rebates when drug prices exceed inflation to Medicare and employer-sponsored insurance; caps Part D out-of-pocket at $2,000 and aligns incentives to lower drug prices. (UNH, ANTM, CLOV, ALHC, HUM)
- Adds vision, hearing and dental benefits to traditional Medicare over the next decade.
- Extends ACA premium tax credits to people living below 100% of FPL from 2022 through 2024. In 2025, establishes a federal Medicaid program in non-expansion states.
- $150B for Medicaid Home and Community-based Services.
Our Thought Bubble: Drug price provision gets watered down or eliminated in the Senate. The inclusion of mandated drug rebates for employer sponsored plans when prices exceed inflation will likely run afoul of the rules, get tossed and turn business groups against the whole idea. Expansion of benefit scope still seems possible, but dentists are raising hell, so outcome unclear.
Making ACA credits available to people in non-expansion states who would otherwise be Medicaid eligible in expansion states looks like a great way for states to shift their costs onto the federal government, much as they did in the expansion states between traditional and ACA Medicaid benefits.
The estimated appropriation for HCBS is lower than the White House’s ask of $400B which is good news for the labor supply-demand dynamic.
Missing from the outline are: a permanent elimination of 400% eligibility threshold for ACA subsidized plans and a reduction of the eligibility age to 60. No one thought the latter was likely, but committee chatter says former may still happen.
The White House.
Vaccine Mandates. The White House announced yesterday that it was expanding the vaccination mandates for health care workers to include “hospitals, home health workers and other medical facilities” or about “17 million” people. The mandate will also extend to federal employees and contractors (excluding the post office apparently). Finally, the Department of Labor will require employees working at businesses with 100 employees or more to be vaccinated. In lieu of a vaccination, workers can submit to a COVID test.
Leaving aside the merits or feasibility of a such a broad mandate, there are some practical effects that are cause for concern. Acute labor demand means individuals can avoid the mandate by quitting and seeking work elsewhere. This hesitancy has driven health care employers to be careful in pushing vaccinations too aggressively. The expanded mandate may aggravate labor supply constraints, which in turn may affect throughput and further magnify patient acuity.
Submitting to a COVID-19 test and returning a negative result every week may provide an option for the hesitant, but it raises another problem. A positive test could mean isolation, time off from work and lost wages, thus providing little in the way of a practical alternative for many.
In short, more labor troubles ahead for health care. (HCA, THC, UHS, ACHC)
Testing. The White House’s plan also includes deploying the Defense Production Act to make more rapid at-home tests available. The press release does not distinguish between antigen and PCR tests like those found at the point of care. Given recent shortages of antigen tests at major retailers, we assume the former.
In the case of rapid at-home antigen tests, which are not very accurate, the goal would be for people who suspect they have a COVID infection to self-administer a test and follow-up with a provider to stay at home and rest. These test results would not be reported to the local health department.
In the case of PCR tests, we have noted the growing capacity for point-of care testing that will expand with more federal support. There is no immediate threat to DGX’s business, but we have noted and continue to monitor growth of point-of care capacity because it may prove to be the most efficient for institutions, schools and other places where people congregate. (DHR, ABT)
Monoclonal Anti-bodies. The White House plans to increase the availability of REGN’s monoclonal antibody treatment. So far, most shipments have ended up in states like Florida and Texas that have experienced a summer surge. The plan is to get more states involved and using the treatment to reduce impact on hospitals. Something that would have been done a long time ago were some policy makers not deluded by the notion of “zero-COVID.” (REGN)
HHS Drug Price Report. HHS issued their report as mandated by a White House Executive Order. It serves as a nice tool for forecasting what might be priorities of the administration in the absence of legislation. Most administrative suggestions are solutions that have been offered up before - models to test value-based arrangements, etc. You can read it here.
Medicare Rule-A-Rama. No rules pending
Other Rules.
None pending.
Other Stuff
Inflation. While the PPI number today is bad enough, economy-wide, the situation in health care is worse. While, PPI for treatment of Neoplasms is down slightly YoY% at 13%, it ticked up in August to 1% MoM. Other areas appear more stable this month, which isn’t saying much given the elevated levels.
JOLTS. Also going vertical are Health Care and Social Assistance Job Openings. To quote Tom Tobin, it is a “nutso number.” There are 1.7M job openings in this super sector of the U.S. economy or roughly 10% of all health care and social assistance employed, re-COVID. Quits were also up suggesting a prolonged battle between labor supply and demand. See above re: vaccinations.
SPAC and S-1 Corner
IPOs.
HeartBeam “medical technology company primarily focusing on telemedicine solutions that enable the detection and monitoring of cardiac disease outside a healthcare facility setting.” Our Thought Bubble: as small as solutions like these may appear relative to the rest of the industry, providing a stream of information/data on a chronic condition is much more valuable that a visit to a doctor’s office in some cases. We are going to see a lot of solutions like these so we are paying attention now.
Cingulate Inc. “Clinical stage biopharmaceutical company using our proprietary Precision Timed Release, or PTR, drug delivery platform technology to build and advance a pipeline of next-generation pharmaceutical products designed to improve the lives of patients suffering from frequently diagnosed conditions characterized by burdensome daily dosing regimens and suboptimal treatment outcomes.”
SPACs.
One new addition to the SPAC list, Monterey Bio Acquisition Corp. focused on biotech.
You can access the updated SPAC spreadsheet here.
Upcoming Events.
Sept. 7-10th What is Next for Health Care? Virtual Event with Matthew Holt of The Health Care Blog and Jess DaMassa, Host and Executive Producer of WTF Health. At this point, it looks like I will be sharing a panel with Matthew and Bill Taranto of MRK’s Global Health Innovation Fund, among others. The line-up is great if you are interested in innovation.
Emily Evans
Managing Director – Health Policy
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