Top of the Funnel | Macro Data + Policy Position Monitor
Labor. With today’s print, it appears we may be finally returning to the slow but predictable employment growth in health care. Pre-pandemic and post-ACA, health care added 0.15% to 0.30% MoM. In January and February, the monthly change was 0.11 and 0.38%, respectively.
What is different now is that the sector employs about 280k fewer people than it did in January 2020. There are about 100k fewer people working in general medical and surgical hospitals; 400k fewer people staffing nursing and residential care facilities; partially offset by 200k more people employed in the ambulatory services area with other subsectors making small contributions.
All that, of course, does not consider the trends pre-COVID that suggest current health care employment should be about 17.5M not 16.1M people.
In other words, growth in health care employment moves forward from what looks like a permanently lower base. With so many other sectors looking for workers as geo-politics dictate near and on-shore manufacturing and logistics, immigration reform remains stalled and demographics follow their natural course, labor supply is going to remain tight.
Employment chartbook can be found here.
Policy Position Monitor
Policy Position Monitor is here.
Congress
Ending the Public Health Emergency Part I. The Senate passed a bill calling for an end of the Public Health Emergency, 49-47. It has no hope in the House and the president has promised to veto it, but it tells you something about the administration’s thinking on the issue.
The White House will need time to, first, lift waivers and, to the extent the law permits, codify those things for which there is consensus for permanent extension. CMS has begun issuing guidance to states on managing the massive redetermination process for 83M Medicaid beneficiaries (see below) but there are concerns and obstacles to planning such a complex undertaking.
While a July end to the PHE seems possible, we are more biased in favor of 3-4Q because it is a situation that requires substantial involvement of a very diverse group of stakeholders. So far, it is not clear enough work has been done.
Vaccine Mandates. The Senate also passed a bill 49-44 requiring an end to vaccine mandates for health care workers. This effort also has no prayer in the House, but it too tells you a little bit about the direction the wind is blowing.
The moderate body that is the Senate has chosen to express the sentiment of a lot of people who, for a host of reasons, do not like to be forced into health care decisions. For some members of the World’s Most Deliberative Body, the vote serves to inoculate them – pun intended – against criticism of the mandates.
In short, vaccine mandates are not popular and may have been politically and public health wise, un/counter-productive.
The White House
State of the Union. The President made two material policy positions at the State of the Union speech this week. ((WELL (-), ENSG (-), AMN (+), CCRN (+), ACHC (-), UHS (-))
First, the administration plans to implement nurse staffing ratios for nursing homes. The theory is that REITs and Private Equity are skimming enough fees off the industry that, with more transparency and oversight regarding ownership, wage rates could rise enough to meet these new requirements.
That conclusion is, of course, delusional, but I digress.
The policy is the result of the Biden administration’s dedication to one of their core constituencies, labor unions. Health care worker unions are losing nursing home members. It was hoped that the Build Back Better plan to fund Home and Community-based Services to the tune of $140-400B over ten years would permit these workers to transition into a new care site.
Absent the passage of the BBB, the administration has shifted to mandating employment at nursing homes. This requirement, if implemented, is another boon to nurse staffing agencies such as AMN and CCRN.
Second, the administration presented a mental health policy that relies heavily on community-based care supported by technology. This policy is in direct conflict with the business models of UHS and ACHC that emphasize inpatient care. Last spring, venture capitalist, Marcus Whitney, and I discussed how this policy is likely to unfold and it is even more relevant today.
Ending the Public Health Emergency Part II. ((ANTM (+/-), CNC (+/-), MOH (+/-)) CMS sent guidance to states regarding Medicaid redeterminations and continuity of coverage for the disenrolled. This guidance is the first major effort to prepare for an end to the PHE.
The guidance gives states 12 months following the end of the PHE to initiate eligibility redeterminations and 14 months to complete them. The redetermination period can begin two months before the end of the PHE and the administration has pledged to give a 60-day heads up.
Based on the experience post-ACA when redeterminations were suspended as the complex law was implemented, this will not be nearly enough time.
The guidance also promoted continuity of coverage and suggests that Medicaid agencies work with MCOs to covert Medicaid enrollees to other programs. We heard a good bit about this during earnings, with ANTM asserting they felt they would be able to capture former Medicaid enrollees through individual and exchange enrollment.
We have also heard that there are some complaints that the guidance did not include an express release of states from marketing restrictions. Use of guidance that promotes continuity of coverage may be spottier than the MCOs have suggested.
Living with COVID. The administration released its 96-page blueprint for the post-COVID future. The report calls for widespread availability of testing, therapeutics and vaccines, of course. You will note that the plan calls for “working with Congress” to meet the stated goals, which is code for new appropriations.
Senator Chuck Grassley, ranking member of the Senate Finance Committee, threw cold water on the idea via Twitter and suggested a full accounting of money spent is in order before Congress makes any more appropriations.
Other Stuff
Employment. Other notable conclusions from the employment data:
- Temporary Help Services – which would include nurse staffing - decelerated to 10.47% from 11.82% in December on a YoY basis but remains well above normal.
- Biotech and scientific research continue their tear
- Long-term care and nursing facility employment shows little signs of life.
Calendar. The Hedgeye Health Policy is back. You can find 2021 here with searchable ticker list. You can find 2022 here.
IPOs + SPACs
SPAC List can be found here.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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