Top of the Funnel | Macro Data + Policy Position Monitor
Mortality. ((AMED (-), CHE (-), DVA (-), EHC (-)) The Centers for Disease Control released provisional mortality data through March 26th on April 6. Data through mid-February is generally reliable and as the chart indicates there are six to eight weeks of lag in data maturation.
In our recent presentation, Shuffling Off This Mortal Coil, we identified several drivers of excess mortality, excluding COVID: diabetes, Alzheimer’s, heart disease and stroke. It is these things that appear to continue to drive excess deaths as COVID mortality recedes. Apply all the caveats appropriate to the data lags. See Tuesday's Chart of the Week for updated Mortality Chartbook.
Policy Position Monitor is here
Congress
COVID Relief. The Senate appeared to be nearing a deal to provide $10B in COVID relief but alas, it was not to be. At last report, the Senate had crafted a package with $5B dedicated to therapeutics, $750M dedicated to vaccine development and the balance to be used at the discretion of BARDA. You should read the Senate’s decision to allocate half the package to therapeutics as a response to the vaccine-centric response that has clearly backfired in so many ways.
Build Back Better. Democrats and the White House attempted to revive the Build Back Better Act with an announcement this week, but it was immediately quashed by Sen. Kyrsten Sinema of Arizona. This dynamic will persist for the rest of the year – and beyond if the conventional wisdom is wrong about a power shift – where Democrat leadership tries as many angles as possible to demonstrate value to constituents at home while at-risk Democrats and Republicans try to prevent it.
Buried in that strategy somewhere, especially among those old enough to remember the 1970s, is an understanding and concern that inflation is never going to come under control unless Congress stops spending money. Saying so out loud, however, would acknowledge political culpability to date and we cannot have that.
The White House
FDA AdComm Meeting. ((PFE (-), MRNA (-)) Notwithstanding the FDA’s approval of a second COVID-19 booster (a.k.a. a fourth shot) without the benefit of a Vaccine and Related Biological Product Advisory Committee meeting, the VRBPAC convened on Wednesday to discuss COVID-19 vaccine approval procedures going forward.
It is a hopeful sign that COVID-19 vaccines will eventually be handled in much the same way flu shots are approved. There remain significant challenges. One area of concern is the low efficacy threshold of antibody titers. Another is the significant data collection and interpretation challenges that have made themselves know since early 2020.
Finally, the Committee seems tired of PFE and MRNA’s tendency to announce a definitive solution for this variant or that, designed to drive media attention and political responses from those who have not yet figured out how to get ahead of that game.
Medicare Advantage Rule. ((UNH (+/-), ANTM (+/-) HUM (+/-) CLOV (+/-)) CMS released its 2023 Rate Announcement for Medicare Advantage Plans. It anticipates that payments to plan sponsors will increase 8.50% versus the pre-announcement of 7.98% and a typical pre-COVID year of 4.00-5.00%. The difference is driven by the FFS growth rate that must account for COVID-related spending, such as 20% add-on for COVID treatment, vaccines and testing, at least through 1H 2022.
Also included in the Medicare spend is increased intensity of treatment. The HHS Office of the Actuary acknowledges that delayed care will result in a correspondingly higher acuity. What makes their modeling interesting is that Medicare Advantage plan sponsors have batted that suggestion away, claiming they see no pent-up demand.
Separately, the Office of the Actuary is anticipating a reduction in volume and intensity of services 2023-2024 and as far out as 2028 due to COVID-era mortality. If their prediction is correct, and they are very rarely too far off, the impact of mortality will end about the time the post-war generation has been exhausted as far as Medicare is concerned. Considering the health care system was built for the Medicare population, that means big change in the future.
Ending the PHE. ((ANTM (+/-), MOH (+/-) CNC (+/-)) CMS issued additional guidance to State Medicaid Directors this week. The task of reviewing the eligibility of 85 million people is daunting. States have developed different approaches which the Medicaid Center shared.
These approaches have different implications for the MCOs. On the one hand, some states are using a population-based approach; putting people who would be categorically ineligible due to age and/or individuals who have not used health care services in a while at the front of the line. In this case these higher margin members would depart first from the MCO’s census.
Other states are using a more simplified time-based approach placing a priority for redetermination on those beneficiaries that have not been subject to review the longest. This approach would be less lumpy for the MCOs and more operationally simple.
CMS also issued new guidance rolling back certain blanket waivers issued early in the pandemic for Nursing Facilities and Long-Term Care Hospitals. These waivers largely apply to oversight, training and physical environment standards and represent the low-lying fruit of waiver reversal.
As we covered in detail with estimated timeline a couple weeks ago, CMS must first roll-back, or find a way to make permanent, waivers implemented during the PHE before it can end the PHE. The batch of waiver terminations issued yesterday become effective within 60 days. Future waiver rescissions will probably follow the same path which puts the end of the PHE in 3Q at the earliest and dependent on how quickly more waivers can be addressed.
At-Home Medicare Tests. (ABT (+) The White House announced that Medicare Part B would cover at-home OTC tests through the end of the Public Health Emergency. This announcement represents a significant departure from traditional Medicare policy, albeit temporarily.
Until the COVID-19 pandemic, Medicare only reimbursed for tests used in the diagnosis and treatment of disease – with five cancer exceptions - which implies the presence of a clinician. In effect, Medicare is pledging to pay for what amounts for screening, something heretofore, they have not done except in five circumstances mandated by Congress.
The reimbursement policy also sets a precedent of payment of OTC products – again, something Medicare has never done before but will again soon as it relates to the hearing aid policy mandated by Congress.
Family Glitch. The Biden administration announced it would, by administrative action, repair the ACA’s family glitch. An individual that is offered affordable insurance coverage (not more than 10% of income) is ineligible for ACA tax credits. That prohibition has been extended to family members since implementation of the ACA, regardless of whether family coverage was more than 10% of household income.
The White House has pledged to fix this. The estimates range from 1.2 to 5.1 million people who would be eligible for ACA tax credits, some of whom are uninsured. I would not get too excited, however. The proposal is legally suspect and requires the IRS to reverse its decade-old finding that it was impossible to do as President Biden asks.
Other Stuff
Vaccine-Associated Atrial Fibrillation. The American College of Cardiology met in Washington, DC last weekend. Researchers from Texas A & M and Louisiana presented research on reports of atrial fibrillation associated with vaccinations. They looked at 1.3 million adverse events reported to VAERS between 1. Among those, atrial fibrillation was reported 2,149 times and 90% of those were associated with the COVID-19 vaccinations. The runner-up was the Zoster vaccine.
Poster write-up here.
Myocarditis and Pericarditis. The longstanding issue with VAERS data is that it is very noisy. In a period when vaccines have been politicized to a previously unimaginable degree, that is particularly true. It is true in the other direction as well. The CDC has relied on VAERS to declare the risk for COVID-19 associated myocarditis and pericarditis in young people is very small.
A paper published in December by researchers at Kaiser Permanente concluded the true incidence of these conditions is higher. By searching encounter text descriptions instead of relying on ICD-10-CM discharge diagnosis codes the authors estimate myopericarditis as 95.4 cases per million after a second COVID-19 vaccine dose to people 12-39. The authors suggest this rate is markedly higher than what the data AdComms reviewed.
What is apparent from this research and this great interview with one author of the Kaiser Permanente study is that politics has exploited the slow arrival of understanding in science, the latter of which is starting to catch up. Another theme that has emerged is that data, especially that dependent on electronic health records, is deeply flawed and often delayed. A fact well known to just about everyone in health care except maybe the CDC.
The picture that is emerging is that the COVID-19 vaccination can be harmful to young people and that harm has yet to be fully elucidated by robust longitudinal clinical data. The risk is probably still low but there it sure would be nice to know what that means.
Ultimately PFE and MRNA are going to have to reckon with the fact that their vaccines are great for those most at risk but probably not going to be endorsed for the young the healthy for very much longer See also the Tamiflu debacle.
ECDC and EMA. Both organizations announced this week that there was no reason to recommend the fourth booster the FDA so heartedly embraced for people over 50 two weeks ago. They have promised to continue to monitor the situation.
Olive Oil. We have highlighted the Theranos-like nature of Olive, the latest over-VC-funded start-up/growth name, and now glad to see general readership media catching on. For over a year, around here anyway, conversations about Olive have tended to conclude with “that won’t end well.”
Sean Lane’s purported National Security background seems a bit overstated when compared to the story told by a previous venture. His presentations about human routers and a lot of other gibberish that ignores things like HIPAA and Personal Health Information should make any health organization a bit nervous. After months of looking, we have been unable to identify any major hospital system that uses Olive’s products. Somewhere in there is probably a company but that $400M Series H round from last July is going to come hard into Quad 4.
Events
Recent.
Shuffling Off the Mortal Coil: Death in the Age of Pandemic
End of the COVID-19 Gravy Train? Relief Funds, End of PFE + Timing.
Calendar. You can find 2021 here with searchable ticker list. You can find 2022 here.
IPOs + SPACs
Updated SPAC Spreadsheet Here
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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