Top of the Funnel | Macro Data + Policy Position Monitor + Earnings Call Commentary
DVA. (-) The company’s 1Q 2022 earnings were poor. Management’s explanation was worse. From CEO Javier Rodriguez’s inability to properly explain the ESRD Prospective Payment System to the sell-side, which should already know, to attributing a bad quarter to seasonal factors, there was little to redeem the quarter and probably the future of DVA. I covered a lot of the existential threats on Wednesday. Link and notes to call here.
Employment. ((AMED (-), CHE (-), DVA (-)) Health care employment continues to demonstrate that back-to-normal is, in fact, mostly normal. Month over month gains for the sector were consistent with pre-COVID trends, although absolute employment is still about 250k below before-times levels.
Ambulatory care is above pre-pandemic levels at 8.1M versus 7.8M in 2019. Month over month growth is 0.34% and YoY% change is 3.74%, both elevated versus 2019 levels. Hospital employment is still below pre-pandemic levels at 5.1M versus 5.2M. YoY% and MoM% are still modest.
The drag on health care employment remains nursing and residential care facilities. On a YoY% basis, employment growth is still in negative territory. Monthly gains are minimal. Headwinds will persist for the nursing home, residential, dialysis and any other low wage, low skill job in health care.
Employment chart book here.
Mortality. ((HCA (+), THC (+), SGRY (+), CHE (-)) All-cause deaths continue to be revised upwards for 2022 and the relationship between COVID and all-cause deaths has broken down a bit. Correlations between all-cause and COVID are .97 in 2020 (March-December), .98 in 2021, and .93 so far in 2022. COVID. This is your weekly reminder that excess deaths in the U.S. are cause by a lot more than COVID and there have been no policy moves to address it.
CONGRESS
Health Policy Agendas. (( UNH (-), ANTM (-), HUM (-), ILMN (+)) Most of the precious O2 in Washington went this week to the decades-long abortion wars when a draft opinion was leaked to Politico from SCOTUS. Leaving aside the merits of the underlying debate, the leak handed Democrats a new tactical tool for November.
Meanwhile, House Republicans released their vision of health care legislation. It leans heavily on reform of Part D, a bipartisan effort that was sidelined by a combination of the No Surprises Act and House progressives’ insistence on more aggressive interventions. The GOP roadmap also calls for a return of the Trump-era policy of temporary but certain reimbursement for devices and drugs with breakthrough designation. Finally, House members plan to continue made-in-America policies for drug manufacturing.
Note that these modest proposals, which generally have bi-partisan support, are probably not the complete agenda. Congress, if November is the bloodbath our operative friends from both sides of the aisle are predicting, is likely to move more aggressively on deregulation to match trends in statehouses.
User Fees. The House has completed much of their work on FDA User Fee legislation. The packages will re-authorize PDUFA, GDUFA, Biosimilar User Fee Act and MDUFA. New provisions include strengthening the Accelerated Approval pathway that has recently become so controversial by ensuring drugs show clinical benefit.
The White House
JNJ Vaccine. The FDA announced a limitation on JNJ’s COVID-19 vaccination. The FDA had previously issued and Emergency Use Authorization for people 18 years and older. The threat of thrombosis and thrombocytopenia syndrome is sufficient to change the indication, according to the FDA. In the event there is no other vaccine available, or they are clinically inappropriate, the FDA advises that the JNJ vaccine presents less of a risk than COVID itself and in that event should be administered. Barring those limitations, the JNJ vaccines should not be used.
There are sure to be more restrictions put in place as VAERS data and experience continue to mature. Getting the vaccination process de-politicized and restoring the FDA’s reputation is job one for the new Commissioner, Robert Califf. The free-wheeling vaccine approvals are going to be coming to an end.
Other Stuff
Workforce Development. ((AMN (+), CCRN (+)) The Assistant Secretary for Planning and Evaluation issued a report on the state of the health care workforce. The report offers some recommendations that include permitting clinicians to practice at the top of their license, supporting evidence-based telehealth and, importantly, retaining COVID-19 flexibilities.
Past Events
On Wednesday, I covered all the problems with DVA’s future that do not end with a bad quarter. Link with timestamps here.
Calendar. You can find 2021 here with searchable ticker list. You can find 2022 here.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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