Top of the Funnel | Macro Data + Policy Position Monitor
Employment. ((HCA (+), THC (+)) Health Care added 56k jobs in June or about 15% of the total 372k increase in nonfarm payrolls. Ambulatory care employment increased 29k (50% of all health care); hospitals added 20.5k (36.5%) and even nursing home turned out with a 8k (14%) increase.
YoY% change in aggregate hours worked looks more like normal pre-pandemic patterns with a YoY% increase of .94% and a MoM% increase of .08% reported for May.
Unlike the pre-pandemic period, average hourly earnings on a YoY% basis remained elevated in May at 7.3%, an acceleration from 7.05% in April.
JOLTS. ((AMN (+) CCRN (+)) Job openings in May rebounded 1.64% after a dramatic decline in April, reflecting reduced federal relief support, better labor management and the slow return of normal operations.
PMI. ((HCA (+), THC (+)) That happy jobs report and last week’s PCE is echoed by the Hospital PMI released on Thursday, which is slowly making its way back to the more normal 60+ levels with a reacceleration in June (1.9%) versus May (1%). However, the case mix index decelerated 4.5% versus an acceleration in May of 6%.
Putting the employment data and PMI together what we are probably looking at is the careful triaging of patients in a way that protects margins. We heard the phrase “patient abandonment” recently – the refusal of providers to begin or continue treatment of low margin patients – primarily the chronically ill that would occupy medical floors. That trend, if it is real, might explain the drop in case mix.
Disability. Disability has been easier to get since Congress relaxed rules for federal workers and "long COVID" became a disability under the ADA. In June, another 200k people were added to "Not in Labor Force - With a Disability." Since spring of 2021, when disability rules changed, about 820k people have been removed from the labor force.
Employment workbook can be found here.
Position Monitor here with changes made last week.
CONGRESS
Negotiations on Build Back kinda Better. Senators Joe Manchin and Senate Majority Leader Chuck Schumer are still managing to keep their conversations under wraps.
However, one possible response to Manchin’s demand that the solvency of the Medicare Trust fund be addressed would be to apply the 3.8% Net Investment Income tax to pass-through income. As reported, the proposal would apply to joint filers with 500k in pass-through income.
THE WHITE HOUSE.
Physician’s Fee Schedule. ((CANO (-), CMAX (-), HUM (-)) Continuing our theme of Medicare’s PPS inability to accommodate price and labor shocks, CMS has proposed a 4.42% decrease in the conversion factor (the starting point for calculating services payment). The professional associations went bananas, of course.
The White House is spinning it as “seniors getting value for their previous contributions and taxes.” That, of course is code for lower cost sharing in Part B.
It is usually best to ignore providers when they say a payment update is going to reduce access, but post-COVID it appears to be the new reality.
Other provisions of the proposed rule include:
- Permitting licensed professional counselors, marriage and family therapists, addiction counselors, certified peer recovery specialists, and others, to provide services under the general supervision of a physician rather than direct. Behavioral health clinicians would be able to operate much like aestheticians’ offices work. A physician will be providing general oversight but not be present in the office every day. ((ACHC, (+))
- CMS is proposing to pay for clinical psychologists and licensed clinical social worker as part of a patients’ primary care team.
- Follow-up colonoscopies to an at home test will be considered a preventive service and all cost-sharing under Medicare Part B would be waived. Medicare is also planning to cover colonoscopies for people as young as 45 – which is a very small part of their populations. ((EXAS (+))
- Dental care when integral to a medical service, like a jaw reconstruction, will be expanded to explicitly include organ transplants. CMS is seeking comment on other medical services that would be considered integral to other medical conditions such as cancer treatment and joint replacement.
First thoughts: removing the direct supervision requirement for behavioral health clinicians is one of better policies proposed by CMS to address the mental health worker shortage.
CMS’ proposed change, especially if adopted by commercial insurers, means the psychiatrists can offer fractional time to a number of clinics instead of being in one office every day.
By agreeing to pay for LCSW and clinical psychologist as part of a primary care team, CMS could be signaling their preferred approach to mental health care. As tele-mental health providers have sprung up like daisies these last couple of years, concerns have been raised about patient-clinician relationships, efficacy and integration with other health services. CMS may be signaling their preferred approach.
Expanded dental services is quite the reach but serves the political purpose of expanding Medicare services demanded by the progressive wing of the democratic party.
Prescribing of Paxlovid. ((WBA (+) CVS (+)) The FDA has authorized pharmacists to prescribe PFE’s anti-viral as long as they have 12 months of medical records that include blood work and medications. Pharmacies that participate in the 340B program are most likely to benefit through their access to the relevant non-profits’ EHR.
SCOTUS. Macro policy analyst, J.T. Taylor, and TMT policy analyst, Paul Glenchur, and I discussed the recent Supreme Court Decision, West Virginia v. EPA and the implications for tech, antitrust and health care. Link is here.
Recent Events
U.S. Medical Economy Macro update.
Upcoming Events
PFE: Bad for America (joking, but only kind of). Tuesday July 27 @ 10am ET. Event link here.
Calendar. You can find 2022 here with searchable ticker list.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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