Top of the Funnel | Marco Data, Policy Position Monitor
JOLTS. (AMN (-), CCRN (-)) Job Openings in Health Care and Social Assistance experienced the biggest sequential drop in over two years. Good news for the industry overall, bad news for contract labor like AMN and CCRN.
Employment. (HCA (+), THC (+) ) Following the trend established after the March Omicron fast fade, health care employment added another month of acceleration, 0.37% MoM and 3.06 YoY% in September.
The driver of employment growth is hospitals. If the August data is any indication all three categories – General Medical & Surgical, Psychiatric and Substance Abuse and Other (mostly specialty hospitals).
Home Health hooked up nicely to reflect a more stable labor market but skilled nursing continues to add jobs too, a reversal of the substitution trend between the two sites of care that began in late 2016 and ended in 4Q 2021.
Employment at dialysis facilities took another header in August and is down 1.99% YoY. Dialysis facilities are at the very bottom of the pile in terms of desirable places to work but with labor supply coming off a high boil, perhaps the September number improves a bit.
PMI. The Purchasing Managers Index for hospitals jumped 57.9% in September from 53.5% in August. With the majority of hospitals reporting higher inpatient and outpatient volumes. Case mix was reported as 47.5% a decrease of 6% from August’s 53.5%. Days payable outstanding dropped 5% points to 52.5%. The Technology Index Spend jumped 60.5%, a 6% increase over August.
Not sure what to make of the decrease in case mix. We saw an acceleration in excess mortality out of the March post-Omicron trough but things appear to have slowed by mid-September, based on the CDC’s most data. We will have to see how it matures and if the lag has stabilized since the agency’s system upgrade in June.
No Changes to the Policy Position Monitor. Here.
Employment Chartbook here.
CONGRESS
The 2021-22 is rounding home plate, but a little work is getting done.
CBO on Telehealth. (TDOC (-), TALK (-), HIMS (-)) As much as we applaud allowing medicine to break out of the dark ages, some trouble looms for the pure play telehealth solutions. The latest comes from the Congressional Budget Office.
Although mostly outside the scope of a report titled, “Policy Approaches to Reduce What Commercial Insurers Pay for Hospitals’ and Physicians’ Services,” the CBO nonetheless notes that savings may be offset by increased utilization.
This concern is the one that has dogged telehealth reforms in the Medicare payment system. The industry has pinned its hopes on between data that would disabuse the CBO of this notion. Appears they are not yet successful.
Other concerns about telehealth continue to build around dispensing abortion-related drugs like Mifepristone. More recently, shortages for drugs that treat ADHD point to ease of access through telehealth.
FDA Oversight. (PRGO (-/+) The FDA’s recent tendency to step out of its role as a regulator and into marketing for the pharmaceutical industry will not go unanswered by Congressional oversight.
In the lead up to the inevitable questions, Senator Richard Burr wants more answers on the baby formula debacle and plans to threaten the agency with their appropriation.
There is no question the agency has some important questions to answer on baby formula and other things.
THE WHITE HOUSE.
Waiving Drug Laws. The President announced widespread pardons for federal prisons convicted of “simple [drug] possession” and recommend states review their laws as well. In 2021, the Department of Justice filed 205 drug possession cases, representing 249 defendants and secured 106 convictions, about 0.9% of the federal drug offense population.
If the current ratio of drug possession to drug dealing can be applied to the entire 66k inmates, the pardons would affect less than 1,000 inmates.
Biden also called for removing marijuana from Schedule I. That is when things get complicated because drug offenses are doled out based on units of marijuana. Removing the drug from the Schedule I is sure to cause some confusion.
And then there is the FDA. They are charged with regulating the lower THC content, CBD, something they have thus far been unable to accomplish. In a normal world, one would expect a more legal marijuana to still be regulated as alcohol is but it may be no one has thought that far ahead. Or they don’t care.
The most immediate purpose for the President’s declaration is support Pennsylvania Senate candidate, John Fetterman, who has called for legalization of marijuana. His race has tightened considerably.
The second goal would be for the Justice Department to reinstate the Cole Memorandum which demoted drug charges as a federal priority. (Hence, we hasten to add, the reason for a declining number of drug offenders in federal custody.)
If the decision is designed to help an particular candidate, its durability should be in question. If the the move is designed to make the Democratic Party more appealing to the young, it is really risky. Any one of those pardoned federal prisoners could end up back in jail, accused of a terrible crime. Federal prison makes you more violent, not less. With crime becoming a focus of urban voters, even the smallest incident will be magnified to enhance Republicans' tough on crime message. See e.g. Willie Horton and Bush v. Dukakis c.1988.
Medicare Advantage Star Ratings. (ELV (-), CVS (-)) CMS released 2023 star rating for Medicare Advantage plans. Next year will be the first since 2020 without the majority of the flexibilities offered under the Public Health Emergency.
The results are not great. CVS average rating, not enrollment weighted, was 3.82 in 2022. For 2023, it is 3.62. In 2022, it had 20 plans with four or more starts. For 2023, the count is 14. CVS has no plans with five stars.
For ELV, the picture is a little brighter. Average star rating, unweighted was 3.92 for 2022. In 2023 it will be 3.54. The number of 5 star plans fille from 17 to 13 during the same period. These ranking represent loss of bonus revenue.
Omicron Boosters. The CDC’s tin ear remains fully functional. Despite broad public rejection of another booster, the CDC issued guidance that defines an “up-to-date” vaccine status to include the recently approved bivalent booster. Uptake is in the mid-single digits despite a mini-buddy movie of Stephen Colbert and Dr. Anthony Fauci getting the shot and America’s grocery stores keeping an audio promotion on loop.
Of course, public opinion is not public health, but you would think the nearly universal skepticism would be a good excuse for reflection. The new definition of “up-to-date” means those employers not subject to court decisions, like colleges and universities, could require the bivalent booster even for those that received the previous two.
Other Stuff.
340B Payouts. In the wake of SCOTUS overturning the Trump administration’s reimbursement reduction for 340B drugs, CMS has been working in restarting payments to non-profit hospitals.
This week they announced the pre-Trump era reimbursement should begin in a couple weeks. Still to be worked out is back-pay for the reductions during 2018-22. That amounts to $10B.
It is welcome news for NFP hospitals whose cost structures are byzantine and their management systems less than nimble. It could relieve some of the financial stress we have been seeing at large systems like Ascension and Commonspirit.
Recent Events
The Failure of (Federal) Science with Dr. Tracy Beth Hoeg.
mRNA Technology: More Downside Than Upside, a Discussion with Dr. Aditi Bhargava.
Searchable calendar of weekly events and notes can be found here.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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