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Top of the Funnel | Marco Data, Policy Position Monitor
PPI. (HCA (+), THC (+), SGRY (+)) The Producer Price Index is an odd duck in health care. The input prices it measures for services are reimbursement from Medicare, Medicaid, and private insurance. Those payments are a function of base rates which are set once a year, at most, and acuity. The more complex and demanding the case, the longer the stay, the higher the reimbursement.
In September, PPI for General and Acute Care Hospitals decelerated for Medicare patients, likely due to decreased use of the Covid add-on payment. Medicaid remained unchanged. Private payers increased their payments – which of course is where most hospitals find their margin.
On the other hand, PPI for Medicaid patients in nursing care facilities accelerated, suggesting an effort by hospitals to discharge as quickly as possible low margin medical cases. This practice is also reflected in the higher labor demand at nursing homes.
CPI. CPI-M, which measures cost-sharing by patients has run hot for another month, accelerating to almost 7% YoY. The increased cost to consumers is probably a result of fewer laboratory confirmed SARS-CoV-2 patients for which cost-sharing has been waived by Medicare and many private insurers. It also reflects the uptick in private insurer PPI.
And, of course, America is sicker as reflected in the ongoing, persistent excess mortality.
Health Care Inflation Chartbook here.
On Wednesday we will be covering all these macro points themes for 4Q. Watch your inbox for invite.
No Changes to the Policy Position Monitor here.
CONGRESS.
Less than a month from election day, health policy is the last thing on Congress’ mind but they still kept us amused.
In Name Only. Progressive Caucus Members introduced a bill that would rename Medicare Advantage, “Alternative Private Health Plan.” This effort is part of a drumbeat of reform emanating from the progressive end of the Democratic Party and includes a lengthy and well sourced article in the New York Times.
With pressure building to support providers getting squeezed between inflation and reimbursement, the ability of Congress to respond will depend on what they can come up with to offset any payment adjustments that help.
Medicare Advantage is certainly a fat program as we have discussed many times. Its largess makes it a bipartisan target and there aren’t too many of those these days. I do not think there is time this year, but it could become a focus in the next term.
THE WHITE HOUSE.
Public Health Emergency. Not unexpected but the Biden administration extended the Public Health Emergency until January 11, 2023, at which point it will have grown into toddler-hood.
The move is not unexpected because the precautionary principle remains in full flower among public health types that are concerned about winter variants. You would think there would already be warning signs of this in the northern states but non meaningful signs thus far.
The true ambition of the Biden White House is to limit disenrollment from Medicaid, which stands at an all-time high. States are getting an enhanced FMAP and dragging their feet a little on preparing for eligibility reviews.
The mid-term elections should change things. Congress is getting testy about the duration of the PHE and the public is confused by not really seeing anything too scary in their midst.
More Drug Policy. The Inflation Reduction Act apparently was not sufficient. The White House issued an Executive Order today calling on CMS to develop new demonstration programs to lower the cost of prescription drugs. The Order specifically names “Value-based’ programs, something generally supported by the pharmaceutical industry.
What the drug industry fears and what Medicaid directors have sought for years, is closed formularies. “Value-based” programs are designed as a compromise.
End of “Family Glitch?” The White House issued a rule to end what policy wonks have referred to as the “family glitch.” The problem exists for the same reason the ACA has met with repeated court challenges over the years, poor legislating.
Under the ACA, an individual can take advantage of the advance premium credits if they do not have access to affordable coverage, defined as no more than 9.5% of individual income for self-only coverage. If family coverage is unaffordable using the same 9.5% threshold, this time for household income, the Department of the Treasury has opined that the advance premium tax credits would not be available.
The Biden administration’s rule will no doubt be challenged. Total new insured under this rule is expected to be about 1M people but that is probably on the high side.
Adderall Shortage. The FDA added Adderall to its shortage list and the DEA is investigating. It isn’t that hard to figure out, especially if you know young adults and teenagers. The proliferation of telehealth companies during Covid, not all of them scrupulous, has made access to prescribed drugs easier than ever.
The ease with which certain drugs are available without a physician-patient relationship is a blind spot for the telehealth industry. Preventing dust-ups with regulators that endanger progress on liberalizing this modality of treatment is a priority.
Other Stuff.
The Ongoing Mystery of Long COVID. Fans of PFE and defenders of all things FDA, have been pointed to “long COVID to explain excess mortality. There was report released by the CDC’s MMWR a few months ago that met a good bit of ridicule. One client, a physician, said, “I cannot believe they published that.”
A recent study published in Nature suggests that we are a long way from understanding “long COVID.”
Paxlovid and Drug Interactions. The Journal of the American College of Cardiology published a review paper this week that concluded Paxlovid can interact with certain commonly prescribed heart medicines like antiarrhythmic, antiplatelet, anticoagulants, certain statins and immunosuppressive agents. The paper calls out specifically Ranolazine, used to treat angina and heart-related chest pain, as contraindicated.
Given that Paxlovid is authorized for unvaccinated individuals at risk for developing severe disease – the elderly and frail – and therefore more likely than not to be taking any one of the drugs of concern
More Shots for Tots. The FDA authorized and the CDC approved the bivalent Omicron booster for children 6 and up (MRNA) and 5 and up (PFE). Not that is matters. Of the 42M doses distributed only 16M have been administered. Most will go in the trash.
Events
Upcoming Events. 4Q Health Care Macro Overview. In a period of successive Quad 4s, health care is a better than average safe harbor. On Wednesday next week, I will run through all the macro data including employment, CPI, PPI, PCE, mortality and paint the clearest possible picture of the health care.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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