Top of the Funnel | Marco Data, Policy Position Monitor+ Earnings
Employment. (HCA (+), THC (+), SGRY (+), ANTM (-), HUM (-), UNH (-) President Biden will not be the first president to benefit when the health care sector goes a-hiring when other parts of the economy are not. It was a major part of President Barack Obama's early success post-GFC.
In October, health care employment increased nearly 3.5% YoY. For the three major sectors, the Ambulatory Services sector increased 0.36% MoM; hospitals were up 0.21%; and nursing facilities rose 0.37%. Home health, considered part of the Ambulatory Sector, increased 0.38% MoM.
Health care is behaving much like expected as we approach a recession. People seek care while assured of insurance coverage. At this time of year, they may be further motivated by exhausted deductibles. There is also the matter of a sicker population post-COVID.
Health Care Employment Chartbook here.
Earnings.
HUM. Not a company I have always loved but they are doing at least one thing right. Unlike ANTM and others, they appear to be hanging on to more of their star ratings after the pandemic accommodations expired. At stake is millions in bonus payments. Relative to their peers, HUM should have a better 2023.
Policy Position Monitor here.
CONGRESS
Medicare Advantage Oversight. (UNH (-), CLOV (-), ANTM (-), ALHC (-), HUM (-) The Senate Finance Committee unveiled an oversight report on Medicare Advantage marketing practices. The Committee found that MA plans sponsors engaged in aggressive and deceptive marketing practices that had led to an increase in complains to state insurance commissioner.
A major problem appears to be that Congress cut state insurance commissioner out of the complaint resolution and enforcement loop. NAIC believes they are better positioned to limit the behavior of bad actors.
Report here.
The Future of Health Policy. As Democrats raise concerns about major changes to Medicare and Social Security, Republicans are running the secret squirrel play. They have proposed nothing substantive although Sen. Rick Scott (R-FL), who has a long history of running it up the middle – just ask a Frist – has suggested these sacred cows of American politics be subject to annual appropriations.
That is unlikely to happen. What Scott and others may really want is a starting point that does not include the status quo. Not the worst strategy but everyone should be thinking about the future of health care policy as one of deregulation and price transparency. As a back-up plan think of the future of health policy as complete and utter paralysis as states step into the void.
The Future of Value-based Purchasing. About 44 House members sent a letter to House leadership asking them to extend the 5% APM incentive payment under the Medicare Access and CHIP Re-authorization Act.
There is little doubt the APM incentive payments will be included in the annual Medicare extenders when the current Continuing Resolution expire in December. It looks like power is shifting and there is no use for Members to spend a lot of time driving new policy.
Lobbyists, like everyone else singing for their supper needs to keep busy.
THE WHITE HOUSE.
Medicare -Rule-a-Rama and nobody is happy..
Physicians Fee Schedule. (CANO (-), CMAX (-), OSH (-), PRVA (-) The sclerotic Medicare reimbursement system continues its path of mayhem. The CY 2023 conversion factor was finalized at $33.06, a decrease of $1.55 from CY 2022 or 4.5%. The complexity of the Medicare statute leaves little room for Medicare to maneuver even if it wanted to.
CMS finalized some coverage expansion policies that include accessing an audiologist without a physicians’ order. In what might turn out to be another one of those overreaches, CMS also finalized dental coverage for patients undergoing organ transplants and certain cardiac procedure.
Hospital Outpatient and Ambulatory Surgery Centers. (CYH (+) CMS finalized a 3.8% payment update which is better than the 2.7% increase proposed. Better than a sharp stick in the eye, but a far cry from the 5-6% wage inflation health care is facing.
CMS also finalized the new Rural Emergency Hospital service category. REH are the first addition to the list of provider types Medicare covers in many years. Services will be reimbursed on the OPPS schedule plus a 5% bump, at least initially. The new provider type will launch in January. Subsequent payment updates will use the OPPS schedule.
Home Health. AMED (-), EHAB (-), The industry got a little reprieve from the barely legal PDGM behavioral adjustments. The proposed cut of 7.7% proposed was increased to 7.9% but, as expected, CMS allowed for a phase-in of the reduction. After taking into account all the adjustments, home health will get a 0.7% rate increase in 2023.
ESRD. DVA (-), FMS (-) The final price increase for dialysis providers will be a relatively robust 3.1% for CY 2023. It should help some but given the headwinds from labor cost and availability and excess mortality it may not change the future of DVA. I went over these problems in a call on Wed. Link here.
Expect heavy lobbying and lots of storytelling about how success is right around the corner. It may be. We should have a different sense of the vibe after election day. I am biased in favor of Congress that wants everyone to gut it out but let's give it a week.
Other Stuff.
Vaccin-a-palooza. (PFE (-), MRNA (-), BNTX (-) PFE reported positive data on a maternal ESV vaccine, launched a P1 study of a combo COVID-flu product and reported clinical data on the effectiveness of its bivalent COVID booster.
Vaccines are very attractive for drug makers because they are usually excused from product liability which means less liability risk, which in turn means less rigorous clinical evidence. We have seen this phenomenon in spades during COVID and there is no reason to expect much different.
The question, given all that has happened, how compelled are physicians to recommend vaccines? More to the point, how willing are patients willing to accept them?
Have a great weekend.
Recent Events
Calendar of Recent Events and published notes here.
The Failure of (Federal) Science with Dr. Tracy Beth Hoeg.
mRNA Technology: More Downside Than Upside, a Discussion with Dr. Aditi Bhargava.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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