Note: We will not be publishing next week in observance of the Thanksgiving holiday. You can always reach me in the kitchen via email. ~EE
Top of the Funnel | Marco Data, Policy Position Monitor
PPI. HCA (+), THC (+), SGRY (+) )ELV (-), UNH (-) The first entrant in reimbursement improvement is Medicare’s hospital payments and it shows up immediately in PPI. Overall, hospital PPI improved 3.56% YoY and 0.65% MoM. Almost all of this increase is due to Medicare which rose 2.5% MoM. Medicaid and private insurance coverage remained mostly flat.
In January, we will see improvements in other sites of service and in other payer types. How much of an improvement and whether it will be enough are the money questions.
To that point, PPI for Medical Equipment and Supplies continued to accelerate in October to 4.13% YoY and 0.49% MoM. PPI for Pharmaceutical Preparation Manufacturing also accelerated to 4.65% YoY and 0.37% MoM. These cost inputs are important but for most subsectors that are small relative to the biggest cost consideration, labor.
If you were to think of the U.S. Medical Economy in a way similar to how the Hedgeye Macro team thinks about the U.S. and Global Economies, health care inflation is accelerating (i.e. Quad3)
Health Care Inflation Chartbook here.
CONGRESS.
End of an Era. Speaker Nancy Pelosi is relinquishing her gavel, announcing she will not seek a leadership positioning. Her announcement opens up a path for younger Democrats like Hakeem Jeffries of New York.
Health care has already dropped down the list of voter priorities since 2010. A younger generation in charge may reduce its visibility more. On the other hand, Pelosi is not going anywhere – a recognition perhaps that the younger generation is not quite ready to lead?
Committee Leadership. Sen. Bernie Sanders will take the helm of the Senate Health, Education, Labor & Pensions (HELP) Committee. Ranking member will be Sen. Bill Cassidy. Cassidy has a pleasant demeanor and a history of bipartisan cooperation on difficult topics. The would-be ranking member, Rand Paul is going to move to Oversight, a topic in which he is very interested.
Ending the PHE. CNC (-), MOH (-), ELV (-), ADUS (-), AVAH (-) It is a monumental task, but Congress is getting antsy. This week the Senate voted 62-36 to end the three-year-old national emergency. The declaration has been the pretext for everything from regulating cruise lines to suspending student loan repayments. The national emergency declaration, of course, also supports, in part, the public health emergency.
The CBO is assuming the public health emergency ends in July 2023. If it ends earlier, that part of the budget dedicated to vaccines, testing, Medicaid FMAP can be redeployed creating a nice carrot for recalcitrant progressives.
One thought is continuous coverage for children in Medicaid and CHIP. This program would cover kids for 12-months after the end of the PHE. Congress is never short of ideas when it comes to spending money so other priorities should emerge as we head into lame duck.
Meanwhile, state Medicaid Directors are getting a little fed up themselves. While most states have reserved for the end of FMAP, enrollment continues to grow while tax collections, especially sales, begin their inevitable slow-down. They have asked Congress for a date certain for when redeterminations can begin, with a 120 day heads-up.
The National Association of Medicaid Directors called the uncertainty “untenable” which is not nothing. The Medicaid Directors are a pretty influential group. The fact they have shifted their attention from influencing HHS to Congress probably means they are pretty irritable.
THE WHITE HOUSE.
MRNA and Bivalent Boosters. PFE (-/+), MRNA (-/+) MRNA announced that their mRNA vaccine is effective against omicron variants. The FDA, however, is still allowing PFE and MRNA to measure effectiveness through the presence of neutralizing antibodies. Peter Marks, the FDA’s primary vaccine booster – err I mean regulator – even acknowledges it but, whatevs.
SecHHS Priorities. At the HLTH Conference in Las Vegas, SecHHS Xavier Becerra, articulated his agency’s priorities in the next Congress. These primarily include implementing the drug price negotiation provisions in the Inflation Reduction Act, getting ARPA-H off the ground, and ramping research on “long-COVID.”
On that latter priority, Becerra said it was slow going. NIH apparently, is trying to be inclusive in gathering study participants. Getting diversity in clinical trials is always difficult but with over $1B dedicated to the task and study sites all over the country, the delay suggests other possibilities.
We have heard anecdotally and via NIH documentation that the definition of “long-COVID” is a major hinderance. It is a condition that was defined first by media accounts and then by politics, bypassing all those analytical sciency-people. Another possibility is that “long-COVID” is not the big deal the aforementioned opinion makers implied. We have a family member enrolled and so far he has not been impressed.
Other Stuff.
BMJ on FDA Oversight. PFE (-), MRNA (-), BNTX (-) The BMJ published an investigative piece – their second – on the FDA’s lax oversight of clinical trials. It is a particularly useful analysis because it puts in context the alleged failed oversight of Covid-19 trials.
Poor oversight and undisclosed potential risks are bad when a drug is administered to a few thousand people each year. When a drug is injected into a few million, hundred million or billion people, it is a real problem.
Meanwhile The New York Times – yes, The New York Times! – published a story that equivocates on the usefulness of Covid vaccine boosters. They do so to make the argument that more money to produce next generation vaccines is required. Nonetheless, any sentient reader will question why they would bother if they hadn't already reached that conclusion.
Recent Events
Searchable calendar of publications and events can be found 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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