Top of the Funnel | Marco Data, Policy Position Monitor.
PMI. PMI for hospitals increased in November from 53 to 57.5 with case mix making a similar leap. That data point points in the same direction as all the other data points like employment.
PPI. Health-related PPI was more of the same with modest retreat in costs from October. Hospital PPI, which represents relative reimbursement from all payer types, decelerated from 3.34% YoY to 3.24% YoY.
Health Care Inflation Chartbook here.
No Changes to the Health Policy Position Monitor
CONGRESS.
Vax Mandates No More. (PFE (-), MRNA (-), BNTX (-) Tacked onto the must-pass National Defense Authorization Act was a requirement to end mandates for Covid vaccinations. The mandates have been the subject of great controversy for a number of reasons.
These include the potential for vaccine injury. Myocarditis, especially among young men, is slowly making its way to widespread acceptance as a potential adverse event associated with administration of mRNA vaccines. Several countries and Florida have suspended use of PFE and MRNA’s for this reason.
Servicemen and women who refused to take the vaccination have been discharged and attracting new recruits has been difficult. These personnel issues could be threats to national defense.
Finally, a whistleblower at the Defense Department, with Sen. Ron Johnson’s sponsorship, has documented and presented testimony about vaccine injury that almost no one wants to talk about.
The end of the mandate passed on a bipartisan vote in the House and is very likely to clear the Senate. The White House called it a mistake but appear uninterested in any escalation.
Cannabis No More? Not tacked onto the NDAA was the SAFE Act which would relieve the banking industry of the many anti-drug trafficking laws when dealing with cannabis businesses. The bill is a pre-requisite for de facto nationalization of the legal pot movement.
A major issue is the Department of Justice’s concern that the SAFE act may make it more difficult to prosecute federal drug crimes. This same concern was raised by former Attorney General Bill Barr during the Trump administration.
The way in which the DOJ can change the mood makes us wonder if state AGs and local prosecutors aren’t facing similar headwinds. As being anti-mass incarceration (whatever that is) is replaced by anti-crime as the winning issue, could 2023 mean a reversal of so much drug law liberalization?
Seems at least possible.
Funding the Government Some More. (AMED (-), EHAB (-)) The Continuing Resolution that expires in a few days represents the last best hope for a number of health care’s supplicants.
Compromise is underway to get the VALID Act, which would regulate Laboratory Developed Tests on a risk stratified basis. The latest twist is that tests developed and used by Academic Medical Centers would be excluded from regulation.
The difficulty the Senate has had reaching consensus on the topic (the House has not yet approved any similar provisions) speaks to the complexity of the problem. It is also another demonstration that the regulatory system put in place in the 1970s may not be quite up to the task in 2022.
More Money for Providers. The pressure wrought by the combined forces of a sclerotic Medicare payment system, inflation and labor shortages has sent the provider community to Capitol Hill looking for relief in the year end spending bill.
Senate Minority Leader Mitch McConnell is giving everyone heartburn by advocating for a temporary extension until January at which point his party will control one side of The Hill. Also weighing has been the budget hawks like the Center for a Responsible Federal Budget which has, rightly, pointed out the implications of such relief on overall inflation.
THE WHITE HOUSE.
ACA Exchanges Continue to Outperform. (ELV (+), UNH (+)) The second “snapshot” was released by CMS this week and shows continued robust growth of exchange enrollment. About 5.5M Americans have enrolled in ACA compliant plans up from 4.6M this time last year.
As we mentioned last week, plans are made attractive by the extension of subsidies for the 400% plus of the FPL. These people are most likely transfers from the unsubsidized/ unregulated market so probably will not move the needle that much on uninsured rate. However, it represents a tailwind for providers.
Drug Price “Negotiation.” (PFE (-), BMY (-)), We remain skeptical that CMS will be able to outsmart the drug industry but they have begun a series of stakeholder meetings that paves the way for the selection of the 10 drugs that will be negotiated in 2026.
On some analysts’ lists of the top ten are Ibrance, Jardiance, Xarelto, Symbicort, Eliquis, Breo Ellipta, Myrbetriq, Januvia, Xtandi and Victoza.
Prior Auth. CMS has proposed a rule that would require streamlined electronic process for prior authorization. Prior Authorization is one of MCOs most treasured tools for utilization management and benefit spend control.
A more transparent and speedy system will make it harder for MCOs to abuse the tool as they are rumored to be doing. The rule has the additional benefit of reducing the cost of a pending bill in prior authorization that has been eyed for inclusion in the year-end spending bill.
Other Stuff.
Upcoming Events
Venture View with Marcus Whitney: Markdowns, Exits & The State of Affairs in Venture Capital. Thursday December 22 @ 10 am (Add to Outlook Calendar)
Recent Events
Searchable calendar of publications and events can be found here.
Where to From Here? MCOs and the 2023 Outlook. Replay here.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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