Top of the Funnel: Macro
JOLTS. Job Openings were down from 2M (an upward revision) to 1.7 but up from March. We tend to see the April number as a bit of an anomaly because it was so large and so hard to explain. Notwithstanding that, the health care job market remains robust.
Employment. DVA (-) In May, General Medical and Surgical Hospitals added 66k jobs or 1% MoM. Meanwhile Kidney Dialysis Centers lost 300 workers. In the former case, it is an indication of demand. In the latter case, it is probably representative of the fierce competition for workers and the relative low pay and hard work associated with a renal dialysis center.
Overall health care added 41.1k jobs or 0..24% MoM.
CONGRESS.
Obesity Drugs. BIIB (-) There has been loads of chatter about what some people assume is the near pending Medicare coverage of the GLP-1 agonists drug class. It is like AI for the health care sector.
Medicare coverage, of course, is a signal to the rest of the insurance markets that they too should cover these drugs.
Everyone has hired lobbyists and the Food and Drug Administration and CMS have been discussing but the immovable object in the way is, wait for it, Congress. Medicare law expressly prohibits drugs, devices and services for weight loss.
The law would need to be changed. After a debt ceiling fight and a weakening presidency (not a partisan statement as some of us like to study the Nixon presidency) puts the House in no mood to spend more money. If and when they were to change the law, offsets would be required and that is where things get really dicey.
THE WHITE HOUSE.
Medicare Rule-a-Rama.
Home Health. EHAB (-) UNH (-) CMS has proposed a 2.2% cut to home health agencies. A 2.7% payment update was more than offset by a 5.1% cut from the Patient-Driven Groupings Model “behavioral adjustment.”
With wages where they are and given the inefficiency of home health relative to skilled nursing, this model will continue to be stressed.
Leqembi Approval. BIIB (-) The internecine war between the FDA and CMS continues. Shortly after Aduhelm was approved, CMS moved to limit reimbursement to treatment via clinical trials. It then said it would reimburse Alzheimer’s drugs if they received full approval but would require enrollment in a registry.
Patient advocates objected to the registry requirement because not every doctor or provider knows/wants/can use one. So, CMS said they would have their own registry. Problem solved!
All that is about this. The FDA is approving Alzheimer’s drugs on limited conclusion of safety and efficacy because of the extreme pressure they are under from medical societies, patient advocates and drug manufacturers.
For its part, CMS is concerned about insurance premiums which would have to rise if predictions about the annual cost of Leqembi or Aduhelm prove accurate. The Kaiser Family Foundation has estimated an annual cost for Aduhelm at $57B.
Given the safety profile – three people died during Leqembi trials – I am not convinced the uptake will be that dramatic.
The larger problem is the FDA and CMS are not at all on the same page when it comes to clearing and paying for very expensive drugs for very difficult diseases.
Short Duration Insurance Plans. It is Deja Vue all over again. The White House has proposed reversing the Trump-era rule that allowed plans to run up to a year and be renewed for up to three years.
These types of plans are not subject to rules imposed by the Affordable Care Act and can be cheaper and more flexible for the price sensitive buyer.
The Obama administration proposed and finalized a rule similar to what the White House has released. Traditional insurers do not like short-term plans because the risk selection tends to favor the healthy which, especially with a yearlong Special Enrollment Period, means they do not enroll in regulated Qualified Health Plans adversely affecting the risk ppol.
OTHER STUFF.
Missouri et. al v. Biden et al. PFE (-) A federal judge in the Eastern District of Louisiana issued a temporary injunction against the White House and multiple agencies prohibiting contact with social media companies that might be characterized as censorship.
The plaintiffs have claimed, and were permitted some abbreviated discovery to prove the point that the White House and other agencies made requests of Twitter, Facebook etc., to limit posts and, in some cases, to delete accounts.
Alternative media applauded. Legacy media did not. The injunction is being appealed to the 5th District Court of Appeals where it is very likely to be upheld.
For health policy it is an important case, as the plaintiffs claim consensus on things like school and business closures did not exist. Had more people known that they may have acted differently.
It has been an historic few years and this case will probably make that point.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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