Top of the Funnel: Macro + Earnings
Consolidation. On Wednesday, September 6th at 10am Paul Glenchur and I will be discussing the prospects for consolidation in health care. As demographic drivers of health care dissipate, what will become of a whole lot of capital dedicated to their care? Paul’s perspective is valuable, and you will enjoy the conversation. Look for invite and links later in the weekend.
CONGRESS.
Gone Fishin’
THE WHITE HOUSE.
Medicare Drug Negotiation. The Biden administration released the inaugural list of drug slated for “negotiation” with CMS. Most were as expected, with Eliquis topping the list.
I remain very dubious this program will ever get off the ground. It is the worst kind of government regulation where Congress creates a class (in this case, 10 drugs with the highest Medicare spend) and attempts to regulate that subset without a lot of regard for the knock-on effects.
The law also requires, as an incentive to negotiate with the government, a 95% excise tax on all sales of the offending drug. Negotiating with the government can be mostly theater but with that sort of penalty there isn’t even a reason to pretend.
Nevertheless, we will play along. Here is the press release.
High Drama On SNF Staffing. On Wednesday, a report from CMS-favored contractor, abt, was leaked this week. The report, one of hundreds the company produces for CMS annually, examined various nurse staffing ratios for nursing facilities.
The report is designed to inform CMS’s decision on minimum nurse staffing ratios for long-term care facilities. In response to the leaked report, the White House cancelled a couple of meetings with interested parties. Today, the Office of Management and Budget released the proposed rule and they benign recommendation of abt appears to have ruled the day.
CMS has proposed a 3 hour per resident day standard, 0.55 hours from an RN and the balance from nursing aides. This rate is well below the 4.10 expected by organized labor and considered in prior research. The proposal also requires RN staffing to be available 24/7 which is probably the most important change. The industry has been criticized for limited professional coverage on weekends and this provision attempts to address that.
This is a hard fought rule so do not expect much in the way of relief in a final later this year.
LDT Regulation. Proving just how difficult it is going to be to reach consensus on regulating Laboratory Developed Tests, the White House continues to meet with interested parties hoping to define an acceptable path forward. Given the wide range of activities covered under the heading of Laboratory Developed Tests, it will not be easy.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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