CHART OF THE WEEK
CONGRESS.
Rural Health Care will be an area to watch in the coming years especially as it relates to digital deployment. The American Rescue Plan Act allocated $8.5B to rural providers in the form of Provider Relief Funds but the influential National Rural Health Association is telling Congress they need money they can use, like broadband and workforce development. The American Jobs Plan includes about $100B for broadband and given the bipartisan support should be top of list of what makes it into final infrastructure package. (CYH)
THE WHITE HOUSE
Tests Everywhere. The Food and Drug Administration issued two new Emergency Use Authorizations for at-home COVID-19 tests available without a prescription. These rapid antigen tests, ABT’s BinaxNOW and QDEL’s QuickVue, join Ellume’s rapid antigen test that was granted an EUA in December. Tests are expected to be priced at $20-30 for a set of two.
The FDA’s approval continues a trend to increase COVID-19 testing capacity significantly through EUAs while HHS permits laboratory developed tests to proliferate at CLIA-approved sites.
Sequester Relief. As expected, CMS has agreed to hold Medicare claims while we wait for Congress to pass sequester relief. The House returns from spring break on April 12th and is expected to take up the Senate-passed bill thereafter. For Medicare-centric providers like AMED, LHCG, EHC, HUM, the temporary moratorium on sequester is a tailwind.
American Jobs Plan. The White House released the aspirational American Jobs Plan Wednesday. Among other things the plan calls for spending $30B over 4 years on “investments to shore up our nation’s strategic national stockpile; accelerate the timeline to research, develop and field tests and therapeutics for emerging and future outbreaks; accelerate response time by developing prototype vaccines through Phase I and II trials, test technologies for the rapid scaling of vaccine production, and ensure sufficient production capacity in an emergency; enhance U.S. infrastructure for biopreparedness and investments in biosafety and biosecurity; train personnel for epidemic and pandemic response; and onshore active pharmaceutical ingredients.”
In military terms, the plan calls for hardening the target. For health care it means more money!
Regulatory Agenda. The White House began publishing its regulatory agenda this week. Under the rules, the agenda is published in the Federal Register and then compiled in something called the Unified Agenda. Published in the Federal Register by Health and Human Services are a few notable items:
- For Medicaid/CHIP plans, a proposed rule to improve the electronic exchange of health care data, and streamline processes related to prior authorization. This rule means trouble for MOH and CNC whose Medicaid plans require onerous prior auth. process.
- International Pricing Index is being revived by the Biden administration as either a threat while negotiations are underway in Congress or as a fallback position. Recall, the issue is being litigated so inclusion in the regulatory agenda may also be part of the legal strategy.
The Department of Labor is considering a rule on COVID related infection control:
- OSHA infection control standards for workplaces where such measures might be necessary and include health care, emergency response, correctional facilities, homeless shelters, drug treatment programs, and other occupational settings where employees can be at increased risk of exposure to potentially infectious people. A standard could also apply to laboratories, which handle materials that may be a source of pathogens, and to pathologists, coroners' offices, medical examiners, and mortuaries. If, as we expect, OSH will require surveillance testing, the post-COVID period for DGX and LH may be more pleasant than we all assume.
OTHER STUFF.
Women and Work. The departure of women from the workforce continues to the one of the most important effects of COVID-19 on health care. The BLS data released today for February indicates some progress but still about 1/2 a million shy of peak in February 2020. About 70k are "missing" from General and Surgical Hospitals which is about 14% of the loss, a disproportionately lower share that may be due, in part, to federal Provider Relief Funds that allowed hospitals to shift incremental labor costs to the federal government.
A New Surge. In the first part of the week, CDC’s Dr. Rochelle Walensky was on Capitol Hill expressing concern about a new wave of infections, particularly in the upper Midwest. At the White House on Monday, the Walensky discouraged holiday travel.
In the dissonance we have come to expect with COVID, today, the CDC updated its guidance to suggested fully vaccinated people can travel. The guidance change isn’t likely to affect leisure travel – let’s face it most people have done their own calculus there. It will have a positive impact on business and government travel as employers’ concerns about liability are assuaged by official federal statements.
Meanwhile... Even before Florida Governor DeSantis threatened to sue the CDC, their retention of the no-sail order for cruise lines until Nov did not seem likely. Today, the CDC took a step in that direction with new "technical" guidance for ship and crew and a phased approach to lifting the order.
WHO Report. The World Health Organization issued its long-anticipated report on its investigation into the origins of the SARS-CoV-2 virus’ leap to humans. Investigators looked at four scenarios and rated them from likely to unlikely. They found a direct leap from an animal reservoir to humans as likely while a laboratory accident was unlikely. Somewhat bizarrely, as this theory does not appear to have been taken seriously by the scientific community, the report concluded it was possible the vector was the frozen food supply chain.
The importance of the WHOs work resides not in the actual results of the study but whether the organization can re-establish itself as a trusted organization working in the interests of global public health. Their role will be important as vaccines are deployed beyond the developed world.
Federal Patent Rights. Based on conversations from pharma investors, there seems to be rising angst that the Biden administration may seek to assert certain patent rights on COVID-related vaccines and therapeutics. The GAO gave them a bit of good news when, in response to an inquiry, they concluded that the federal government had no claims to GILD’s Remdesivir. Report here.
SPAC AND S-1 CORNER.
Only one addition to the SPAC list this week, Apollo Strategic Growth Capital III. Sandbridge Capital Asset Management announced an IBC with Owlet, a baby monitoring system. There is currently about $27B in closed or filed SPACs out hunting deals in and around health care.
You can access the updated SPAC list here. The updated IBC list here.
Interestingly, there were a few traditional S-1s of note:
Aveanna Healthcare Holdings, Inc., a home health platform going after the decentralized and highly fractured market for home health. The end of RAP payments, end of the sequester and labor costs may send small private home health providers into the arms of Aveanna as well as AMED, LHCG, to name just the public companies.
Anebulo Pharmaceuticals, Inc., a clinical stage company addressing the market for Cannabinoid overdose and substance addiction. But wait, I thought….
Applied Molecular Transport, Inc., a clinical stage biopharmaceutical company leveraging a proprietary technology platform to develop novel oral biological candidates.
Ascend Wellness Holdings, LLC., a vertically integrated multi-state operator focused on adult-use or near-term adult-use cannabis states in limited license markets.
Additionally, Bright Health, an insurance company we have followed for years, announced their intention to go public.
If you are investing in SPACs but not super familiar with health care, hit and we can help.
Upcoming Events.
Wednesday April 14th @ 12:30PM: Black Book on the state of COVID-19 testing, capacity and when and if volumes decline. Look for invite shortly.
Wednesday April 28th @ 12:30PM Black Book on Managed Care, Direct Contracting & PCP Roll-ups: HUM, OHS, JWS, apligon and ALHC. Look for invite shortly.
Recent Events
On Wednesday, John Quinn, CEO of Wellnecity, a data driven solution for small and mid-sized companies seeking to reduce their benefit spend without sacrificing quality, joined Tom Tobin and I in the studio. We discussed important trends in cancer detection, primary care utilization and diagnostics. If you are wondering what comes next in health care post-COVID, this event is a good place to start. Replay for available here. If you do nothing else, review his slides.
Tweet of the Week
