Chart of the Week
Congress.
ESRD. A hearing on Organ Procurement Organizations was not exactly hotly anticipated this week, nor was Rep. Katie Porter’s grilling of the president of the Association of Organ Procurement Organizations with white board in hand. But there it was.
Aside from the dark entertainment value of Rep. Porter challenging the president of the AOPO, the hearing was important for several reasons. First, the go-to rational for the persistence of dialysis is the shortage of kidneys for transplant. The Trump administration had proposed and finalized new rules on how OPOs are evaluated. These rules were allowed to go into effect by the Biden administration and are expected to increase available organs by 6-7k per year.
Another important implication of the hearing is that the emerging school of thought that the regulatory system should be more proactive in finding cost-savings. Improving organ transplant is one area of focus.
Finally, although the ESG overlords have ignored it, transplant rates among minorities and the poor are much lower than for the balance of the population. Recall that Rep. Porter had made inquiries into some of DVA’s practices during the heated debate over California’s AB490, advocated by the Service Employees International Union which has accused dialysis providers like DVA of predatory practices.
The new rules do not start to go into effect until next year, but coupled with high COVID-19 mortality among ESRD patients, shifting demographics and a renewed emphasis on equity in access in health care, it seems the generational wave DVA and FMS have been riding for the last 20 years may have crested.
Telehealth. There appear to be three telehealth bills with legs on Capitol Hill. All focus on the originating site and rural requirements. With the public health emergency set to expire and take with it a number of telehealth flexibilities approved during the early days of the pandemic, there is some urgency to act before the end of the year. Another area of interest is requiring in person visit before ordering expensive tests or drugs.
Given that the CBO continues to score expansion of telehealth in the billions of dollars, Congress has to thread the needle between good policy and the deficit. (TDOC, AMWL, GDRX)
The White House
COVID Patents. Bowing to international and Congressional pressure, the White House instructed the U.S. Trade Representative Katherine Tai to begin negotiations with the World Trade Organization on waiving patent protections for COVID-19 vaccinations. Generally, USTR’s move is not great for the U.S.’s long standing but often inadequate efforts, to defend American intellectual property, especially in countries where private property is an unacceptable construct.
As a practical matter, the decision may send lobbyists, reporters and certain partisan lawmakers into a swoon but few others. The international vaccination rates are vexed by larger problems than IP restrictions. Cooking up an mRNA vaccine takes a lot more than staffing manufacturing plants in Asia. The challenges of available raw materials, the machinery to turn them into viable vaccines, the vials, needles, alcohol, swabs, not to mention that transportation demands for getting vaccines into every nook and cranny of the globe are legion.
These facts are recognized by the USTR, “Those negotiations will take time given the consensus-based nature of the institution and the complexity of the issues involved,” according to Tai’s statement. In other words, we are a long, long way from immunizing the world against COVID-19, no matter what happens with vaccine IP. (MRNA, PFE)
Regulatory Agenda.
PFE and MRNA BLAs. PFE submitted its application for full Food and Drug Administration approval of its COVID-19 vaccine. MRNA indicated they were not far behind. Full FDA approval brings with it the ability of employers, the government and the military to mandate vaccinations. Given hesitancy levels at 10-30%, mandating might be necessary especially in critical industries like transportation, health care and food processing.
Medicare Rule-a-Rama. The Office of Management and Budget is currently reviewing a plethora of annual payment updates including:
- CY 2022 Update to the Physicians Fee Schedule and “Other Revisions to Medicare Part B”
- CY 2022 Update to Home Health Payment System and Home Infusion Therapy Services
- CY 2022 Update to End Stage Renal Disease Payment System
- Medicare Coverage of Innovative Technology and Definition of Reasonable and Necessary
As a reminder, OMB still has under review new workplace emergency standard regulations related to COVID. The lobbyists are out in droves suggesting the proposal was pretty draconian – and expensive.
Vaccine Passports. The new cause for the right end of the political spectrum is vaccine passports. Governor Ron DeSantis of Florida recently signed a bill prohibiting their use, which prompted the Holland American cruise line to threaten to leave Florida. Although providing evidence of immunization to cross international boundaries is nothing new, the Big Tech skittishness politically right-leaning is concerned the concept will be extended to domestic activity. The White House has declined to get involved.
ACA Exchange Special Enrollment. HHS reported that just under 1M people have enrolled in ACA insurance exchanges with about half signing up in April in response to new subsidies for those living at 400% or more of the FPT. HHS did not release data on how many new enrollees are newly covered, but history suggests these are people migrating from other insurance regimes like Medicaid. One area of focus, given the new subsidy levels should be the high deductible PEO sponsored insurance like NSP’s UNH plans.
Other Stuff.
Another Centers for Disease Control and Prevention Departure. Dr. Nancy Messonnier, who clashed with the Trump administration has left the CDC over what appears to be differences with the Biden White House. The CDC is taking a good bit of heat from private sector scientists over guidance for vaccinated adults and school openings.
Employment Data. Women are still AWOL from health care labor force according to today’s release with March data. Additionally, women that do return to the health care workforce are finding many more opportunities than before. Those areas of health care that represent the least desirable environments, like inpatient psychiatric care have not returned to pre-pandemic employment levels while medical diagnostic laboratories now exceed them. (AMN, CCRN)
SPAC and S-1 Corner.
Two SPAC’s found dance partners this week. LifeSci Acquisition II is merging with Science 37, a clinical research organization. Post-COVID, research is going to be very different and interesting as Real World Evidence, the need for more diverse trial subjects and the use of data tools like clinical records become more vital to the process. AMHC is pairing up with Jasper Therapeutics.
On the S-1 front, FIGS, the maker of scrubs filed their S-1.
You can access the updated SPAC spreadsheet here.
If you are investing in SPACs but not super familiar with health care, hit and we can help.
Recent Events.
On Wednesday, we reviewed the implications of an explosion of digital health solutions for behavioral health and the likely outcome for incumbents. Replay here.
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Emily Evans
Managing Director – Health Policy
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