Our research team breaks down this week’s top healthcare news.
In an age of unprecedented change, staying current has never been more important. Our team at Chartis is curating news most relevant to the healthcare industry and tracking the topics that are trending on seven key issues: clinical quality and risk, digital and advanced technology, financial sustainability, health disparities, the health ecosystem of the future, partnerships, and the provider enterprise. Each week, we break down what’s happening and why it matters.
Four days after Election Day, the Associated Press and other news outlets reported on Saturday, November 7, that Joe Biden and Kamala Harris would be the next President and Vice-President of the United States. However, to date President Trump has not conceded the election, which will hinder some transition activities. This week also saw continued record-breaking numbers of COVID-19 cases. Biden and Harris have made clear that getting COVID under control will be a top priority of their administration. Biden’s plan includes empowering scientists, ramping up testing, creating a public health workforce, and making investments in vaccine distribution. Biden already has appointed to his COVID task force a number of private citizens, including physicians and scientists who are experts in public health and infectious disease. It is also likely that government members of the current White House task force, Dr. Anthony Fauci in particular, could become a part of Biden’s task force at a later date.
While the pandemic is a top priority, it is not the only healthcare issue of focus for Biden. Other healthcare topics Biden favored during the election were lowering Medicare age, reducing drug prices, a public insurance option for the Affordable Care Act (ACA), and lowering income thresholds for credits for insurance on the exchange. Many of those matters may face legislative pushback. Depending on the outcome of the Georgia Senate runoffs, Biden could be working with a Republican-led Senate.
The emerging Biden-Harris pandemic plan, which promises a more centralized, federally driven response, contrasts President Trump’s loose federal restrictions. While there is renewed hope that an effective vaccine will be widely available next year with this week’s Pfizer announcement, Biden has signaled support for other mechanisms such as a pandemic risk-assessment dashboard and national mask mandate, even if a future vaccine becomes available.
While reducing drug prices is likely to receive bipartisan support, other healthcare issues on Biden’s agenda may be tougher to find political consensus. Even if the Senate should be 50-50 following Georgia runoff elections, many of Biden’s agenda items — such as the public option for the ACA — are not likely to get through a divided Senate. If that is the case, Biden is likely to turn to executive orders and regulations, much like Trump and Obama before him. Biden has already announced his intention to rejoin the World Health Organization on Day 1, and more healthcare executive orders are likely to follow.
Pfizer announced November 9 that its vaccine candidate for the prevention of contracting COVID-19 showed better-than-anticipated results — a 90 percent efficacy rate — in a Phase 3 study with nearly 44,000 subjects in the U.S. Sarah Zhang, a staff writer covering COVID for The Atlantic stated, “The fact that this vaccine might be over 90 percent effective was a lot better than most people expected. It was certainly a lot better than the [50 percent] minimum the U.S. Food and Drug Administration (FDA) set, and a lot better than what many scientists I’ve talked with expected.” Pfizer’s Senior Vice President of Vaccine Clinical Research and Development William Gruber commented, “I’ve been in vaccine development for 35 years … I’ve seen some really good things. This is extraordinary.”
The market responded swiftly on Monday, with its biggest rally in more than five months. The Dow Industrial Average initially rose more than 5 percent, then settled to close 2.95 percent higher than opening: its biggest one-day gain since early June. The S&P 500 rose 1.2 percent, and the Russell 2000 index rose 3.7 percent. Pfizer’s own shares rose 15 percent on Monday, the day of the announcement. Travel-related stocks and sectors rose in anticipation of a return to some semblance of normalcy: oil futures initially rose 15 percent, Carnival Cruises rose more than 39 percent, and Southwest Airlines jumped nearly 10 percent.
This is promising news in the global fight to contain the spread of COVID-19 and to improve health and mortality rate across the world. The market is indicating that a related positive impact to our economy will also result. In addition, other drug makers such as Moderna and Johnson & Johnson are not far behind Pfizer in their vaccine candidate testing process. If they can clear the FDA’s 50 percent efficacy threshold and safety monitoring requirements, production and distribution constraints will be reduced and vaccination rates would be able to accelerate.
However, there are still many hurdles to overcome:
On November 10, the Supreme Court of the United States heard oral arguments on California v. Texas. The plaintiffs argued that the individual mandate becomes unconstitutional without the financial penalties associated with the ACA, and therefore, the entire law is unconstitutional. However, many have argued that even if the individual mandate is unconstitutional, it can be severed from the ACA, and the remainder of the ACA can be upheld. The case is likely to hinge on whether the justices feel the individual mandate can be severed from the rest of the ACA without meaningfully changing the rest of the law.
The court could rule in many ways. A few possibilities include: uphold the constitutionality of the individual mandate; determine the individual mandate is unconstitutional but severable; and overturn the ACA because of the unconstitutionality of the individual mandate and inability to sever. Many legal scholars have indicated they believe that the historical voting of some of the more conservative justices to uphold severability makes them likely to do so again in this case. Ruling on the case is not expected until June, and the ACA stands in the meantime.
Overturning the ACA could affect millions of Americans, by eliminating insurance marketplaces, the expansion of Medicaid that has taken place in many states, and the coverage of adults under 26 years of age on their parents’ plans. The overturn of the ACA is also harrowing for those with pre-existing conditions, who would no longer be protected; while there is bipartisan support to maintain pre-existing condition coverage, it is unclear how this would be accomplished were the ACA overturned. Upending the ACA also has significant impacts for the health systems that serve these patients. Health systems are in a precarious financial position due to COVID-19, and a return to pre-ACA uninsurance levels would add additional strain.
Oral arguments Tuesday gave a potential look into how justices may rule in the case. Two of the conservative justices, Roberts and Kavanaugh, indicated they could support severability. Kavanaugh noted, “It does seem fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the act in place — the provisions regarding pre-existing conditions and the rest.” The market responded positively to that indication with many healthcare stocks seeing a positive bump on Tuesday afternoon, though we will not know any of the justice’s stances with certainty until they rule in June.
Data & Analysis
As the COVID-19 pandemic endures, health systems across the country head into the second half of 2020 with margin improvement as a top priority. The first six months of the year brought the “perfect storm” of financial disruption – loss of elective procedures, reduced patient volumes and increased costs to manage dual systems of care for both COVID and non-COVID patients. Amid the fallout, hospitals face an immediate need to reduce costs by year-end.
As provider organizations prepare for a changed future, health systems must make it easier for medical staff to effectively deliver care across the system, without unnecessary barriers, bureaucracy or costs. In this paper, we outline how four key components can help health systems increase agility, effectiveness and cost efficiency in their medical staff functions.
In this new analysis, The Chartis Center for Rural Health explores key factors in assessing the potential impact of the COVID-19 pandemic on the rural health safety net, including access to intensive care unit beds, the reliance on outpatient service revenues and rural provider days cash on hand.