The indictment describes an inside job involving Beaumont employees who sold stolen sponges, adhesives and instruments used to inspect eyes and ears. The equipment included cystoscopes, a thin tube with a camera that is inserted through the urethra and into the bladder.
“Some of the medical devices stolen and re-sold over the Internet were possibly contaminated devices that were previously used in various surgical and other medical procedures on patients,” according to the indictment.
The three individuals charged in the indictment are:
Paul Purdy, 49, of Bellbrook, Ohio
Valdet Seferovic, 32, of Auburn Hills
Zafar Khan, 40, of Fenton
Purdy and Seferovic not respond to messages seeking comment Thursday while Harold Gurewitz, a lawyer for Khan, declined comment. The three defendants are scheduled to make initial appearances Jan. 21 in federal court.
“These defendants used their employment status to circumvent the safety protocols established by Beaumont Hospital to profit from the theft of medical devices and put the health and safety of the general public at risk in doing so,” U.S. Attorney Matthew Schneider said in a statement.
The wire fraud and conspiracy charges listed in the 18-count indictment are punishable by up to 20 years in federal prison.
Beaumont officials have cooperated fully with the investigation, health system spokesman Mark Geary wrote in an email to The Detroit News.
“This kind of theft does a disservice to more than just Beaumont — it does a disservice to the community,” Geary wrote. “We have confidence in the legal process and trust a just result will be achieved.”
Purdy and Seferovic were friends who worked at Beaumont and had access to storage areas inside one of the system’s hospitals, prosecutors alleged. The duo gained access to medical supplies and devices, according to the government, and devised a plan to steal the equipment and sell the items throughout the U.S.
Purdy, who worked for Beaumont until resigning in 2017, never told buyers the items were stolen, prosecutors said. After he quit, Purdy recruited Seferovic to continue stealing items from the medical supply, cleaning and disinfecting rooms, according to prosecutors.
“Medical devices that are removed from their rightful place in a hospital or other medical setting put patients’ health at risk by denying them access to needed diagnostic imaging and treatment,” Lynda Burdelik, special agent in charge of the U.S. Food and Drug Administration’s Criminal Investigations field office in Chicago, said in a statement.
Purdy paid Seferovic for stolen items via PayPal and resold the devices on eBay and Amazon, according to the government. On March 28, 2018, the indictment alleges Purdy received a $4,800 wire payment from the sale of two cystoscopes.
That same day, Seferovic received a $2,550 payment via PayPal, according to the government.
In fall 2017, Seferovic also agreed to steal and sell medical devices and supplies to Khan, who owns Wholesale Medical & Surgical Suppliers of America, LLC in Flint, according to the indictment.
Seferovic would transfer stolen supplies to Khan during meetings in metro Detroit, including at a Walmart parking lot, according to the indictment. Khan, in turn, would sell the supplies and devices online at below retail price.
Seferovic’s job duties and status was unclear Thursday.
The investigation and alleged crimes have prompted internal changes at Beaumont.
“…Beaumont has enhanced security protocols and implemented additional checks and balances across the organization to reduce the chances of something like this happening again,” Geary said.
🚨New CDC warning: The highly contagious variant B.1.1.7 originally detected in the U.K. could become the dominant strain in the U.S. by March.
Why it matters: The variant is estimated to be 30% to 50% more transmissible than other forms of the virus, threatening efforts to push the U.S. past its record high case count.
The variant is in 12 states, but has been diagnosed in only 76 of the 23 million U.S. cases reported to date, the AP reports.
It’s likely that the variant is more widespread than currently reported.
The big picture: Americans are exhausted and burned out, and COVID wariness is slipping.
So far, the variants do not appear to be resistant to the existing vaccines or cause more severe disease.
But the health care system is on the brink in places like Southern California.
Another spike in cases could lead us to a very dark place.
The bottom line:There’s no evidence that this variant is transmitted differently, so keep up the masks and social distancing.
Go deeper … The coronavirus variants: What you need to know.
I had been staring her in the eyes, as she had ordered, but when a doctor on my other side began jabbing me with a needle, I started to turn my head. “Don’t look at it,” the first doctor said. I obeyed.
This was in early August in New Orleans, where I had signed up to be a participant in the clinical trial for the Pfizer-BioNTech COVID-19 vaccine. It was a blind study, which meant I was not supposed to know whether I had gotten the placebo or the real vaccine. I asked the doctor if I would really been able to tell by looking at the syringe. “Probably not,” she answered, “but we want to be careful. This is very important to get right.”
I became a vaccine guinea pig because, in addition to wanting to be useful, I had a deep interest in the wondrous new roles now being played by RNA, the genetic material that is at the heart of new types of vaccines, cancer treatments and gene-editing tools. I was writing a book on the Berkeley biochemist Jennifer Doudna. She was a pioneer in determining the structure of RNA, which helped her and her doctoral adviser figure out how it could be the origin of all life on this planet. Then she and a colleague invented an RNA-guided gene-editing tool, which won them the 2020 Nobel Prize in Chemistry.
The tool is based on a system that bacteria use to fight viruses. Bacteria develop clustered repeated sequences in their DNA, known as CRISPRs, that can remember dangerous viruses and then deploy RNA-guided scissors to destroy them. In other words, it’s an immune system that can adapt itself to fight each new wave of viruses—just what we humans need. Now, with the recently approved Pfizer-BioNTech vaccine and a similar one from Moderna being slowly rolled out across the U.S. and Europe, RNA has been deployed to make a whole new type of vaccine that will, when it reaches enough people, change the course of the pandemic.
Drs. Ugur Sahin and Ozlem Tureci, Co-founders, BioNTech. In January 2020, before many in the Western world were paying attention to a new virus spreading in China, Dr. Ugur Sahin was convinced it would spur a pandemic. Sahin, who in 2008 co-founded the German biotech company BioNTech with his wife Dr. Ozlem Tureci, went to work on a vaccine and by March called his contact at Pfizer, a much larger pharmaceutical company with which BioNTech had previously worked on an influenza vaccine using mRNA. Less than a year later, the Pfizer-BioNTech COVID-19 vaccine became the first ever mRNA vaccine available for widespread use. Even so, Sahin, BioNTech’s CEO, and Tureci, its chief medical officer, maintain that BioNTech is not an mRNA company but rather an immunotherapy company. Much of the couple’s work—both at BioNTech and at their previous venture, Ganymed—has focused on treating cancer. But it is mRNA, and the COVID-19 vaccine made possible by the technology, that has pushed the famously hardworking couple into the limelight—and helped them become one of the richest pairs in Germany, though they reportedly still bicycle to work and live in a modest apartment near their office.
Up until last year, vaccines had not changed very much, at least in concept, for more than two centuries. Most have been modeled on the discovery made in 1796 by the English doctor Edward Jenner, who noticed that many milkmaids were immune to smallpox. They had all been infected by a form of pox that afflicts cows but is relatively harmless to humans, and Jenner surmised that the cowpox had given them immunity to smallpox. So he took some pus from a cowpox blister, rubbed it into scratches he made in the arm of his gardener’s 8-year-old son and then (this was in the days before bioethics panels) exposed the kid to smallpox. He didn’t become ill.
Before then, inoculations were done by giving patients a small dose of the actual smallpox virus, hoping that they would get a mild case and then be immune. Jenner’s great advance was to use a related but relatively harmless virus. Ever since, vaccinations have been based on the idea of exposing a patient to a safe facsimile of a dangerous virus or other germ. This is intended to kick the person’s adaptive immune system into gear. When it works, the body produces antibodies that will, sometimes for many years, fend off any infection if the real germ attacks.
One approach is to inject a safely weakened version of the virus. These can be good teachers, because they look very much like the real thing. The body responds by making antibodies for fighting them, and the immunity can last a lifetime. Albert Sabin used this approach for the oral polio vaccine in the 1950s, and that’s the way we now fend off measles, mumps, rubella and chicken pox.
At the same time Sabin was trying to develop a vaccine based on a weakened polio virus, Jonas Salk succeeded with a safer approach: using a killed or inactivated virus. This type of vaccine can still teach a person’s immune system how to fight off the live virus but is less likely to cause serious side effects. Two Chinese companies, Sinopharm and Sinovac, have used this approach to develop vaccines for COVID-19 that are now in limited use in China, the UAE and Indonesia.
Another traditional approach is to inject a subunit of the virus, such as one of the proteins that are on the virus’s coat. The immune system will then remember these, allowing the body to mount a quick and robust response when it encounters the actual virus. The vaccine against the hepatitis B virus, for example, works this way. Using only a fragment of the virus means that they are safer to inject into a patient and easier to produce, but they are often not as good at producing long-term immunity. The Maryland-based biotech Novavax is in late-stage clinical trials for a COVID-19 vaccine using this approach, and it is the basis for one of the two vaccines already being rolled out in Russia.
The plague year of 2020 will be remembered as the time when these traditional vaccines were supplanted by something fundamentally new:genetic vaccines, which deliver a gene or piece of genetic code into human cells. The genetic instructions then cause the cells to produce, on their own, safe components of the target virus in order to stimulate the patient’s immune system.
For SARS-CoV-2—the virus that causes COVID-19—the target component is its spike protein, which studs the outer envelope of the virus and enables it to infiltrate human cells. One method for doing this is by inserting the desired gene, using a technique known as recombinant DNA, into a harmless virus that can deliver the gene into human cells. To make a COVID vaccine, a gene that contains instructions for building part of a coronavirus spike protein is edited into the DNA of a weakened virus like an adenovirus, which can cause the common cold. The idea is that the re-engineered adenovirus will worm its way into human cells, where the new gene will cause the cells to make lots of these spike proteins. As a result, the person’s immune system will be primed to respond rapidly if the real coronavirus strikes.
This approach led to one of the earliest COVID vaccine candidates, developed at the aptly named Jenner Institute of the University of Oxford. Scientists there engineered the spike-protein gene into an adenovirus that causes the common cold in chimpanzees, but is relatively harmless in humans.
The lead researcher at Oxford is Sarah Gilbert. She worked on developing a vaccine for Middle East respiratory syndrome (MERS) using the same chimp adenovirus. That epidemic waned before her vaccine could be deployed, but it gave her a head start when COVID-19 struck. She already knew that the chimp adenovirus had successfully delivered into humans the gene for the spike protein of MERS. As soon as the Chinese published the genetic sequence of the new coronavirus in January 2020, she began engineering its spike-protein gene into the chimp virus, waking each day at 4 a.m.
Her 21-year-old triplets, all of whom were studying biochemistry, volunteered to be early testers, getting the vaccine and seeing if they developed the desired antibodies. (They did.) Trials in monkeys conducted at a Montana primate center in March also produced promising results.
Bill Gates, whose foundation provided much of the funding, pushed Oxford to team up with a major company that could test, manufacture and distribute the vaccine. So Oxford forged a partnership with AstraZeneca, the British-Swedish pharmaceutical company. Unfortunately, the clinical trials turned out to be sloppy, with the wrong doses given to some participants, which led to delays. Britain authorized it for emergency use at the end of December, and the U.S. is likely to do so in the next two months.
Johnson & Johnson is testing a similar vaccine that uses a human adenovirus, rather than a chimpanzee one, as the delivery mechanism to carry a gene that codes for making part of the spike protein. It’s a method that has shown promise in the past, but it could have the disadvantage that humans who have already been exposed to that adenovirus may have some immunity to it. Results from its clinical trial are expected later this month.
In addition, two other vaccines based on genetically engineered adenoviruses are now in limited distribution: one made by CanSino Biologics and being used on the military in China and another named Sputnik V from the Russian ministry of health.
There is another way to get genetic material into a human cell and cause it to produce the components of a dangerous virus, such as the spike proteins, that can stimulate the immune system. Instead of engineering the gene for the component into an adenovirus, you can simply inject the genetic code for the component into humans as DNA or RNA.
Let’s start with DNA vaccines. Researchers at Inovio Pharmaceuticals and a handful of other companies in 2020 created a little circle of DNA that coded for parts of the coronavirus spike protein. The idea was that if it could get inside the nucleus of a cell, the DNA could very efficiently churn out instructions for the production of the spike-protein parts, which serve to train the immune system to react to the real thing.
The big challenge facing a DNA vaccine is delivery.How can you get the little ring of DNA not only into a human cell but into the nucleus of the cell? Injecting a lot of the DNA vaccine into a patient’s arm will cause some of the DNA to get into cells, but it’s not very efficient.
Some of the developers of DNA vaccines, including Inovio, tried to facilitate the delivery into human cells through a method called electroporation, which delivers electrical shock pulses to the patient at the site of the injection. That opens pores in the cell membranes and allows the DNA to get in. The electric pulse guns have lots of tiny needles and are unnerving to behold. It’s not hard to see why this technique is unpopular, especially with those on the receiving end. So far, no easy and reliable delivery mechanism has been developed for getting DNA vaccines into the nucleus of human cells.
That leads us to the molecule that has proven victorious in the COVID vaccine race and deserves the title of TIME magazine’s Molecule of the Year: RNA. Its sibling DNA is more famous. But like many famous siblings, DNA doesn’t do much work. It mainly stays bunkered down in the nucleus of our cells, protecting the information it encodes. RNA, on the other hand, actually goes out and gets things done. The genes encoded by our DNA are transcribed into snippets of RNA that venture out from the nucleus of our cells into the protein-manufacturing region. There, this messenger RNA (mRNA) oversees the assembly of the specified protein. In other words, instead of just sitting at home curating information, it makes real products.
Scientists including Sydney Brenner at Cambridge and James Watson at Harvard first identified and isolated mRNA molecules in 1961. But it was hard to harness them to do our bidding, because the body’s immune system often destroyed the mRNA that researchers engineered and attempted to introduce into the body. Then in 2005, a pair of researchers at the University of Pennsylvania, Katalin Kariko and Drew Weissman, showed how to tweak a synthetic mRNA molecule so it could get into human cells without being attacked by the body’s immune system.
Stéphane Bancel, CEO, Moderna. Moderna’s COVID-19 vaccine was first tested in humans less than three months after news of the novel virus broke. But that lightning-fast development process belies the years of work that got Moderna to where it is today. The startup was founded in 2010 with the belief that mRNA technology, then still fairly new, could help treat any number of ailments. CEO Stéphane Bancel, pictured above, joined a year later. Moderna wasn’t originally focused on vaccines, but over time, its scientists began working toward vaccines against several infectious diseases as well as some forms of cancer. That experience came in handy when the COVID-19 pandemic arrived, leaving the world clamoring for a vaccine that could fight the deadly virus—and fast. Bancel’s company took the challenge in stride, using its mRNA platform to develop a vaccine around 95% effective at protecting against COVID-19 disease in less than a year.
When the COVID-19 pandemic hit a year ago, two innovative young pharmaceutical companies decided to try to harness this role played by messenger RNA: the German company BioNTech, which formed a partnership with the U.S. company Pfizer; and Moderna, based in Cambridge, Mass. Their mission was to engineer messenger RNA carrying the code letters to make part of the coronavirus spike protein—a string that begins CCUCGGCGGGCA … —and to deploy it in human cells.
BioNTech was founded in 2008 by the husband-and-wife team of Ugur Sahin and Ozlem Tureci, who met when they were training to be doctors in Germany in the early 1990s. Both were from Turkish immigrant families, and they shared a passion for medical research, so much so that they spent part of their wedding day working in the lab. They founded BioNTech with the goal of creating therapies that stimulate the immune system to fight cancerous cells. It also soon became a leader in devising medicines that use mRNA in vaccines against viruses.
In January 2020, Sahin read an article in the medical journal Lancet about a new coronavirus in China. After discussing it with his wife over breakfast, he sent an email to the other members of the BioNTech board saying that it was wrong to believe that this virus would come and go as easily as MERS and SARS. “This time it is different,” he told them.
BioNTech launched a crash project to devise a vaccine based on RNA sequences, which Sahin was able to write within days, that would cause human cells to make versions of the coronavirus’s spike protein. Once it looked promising, Sahin called Kathrin Jansen, the head of vaccine research and development at Pfizer. The two companies had been working together since 2018 to develop flu vaccines using mRNA technology, and he asked her whether Pfizer would want to enter a similar partnership for a COVID vaccine. “I was just about to call you and propose the same thing,” Jansen replied. The deal was signed in March.
By then, a similar mRNA vaccine was being developed by Moderna, a much smaller company with only 800 employees. Its chair and co-founder, Noubar Afeyan, a Beirut-born Armenian who immigrated to the U.S., had become fascinated by mRNA in 2010, when he heard a pitch from a group of Harvard and MIT researchers. Together they formed Moderna, which initially focused on using mRNA to try to develop personalized cancer treatments, but soon began experimenting with using the technique to make vaccines against viruses.
In January 2020, Afeyan took one of his daughters to a restaurant near his office in Cambridge to celebrate her birthday. In the middle of the meal, he got an urgent text message from the CEO of his company, Stéphane Bancel, in Switzerland. So he rushed outside in the freezing temperature, forgetting to grab his coat, to call him back.
Bancel said that he wanted to launch a project to use mRNA to attempt a vaccine against the new coronavirus. At that point, Moderna had more than 20 drugs in development but none had even reached the final stage of clinical trials. Nevertheless, Afeyan instantly authorized him to start work. “Don’t worry about the board,” he said. “Just get moving.” Lacking Pfizer’s resources, Moderna had to depend on funding from the U.S. government. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, was supportive. “Go for it,” he declared. “Whatever it costs, don’t worry about it.”
It took Bancel and his Moderna team only two days to create the RNA sequences that would produce the spike protein, and 41 days later, it shipped the first box of vials to the National Institutes of Health to begin early trials. Afeyan keeps a picture of that box on his cell phone.
An mRNA vaccine has certain advantages over a DNA vaccine, which has to use a re-engineered virus or other delivery mechanism to make it through the membrane that protects the nucleus of a cell. The RNA does not need to get into the nucleus. It simply needs to be delivered into the more-accessible outer region of cells, the cytoplasm, which is where proteins are constructed.
The Pfizer-BioNTech and Moderna vaccines do so by encapsulating the mRNA in tiny oily capsules, known as lipid nanoparticles.Moderna had been working for 10 years to improve its nanoparticles.This gave it one advantage over Pfizer-BioNTech: its particles were more stable and did not have to be stored at extremely low temperatures.
Katalin Kariko, Senior vice president, BioNTech. In 1995, after years of struggle, Hungarian-born Katalin Kariko was pushed off the path to full professorship at the University of Pennsylvania. Her work on mRNA, molecules she believed could fundamentally change the way humans treat disease, had stalled. Then, in 1997, she met and began working with immunologist Drew Weissman. In 2005, they published a study describing a modified form of artificial mRNA—a discovery, they argued, that opened the door to mRNA’s use in vaccines and other therapies. Eventually, Kariko and Weissman licensed their technology to the German company BioNTech, where Kariko, shown here in a portrait shot by a photographer working remotely, is now a senior vice president. Her patience paid off this year. The mRNA-based Pfizer-BioNTech coronavirus vaccine, which Kariko helped develop, has been shown to be 95% effective at preventing COVID-19.
By November, the results of the Pfizer-BioNTech and Moderna late-stage trials came back with resounding findings: both vaccines were more than 90% effective. A few weeks later, with COVID-19 once again surging throughout much of the world, they received emergency authorization from the U.S. Food and Drug Administration and became the vanguard of the biotech effort to beat back the pandemic.
The ability to code messenger RNA to do our bidding will transform medicine. As with the COVID vaccines, we can instruct mRNA to cause our cells to make antigens—molecules that stimulate our immune system—that could protect us against many viruses, bacteria, or other pathogens that cause infectious disease. In addition, mRNA could in the future be used, as BioNTech and Moderna are pioneering, to fight cancer. Harnessing a process called immunotherapy, the mRNA can be coded to produce molecules that will cause the body’s immune system to identify and kill cancer cells.
RNA can also be engineered, as Jennifer Doudna and others discovered, to target genes for editing. Using the CRISPR system adapted from bacteria, RNA can guide scissors-like enzymes to specific sequences of DNA in order to eliminate or edit a gene. This technique has already been used in trials to cure sickle cell anemia. Now it is also being used in the war against COVID. Doudna and others have created RNA-guided enzymes that can directly detect SARS-CoV-2 and eventually could be used to destroy it.
More controversially, CRISPR could be used to create “designer babies” with inheritable genetic changes. In 2018, a young Chinese doctor used CRISPR to engineer twin girls so they did not have the receptor for the virus that causes AIDS. There was an immediate outburst of awe and then shock. The doctor was denounced, and there were calls for an international moratorium on inheritable gene edits. But in the wake of the pandemic, RNA-guided genetic editing to make our species less receptive to viruses may someday begin to seem more acceptable.
Throughout human history, we have been subjected to wave after wave of viral and bacterial plagues. One of the earliest known was the Babylon flu epidemic around 1200 B.C. The plague of Athens in 429 B.C. killed close to 100,000 people, the Antonine plague in the 2nd century killed 5 million, the plague of Justinian in the 6th century killed 50 million, and the Black Death of the 14th century took almost 200 million lives, close to half of Europe’s population.
The COVID-19 pandemic that killed more than 1.8 million people in 2020 will not be the final plague. However, thanks to the new RNA technology, our defenses against most future plagues are likely to be immensely faster and more effective. As new viruses come along, or as the current coronavirus mutates, researchers can quickly recode a vaccine’s mRNA to target the new threats. “It was a bad day for viruses,” Moderna’s chair Afeyan says about the Sunday when he got the first word of his company’s clinical trial results. “There was a sudden shift in the evolutionary balance between what human technology can do and what viruses can do. We may never have a pandemic again.”
The invention of easily reprogrammable RNA vaccines was a lightning-fast triumph of human ingenuity, but it was based on decades of curiosity-driven research into one of the most fundamental aspects of life on planet earth: how genes are transcribed into RNA that tell cells what proteins to assemble. Likewise, CRISPR gene-editing technology came from understanding the way that bacteria use snippets of RNA to guide enzymes to destroy viruses. Great inventions come from understanding basic science. Nature is beautiful that way.
The highly contagious variant of the coronavirus first seen in the United Kingdom will become the dominant strain in the United States within about two months, its rapid spread heightening the urgency of getting people vaccinated, the Centers for Disease Control and Prevention predicted Friday in its most sobering warning yet about mutations in the virus.
In every scenario explored by the CDC, the U.K. strain, which British researchers estimate is roughly 50 percent more transmissible than the more common coronavirus strain, will account for a majority of cases in the United States by some point in March.
The CDC released modeling data to back up its forecast showing a rapid spike in infections linked to the U.K. strain. The agency said the emergence of these mutation-laden variants requires greater efforts to limit viral spread — immediately, even before the U.K. variant becomes commonplace.
So far, no variant is known to cause more severe illness, although more infections would inevitably mean a higher death toll overall, as the CDC made clear in an informational graphic released Friday: “MORE SPREAD — MORE CASES — MORE DEATHS,” it said.
The CDC report “speaks to the urgency of getting vaccines out. It’s now a race against the virus,” said William Hanage, an epidemiologist at the Harvard T.H. Chan School of Public Health.
Scientists both in and out of government have stressed the need for the public to stick to proven methods of limiting viral spread, such as wearing a mask, social distancing, avoiding crowds and having good hand hygiene.
“We know what works and what to do,” CDC scientist Jay Butler said Friday.
The emergence of highly contagious variants has grabbed the full attention of scientists, who in recent weeks have warned that these mutations require closer surveillance. The CDC and its partners in private and academic laboratories are ramping up genomic sequencing efforts to gain better awareness of what is already circulating. Experts think there could be many variants containing mutations worth a closer look.
“This is a situation of concern. We are increasing our surveillance of emerging variants. This virus sometimes surprises us,” Butler said.
Mutations could limit the efficacy of vaccines or therapeutic drugs such as monoclonal antibodies. Scientists believe vaccines will probably remain effective because they produce a robust immune system response, but such reassurances have been paired with cautionary notes about how much remains unknown.
The coronavirus mutations are not unexpected, because all viruses mutate. There are now several “variants of concern” receiving close scrutiny, including ones identified first in South Africa and Brazil, and U.S. officials have said genomic surveillance is still ramping up here and that there may be other variants in circulation, not yet identified, that are enhancing transmission.
“We’re going forward with the assumption that these three variants that we know about now are not going to be the only variants that emerge that are of concern to us,” Greg Armstrong, head of the CDC’s strain surveillance program, said Friday.
The CDC model suggests that the level of pain and suffering in March, when the new variant is expected to be dominant, depends on actions taken today to try to drive down infection rates. Because the threshold for herd immunity depends in part on how infectious a virus is, the emergence of a more transmissible strain can prolong efforts to crush a pandemic.
The emergence in recent weeks of mutation-laden variants has alarmed the CDC and the scientific community because of accelerating infections in Britain, Denmark, Ireland and other countries where the variant named B.1.1.7 has been spreading.
“Increased SARS-CoV-2 transmission might threaten strained healthcare resources, require extended and more rigorous implementation of public health strategies, and increase the percentage of population immunity required for pandemic control,” the CDC wrote. “Taking measures to reduce transmission now can lessen the potential impact of B.1.1.7 and allow critical time to increase vaccination coverage.”
It is unclear if the winter surge in the United States is at a peak, but the numbers are staggering, with more than 200,000 new infections confirmed every day on average.
This is not the first warning from the CDC about variants of the virus, but it is the first to offer a plausible timeline for when and to what degree the mutations seen recently could complicate efforts to end the pandemic.
It shows that vaccination, performed rapidly, is critical to crushing the curve of viral infections. Without vaccines, under one CDC scenario, the country could be dealing with even greater levels of infections in May than in January.
But if public health agencies can ramp up to 1 million vaccinations a day, the CDC model forecasts that daily new infections will decline in the next few months — even with the extra boost from the highly contagious U.K. variant. It has been identified in 12 states, the CDC said Friday, and the agency has informed officials nationwide that they should assume the variant is present in their state.
The CDC and unaffiliated scientists have said they see no evidence that this particular variant is driving the winter surge in cases. So far, it has been involved in fewer than 0.5 percent of infections nationwide, testing data suggests.
Friday’s sobering CDC forecast is based on simple models and has limitations, the agency acknowledged.
The model looks at just the B.1.1.7 variant and does not consider the impact of other variants already discovered or not yet identified. The variants in South Africa and Brazil could prove to be even more problematic, though they have not been spotted so far in the United States. Researchers have noted the disastrous spike in cases in Manaus, Brazil, in recent weeks, despite the high percentage of the population believed to have been previously infected — a situation that raises suspicions, not confirmed by data, that some people who had recovered are becoming re-infected by the new strain.
The CDC model treats the country as a single unit even though the virus is spreading at different rates locally and regionally. No one knows, even at the national level, the current “R,” the reproduction number, of the common coronavirus variant. That’s the number of people an infected person will infect, on average.
The CDC model used plausible reproduction rates of 1.1 (faster spread right now) and 0.9 (slower). The CDC then used British data to project that the U.K. variant is 50 percent more transmissible than the common variant. The model assumes that between 10 and 30 percent of the population has been infected already and recovered and now has immunity.
“It would be foolish to say that this is never going to end, and we might as well stop trying,” the CDC’s Butler said Friday. “But there is reason to be concerned. We’re not out of the woods on this pandemic yet. We need to continue to press ahead.”
The Medicare Payment Advisory Commission voted Jan. 14 to recommend a 2 percent raise in Medicare payments for hospitals next year.
The commission said it wants to give the payment boost to both acute-care and long-term care hospitals. The 2 percent payment increase will result in about a $750 million to $2 billion increase in acute-care hospital spending for Medicare and about $50 million for long-term care hospitals.
MedPAC also plans to recommend no change to the payment rate for physicians in 2022 and a 5 percent decrease for home health firms and inpatient rehabilitation centers.
Although MedPAC will recommend the payment boost, Congress is not required to implement the recommendation.
The vote occurred at MedPAC’s January public meeting.
The annual J.P. Morgan Healthcare Conference is one of the best ways to diagnose the financial condition of the healthcare industry. Every January, every key stakeholder — providers, payers, pharmaceutical companies, tech companies, medical device and supply companies as well as bankers, venture capital and private equity firms — comes together in one exam room, even when it is virtual, for their annual check-up. But as we all know, this January is unlike any other as this past year has been unlike any other year.
You would have to go back to the banking crisis of 2008 to find a similar moment from an economic perspective. At the time, we were asking, “Are banks too big to fail?” The concern behind the question was that if they did fail, the economic chaos that would follow would lead to a collapse with the consumer ultimately picking up the tab. The rest is history.
Healthcare is “Too Vital to Fail”
2020 was historic in too many ways to count. But in a year when healthcare providers faced the worst financial crisis in the history of healthcare, the headline is that they are still standing. And what they proved is that in contrast to banks in 2008 that were seen by many as “too big to fail,” healthcare providers in 2020 proved that they were “too vital to fail.”
One of the many unique things about the COVID-19 pandemic is we are simultaneously experiencing a health crisis, where healthcare providers are the front line in the battle, and an economic crisis, felt in a big way in healthcare given the unique role hospitals play as the largest employer in most communities. Hospitals and health systems have done the vast majority of testing, treating, monitoring, counseling, educating and vaccinating all while searching for PPE and ventilators, and conducting clinical trials. And that’s just the beginning of the list.
Stop and think about that for a minute. What would we have done without them? Thinking through that question will give you some appreciation for the critical, challenging and central role that healthcare providers have had to play over the past year.
Simply stated, healthcare providers are the heart of healthcare, both clinically (essentially 100 percent of the care) and financially (over 50 percent of the $4 trillion annual spend on U.S. healthcare). Over the last year they stepped up and they stepped in at the moment where we needed them the most. This was despite the fact that, like most businesses, they were experiencing calamitous losses with no assurances of any assistance.
Healthcare is “Pandemic-Proof”
This was absolutely the worst-case scenario and the biggest test possible for our nation’s healthcare delivery system. Patient volume and therefore revenue dropped by over 50 percent when the panic of the pandemic was at its peak, driving over $60 billion in losses per month across hospitals and healthcare providers. At the same time, they were dramatically increasing their expenses with PPE, ventilators and additional staff. This was not heading in a good direction. While failure may not have been seen as an option, it was clearly a possibility.
The CARES Act clearly provided a temporary lifeline, providing funding for our nation’s hospitals to weather the storm. While there are more challenging times ahead, it is now clear that most are going to make it to the other side. The system of care in our country is often criticized, but when faced with perhaps the most challenging moment in the history of healthcare, our nation’s hospitals and health systems stepped up heroically and performed miraculously. The work of our healthcare providers on the front line and those who supported them was and is one thing that we all should be exceptionally proud of and thankful for.In 2020, they proved that not only is our nation’s healthcare system too vital to fail, but also that it is “pandemic proof.”
Listening to Front Line at the 2021 J.P. Morgan Healthcare Conference
There has never been a more important year to listen to the lessons from healthcare providers. They are and were the front line of our fight against COVID-19. If there was a class given about how to deal with a pandemic at an institutional level, this conference is where those lessons were being taught.
This year at the J.P. Morgan Healthcare Conference, CEOs, and CFOs from many of the most prestigious and most well-respected health systems in the world presented including AdventHealth, Advocate Aurora Health, Ascension, Baylor Scott & White Health, CommonSpirit Health, Henry Ford Health System, Intermountain Healthcare, Jefferson Health, Mass General Brigham, Northwell Health, OhioHealth, Prisma Health, ProMedica Health System, Providence, Spectrum Health and SSM Health.
I’ve been in healthcare for 30 years and this is my fifth year of writing up the summary of the non-profit provider track of the conference for Becker’s Healthcare to help share the wisdom of the crowd of provider organizations that share their stories. Clearly, this year was different and not because the presentations were virtual, but because they were inspirational.
What did we learn? The good news is that they have made many changes that have the potential to move healthcare in a much better direction and to get to a better place much faster. So, this year instead of providing you a nugget from each presentation, I am going to take a shot at summarizing what they collectively have in motion to stay vital after COVID.
10 Moves Healthcare Providers are Making to Stay Vital After-COVID
As a leader in healthcare, you will never have a bigger opportunity to drive change than right now. Smart leaders are framing this as essentially “before-COVID (BC)” and “after-COVID (AC)” and using this moment as their burning platform to drive change. Credit to the team at Providence for the acronym, but every CEO talked about this concept. As the saying goes, “never let a good crisis go to waste.” Well, we’ve certainly had a crisis, so here is a list of what the top health systems are doing to ensure that they don’t waste it and that they stay vital after-COVID:
1. Take Care of Your Team and They’ll Take Care of You: In a crisis, you can either come together as a team or fall apart. Clearly there has been a significant and stunning amount of pressure on healthcare providers. Many are fearing that mental health might be our nation’s next pandemic in the near future because they are seeing it right now with their own team. Perhaps one of their biggest lessons from this crisis has been the need to address the mental, physical and spiritual health of both team members as well as providers. They have put programs in place to help and have also built a tremendous amount of trust with their team by, in many cases, not laying off and/or furloughing employees. While they have made cuts in other areas such as benefits, this collective approach proved incredibly beneficial. And the last point here that relates to thinking differently about their team is that similar to other businesses, many health systems are making remote arrangements permanent for certain administrative roles and moving to a flexible approach regarding their team and their space in the future.
2. Focus on Health Equity, Not Just Health Care: This was perhaps the most notable and encouraging change from presentations in past years at J.P. Morgan. I have been going to the conference for over a decade, and I’ve never heard someone mention this term or outline their efforts on “health equity” — this year, nearly everyone did. In the past, they have outlined many wonderful programs on “social determinants of health,” but this year they have seen the disproportionate impact of COVID on low-income communities bringing the ongoing issue of racial disparities in access to care and outcomes to light. As the bedrock of employment in their community, this provides an opportunity to not just provide health care, but also health equity, taking an active role to help make progress on issues like hunger, homelessness, and housing. Many are making significant investments in a number of these and other areas.
3. Take the Lead in Public Health — the Message is the Medicine:One of the greatest failings of COVID, perhaps the greatest lesson learned, is the need for clear and consistent messaging from a public health perspective. That is a role that healthcare providers can and should play. In the pandemic, it represented the greatest opportunity to save lives as the essence of public health is communication — the message is the medicine. A number of health systems stepped into this opportunity to build trust and to build their brand, which are essentially one in the same. Some organizations have created a new role — a Chief Community Health Officer — which is a good way to capture the work that is in motion relative to social determinants of health as well as health equity. Many understand the opportunity here and will take the lead relative to vaccine distribution as clear messaging to build confidence is clearly needed.
4. Make the Home and Everywhere a Venue of Care:A number of presenters stated that “COVID didn’t change our strategy, it accelerated it.” For the most part, they were referring to virtual visits, which increased dramatically now representing around 10 percent of their visits vs. 1 percent before-COVID. One presenter said, “Digital has been tested and perfected during COVID,” but that is only considering the role we see digital playing in this moment. It is clear some organizations have a very narrow tactical lens while others are looking at the opportunity much more strategically. For many, they are looking at a “care anywhere and everywhere” strategy. From a full “hospital in the home” approach to remote monitoring devices, it is clear that your home will be seen as a venue of care and an access point moving forward. The pandemic of 2020 may have sparked a new era of “post-hospital healthcare” — stay tuned.
5. Bury Your Budget and Pivot to Planning:The budget process has been a source of incredible distrust, dissatisfaction and distraction for every health system for decades. The chaos and uncertainty of the pandemic forced every organization to bury their budget last year. With that said, many of the organizations that presented are now making a permanent shift away from a “budget-based culture” where the focus is on hitting a now irrelevant target set that was set six to nine months ago to a “performance-based culture” where the focus is on making progress every day, week, month and quarter. Given that the traditional annual operating budget process has been the core of how health systems have operated, this shift to a rolling forecast and a more dynamic planning process is likely the single most substantial and permanent change in how hospitals and health systems operate due to COVID. In other words, it is arguably a much bigger headline than what’s happened with virtual visits.
6. Get Your M&A Machine in Motion: It was clear from the presentations that activity around acquisitions is going to return, perhaps significantly. These organizations have strong balance sheets and while the strong have gotten stronger during COVID, the weak have in many cases gotten weaker. Many are going to be opportunistic to acquire hospitals, but at the same time they have concluded that they can’t just be a system of care delivery. They are also focused on acquiring and investing in other types of entities as well as forming more robust partnerships to create new revenue streams. Organizations that already had diversified revenue streams in place came through this pandemic the best. Most hospitals are overly reliant on the ED and surgical volume. Trying to drive that volume in a value-based world, with the end of site of service differentials and the inpatient only list, will be an even bigger challenge in the future as new niche players enter the market. As I wrote in the headline of my summary two years ago, “It’s the platform, stupid.” There are better ways to create a financial path forward that involve leveraging their assets — their platform — in new and creative ways.
7. Hey, You, Get into the Cloud:With apologies for wrapping a Rolling Stones song into a conference summary, one of the main things touted during presentations was “the cloud” and their ability to pull clinical, operational and financial dashboards together to monitor the impact of COVID on their organization and organize their actions. Focus over the last decade has been on the clinical (implementing EHRs), but it is now shifting to “digitizing operations” with a focus on finance and operations (planning, cost accounting, ERPs, etc.) as well as advanced analytics and data science capabilities to automate, gather insight, manage and predict. It is clear that the cloud has moved from a curiosity to a necessity for health systems, making this one of the biggest areas of investment for every health system over the next decade.
8. Make Price Transparency a Key Differentiator: One of the great lessons from Amazon (and others) is that you can make a lot of money when you make something easy to buy. While many health systems are skeptical of the value of the price transparency requirements, those that have a deep understanding of both their true cost of care and margins are using this as an opportunity to prove their value and accelerate their strategy to become consumer-centric. While there is certainly a level of risk, no business has ever been unsuccessful because they made their product easier to understand and access. Because healthcare is so opaque, there is an opening for healthcare providers to build trust, which is their main asset, and volume, which is their main source of revenue, by becoming stunningly easy to do business with. This may be tough sledding for some as this isn’t something healthcare providers are known for. To understand this, spend a few minutes on Tesla’s website vs. Ford’s. The concept of making something easy, or hard, to buy will become crystal clear as fast as a battery-driven car can go from zero to 60.
9. Make Care More Affordable:This represents the biggest challenge for hospitals and health systems as they ultimately need to be on the right side of this issue or the trust that they have will disappear and they will remain very vulnerable to outside players. All are investing in advanced cost accounting systems (time-driven costing, physician costing, supply, and drug costing) to truly understand their cost and use that as a basis to price more strategically in the market. Some are dropping prices for shoppable services and using loss leader strategies to build their brand. The incoming Secretary of Health and Human Services has a strong belief regarding the accountability of health systems to be consumer centric. The health systems that understand this are working to get ahead of this issue as it is likely one of their most significant threats (or opportunities) over the next decade. This means getting all care to the right site of care, evaluating every opportunity to improve, and getting serious about eliminating the need for expensive care through building healthy communities. If you’re worried about Wal-Mart or Amazon, this is your secret weapon to keep them on the sideline.
10. Scale = Survival: One of the big lessons here is that the strong got stronger, the weak got weaker. For the strong, many have been able to “snapback” in financial performance because they were resilient. They were able to designate COVID-only facilities, while keeping others running at a higher capacity. To be clear, while most health systems are going to get to the other side and are positioned better than ever, there are many others that will continue to struggle for years to come. According to our data at Strata, we see 25 percent operating at negative margins right now and another 50 percent just above breakeven. They key to survival moving forward, for those that don’t have a captive market, will be scale. If this pandemic proved one thing relative to the future of health systems it is this — scale equals survival.
When Will We Return to Normal?
Based on what the projections that these health systems shared, the “new normal” for health systems for the first half of 2021 will be roughly 95 percent of prior year inpatient volume with a 20 percent year-over-year drop in ED volume and a drop of 10-15 percent in observation visits. So, the pain will continue, but given the adjustments that were already made in 2020, it looks like they will be able to manage through COVID effectively. While there will be a pickup in the second half of 2021, the safe bet is that a “return to normal” pre-COVID volumes likely won’t occur until 2022. And there are some who believe that some of the volume should have never been there to begin with and we might see a permanent shift downward in ED volume as well as in some other areas.
With that said, I’ll steal a quote from Bert Zimmerli, the CFO of Intermountain Healthcare, who said, “Normal wasn’t ever nearly good enough in healthcare.”In that spirit, the goal should be to not return to normal, but rather to use this moment as an opportunity to take the positive changes driven by COVID — from technology to processes to areas of focus to a sense of responsibility — and make them permanent.
Thanking Our “Healthcare Heroes”
We’ll never see another 2020 again, hopefully. With that said, one of the silver linings of the year is everything we learned in healthcare. The most important lesson was this — in healthcare there are literally heroes everywhere. To each of them, I just want to say “thank you” for being there for us when we needed you the most. We should all be writing love letters to those on the front line who risked their lives to save others. Our nation’s healthcare system has taken a lot of criticism through the years from those on the outside, often with a blind eye to how things work in practice vs. in concept. But this year we all got to see first-hand what’s happening inside of healthcare — the heroic work of our healthcare providers and those who support them.
They faced the worst crisis in the history of healthcare. They responded heroically and were there for our families and friends.
They proved that healthcare is too vital to fail. They proved that healthcare is pandemic-proof.
The Federal Trade Commission sent orders to six health insurance companies to obtain patient-level claims data for inpatient, outpatient, and physician services from 2015 to 2020, the agency said Thursday.
The FTC wants to figure out how hospitals’ acquisitions of physician practices has affected competition.
The agency sent orders to some of the nation’s largest insurance companies, including UnitedHealthcare, Anthem, Aetna, Cigna, Florida Blue and Health Care Service Corporation.
Dive Insight:
This action is part of a larger effort underway at the agency to consider new questions and areas of study to help it understand the ultimate impact of mergers. The hope is that those studies will yield evidence to better equip the agency to legally challenge mergers in the future.
Health economists cheered the news online following the FTC’s Thursday’s announcement about studying physician practice buy-ups.
Martin Gaynor, former director of FTC’s Bureau of Economics, tweeted: “This is a big deal – a huge # of physician practices are now owned by hospitals.” Gaynor is a health economist at Carnegie Mellon.
In the orders, the FTC asks the insurers for data such as the total billed charges of all health providers, total deductibles, copays and coinsurance paid by the patient. It also asks for data tied to each inpatient admission and outpatient and physician episodes during the time period in question, which will likely result in a barrage of data for the agency to review.
“The study results should aid the FTC’s enforcement mission by providing much more detailed information than is currently available about how physician practice mergers and healthcare facility mergers affect competition,” the agency said in a statement.
This area of study expands the agency’s current work. One area already of interest within this broader retrospective merger review program is the scrutiny of labor markets.
One area of concern for the FTC is states’ willingness to greenlight COPAs, or certificates of public advantage (COPAs), which essentially shield mergers from federal antitrust regulators in exchange for prolonged state oversight.
HENRY KOTULA 