Thought of the Day: On Motivation
Monthly Archives: November 2021
State of the Union: On Ethics
CVS wants to employ doctors. Should health systems be worried?
https://mailchi.mp/96b1755ea466/the-weekly-gist-november-19-2021?e=d1e747d2d8
We recently caught up with a health system chief clinical officer, who brought up some recent news about CVS. “I was really disappointed to hear that they’re going to start employing doctors,” he shared, referring to the company’s announcement earlier this month that it would begin to hire physicians to staff primary care practices in some stores. He said that as his system considered partnerships with payers and retailers, CVS stood out as less threatening compared to UnitedHealth Group and Humana, who both directly employ thousands of doctors: “Since they didn’t employ doctors, we saw CVS HealthHUBs as complementary access points, rather than directly competing for our patients.”
As CVS has integrated with Aetna, the company is aiming to expand its use of retail care sites to manage cost of care for beneficiaries. CEO Karen Lynch recently described plans to build a more expansive “super-clinic” platform targeted toward seniors, that will offer expanded diagnostics, chronic disease management, mental health and wellness, and a smaller retail footprint. The company hopes that these community-based care sites will boost Aetna’s Medicare Advantage (MA) enrollment, and it sees primary care physicians as central to that strategy.
It’s not surprising that CVS has decided to get into the physician business, as its primary retail pharmacy competitors have already moved in that direction. Last month, Walgreens announced a $5.2B investment to take a majority stake in VillageMD, with an eye to opening of 1,000 “Village Medical at Walgreens” primary care practices over the next five years. And while Walmart’s rollout of its Walmart Health clinics has been slower than initially announced, its expanded clinics, led by primary care doctors and featuring an expanded service profile including mental health, vision and dental care, have been well received by consumers. In many ways employing doctors makes more sense for CVS, given that the company has looked to expand into more complex care management, including home dialysis, drug infusion and post-operative care. And unlike Walmart or Walgreens, CVS already bears risk for nearly 3M Aetna MA members—and can immediately capture the cost savings from care management and directing patients to lower-cost servicesin its stores.
But does this latest move make CVS a greater competitive threat to health systems and physician groups? In the war for talent, yes. Retailer and insurer expansion into primary care will surely amp up competition for primary care physicians, as it already has for nurse practitioners. Having its own primary care doctors may make CVS more effective in managing care costs, but the company’s ultimate strategy remains unchanged: use its retail primary care sites to keep MA beneficiaries out of the hospital and other high-cost care settings.
Partnerships with CVS and other retailers and insurers present an opportunity for health systems to increase access points and expand their risk portfolios. But it’s likely that these types of partnerships are time-limited. In a consumer-driven healthcare market, answering the question of “Whose patient is it?” will be increasingly difficult, as both parties look to build long-term loyalty with consumers.
Understanding the mechanics of the 340B drug pricing program
https://mailchi.mp/96b1755ea466/the-weekly-gist-november-19-2021?e=d1e747d2d8
The 340B Drug Pricing Program, designed to increase access to specialty pharmaceuticals for low-income patients, is a perennial area of concern for health policy. The program has grown exponentially since its inception almost 30 years ago: 340B providers increased purchases of discounted drugs from $4B in 2009 to $38B in 2020, five times faster than the overall growth rate of US drug sales. Insurers and drug manufacturers are advocating for significant changes to the program, or even favor eliminating it entirely, claiming that 340B has grown beyond its original intent to help safety net facilities, and simply enriches providers without directly benefiting patients. Indeed, the profits from 340B have become essential for many hospitals’ sustainability; some systems tell us that 340B accounts for their entire margin.
In the graphic above, we outline the basics of revenue and product flow within this complex program. The 340B program is meant to allow hospitals that treat low-income, underserved patients to purchase drugs from manufacturers at a 25 to 50-plus percent discount, but still be reimbursed by payers at standard network rates. The discounts are intended to help hospitals overcome losses they incur in providing uncompensated care, but apply to drugs for all patients, regardless of income and insurance status. 340B providers often partner with independent pharmacies to dispense the drugs, and payers are billed the full list price for the medication. Thus, insured patients pay co-payments on the full price of drugs, leading to criticism that 340B savings are not passed on to patients. 340B providers share an estimated $40B in total annual profit with partner contract pharmacies.
The program has been targeted for overhaul by both the Trump and Biden administrations, and faces another threat later this month, when the US Supreme Court is set to hear a case between the hospital industry and the Department of Health and Human Services (HHS) to decide whether the Centers for Medicare & Medicaid Services (CMS) has the authority to enact payment cuts through rulemaking.
If the court rules in favor of the agency, 340B providers could see significant cuts in payment rates. In our next edition, we’ll dive deeper into the potential impact of that ruling on the industry.
Quote of the Day: On True Leadership Value
Quote of the Day: On Good Leadership
Quote of the Day: On People Leaving
30% of hospital healthcare workers remained unvaccinated as of September
Dive Brief:
- Some 30% of U.S. healthcare workers employed at hospitals remained unvaccinated as of Sept. 15, according to an analysis of Centers for Disease Control and Prevention data published Thursday by the Association for Professionals in Infection Control and Epidemiology.
- The findings include data from 3.3 million healthcare workers at more than 2,000 hospitals, collected between Jan. 20 and Sept. 15.
- Healthcare personnel working in children’s hospitals had the highest vaccination rates, along with those working in metropolitan counties.
Dive Insight:
The vaccination rate for healthcare workers is roughly in line with that of the general population, though the risk of exposure and transmission can be higher in settings where infected COVID-19 patients are treated, Hannah Reses, CDC epidemiologist and lead author of the analysis, said.
When the shots were initially rolled out, vaccination rates climbed among healthcare workers, rising from 36% to 60% between January and April of 2021, the analysis found. But a major slowdown occurred shortly after.
From April to August, vaccination rates rose just 5%. They then rose 5% again in just one month — from August to September — likely due to the delta variant and more systems implementing their own mandates, the report said.
Researchers also found discrepancies in vaccination rates based on the type of hospitals and their geographic locations.
By September, workers at children’s hospitals had the highest vaccination rates (77%), followed by those at short-term acute care hospitals (70%), long-term care facilities (68.8%), and critical access hospitals (64%).
Among healthcare workers at facilities in metropolitan areas, about 71% were vaccinated by September, compared to 65% of workers at rural facilities.
The findings come as health systems work to comply with new vaccination mandates from the Biden administration.
Healthcare facilities must follow the CMS rule, which stipulates employees must be fully vaccinated by Jan. 4 or risk losing Medicare and Medicaid funding. Unlike the Occupational Safety and Health Administration’s rule that applies to businesses with 100 employees or more but excludes healthcare providers, the CMS rule does not allow for a testing exception.
Both agencies’ rules were met with pushback. The attorneys general of 10 mostly rural states — Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota and New Hampshire — filed a lawsuit on Oct. 10 against CMS for its rule and said the mandates would exacerbate existing staffing shortages.
“Requiring healthcare workers to get a vaccination or face termination is unconstitutional and unlawful, and could exacerbate healthcare staffing shortages to the point of collapse, especially in Missouri’s rural areas,” the state’s attorney general, Eric Schmitt, said in a statement.
But some regional systems that implemented their own mandates have seen positive results.
After UNC Health and Novant Health in North Carolina required the shots, staff vaccination rates rose to 97% and 99%, respectively, according to a White House report.
Among Novant Health’s 35,000 employees, about 375 were suspended for not complying, and about 200 of those suspended employees did end up getting vaccinated so they could return to work, according to the report.
And some major hospital chains across the country are joining suit with the looming deadline, including HCA with its 183 hospitals and more than 275,000 employees.
The chain is requiring employees be fully vaccinated by the CMS deadline on Jan. 4, a spokesperson said in an email statement.
At the same time, this year’s flu season is difficult to predict, though, “the number of influenza virus detection reported by public health labs has increased in recent weeks,” Reses said.
“The CDC is preparing for flu and COVID to circulate along with other respiratory viruses, and so flu vaccination therefore will be really important to reduce the risk of flu and potentially serious complications, particularly in combination with COVID-19 circulating,” Reses said.
Quote of the Day: On Bully Leadership
The ‘threat multiplier’ healthcare leaders can’t afford to ignore
From excessive waste to greenhouse gas emissions, healthcare organizations play a key role in contributing to climate change.
Research suggests the United States is the highest contributor to the global healthcare climate footprint. The healthcare industry accounts for 8.5 percent of all greenhouse gas emissions in the U.S.. Worldwide, the healthcare industry is responsible for 4.4 percent of net emissions, which is the equivalent of 514 coal-fired power plants, according to a 2019 report from Arup and Health Care Without Harm, a group dedicated to achieving more sustainable healthcare practices.
The medical supply chain accounts for 71 percent of healthcare’s carbon footprint. Excess waste is created from plastic gloves, surgical supplies, medicine containers and gowns, among other materials. If the American healthcare sector were its own country, it would be the 13th largest source of greenhouse gas emissions in the world, according to a column by Baltimore-based Johns Hopkins physicians.
A 2010 study estimated that each occupied U.S. hospital bed created 33.8 pounds of waste per day. Hospitals also dispose of 2 million pounds of supplies that have never been used, which costs them $15 million each year.
Other key contributors to healthcare’s carbon footprint are emissions from facilities, which account for 17 percent of its footprint, and indirect emissions from electricity, heating and cooling, which account for 12 percent, according to the Arup and Health Care Without Harm report.
A study by the National Health Service in England found that 2 to 3 percent of its carbon footprint is created by inhaled anesthetic gases. The drugs are vented through hospital rooftops and can be destructive to the ozone layer. Despite the potential consequences of releasing the gases into the atmosphere, the U.S. has no regulations on how to dispose them.
HENRY KOTULA 