Health insurers licensed by the Blue Cross Blue Shield Association face steep financial penalties from that organization if they merge with a competitor that doesn’t sell BCBS insurance, Axios’ Bob Herman writes.
Why it matters: Blue Cross Blue Shield is one of the most recognizable health insurance names in the country, and the powerful association behind that brand wants to keep its dominance in local markets.
Case in point: Triple-S Management, a BCBS affiliate in Puerto Rico, sold itself in August to the parent company of the Florida Blues for $900 million.
If Triple-S sold itself to a non-BCBS company, therefore terminating its license with the BCBSA, Triple-S would have faced a $96 million surcharge, according to merger documents filed by Triple-S.
The $96 million charge, based on a fee of $98.33 per member, was called a “re-establishment fee.”
What they’re saying: “The license agreements between the Blue Cross Blue Shield Association and its licensees include various financial and other provisions that apply to terminations, mergers and sales of licensees,” BCBSA said in a statement.
“BCBSA is unable to confirm the financial implications of any other transactions that Triple-S may have considered in deciding to enter into this transaction.”
A first COVID shot will give kids some protection, but none of them will be fully vaccinated until the beginning of December.
For many, many months now, 7-year-old Alain Bell has been keeping a very ambitious list of the things he wants to do after he gets his COVID-19 shots: travel (to Disneyworld or Australia, ideally); play more competitive basketball; go to “any restaurants that have french fries, which are my favorite food,” he told me over the phone.
These are very good kid goals, and they are, at last, in sight. On Tuesday evening, about as early as anyone in the general public could, Alain nabbed his first dose of Pfizer’s newly cleared pediatric COVID-19 vaccine. The needle delivered “a little poke,” he said, but also a huge injection of excitement and relief. Since his father, a critical-care physician, was vaccinated last December (the first time I interviewed Alain), “I’ve been impatient,” Alain said. “I really wanted to get mine.” Now he is finally on his way to joining the adults. When he heard on Tuesday that his shot was imminent, he let out a scream of joy, at “a pitch I have never heard him use before,” his mother, Kristen, told me.
There’s an air of cheer among the grown-ups as well. “It’s cause for celebration,” says Angie Kell, who lives in Utah with her spouse and their soon-to-be-vaccinated 6-year-old son, Beck. Their family, like many others, has been reining in their behavior for months to accommodate their still-vulnerable kid, unable to enjoy the full docket of post-inoculation liberties that so many have. Once Beck is vaccinated, though, they can leave mixed-immunity limbo: “We might have an opportunity to live our lives,” Kell told me.
The past year has been trying for young children, a massive test of patience—not always a kid’s strongest skill. And there’s yet another immediate hurdle to clear: the plodding accumulation of immunological defense. Alain has another 15 days to go until his second dose; after that, it’ll be two more weeks before he reaches a truly excellent level of protection. Only then, on December 7, will he count as fully vaccinatedby CDC standards and be able to start adopting the behavioral changes the agency has green-lit. In the intervening weeks, he and the many other 5-to-11-year-olds in his position will remain in a holding pattern. Their wait isn’t over yet.
The timing of this semi-immune stretch might feel particularly frustrating, especially with the winter holidays approaching: At this point, essentially no young kids are slated to be fully vaccinated by Thanksgiving or Hanukkah, except the ones who were enrolled in clinical trials. One shot can offer a level of protection, but experts advise waiting to change behavior for a reason—the extra safeguards that set in about two weeks after the second shot really are that much better, and absolutely worth sitting tight for.
“It takes time for immune cells to get into a position where they’re ready to pounce,” Gigi Gronvall, a senior scholar at the Johns Hopkins Center for Health Security, told me. COVID-19 vaccines teach immune cells to thwart the coronavirus, a process that, like most good boot camps, takes many days to unfold. The second shot is essential to clinch the lesson in the body’s memory, encouraging cells to take the threat more seriously for longer. Immune cells also improve upon themselves over time—the more, the better in these early stages. Gronvall’s own 11-year-old son is also about to get his first shot, and she doesn’t want to risk stumbling so close to the finish line. “I can’t know exactly what his immune system is going to do” after the first dose alone, she said.
Evidence from Pfizer’s original clinical trial, conducted only in adults, hinted that a first, decent defensive bump takes hold after the first shot. Kit Longley, Pfizer’s senior manager of science media relations, pointed to those data when I asked how kids at various points along the vaccination timeline should be approaching behavioral change. “Protection in the vaccinated cohort begins to separate from the placebo arm as early as 12 to 14 days after the first dose,” he told me.
The adult clinical-trial data were collected last year, though, long before the rise of the Delta variant. A more recent study, conducted in the United Kingdom, showed that one dose of Pfizer reduced the risk of symptomatic COVID-19 by only 35.6 percent when the cause was Delta, and by only 47.5 percent with Alpha. (And remember that those numbers apply best on a population scale—not for a single, individual child.) After adding a second dose, though, effectiveness rocketed up to about 90 or 95 percent against either variant. “You really need two doses for adequate, good protection,” Samuel Dominguez, a pediatric-infectious-disease specialist at Children’s Hospital Colorado, told me.
Immunity is so far looking strong in young kids: In a recent trial of thousands of children ages 5 to 11, Pfizer’s vaccine was more than 90 percent effective at blocking symptomatic cases of COVID-19, including ones caused by Delta. Longley said Pfizer expects that the timing of protection will be similar between children and adults—a first dose should lower everyone’s risk to some degree. But the company’s pediatric trial picked up only a few COVID-19 cases; none of them occurred until about three weeks after the first dose was given, or later. So it’s hard to say anything definitive about when “enough” immunity really kicks in for kids.
Some parents are counting on a level of early protection from one shot, including my cousin Joanne Sy, whose 8-year-old son, Jonah, received his first injection on Friday. “He will have good immunity after one dose,” she told me, hopefully enough to guard him on a trip they’re taking to New York for Thanksgiving two weeks from now. “We’re still going to be cautious,” Sy told me: They’ll be watching the Macy’s Thanksgiving Day Parade from a hotel room rather than the streets, and wearing masks, at least on the plane. “But we just need to move forward.”
The calculus is playing out differently for Christy Robinson of Arlington, Virginia, who will again be “hunkering down” with her husband and two daughters, June and Iris, 7 and 5, respectively, this Thanksgiving. The kids got their first Pfizer shot on Saturday, setting their household up for full, full vaccination by mid-December, just in time to hold an indoor gathering with their aunts, uncles, and cousins for Christmas. (Some quick arithmetic: To be fully vaccinated by December 25, a kid would need their first dose by November 20.) June’s also eager to “see my friends inside, because it’s cold outside,” she told me—plus go to movie theaters, and Build-A-Bear, and a trampoline park, and IHOP, and the nail salon.
By the end of this conversation, Robinson looked amused and maybe a little regretful that my question had prompted such an extravagant list. As their mother, she’s especially excited for the possibility of no longer having to quarantine her daughters after viral exposures at school. Heftier decisions are ahead too. She and her husband are still weighing whether to bring their daughters into closer, more frequent indoor contact with their grandparents, who are vaccinated but could still get seriously sick if someone ferries the virus into their midst.
And that risk—of transmitting the virus—is worth keeping in mind, with so much SARS-CoV-2 “still circulating around,” cautions Tina Tan, a pediatrician and infectious-disease specialist at Northwestern University. Immunized people are at much lower risk of picking up the virus and passing it on. There still aren’t enough of them, though, to reliably tamp down spread; uptake of shots among young kids, too, is expected to be sluggish in the months to come. Even fully vaccinated families won’t be totally in the clear while our collective defenses remain weak.
That doesn’t mean Thanksgiving has to be a bust—or even a repeat of 2020, before the vaccines rolled out. The Bells will be cautiously gathering with a few loved ones; all the adults in attendance will be immunized and everyone will get tested beforehand. “Then they can come inside the house, mask off,” Taison Bell, Alain’s father, told me. None of those measures is completely reliable on its own; together, though, they’ll hopefully keep the virus out.
The road ahead might feel a little bumpy for Alain, who’s celebrating his 8th birthday at the end of November, a few days after his second shot. (He’s getting the gift of immunity this year, his father joked.) The Bells will do something special “around when he hits full vaccination,” Kristen said, “with something Alain hasn’t gotten to do in the last two years.” But Alain, who has asthma, which can make COVID-19 worse, knows that his own injections won’t wipe the slate clean for him, or those around him. Some people in his neighborhood have caught the virus even after getting vaccinated, and he understands that he could too.
Alain will keep masking, and treading carefully at school, and even a bit at home. His 3-year-old sister, Ruby, hasn’t yet been able to get a shot. (I asked her how she felt about Alain’s vaccine; she responded, almost imperceptibly, “Jealous.”) Until another regulatory green light comes, she will still be waiting, which means that her family will be too.
The job market added a stunning 531,000 jobs last month. The unemployment rate ticked down to 4.6% — a new pandemic-era low.
Why it matters: America’s job market recovery has been on track all along.
Between the lines: Revisions to prior months are often overlooked. Not this month: Upgrades to both August and September were so enormous — fully 366,000 jobs higher than originally reported — that they have definitively reversed the narrative that there was a Delta-induced hiring slump in late summer.
By the numbers:America has now recovered 80% of the jobs lost at the depth of the recession in 2020.
The big picture: Leisure and hospitality added 164,000 jobs last month — but jobs growth was widespread. The disappointment — again — came in public sector education. State and local education shed a combined 65,000 jobs.
Wages are still rising: Average hourly earnings rose another 11 cents an hour in October, to $30.96. That’s enough to keep up with inflation.
What to watch: Millions of workers remain on the sidelines — and there wasn’t much improvement in pulling them back into the workforce.
The bottom line: “The Fall hiccup is now at best a Fall deep breath,” tweeted University of Michigan economist Justin Wolfers.
Pregnancy is a significant life event, one that typically leads to substantially more interaction with the health care system than average. In the United States (US), pregnant people usually have about one health care visit per month of pregnancy, during which they receive a myriad of services. However, access to high quality prenatal care — and enough of it — is often limited by one’s health insurance coverage.
When the Affordable Care Act was enacted, it established the individual Marketplaces from which those who are ineligible for Medicaid, Medicare, and/or employer-sponsored insurance can purchase coverage. However, pregnancy is not considered a qualifying life event, so an individual cannot just sign up for coverage once they find out they’re pregnant; they must wait until the next open enrollment period or the birth of their child, whichever comes first. Thus, they may be stuck without coverage during pregnancy. This can have a significant impact on access to appropriate prenatal care.
New Research
A recent study in Health Affairs looked at Marketplace enrollment patterns for pregnant people and the impact of Marketplace insurance coverage on their health and care utilization.
The authors are Sarah Gordon and Melissa Garrido from Boston University School of Public Health (BUSPH) Health, Law, Policy, and Management Department (HLPM) and VA Boston Healthcare System; Charlotte Alger from BUSPH HLPM; and Eugene Declercq from BUSPH Community Health Sciences Department.
The authors used data from the Pregnancy Risk Surveillance and Monitoring System (PRAMS) from 2016 to 2018. Developed by the Centers for Disease Control and Prevention, PRAMS is a self-reported survey within 40 states and New York City and is representative of 83 percent of all US births. State health departments pull a representative sample of recent births from birth certificate registries and reach out via mail and telephone to the selected mothers. The survey asks respondents about health status and behaviors, health care use, and insurance coverage.
With these data, they studied two questions. First, they assessed how likely pregnant people were to be enrolled in Marketplace insurance coverage preconception, during pregnancy, and/or postpartum. Sample size for this question was 6491 and the authors used simple descriptive analysis techniques.
Second, they studied how Marketplace enrollment impacted individuals’ receipt of prenatal care, such as the number of prenatal visits, receipt of care within the first trimester, and receipt of specific health care services like flu shots and screenings for intimate partner violence and depression. The sample size for this question was 3443, limited to individuals who reported Marketplace coverage during pregnancy. The authors used logistic regression models and inverse probability of treatment weights to conduct these analyses.
Findings
For enrollment, the authors found that about one third of respondents had continual Marketplace coverage, from preconception to postpartum. Of those who were only enrolled in the Marketplace preconception, over 70 percent reported Medicaid coverage during pregnancy. Of those who were only enrolled in the Marketplace postpartum, almost 50 percent reported Medicaid coverage and one third reported employer-sponsored insurance coverage during pregnancy.
For impact of enrollment during pregnancy, the authors compared those with continuous coverage (preconception to postpartum) to those who only enrolled in the Marketplace during pregnancy. Those with continuous Marketplace coverage were more likely to have “adequate” or “more than adequate” prenatal care use. (The authors defined these classifications using the Adequacy of Prenatal Care Utilization Index which measures timing and quantity of care.) Those with continuous coverage were also more likely to initiate prenatal care in the first trimester, though over 80 percent of respondents in both groups did so. The authors did not find any significant differences in the likelihood of receipt of particular prenatal services, such as flu shots or social/mental health screenings.
Limitations
There were several limitations to this study due to the nature of the PRAMS data set. For example, PRAMS is self-reported, subject to both recall bias and response bias. Plus, the survey is not conducted in all states and, thus, assumptions must be made about generalizability. Lastly, PRAMS simply includes a finite set of questions; this is certainly understandable but does limit researchers’ analyses.
Discussion
With the connection between insurance coverage and access to care clear, several notable policy questions arise from this study. Classifying pregnancy as a qualifying life event is perhaps the most obvious. As mentioned previously, pregnancy is not a qualifying life event, though the birth of a child is. (Only two states have implemented policies to the contrary.) Allowing an individual to sign up for health insurance coverage once pregnant, rather than waiting until birth or the next open enrollment period, could improve access to prenatal care and even improve maternal and child health outcomes.
Another related policy implication is determining what type of insurance is ideal for pregnant individuals. The authors found that individuals without Marketplace coverage often have other types of coverage, at least temporarily. What type of insurance is best or most cost-effective for pregnant people — and the benefits of coverage continuity regardless of type — could be studied further.
The study did not touch on the quality of prenatal care but that is also worth discussion. In the US, pregnant people tend to receive far more prenatal care than other countries but that doesn’t mean the quality is better, nor do maternal health outcomes suggest that’s true. In fact, the US’ maternal health outcomes are some of the worst in the industrial world.
Pregnancy is full of changes, expenses, and challenges. Determining how Marketplace insurance coverage — which has been around for a decade — access to care, and maternal and child health outcomes all interact from preconception to postpartum warrants more study.
Regulators in Britain granted approval to the experimental drug molnupiravir from U.S. pharmaceutical giant Merck on Thursday, marking the first authorization from a public health body for an oral antiviral treatment for covid-19 in adults.
Experts have said that if widely authorized, the medicine could have huge potential to help fight the coronavirus pandemic: Pills are easier to take, manufacture and store, making them particularly useful in lower- to middle-income countries with weaker infrastructure and limited vaccine supplies.
“We will continue to move with both rigor and urgency to bring molnupiravir to patients around the world as quickly as possible,”Merck President Robert M. Davis said in a statement.
The company, which added that it would submit applications to other regulatory agencies, has applied to the U.S. Food and Drug Administration for emergency use authorization, while the European Medicines Agency has launched a rolling review of the drug.
“Today is a historic day for our country,” British Health Secretary Sajid Javid said in Thursday’s announcement. “This will be a game changer for the most vulnerable … who will soon be able to receive the ground-breaking treatment.”
In a global clinical trial, the pill reduced hospitalizations and deaths by nearly half among higher-risk adult coronavirus patients diagnosed with mild to moderate illness, according to Merck, which developed the drug with Ridgeback Biotherapeutics after it was discovered at Emory University. The first dose given to a volunteer in the trial was in the United Kingdom.
The U.K. medicines regulator approved the use of the treatment in people who are above 60 years old or have at least one other factor that puts them at risk of covid-19 developing into severe illness, such as obesity and heart disease. The agency found it “safe and effective” at curbing the risk after “a rigorous review.”
Britain became known during the pandemic for its speed in authorizing vaccines. It was the first country in the world to approve a coronavirus vaccine tested in a large clinical trial when it granted emergency-use authorization to the Pfizer-BioNTech shot last December.
The United States has made an advance purchase of 1.7 million courses of molnupiravir at a cost of about $1.2 billion, or roughly $700 per treatment course. Other countries have also reached agreements with Merck to buy the pills, including Australia, Singapore and South Korea.
The U.S. drugmakersaid it expects to produce 10 million courses of the treatment by the end of this year, along with at least 20 million in 2022, and that it plans to adopt a “tiered pricing approach” taking into account each country’s ability to pay.
The firm has also agreed to share its license for the pill with several Indian manufacturers and with a U.N.-backed nonprofit organization to allow production around the world and help boost access to more than 100 low- and middle-income countries.
The move stood out in a pandemic that has seen pharmaceutical companies lobbying to keep rights to vaccines. Some advocacy organizations, however, have criticized Merck for leaving out upper-middle-income countries hit hard by the pandemic.
Suerie Moon, co-director of the Global Health Center in Geneva, described the first approval of molnupiravir as “a big step forward.”
“I would say it’s very significant in terms of giving patients and the public a large confidence that this treatment can be widely used,” she said.
The drug — which received a type of conditional market authorization for products that fulfill an unmet medical need — will go by the name Lagevrio in Britain. It works by introducing errors that garble the genetic code of the virus and prevent it from making copies of itself. The window in which it can be administered and still work may be narrow, though, and the British regulator recommended taking it “as soon as possible” after a positive coronavirus test and within five days of symptoms onset.
The U.K. health secretary, Javid, called it “an excellent addition to our armory,” while urging people to keep getting their covid-19 shots. Doctors maintain the vaccines remain the principal tool against the coronavirus, as they seek to help prevent people from catching it rather than treating the disease after infection.
The pill is notably easy to use compared to monoclonal antibodies, a costly treatment that is infused or injected. Virologists have said they are hopeful that as well as limiting the risk of developing severe illness, the treatment could help reduce transmission of the virus too.
The pharmaceutical industry scored a muted win in its long-running feud with the Department of Health and Human Services (HHS) over 340B program discounts Friday when a federal court judge granted Eli Lilly’s bid to vacate two administrative actions aimed at drugmakers.
U.S. District Court Judge Sarah Evans Barker ruled that a December advisory opinion from HHS’ Office of the General Counsel and a May enforcement letter from the Health Resources and Services Administration (HRSA) were “arbitrary and capricious” and in violation of the Administrative Procedures Act.
But while Barker ordered the two actions to be set aside and vacated, she also specified that HHS did not exceed its statutory authority or act unconstitutionally in regard to the May enforcement letter.
“Lilly is encouraged by Friday’s opinion, which confirms that the government’s enforcement decision against it was improper,” the drugmaker said in an email statement.
Further, the judge determined that Lilly and other drug manufacturers are not permitted under the current 340B statute “to impose unilateral extra-statutory restrictions on its offer to sell 340B drugs to covered entities utilizing multiple contract pharmacy arrangements.”
HHS may have “suddenly” changed its views on whether the agency could enforce penalties against drugmakers restricting sales of the discounted products to contract pharmacies, but the law as written makes it impossible to discern whether Congress intended for drug manufacturers to have “unlimited delivery obligations … untethered to the particular covered entity’s actual distribution needs,” the judge wrote.
As such, Barker underscored the need for lawmakers to settle the ambiguity with new, explicit legislation.
“We have no insight into why there is apparently so much reluctance to promulgate a holistic legislative proposal to bring clarity to the scope of the regulated parties’ obligations and entitlements … rather than engage in piecemeal interpretations and after the fact patchwork characterizing the history of the agency’s attempts to manage this program,” Barker wrote in the Friday order.
“What we have come to see, however, is that the 340B program can no longer be held together and implemented fairly for all concerned with non-binding interpretive guidelines and mixed, sometimes inconsistent messaging by the agency regarding the source and extent of its authority to enforce statutory compliance in the area of contract pharmacies.”
Eli Lilly’s case against HHS is the latest in a lengthy dispute between the agency and a slew of pharmaceutical companies including AstraZeneca, Novartis, Novo Nordisk, Sanofi and United Therapeutics.
The 340B program requires drugmakers to offer discounted products to safety net hospitals, community health centers and other providers as a condition of participation in Medicare and Medicaid.
Beginning in July 2020, however, the drugmakers announced they would no longer provide 340B-discounted products to contract pharmacies or would be limiting sales unless a 340B-covered entity provided claims data ensuring there were no duplicative discounts being applied.
In response, HHS’ Office of the General Counsel issued the December advisory opinion, which stated that the restrictions violated federal law, and later through HRSA delivered enforcement letters threatening penalties to the six companies.
HHS’ pushback has generally taken a beating in the courts. In June, the agency decided to pull the December advisory opinion to “avoid confusion and unnecessary litigation” after courts took the side of AstraZeneca and struck down a motion from HHS to dismiss the case.
Industry supporters of HHS’ position focused on the silver lining of Friday’s decision.
In a statement, Maureen Testoni, president and CEO of 340B Health, a membership organization of more than 1,400 340B participants, said the group was encouraged by Barker’s position on the “unilateral” restrictions on drug discounts for contract pharmacies.
“We are encouraged that the court upheld HRSA’s view that Lilly is violating the law as one that ‘best aligns with congressional intent’ of the 340B program,” she said in a statement. “We urge the government to continue its work to enforce the law and restore the statutory drug discounts that enable 340B hospitals to care for patients with low incomes and those living in rural parts of the country.”
Hospitals’ performances declined “by almost every metric” during September as volumes dropped, average patient stays rose and expenses increased “dramatically” due to labor and supply chain issues, Kaufman Hall wrote in its latest monthly report.
Although revenue increased compared to this time last year, the industry analyst said that these pressures have led median change in hospital operating margin to decline 18.2% from August to September, not including CARES act funding.
These declines were greatest across regions heavily affected by the recent delta surge, with the west part of the country seeing the largest year-over-year drop in its median change in operating EBITDA margin (38%), Kaufman Hall wrote.
Hospital size also played a role in margin performance, they wrote, with hospitals containing more than 500 beds seeing year-over-year declines of 36% while those with 25 or fewer beds actually seeing their margins increase year over year.
Adjusted discharges dropped 5.1% month over month but remained up 11.4% year over year. Patient days similarly dropped 1.4% month over month, “reflecting a decrease in COVID-19-related hospitalizations,” but are still up 11.4% year over year, according to the report. Notably, the average length of stay saw increases across the board—0.7% month over month and 4.8% year over year.
Expenses and revenues continued their hand-in-hand climb during September.
For the former, total expenses grew 2.2% month over month and 11.2% year over year. Labor expenses increased 1.4% month over month at the same time as workers per patient bed declined, the group wrote. Other non-labor expenses, including drugs and medical supplies, also saw a 1.3% month-over-month increase.
“Multiple factors are contributing to alarming and sustained increases in hospital expenses,” Erik Swanson, a senior vice president of data and analytics with Kaufman Hall. “Growth in labor expenses are outpacing increases in hours worked, suggesting hospitals are paying more due to nationwide labor shortages. Rising supply and drug expenses also point to worldwide supply chain issues.”
Hospital revenues saw their seventh consecutive month of year-to-date increases when compared to 2020 and 2019 alike, “due in part to yearly rate changes and the continued rise in higher acuity cases,” Kaufman Hall wrote. Specifically, gross operating revenues minus CARES grew 12.3% year over year from 2020 and 12.3% year over year from 2019, with inpatient revenue rising faster than outpatient revenue.
Month over month was a different story, however, with gross operating revenue without CARES dropping 1.4%. While inpatient revenue was up 1.5% from August, a 3.3% decline in outpatient revenue “suggests that consumer worries about accessing care during the recent delta surge have led to another downswing,” Kaufman Hall wrote.
Kaufman Hall’s reports incorporate data from more than 900 U.S. hospitals. The September numbers follow early warnings of delta-fueled recovery roadblocks from the group’s preceding monthly reports as well as recent hospital chain earnings calls highlighting high revenues, costs and COVID-19 patient counts.
HENRY KOTULA 