The Unique U. S. Failure to Control the Coronavirus

The Unique U.S. Failure to Control the Virus - The New York Times

Nearly every country has struggled to contain the coronavirus and made mistakes along the way.

China committed the first major failure, silencing doctors who tried to raise alarms about the virus and allowing it to escape from Wuhan. Much of Europe went next, failing to avoid enormous outbreaks. Today, many countries — Japan, Canada, France, Australia and more — are coping with new increases in cases after reopening parts of society.

Yet even with all of these problems, one country stands alone, as the only affluent nation to have suffered a severe, sustained outbreak for more than four months: the United States.

Over the past month, about 1.9 million Americans have tested positive for the virus.

That’s more than five times as many as in all of Europe, Canada, Japan, South Korea and Australia, combined.

Even though some of these countries saw worrying new outbreaks over the past month, including 50,000 new cases in Spain …

the outbreaks still pale in comparison to those in the United States. Florida, with a population less than half of Spain, has reported nearly 300,000 cases in the same period.

When it comes to the virus, the United States has come to resemble not the wealthy and powerful countries to which it is often compared but instead far poorer countries, like Brazil, Peru and South Africa, or those with large migrant populations, like Bahrain and Oman.

As in several of those other countries, the toll of the virus in the United States has fallen disproportionately on poorer people and groups that have long suffered discrimination. Black and Latino residents of the United States have contracted the virus at roughly three times as high of a rate as white residents.

How did this happen? The New York Times set out to reconstruct the unique failure of the United States, through numerous interviews with scientists and public health experts around the world. The reporting points to two central themes.

First, the United States faced longstanding challenges in confronting a major pandemic. It is a large country at the nexus of the global economy, with a tradition of prioritizing individualism over government restrictions. That tradition is one reason the United States suffers from an unequal health care system that has long produced worse medical outcomes — including higher infant mortality and diabetes rates and lower life expectancy — than in most other rich countries.

“As an American, I think there is a lot of good to be said about our libertarian tradition,” Dr. Jared Baeten, an epidemiologist and vice dean at the University of Washington School of Public Health, said. “But this is the consequence — we don’t succeed as well as a collective.”

The second major theme is one that public health experts often find uncomfortable to discuss because many try to steer clear of partisan politics. But many agree that the poor results in the United States stem in substantial measure from the performance of the Trump administration.

In no other high-income country — and in only a few countries, period — have political leaders departed from expert advice as frequently and significantly as the Trump administration. President Trump has said the virus was not serious; predicted it would disappear; spent weeks questioning the need for masks; encouraged states to reopen even with large and growing caseloads; and promoted medical disinformation.

In recent days, Mr. Trump has continued the theme, offering a torrent of misleading statistics in his public appearances that make the situation sound less dire than it is.

Some Republican governors have followed his lead and also played down the virus, while others have largely followed the science. Democratic governors have more reliably heeded scientific advice, but their performance in containing the virus has been uneven.

“In many of the countries that have been very successful they had a much crisper strategic direction and really had a vision,” said Caitlin Rivers, an epidemiologist at the Johns Hopkins Center for Health Security, who wrote a guide to reopening safely for the American Enterprise Institute, a conservative research group. “I’m not sure we ever really had a plan or a strategy — or at least it wasn’t public.”

Together, the national skepticism toward collective action and the Trump administration’s scattered response to the virus have contributed to several specific failures and missed opportunities, Times reporting shows:

  • a lack of effective travel restrictions;

  • repeated breakdowns in testing;

  • confusing advice about masks;

  • a misunderstanding of the relationship between the virus and the economy;

  • and inconsistent messages from public officials.

Already, the American death toll is of a different order of magnitude than in most other countries. With only 4 percent of the world’s population, the United States has accounted for 22 percent of coronavirus deaths. Canada, a rich country that neighbors the United States, has a per capita death rate about half as large. And these gaps may worsen in coming weeks, given the lag between new cases and deaths.

For many Americans who survive the virus or do not contract it, the future will bring other problems. Many schools will struggle to open. And the normal activities of life — family visits, social gatherings, restaurant meals, sporting events — may be more difficult in the United States than in any other affluent country.

 

In retrospect, one of Mr. Trump’s first policy responses to the virus appears to have been one of his most promising.

On Jan. 31, his administration announced that it was restricting entry to the United States from China: Many foreign nationals — be they citizens of China or other countries — would not be allowed into the United States if they had been to China in the previous two weeks.

It was still early in the spread of the virus. The first cases in Wuhan, China, had been diagnosed about a month before, and the first announced case in the United States had come on Jan. 21. In announcing the new travel policy, Alex M. Azar II, the secretary of health and human services, declared that the virus posed “a public health emergency.” Mr. Trump described the policy as his “China ban.”

After the Trump administration acted, several other countries quickly announced their own restrictions on travel from China, including Japan, Vietnam and Australia.

But it quickly became clear that the United States’ policy was full of holes. It did not apply to immediate family members of American citizens and permanent residents returning from China, for example. In the two months after the policy went into place, almost 40,000 people arrived in the United States on direct flights from China.

Even more important, the policy failed to take into account that the virus had spread well beyond China by early February. Later data would show that many infected people arriving in the United States came from Europe. (The Trump administration did not restrict travel from Europe until March and exempted Britain from that ban despite a high infection rate there.)

The administration’s policy also did little to create quarantines for people who entered the United States and may have had the virus.

Authorities in some other places took a far more rigorous approach to travel restrictions.

South Korea, Hong Kong and Taiwan largely restricted entry to residents returning home. Those residents then had to quarantine for two weeks upon arrival, with the government keeping close tabs to ensure they did not leave their home or hotel. South Korea and Hong Kong also tested for the virus at the airport and transferred anyone who was positive to a government facility.

Australia offers a telling comparison. Like the United States, it is separated from China by an ocean and is run by a conservative leader — Scott Morrison, the prime minister. Unlike the United States, it put travel restrictions at the center of its virus response.

Australian officials noticed in March that the travel restrictions they had announced on Feb. 1 were not preventing the virus from spreading. So they went further.

On March 27, Mr. Morrison announced that Australia would no longer trust travelers to isolate themselves voluntarily. The country would instead mandate that everyone arriving from overseas, including Australian citizens, spend two weeks quarantined in a hotel.

The protocols were strict. As people arrived at an airport, the authorities transported them directly to hotels nearby. People were not even allowed to leave their hotel to exercise. The Australian military helped enforce the rules.

Around the same time, several Australian states with minor outbreaks shut their own borders to keep out Australians from regions with higher rates of infection. That hardening of internal boundaries had not happened since the 1918 flu pandemic, said Ian Mackay, a virologist in Queensland, one of the first states to block entry from other areas.

The United States, by comparison, imposed few travel restrictions, either for foreigners or American citizens. Individual states did little to enforce the rules they did impose.

“People need a bit more than a suggestion to look after their own health,” said Dr. Mackay, who has been working with Australian officials on their pandemic response. “They need guidelines, they need rules — and they need to be enforced.”

Travel restrictions and quarantines were central to the success in controlling the virus in South Korea, Hong Kong, Taiwan and Australia, as well as New Zealand, many epidemiologists believe. In Australia, the number of new cases per day fell more than 90 percent in April. It remained near zero through May and early June, even as the virus surged across much of the United States.

In the past six weeks, Australia has begun to have a resurgence — which itself points to the importance of travel rules. The latest outbreak stems in large part from problems with the quarantine in the city of Melbourne. Compared with other parts of Australia, Melbourne relied more on private security contractors who employed temporary workers — some of whom lacked training and failed to follow guidelines — to enforce quarantines at local hotels. Officials have responded by banning out-of-state travel again and imposing new lockdowns.

Still, the tolls in Australia and the United States remain vastly different. Fewer than 300 Australians have died of complications from Covid-19, the illness caused by the virus. If the United States had the same per capita death rate, about 3,300 Americans would have died, rather than 158,000.

Enacting tough travel restrictions in the United States would not have been easy. It is more integrated into the global economy than Australia is, has a tradition of local policy decisions and borders two other large countries. But there is a good chance that a different version of Mr. Trump’s restrictions — one with fewer holes and stronger quarantines — would have meaningfully slowed the virus’s spread.

Traditionally, public health experts had not seen travel restrictions as central to fighting a pandemic, given their economic costs and the availability of other options, like testing, quarantining and contact tracing, Dr. Baeten, the University of Washington epidemiologist, said. But he added that travel restrictions had been successful enough in fighting the coronavirus around the world that those views may need to be revisited.

“Travel,” he said, “is the hallmark of the spread of this virus around the world.”

 

On Jan. 16, nearly a week before the first announced case of the coronavirus in the United States, a German hospital made an announcement. Its researchers had developed a test for the virus, which they described as the world’s first.

The researchers posted the formula for the test online and said they expected that countries with strong public health systems would soon be able to produce their own tests. “We’re more concerned about labs in countries where it’s not that easy to transport samples, or staff aren’t trained that thoroughly, or if there is a large number of patients who have to be tested,” Dr. Christian Drosten, the director of the Institute for Virology at the hospital, known as Charité, in Berlin.

It turned out, however, that the testing problems would not be limited to less-developed countries.

In the United States, the Centers for Disease Control and Prevention developed their own test four days after the German lab did. C.D.C. officials claimed that the American test would be more accurate than the German one, by using three genetic sequences to detect the virus rather than two. The federal government quickly began distributing the American test to state officials.

But the test had a flaw. The third genetic sequence produced inconclusive results, so the C.D.C. told state labs to pause their work. In meetings of the White House’s coronavirus task force, Dr. Robert R. Redfield, the C.D.C. director, played down the problem and said it would soon be solved.

Instead, it took weeks to fix. During that time, the United States had to restrict testing to people who had clear reason to think they had the virus. All the while, the virus was quietly spreading.

By early March, with the testing delays still unresolved, the New York region became a global center of the virus — without people realizing it until weeks later. More widespread testing could have made a major difference, experts said, leading to earlier lockdowns and social distancing and ultimately less sickness and death.

“You can’t stop it if you can’t see it,” Dr. Bruce Aylward, a senior adviser to the director general at the World Health Organization, said.

While the C.D.C. was struggling to solve its testing flaws, Germany was rapidly building up its ability to test. Chancellor Angela Merkel, a chemist by training, and other political leaders were watching the virus sweep across northern Italy, not far from southern Germany, and pushed for a big expansion of testing.

By the time the virus became a problem in Germany, labs around the country had thousands of test kits ready to use. From the beginning, the government covered the cost of the tests. American laboratories often charge patients about $100 for a test.

Without free tests, Dr. Hendrik Streeck, director of the Institute of Virology at the University Hospital Bonn, said at the time, “a young person with no health insurance and an itchy throat is unlikely to go to the doctor and therefore risks infecting more people.”

Germany was soon far ahead of other countries in testing. It was able to diagnose asymptomatic cases, trace the contacts of new patients and isolate people before they could spread the virus. The country has still suffered a significant outbreak. But it has had many fewer cases per capita than Italy, Spain, France, Britain or Canada — and about one-fifth the rate of the United States.

The United States eventually made up ground on tests. In recent weeks, it has been conducting more per capita than any other country, according to Johns Hopkins researchers.

But now there is a new problem: The virus has grown even more rapidly than testing capacity. In recent weeks, Americans have often had to wait in long lines, sometimes in scorching heat, to be tested.

One measure of the continuing troubles with testing is the percentage of tests that come back positive. In a country that has the virus under control, fewer than 5 percent of tests come back positive, according to World Health Organization guidelines. Many countries have reached that benchmark. The United States, even with the large recent volume of tests, has not.

“We do have a lot of testing,” Ms. Rivers, the Johns Hopkins epidemiologist, said. “The problem is we also have a lot of cases.”

The huge demand for tests has overwhelmed medical laboratories, and many need days — or even up to two weeks — to produce results. “That really is not useful for public health and medical management,” Ms. Rivers added. While people are waiting for their results, many are also spreading the virus.

In Belgium recently, test results have typically come back in 48 to 72 hours. In Germany and Greece, it is two days. In France, the wait is often 24 hours.

 

For the first few months of the pandemic, public health experts could not agree on a consistent message about masks. Some said masks reduced the spread of the virus. Many experts, however, discouraged the use of masks, saying — somewhat contradictorily — that their benefits were modest and that they should be reserved for medical workers.

“We don’t generally recommend the wearing of masks in public by otherwise well individuals because it has not been up to now associated with any particular benefit,” Dr. Michael Ryan, a World Health Organization official, said at a March 30 news conference.

His colleague Dr. Maria Van Kerkhove explained that it was important to “prioritize the use of masks for those who need them most.”

The conflicting advice, echoed by the C.D.C. and others, led to relatively little mask wearing in many countries early in the pandemic. But several Asian countries were exceptions, partly because they had a tradition of mask wearing to avoid sickness or minimize the effects of pollution.

By January, mask wearing in Japan was widespread, as it often had been during a typical flu season. Masks also quickly became the norm in much of South KoreaThailandVietnamTaiwan and China.

In the following months, scientists around the world began to report two strands of evidence that both pointed to the importance of masks: Research showed that the virus could be transmitted through droplets that hang in the air, and several studies found that the virus spread less frequently in places where people were wearing masks.

On one cruise ship that gave passengers masks after somebody got sick, for example, many fewer people became ill than on a different cruise where people did not wear masks.

Consistent with that evidence was Asia’s success in holding down the number of cases (after China’s initial failure to do so). In South Korea, the per capita death rate is about one-eightieth as large as in the United States; Japan, despite being slow to enact social distancing, has a death rate about one-sixtieth as large.

“We should have told people to wear cloth masks right off the bat,” Dr. George Rutherford of the University of California, San Francisco, said.

In many countries, officials reacted to the emerging evidence with a clear message: Wear a mask.

Prime Minister Justin Trudeau of Canada began wearing one in May. During a visit to an elementary school, President Emmanuel Macron of France wore a French-made blue mask that complemented his suit and tie. Zuzana Caputova, the president of Slovakia, created a social media sensation by wearing a fuchsia-colored mask that matched her dress.

In the United States, however, masks did not become a fashion symbol. They became a political symbol.

Mr. Trump avoided wearing one in public for months. He poked fun at a reporter who wore one to a news conference, asking the reporter to take it off and saying that wearing one was “politically correct.” He described former Vice President Joseph R. Biden Jr.’s decision to wear one outdoors as “very unusual.”

Many other Republicans and conservative news outlets, like Fox News, echoed his position. Mask wearing, as a result, became yet another partisan divide in a highly polarized country.

Throughout much of the Northeast and the West Coast, more than 80 percent of people wore masks when within six feet of someone else. In more conservative areas, like the Southeast, the share was closer to 50 percent.

A March survey found that partisanship was the biggest predictor of whether Americans regularly wore masks — bigger than their age or whether they lived in a region with a high number of virus cases. In many of the places where people adopted a hostile view of masks, including Texas and the Southeast, the number of virus cases began to soar this spring.

 

Throughout March and April, Gov. Brian Kemp of Georgia and staff members held long meetings inside a conference room at the State Capitol in Atlanta. They ordered takeout lunches from local restaurants like the Varsity and held two daily conference calls with the public health department, the National Guard and other officials.

One of the main subjects of the meetings was when to end Georgia’s lockdown and reopen the state’s economy. By late April, Mr. Kemp decided that it was time.

Georgia had not met the reopening criteria laid out by the Trump administration (and many outside health experts considered those criteria too lax). The state was reporting about 700 new cases a day, more than when it shut down on April 3.

Nonetheless, Mr. Kemp went ahead. He said that Georgia’s economy could not wait any longer, and it became one of the first states to reopen.

“I don’t give a damn about politics right now,” he said at an April 20 news conference announcing the reopening. He went on to describe business owners with employees at home who were “going broke, worried about whether they can feed their children, make the mortgage payment.”

Four days later, across Georgia, barbers returned to their chairs, wearing face masks and latex gloves. Gyms and bowling alleys were allowed to reopen, followed by restaurants on April 27. The stay-at-home order expired at 11:59 p.m. on April 30.

Mr. Kemp’s decision was part of a pattern: Across the United States, caseloads were typically much higher when the economy reopened than in other countries.

As the United States endured weeks of closed stores and rising unemployment this spring, many politicians — particularly Republicans, like Mr. Kemp — argued that there was an unavoidable trade-off between public health and economic health. And if crushing the virus meant ruining the economy, maybe the side effects of the treatment were worse than the disease.

Dan Patrick, the Republican lieutenant governor of Texas, put the case most bluntly, and became an object of scorn, especially from the political left, for doing so. “There are more important things than living,” Mr. Patrick said in a television interview the same week that Mr. Kemp reopened Georgia.

It may have been an inartful line, but Mr. Patrick’s full argument was not wholly dismissive of human life. He was instead suggesting that the human costs of shutting down the economy — the losses of jobs and income and the associated damages to living standards and people’s health — were greater than the costs of a virus that kills only a small percentage of people who get it.

“We are crushing the economy,” he said, citing the damage to his own children and grandchildren. “We’ve got to take some risks and get back in the game and get this country back up and running.”

The trouble with the argument, epidemiologists and economists agree, was that public health and the economy’s health were not really in conflict.

Early in the pandemic, Austan Goolsbee, a University of Chicago economist and former Obama administration official, proposed what he called the first rule of virus economics: “The best way to fix the economy is to get control of the virus,” he said. Until the virus was under control, many people would be afraid to resume normal life and the economy would not function normally.

The events of the last few months have borne out Mr. Goolsbee’s prediction. Even before states announced shutdown orders in the spring, many families began sharply reducing their spending. They were responding to their own worries about the virus, not any official government policy.

And the end of lockdowns, like Georgia’s, did not fix the economy’s problems. It instead led to a brief increase in spending and hiring that soon faded.

In the weeks after states reopened, the virus began surging. Those that opened earliest tended to have worse outbreaks, according to a Times analysis. The Southeast fared especially badly.

In June and July, Georgia reported more than 125,000 new virus cases, turning it into one of the globe’s new hot spots. That was more new cases than Canada, France, Germany, Italy, Japan and Australia combined during that time frame.

Americans, frightened by the virus’s resurgence, responded by visiting restaurants and stores less often. The number of Americans filing new claims for unemployment benefits has stopped falling. The economy’s brief recovery in April and May seems to have petered out in June and July.

In large parts of the United States, officials chose to reopen before medical experts thought it wise, in an attempt to put people back to work and spark the economy. Instead, the United States sparked a huge new virus outbreak — and the economy did not seem to benefit.

“Politicians are not in control,” Mr. Goolsbee said. “They got all the illness and still didn’t fix their economies.”

The situation is different in the European Union and other regions that have had more success reducing new virus cases. Their economies have begun showing some promising signs, albeit tentative ones. In Germany, retail sales and industrial production have risen, and the most recent unemployment rate was 6.4 percent. In the United States, it was 11.1 percent.

 

The United States has not performed uniquely poorly on every measure of the virus response.

Mask wearing is more common than throughout much of Scandinavia and Australia, according to surveys by YouGov and Imperial College London. The total death rate is still higher in Spain, Italy and Britain.

But there is one way — in addition to the scale of the continuing outbreaks and deaths — that the United States stands apart: In no other high-income country have the messages from political leaders been nearly so mixed and confusing.

These messages, in turn, have been amplified by television stations and websites friendly to the Republican Party, especially Fox News and the Sinclair Broadcast Group, which operates almost 200 local stations. To anybody listening to the country’s politicians or watching these television stations, it would have been difficult to know how to respond to the virus.

Mr. Trump’s comments, in particular, have regularly contradicted the views of scientists and medical experts.

The day after the first American case was diagnosed, he said, “We have it totally under control.” In late February, he said: “It’s going to disappear. One day — it’s like a miracle — it will disappear.” Later, he incorrectly stated that any American who wanted a test could get one. On July 28, he falsely proclaimed that “large portions of our country” were “corona-free.”

He has also promoted medical misinformation about the virus. In March, Mr. Trump called it “very mild” and suggested it was less deadly than the common flu. He has encouraged Americans to treat it with the antimalarial drug hydroxychloroquine, despite a lack of evidence about its effectiveness and concerns about its safety. At one White House briefing, he mused aloud about injecting people with disinfectant to treat the virus.

These comments have helped create a large partisan divide in the country, with Republican-leaning voters less willing to wear masks or remain socially distant. Some Democratic-leaning voters and less political Americans, in turn, have decided that if everybody is not taking the virus seriously, they will not either. State leaders from both parties have sometimes created so many exceptions about which workplaces can continue operating normally that their stay-at-home orders have had only modest effects.

“It doesn’t seem we have had the same unity of purpose that I would have expected,” Ms. Rivers, the Johns Hopkins epidemiologist, said. “You need everyone to come together to accomplish something big.”

Across much of Europe and Asia, as well as in Canada, Australia and elsewhere, leaders have delivered a consistent message: The world is facing a deadly virus, and only careful, consistent action will protect people.

Many of those leaders have then pursued aggressive action. Mr. Trump and his top aides, by contrast, persuaded themselves in April that the virus was fading. They have also declined to design a national strategy for testing or other virus responses, leading to a chaotic mix of state policies.

“If you had to summarize our approach, it’s really poor federal leadership — disorganization and denial,” said Andy Slavitt, who ran Medicare and Medicaid from 2015 to 2017. “Watch Angela Merkel. Watch how she communicates with the public. Watch how Jacinda Ardern in New Zealand does it. They’re very clear. They’re very consistent about what the most important priorities are.”

New York — both the city and the state — offers a useful case study. Like much of Europe, New York responded too slowly to the first wave of the virus. As late as March 15, Mayor Bill de Blasio encouraged people to go to their neighborhood bar.

Soon, the city and state were overwhelmed. Ambulances wailed day and night. Hospitals filled to the breaking point. Gov. Andrew M. Cuomo — a Democrat, like Mr. de Blasio — was slow to protect nursing home residents, and thousands died. Earlier action in New York could have saved a significant number of lives, epidemiologists say.

By late March, however, New York’s leaders understood the threat, and they reversed course.

They insisted that people stay home. They repeated the message every day, often on television. When other states began reopening, New York did not. “You look at the states that opened fast without metrics, without guardrails, it’s a boomerang,” Mr. Cuomo said on June 4.

The lockdowns and the consistent messages had a big effect. By June, New York and surrounding states had some of the lowest rates of virus spread in the country. Across much of the Southeast, Southwest and West Coast, on the other hand, the pandemic was raging.

Many experts now say that the most disappointing part of the country’s failure is that the outcome was avoidable.

What may not have been avoidable was the initial surge of the virus: The world’s success in containing previous viruses, like SARS, had lulled many people into thinking a devastating pandemic was unlikely. That complacency helps explains China’s early mistakes, as well as the terrible death tolls in the New York region, Italy, Spain, Belgium, Britain and other parts of Europe.

But these countries and dozens more — as well as New York — have since shown that keeping the virus in check is feasible.

For all of the continuing uncertainty about how this new coronavirus is transmitted and how it affects the human body, much has become clear. It often spreads indoors, with close human contact. Talking, singing, sneezing and coughing play a major role in transmission. Masks reduce the risk. Restarting normal activity almost always leads to new cases that require quick action — testing, tracing of patients and quarantining — to keep the virus in check.

When countries and cities have heeded these lessons, they have rapidly reduced the spread of the virus and been able to move back, gingerly, toward normal life. In South Korea, fans have been able to attend baseball games in recent weeks. In Denmark, Italy and other parts of Europe, children have returned to school.

In the United States, the virus continues to overwhelm daily life.

“This isn’t actually rocket science,” said Dr. Thomas R. Frieden, who ran the New York City health department and the C.D.C. for a combined 15 years. “We know what to do, and we’re not doing it.”

 

 

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Wave of evictions expected as moratoriums end in many states

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Wave of evictions expected as moratoriums end in many states

Kelyn Yanez used to clean homes during the day and wait tables at night in the Houston area before the coronavirus. But the mother of three lost both jobs in March because of the pandemic and now is facing eviction.

The Honduran immigrant got help from a local church to pay part of July’s rent but was still hundreds of dollars short and is now awaiting a three-day notice to vacate the apartment where she lives with her children. She has no idea how she will meet her August rent.

“Right now, I have nothing,” said Yanez, who briefly got her bar job back when the establishment reopened, but lost it again when she and her 4-year-old daughter contracted the virus in June and had to quarantine. The apartment owners “don’t care if you’re sick, if you’re not well. Nobody cares here. They told me that I had to have the money.”

Yanez, who lives in the U.S. illegally, is among some 23 million people nationwide at risk of being evicted, according to The Aspen Institute, as moratoriums enacted because of the coronavirus expire and courts reopen. Around 30 state moratoriums have expired since May, according to The Eviction Lab at Princeton University. On top of that, some tenants were already encountering illegal evictions even with the moratoriums.

Now, tenants are crowding courtrooms — or appearing virtually — to detail how the pandemic has upended their lives. Some are low-income families who have endured evictions before, but there are also plenty of wealthier families facing homelessness for the first time — and now being forced to navigate overcrowded and sometimes dangerous shelter systems amid the pandemic.

Experts predict the problem will only get worse in the coming weeks, with 30 million unemployed and uncertainty whether Congress will extend the extra $600 in weekly unemployment benefits that expired Friday. The federal eviction moratorium that protects more than 12 million renters living in federally subsidized apartments or units with federally backed mortgages expired July 25. If it’s not extended, landlords can initiate eviction proceedings in 30 days.

“It’s going to be a mess,” said Bill Faith, executive director of Coalition on Homelessness and Housing in Ohio, referring to the Census Bureau Household Pulse Survey, which found last week that more than 23% of Ohioans questioned said they weren’t able to make last month’s rent or mortgage payment or had little or no confidence they could pay next month’s.

Nationally, the figure was 26.5% among adults 18 years or older, with numbers in Louisiana, Oklahoma, Nevada, Alabama, Florida, Mississippi, New York, Tennessee and Texas reaching 30% or higher. The margins of error in the survey vary by state.

“I’ve never seen this many people poised to lose their housing in a such a short period of time,” Faith said. “This is a huge disaster that is beginning to unfold.”

Housing advocates fear parts of the country could soon look like Milwaukee, which saw a 21% spike in eviction filings in June, to nearly 1,500 after the moratorium was lifted in May. It’s more than 24% across the state.

“We are sort of a harbinger of what is to come in other places,” said Colleen Foley, the executive director of the Legal Aid Society of Milwaukee.

“We are getting calls to us from zip codes that we don’t typically serve, the part of the community that aren’t used to coming to us,” she added. “It’s a reflection of the massive job loss and a lot of people facing eviction who aren’t used to not paying their rent.”

In New Orleans, a legal aid organization saw its eviction-related caseload almost triple in the month since Louisiana’s moratorium ended in mid-June. Among those seeking help is Natasha Blunt, who could be evicted from her two-bedroom apartment where she lives with her two grandchildren.

Blunt, a 50-year-old African American, owes thousands of dollars in back rent after she lost her banquet porter job. She has yet to receive her stimulus check and has not been approved for unemployment benefits. Her family is getting by with food stamps and the charity of neighbors.

“I can’t believe this happened to me because I work hard,” said Blunt, whose eviction is at the mercy of the federal moratorium. “I don’t have any money coming in. I don’t have nothing. I don’t know what to do. … My heart is so heavy.”

Along with exacerbating a housing crisis in many cities that have long been plagued by a shortage of affordable options, widespread discrimination and a lack of resources for families in need, the spike in filings is raising concerns that housing courts could spread the coronavirus.

Many cities are still running hearings virtually. But others, like New Orleans, have opened their housing courts. Masks and temperature checks are required, but maintaining social distance has been a challenge.

“The first couple of weeks, we were in at least two courts where we felt really quite unsafe,” said Hannah Adams, a staff attorney with Southeast Louisiana Legal Services.

In Columbus, Ohio, Amanda Wood was among some 60 people on the docket Friday for eviction hearings at a convention center converted into a courtroom.

Wood, 23, lost her job at a claims management company in early April. The following day, the mother of a 6-month-old found out she was pregnant again. Now, she is two months behind rent and can’t figure out a way to make ends meet.

Wood managed to find a part-time job at FedEx, loading vans at night. But her pregnancy and inability to find stable childcare has left her with inconsistent paychecks.

“The whole process has been really difficult and scary,” said Wood, who is hoping to set up a payment scheduled after meeting with a lawyer Friday. “Not knowing if you’re going to have somewhere to live, when you’re pregnant and have a baby, is hard.”

Though the numbers of eviction filings in Ohio and elsewhere are rising and, in some places reaching several hundred a week, they are still below those in past years for July. Higher numbers are expected in August and September.

Experts credit the slower pace to the federal eviction moratorium as well as states and municipalities that used tens of millions of dollars in federal stimulus funding for rental assistance. It also helped that several states, including Massachusetts and Arizona, have extended their eviction moratorium into the fall.

Still, experts argue more needs to be done at the state and federal level for tenants and landlords.

Negotiations between Congress and the White House over further assistance are ongoing. A $3 trillion coronavirus relief bill passed in May by Democrats in the House would provide about $175 billion to pay rents and mortgages, but the $1 trillion counter from Senate Republicans only has several billion in rental assistance. Advocacy groups are looking for over $100 billion.

“An eviction moratorium without rental assistance is still a recipe for disaster,” said Graham Bowman, staff attorney with the Ohio Poverty Law Center. “We need the basic economics of the housing market to continue to work. The way you do that is you need broad-based rental assistance available to families who have lost employment during this crisis.”

“The scale of this problem is enormous so it needs a federal response.”

 

 

 

 

Virus testing in the US is dropping, even as deaths mount

https://apnews.com/aebdc0978de958f20ab3f398cdf6f769

Virus testing in the US is dropping, even as deaths mount

U.S. testing for the coronavirus is dropping even as infections remain high and the death toll rises by more than 1,000 a day, a worrisome trend that officials attribute largely to Americans getting discouraged over having to wait hours to get a test and days or weeks to learn the results.

An Associated Press analysis found that the number of tests per day slid 3.6% over the past two weeks to 750,000, with the count falling in 22 states. That includes places like Alabama, Mississippi, Missouri and Iowa where the percentage of positive tests is high and continuing to climb, an indicator that the virus is still spreading uncontrolled.

Amid the crisis, some health experts are calling for the introduction of a different type of test that would yield results in a matter of minutes and would be cheap and simple enough for millions of Americans to test themselves — but would also be less accurate.

“There’s a sense of desperation that we need to do something else,” said Dr. Ashish Jha, director of Harvard’s Global Health Institute.

Widespread testing is considered essential to managing the outbreak as the U.S. approaches a mammoth 5 million confirmed infections and more than 157,000 deaths out of over 700,000 worldwide.

Testing demand is expected to surge again this fall, when schools reopen and flu season hits, most likely outstripping supplies and leading to new delays and bottlenecks.

Some of the decline in testing over the past few weeks was expected after backlogged commercial labs urged doctors to concentrate on their highest-risk patients. But some health and government officials are seeing growing public frustration and waning demand.

In Iowa, state officials are reporting less interest in testing, despite ample supplies. The state’s daily testing rate peaked in mid-July but has declined 20% in the last two weeks.

“We have the capacity. Iowans just need to test,” Gov. Kim Reynolds said last week.

Jessica Moore of rural Newberry, South Carolina, said that after a private lab lost her COVID-19 test results in mid-July, she had to get re-tested at a pop-up site organized by the state.

Moore and her husband arrived early on a Saturday morning at the site, a community center, where they waited for two hours for her test. Moore watched in the rear-view mirror as people drove up, saw the long line of cars, and then turned around and left.

“If people have something to do on a Saturday and they want to get tested, they’re not going to wait for two hours in the South Carolina heat for a test, especially if they’re not symptomatic,” Moore said.

Before traveling from Florida to Delaware last month, Laura DuBose Schumacher signed up to go to a drive-up testing site in Orlando with her husband. They were given a one-hour window in which to arrive.

They got there at the start of the window, but after 50 minutes it looked as if the wait would be another hour. Others who had gone through the line told them that they wouldn’t get their results until five days later, a Monday, at the earliest. They were planning to travel the next day, so they gave up.

“Monday would have been pointless, so we left the line,” Schumacher said.

The number of confirmed infections in the U.S. has topped 4.7 million, with new cases running at nearly 60,000 a day on average, down from more than 70,000 in the second half of July.

U.S. testing is built primarily on highly sensitive molecular tests that detect the genetic code of the coronavirus. Although the test is considered the gold standard for accuracy, experts increasingly say the country’s overburdened lab system is incapable of keeping pace with the outbreak and producing results within two or three days, the time frame crucial to isolating patients and containing the virus.

“They’re doing as good a job as they possibly can do, but the current system will not allow them to keep up with the demand,” said Mara Aspinall of Arizona State University’s College of Health Solutions.

Testing delays have led researchers at Harvard and elsewhere to propose a new approach using so-called antigen tests — rapid technology already used to screen for flu, strep throat and other common infections. Instead of detecting the virus itself, such tests look for viral proteins, or antigens, which are generally considered a less accurate measure of infection.

A number of companies are studying COVID-19 antigen tests in which you spit on a specially coated strip of paper, and if you are infected, it changes color. Experts say the speed and widespread availability of such tests would more than make up for their lower precision.

While no such tests for the coronavirus are on the U.S. market, experts say the technology is simple and the hurdles are more regulatory than technical. The Harvard researchers say production could quickly be scaled into the millions.

A proposal from the Harvard researchers calls for the federal government to distribute $1 saliva-based antigen tests to all Americans so that they can test themselves regularly, perhaps even daily.

Even with accuracy as low as 50%, researchers estimate the paper strip tests would uncover five times more COVID-19 cases than the current laboratory-based approach, which federal officials estimate catches just 1 in 10 infections.

But the approach faces resistance in Washington, where federal regulators have required at least 80% accuracy for new COVID-19 tests.

To date, the Food and Drug Administration has allowed only two COVID-19 antigen tests to enter the market. Those tests require a nasal swab supervised by a health professional and can only be run on specialized machines found at hospitals, doctor’s offices, nursing homes and clinics.

Also, because of the risk of false negatives, doctors may need to confirm a negative result with a genetic test when patients have possible symptoms of COVID-19.

On Tuesday, the governors of Maryland, Virginia, Louisiana and three other states announced an agreement with the Rockefeller Foundation to purchase more than 3 million of the FDA-cleared antigen tests, underscoring the growing interest in the technology.

When asked about introducing cheaper, paper-based tests, the government’s “testing czar,” Adm. Brett Giroir, warned that their accuracy could fall as low as 20% to 30%.

“I don’t think that would do a service to the American public of having something that is wrong seven out of 10 times,” Giroir said last week. “I think that could be catastrophic.”

___

This story has been corrected to show that Iowa’s daily testing rate has declined 20%, not 40%.

 

 

 

Industry Voices—6 ways the pandemic will remake health systems

https://www.fiercehealthcare.com/hospitals/industry-voices-6-ways-pandemic-will-remake-health-systems?mkt_tok=eyJpIjoiTURoaU9HTTRZMkV3TlRReSIsInQiOiJwcCtIb3VSd1ppXC9XT21XZCtoVUd4ekVqSytvK1wvNXgyQk9tMVwvYXcyNkFHXC9BRko2c1NQRHdXK1Z5UXVGbVpsTG5TYml5Z1FlTVJuZERqSEtEcFhrd0hpV1Y2Y0sxZFNBMXJDRkVnU1hmbHpQT0pXckwzRVZ4SUVWMGZsQlpzVkcifQ%3D%3D&mrkid=959610

Industry Voices—6 ways the pandemic will remake health systems ...

Provider executives already know America’s hospitals and health systems are seeing rapidly deteriorating finances as a result of the coronavirus pandemic. They’re just not yet sure of the extent of the damage.

By the end of June, COVID-19 will have delivered an estimated $200 billion blow to these institutions with the bulk of losses stemming from cancelled elective and nonelective surgeries, according to the American Hospital Association

A recent Healthcare Financial Management Association (HFMA)/Guidehouse COVID-19 survey suggests these patient volumes will be slow to return, with half of provider executive respondents anticipating it will take through the end of the year or longer to return to pre-COVID levels. Moreover, one-in-three provider executives expect to close the year with revenues at 15 percent or more below pre-pandemic levels. One-in-five of them believe those decreases will soar to 30 percent or beyond. 

Available cash is also in short supply. A Guidehouse analysis of 350 hospitals nationwide found that cash on hand is projected to drop by 50 days on average by the end of the year — a 26% plunge — assuming that hospitals must repay accelerated and/or advanced Medicare payments.

While the government is providing much needed aid, just 11% of the COVID survey respondents expect emergency funding to cover their COVID-related costs.

The figures illustrate how the virus has hurled American medicine into unparalleled volatility. No one knows how long patients will continue to avoid getting elective care, or how state restrictions and climbing unemployment will affect their decision making once they have the option.

All of which leaves one thing for certain: Healthcare’s delivery, operations, and competitive dynamics are poised to undergo a fundamental and likely sustained transformation. 

Here are six changes coming sooner rather than later.

 

1. Payer-provider complexity on the rise; patients will struggle.

The pandemic has been a painful reminder that margins are driven by elective services. While insurers show strong earnings — with some offering rebates due to lower reimbursements — the same cannot be said for patients. As businesses struggle, insured patients will labor under higher deductibles, leaving them reluctant to embrace elective procedures. Such reluctance will be further exacerbated by the resurgence of case prevalence, government responses, reopening rollbacks, and inconsistencies in how the newly uninsured receive coverage.

Furthermore, the upholding of the hospital price transparency ruling will add additional scrutiny and significance for how services are priced and where providers are able to make positive margins. The end result: The payer-provider relationship is about to get even more complicated. 

 

2. Best-in-class technology will be a necessity, not a luxury. 

COVID has been a boon for telehealth and digital health usage and investments. Two-thirds of survey respondents anticipate using telehealth five times more than they did pre-pandemic. Yet, only one-third believe their organizations are fully equipped to handle the hike.

If healthcare is to meet the shift from in-person appointments to video, it will require rapid investment in things like speech recognition software, patient information pop-up screens, increased automation, and infrastructure to smooth workflows.

Historically, digital technology was viewed as a disruption that increased costs but didn’t always make life easier for providers. Now, caregiver technologies are focused on just that.

The new necessities of the digital world will require investments that are patient-centered and improve access and ease of use, all the while giving providers the platform to better engage, manage, and deliver quality care.

After all, the competition at the door already holds a distinct technological advantage.

 

3. The tech giants are coming.

Some of America’s biggest companies are indicating they believe they can offer more convenient, more affordable care than traditional payers and providers. 

Begin with Amazon, which has launched clinics for its Seattle employees, created the PillPack online pharmacy, and is entering the insurance market with Haven Healthcare, a partnership that includes Berkshire Hathaway and JPMorgan Chase. Walmart, which already operates pharmacies and retail clinics, is now opening Walmart Health Centers, and just recently announced it is getting into the Medicare Advantage business.

Meanwhile, Walgreens has announced it is partnering with VillageMD to provide primary care within its stores.

The intent of these organizations clear: Large employees see real business opportunities, which represents new competition to the traditional provider models.

It isn’t just the magnitude of these companies that poses a threat. They also have much more experience in providing integrated, digitally advanced services. 

 

4. Work locations changes mean construction cost reductions. 

If there’s one thing COVID has taught American industry – and healthcare in particular – it’s the importance of being nimble.

Many back-office corporate functions have moved to a virtual environment as a result of the pandemic, leaving executives wondering whether they need as much real estate. According to the survey, just one-in-five executives expect to return to the same onsite work arrangements they had before the pandemic. 

Not surprisingly, capital expenditures, including new and existing construction, leads the list of targets for cost reductions.

Such savings will be critical now that investment income can no longer be relied upon to sustain organizations — or even buy a little time. Though previous disruptions spawned only marginal change, the unprecedented nature of COVID will lead to some uncomfortable decisions, including the need for a quicker return on investments. 

 

5. Consolidation is coming.

Consolidation can be interpreted as a negative concept, particularly as healthcare is mostly delivered at a local level. But the pandemic has only magnified the differences between the “resilients” and the “non-resilients.” 

All will be focused on rebuilding patient volume, reducing expenses, and addressing new payment models within a tumultuous economy. Yet with near-term cash pressures and liquidity concerns varying by system, the winners and losers will quickly emerge. Those with at least a 6% to 8% operating margin to innovate with delivery and reimagine healthcare post-COVID will be the strongest. Those who face an eroding financial position and market share will struggle to stay independent..

 

6. Policy will get more thoughtful and data-driven.

The initial coronavirus outbreak and ensuing responses by both the private and public sectors created negative economic repercussions in an accelerated timeframe. A major component of that response was the mandated suspension of elective procedures.

While essential, the impact on states’ economies, people’s health, and the employment market have been severe. For example, many states are currently facing inverse financial pressures with the combination of reductions in tax revenue and the expansion of Medicaid due to increases in unemployment. What’s more, providers will be subject to the ongoing reckonings of outbreak volatility, underscoring the importance of agile policy that engages stakeholders at all levels.

As states have implemented reopening plans, public leaders agree that alternative responses must be developed. Policymakers are in search of more thoughtful, data-driven approaches, which will likely require coordination with health system leaders to develop flexible preparation plans that facilitate scalable responses. The coordination will be difficult, yet necessary to implement resource and operational responses that keeps healthcare open and functioning while managing various levels of COVID outbreaks, as well as future pandemics.

Healthcare has largely been insulated from previous economic disruptions, with capital spending more acutely affected than operations. But the COVID-19 pandemic will very likely be different. Through the pandemic, providers are facing a long-term decrease in commercial payment, coupled with a need to boost caregiver- and consumer-facing engagement, all during a significant economic downturn.

While situations may differ by market, it’s clear that the pre-pandemic status quo won’t work for most hospitals or health systems.

 

 

 

For 20th straight week, more than 1 million Americans filed jobless claims even as enhanced benefits expired

https://www.washingtonpost.com/business/2020/08/06/20th-straight-week-more-than-1-million-americans-filed-jobless-claims-even-enhanced-benefits-expired/?utm_campaign=wp_main&utm_medium=social&utm_source=facebook&fbclid=IwAR2i4HqZnx_L6zRMf81cWUKPOQYNCp7iqWWvw0eMcwVzw1Q_3yUy5j7F0Ok

Stocks fall as weekly unemployment claims show a 'slowing' pace of ...

1.2 million Americans sought the benefits last week, down slightly from the week before.

The number of newly filed unemployed insurance claims dropped last week after two straight weeks of rising, but it remains well above historic pre-pandemic levels, according to Labor Department data.

It marked the 20th straight week that more than 1 million Americans filed jobless claims.

A total of 1.19 million people filed new claims last week, down from 1.43 million the week previously. The numbers of new claimants have come down from their peak in March of more than six million, but they are still well above the pre-pandemic record of 695,000 from 1982.

Another 656,000 new claims were filed for Pandemic Unemployment Assistance, the benefits offered to gig and self-employed workers.

The number of people continuing traditional unemployment claims, from the week ending July 25, was 16.1 million, down about 844,000 from the week prior. (The statistic lags by a week.) When including the PUA, more than 32.1 million Americans are currently receiving some form of unemployment benefits.

“It is promising that the initial unemployment numbers have ticked down,” said AnnElizabeth Konkel, an economist at Indeed Hiring Lab. “But we aren’t out of the woods yet. The claims are still much higher than the pre-covid era, so it’s still pointing to a lot of economic pain.”

The numbers come during what many economists say is an inflection point for the country’s economy.

Congress continues to wrangle over an extension to the extra $600 a week in unemployment benefits that many laid off workers say have helped stabilize their finances — and stave off a deeper crisis from an economy hollowed by evictions, mortgage and credit card defaults, and plunging consumer demand. Those benefits expired last week.

Funds from the Paycheck Protection Program, the $660 billion federal aid program that was meant to help small businesses keep workers on the payroll, are in the process of running out, as well. And the coronavirus’ frightening march since mid-June has added to uncertainty about when — or even if — the country can expect a return in the near future to what was considered a normal way of life and doing business not that long ago.

There are many indications that workers are getting laid off for a second time in just a few short months. In California, for example, which has one of the highest rates of workers on unemployment insurance, an analysis by the University of California, Los Angeles, and the California Employment Development Department found that more than half — 57 percent — of initial unemployment claims filed during the week ending July 25th were from workers re-opening older claims, a large majority of which had been filed early in the crisis.

The unemployment rate for July, as well as the number of jobs added or lost, will be released Friday by the Bureau of Labor Statistics, from a survey taken early in the month. Many economists expect the country’s unemployment rate to drop from the 11.1 percent it was at in June; but due to the survey’s lag, many caution that the release will not register more recent economic developments that have emerged in recent weeks as the the pandemic has caught up with the country’s economic rebound.

Companies announcing layoffs in the last week include: NBCUniversalJohn DeereFujitsu Network Communications, and hotel and tourism based businesses like retailer DFS Group and Wyndham Vacation Ownership.

 

 

 

 

The Future of Hospitals in Post-COVID America (Part 1): The Market Response

Click to access CBC_72_08052020_Final.pdf

 

[Readers’ Note: This is the first of two articles on the Future of Hospitals in Post-COVID America. This article
examines how market forces are consolidating, rationalizing and redistributing acute care assets within the
broader industry movement to value-based care delivery. The second article, which will publish next month,
examines gaps in care delivery and the related public policy challenges of providing appropriate, accessible
and affordable healthcare services in medically-underserved communities.]

In her insightful 2016 book, The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore,
Michelle Wucker coins the term “Gray Rhinos” and contrasts them with “Black Swans.” That distinction is
highly relevant to the future of American hospitals.

Black Swans are high impact events that are highly improbable and difficult to predict. By contrast, Gray
Rhinos are foreseeable, high-impact events that we choose to ignore because they’re complex, inconvenient
and/or fortified by perverse incentives that encourage the status quo. Climate change is a powerful example
of a charging Gray Rhino.

In U.S. healthcare, we are now seeing what happens when a Gray Rhino and a Black Swan collide.
Arguably, the nation’s public health defenses should anticipate global pandemics and apply resources
systematically to limit disease spread. This did not happen with the coronavirus pandemic.

Instead, COVID-19 hit the public healthcare infrastructure suddenly and hard. This forced hospitals and health systems to dramatically reduce elective surgeries, lay off thousands and significantly change care delivery with the adoption of new practices and services like telemedicine.

In comparison, many see the current American hospital business model as a Gray Rhino that has been charging toward
unsustainability for years with ever-building momentum.

Even with massive and increasing revenue flows, hospitals have long struggled with razor-thin margins, stagnant payment rates and costly technology adoptions. Changing utilization patterns, new and disruptive competitors, pro-market regulatory rules and consumerism make their traditional business models increasingly vulnerable and, perhaps, unsustainable.

Despite this intensifying pressure, many hospitals and health systems maintain business-as-usual practices because transformation is so difficult and costly. COVID-19 has made the imperative of change harder to ignore or delay addressing.

For a decade, the transition to value-based care has dominated debate within U.S. healthcare and absorbed massive strategic,
operational and financial resources with little progress toward improved care outcomes, lower costs and better customer service. The hospital-based delivery system remains largely oriented around Fee-for-Service reimbursement.

Hospitals’ collective response to COVID-19, driven by practical necessity and financial survival, may accelerate the shift to value-based care delivery. Time will tell.

This series explores the repositioning of hospitals during the next five years as the industry rationalizes an excess supply of acute care capacity and adapts to greater societal demands for more appropriate, accessible and affordable healthcare services.

It starts by exploring the role of the marketplace in driving hospital consolidation and the compelling need to transition to value-based care delivery and payment models.

COVID’s DUAL SHOCKS TO PATIENT VOLUME

Many American hospitals faced severe financial and operational challenges before COVID-19. The sector has struggled to manage ballooning costs, declining margins and waves of policy changes. A record 18 rural hospitals closed in 2019. Overall, hospitals saw a 21% decline in operating margins in 2018-2019.

COVID intensified those challenges by administering two shocks to the system that decreased the volume of hospital-based activities and decimated operating margins.

The first shock was immediate. To prepare for potential surges in COVID care, hospitals emptied beds and cancelled most clinic visits, outpatient treatments and elective surgeries. Simultaneously, they incurred heavy costs for COVID-related equipment (e.g. ventilators,PPE) and staffing. Overall, the sector experienced over $200 billion in financial losses between March and June 20204.

The second, extended shock has been a decrease in needed but not necessary care. Initially, many patients delayed seeking necessary care because of perceived infection risk. For example, Emergency Department visits declined 42% during the early phase of the pandemic.

Increasingly, patients are also delaying care because of affordability concerns and/or the loss of health insurance. Already, 5.4 million people have lost their employer-sponsored health insurance. This will reduce incremental revenues associated with higher-paying commercial insurance claims across the industry. Additionally, avoided care reduces patient volumes and hospital revenues today even as it increases the risk and cost of future acute illness.

The infusion of emergency funding through the CARES Act helped offset some operating losses but it’s unclear when and even whether utilization patterns and revenues will return to normal pre-COVID levels. Shifts in consumer behavior, reductions in insurance coverage, and the emergence of new competitors ranging from Walmart to enhanced primary care providers will likely challenge the sector for years to come.

The disruption of COVID-19 will serve as a forcing function, driving meaningful changes to traditional hospital business models and the competitive landscape. Frankly, this is long past due. Since 1965, Fee-for-Service (FFS) payment has dominated U.S. healthcare and created pervasive economic incentives that can serve to discourage provider responsiveness in transitioning to value-based care delivery, even when aligned to market demand.

Telemedicine typifies this phenomenon. Before COVID, CMS and most health insurers paid very low rates for virtual care visits or did not cover them at all. This discouraged adoption of an efficient, high-value care modality until COVID.

Unable to conduct in-person clinical visits, providers embraced virtual care visits and accelerated its mass adoption. CMS and
commercial health insurers did their part by paying for virtual care visits at rates equivalent to in-person clinic visits. Accelerated innovation in care delivery resulted.

 

THE COMPLICATED TRANSITION TO VALUE

Broadly speaking, health systems and physician groups that rely almost exclusively on activity-based payment revenues have struggled the most during this pandemic. Vertically integrated providers that offer health insurance and those receiving capitated payments in risk-based contracts have better withstood volume losses.

Modern Healthcare notes that while provider data is not yet available, organizations such as Virginia Care Partners, an integrated network and commercial ACO; Optum Health (with two-thirds of its revenue risk-based); and MediSys Health Network, a New Yorkbased NFP system with 148,000 capitated and 15,000 shared risk patients, are among those navigating the turbulence successfully. As the article observes,

providers paid for value have had an easier time weathering the storm…. helped by a steady source of
income amid the chaos. Investments they made previously in care management, technology and social
determinants programs equipped them to pivot to new ways of providing care.

They were able to flip the switch on telehealth, use data and analytics to pinpoint patients at risk for
COVID-19 infection, and deploy care managers to meet the medical and nonclinical needs of patients even
when access to an office visit was limited.

Supporting this post-COVID push for value-based care delivery, six former leaders from CMS wrote to Congress in
June 2020 calling for providers, commercial insurers and states to expand their use of value-based payment models to
encourage stability and flexibility in care delivery.

If value-based payment models are the answer, however, adoption to date has been slow, limited and difficult. Ten
years after the Affordable Care Act, Fee-for-Service payment still dominates the payer landscape. The percentage of
overall provider revenue in risk-based capitated contracts has not exceeded 20%

Despite improvements in care quality and reductions in utilization rates, cost savings have been modest or negligible.
Accountable Care Organizations have only managed at best to save a “few percent of Medicare spending, [but] the
amount varies by program design.”

While most health systems accept some forms of risk-based payments, only 5% of providers expect to have a majority
(over 80%) of their patients in risk-based arrangements within 5 years.

The shift to value is challenging for numerous reasons. Commercial payers often have limited appetite or capacity for
risk-based contracting with providers. Concurrently, providers often have difficulty accessing the claims data they need
from payers to manage the care for targeted populations.

The current allocation of cost-savings between buyers (including government, employers and consumers), payers
(health insurance companies) and providers discourages the shift to value-based care delivery. Providers would
advance value-based models if they could capture a larger percentage of the savings generated from more effective
care management and delivery. Those financial benefits today flow disproportionately to buyers and payers.

This disconnection of payment from value creation slows industry transformation. Ultimately, U.S. healthcare will not
change the way it delivers care until it changes the way it pays for care. Fortunately, payment models are evolving to
incentivize value-based care delivery.

As payment reform unfolds, however, operational challenges pose significant challenges to hospitals and health
systems. They must adopt value-oriented new business models even as they continue to receive FFS payments. New
and old models of care delivery clash.

COVID makes this transition even more formidable as many health systems now lack the operating stamina and
balance sheet strength to make the financial, operational and cultural investments necessary to deliver better
outcomes, lower costs and enhanced customer service.

 

MARKET-DRIVEN CONSOLIDATION AND TRANSFORMATION

Full-risk payment models, such as bundled payments for episodic care and capitation for population health, are the
catalyst to value-based care delivery. Transition to value-based care occurs more easily in competitive markets with
many attributable lives, numerous provider options and the right mix of willing payers.

As increasing numbers of hospitals struggle financially, the larger and more profitable health systems are expanding
their networks, capabilities and service lines through acquisitions. This will increase their leverage with commercial
payers and give them more time to adapt to risk-based contracting and value-based care delivery.

COVID also will accelerate acquisition of physician practices. According to an April 2020 MGMA report, 97% of
physician practices have experienced a 55% decrease in revenue, forcing furloughs and layoffs15. It’s estimated the
sector could collectively lose as much as $15.1 billion in income by the end of September 2020.

Struggling health systems and physician groups that read the writing on the wall will pro-actively seek capital or
strategic partners that offer greater scale and operating stability. Aggregators can be selective in their acquisitions,
seeking providers that fuel growth, expand contiguous market positions and don’t dilute balance sheets.

Adding to the sector’s operating pressure, private equity, venture investors and payers are pouring record levels of
funding into asset-light and virtual delivery companies that are eager to take on risk, lower prices by routing procedures
and capture volume from traditional providers. With the right incentives, market-driven reforms will reallocate resources
to efficient companies that generate compelling value.

As this disruption continues to unfold, rural and marginal urban communities that lack robust market forces will
experience more facility and practice closures. Without government support to mitigate this trend, access and care gaps
that already riddle American healthcare will unfortunately increase.

 

WINNING AT VALUE

The average hospital generates around $11,000 per patient discharge. With ancillary services that can often add up to
more than $15,000 per average discharge. Success in a value-based system is predicated on reducing those
discharges and associated costs by managing acute care utilization more effectively for distinct populations (i.e.
attributed lives).

This changes the orientation of healthcare delivery toward appropriate and lower cost settings. It also places greater
emphasis on preventive, chronic and outpatient care as well as better patient engagement and care coordination.
Such a realignment of care delivery requires the following:

 A tight primary care network (either owned or affiliated) to feed referrals and reduce overall costs through
better preventive care.

 A gatekeeper or navigator function (increasingly technology-based) to manage / direct patients to the most
appropriate care settings and improve coordination, adherence and engagement.

 A carefully designed post-acute care network (including nursing homes, rehab centers, home care
services and behavioral health services, either owned or sufficiently controlled) to manage the 70% of
total episode-of-care costs that can occur outside the hospital setting.

 An IT infrastructure that can facilitate care coordination across all providers and settings.

Quality data and digital tools that enhance care, performance, payment and engagement.

Experience with managing risk-based contracts.

 A flexible approach to care delivery that includes digital and telemedicine platforms as well as nontraditional sites of care.

Aligned or incentivized physicians.

Payer partners willing to share data and offload risk through upside and downside risk contracts.

Engaged consumers who act on their preferences and best interests.

 

While none of these strategies is new or controversial, assembling them into cohesive and scalable business models is
something few health systems have accomplished. It requires appropriate market conditions, deep financial resources,
sophisticated business acumen, operational agility, broad stakeholder alignment, compelling vision, and robust
branding.

Providers that fail to embrace value-based care for their “attributed lives” risk losing market relevance. In their relentless pursuit of increasing treatment volumes and associated revenues, they will lose market share to organizations that
deliver consistent and high-value care outcomes.

CONCLUSION: THE CHARGING GRAY RHINO

America needs its hospitals to operate optimally in normal times, flex to manage surge capacity, sustain themselves
when demand falls, create adequate access and enhance overall quality while lowering total costs. That is a tall order
requiring realignment, evolution, and a balance between market and policy reform measures.

The status quo likely wasn’t sustainable before COVID. The nation has invested heavily for many decades in acute and
specialty care services while underinvesting, on a relative basis, in primary and chronic care services. It has excess
capacity in some markets, and insufficient access in others.

COVID has exposed deep flaws in the activity-based payment as well as the nation’s underinvestment in public health.
Disadvantaged communities have suffered disproportionately. Meanwhile, the costs for delivering healthcare services
consume an ever-larger share of national GDP.

Transformational change is hard for incumbent organizations. Every industry, from computer and auto manufacturing to
retailing and airline transportation, confronts gray rhino challenges. Many companies fail to adapt despite clear signals
that long-term viability is under threat. Often, new, nimble competitors emerge and thrive because they avoid the
inherent contradictions and service gaps embedded within legacy business models.

The healthcare industry has been actively engaged in value-driven care transformation for over ten years with little to
show for the reform effort. It is becoming clear that many hospitals and health systems lack the capacity to operate
profitably in competitive, risk-based market environments.

This dismal reality is driving hospital market valuations and closures. In contrast, customers and capital are flowing to
new, alternative care providers, such as OneMedical, Oak Street Health and Village MD. Each of these upstart
companies now have valuations in the $ billions. The market rewards innovation that delivers value.

Unfortunately, pure market-driven reforms often neglect a significant and growing portion of America’s people. This gap has been more apparent as COVID exacts a disproportionate toll on communities challenged by higher population
density, higher unemployment, and fewer medical care options (including inferior primary and preventive care infrastructure).

Absent fundamental change in our hospitals and health systems, and investment in more efficient care delivery and
payment models, the nation’s post-COVID healthcare infrastructure is likely to deteriorate in many American
communities, making them more vulnerable to chronic disease, pandemics and the vicissitudes of life.

Article 2 in our “Future of Hospitals” series will explore the public policy challenges of providing appropriate, affordable and accessible healthcare to all American communities.

 

 

 

Survey finds nearly one-third of rehired workers laid off again

https://thehill.com/policy/finance/510524-survey-finds-nearly-one-third-of-rehired-workers-laid-off-again

Survey finds nearly one-third of rehired workers laid off again

Nearly a third of the laid off workers who were able to go back to their previous jobs have been laid off again, according to a Cornell survey released Tuesday.

The survey was conducted by RIWI from July 23 to Aug. 1, as a slew of states experiencing major COVID-19 outbreaks slammed the breaks on their economic reopenings and reimposed social distancing restrictions.

Danielle Goldfarb, head of global research at RIWI, said it was a sign that a second wave of layoffs was well underway.

“Official and private sectors jobs data have not yet picked up the significant share of American workers that have already been re-laid off,” said Goldfarb.

“Since the impact is actually worse in states that have not seen COVID surges, these data indicate a systemic problem and a much deeper recession than the mainstream data suggest,” she said.

The survey found that about 37 percent of people who were not self-employed were laid off after the pandemic struck in March, but over half (57 percent) had been called back to work since then.

But of those, 31 percent had been laid off again and another 26 percent had been told there was a possibility they would lose their jobs.

A deeper dive into the data, however, suggested that the second round of layoffs may be less about the resurgence of the virus than the loss of aid. It found only small differences in “healthier” states, those not experiencing a surge, than in places with new outbreaks.

One possible reason for the additional layoffs are problems with businesses that had remained afloat with the help of forgivable loans from the federal Paycheck Protection Program (PPP).

The funds, which started rolling out the door in April, were supposed to be enough to cover eight weeks of salary and expenses.

“The RIWI dataset output clearly shows that a substantial portion of the job growth experienced in May and June resulted from anomalies associated with PPP requirements, as opposed to underlying economic strength,” said Daniel Alpert, a senior fellow and adjunct professor of macroeconomics at Cornell Law School.

Congress has made scant progress in negotiating a new COVID-19 response bill which is expected to include an extension of the PPP and may allow businesses to apply for a second loan.

The survey was completed by 6,383 respondents, though some questions had smaller samples because they were only applicable to some people.

The margins of error for the survey questions ran from plus or minus 1.5 percent to plus or minus 3.9 percent.

 

 

 

 

Pandemic reveals flaws of unemployment insurance programs

https://thehill.com/policy/finance/510368-pandemic-reveals-flaws-of-unemployment-insurance-programs

Pandemic reveals flaws of unemployment insurance programs

The lapse of enhanced jobless benefits amid a record-breaking crush of applications is exposing the flaws and shortcomings of how the U.S. provides unemployment insurance.

The economic toll of the coronavirus pandemic has torn holes in a federal safety net woven by individual systems for every state plus the District of Columbia, Puerto Rico and the Virgin Islands. More than 30.2 million Americans were on some form of unemployment insurance as of mid-July, with the Labor Department reporting a growing number of new applications in subsequent weeks.

Friday’s expiration of a $600 weekly add-on to state benefits plunged those vulnerable Americans into financial peril.

Congressional Democrats and Trump administration officials are now deadlocked over negotiations for a broader coronavirus relief package that’s expected to include some form of federal unemployment benefits.

But short-staffed unemployment offices across the U.S. grappling with outdated technology and unprecedented demand would face challenges from implementing a scaled-down or more complicated approach to the weekly payments.

Economists and labor market experts also warn that any solution that emerges from the negotiations would take weeks, if not months, to get up and running, risking a potentially catastrophic fiscal cliff for tens of millions of U.S. households.

“You ought to be able to deliver the program that’s on the books,” said Douglas Holtz-Eakin, former director of the Congressional Budget Office and a White House economist under former President George W. Bush.

“The states, collectively, seem to have not kept up the systems and we now have a big problem because of that,” he added.

The unprecedented size and speed of the pandemic-driven economic collapse has posed a brutal challenge for state unemployment agencies. After 10 years of steady economic expansion, the labor market quickly went from the lowest unemployment rate in 50 years to the highest level of joblessness since the Great Depression.

New claims for unemployment benefits were averaging roughly 200,000 nationwide a week before the pandemic — a manageable level for state agencies that had largely been neglected during the longest stretch of growth in modern U.S. history. But the coronavirus lockdowns spurred 3.3 million new claims between March 15 and March 22, a then-record that would be doubled the following week. Before the COVID-19 outbreak, the previous record was 695,000 from the first week of October 1982.

A little more than four months after the pandemic hit, state agencies are now processing roughly 2 million new claims a week for both unemployment insurance and Pandemic Unemployment Assistance (PUA), a program designed to cover those who don’t qualify for typical benefits.

“On some level, you can’t really blame states for not being prepared for that level of onslaught,” said Michele Evermore, senior policy analyst at the National Employment Law Project.

“Usually, you see the recession starting up and state agencies say ‘You know, this looks like a recession here, so let’s start to staff up.’ This came on all at once, so we’ve had these neglected, antiquated systems and then there’s all these other stressors.”

The U.S. economy has been in recession since February, according to the National Bureau of Economic Research.

Processing the massive surge of unemployment claims on shoddy technology would have been hard enough for states. Adding enhanced benefits and PUA claims to the mix strained state agencies even more.

“It took time to upgrade those systems. It took time to hire and train new staff who could deal with the volumes of the calls, and all in a pandemic, when face-to-face contact and training and being together in office were not possible,” said Julia Pollak, labor economist at job recruitment and posting company ZipRecuriter.

“So it’s easy to see in hindsight why it all fell apart.”

Enhanced unemployment benefits are among the biggest obstacles to reaching a deal on what’s likely to be the last coronavirus relief package before the election. While President Trump and Republicans are divided over how and whether to extend the federal boost, Democrats are largely united behind extending the benefits and reducing them gradually along a curve tied to the unemployment rate.

Speaker Nancy Pelosi (D-Calif.) has called for including such a mechanism, known as an automatic stabilizers, in the coronavirus package being negotiated.

Rep. Don Beyer (D-Va.), vice chair of the Joint Economic Committee, introduced a separate bill designed to tackle economic downturns beyond the coronavirus recession. His measure would establish a six-tier system for reducing the federal benefit in line with a state’s unemployment rate.

The approach was endorsed by former Federal Reserve Chairman Ben Bernanke, who oversaw the central bank’s response to the Great Recession, and his successor, Janet Yellen.

“Every time you get close to a cliff and there’s a political battle and political price to be paid, probably by both sides, rather than just saying ‘This is what’s needed,’ let’s kick it in,” Beyer said in an interview.

“We talked to economists all across the country and virtually everyone we talked to said this makes the most sense.”

But Republican lawmakers and right-leaning economists have pushed back on efforts to codify mandatory spending and make decisions now about what will be needed to mitigate future crises.

“It’s hard for me to understand why it’s appropriate now to anticipate the economic conditions in the future and tie the hands of future elected representatives of Congress,” Holtz-Eakin said.

“It forked out $2.3 trillion in [the CARES Act] across the board in ways that got to small businesses, to households, to the employed, the unemployed. If you’re going to have one in 100-year events, that’s how you deal with them,” he added.

Republicans have instead proposed replacing the flat $600 weekly boost with a percentage of the worker’s pre-pandemic earnings in addition to what is prescribed by each state. While the wage-replacement is more tailored, Evermore warned that making the necessary calculations for each claimant could overwhelm an already teetering system.

“If you told states that they had to do a percentage replacement — oh, my gosh, that’s a recipe for crashing everything,” she said.

“It’s just not how the system is set up to work.”