Health officials say omicron variant likely to cause record-high coronavirus cases, hospitalizations in U.S.

Top government health officials on Sunday warned that the United States will probably see record numbers of coronavirus cases and hospitalizations as the omicron variant spreads rapidly and forces Americans to again grapple with the dangers of a pandemic that has upended life around the globe.

“Unfortunately, I think that that is going to happen. We are going to see a significant stress in some regions of the country on the hospital system, particularly in those areas where you have a low level of vaccination,” Anthony S. Fauci, the nation’s leading infectious-disease specialist, said on CNN’s “State of the Union” when asked whether the United States could see record numbers of cases, hospitalizations and deaths.

Fauci described the variant as “extraordinary” in its transmissibility, with a doubling time of two to three days. It accounts for 50 percent of coronavirus cases in parts of the country, which meant it would almost certainly take over as the dominant variant in the United States, he added.

“It is going to be a tough few weeks, months, as we get deeper into the winter,” Fauci said.

On CBS News’s “Face the Nation,” Francis Collins, director of the National Institutes of Health, said that cases will rise steeply over the next couple of weeks and that the country could soon see 1 million new cases a day tied to the omicron variant, dramatically exceeding the record of about 250,000 new cases per day set in January.

“The big question is, are those million cases going to be sick enough to need health care and especially hospitalization?” Collins said. “We’re just holding our breath to see how severe this will be.”

Fauci and Collins painted a stark but realistic picture of the winter ahead, on the heels of a week of coronavirus-related setbacks. Coronavirus cases, hospitalizations and deaths rose across much of the country last week, with officials warning of a surge just as millions of Americans — already weary after nearly two years of the pandemic — are expected to travel for Christmas and New Year’s. On Friday, Pfizer and BioNTech announced that coronavirus vaccines for children younger than 5 would be pushed back further into 2022, as the companies modified their trials to include a third dose. On Sunday, New York, one of the country’s early epicenters in the pandemic, reported 22,478 cases.

Health officials have continued to urge the unvaccinated to get their shots and those who have received only two doses of either the Pfizer or Moderna mRNA vaccines to get booster doses. Vaccines cannot be the only layer of protection against the omicron variant, Fauci said, but defeating the pandemic would not be possible without them.

There are still safe ways for vaccinated people to get together for the holidays, including wearing a mask while traveling, testing beforehand and knowing the vaccination status of everyone present at indoor celebrations, Fauci said on “Face the Nation.”

“If you do these things, I do believe that you can feel quite comfortable with a family setting,” he said. “Nothing is 100 percent risk-free, but I think if you do the things that I just mentioned, you’d actually mitigate that risk enough to feel comfortable about being able to enjoy the holiday.”

Collins stopped short of urging people to cancel holiday plans but said travel will be risky even for vaccinated people.

“This virus is going to be all around us,” he said. “I’m not going to say you shouldn’t travel, but you should do so very carefully. … People are going, ‘I’m so sick of hearing this,’ and I am, too. But the virus is not sick of us, and it is still out there looking for us, and we’ve got to double down on these things if we’re going to get through the next few months.”

Doctors, nurses and others are warning that the nation’s health system continues to be strained by an unending stream of coronavirus cases. Confirmed U.S. coronavirus infections have surpassed more than 128,000 per day and confirmed virus deaths are near 1,300 per day, according to The Washington Post’s rolling seven-day average.

“For people trained to save lives, this moment is frustrating, exhausting and heartbreaking,” the American Hospital Association, the American Medical Association and the American Nurses Association said in a joint statement on Friday, urging more Americans to get booster shots.

Public health experts are bracing for a winter surge of cases driven by the omicron variant, which can evade some protection conferred by vaccinations and prior infections, as well as cases linked to the delta variant. Officials caution that they are still relying on preliminary data about the omicron variant’s severity compared with earlier forms of the virus.

President Biden plans to address the nation Tuesday on the status of the country’s fight against the virus, the White House said Saturday.

“We are prepared for the rising case levels,” White House press secretary Jen Psaki wrote on Twitter, adding that Biden “will detail how we will respond to this challenge. He will remind Americans that they can protect themselves from severe illness from COVID-19 by getting vaccinated and getting their booster shot when they are eligible.”

The speech, coming just before Christmas and New Year’s Day, underlines Biden’s struggle to contain the pandemic nearly a year into office. On top of the emergence of new variants and attendant challenges, the administration has at times faced criticism for what some have described as mixed signals.

Biden won high marks from the public during the first half of the year as cases declined, the country opened up from shutdowns and vaccines became widely available. But the past few months have been more difficult. After he gave a speech on July 4 saying the country was “closer than ever to declaring our independence from a deadly virus,” the situation started changing. Case rates increased as the delta variant gained a foothold and many Americans refused to get vaccinated.

And despite Biden’s promise that at-home rapid tests would become a widely available tool to fight the coronavirus, the tests remain hard to find in many parts of the country and are more expensive than in some other places across the globe.

Fauci conceded Sunday that the administration needed to do better on increasing the availability of at-home coronavirus rapid tests, though he emphasized that the country was in a much better place than it was a year ago, with 200 million to 500 million tests available per month, many of them free.

“We’re going in the right direction,” he said on CNN. “We really need to flood the system with testing. We need to have tests available for anyone who wants them, particularly when we’re in a situation right now where people are going to be gathering.”

The omicron variant also has challenged the nation’s coronavirus medicine cabinet, with evidence that mutations will wipe out or weaken the effectiveness of treatments that can reduce the virus’s severity and keep people out of hospitals. As a result, the Biden administration around Thanksgiving paused distribution of sotrovimab, the one monoclonal antibody that remains effective against the omicron variant, with senior officials such as David Kessler calculating that the drug should be maximally deployed when the variant becomes more prevalent.

By Thursday, administration officials decided to resume shipments of the drug, amid indicators that the omicron variant was spreading faster in states such as New York and Washington than data published by the Centers for Disease Control and Preventionearlier in the week indicated, said two officials with knowledge of the deliberations.

“Shipment of product will begin soon, and jurisdictions will see product arrive as early as Tuesday, December 21, 2021,” the federal health agency said in a statement on Friday, announcing that about 55,000 doses of sotrovimab would soon go out.

Doctors said they were desperate for treatments like sotrovimab as emergency rooms begin to crowd and case numbers soar.

“Too slow! We are already seeing widespread omicron,” texted one infectious-disease doctor at a large New York City hospital, who estimated that at least 50 percent of patients had contracted the variant and requested confidentiality to discuss patient care. “It’s a lot of hospitalizations that could have potentially [been] averted because of slow response.”

Fauci said Sunday that he expected it to be months before antiviral drugs can be mass-produced and available to anyone who needs them. While he did not foresee the kind of shutdowns that were put in place in the early days of the pandemic, Fauci also noted that it would be difficult to keep the virus under control when there remained “about 50 million people in the country who are eligible to be vaccinated who are not vaccinated.”

Similarly, several governors on Sunday shied away from the possibility of implementing more shutdowns to fight the spread of the new variant. Maryland Gov. Larry Hogan (R) said on “Fox News Sunday” that his state, which has seen a 150 percent increase in hospitalizations over the past two weeks, was not considering shutdowns and instead was putting more resources into testing and encouraging vaccinations and boosters. New Jersey Gov. Phil Murphy (D) said on the same show that shutdowns remained “on the table” but that he didn’t think such a move was likely because a high percentage of the state’s population was vaccinated.

Colorado Gov. Jared Polis (D) emphasized that people in his state should keep themselves safe with “individual freedom and local control.” He also said Colorado officials were looking to change the definition of “fully vaccinated” to include three shots, as health officials in the country and around the world have signaled in recent days they are also considering.

“That’s certainly where it’s headed,” Polis said on NBC News’s “Meet the Press.” “I wish they’d stop talking about [the third shot] as a booster. It really is a three-dose vaccine.”

Michigan this week counted more people hospitalized with COVID-19 than at any other time during the pandemic

https://www.cnn.com/2021/12/09/us/hospital-covid-19-deaths-michigan/index.html

Coronavirus: Michigan's highest-in-the-U.S. case count exceeds California,  Texas combined | CTV News

Nurse Katie Sefton never thought Covid-19 could get this bad — and certainly not this late in the pandemic. “I was really hoping that we’d (all) get vaccinated and things would be back to normal,” said Sefton, an assistant manager at Sparrow Hospital in Lansing, Michigan. But this week Michigan had more patients hospitalized for Covid-19 than ever before. Covid-19 hospitalizations jumped 88% in the past month, according to the Michigan Health & Hospital Association.

“We have more patients than we’ve ever had at any point, and we’re seeing more people die at a rate we’ve never seen die before,” said Jim Dover, president and CEO of Sparrow Health System.

“Since January, we’ve had about 289 deaths; 75% are unvaccinated people,” Dover said. “And the very few (vaccinated people) who passed away all were more than 6 months out from their shot. So we’ve not had a single person who has had a booster shot die from Covid.”

Among the new Covid-19 victims, Sefton said she’s noticed a disturbing trend.

We’re seeing a lot of younger people. And I think that is a bit challenging,” said Sefton, a 20-year nursing veteran.She recalls helping the family of a young adult say goodbye to their loved one. “It was an awful night,” she said. “That was one of the days I went home and just cried.”

‘We haven’t peaked yet’

It’s not just Michigan that’s facing an arduous winter with Covid-19. Nationwide, Covid-19 hospitalizations have increased 40% compared to a month ago, according to data from the US Department of Health and Human Services. This is the first holiday season with the relentless spread of the Delta variant — a strain far more contagious than those Americans faced last winter.

“We keep talking about how we haven’t peaked yet,” Sefton said.Health experts say the best protection against Delta is to get vaccinated and boosted. But as of Thursday, only about 64.3% of eligible Americans had been fully vaccinated, and less than a third of those eligible for boosters have gotten one.

Sparrow Hospital nurse Danielle Williams said the vast majority of her Covid-19 patients are not vaccinated — and had no idea they could get pummeled so hard by Covid-19.“Before they walked in the door, they had a normal life. They were healthy people. They were out celebrating Thanksgiving,” Williams said. “And now they’re here, with a mask on their face, teary eyed, staring at me, asking me if they’re going to live or not.”

‘The next few weeks look hard’

Dover said he’s saddened but not surprised that his state is getting walloped with Covid-19.“Michigan is not one of the highest vaccination states in the nation. So it continues to have variant after variant grow and expand across the state,” he said.

“The next few weeks look hard. We’re over 100% capacity right now,” Dover said.”Most hospitals and health systems in the state of Michigan have gone to code-red triage, which means they won’t accept transfers. And as we go into the holidays, if the current growth rate that we’re at today, we would expect to see 200 in-patient Covid patients by the end of the month — on a daily basis.”And that would mean “absolutely stretching us to the breaking point,” Dover said.”We’ve already discontinued in-patient elective surgeries,” he said. “In order to create capacity, we took our post-anesthesia recovery care unit and converted it into another critical care unit.”

‘There’s a lot of frustration’

Nurse Leah Rasch is exhausted. She’s worked with Covid-19 patients since the beginning of the pandemic and was stunned to see so many people still unvaccinated enter the Covid unit.

“I did not think we’d be here. I truly thought that people would be vaccinated,” the Sparrow Hospital nurse said.”I don’t remember the last time we did not have a full Covid floor.”The relentless onslaught of Covid-19 patients has impacted Rasch’s own health. “There’s a lot of frustration,” she said. “The other day, I had my first panic attack … I drove to work and I couldn’t get out of the car.”

‘We need everybody to get vaccinated’

Dover said many people have asked how they can support health care workers.”If you really want to support your staff, and you really want to support health care heroes, get vaccinated,” he said. “It’s not political. We need everybody to get vaccinated.”

He’s also urging those who previously had Covid-19 to get vaccinated, as some people can get reinfected.”My daughter’s a good example. She had Covid twice before she was eligible for a vaccine,” Dover said. “She still got a vaccine because we know that if you don’t get the vaccine, just merely having contracted Covid is not enough to protect you from getting it again. And I know that from personal experience. “And those who are unvaccinated shouldn’t underestimate the pandemic right now, Dover said.

“The problem is, it’s not over yet. I don’t know if people realize just how critical it still is,” he said.”But they do realize it when they come into the ER, and they have to wait three days for a bed. And at that point, they realize it.”

Facing a “new normal” of higher labor costs

https://mailchi.mp/161df0ae5149/the-weekly-gist-december-10-2021?e=d1e747d2d8

The price of higher labor costs in the consumer discretionary sector -  AlphaSense

Attending a recent executive retreat with one of our member health systems, we heard the CEO make a statement that really resonated with us. Referring to the current workforce crisis—pervasive shortages, pressure to increase compensation, outsized reliance on contract labor to fill critical gaps—the CEO made the assertion that this situation isn’t temporary. Rather, it’s the “new normal”, at least for the next several years.

The Great Resignation that’s swept across the American economy in the wake of COVID has not spared healthcare; every system we talk to is facing alarmingly high vacancy rates as nurses, technicians, and other staff head for the exits. The CEO made a compelling case that the labor cost structure of the system has reset at a level between 20 and 30 percent more expensive than before the pandemic, and executives should begin to turn attention away from stop-gap measures (retention bonuses and the like) to more permanent solutions (rethinking care models, adjusting staffing ratios upward, implementing process automation).

That seemed like an important insight to us. It’s increasingly clear as we approach a third year of the pandemic: there is no “post-COVID world” in which things will go back to normal. Rather, we’ll have to learn to live in the “new normal,” revisiting basic assumptions about how, where, and by whom care is delivered.

If hospital labor costs have indeed permanently reset at a higher level, that implies the need for a radical restructuring of the fundamental economic model of the health systemrazor-thin margins won’t allow for business to continue as usual. Long overdue, perhaps, and a painful evolution for sure—but one that could bring the industry closer to the vision of “right care, right place, right time” promised by population health advocates for over a decade.

9 hospitals laying off workers

Layoffs are back in NC: Emerson Electric to close facility; Global Brands  cutting jobs | WRAL TechWire

Several hospitals across the U.S. are laying off workers over the next three months. 

Below are nine hospitals and health systems that laid off employees or announced plans to implement layoffs since Oct. 1. 

1. Community Hospital Long Beach (Calif.) plans to lay off 328 employees early next year, according to a notice filed with state regulators. The hospital said the layoffs are set to begin after Jan. 31, 2022, and may come in stages. The layoffs are a result of Community Hospital Long Beach ending acute care and closing its emergency department. 

2. Watsonville (Calif.) Community Hospital is preparing to lay off 677 workers, according to a notice filed with the state Nov. 29. The hospital entered Chapter 11 bankruptcy Dec. 5 and announced a tentative sale agreement with the Pajaro Valley Healthcare District Project. If the sale to the nonprofit group or another buyer is finalized by Jan. 28, all 677 employees will be terminated by Watsonville Community Hospital. CEO Steven Salyer said all potential buyers are being asked to offer employment to the hospital’s workers. If the sale isn’t finalized, the hospital will close after the bankruptcy court authorizes those steps, and all employees would be terminated Jan. 28, according to the notice to the state. Funds made available through the bankruptcy process may allow the hospital to delay the layoffs.

3. Pensacola, Fla.-based Baptist Health Care said in a notice filed with state regulators that it is eliminating 233 jobs in February when it outsources various services to Wayne, Pa.-based Compass One Healthcare. Affected employees were offered positions with Compass One at the same or higher wages, according to the Nov. 22 layoff notice. 

4. West Reading, Pa.-based Tower Health filed a notice in early November with state regulators indicating it would lay off 293 employees by Dec. 31. The health system said the layoffs would affect workers at Jennersville Hospital in West Grove, Pa., which Tower Health was planning to close by the end of the year. In late November, the health system announced it entered into a definitive agreement to sell Jennersville Hospital and another facility to Canyon Atlantic Partners, a hospital management firm based in Austin, Texas. The health system subsequently called off that deal. It plans to close Jennersville Hospital on Dec. 31 and Brandywine Hospital in Coatesville, Pa., on Jan. 31. The closures will result in the loss of more than 800 jobs, according to the Philadelphia Business Journal

5. Columbia University Irving Medical Center in New York City is laying off 56 workers in February, but affected employees will be offered employment with NewYork-Presbyterian Hospital, according to a notice filed with the state Nov. 8. The layoffs are due to the integration of electronic medical records systems at Columbia University Irving Medical Center and NewYork-Presbyterian Hospital, according to the notice. 

6. Ascension Technologies, the IT subsidiary of St. Louis-based Ascension, outsourced about 330 tech jobs in November, according to a notice filed with the state. Affected employees could apply for other positions within Ascension Technologies or with the new vendor that took over the tech support for application and platforms, collaboration and end-user engineering, network and telecom and field services areas.

7. Middletown, N.Y.-based Garnet Health laid off 66 workers Oct. 29 when it closed its skilled nursing unit, according to a notice filed with the state. 

8. Kindred Hospital Northwest Indiana, a 70-bed long-term acute care hospital in Hammond, is closing, resulting in 110 layoffs, according to a notice filed with the state in August. The layoffs started Oct. 10. Kindred said the closure is a result of Mishawaka, Ind.-based Franciscan Health’s decision to downsize its Hammond hospital, a move that will eliminate Kindred’s space on the campus. 

9. Garland (Texas) Behavioral Hospital, part of King of Prussia, Pa.-based Universal Health Services, is closing and laying off its 119 employees, according to the Dallas Morning News. The layoffs started Oct. 7, according to a notice filed with the state. 

Supreme Court hears 340B rate cut case

https://mailchi.mp/016621f2184b/the-weekly-gist-december-3-2021?e=d1e747d2d8

Earlier this week, the American Hospital Association (AHA) made its case before the US Supreme Court, in opposition to Medicare reimbursement cuts to hospitals that participate in the 340B Drug Pricing Program. The program allows hospitals that serve low-income patients to purchase outpatient drugs at a discount.

In the graphic above, we look at what’s at stake for hospitals in the case. Beginning in 2018, Medicare cut reimbursement for 340B-eligible drugs purchased by most hospitals by 28.5 percentage points, amounting to roughly $1.6B annually—which was a significant hit to hospitals’ 340B revenue. As we recently discussed, that revenue has become essential for many hospitals’ financial sustainability. However, the true impact on hospital bottom lines is more nuanced, as the savings from 340B rate cuts are being redistributed to all hospitals that participate in the Outpatient Prospective Payment System (OPPS), regardless of their 340B status, via a 3.2 percent payment bump for non-drug Part B services. While the cut negatively impacts those with large 340B programs—generally larger hospitals located in urban areas—the resulting redistribution actually provides a net benefit to about four in five hospitals.

Although 340B program revenues are at stake, the broader legal question before the Court centers on the level of authority federal agencies like the Centers for Medicare & Medicaid Services (CMS) have to create regulations to interpret ambiguous laws. (If the justices rule against CMS, it will overturn a key legal doctrine known as the Chevron Defense, which compels courts to defer to an agency’s interpretation of unclear statutes.)

A ruling isn’t expected until next spring, but regardless of the outcome, the 340B program faces other threats, chiefly from several lawsuits involving large pharmaceutical manufacturers’ moves to restrict discounted product sales to contract pharmacies. Undoubtedly, the ongoing scrutiny of the 340B program will continue to raise questions about whether there are better ways to subsidize the operations of hospitals serving low-income patients and ensure that underserved patients have access to lifesaving treatments.

Strategic misalignment at the heart of a governance issue

https://mailchi.mp/016621f2184b/the-weekly-gist-december-3-2021?e=d1e747d2d8

When Innovation and Strategy Don't Align - TENZING Strategic

In our work with health systems, physician groups, and other organizations over the years, we’ve often been asked to facilitate board-level discussions about governance—resolving board conflicts, navigating difficult decisions, evaluating board composition.

A recent discussion again highlighted one of our main observations in working with boards: governance problems are often strategy problems in disguise. Working with a system that has grown through acquisition over the years, and whose board includes members from several of the “legacy” hospitals which had merged into the system over time, we were asked to help facilitate a dialogue about investment priorities across the component parts of the system.

At the root of the issue: each of the “representatives” of the subsidiary entities were pushing to have their own investment needs take precedence. On the face of it, that’s a governance problem: boards shouldn’t be constituent assemblies, with each member representing the interests of a sub-unit. Rather, they should act with one purpose: to advance the interests of the whole.

But that misalignment turned out to be a symptom of a larger problem: there was no consensus at the board level about what the strategic direction of the combined system should be, and what role each component part played in that direction.

That’s a strategy problem, masquerading as a governance issue. Identifying the strategic issue allowed the board to reframe the dialogue around vision, which then unblocked the subsequent decisions about investments. Good strategy and good governance go hand in hand.

Justices mull Chevron and voice skepticism of Medicare’s rate cut for hospital drugs

Justices mull Chevron and voice skepticism of Medicare's rate cut for hospital  drugs - SCOTUSblog

Over at Scotusblog, I’ve posted a recap of yesterday’s oral argument on American Hospital Association v. Becerra.

The Supreme Court appeared receptive to the claim that Medicare overstepped its authority when it cut the amount that it paid certain hospitals for drugs they dispensed in their outpatient departments. None of the justices voiced sympathy with the government’s argument that Congress had precluded judicial review of the question. And while oral argument mainly involved a technical discussion about statutory meaning, several of the conservative justices toyed with the possibility of abandoning Chevron deference — the principle that the courts will defer to an agency’s reasonable interpretation of the statute that it administers.

It is always treacherous to try to anticipate what the justices will decide from the questions they ask at oral argument. Still, it’s safe to say that the hospitals challenging Medicare’s rate change had a good day in court. If they prevail, 340B hospitals will recoup billions in withheld payments and will continue to have an enormous incentive to dispense expensive drugs in their outpatient centers, even when cheaper and equally effective alternatives exist.

That’s a bad policy outcome, whatever the Supreme Court thinks the law requires. If Medicare lacks the legal power to fix it, however, it will be up to Congress to narrow the gap between 340B drug costs and Medicare payments. We could be waiting a very long time for a solution.

Hospitals brace for omicron as margins weaken further, Kaufman Hall reports

Dive Brief:

  • Hospitals saw operating margins continue to erode in October, declining 12% from September under the weight of rising labor costs, according to a national median of more than 900 health systems calculated by Kaufman Hall. It was the second consecutive monthly drop and comes as facilities are preparing for the fast-spreading omicron variant of the coronavirus.
  • Although expenses remained highly elevated, patient days and average length of stay fell for the first time in months in October, likely reflecting lower hospitalization rates as the pressure of treating large numbers of COVID cases began to ease, Kaufman Hall said in its latest report.
  • At the same time, operating room minutes rose 6.8% from September, pointing to renewed patient interest in elective procedures.

Dive Insight:

Doctors and nurses have barely caught a breath from the most recent surge in inpatient volumes driven by the delta variant. Now, hospitals face the possibility of a fresh wave of cases led by omicron.

“Performance could continue to suffer in the coming months as hospitals face sustained labor increases and the uncertainties of the emerging omicron variant,” according to the Kaufman Hall report.

The new variant has not been detected in the U.S. as of Wednesday morning, but Canada is among the 20 countries that have confirmed cases.

Scientists are scrambling to understand the characteristics of the omicron variant. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told a White House press briefing Tuesday that omicron’s mutation profile points to “increased transmissibility and immune evasion.” But it is too soon to tell whether omicron will cause more severe disease than other COVID-19 variants, or how well current vaccines and treatments work against it, Fauci said.

Moderna CEO Stéphane Bancel told the Financial Times he thought existing vaccines would be less effective against omicron than earlier variants. Moderna, Pfizer, Johnson & Johnson and other manufacturers are already working to adapt their vaccines to combat the new threat, first reported by South African scientists on Nov. 24.

Regeneron also said its COVID-19 antibody drug, the top-selling treatment in the U.S., might be less effective against omicron. The company said it is now conducting tests to determine how the variant affects its drug.

As the focus shifts to preparing for omicron, labor costs are squeezing hospital margins. Leading hospital systems including Kaiser Permanente and Advocate Aurora Health were among those reporting pressure on margins from rising labor expenses in the third quarter.

The median hospital operating margin, not including federal Coronavirus Aid, Relief, and Economic Security Act funding, was down 31.5% in October, compared to pre-pandemic levels in the same month of 2019, according to Kaufman Hall’s snapshot. Hospitals in the West, South and Midwest that were hardest hit by the delta variant saw year-over-year margin declines.

Total labor expenses rose nearly 3% from September to October, 12.6% compared to October 2020 and 14.8% compared to October 2019, Kaufman Hall said. Full-time equivalents per adjusted occupied bed decreased 4.5% versus 2020 and 4% versus 2019, suggesting higher salaries due to nationwide labor shortages, rather than increased staffing levels, are driving up labor expenses.

Total non-labor expenses, however, decreased 1% in October from September for supplies, drugs and purchased services, following months of increases.

Broader economic trends such as U.S. labor shortages are adding to the extreme pressures of the pandemic. Hospitals face greater uncertainties in the coming months as a result, as COVID-19 cases and hospitalizations appear to once again be on the upswing before many have even had a chance to recover from the last surge,” Erik Swanson, a senior vice president of data and analytics at Kaufman Hall said.

Chevron deference at stake in fight over payments for hospital drugs

Chevron deference at stake in fight over payments for hospital drugs -  SCOTUSblog

How much should we pay for drugs? That’s the question at the center of American Hospital Association v. Becerra, a sleeper of a case involving billions of dollars in federal spending and a chance to reshape two doctrines at the heart of administrative law.

Drugs, money, and the law: Sounds sexy, right? Still, you could be forgiven for never having heard of the case, which will be argued on Tuesday. It arises out of a technical dispute over how Medicare, the federal program that insures 63 million elderly and disabled people, pays for some of the drugs that hospitals dispense to patients in outpatient departments — in particular, chemotherapy drugs and other expensive anti-cancer medications.

The case centers on part of a 2003 law that gives Medicare two options for how to pay for those drugs. Under the first option, Medicare would survey hospitals about what it cost them to acquire the drugs. Medicare would then draw on the survey data and reimburse hospitals for their “average acquisition costs,” subject to variations for different types of hospitals. It’s a rough-cut way to make hospitals whole without requiring them to submit receipts for every drug purchase.

But Medicare immediately encountered a problem: It just wasn’t practical to survey hospitals about their acquisition costs. Fortunately, the law anticipated that possibility and gave Medicare a second option. In the absence of survey data, Medicare could pay the “average price” for the drug, “as calculated and adjusted by the Secretary [of Health and Human Services] as necessary for purposes of this [option].”

This approach turned out to be costly. A drug’s “average price” is fixed elsewhere in the Medicare statute, typically at 106% of the drug’s sale price. As a policy matter, this “average sales price plus 6%” approach is hard to defend. Because 6% of a large number is bigger than 6% of a small number, hospitals have an incentive to dispense more expensive drugs, even when there are cheaper and equally effective therapies.

Other developments soon made the payment policy look even more dubious. Back in 1992, Congress created something called the 340B program to support health-care providers that serve poor and disadvantaged communities. Eligible providers get steep discounts on the drugs that they purchase — anywhere between 20% and 50% of the normal price.

Initially, few hospitals qualified for the 340B program. Today, more than two-thirds of nonprofit hospitals participate. (For-profits are excluded from the program.) For years, Medicare kept paying those 340B hospitals 106% of the average sales price of their outpatient drugs. The upshot was that hospitals were buying highly discounted drugs and then charging the federal government full price. That heightened the incentive to prescribe very expensive medications — which is partly why Medicare spending on outpatient drugs has ballooned, growing an average of 8.1% per year from 2006 through 2017.

Federal regulators were troubled by the gap between hospital costs and Medicare payments. In their view, the point of the 2003 statute was to cover hospitals’ costs, not to subsidize 340B hospitals. That jibes with the Medicare statute more generally: Its “overriding purpose” is to provide “reasonable (not excessive or unwarranted) cost-based reimbursement.”

So Medicare adopted a rule that, starting in 2018, slashed the reimbursement rate for 340B hospitals’ outpatient drugs (or, more precisely, a subset of them) to 22.5% less than the average sales price. That was still generous, since on average the 340B discount is about one-third of a drug’s price. But it was much less generous than before, and Medicare estimated that the change would save taxpayers $1.6 billion every year.

The American Hospital Association, together with two hospital trade groups and three hospitals, filed suit. Had Medicare chosen option one, the plaintiffs argued, it could have focused on acquisition costs and even distinguished among hospital groups in setting payment rates. Instead, it chose option two, which says that Medicare must pay a drug’s “average price” — not its acquisition price — and doesn’t provide for discriminating between hospitals. While the plaintiffs acknowledged that Medicare could “adjust” the average price, they argued that a cut from 106% to 77.5% of the average sales price was not really an adjustment. It was a wholesale revision of the statutory scheme.

The plaintiffs encountered an obstacle right out of the gate. To prevent courts from second-guessing Medicare’s choices about how much to pay for outpatient care, the Medicare statute says that “[t]here shall be no administrative or judicial review” of those choices. In the government’s telling, Congress precluded review because Medicare has a fixed annual budget for outpatient care. Increasing payments for one type of care thus requires cutting payments for other types of care.

That linkage means that, if the plaintiffs win, it’s not just that they should have been paid more for certain drugs. It’s that all hospitals should have been paid less for other services. (That helps explains why coalitions representing rural and for-profit hospitals have filed amicus briefs in support of Medicare.) Unwinding that decision would be an administrative nightmare — which is why Congress precluded review in the first place.

As the plaintiffs see it, however, the government simply misreads the scope of the preclusion language. Though it generally precludes review of reimbursement decisions relating to outpatient care, it doesn’t cross-reference the subsection relating to outpatient drugs. Both the district court and the U.S. Court of Appeals for the District of Columbia Circuit agreed, invoking the strong presumption favoring judicial review of agency action.

On the merits, the plaintiffs fared less well. Though they won in the district court, the D.C. Circuit held that Medicare reasonably read the 2003 law to allow it to align hospital reimbursement with hospital acquisition costs. Medicare’s interpretation — and the scope of its authority to “adjust” payment rates — was thus owed deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, a 1984 decision holding that courts generally should defer to agencies’ reasonable interpretations of ambiguous statutes. Judge Cornelia Pillard dissented, arguing that the statute unambiguously foreclosed Medicare’s interpretation.

The plaintiffs asked the Supreme Court to review a single question: whether Medicare should receive Chevron deference for interpreting the 2003 law in the manner that it did. Tantalizingly, the plaintiffs noted that “[i]t is no secret that members of this Court have raised concerns about whether Chevron deference, particularly when applied as indiscriminately as it was in this case, violates the separation of powers.”

The Supreme Court bit. In its order granting certiorari, however, the court instructed the parties to brief an additional question: whether the Medicare statute precludes the lawsuit. What that means is that — in addition to resolving whether hospitals are entitled to billions of taxpayer dollars — the court will have the chance to address two foundational doctrines of administrative law: the presumption of reviewability and Chevron deference.

Arguably, AHA v. Becerra offers an unusually vivid example of the costs of a strong presumption of reviewability. If the plaintiffs win, what’s the remedy? Is Medicare supposed to reopen every outpatient payment decision that it’s made since 2018, given that paying more for 340B drugs means it should have paid less for other services? The plaintiffs say no, arguing that Medicare wouldn’t be required to make any retroactive adjustments. But the government fears otherwise and the answer is not at all clear. Isn’t that the kind of mess that preclusion is meant to avoid?

I’ve called in my academic work for abandoning the presumption of reviewability precisely because it disrespects Congress’ reasonable desire to shield some administrative decisions from judicial review. In recent years, however, the Supreme Court has evinced no interest in doing so — the presumption of reviewability remains “strong.” We may soon find out just how strong it is.

But the big question about the case is whether the court will use it as a vehicle to reconsider Chevron deference. In the plaintiffs’ view, it is galling — “an affront to the separation of powers” — that the courts would defer when Medicare has exploited a purported ambiguity to sidestep Congress’ clear instructions about how much to pay hospitals. Several of the conservative justices, including in particular Justices Clarence Thomas and Neil Gorsuch, may be receptive to the argument. If so, the right wing of the court could use the case to narrow or even overturn Chevron, with potentially dramatic implications for the scope of executive-branch power.

Whether the court will do so is anyone’s guess. The justices could easily resolve the case on narrower grounds. Maybe the statute unambiguously forecloses Medicare’s interpretation of the law, as the plaintiffs argue. Or maybe, as the government claims, Medicare properly exercised its explicit authority to “adjust” prices for outpatient drugs.

Neither of those holdings would be the sexiest decision that the Supreme Court has ever issued. It would be technical, arcane — even boring. Given the financial stakes, however, it would be significant nonetheless.

https://ballotpedia.org/Chevron_deference_(doctrine)

The less-discussed consequence of healthcare’s labor shortage

Patient Safety and Quality Care Movement - YouTube

The healthcare industry’s staffing shortage crisis has had clear consequences for care delivery and efficiency, forcing some health systems to pause nonemergency surgeries or temporarily close facilities. Less understood is how these shortages are affecting care quality and patient safety. 

A mix of high COVID-19 patient volume and staff departures amid the pandemic has put hospitals at the heart of a national staffing shortage, but there is little national data available to quantify the shortages’ effects on patient care. 

The first hint came last month from a CDC report that found healthcare-associated infections increased significantly in 2020 after years of steady decline. Researchers attributed the increase to challenges related to the pandemic, including staffing shortages and high patient volumes, which limited hospitals’ ability to follow standard infection control practices. 

“That’s probably one of the first real pieces of data — from a large scale dataset — that we’ve seen that gives us some sense of direction of where we’ve been headed with the impact of patient outcomes as a result of the pandemic,” Patricia McGaffigan, RN, vice president of safety programs for the Institute for Healthcare Improvement, told Becker’s. “I think we’re still trying to absorb much of what’s really happening with the impact on patients and families.”

An opaque view into national safety trends

Because of lags in data reporting and analysis, the healthcare industry lacks clear insights into the pandemic’s effect on national safety trends.

National data on safety and quality — such as surveys of patient safety culture from the Agency for Healthcare Research and Quality — can often lag by several quarters to a year, according to Ms. McGaffigan. 

“There [have been] some declines in some of those scores more recently, but it does take a little while to be able to capture those changes and be able to put those changes in perspective,” she said. “One number higher or lower doesn’t necessarily indicate a trend, but it is worth really evaluating really closely.”

For example, 569 sentinel events were reported to the Joint Commission in the first six months of 2021, compared to 437 for the first six months of 2020. However, meaningful conclusions about the events’ frequency and long-term trends cannot be drawn from the dataset, as fewer than 2 percent of all sentinel events are reported to the Joint Commission, the organization estimates.

“We may never have as much data as we want,” said Leah Binder, president and CEO of the Leapfrog Group. She said a main area of concern is CMS withholding certain data amid the pandemic. Previously, the agency has suppressed data for individual hospitals during local crises, but never on such a wide scale, according to Ms. Binder.  

CMS collects and publishes quality data for more than 4,000 hospitals nationwide. The data is refreshed quarterly, with the next update scheduled for October. This update will include additional data for the fourth quarter of 2020.

“It is important to note that CMS provided a blanket extraordinary circumstances exception for Q1 and Q2 2020 data due to the COVID-19 pandemic where data was not required nor reported,” a CMS spokesperson told Becker’s. “In addition, some current hospital data will not be publicly available until about July 2022, while other data will not be available until January 2023 due to data exceptions, different measure reporting periods and the way in which CMS posts data.”

Hospitals that closely monitor their own datasets in more near-term windows may have a better grasp of patient safety trends at a local level. However, their ability to monitor, analyze and interpret that data largely depends on the resources available, Ms. McGaffigan said. The pandemic may have sidelined some of that work for hospitals, as clinical or safety leaders had to shift their priorities and day-to-day activities. 

“There are many other things besides COVID-19 that can harm patients,” Ms. Binder told Becker’s. “Health systems know this well, but given the pandemic, have taken their attention off these issues. Infection control and quality issues are not attended to at the level of seriousness we need them to be.”

What health systems should keep an eye on 

While the industry is still waiting for definitive answers on how staffing shortages have affected patient safety, Ms. Binder and Ms. McGaffigan highlighted a few areas of concern they are watching closely. 

The first is the effect limited visitation policies have had on families — and more than just the emotional toll. Family members and caregivers are a critical player missing in healthcare safety, according to Ms. Binder. 

When hospitals don’t allow visitors, loved ones aren’t able to contribute to care, such as ensuring proper medication administration or communication. Many nurses have said they previously relied a lot on family support and vigilance. The lack of extra monitoring may contribute to the increasing stress healthcare providers are facing and open the door for more medical errors.

Which leads Ms. Binder to her second concern — a culture that doesn’t always respect and prioritize nurses. The pandemic has underscored how vital nurses are, as they are present at every step of the care journey, she continued. 

To promote optimal care, hospitals “need a vibrant, engaged and safe nurse workforce,” Ms. Binder said. “We don’t have that. We don’t have a culture that respects nurses.” 

Diagnostic accuracy is another important area to watch, Ms. McGaffigan said. Diagnostic errors — such as missed or delayed diagnoses, or diagnoses that are not effectively communicated to the patient — were already one of the most sizable care quality challenges hospitals were facing prior to the pandemic. 

“It’s a little bit hard to play out what that crystal ball is going to show, but it is in particular an area that I think would be very, very important to watch,” she said.

Another area to monitor closely is delayed care and its potential consequences for patient outcomes, according to Ms. McGaffigan. Many Americans haven’t kept up with preventive care or have had delays in accessing care. Such delays could not only worsen patients’ health conditions, but also disengage them and prevent them from seeking care when it is available. 

Reinvigorating safety work: Where to start

Ms. McGaffigan suggests healthcare organizations looking to reinvigorate their safety work go back to the basics. Leaders should ensure they have a clear understanding of what their organization’s baseline safety metrics are and how their safety reports have been trending over the past year and a half.

“Look at the foundational aspects of what makes care safe and high-quality,” she said. “Those are very much linked to a lot of the systems, behaviors and practices that need to be prioritized by leaders and effectively translated within and across organizations and care teams.”

She recommended healthcare organizations take a total systems approach to their safety work, by focusing on the following four, interconnected pillars:

  • Culture, leadership and governance
  • Patient and family engagement
  • Learning systems
  • Workforce safety

For example, evidence shows workforce safety is an integral part of patient safety, but it’s not an area that’s systematically measured or evaluated, according to Ms. McGaffigan. Leaders should be aware of this connection and consider whether their patient safety reporting systems address workforce safety concerns or, instead, add on extra work and stress for their staff. 

Safety performance can slip when team members get busy or burdensome work is added to their plates, according to Ms. McGaffigan. She said leaders should be able to identify and prioritize the essential value-added work that must go on at an organization to ensure patients and families will have safe passage through the healthcare system and that care teams are able to operate in the safest and healthiest work environments.

In short, leaders should ask themselves: “What is the burdensome work people are being asked to absorb and what are the essential elements that are associated with safety that you want and need people to be able to stay on top of,” she said.

To improve both staffing shortages and quality of care, health systems must bring nurses higher up in leadership and into C-suite roles, Ms. Binder said. Giving nurses more authority in hospital decisions will make everything safer. Seattle-based Virginia Mason Hospital recently redesigned its operations around nurse priorities and subsequently saw its quality and safety scores go up, according to Ms. Binder. 

“If it’s a good place for a nurse to go, it’s a good place for a patient to go,” Ms. Binder said, noting that the national nursing shortage isn’t just a numbers game; it requires a large culture shift.

Hospitals need to double down on quality improvement efforts, Ms. Binder said. “Many have done the opposite, for good reason, because they are so focused on COVID-19. Because of that, quality improvement efforts have been reduced.”

Ms. Binder urged hospitals not to cut quality improvement staff, noting that this is an extraordinarily dangerous time for patients, and hospitals need all the help they can get monitoring safety. Hospitals shouldn’t start to believe the notion that somehow withdrawing focus on quality will save money or effort.  

“It’s important that the American public knows that we are fighting for healthcare quality and safety — and we have to fight for it, we all do,” Ms. Binder concluded. “We all have to be vigilant.”

Conclusion

The true consequences of healthcare’s labor shortage on patient safety and care quality will become clear once more national data is available. If the CDC’s report on rising HAI rates is any harbinger of what’s to come, it’s clear that health systems must place renewed focus and energy on safety work — even during something as unprecedented as a pandemic. 

The irony isn’t lost on Ms. Binder: Amid a crisis driven by infectious disease, U.S. hospitals are seeing higher rates of other infections.  

“A patient dies once,” she concluded. “They can die from COVID-19 or C. diff. It isn’t enough to prevent one.”