Exactly 300 years ago, in 1721, Benjamin Franklin and his fellow American colonists faced a deadly smallpox outbreak. Their varying responses constitute an eerily prescient object lesson for today’s world, similarly devastated by a virus and divided over vaccination three centuries later.
As a microbiologist and a Franklin scholar, we see some parallels between then and now that could help governments, journalists and the rest of us cope with the coronavirus pandemic and future threats.
Smallpox strikes Boston
Smallpox was nothing new in 1721. Known to have affected people for at least 3,000 years, it ran rampant in Boston, eventually striking more than half the city’s population. The virus killed about 1 in 13 residents – but the death toll was probably more, since the lack of sophisticated epidemiology made it impossible to identify the cause of all deaths.
What was new, at least to Boston, was a simple procedure that could protect people from the disease. It was known as “variolation” or “inoculation,” and involved deliberately exposing someone to the smallpox “matter” from a victim’s scabs or pus, injecting the material into the skin using a needle. This approach typically caused a mild disease and induced a state of “immunity” against smallpox.
Even today, the exact mechanism is poorly understood and not much research on variolation has been done. Inoculation through the skin seems to activate an immune response that leads to milder symptoms and less transmission, possibly because of the route of infection and the lower dose. Since it relies on activating the immune response with live smallpox variola virus, inoculation is different from the modern vaccination that eradicated smallpox using the much less harmful but related vaccinia virus.
The inoculation treatment, which originated in Asia and Africa, came to be known in Boston thanks to a man named Onesimus. By 1721, Onesimus was enslaved, owned by the most influential man in all of Boston, the Rev. Cotton Mather.
Known primarily as a Congregational minister, Mather was also a scientist with a special interest in biology. He paid attention when Onesimus told him “he had undergone an operation, which had given him something of the smallpox and would forever preserve him from it; adding that it was often used” in West Africa, where he was from.
Inspired by this information from Onesimus, Mather teamed up with a Boston physician, Zabdiel Boylston, to conduct a scientific study of inoculation’s effectiveness worthy of 21st-century praise. They found that of the approximately 300 people Boylston had inoculated, 2% had died, compared with almost 15% of those who contracted smallpox from nature.
The findings seemed clear: Inoculation could help in the fight against smallpox. Science won out in this clergyman’s mind. But others were not convinced.
Stirring up controversy
A local newspaper editor named James Franklin had his own affliction – namely an insatiable hunger for controversy. Franklin, who was no fan of Mather, set about attacking inoculation in his newspaper, The New-England Courant.
One article from August 1721 tried to guilt readers into resisting inoculation. If someone gets inoculated and then spreads the disease to someone else, who in turn dies of it, the article asked, “at whose hands shall their Blood be required?” The same article went on to say that “Epidemeal Distempers” such as smallpox come “as Judgments from an angry and displeased God.”
In contrast to Mather and Boylston’s research, the Courant’s articles were designed not to discover, but to sow doubt and distrust. The argument that inoculation might help to spread the disease posits something that was theoretically possible – at least if simple precautions were not taken – but it seems beside the point. If inoculation worked, wouldn’t it be worth this small risk, especially since widespread inoculations would dramatically decrease the likelihood that one person would infect another?
Franklin, the Courant’s editor, had a kid brother apprenticed to him at the time – a teenager by the name of Benjamin.
Historians don’t know which side the younger Franklin took in 1721 – or whether he took a side at all – but his subsequent approach to inoculation years later has lessons for the world’s current encounter with a deadly virus and a divided response to a vaccine.
You might expect that James’ little brother would have been inclined to oppose inoculation as well. After all, thinking like family members and others you identify with is a common human tendency.
That he was capable of overcoming this inclination shows Benjamin Franklin’s capacity for independent thought, an asset that would serve him well throughout his life as a writer, scientist and statesman. While sticking with social expectations confers certain advantages in certain settings, being able to shake off these norms when they are dangerous is also valuable. We believe the most successful people are the ones who, like Franklin, have the intellectual flexibility to choose between adherence and independence.
Truth, not victory
Perhaps the inoculation controversy of 1721 had helped him to understand an unfortunate phenomenon that continues to plague the U.S. in 2021: When people take sides, progress suffers. Tribes, whether long-standing or newly formed around an issue, can devote their energies to demonizing the other side and rallying their own. Instead of attacking the problem, they attack each other.
Franklin, in fact, became convinced that inoculation was a sound approach to preventing smallpox. Years later he intended to have his son Francis inoculated after recovering from a case of diarrhea. But before inoculation took place, the 4-year-old boy contracted smallpox and died in 1736. Citing a rumor that Francis had died because of inoculation and noting that such a rumor might deter parents from exposing their children to this procedure, Franklin made a point of setting the record straight, explaining that the child had “receiv’d the Distemper in the common Way of Infection.”
Writing his autobiography in 1771, Franklin reflected on the tragedy and used it to advocate for inoculation. He explained that he “regretted bitterly and still regret” not inoculating the boy, adding, “This I mention for the sake of parents who omit that operation, on the supposition that they should never forgive themselves if a child died under it; my example showing that the regret may be the same either way, and that, therefore, the safer should be chosen.”
A scientific perspective
A final lesson from 1721 has to do with the importance of a truly scientific perspective, one that embraces science, facts and objectivity.
Inoculation was a relatively new procedure for Bostonians in 1721, and this lifesaving method was not without deadly risks. To address this paradox, several physicians meticulously collected data and compared the number of those who died because of natural smallpox with deaths after smallpox inoculation. Boylston essentially carried out what today’s researchers would call a clinical study on the efficacy of inoculation. Knowing he needed to demonstrate the usefulness of inoculation in a diverse population, he reported in a short book how he inoculated nearly 300 individuals and carefully noted their symptoms and conditions over days and weeks.
The recent emergency-use authorization of mRNA-based and viral-vector vaccines for COVID-19 has produced a vast array of hoaxes, false claims and conspiracy theories, especially in various social media. Like 18th-century inoculations, these vaccines represent new scientific approaches to vaccination, but ones that are based on decades of scientific research and clinical studies.
We suspect that if he were alive today, Benjamin Franklin would want his example to guide modern scientists, politicians, journalists and everyone else making personal health decisions. Like Mather and Boylston, Franklin was a scientist with a respect for evidence and ultimately for truth.
When it comes to a deadly virus and a divided response to a preventive treatment, Franklin was clear what he would do. It doesn’t take a visionary like Franklin to accept the evidence of medical science today.
Overlake Medical Center & Clinics invited about 110 donors who gave more than $10,000 to the Bellevue, Wash.-based health system to receive COVID-19 vaccines, drawing criticism from the state’s governor, according to The Seattle Times.
Molly Stearns, the chief development officer at Overlake, emailed the “major donors,” as they were addressed in correspondence, about 500 open appointments in its COVID-19 clinic that were set to open Jan. 23. According to The Seattle Times, donors who received the email got an access code to register for appointments.
The vaccination appointments weren’t exclusive to donors, but were open to some 4,000 people who were board members, some patients, volunteers, employees and retired health providers, Overlake told the newspaper. All registrants were supposed to meet state-specific eligibility requirements for the vaccine, according to The Seattle Times.
Tom DeBord, Overlake’s COO, told the newspaper that the invitation was sent after the hospital’s scheduling system stopped working properly. To speed up distribution, the system began contacting people whose emails they had access to, which included donors, retirees, some patients and board members.
“We’re under pressure to vaccinate people who are eligible and increase capacity. In hindsight, we could certainly look back and say this wasn’t the best way to do it,” Mr. DeBord told The Seattle Times.
Once Gov. Jay Inslee’s office found out about the “invite-only” appointments, the office asked Overlake to shut down the sign-ups, which the system did.
In a Jan. 27 statement posted to the health system’s website, Overlake said all communications with people invited to sign up for the vaccine “made clear that people must show proof of eligibility under current Washington State requirements to ultimately be vaccinated, no matter who they are or how they are affiliated with us. We recognize we made a mistake by including a subset of our donors and by not adopting a broader outreach strategy to fill these appointments, and we apologize. Our intent and commitment has always been to administer every vaccine made available to us safely, appropriately, and efficiently.”
Read the full report here.
Hardly one month into 2021, the pressing priorities facing healthcare leaders are abundantly clear.
First, we will be living in a world preoccupied by COVID-19 and vaccination for many months to come. Remember: this is a marathon, not a sprint. And the stark reality is that the vaccination rollout will continue well into the summer, if not longer, while at the same time we continue to care for hundreds of thousands of Americans sickened by the virus. Despite the challenges we face now and in the coming months in treating the disease and vaccinating a U.S. population of 330 million, none of us should doubt that we will prevail. Despite the federal government’s missteps over the past year in managing and responding to this unprecedented public health crisis, historians will recognize the critical role of the nation’s healthcare community in enabling us to conquer this once-in-a-generation pandemic.
While there has been an overwhelming public demand for the vaccine during the past couple of weeks, there remains some skepticism within the communities we serve, including some of the most-vulnerable populations, so healthcare leaders will find themselves spending time and energy communicating the safety and efficacy of vaccines to those who may be hesitant. This is a good thing. It is our responsibility to share facts, further public education and influence public policy. COVID-19 has enhanced public trust in healthcare professionals, and we can maintain that trust if we keep our focus on the right things — namely, how we improve the health of our communities.
And as healthcare leaders diligently balance this work, we also have a great opportunity to reimagine what our hospitals and health systems can be as we emerge from the most trying year of our professional lifetimes. How do you want your hospital or system organized? What kind of structural changes are needed to achieve the desired results? What do you really want to focus on? Amid the pressing priorities and urgent decision-making needed to survive, it is easy to overlook the great reimagination period in front of us. The key is to forget what we were like before COVID-19 and reflect upon what we want to be after.
These changes won’t occur overnight. We’ll need patience, but here are my thoughts on five key questions we need to answer to get the right results.
1. How do you enhance productivity and become more efficient? Throughout 2021, most systems will be in recovery mode from COVID’s financial bruises. Hospitals saw double-digit declines in inpatient and outpatient volumes in 2020, and total losses for hospitals and health systems nationwide were estimated to total at least $323 billion. While federal relief offset some of our losses, most of us still took a major financial hit. As we move forward, we must reorganize to operate as efficiently as possible. Does reorganization sound daunting? If so, remember the amount of reorganization we mustered to work effectively in the early days of the pandemic. When faced with no alternative, healthcare moved heaven and earth to fulfill its mission. Crises bring with them great clarity. It’s up to leaders to keep that clarity as this tragic, exhausting and frustrating crisis gradually fades.
2. How do you accelerate digital care? COVID-19 changed our relationship with technology, personally and professionally. Look at what we accomplished and how connected we remain. We were reminded of how high-quality healthcare can go unhindered by distance, commutes and travel constraints with the right technology and telehealth programs in place. Health system leaders must decide how much of their business can be accommodated through virtual care so their organizations can best offer convenience while increasing access. Oftentimes, these conversations don’t get far before confronting doubts about reimbursement. Remember, policy change must happen before reimbursement catches up. If you wait for reimbursement before implementing progressive telehealth initiatives, you’ll fall behind.
3. How will your organization confront healthcare inequities? In 2020, I pledged that Northwell would redouble its efforts and remain a leader in diversity and inclusion. I am taking this commitment further this year and, with the strength of our diverse workforce, will address healthcare inequities in our surrounding communities head-on. This requires new partnerships, operational changes and renewed commitments from our workforce. We need to look upstream and strengthen our reach into communities that have disparate access to healthcare, education and resources. We must push harder to transcend language barriers, and we need our physicians and medical professionals of color reinforcing key healthcare messages to the diverse communities we serve. COVID-19’s devastating effect on communities of color laid bare long-standing healthcare inequalities. They are no longer an ugly backdrop of American healthcare, but the central plot point that we can change. If more equitable healthcare is not a top priority, you may want to reconsider your mission. We need leaders whose vision, commitment and courage match this moment and the unmistakable challenge in front of us.
4. How will you accommodate the growing portion of your workforce that will be remote? Ten to 15 percent of Northwell’s workforce will continue to work remotely this year. In the past, some managers may have correlated remote work and teams with a decline in productivity. The past year defied that assumption. Leaders now face decisions about what groups can function remotely, what groups must return on-site, and how those who continue to work from afar are overseen and managed. These decisions will affect your organizations’ culture, communications, real estate strategy and more.
5. How do you vigorously hold onto your cultural values amid all of this change? This will remain a test through 2021 and beyond. Culture is the personality of your organization. Like many health systems and hospitals, much of Northwell’s culture of connectedness, awareness, respect and empathy was built through face-to-face interaction and relationships where we continually reinforced the organization’s mission, vision and values. With so many employees now working remotely, how can we continue to bring out the best in all of our people? We will work to answer that question every day. The work you put in to restore, strengthen and revitalize your culture this year will go a long way toward cementing how your employees, patients and community come to see your organization for years to come. Don’t underestimate the power of these seemingly simple decisions.
While we’ve been through hell and back over the past year, I’m convinced that the healthcare community can continue to strengthen the public trust and admiration we’ve built during this pandemic. However, as we slowly round the corner on COVID-19, our future success will hinge on what we as healthcare organizations do now to confront the questions above and others head-on. It won’t be quick or easy and progress will be a jagged line. Let’s resist the temptation to return to what healthcare was and instead work toward building what healthcare can be. After the crisis of a lifetime, here’s our opportunity of a lifetime. We can all be part of it.
President-elect Joe Biden on Monday announced the members of his coronavirus task force, a group made up entirely of doctors and health experts, signaling his intent to seek a science-based approach to bring the raging pandemic under control.
Biden’s task force will have three co-chairs: Vivek H. Murthy, surgeon general during the Obama administration; David Kessler, Food and Drug Administration commissioner under Presidents George H.W. Bush and Bill Clinton; and Marcella Nunez-Smith, associate dean for health equity research at the Yale School of Medicine. Murthy and Kessler have briefed Biden for months on the pandemic.
Biden will inherit the worst crisis since the Great Depression, made more difficult by President Trump’s refusal to concede the election and commit to a peaceful transition of power. The Trump administration has not put forward national plans for testing, contact tracing and resolving shortages in personal protective equipment that hospitals and health-care facilities are experiencing again as the nation enters its third surge of the virus.
“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” Biden said in a statement. “The advisory board will help shape my approach to managing the surge in reported infections; ensuring vaccines are safe, effective, and distributed efficiently, equitably, and free; and protecting at-risk populations.”
The United States is recording more than 100,000 new coronavirus cases a day and, on many days, more than 1,000 deaths, a toll expected to worsen during the crucial 10-week stretch of the transition. It remains unclear whether Trump or his top aides will oversee and lead a robust response to the pandemic during the transition, which could further exacerbate the crisis Biden and Vice President-elect Kamala D. Harris inherit.
The 13-member task force also includes former Trump administration officials, including Rick Bright, former head of the Biomedical Advanced Research and Development Authority, who, after being demoted, spoke out against the administration’s approach to the pandemic. Luciana Borio, director for medical and biodefense preparedness on Trump’s National Security Council until 2019, is also on the panel.
The group includes several other prominent doctors:
· Ezekiel Emanuel, chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania.
· Atul Gawande, a surgeon at Brigham and Women’s Hospital and a professor at Harvard Medical School who is a prolific author.
· Michael T. Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota.
· Eric Goosby, global AIDS coordinator under President Barack Obama and professor of medicine at the University of California at San Francisco School of Medicine.
· Celine R. Gounder, clinical assistant professor of medicine and infectious diseases at New York University’s Grossman School of Medicine.
· Julie Morita, executive vice president of the Robert Wood Johnson Foundation, a philanthropy focused on health issues.
· Loyce Pace, president and executive director of the Global Health Council, a U.S.-based nonprofit organization dedicated to global health issues.
· Robert Rodriguez, professor of emergency medicine at the UCSF School of Medicine.
Rebecca Katz, director of the Center for Global Health Science and Security at Georgetown University Medical Center, and Beth Cameron, director for global health security and biodefense on the White House National Security Council during the Obama administration, are serving as advisers to the transition task force.
Task force members will work with state and local officials to craft public health and economic policies to address the virus and racial and ethnic disparities, while also working to reopen schools and businesses, the transition team said in a news release.
While the makeup of the task force garnered widespread praise, Peter Hotez, dean of the National School of Tropical Medicine at the Baylor College of Medicine, said the group needs more geographic diversity.
“They are all from the Acela corridor or the [San Francisco] Bay Area,” he said. “Who is going to be the field marshal or the supreme allied commander who goes into middle of the country and get this done? The coasts are doing okay but the red states are being hammered and the deaths are going to be extraordinary. There needs to be a frank reckoning between leaders of the two parties, to say we cannot let this happen.”
Public health experts said Biden should use the transition to provide leadership as the pandemic continues through a deadly stretch and begin communicating a strong national message.
“Clearly from the election outcomes, half the country doesn’t believe we’re in a crisis,” said Kavita Patel, a fellow at the Brookings Institution who worked on health policy in the Obama administration. Biden and Harris “have an incredible platform that can be used for communication. The country needs clear daily briefings that we thought we’d get from the White House coronavirus task force. They have an incredible platform, if not an official platform.”
Biden plans to call Republican and Democratic governors to ask for their help in developing a consistent message from federal and state leaders, according to three Biden advisers who spoke on the condition of anonymity because they were not authorized to speak publicly about these matters. He will urge governors to adopt statewide mask mandates and to provide clear public health guidance to their constituents, including about social distancing and limiting large gatherings.
The task force will have subgroups that focus on issues related to the response, including testing, vaccine distribution and personal protective equipment, according to two people familiar with the plans who spoke on the condition of anonymity to reveal plans that were not yet public.
In his victory speech Saturday, Biden addressed challenges in bringing the pandemic under control.
“We cannot repair the economy, restore our vitality or relish life’s most precious moments — hugging a grandchild, birthdays, weddings, graduations, all the moments that matter most to us — until we get this virus under control,” Biden said. “That plan will be built on a bedrock of science. It will be constructed out of compassion, empathy and concern. I will spare no effort — or commitment — to turn this pandemic around.”
Yet the plans Biden laid out on the campaign trail are set to collide with political realities. That includes a deeply divided nation in which more than 71 million people voted for Trump and the possibility of having to navigate a Republican-controlled Senate disinclined to support a greater federal role in testing and contact tracing, among other responsibilities now left mostly to the states.
Biden’s most ambitious plans will require significant congressional funding. Senate Majority Leader Mitch McConnell (R-Ky.) has said he would like to pass new coronavirus relief measures during Congress’s lame-duck session, and Congress faces a Dec. 11 government funding deadline. Biden and his team are poised to begin engaging with congressional Democrats on their priorities.
Biden’s plans include dramatically expanding testing and building a U.S. public health jobs corps to have 100,000 Americans conduct contact tracing. They also include ramping up production of personal protective equipment and implementing a vaccine distribution plan.
Murthy, who served as the 19th U.S. surgeon general, is a physician whose nomination was stalled in the Senate for more than a year because of his view that gun violence is a public health issue. Three months into the Trump administration, he was replaced as “the nation’s doctor” with more than two years left on his four-year term.
In 2016, he wrote a landmark report on drug and alcohol addiction, which put that condition alongside smoking, AIDS and other public health crises that previous surgeons general addressed. The report called the addiction epidemic “a moral test for America.” Murthy’s office sent millions of letters to doctors asking for their help to combat the opioid crisis.
The son of immigrants from India, he earned medical and MBA degrees at Yale before joining the faculty at Harvard Medical School, where his research focused on vaccine development and the participation of women and minorities in clinical trials.
After leaving his post as surgeon general, he wrote a book on loneliness and social isolation, including their implications for health, that grew out of his conversations with people in clinical practice and as surgeon general.
Several public health officials celebrated Nunez-Smith’s leadership role on the task force. Her research focuses on promoting health and health-care equity in marginalized populations, according to her Yale biography. She has also studied discrimination that patients endure in the health-care system — expertise that many said was welcome in an epidemic that is disproportionately affecting people of color.
Kessler was FDA commissioner from 1990 to 1997, during the George H.W Bush and Clinton administrations. He is well-known for his attempts to regulate cigarettes — an effort that resulted in a loss in the Supreme Court, which ruled that the agency did not have the authority. That prompted Congress to pass a law, enacted in 2009, that explicitly gave the agency that power.
Kessler, a pediatrician and lawyer, worked at the FDA to accelerate AIDS treatments and on food and nutrition issues. He oversaw the FDA’s development of standardized nutrition labels and notably ordered the seizure of orange juice labeled “fresh” because it was made from concentrate. He has written several books on diet, mental illness and other topics, and has served as dean of the medical schools at Yale and UCSF.
President-elect Joe Biden’s healthcare agenda: building on the ACA, value-based care, and bringing down drug prices.
In many ways, Joe Biden is promising a return to the Obama administration’s approach to healthcare:
- Building on the Affordable Care Act (ACA) through incremental expansions in government-subsidized coverage
- Continuing CMS’ progress toward value-based care
- Bringing down drug prices
- Supporting modernization of the FDA
Bolder ideas, such as developing a public option, resolving “surprise billing,” allowing for negotiation of drug prices by Medicare, handing power to a third party to help set prices for some life sciences products, and raising the corporate tax rate, could be more challenging to achieve without overwhelming majorities in both the House and the Senate.
Biden is likely to mount an intensified federal response to the COVID-19 pandemic, enlisting the Defense Production Act to compel companies to produce large quantities of tests and personal protective equipment as well as supporting ongoing deregulation around telehealth. The Biden administration also will likely return to global partnerships and groups such as the World Health Organization, especially in the area of vaccine development, production and distribution.
What can health industry executives expect from Biden’s healthcare proposals?
Broadly, healthcare executives can expect an administration with an expansionary agenda, looking to patch gaps in coverage for Americans, scrutinize proposed healthcare mergers and acquisitions more aggressively and use more of the government’s power to address the pandemic. Executives also can expect, in the event the ACA is struck down, moves by the Biden administration and Democratic lawmakers to develop a replacement. Healthcare executives should scenario plan for this unlikely yet potentially highly disruptive event, and plan for an administration marked by more certainty and continuity with the Obama years.
All healthcare organizations should prepare for the possibility that millions more Americans could gain insurance under Biden. His proposals, if enacted, would mean coverage for 97% of Americans, according to his campaign website. This could mean millions of new ACA customers for payers selling plans on the exchanges, millions of new Medicaid beneficiaries for managed care organizations, millions of newly insured patients for providers, and millions of covered customers for pharmaceutical and life sciences companies. The surge in insured consumers could mirror the swift uptake in the years following the passage of the ACA.
Biden’s plan to address the COVID-19 pandemic
Biden is expected to draw on his experience from H1N1 and the Ebola outbreaks to address the COVID-19 pandemic with a more active role for the federal government, which many Americans support. These actions could shore up the nation’s response in which the federal government largely served in a support role to local, state and private efforts.
Three notable exceptions have been the substantial federal funding for development of vaccines against the SARS-CoV-2 virus, Congress’ aid packages and the rapid deregulatory actions taken by the FDA and CMS to clear a path for medical products to be enlisted for the pandemic and for providers, in particular, to be able to respond to it.
Implications of Biden’s 2020 health agenda on healthcare payers, providers and pharmaceutical and life sciences companies
The US health system has been slowly transforming for years into a New Health Economy that is more consumer-oriented, digital, virtual, open to new players from outside the industry and focused on wellness and prevention. The COVID-19 pandemic has accelerated some of those trends. Once the dust from the election settles, companies that have invested in capabilities for growth and are moving forcefully toward the New Health Economy stand to gain disproportionately.
Shortages of clinicians and foreign medical students may continue to be an issue for a while
The Trump administration made limiting the flow of immigrants to the US a priority. The associated policy changes have the potential to exacerbate shortages of physicians, nurses and other healthcare workers, including medical students. These consequences have been aggravated by the pandemic, which dramatically curtailed travel into the US.
- Healthcare organizations, especially rural ones heavily dependent on foreign-born employees, may find themselves competing fiercely for workers, paying higher salaries and having to rethink the structure of their workforces.
- Providers should consider reengineering primary care teams to reflect the patients’ health status and preferences, along with the realities of the workforce on the ground and new opportunities in remote care.
Focus on modernizing the supply chain
Biden and lawmakers from both parties have been raising questions about life sciences’ supply chains. This focus has only intensified because of the pandemic and resulting shortages of personal protective equipment (PPE), pharmaceuticals, diagnostic tests and other medical products.
- Investment in advanced analytics and cybersecurity could allow manufacturers to avoid disruptive stockouts and shortages, and deliver on the promise of the right treatment to the right patient at the right time in the right place.
Drug pricing needs a long-term strategy
Presidents and lawmakers have been talking about drug prices for decades; few truly meaningful actions have been implemented. Biden has made drug pricing reform a priority.
- Drug manufacturers may need to start looking past the next quarter to create a new pricing strategy that maximizes access in local markets through the use of data and analytics to engage in more value-based pricing arrangements.
- New financing models may help patients get access to drugs, such as subscription models that provide unlimited access to a therapy at a flat rate.
- Companies that prepare now to establish performance metrics and data analytics tools to track patient outcomes will be well prepared to offer payers more sustainable payment models, such as mortgage or payment over time contracts, avoiding the sticker shock that comes with these treatments and improving uptake at launch.
- Pharmaceutical and life sciences companies will likely have to continue to offer tools for consumers like co-pay calculators and use the contracting process where possible to minimize out-of-pocket costs, which can improve adherence rates and health outcomes.
View interoperability as an opportunity to embrace, not a threat to avoid or ignore
While the pandemic delayed many of the federal interoperability rule deadlines, payers and providers should use the extra time to plan strategically for an interoperable future.
- Payers should review business partnerships in this new regulatory environment.
- Digital health companies and new entrants may help organizations take advantage of the opportunities that achieving interoperability may present.
- Companies should consider the legal risks and take steps to protect their reputations and relationships with customers by thinking through issues of consent and data privacy.
Health organizations should review their policies and consider whether they offer protections for customers under the new processes and what data security risks may emerge. They should also consider whether business associate agreements are due in more situations.
Plan for revitalized ACA exchanges and a booming Medicare Advantage market
The pandemic has thrown millions out of work, generating many new customers for ACA plans just as the incoming Biden administration plans to enrich subsidies, making more generous plans within reach of more Americans.
- Payers in this market should consider how and where to expand their membership and appeal to those newly eligible for Medicare. Payers not in this market should consider partnerships or acquisitions as a quick way to enter the market, with the creation of a new Medicare Advantage plan as a slower but possibly less capital-intensive entry into this market.
- Payers and health systems should use this opportunity to design more tailored plan options and consumer experiences to enhance margins and improve health outcomes.
- Payers with cash from deferred care and low utilization due to the pandemic could turn to vertical integration with providers as a means of investing that cash in a manner that helps struggling providers in the short term while positioning payers to improve care and reduce its cost in the long term.
- Under the Trump administration, the FDA has approved historic numbers of generic drugs, with the aim of making more affordable pharmaceuticals available to consumers. Despite increased FDA generics approvals, generics dispensed remain high but flat, according to HRI analysis of FDA data.
- Pharmaceutical company stocks, on average, have climbed under the Trump administration, with a few notable dips due to presidential speeches criticizing the industry and the pandemic.
- Providers have faced some revenue cuts, particularly in the 340B program, and many entered the pandemic in a relatively weak liquidity position. The pandemic has led to layoffs, pay cuts and even closures. HRI expects consolidation as the pandemic continues to curb the flow of patients seeking care in emergency departments, orthopedic surgeons’ offices, dermatology suites and more.
Lawmakers and politicians often use bold language, and propose bold solutions to problems, but the government and the industry itself resists sudden, dramatic change, even in the face of sudden, dramatic events such as a global pandemic. One notable exception to this would be a decision by the US Supreme Court to strike down the ACA, an event that would generate a great deal of uncertainty and disruption for Americans, the US health industry and employers.