Importance of Showing Respect
SEC may take ‘fresh look’ at auditor conflicts of interest: Gensler
Dive Brief:
- Securities and Exchange Commission (SEC) Chair Gary Gensler has asked the Public Company Accounting Oversight Board (PCAOB) Chair Erica Williams to consider adding auditor independence standards to its agenda and the SEC itself may need to take a “fresh look” at its own rules on the independence issue, Gensler said during a webinar Wednesday.
- SEC staff has seen “situations of decreased vigilance” when it comes to auditor independence and Gensler expressed concern that conflicts of interest stemming from auditors and affiliated firms serving the same client persist 20 years after the Sarbanes Oxley Act directed the SEC to take steps to create stronger barriers between auditors and other parts of their firms, he said.
- “A number of firms spun out their consulting businesses in the days shortly before and after Sarbanes-Oxley. Over the past 20 years, however, many of these firms went on to rebuild them again. PCAOB inspections continue to identify independence — and lack of professional skepticism — as perennial problem areas,” Gensler said.
Dive Insight:
Gensler spoke during a webinar hosted by the Center for Audit Quality commemorating the 20th anniversary Sarbanes-Oxley Act, which established the PCAOB in the wake of the Enron and WorldCom accounting scandals to oversee accounting firms that audit public companies.
The SEC chair has been shaking up the oversight of auditors for some time, ousting William Duhnke as PCAOB chair last year. Last fall SEC Acting Chief Accountant Paul Munter underscored the importance of independent audits as an investor safeguard, saying that an auditor that provides extensive non-audit services to an entity that has an active mergers and acquisitions business model must continually monitor the impacts of all such transitions on its audit engagement to ensure that the auditor remains independent of all of its audit clients.
During the talk Gensler was also critical of the sluggish pace at which PCAOB has undertaken the responsibility that it was given to update interim standards that it inherited from the American Institute of Certified Public Accountants.
“Historically … the PCAOB has been too slow to update auditing standards. Twenty years later, most of those interim standards remain,” Gensler said. But he expressed confidence that Williams, who took over as chair of the U.S. audit watchdog in January, and the board would “live up to Congress’s original vision with respect to standard-setting. I hope we can make some progress before Sarbanes-Oxley can legally drink.”
In May the PCAOB announced plans to update almost all of the remaining interim standards.
San Francisco, New York state call monkeypox an emergency: 5 updates
New York state declared an imminent threat and San Francisco issued a state of emergency over monkeypox July 28 as the virus continues to spread in the U.S., NBC News reported.
The news comes after the World Health Organization declared monkeypox a global emergency July 23 and as the CDC reported 4,907 confirmed cases nationwide as of July 28. California and New York account for more than 40 percent of the reported cases in the U.S., according to The Washington Post.
In a statement, New York State Commissioner of Health Mary Bassett, MD, said the declaration allows local health departments “to access additional state reimbursement, after other federal and state funding sources are maximized, to protect all New Yorkers and ultimately limit the spread of monkeypox in our communities.” It covers monkeypox prevention response and activities from June 1 through the end of the year.
In San Francisco, the monkeypox public health emergency takes effect Aug. 1, city officials said in a news release. The release, from Mayor London Breed and the San Francisco Department of Public Health, said the declaration “will mobilize city resources, accelerate emergency planning, streamline staffing, coordinate agencies across the city, allow for future reimbursement by the state and federal governments and raise awareness throughout San Francisco about [monkeypox].”
Four other updates:
1. HHS announced July 28 that nearly 800,000 additional monkeypox vaccine doses will be available for distribution to states and jurisdictions. The 786,000 additional doses are on top of the more than 300,000 doses already distributed. This means the U.S. has secured a total of about 1.1 million doses “that will be in the hands of those who need them in the next several weeks,” HHS Secretary Xavier Becerra said during a July 28 news conference. The additional doses will be allocated based on the total population of at-risk people and the number of new cases in each jurisdiction. “This strategy ensures that jurisdictions have the doses needed to complete the second dose of this two-dose vaccine regimen for those who have been vaccinated over the past month,” HHS said in a news release.
2. As of the morning of July 29, the U.S. has held off on declaring a national monkeypox emergency. Mr. Becerra said July 28 that HHS “continue[s] to monitor the response throughout the country on monkeypox” and will weigh any decision regarding a public health emergency declaration based on the response.
3. The monkeypox response is straining public health workers. Health experts are concerned over how the monkeypox response will further deplete the nation’s public health workforce, still strained and burnt out from the ongoing COVID-19 pandemic. Barriers to testing, treatment and vaccine access largely mirror the missteps in the early coronavirus response, Megan Ranney, MD, emergency physician and academic dean of Brown University School of Public Health in Providence, R.I, told The Washington Post. “I can’t help but wonder if part of the delay is that our public health workforce is so burned out,” she said. “Everyone who’s available to work on epidemiology or contract tracing is already doing it for COVID-19.”
4. Monkeypox testing demand is low, commercial laboratories told CNN. In recent weeks, five major commercial laboratories have begun monkeypox testing, giving the nation capacity to conduct 80,000 tests per week. While Mayo Clinic Laboratories can process 1,000 samples a week, it’s received just 45 specimens from physicians since it began monkeypox testing July 11, according to the July 28 CNN report. “Without testing, you’re flying blind,” William Morice, MD, PhD, president of Mayo’s lab and chair of the board of directors at the American Clinical Laboratory Association, told the news outlet. “The biggest concern is that you’re not going to identify cases and [monkeypox] could become an endemic illness in this country. That’s something we really have to worry about.”
Critics say Mark Cuban’s pharmacy isn’t tackling the big issue: brand-name drugs
Mark Cuban’s pharmacy, Cost Plus Drug Co., has hundreds of drugs marked at discounted prices, but some pharmacy experts say there’s a larger problem that needs fixing, CNBC reported July 28.
The online pharmacy launched in January with about 100 drugs, and by its one-year anniversary, plans to have more than 1,500 medications, according to the company’s website. The business model, which allocates for a $3 pharmacy dispensing fee, $5 shipping fee and a 15 percent profit margin with each order, aims to uproot the pharmaceutical industry, which has faced criticism for years about its opaque business practices.
Gabriel Levitt, the president of PharmacyChecker, a company that monitors the cheapest drug prices, told CNBC there’s more to be done.
“As much as I support the venture, what they’re doing does not address the big elephant in the room,” Mr. Levitt said. “It’s really brand-name drugs that are increasing in price every year and forcing millions of Americans to cut back on medications or not take them at all.”
Brand-name drugs are 80 percent to 85 percent more expensive than generics since brand-name drugs have to repeat clinical tests to prove efficacy, according to the FDA. Cost Plus Drug Co. only offers generics. Mr. Cuban told CNBC he hopes to sell brand-name medications “within six months,” but added that it’s a tentative timeline.
Developing a compelling value proposition for employees
https://mailchi.mp/ff342c47fa9e/the-weekly-gist-july-22-13699925?e=d1e747d2d8
As we’ve been discussing, the COVID pandemic and ensuing economic environment have driven health system job vacancies and attrition rates to all-time highs. Right now, for myriad reasons, many hospital workers are deciding that the financial, emotional, and professional benefits of working for a hospital are outweighed by the toll working in a hospital takes on them personally.
Health systems are responding to this challenge with a wide variety of discrete measures—including hiring and retention bonuses, incentive pay, employee wellbeing initiatives, and expanded professional development opportunities— that target specific groups of employees, but don’t form a long-term solution to workforce instability.
To rebuild a stable and committed workforce, health systems must create, and then communicate, a compelling employee value proposition—a concise statement highlighting why employees should work for them.
The graphic above shows what we believe are the key components of a successful employee value proposition, which must have a clear vision and focus on the things most important to employee needs: compensation, work-life balance, and career support. Systems can use the guiding questions listed in each column to craft a value proposition that is differentiated in their local labor market, informed by their level of resources, and undergirded by their own culture and values.
Value-based care isn’t yielding much “value.”
https://mailchi.mp/ff342c47fa9e/the-weekly-gist-july-22-13699925?e=d1e747d2d8
Despite the hype, accountable care organizations (ACOs) and other Medicare-driven payment reform programs intended to improve quality and lower healthcare spending haven’t bent the cost curve to the extent many had hoped.
A recent and provocative opinion piece in STAT News, from health policy researcher Kip Sullivan and two single-payer healthcare advocates, calls for pressing pause on value-based payment experimentation. The authors argue that current attempts to pay for value have ill-defined goals and hard-to-measure quality metrics that incentivize reducing care and upcoding, rather than improving outcomes.
The Gist: We agree with the authors that current value-based care experiments have been disappointing.
The intention is good, but the execution has been bogged down by entrenched industry dynamics and slow-to-move incumbents. One fair criticism: ACOs and other “total cost management” reforms largely focus on the wrong problem. They address utilization, rather than excessive price.
But we’re having a price problem in the US, not a utilization problem. Europeans, for example, have more physician visits each year than Americans, yet spend less per-person on healthcare. It’s our high prices—for everything from physician visits to hospital stays to prescription drugs—that drive high healthcare spending.
The root cause: our third-party payer structure actively discourages real efforts to lower price—every player in the value chain, including providers, brokers, and insurers, does better economically as prices increase. That’s why price control measures like reference pricing or price caps have been nonstarters among industry participants.
Recent reforms that increase price transparency, while not the entire solution, at least shine a light on the real challenges our healthcare system faces.
Large nonprofit health systems in the spotlight again for not providing enough charity care
https://mailchi.mp/ff342c47fa9e/the-weekly-gist-july-22-13699925?e=d1e747d2d8
A recent Wall Street Journal analysis, published this week, provides further evidence that large, nonprofit health systems often offer less charity care than their for-profit peers. It found that, on average, nonprofit systems spent 2.3 percent of their net patient revenue on financial aid for patients, whereas for-profit hospitals spent 3.4 percent.
The American Hospital Association criticized the analysis, arguing that it doesn’t fully capture the broader community benefits that nonprofit hospitals provide. Earlier this year the Lown Institute, a Boston-based think tank, also found that most nonprofit hospitals invest less in their communities and spend less on charity care than the amount they receive from tax exemptions.
The Gist: The issue of whether hospital systems should continue to enjoy tax-exempt status is a perennial stalking horse in the health policy community. The topic often gets conflated with whether nonprofit systems are truly “nonprofit”, since many larger systems make robust profits.
There’s no question that nonprofit systems enjoy a huge economic advantage from not being subject to taxation, in return for which we should expect them to provide “community benefit” at a level commensurate with the status.
The difficulty is in defining and measuring community benefit— for example, should serving Medicaid patients count? Is it fair to count discounts for the uninsured as “charity care”, if we know prices are artificially inflated in the first place? These are thorny questions with no obvious answers, but ones that would benefit from clearer guidance and more transparency from policymakers.
For-profit hospital company earnings announcements show economic headwinds are mounting
https://mailchi.mp/ff342c47fa9e/the-weekly-gist-july-22-13699925?e=d1e747d2d8
While for-profit health system giants HCA Healthcare and Tenet Healthcare reported reductions in contract labor usage last quarter, sustained higher labor costs and sluggish demand resulted in both of them, along with Community Health Systems and Universal Health Services, seeing their net income decline in the second quarter.
Like many systems, the for-profit chains seem to have successfully weaned themselves from earlier reliance on expensive temporary nurses, but are facing more structural increases in labor costs as salaries have risen to remain competitive in a very tight labor market.
The Gist: The earnings reports from for-profit companies are a canary in the coal mine for the overall margin performance of the industry. Although investor-owned companies are vastly outnumbered by their not-for-profit peers, they often move more quickly, and with more vigor, to reduce costs in order to meet the earnings expectations of Wall Street investors. They also typically rely more heavily on volume growth—particularly emergency department visits—as a driver of earnings.
If for-profits are now finding it more difficult to pull those levers, we’d expect that the broader universe of nonprofit systems is experiencing even tougher sledding. That’s consistent with what we’re hearing anecdotally from health systems we work with.
Democrats reach deal on healthcare and climate bill
https://mailchi.mp/ff342c47fa9e/the-weekly-gist-july-22-13699925?e=d1e747d2d8
Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) surprised everyone Wednesday night by announcing they reached a deal on a legislation package called the Inflation Reduction Act of 2022. The deal is a revival of portions of President Biden’s “Build Back Better” plan, more narrowly scoped to meet the demands of Sen. Manchin.
On the healthcare front, the bill would allow Medicare to negotiate prices for certain prescription drugs starting in 2026, and limit seniors’ annual out-of-pocket spending on Part D prescriptions to $2,000. It also includes $64B to extend the enhanced tax credits for Affordable Care Act exchange plans through 2025, avoiding health plan rate increases for millions of Americans.
The Gist: While several Senate Democrats have announced support for the legislation, the party can’t afford any holdouts given its razor-thin majority. If all Democrats get on board, this legislation will fulfill the party’s longtime promise to lower prescription drug prices. But it stops well short of other major healthcare measures being discussed last year, including expanding Medicare coverage to include dental, vision, and hearing coverage, and closing the so-called Medicaid coverage gap.
Longtime HIV patient is effectively cured after stem cell transplant
A 66-year-old man with HIVis in long-term remission after receiving a transplant of blood stem cells containing a rare mutation, raising the prospect that doctors may someday be able to use gene editing to re-create the mutation and cure patients of the virus that causes AIDS, a medical team announced Wednesday.
For now, the crucial virus-defeating mutation is rare, leaving the treatment unavailable to the vast majority of the 38 million patients living with HIV, including over 1.2 million in the United States. Bone marrow transplants also carry significant risk and have been used only on HIV patients who have developed cancer.
The patient, who had lived more than half his life with the virus, is among a handful of people who went into remission after receiving stem cells from a donor with the rare mutation, said doctors from City of Hope, a cancer and research center in Duarte, Calif., who treated him.
“This is one step in the long road to cure,” said William Haseltine, a former Harvard Medical School professor, who founded the university’s cancer and HIV/AIDS research departments. Haseltine, now chairman and president of the nonprofit think tank Access Health International, was not involved in the City of Hope case.
While the announcement at the 24th International AIDS Conference in Montreal does not have immediate implications for most people living with HIV, it continues the long, slow progression of treatment that began with federal approval of the drug AZT in 1987, advanced a decade later with the use of protease inhibitors to reduce the virus in the body, and went further in 2012, with the approval of PrEP, which protects healthy people from becoming infected.
As a result of those developments,an HIV patient diagnosed at around age 20 today can receive antiretroviral therapy and live another 54 years, according to a 2017 study in the journal AIDS.
“When I was diagnosed with HIV in 1988, like many others, I thought it was a death sentence,” said the City of Hope patient, who asked not to be identified, in a statement shared by the hospital. “I never thought I would live to see the day that I no longer have HIV.”
The man received the transplant in early 2019, but continued taking antiretroviral therapy until he had been vaccinated against covid-19. He has been in remission for almost a year and a half.
“He’s doing great,” said Jana T. Dickter, an associate clinical professor in the division of infectious diseases at City of Hope, who presented the data at the conference. “He’s in remission for HIV.”
Dickter said the patient is being treated for painful ulcers in his mouth caused by the donor’s stem cells attacking his tissue.
The patient received the transplant from an unrelated donor in 2019, after being diagnosed with acute myelogenous leukemia. His doctor at City of Hope chose donor stem cells that had a genetic mutation found in about 1 in 100 people of northern European descent.
Those having the mutation, known as CCR5- delta 32, cannot be infected by HIV because it slams shut the doorway used by the virus to enter and attack the immune system. That doorway is the cell receptor CCR5, which the virus uses to enter white blood cells that form an important part of the body’s defense against disease.
The City of Hope patient is among a small, select group of HIV patients to go into remission after receiving such a transplant.
“This is probably the fifth case in which this type of transplant appeared to cure someone. This approach clearly works. It’s curative and we know the mechanism,” said Steven Deeks, a professor of medicine at the University of California at San Francisco, who cared for the first such patient, Timothy Ray Brown. In 2007, Brown was cured by a medical team in Berlin using a transplant from someone who hadthe same mutation.
Following the transplant, Brown no longer had a detectable level of HIV in his blood. He was known as “the Berlin patient” until he released his name in 2010 and moved to San Francisco.
“I will not stop until HIV is cured,” Brown vowed in a 2015 essay in the journal AIDS Research and Human Retroviruses. Brown died in September 2020 of leukemia unrelated to his HIV. He was 54.
Similar successes followed in patients in London, Düsseldorf, Germany and New York.
“It is yet another case that resembles Timothy Brown from years ago,” emailed David D. Ho, one of the world’s leading AIDS researchers and director of the Aaron Diamond AIDS Research Center at Columbia University. “There are several others as well, each using approaches that are not feasible for most infected patients.”
The other patients also received bone marrow transplants, a relatively risky procedure that involves wiping out the patient’s immune system with chemotherapy drugs. Chemotherapy destroys remaining cancer cells, makes room in the marrow for the donor cells and reduces the likelihood that they will come under attack from the immune system. The transplanted blood stem cells are then injected into the bloodstream and make their way to the marrow, where — ideally — they begin producing new, healthy blood cells.
Although the survival rate for bone marrow transplant recipients has risen significantly, 30 percent of the patientsdie within a year of the procedure.
“I think it’s highly feasible to identify appropriate donors — in particular when more people register as bone marrow donors, with more representation of different racial and ethnic backgrounds,” said Eileen Scully, associate professor of medicine at Johns Hopkins University School of Medicine.“That will enable this type of approach to be used for more people.”
But she added that “bone marrow transplantation is a significant medical procedure that carries its own risks.”
Doctors at City of Hope said they prepared the HIV patient for the transplant by giving him a lower-intensity regimen of chemotherapy developed by the cancer center and used with older patients.
HIV patients in wealthy countries like the United States,where antiretrovirals are widely available, live longer, but they also run a higher risk of developing certain cancers such as leukemia. In addition, they have a higher risk of developing heart disease, diabetes and even some brain conditions.
Dickter said that when the City of Hope patient was diagnosed with acute myelogenous leukemia in 2019, his doctors searched for a bone marrow match that contained the HIV-resistant mutation.
The nonprofit National Marrow Donor Program, now routinely screens donors to learn whether they have the CCR5- delta 32 mutation, said Joseph Alvarnas, a City of Hope hematologist-oncologist and a co-author of the abstract.
The possibility of someday being able to effectively cure much large numbers of people by using gene-editing techniques to generate the mutation may be a decade off, Deeks said.
Deeks said he is working with a San Francisco-based company called Excision BioTherapeutics to develop the first-in-human trials that would involve editing the genes of patients with HIV. Studies have shown some success in editing genes inside mice and monkeys infected with HIV.
Deeks said that it is not hardin the lab to use a gene-editing tool to knock out the receptor that allows HIV to invade the immune system. Carrying out that task inside the body of a human patient is where the work gets complex.
“That’s the challenge — to do that effectively and safely,” Deeks said. “And that’s a whole can of worms.”
Haseltine said that researchers must figure out how to reach enough of the right cells inside the body. At the same time, they must ensure the treatment does not cause unwanted effects to other genes.
“The message to people living with HIV is that this is a signal of hope,” said Scully of Johns Hopkins.“It is feasible. It has been replicated again. It’s also a signal that the scientific community is really engaged with trying to solve this puzzle.”
HENRY KOTULA 