Two conservative justices on the Supreme Court appeared prepared to preserve at least some of the major components of ObamaCare, including its protections for people with preexisting conditions, as they heard arguments Tuesday in a suit challenging the law.
Chief Justice John Roberts and Justice Brett Kavanaugh seemed to express the view that if the court were to strike down the provision of the law mandating the purchase of health insurance, the rest of the law should be allowed to survive.
“Looking at our severability precedents, it does seem fairly clear that the proper remedy would be to sever the mandate provision and leave the rest of the act in place, the provisions regarding preexisting conditions and the rest,” Kavanaugh said.
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.
Kaiser Permanente saw its net income climb more than 68 percent in the third quarter of 2020, according to its financial report released Nov. 6.
The Oakland, Calif.-based health system recorded operating revenue of $22 billion in the quarter ended Sept. 30, up 5.3 percent from the same period a year earlier. Kaiser also saw expenses rise about 5.9 percent year over year, to $21.5 billion.
“Although the pandemic continues to have an impact on Kaiser Permanente, during the third quarter we safely resumed in-person preventive and elective care, started to address the backlog of deferred procedures that were put on hold due to COVID-19, and continued to leverage and grow virtual care for members’ safety and convenience,” said executive vice president and CFO Kathy Lancaster.
The 39-hospital system spent $964 million on capital projects in the third quarter, up from $891 million in the third quarter of 2019.
A lot of the capital spend has been shifted into the IT arena to boost patient and member access to various digital health services such as telehealth, Tom Meier, corporate treasurer of Kaiser, told Becker’s. It also included ongoing multi-year projects and maintenance of its hospitals.
Compared to the third quarter of 2019, Kaiser’s operating income fell 25.9 percent to $456 million.
Largely due to the result of returns in the financial market, the system ended the third quarter of 2020 with a net income of $2 billion. In the same quarter last year, Kaiser recorded a net income of $1.2 billion.
In the third quarter, Kaiser saw its non-operating income reach $1.5 billion, up from $556 million in the third quarter of 2019, Mr. Meier said.
Kaiser also offers a health plan to members across the U.S. As of Sept. 30, Kaiser had 12.4 million health plan members, representing a loss of 11,000 members in the third quarter. The decline was largely attributed to members losing access to their employer-sponsored plan as unemployment went up in the state. However, this decline was offset slightly by members purchasing individual plans or being enrolled in a government-sponsored plan, Mr. Meier said.
For the nine-month period ended Sept. 30, Kaiser reported a net income of $5.4 billion on revenue of $66.6 billion. In the same nine-month period in 2019, the health system recorded a net income of $6.4 billion on revenue of $63.7 billion.
The health system continues to respond to the COVID-19 pandemic. Through the third quarter the system has cared for 185,000 COVID-19 patients and tested nearly 2 million people for the novel virus.
The U.S. Supreme Court is set to hear a case questioning the legality of the ACA on Nov. 10.
Five things to know:
1. At the center of the case is whether the health law should be struck down. In a brief filed June 25 in Texas v. United States, the Trump administration argues the entire ACA is invalid because in December 2017, Congress eliminated the ACA’s tax penalty for failing to purchase health insurance. The administration argues the individual mandate is inseverable from the rest of the law and became unconstitutional when the tax penalty was eliminated; therefore, the entire health law should be struck down.
2. The administration’s brief was filed in support of a group of Republican-led states seeking to undo the ACA. Meanwhile, California Attorney General Xavier Becerra is leading a coalition of more Democratic states to defend the ACA before the Supreme Court.
3. The case goes before the Supreme Court days after media outlets projected Joe Biden as the next president of the U.S. President-elect Biden has said he seeks to expand government-subsidized insurance coverage and wants to the bring back the ACA’s tax penalty for failing to purchase health insurance, according to The Wall Street Journal. If a change regarding the tax penalty did occur, the publication notes that Republicans’ argument on severability would no longer apply.
4. The case also goes before the Supreme Court about two weeks after the Senate voted Oct. 26 to confirm Amy Coney Barrett to the Supreme Court. Ms. Barrett previously criticized Chief Justice John Roberts’ 2012 opinion sustaining the law’s individual mandate, The New York Times reported, but she said during her confirmation hearings in October that “the issue in the case is this doctrine of severability, and that’s not something that I have ever talked about with respect to the Affordable Care Act.”
5. According to the Journal, the Supreme Court is not expected to make a decision in the case until the end of June.
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.
The financial challenges caused by the COVID-19 pandemic have forced hundreds of hospitals across the nation to furlough, lay off or reduce pay for workers, and others have had to scale back services or close.
Lower patient volumes, canceled elective procedures and higher expenses tied to the pandemic have created a cash crunch for hospitals. U.S. hospitals are estimated to lose more than $323 billion this year, according to a report from the American Hospital Association. The total includes $120.5 billion in financial losses the AHA predicts hospitals will see from July to December.
Hospitals are taking a number of steps to offset financial damage. Executives, clinicians and other staff are taking pay cuts, capital projects are being put on hold, and some employees are losing their jobs. More than 260 hospitals and health systems furloughed workers this year and dozens of others have implemented layoffs.
Below are 11 hospitals and health systems that announced layoffs since Sept. 1, most of which were attributed to financial strain caused by the pandemic.
1. NorthBay Healthcare, a nonprofit health system based in Fairfield, Calif., is laying off 31 of its 2,863 employees as part of its pandemic recovery plan, the system announced Nov. 2.
2. Minneapolis-based Children’s Minnesota is laying off 150 employees, or about 3 percent of its workforce. Children’s Minnesota cited several reasons for the layoffs, including the financial hit from the COVID-19 pandemic. Affected employees will end their employment either Dec. 31 or March 31.
3. Brattleboro Retreat, a psychiatric and addiction treatment hospital in Vermont, notified 85 employees in late October that they would be laid off within 60 days.
4. Citing a need to offset financial losses, Minneapolis-basedM Health Fairview said it plans to downsize its hospital and clinic operations. As a result of the changes, 900 employees, about 3 percent of its 34,000-person workforce, will be laid off.
5. Lake Charles (La.) Memorial Health Systemlaid off 205 workers, or about 8 percent of its workforce, as a result of damage sustained from Hurricane Laura. The health system laid off employees at Moss Memorial Health Clinic and the Archer Institute, two facilities in Lake Charles that sustained damage from the hurricane.
6. Burlington, Mass.-based Wellforce laid off 232 employees as a result of operating losses linked to the COVID-19 pandemic. The health system, comprising Tufts Medical Center, Lowell General Hospital and MelroseWakefield Healthcare,experienced a drastic drop in patient volume earlier this year due to the suspension of outpatient visits and elective surgeries. In the nine months ended June 30, the health system reported a $32.2 million operating loss.
7. Baptist Health Floyd in New Albany, Ind., part of Louisville, Ky.-based Baptist Health, eliminated 36 positions. The hospital said the cuts, which primarily affected administrative and nonclinical roles, are due to restructuring that is “necessary to meet financial challenges compounded by COVID-19.”
8. Cincinnati-based UC Health laid off about 100 employees. The job cuts affected both clinical and non-clinical staff. A spokesperson for the health system said no physicians were laid off.
9. Mercy Iowa City(Iowa) announced in September that it will lay off 29 employees to address financial strain tied to the COVID-19 pandemic.
10. Springfield, Ill.-based Memorial Health Systemlaid off 143 employees, or about 1.5 percent of the five-hospital system’s workforce. The health system cited financial pressures tied to the pandemic as the reason for the layoffs.
11. Watertown, N.Y.-based Samaritan Healthannounced Sept. 8 that it laid off 51 employees and will make other cost-cutting moves to offset financial stress tied to the COVID-19 pandemic.
A promising vaccine developed by drug giant Pfizer and German biotechnology firm BioNTech would need to be stored at ultracold temperatures that experts say could make it far more difficult to distribute than other potential vaccines.
Pfizer announced Monday that an interim analysis had shown the vaccine was more than 90 percent effective, news that was greeted with near universal celebration among experts.
But the Pfizer vaccine is relatively unusual as it has to be stored and transported at an ultracold temperature of around -94 Fahrenheit (-70 Celsius), significantly complicating the process of getting the vaccine to people.
Ultracold storage is “is not necessarily routinely available in most health centers even in the U.K., let alone globally,” Michael Head, a fellow in global health at the University of Southampton said in a statement.
Vaccines often require some kind of cold storage to remain effective; some candidates for a coronavirus vaccine need to be held at cooler temperatures like 26 Fahrenheit (2 Celsius). They need to be kept this temperature not only while in storage but also while being delivering on planes and trucks.
The Pfizer vaccine would be considerably colder, requiring more than just refrigeration but something capable of producing freezing temperatures even during potential lengthy periods of transport. It has been done before, though at a smaller scale: A vaccine for the Ebola virus was notable for requiring ultracold storage. Pfizer has been preparing for the challenge by creating special containers that can last 10 days at -94 Fahrenheit, according to the Wall Street Journal.
Groups like the World Health Organization and UNICEF have said that countries need to improve their “cold chain” logistical networks to make sure vaccines can be distributed safely.The Associated Press reported last month that nearly 3 billion people live in areas where temperature-controlled storage is insufficient for the task.
