DCMedical News: Tuesday, May 17, 2022
DCMedical News is published every day both the House and the Senate are scheduled to be in session.
THE BIG STORY Tuesday, May 17, 2022
Massive Losses at Two Major Hospital Systems
Two first quarter (March 31) financial reports from non-profit hospital systems required to make such reports (bonds, regulators) show massive losses from operations. CommonSpirit (142 hospitals in 21 states, report here) showed a $591 million loss for the quarter, while Mass General Brigham (here, formerly Partners, formerly Mass General and Brigham) showed a $867 million loss, for the quarter.
CommonSpirit reported receiving $1.6 billion in CARES Provider Relief Funds through 3-31-2022, and an additional $2.8 billion in accelerated Medicare payments. The current ratio was 1.27 as of 3/31/2022; the statement of cash flows shows a $1.77 billion loss from operations in the nine month period ended 3-31-2022; cash, which was $5.9 billion at the beginning of October 2020, was $2.9 billion at the end of March 2022.
Mass General Brigham's losses were primarily in investments, but also came from operations. Revenue increased by 4% in the first quarter, compared to the same period in 2021, while expenses grew 12%. Becker's reports (here), "Mass General Brigham attributed the expense increase to the use of temporary staffing, wage adjustments to facilitate workforce retention, supply cost increases and retirement benefit costs. For the second quarter of fiscal 2022, Mass General Brigham posted an operating loss of $193.18 million. In the same period one year prior, Mass General Brigham recorded an operating gain of $250.15 million. After factoring in nonoperating items, including an $853.04 million investment loss, Mass General Brigham ended the period with a net loss of $866.59 million. In the comparable 2021 quarter, Mass General recorded a net income of $955.87 million."
For Mass General Brigham, the current ratio was 2.68 on 3-31-2022; the statement of cash flows shows a $426 million loss from operations in the six months ended March 31; cash, which was $2.5 billion on March 31, 2021, was $164.5 million at the end of March 2022.
DOCTORS, NURSES AND OTHER HEALTH PROFESSIONALS
Summary of the Challenge to Private Practice
An essay in Forbes ("Is the End of Private Practice Nigh?" by Sally Pipes, here) highlights the challenge: (1) "The independent physician is becoming an endangered species. The corporatization of medicine is sapping competition in the healthcare marketplace. And that's leading to higher prices for patients—and lower pay for providers. The pandemic accelerated the longstanding trend of greater consolidation in medicine. Large health systems acquired more than 36,000 physician practices between January 1, 2019—the year before the pandemic began—and January 1, 2022. That represents [a] 38% increase in the share of practices that are corporate-owned; and
(2) "As an employee of a larger system, doctors don't have to deal with the administrative headaches of billing and paperwork that accompany private practice. They're also guaranteed a set salary and working hours—unlike an independent physician, whose income and hours often depend on the volume of care he or she delivers and the overhead expenses the practice accrues"; but also
(3) "When a hospital acquires a physician practice, prices for healthcare services increase by more than 14%, according to research published in the Journal of Health Economics. Those higher costs don't translate to higher salaries for doctors. A recent Health Affairs study found that a physician's salary actually decreases after his or her practice is acquired by a hospital. Doctors in some specialties experience average salary cuts of nearly $10,000 after a hospital takes over their practice."
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Public Health Emergency
InsideHealthPolicy reports (here) that "HHS' highly watched-for 60 days' notice of the end of the COVID-19 public health emergency in July did not materialize on Monday, signaling the administration likely will extend the PHE through at least mid-October. Days earlier, the administration put governors on notice to be fully prepared to make Medicaid redeterminations when the PHE finally winds down."
"Without a 60-days' notice from the administration as of late Monday (May 16), it now appears the PHE could be extended on July 15 for another 90 days. Hospitals, providers, nursing homes and children’s health advocates had begged the Biden administration to extend the public health emergency though October, arguing COVID-19 variants will run rampant without the flexibilities made available during the PHE, including the Medicaid renewals freeze and FDA’s emergency use authorizations for new vaccines, tests and treatments."
The "State Network" (Robert Wood Johnson Foundation) publishes (here) a "Resource Page" for Planning for the End of the Continuous Coverage Requirement: Communications Resources for States . . . downloadable and customizable communications resources designed to support states as they prepare for the various stages of work needed to inform stakeholders and consumers about the upcoming end of the Medicaid continuous coverage requirement."
Healthcare, The Big Employer
Becker's highlights (here) a Kaiser Family Foundation report on healthcare employment as a percent of total employment, by state.
"West Virginia leads the nation for healthcare employment as a percent of total employment [16%), while Nevada is last [9%]. The data comes from Kaiser Family Foundation, which ranked states by healthcare employment as a percent of total employment based on the U.S. Bureau of Labor Statistics' State Occupational Employment Statistics Survey for May 2021, which was released in March 2022. Healthcare employment includes occupations in ambulatory care, hospitals and nursing and residential care facilities. . . The national average is 12 percent."
DRUGS & DEVICES
Pharma-Sponsored Coupons Foil Insurer Limits on Prescription Drugs
Dafny and colleagues publish research (NBER, here) concluding that "Pharmaceutical companies have succeeded in boosting demand for high-priced brand-name drugs by offering coupons to offset patient cost-sharing. While consumers who qualify for these coupons enjoy immediate benefits, the practice has frustrated insurers’ efforts to manage costs and has increased US drug spending."
The researchers estimate the effects of coupon programs on drug utilization and prices. They use Medicare Advantage enrollees as a control group, since by law they are prohibited from using copayment coupons. "Coupons shield consumers from cost-sharing incentives that private insurers rely upon to promote utilization of cost-effective drug therapies, e.g., tiered formularies. For example, the copayment for a generic drug might be only $5 or $10, compared with much higher amounts, often a percentage of the actual cost, for brand-name drugs."
"Copayment coupons and related initiatives by pharmaceutical companies are designed to boost demand for brand-name drugs . . . In the 12 months after coupons were introduced for a drug, individuals covered by commercial insurance plans increased their purchases, as measured by days of the drug supplied, by an average of more than 20 percent compared with those enrolled in Medicare Advantage."
"They estimate that banning copay coupons would reduce total spending on these drugs by $950 million, which translates to a reduction in insurer costs of 7.6 percent. They further estimate that the market shares of couponed drugs would fall by 6 to 9 percent if coupons were no longer used, while those of never-couponed drugs would increase."
READINGS & REFERENCES
Select Coronavirus Public Health Resources and References may be found here.
The JAMA Patient Page explains the current status of oral anti-viral medications for COVID-19, here.
2022 CQ Congressional Calendar here.
PUBLICATION SCHEDULE FOR DCMEDICAL NEWS
May 18, 19
June 7, 8, 9, 10, 13, 14, 15, 16, 21, 22, 23, 24
July 12, 13, 14, 15, 18, 19, 20, 21, 26, 27, 28, 29
August, Congress adjourned, no issues
Notes to Fred Hyde, MD, JD, MBA, news@dcmedicalnews.org