By Ken Perez, vice president of healthcare policy and government affairs, Omnicell, Inc.
On July 9, President Joe Biden issued a wide-ranging executive order (EO), “Executive Order on Promoting Competition in the American Economy,” that is highly critical of big business and advocates policy and regulatory changes to spur competition in seven areas: labor markets, healthcare, transportation, agriculture, internet services, technology, and banking and consumer finance. The EO has been described as the centerpiece of a new Democratic Party emphasis on restraining the nation’s most powerful companies, bolstering and consolidating the federal government’s power.
Of course, as with all presidential EOs, the EO by itself does not impose new requirements on the business community; rather, federal agency-driven policy changes, formal rulemaking or passage of legislation by Congress are required. Moreover, an EO can be easily overturned by a new president, as Biden has done with several Trump-era EOs.
Healthcare Proposals
The EO tackles four areas in healthcare where the Biden administration contends that lack of competition increases prices and reduces access to quality care: prescription drug prices, hearing aids, hospitals, and health insurance. In accord with the status of the high cost of prescription drugs as the public’s top healthcare-related concern, three-fourths of the EO’s healthcare verbiage is devoted to this area, with only brief paragraphs addressing the other three. Here are the specific proposals in the EO for the four areas.
By Ken Perez, vice president of healthcare policy and government affairs, Omnicell.
The coronavirus pandemic has disproportionately affected racial and ethnic minority groups in the United States due to a variety of factors, including social determinants of health, greater incidence of chronic medical conditions, and less access to healthcare. Though brought into sharp relief by COVID-19, these health and healthcare disparities are not new.
Because of its size and concentration in rural and poverty-stricken urban areas, the longstanding primary care physician (PCP) shortage is a key healthcare disparity as well as contributor to health disparities.
A June 2020 report from the Association of American Medical Colleges (AAMC) found that over 1,200 counties in the United States (39%) had a shortage of PCPs in 2017, and a September 2018 analysis by UnitedHealth Group concluded that 13% of the U.S. population (44 million) lived in counties with a PCP shortage, with 23 million residing in rural areas and 21 million in urban or suburban environments.
Moreover, the future is not bright. Using projected changes in population size and age, Ziaoming Zhang, et al. developed demand and supply models to forecast the physician shortage or surplus for each of the 50 states in the United States. The results of the study were published in Human Resources for Health in February 2020. They projected that the United States will face a shortage of 139,160 physicians by 2030. Two regions will have severe shortages—the South (92,172) and the West (63,589)—while the Midwest will have a smaller shortage, and the Northeast will have a surplus. Three of the most populous states will have the greatest physician shortages: California (32,669), Florida (21,978), and Texas (20,420). More than two-thirds of the states (34) will have significant physician shortages.
Similarly, the AAMC study examined the complexities of physician supply and demand and generated projections from 2018-2033. The analysis included supply and demand scenarios and was updated with information on trends in healthcare delivery and the state of the healthcare workforce, such as data on physician work hours and retirement trends.
According to the analysis, the United States could experience an overall physician shortfall of 54,100 to 139,000 by 2033, including shortages of 21,400 to 55,200 primary care physicians and 33,700 to 86,700 nonprimary care physicians (specialists).
According to the AAMC study, there are three main drivers of the projected physician shortage, two on the demand side and one on the supply side.
By Ken Perez, vice president of healthcare policy and government affairs, Omnicell, Inc.
Ken Perez
During the 2020 presidential election campaign, the top dozen or so health policies advocated by the Biden-Sanders Unity Task Force Recommendations, the Democratic Party Platform, and the Joe Biden for President Campaign Website fell into two distinct categories: ambitious progressive policies that would probably require a “go-it-alone” approach by the Democrats; and more moderate bipartisan policies that could be passed under the current rules in the Senate as an outcome of traditional political compromise.
Pursuit of the former approach is fashionable, as many Senate Democrats have advocated elimination of the filibuster. In addition, Senate Parliamentarian Elizabeth MacDonough recently determined that Democrats may be able to employ a fast-track process known as budget reconciliation multiple times before next year’s midterm elections, potentially allowing them to pass a bill with a simple majority, assuming that all 50 Democrats fall in line and Vice President Kamala Harris casts the tie-breaking vote as president of the Senate.
Nevertheless, there are key players in the Senate dedicated to pursuing bipartisanship.
By Ken Perez, vice president of healthcare policy and government affairs, Omnicell, Inc.
On February 27, the U.S. House of Representatives passed H.R. 1319, the American Rescue Plan Act of 2021. One week later, on March 6, the U.S. Senate passed its own version of the bill, on a 50-49 party-line vote, under budget reconciliation which allowed for passage of the bill by a simple majority.
The House took it up on March 9. Notably, the Senate removed a phased-in federal $15 minimum-wage mandate.
In late February, the American Hospital Association had lobbied for $35 billion in targeted emergency funding for hospitals across the nation. However, neither the House nor the Senate version included that level of assistance, though H.R. 1319 does include a number of provisions that either directly or indirectly benefit hospitals:
$160 billion for COVID-19 vaccine and testing: Hospitals will get paid for COVID-19 vaccine administration and testing, but that will be just a portion of this amount
$8.5 billion for rural hospitals
$330 million for graduate medical education at academic medical centers
$200 million for Nurse Cops: This scholarship program supports the training of nurses for the U.S. military, eventually contributing to the pool of nurses available for hospitals
$60 million for education, an awareness campaign, and grants for mental and behavioral health for healthcare professionals
$20 million for grants to modernize Affordable Care Act health insurance marketplaces and 100% coverage of continuing health insurance through September 2021 for laid-off workers: These coverage-related provisions should enable more people to get health insurance, reducing hospitals’ uncompensated care exposure.
By Ken Perez, vice president of healthcare policy, Omnicell, Inc.
Ken Perez
The cost of prescription drugs is one of the top reasons why the U.S. spends much more on healthcare on a per capita basis than economically similar countries. The general public understands this, as polls consistently show that high drug costs are the number one healthcare issue for Americans.
Congress certainly understands this as well, as there have been numerous attempts in recent years—many of which have garnered some bipartisan support—to slow the growth of prescription drug costs. However, the devil has been in the details, precluding passage of substantive legislation.
The inaction by the legislative branch led President Donald Trump to sign on July 24 four executive orders aimed at reducing drug prices and ensuring access to medications.
The first order directed federally qualified health centers to pass along discounts on insulin and epinephrine received from drug makers to medically underserved patients.
The second order allowed states to develop plans for safe importation of certain drugs, authorize the re-importation of insulin products made in the United States, and create a pathway for personal importation through the use of individual waivers to purchase drugs at lower cost from pre-authorized U.S. pharmacies.
The third order required that kickbacks between drug makers and pharmacy benefit managers be passed along to seniors as discounts in Medicare Part D.
The fourth order authorized the Centers for Medicare and Medicaid Services (CMS) to take action to ensure that the Medicare program and seniors pay no more for the most-costly Medicare Part B drugs than any economically comparable OECD country. (This concept was first introduced by the Trump administration as a rule in October 2018.)
Per the fourth order, on Nov. 20 CMS issued an interim final rule for the Most Favored Nation (MFN) Model that would lower prescription drug costs by paying no more for Medicare Part B drugs and biologicals than the lowest price that drug manufacturers receive in 25 other industrialized countries, normalized by GDP per capita.
By Ken Perez, vice president of healthcare policy, Omnicell, Inc.
If one asks the average American what is former Vice President Joe Biden’s healthcare plan, it’s likely that they will say it is about restoring the Affordable Care Act (ACA), and some may mention the idea of a public option —Medicare or something like Medicare made available to more people.
Those high-level impressions are certainly accurate. Biden’s official campaign website quotes the presidential candidate as saying, “We have to protect and build on Obamacare,” and Biden’s current policy stances touch upon the ACA’s three main areas of focus: access, quality and cost.
Biden’s plan for healthcare has been best articulated in two documents. First, negotiations during June with representatives of Sen. Bernie Sanders (D-Vt.) produced the “Biden-Sanders Unity Task Force Recommendations,” a 110-page document which was released in early July. Second, the 2020 Democratic Party Platform, a 92-page document, was approved by the Democratic National Committee’s Platform Committee on July 27 and adopted during the 2020 Democratic National Convention in mid-August.
As was the case with the ACA, both documents affirm healthcare as a human right, advocating “free or low-cost healthcare coverage for every American, including by expanding Medicaid, subsidizing employer health insurance for people who lose their jobs, and offering a high-quality low or no-cost public option available without a deductible and with automatic enrollment for those who qualify throughout the COVID-19 crisis.”1
In general, expanding coverage benefits hospitals by reducing bad debt expense, which for U.S. hospitals averaged 1.73% of revenue in 2018.2 According to Rich Umbdenstock, former president and CEO of the American Hospital Association (AHA), the hospital industry agreed to support the ACA because the Obama administration and Congress promised that at least 97% of Americans would have healthcare coverage.3 In like manner, the Biden healthcare plan’s promise to increase access and expand coverage make it attractive to the hospital industry.
By Ken Perez, vice president of healthcare policy, Omnicell, Inc.
Ken Perez
Discussions about the application of artificial intelligence (AI) in healthcare often span multiple areas, most commonly about making more accurate diagnoses, identifying at-risk populations, and better understanding how individual patients will respond to medicines and treatment protocols.
To date, there has been relatively little discussion about practical applications of AI to improve medication management across the care continuum, an area this article will address.
The Significance of Medications
What’s the first thing that comes to mind when someone mentions prescription drugs in the United States? In poll after poll, the high and rising costs of medications are American voters’ top healthcare-related issue.
This concern is well founded. The U.S. spends almost $400 billion a year on medications–$325 billion on a retail basis and about $75 billion for inpatient and outpatient use.
To put the $400 billion in perspective, it is equal to about 11% of total U.S. healthcare expenditures, and it’s one of the top reasons why the U.S. spends much more on healthcare than other industrialized countries.
Medication Management Shortcomings
Unfortunately, there are a lot of issues with the medication management system, broadly defined.
It’s estimated that 20-30% of prescriptions are not even filled, not even picked up at the retail pharmacy. According to the Centers for Disease Control and Prevention (CDC), each year, adverse drug events result in 1.3 million visits to the emergency department, and of those ED visits, over a fourth, 350,000, result in hospitalizations, which result in significant costs.
Over the past 50 years, much legislation has been passed to regulate and reform the U.S. healthcare system, and this has significantly increased the administrative burden on healthcare provider organizations. As a result, according to data from the Bureau of Labor Statistics, the National Center for Health Statistics, and the United States Census Bureau’s Current Population Survey, the number of administrators has grown by 3,200% since 1970, while over the same period, the number of physicians has been relatively flat, in line with population growth. Correspondingly, per research funded by the Physicians Foundation, it is estimated that the average physician and/or his or her staff spends 785 hours per year on quality reporting.
The administrative burden also falls heavily on pharmacists. According to a national survey by the American Society of Health-System Pharmacists (ASHP), pharmacists spend over three-fourths of their time on non-clinical activities—mostly manual, administrative processes.
In spite of the massive amount of spending on medications, the medication management system is fraught with errors at multiple steps in the medication-use process, prescriptions are often not filled, and over one-fourth of all hospital readmissions are potentially preventable and medication related.
By Ken Perez, vice president of healthcare policy, Omnicell
Ken Perez
While proper hand hygiene, personal protective equipment, social distancing, testing, and therapeutics are all valid and useful measures in the battle against SARS-CoV-2, the virus that causes COVID-19, a safe, effective vaccine is the only path to normal. It is the ultimate game-changer. As one reader recently wrote to The Buffalo News, “Without a COVID-19 vaccine, there is no Hollywood ending.”
It certainly won’t be easy. In general, over 90% of vaccine candidates fail, and vaccines usually take several years, not months, to develop. Despite 33 attempts at a vaccine for Severe Acute Respiratory Syndrome (SARS), which spread worldwide in a few months from China in 2002, no SARS vaccine exists today.
Similarly, for Middle East Respiratory Syndrome (MERS), which started in Jordan in April 2012 and spread to a total of 27 countries, all 13 vaccine candidates to date have failed.
As of this writing, the novel coronavirus has infected 5.6 million persons and caused some 350 thousand deaths across over 200 countries. It is highly transmissible—spread by even asymptomatic individuals—and it is “wily,” as it has mutated over a dozen times. In short, it constitutes an epochal challenge for all of humankind.
Nevertheless, there are reasons to be optimistic about the chances for successful development of a COVID-19 vaccine.
