This Week in Healthcare Reform: February 26th, 2021

Lawmakers convene a hearing on vaccines; private equity exacts a terrible toll on nursing home populations; Medicaid expansion led to fewer uninsured young adults; and, a handful of chronic conditions cost employers billions of dollars.

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Week in Review

Vaccine Hearing: On Tuesday, the House Energy & Commerce Committee’s Subcommittee on Oversight & Investigations convened a hearing to examine drugmakers’ ongoing efforts to develop and expand production and distribution of the coronavirus vaccine.  Five companies were invited to testify, including executives from Pfizer, Moderna, and Johnson & Johnson.  In their testimony to the Subcommittee, the vaccine makers told lawmakers that supplies in the U.S. should surge in the coming weeks, with as many as three million doses per day being made available by April.  That surge is the result of a combination of manufacturing expansions and new (anticipated) authorizations, the latter referring to the vaccine developed by Johnson & Johnson, which, in a preliminary analysis released by the Food and Drug Administration (FDA) Wednesday morning indicated that the vaccine was safe and effective.  That analysis paves the way for today’s formal review – by the FDA and a panel of advisors – to authorize the vaccine for emergency use.

Private Equity’s Toll: A new working paper takes a hard look at what happens when private equity firms acquire nursing homes.  According to the analysis published by the National Bureau of Economic Research (NBER), when these firms swoop in and take control of these facilities patients start to die more often.  This topic is increasingly pressing, with private equity investment in nursing homes having exploded from $5 billion in 2000 to more than $100 billion in 2018.  What NBER researchers found was that mortality increased by 10 percent for patients who went to a private equity-owned nursing home.  Put another way, according to their estimates, that translates into more than 20,000 Medicare lives lost due to private equity ownership.

Medicaid Expansion: Prior to the Affordable Care Act (ACA), young adults were among the likeliest groups to be uninsured.  But, owing to the ACA’s expansion of the Medicaid program, the rates of uninsurance for young adults declined.  In research published last week by the Urban Institute, the uninsured rate for individuals aged 19 to 25 decreased from 30 percent to 16 percent between 2011 and 2018, while Medicaid enrollment for this population increased from 11 percent to 15 percent.  While those gains were most keenly experienced between 2013 and 2016, when many of the ACA’s central provisions were coming along – such as the launch of the exchanges – states that expanded their Medicaid programs saw even greater declines in their uninsured young adult populations.  By comparison, in expansion states, those rates went from 28 percent in 2011 to 11 percent in 2018, whereas, in non-expansion states, the uninsured rate for young adults went from about 33 percent to 21 percent.  Further, Medicaid enrollment for this group in expansion states jumped from 12 percent to 21 percent while remaining flat in the non-expansion states.

Chronic Conditions: If five specific chronic conditions were eliminated, employers’ health care costs would likely be declining rather than growing, at least, according to a new report from the Health Action Council, a large employer nonprofit made up of over 200 large companies with 2.8 million employees.  Taking a look at health data trends from dozens of their own member companies, they determined that 63 percent of the lives covered by Health Action Council organizations had at least one of five chronic conditions that were driving health care costs.  While not strictly reflective of the health care experiences for all employers and employees, their analysis did provide useful insights into how this handful of costly conditions – specifically, asthma, diabetes, hypertension, back disorders, and mental health and substance use – contribute to health care spending. 



Stakeholders continue to bang the drum on why the flawed, expensive, and unpopular “rebate rule” is the wrong prescription for lowering drug costs.

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