The end of the pandemic emergency, provider consolidation, AEDs in the workplace, prior authorization, and commuting time savings for remote workers.

February 3, 2023

Happy Friday!

Today, I’ll review the employer implications of the end of the Pandemic Emergency, I’ll also cover a study showing that hospitals and physicians in provider systems have very slightly better quality but dramatically higher costs, the importance of defibrillators in the workplace, how remote workers report they are using the minutes they save when they don’t have to commute. I’ll also review implications for employers of the end of the Pandemic Emergency, now scheduled for May 11.

1.     Pandemic Emergency to end

The Biden Administration announced that the Pandemic Public Health Emergency, which began March 13, 2020, and the COVID-19 National Emergency, which began on March 1, 202, are scheduled to end on May 11, 2023. This will decrease federal funding for Medicaid and could mean that some telemedicine flexibility could end at the end of 2024. Many will need a provider prescription to gain access to PCR tests. Some states could reinstate requirements that providers be licensed where they are practicing, and some could reimpose in-person requirements for opioid use disorder treatment. The FDA has announced it will continue to issue Emergency Use Authorizations for COVID-19 drugs after the end of the Pandemic Emergency. In addition, pandemic requirements that states continuously enroll Medicaid beneficiaries will end on March 31.  Five to 14 million Medicaid beneficiaries could lose Medicaid eligibility due to this change. 

Implications for employers:

-       Employers should anticipate that some of those who lose Medicaid eligibility are dependents of employees and might move to employer sponsored health insurance.

-       Beginning 60 days after May 11, employers will no longer be required to offer extended deadlines for COBRA, file claims and request appeals.

-       Employers will no longer be required to cover over the counter COVID-19 rapid antigen tests. Employers will be free to maintain this coverage, which could help keep infectious employees from coming to the workplace. Employers will be allowed to impose cost sharing if desired.  

-       Future COVID-19 vaccines will still be covered without cost sharing in employer sponsored health plans that are compliant with the Affordable Care Act if they are recommended by the Advisory Committee on Immunization Practices.

2.     Providers in systems give slightly better care, for substantially higher costs

Hospitals and doctors integrating into systems have long promised better coordination, higher quality, and lower costs. But it’s hard to assess whether this is true! There is no central registry of medical systems, making it difficult to report on costs and quality of medical care in systems. 

Researchers in JAMA (the Journal of the American Medical Association) reviewed medical claims, Internal Revenue Service filings, Centers for Medicare and Medicaid Services, and a variety of other sources to identify 580 medical systems (which represent about 40% of physicians and 84% of hospital beds. Hospitals and physician groups in systems were larger (more beds or more physicians) than providers outside of systems.

The researchers then evaluated the quality and cost of those cared for inside and outside systems during 2018. They assessed quality using Medicare data, and assessed cost using a database of 20 million covered commercial members, those most likely under 65 and covered by employer sponsored health insurance. Those receiving care in systems were slightly more likely to get preventive care (flu shots and pneumonia shots) and evidence-based diabetes and cardiovascular care. Those cared for by system providers performed the same as their counterparts outside of systems on other clinical quality measures.

Allowable rates paid by commercial health plans (from a database of 20 million covered members) for those cared for by system providers were 12%-26% higher for physician services and 31% for hospital services.

Previous research published in 2020 in New England Journal by some of the same authors found that hospitals which were acquired by other hospitals or hospital systems offered worse patient experiences, with no change in measured quality.  

Networks acquiring hospitals and physicians say that consolidation will help them be prepared to deliver value-based care. However, the value (quality divided by cost) for employers is diminished by consolidation that raises prices out of proportion to an increase in quality.

Implications for employers:

-       We should continue to be skeptical of claims that provider consolidation will lower cost or substantially increase quality.

-       Employers can continue to steer patients to higher value providers through centers of excellence and benefit design

3.     Automated External Defibrillators (AED) can save lives in public buildings

The country was transfixed last month when Buffalo Bills safety Damar Hamlin suffered a cardiac arrest after a tackle in a Monday night football game with the Cincinnati Bengals. He likely had Commotio Cordis, suffering an external blow to the chest at the exact instant of the heart rhythm which could lead to a fatal abnormal heart rhythm. On-field medical personnel immediately began CPR, and he was given a shock using an AED (automated external defibrillator) which restored his normal cardiac rhythm. He was released from the hospital nine days later and his prognosis is good.

Fatal heart rhythms, often called sudden cardiac death, are much more commonly caused by a heart attack, and a rapid response makes survival much more likely. There are 350,000 cardiac arrests annually in the US, and about 40% of these get CPR, and only about 10% are treated with an AED. Many more lives could be saved if more people were treated with AEDs, which require no medical training. The responder applies two adhesive leads to the chest, and the machine detects existing rhythm and gives clear instructions about what to do. If the person has a heart rhythm and wouldn’t benefit from a shock, the machine will not administer a shock. Current resuscitation guidelines when someone has lost consciousness and has no pulse is to call 911, deliver CPR, and use an AED if available. Guidelines no longer prioritize mouth-to-mouth resuscitation.

Some states, including California, require AEDs in many public buildings. All states have “Good Samaritan” laws to protect responders from lawsuits based on their efforts to help resuscitate people in distress.

Implications for employers:

-       Employers can help save lives by putting AEDs in common areas of their buildings.

-       The cost of AEDs is not prohibitive, and AEDs generally require battery replacement only every 3-4 years.

-       AEDs should be clearly marked in areas with high foot traffic, and generally should be on each floor of a building.

-       AEDs will only help if employees know where they are and how to use them. Employers offering AEDS should communicate their location and their ease of use.

4.     Prior authorization lowers utilization

No one likes prior authorization. 

Members don’t like the hassles and delays, and providers are angry at the extra work. But new research on prior authorizations for drugs in Medicare Part D plans confirms that prior authorization processes lower overall utilization. Researchers reviewed data from low-income beneficiaries who were randomly assigned to plans with and without prior authorization, and found that prior authorization reduced use of targeted drugs by 21.8%, and lowered overall medical costs by 3.6%. There was a 0.6% increase in the cost of much cheaper substitute drugs not subject to prior authorization. The researchers could not find evidence of harm, although this might not have been evident from medical claims. The researchers also assert that the savings from this program far outweigh the administrative costs, although their estimate of administrative cost of prior authorizations seems low to me.

Implications for employers:

-       This research demonstrates that prior authorization can be cost saving

-       Prior authorization is likely to be most helpful for relatively expensive brand name medications with ready substitutes.

5. Remote work saves time

Source: Aksoy, et al NBER January, 2023 LINK

Researchers asked workers in 27 countries about their work time from 2020 to 2022. I’ve summarized data from more developed countries above. The researchers collected 10,000 survey responses monthly in 2022 and found that across all countries employees reported about 73 minutes saved by working remotely. The US time savings were lower at 55 minutes, surprising given our traffic jams!  Globally, employees reported that 40% of the total “newfound” time was spent on working, while smaller amounts of time were spent on caregiving and leisure. Forty-two percent of the time saved was spent on the job in both the US and Canada. This was a survey, so respondents might not have answered accurately.

Implications for employers:

-       Employers appear to gain a productivity advantage from remote workers

-       Many companies and workers are likely to prefer some degree of remote work even after the end of the Pandemic Emergency.

Hope your weekend is wonderful, and if you are in the northeast, stay warm!

Jeff