Week in Washington is brought to you by Michael Cohen, PhD. Tune in each week to read the latest on healthcare policy and get a glimpse of what’s on the horizon.
Week in Washington: News on the Last Week in April
Risk Corridor Ruling
The Supreme Court ruled in favor of issuers over whether they should be paid $12 billion in unpaid risk corridor amounts, accrued for the 2014 through 2016 benefit years. In an 8-1 ruling, the Supreme Court ruled that, in fact, issuers were owed that amount. Katie Keith does a great job of summarizing the issue but she does note that there is uncertainty as to what’s next, especially in regard to MLR. The general expectation is that CMS will release new regulations or guidance to clarify how these amounts should be treated.
Breaking today was news that the FDA was poised to approve Gilead’s new antiviral drug, remdesivir, for immediate usage in the treatment for coronavirus. The US National Institute of Allergy and Infectious Disease (NIAID) found that the drug resulted in individuals hospitalized for COVID-19 to recover, on average, in 11 days rather than 15 days in the placebo group. The data suggested some possible survival benefits, but it was not statistically significant. Another study, from China, did not find that drug had much of an effect, although the trial was cut short, so results are inconclusive. Gilead has not yet announced a price for the drug.
Efforts will continue on developing new drugs and vaccines. The NY Times has a good article on the potential timeline for a vaccine, where various companies are in their development, and potential hurdles. According to the article, there are currently at least 254 therapies and 95 vaccines related to COVID-19 being explored. I’d highly recommend reading the article.
As of today, the US had over a million confirmed cases and over 60,000 confirmed deaths. Worldwide the figure stands at about 230,000 deaths. There is growing evidence that these numbers represent an undercount. The Financial Times did analysis of multiple countries and found that if you measure excess mortality from normal, the number of deaths may be almost 60 percent higher.
Testing Ramp Up
Testing numbers in the US were up this week, to approximately 1.5 million tests per week. This should improve the ability of public health officials to control the virus but may also make it seem like there are “spikes” in the number of confirmed cases. When examining the number of positive cases announced, I’d recommend also examining the percentage of total cases that are positive, to evaluate if a pandemic is getting worse in a particular state.
Other grim news on the economy was also released this week.
- Jobless claims increased another 3.8 million this week pushing the six week claim number to 30 million. Overall the unemployment rate is likely around 20%.
- Overall the economy (GDP) contracted on an annualized basis by 4.8% during Q1 of 2020. Of that decline, slightly less than half was a result of contraction in health care spending. In other words, nearly half of the decline of the entire US’s economy (GDP) in Q1 can be attributed to declines in health care spending.
- Overall spending on health care declined about 2.25% in Q1 2020 annualized (year over year) and fell about 12% in March- portending even larger drops 2Q
- SOA analysis estimated about a 30% overall claims decrease
4/23/2020: Week in Washington
4/16/2020: Waiting on Congress
4/9/2020: Week in Washington
4/2/2020: Grim News