May 2022 - Hearings in Healthcare
Baby Formula Crisis. VA Murders. Staffing, PBMs, and Monopolies, too.
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May 3, 2022
Senate Committee of Veterans Affairs (Hearing Length - 1:06)
The VA Workforce: Assessing Ways to Bolster Recruitment and Retention, or
NO GOOD SOLUTIONS FOR A TOUGH PROBLEM
Relevant to: Staffing, Government Contractors, Veterans
This hearing was front and center about how the VA is tackling staffing issues endemic to the industry. Interestingly, the hearing played almost like the discovery and scoping sessions of a major consulting project. With Senators, as the hypothetical consultants, asking “what are your problems?”, “how are they affecting your bottom line (care delivery)?”. “what are you doing today to address the issues?”, and “"what can we do to help?”
Main Theme: The VA representative stand out in their pragmatic and honest approach in assessing their problems and designing solutions. The form of questions came across as - here is where we are failing, here is why we are failing, here are the steps we are taking to ameliorate, and here’s how. Perhaps the VA has the political coverage to be this open (who’s going to defund veteran care?), but it’s still a breath of fresh air from some of the other agency representatives. It helps that the Committee itself is very bipartisan for the most part, as I’ve mentioned in past recaps regarding the VA.
Other Takeaways:
VISN HR standardization seems practical but has political baggage. The VA representatives lauded the Trump era policy, but several Democrats took some measured umbrage. One has to wonder whether this is real dissent or just politics.
Despite desperate hiring needs, VA should be careful in removing red tape. As we’ll see in the next hearing, hiring processes do exist for a reason. The VA should be careful when selecting which guard rails to remove to expedite hiring for.
Bipartisan scorn over rumors of DHS moving VA staff to the border. The entire Committee made clear they would fight tooth and nail to keep VA staff on mission. Surprisingly, “VA Staff for Veterans” trumps traditional ideology.
Will non-fiscal incentives increase hiring/retention rates? VA spent some time outlining the various levers they have at their disposal, other than more $$$. Leadership and mentorship opportunities, as well as loan forgiveness were at the top of the list.
The backlog in benefits claims could become a problem . The current backlog (expected to increase) is troubling, despite VA’s confidence in their hiring plan for claims administrators.
May 5, 2022
US Senate Committee on Commerce, Science, and Transportation (Hearing - 1:40)
Ensuring Fairness and Transparency in the Market for Prescription Drugs, or
“A PETRI DISH OF ANTI-COMPETITIVE BEHAVIORS”
Relevant to: Antitrust, PBMs, transparency, payors, prescriptions
This was a hearing on the role of PBMs and their effects on rising prices of prescription drugs for patients. More specifically, the focus was a) the lack of PBM transparency and how much “savings” they keep for themselves, and b) effects of oligopoly (85% of prescriptions serviced through 3 PBMs, all owned by top 5 payors :)). Witnesses present included three university professors, and a spokesperson for the PBM association.
Main Theme:
We are so, so far away from federally regulating PBMs, if at all. The PBM model is genius, in that its almost deliberately devised to obscure and confuse (while making a ton of money). This complexity makes it very hard to foment public opinion, in addition to overcoming massive lobbying power. Now, the FTC did announce an investigation into PBM practices shortly after this hearing. However, by the time that investigation is over, we may have a new President from a different party with a different agenda.
Other Takeaways:
There many good arguments against the PBM model, and some bad ones. The Committee would be wise to pick and choose witness arguments with care for use in other forums. “Companies should not be able to sell information” is not a winner.
“Other healthcare is also terrible, focus on that!” Nice try, PBMs. PBM rep’s main line of defense was essentially other healthcare players also take advantage of the system. A tired talking point in the “defend your healthcare badness 101” manual.
It’s frustrating to hear people lie when they know that you know they’re lying. Such was my sentiment with the PBM rep when actually saying pharmacies have 70 PBMs to choose from, despite the fact that 3 control 80% of the market.
Politicians need to embrace compromise and acknowledge trade-offs in healthcare. We have many levers for quality, cost, and access, but often one at the expense of another to some degree. If we won’t acknowledge this reality, then we won’t get solutions.
May 11, 2022
Senate Committee on Veteran Affairs (Hearing 1:45)
Examining Quality of Care in VA and the Private Sector, or
VA REMAINS A MODEL FOR INNOVATIVE CARE
Relevant to: VBC, Veterans, Staffing
This hearing was an overview of how the VA compares with the private sector today across different metrics of care quality. Witnesses included a VA representative, an OIG representative, and a facility accreditation representative.
On average, the VA continues to be a sustained example of innovative and sustainable care models. Not everything is rosy (discussed in Other Takeaways), but the VA is clearly effective at providing the right care to their population. It’s apparent in the responses of the Committee and the witnesses, and in the thoughtful and honest manner with which the VA witnesses discuss their successes and failures.
Other Takeaways
The mean of excellence hides some very poor facility performances in the lowest quartile. Hopefully, VA’s efforts for more process standardization across VISNs (including HR Modernization) can reduce these gaps.
The 2018 Clarksburg veteran murders are an extreme example of the risks of hiring too fast. Even in this trying time for healthcare staffing, the VA needs to maintain some quality control measures to avoid disasters like this.
The OIG and VA relationship exemplifies a culture of checks and balances. This is especially impressive given the fact that the OIG doesn’t have actual authority to implement its recommendations.
VA has difficulty managing quality at community referral facilities. As other risk bearing entities can attest, this isn’t a unique problem to the VA. Obtaining patient encounter records from community partners seems to be one of the bigger obstacles.
The VA’s success in patient engagement is difficult for private practices to replicate. The unique 150+ year relationship between the VA and veterans is critical for this. It’s unclear how private systems could engender similar loyalty with their patients.
May 12, 2022
House Committee on Veteran Affairs (Hearing: 90 mins)
Innovative Care Delivery at VA: Partnering to Improve Infrastructure and Operational Efficiency, or
INNOVATION NEEDED TO ATTACK INFRASTRUCTURE CRISIS
Relevant to: Facility Infrastructure, Veterans, Public Private Partnerships
This Committee hearing was set to discuss various ongoing initiatives to tackle the VA’s aging infrastructure problem. And it is a problem: the average VA facility was built in 1963, 47 years older than the average private facility. Witnesses present included representatives from the GAO, VFW and VISN leaders of the VA.
A multi-faceted approach is the only realistic way to solve this infrastructure crisis. In this hearing alone, the pros and cons of a myriad of different initiatives were discussed - these include the Air and Infrastructure Review (AIR) committee, private donations, innovative pilots, and cross-agency collaboration, among others. In a different department with a different objective, one could argue that with so many projects ongoing at one time, the effectiveness of any one in particular will be significantly diluted. This particular problem warrants the diversity - barriers to implementation and review come from the political, the medical, and the natural barriers of large capital projects. When assessing a pilot can take over a decade (see below), the VA has no choice but to experiment with as many different approaches as possible in parallel.
Other Takeaways:
The AIR commission may be finished before it even gets started. The AIR commission was given one year to make its infrastructure recs. We are now less than a year from that deadline, and the commission roster has not been fully approved.
Private facility donations, while beneficial, are not sustainable. BS&W donated one of their older TX facilities to the VA - saving the agency $80M overall. Moving care from an old VA facility to a slightly less old facility is akin to operating on borrowed time.
The Chip In pilot will take 10+ years to determine viability. Since inception 5 years ago, the public-private pilot has developed just one (albeit successful) new facility. However, testing whether the approach scales will take at least another 5-10 years.
Combining DOD and VA workflows has shown some economies and diseconomies of scale. This was tested recently at a Chicago facility, to mixed results. While there were some efficiencies in manpower, there were also serious delays from EHR integration issues.
Vacancy rates are absurd for VA facilities management. There are currently 100,000 openings in the facilities management department of the VA, with a 33% vacancy rate in the VA Central Office. Great ideas are just ideas without the resources to execute.
May 17, 2022
Senate Appropriations Committee (Time - 1:30)
A Review of the President’s FY 2023 Funding Request and Budget Justification for the National Institutes of Health, or
PARTISAN POLITICS TAKES CENTER STAGE
Relevant to: Partisanship, Pandemic Prevention, R&D Focus
This hearing’s purpose is pretty much the official title above. Despite the political attention the NIH has received, the hearing itself was relatively short. Witnesses present were leaders of various offices of the NIH, including Dr. Fauci.
Politics, in the most pejorative sense of the word, stymied the opportunity for thoughtful policy discussion and inquiry. As expected, pretty much all discussion related to COVID had a political bent to it. I personally find this very annoying, but more importantly, this type of performative pandering reduces the much-needed focus on other important areas, like Alzheimers research and newly instituted Advanced Research Projects Agency for Health (ARPA-H).
Other Takeaways:
A useful clarification diffuses tensions on Aduhelm decision. It turns out the FDA’s Aduhelm approval was contingent on a future RCT showing clinical outcome improvement. This squares well with CMS’s own coverage requirements.
$15B in public Alzheimer’s R&D funding has generated promising results. There are eight Alzheimer’s related stage 3 clinical trials and 62 early stage investigations. Still, discovering the cure for Alzheimers by 2025 (Congress’ goal) seems a tad aggressive.
$2M for a Center for Sexual Orientation and Gender Identity Research - why? I’m unclear if there is a non-performative purpose for this. $2M is not a lot of a money to start a new center (I could be wrong here - if anyone in the readership wants to correct me).
COVID discussions serve only to rehash tired political proselytizing. Inconsistent public health guidance, the effect of lockdowns, vaccine mandates were all argued about, with the same talking points, with the same results (none).
ARPA-H may lead to NIH redundancies. A few committee members asked how the NIH would safeguard against redundancies in ARPA-H vs NIH. The NIH response was a bit lackluster - basically, “we’ll review to make sure that doesn’t happen”.
May 18, 2022
Senate Committee on Health, Education, Labor and Pensions (Time - 1:30)
FULL COMMITTEE HEARING Cybersecurity in the Health and Education Sectors, or
CYBER SECURITY - FROM INDIVIDUAL CRIMES TO GLOBAL THREATS
Relevant to: CISOs, Foreign Policy, Healthcare Data, Healthcare Privacy
This hearing was about the growing threat of cyber security as it related to the education and healthcare, as well as what to do about these threats systemically. I’ll stick to the points made about the healthcare system specifically, as well as points related to cyber security more generally. Witnesses included representatives from a healthcare cybersecurity NGO, a small cybersecurity non-profit,
Most stakeholders are unwilling, unaware or unable to put material resources into cyber defense. This was basically the sentiment of the witnesses present: this despite the constant high profile news stories, the awareness of the specific ramifications of breaches, and the potential for global rivals to utilize these cyber measures against the US. It’s not exactly the sexiest topic, but it important. Hope it doesn’t have to take a truly devastating public crisis to turn this around.
Other Takeaways:
Are Chief Information Security Officers (CISOs) practical for SMBs? Witnesses emphasized the need for more CISOs, but I’m skeptical SMBs put that hire high on their totem pole. More “fractional” approaches are probably required for now.
The pipeline of information security graduates is weak. Even if employers wanted to get serious about cyber, there aren’t enough qualified candidates in the overall pipeline. Developing accelerated, inexpensive programs to credential could be one avenue.
Cybersecurity can interfere directly with patient lives. Witnesses colored a few vivid examples of deleterious effects of cyber hacking, including the disruption of pacemakers and the time lost in the ER if systems go down.
Wishing that technology would go backwards isn’t a practical solution. I hope the Committee didn’t take these comments too seriously - the good of technological progress is often taken for granted, and far outweighs the risk.
Federal/NGO resources exist but companies don’t know about them. For one reason or another, federal resources on cyber-security practices have not reached their target audience. This seems like an excellent opportunity for private sector partnership.
May 25, 2022
House Appropriations Committee (Hearing - 1:30)
Defense Health and Medical Readiness, or
DEFENSE HEALTH AND MEDICAL READINESS (it really wasn’t that interesting)
This was a hearing on the DoD’s healthcare operations for FY23 across the Army, Navy, Air Force, and Marines. Witnesses included the Assistant Secretary of the DHA, the Director of the DHA, and the Surgeon Generals of the various military branches. There weren’t any particular pressing issues discussed, although the Committee raised concerns on whether the expected reduction in medical billets would affect care, to which the DHA and DoD repres
Military healthcare has different objectives than civilian care. For one, “preventative care” in the military seems more likely to durable armor than diagnostics testing. Secondly, there is a larger focus on trauma care - obvious when you think about it. That being said, there seems to be many of the same issues in DoD healthcare, like an inadequate supply of providers.
Other Takeaways
Military loyalty improves health outcomes. Both the VA and DoD pride themselves on outcomes, much of which is ascribed to the loyalty veterans/military have for their respective systems. If only the private sector could somehow replicate that loyalty...
Telehealth has a unique use case for DoD. Witnesses mentioned the value of telehealth in for providers in remote outposts. Telehealth seems like a great way to keep providers practicing when physical care needs are few and far between.
The DoD allows transfers to different states for abortion - what are the future implications?Makes one wonder what arenas the military may allow transfers for in the future, and what that process looks like in different political administrations.
The DoD deserves recognition for operating a large number of COVID vaccination sites. As a nation, we often focus on the strictly military component of the DoD, but it’s good to recognize the other work they do for the country.
House Committee on Energy and Commerce (5:10)
Formula Safety and Supply: Protecting the Health of America’s Babies, or
COMMITTEE GRILLS FDA, ABBOTT ON DELAYED RESPONSE
Relevant: Parents, Supply Chain, Infant Health, Public Health Oligopoly
The following hearing was all about the highly publicized infant formula crisis Americans are dealing with across the country. For those who haven’t been following closely, Abbott’s Sturgis facility (which produces ~20% of America’s baby formula) was shut down in early 2022 after multiple deficiencies were discovered in a September 2021 FDA inspection from a separate issue involving 4 infant deaths. The infant deaths ultimately could not be definitively tied to the facility’s formula, but substandard conditions, such as a leaky roof, lead to the interim shut down anyways. This shut down, combined with existing issues in supply and a demand spike from fears of future shortage, led to the baby formula crisis many have seen on the news or unfortunately experienced first hand. The first panel featured speakers from the FDA, while the second panel featured speakers from the big three manufacturers of US baby formula - Abbott, Ricketts, and Nestle (owns Gerber).
A baffling lack of Abbott and the Sturgis facility debacle. Abbott has a lot to answer for with regards to Sturgis: infant mortalities, the current shutdown, FDA violations in 2017 and 2019, and a whistleblower account alleging local management’s suppression of poor conditions to Abbott higher ups. Yet from the Abbott exec corporate speak, you’d think that the issue was something akin to a few dirty dishes left over night, not a history of unsafe conditions leading to the major crisis we’re now for many American families. Abbott is a business; we shouldn’t expect them to be the steward of the people’s best interest. The problem is that the formula industry is in a position where one business’s decision can materially affect the nation’s welfare.
5 Other Takeaways
In reforming the FDA, Director Cardiff has his work cut out for him. Outdated tech infrastructure, byzantine processes, chronic underfunding for food regulation, and the ongoing baby formula crisis. Good luck, Dr. Cardiff.
“Concerned parents should call our hot line”. This was the extent of the private and public sector’s information outreach efforts. Considering the tech-friendly COVID info outreach, it’s disappointing that we seem to have gone backwards here.
Supply chain transparency needed, but government will have to step in to make it happen. As Dir. Cardiff notes, the FDA has no view into the formula supply chain because the big three suppliers won’t hand that over willingly. Game theory 101…
US government and Nestle takes impressive steps to mitigate formula crisis. The Biden administration utilized the Defense Protection Act to relax restrictions on formula, allowing Nestle to ship over millions of products from their international factories
The Sturgis facility is responsible for 20% of US baby formula output, in some cases 100% of certain specialty formulas. One facility’s temporary shut down shouldn’t have this effect on a critical supply chain. One hopes this is not forgotten post-crisis.
May 26, 2022
Senate Committee on Health Education Labor and Pensions (2:10)
Infant Formula Crisis: Addressing the Shortage and Getting Formula On Shelves, or
COMMITTEE SEEKS ANSWERS FOR FDA DELAYS IN FORMULA CRISIS
Relevant to: babies, FDA, supply chain, anti-trust, formula,
This was the second consecutive hearing on the ongoing domestic baby formula crisis. This time, the hearing was more focused on the quality and response time of FDA’s actions since the September 2021 FDA investigation at Abbott’s Sturgis Plant. The only witness present was Dr. Robert Califf, the recently appointed head of the FDA. Frankly, this hearing doesn’t add much color to the ongoing crisis. The Senators here ask many of the same questions the House members asked in the prior day’s hearing.
FDA’s inability to get ahead of the baby formula crisis speaks to more issues than funding. The chronic underfunding of the “Food” in Food & Drug Administration obviously affects the organization’s ability issue effective and timely responses to crises such as this. However, underfunding does not excuse or rationalize a nearly half-year delay between the FDA’s discovery of the Sturgis facility issues and FDA leadership’s own awareness of said issues. Fixing a “mailing room incident” and policy designed to keep leadership siloed can’t be done as a line item.
Other Takeaways:
The Baby Formula Oligopoly is addressed, albeit briefly. Committee members are, understandably more concerned today with fixing this problem. It’s nice to see a few senators bring up the obvious issue - 3 suppliers control 95% of the domestic market.
If FDA can’t prioritize its resources now, how will it do so with a larger budget? Examples of current FDA projects, including “improving consumer acceptance of grated parmesan cheese”, do not instill confidence here.
A public sector technical debt crisis is looming. Director Califf warned the committee that FDA’s work has been greatly hampered without upgrades to its many legacy software systems. It remains to be seen whether Congress acts on this information.