2
Apr
2020

COVID-19’s Unexpected Silver Lining: A Chance at Redemption for US Healthcare

Leora Schiff, principal, Altius Strategy Consulting

The US healthcare system has taken a lot of heat the past few years. Stories about surprise out-of-network hospital bills, overpriced drugs and sky-high insurance premiums and deductibles have severely tarnished the reputations of hospitals, drugmakers and health insurers.

The COVID-19 pandemic presents these industries with a chance for a fresh start. Everything that they do, and why they do it, is being re-assessed under these new circumstances, when we’re more focused on life and death than on the quarterly bottom line. This is a chance for American healthcare to demonstrate to the American public that it can live up to its potential and be a force of good.

Hospitals – Fighting the Pandemic War from the Front Lines

If the COVID-19 pandemic is a war, hospitals are the frontline. The emergency medical technicians, police, firefighters, doctors and nurses are the soldiers going into battle. These selfless professionals are rightly being acclaimed as this war’s heroes, putting their lives on the line daily to care for the increasing flood of COVID-19 positive patients struggling to breathe, who may in turn infect them due to their insufficient PPE. Globally, there has been an outpouring of appreciation for the brave men and women on the front lines. Last Friday, the people of New York City applauded their first responders in a coordinated 2-minute expression of gratitude. A similar demonstration to thank not only healthcare workers but also those keeping critical businesses open is planned for Boston this coming Friday.

Hospitals are also stepping into the breach, showing creativity and innovation in trying to manage insufficient supplies. This  week, Prisma Health received FDA emergency approval for a device that will allow one ventilator to support up to four patients at a time. The American Hospital Association is sharing best practices with its members. The group’s website includes COVID-19 guidance on such things as “converting alternate care sites to patient space options” and “innovative IV pump placement” to reduce PPE usage.

Diagnostic Companies – Coming to the Rescue

Before the COVID-19 pandemic hit, most people took diagnostic tests for granted. The field of diagnostics is challenging to grasp, sometimes even for doctors. The technologies that are now being discussed regularly in the media (such as PCR, antibodies, high-throughput testing and point-of-care) are complicated to explain to the layman.

The vast majority people aren’t interested in the differences, and don’t need to be. But they are getting a clear message that diagnostic companies are stepping up to meet the urgent need after the abject failure of the federal government’s testing system. Each new test approval has been headline news and heralded as another weapon that can be used in the effort to make our invisible enemy visible. In the past two weeks alone, The New York Times has published articles in rapid succession on FDA Emergency Use Approvals of COVID-19 tests manufactured by Co-Diagnostics, Novacyte, Abbott, Biomerieux and Cepheid.

Health Insurers – Making COVID-19 Testing and Treatment Accessible

Private health insurers have also stepped up in this crisis. The American Health Insurance Plans, a trade group, has publicly posted a long list of health insurance companies that are waiving co-payments for COVID-19 related diagnostic testing. A number of these health insurers are also waiving co-payments for COVID-19 related care delivered via telemedicine and/or hospital inpatient care.

Other actions being taken to support beneficiaries include waiving prescription refill quantity (e.g. 30-day drug supply limits) and restrictions on how often prescriptions can be filled.

Biotech and Pharmaceutical Companies – Providing Hope for Survival and Immunity

When we think of life-saving contributions of biotech and pharma companies, we think of therapies and vaccines.

No FDA-approved treatment or vaccine currently exists. A large number of treatment and vaccine candidates are now being tested in the clinic, or preclinical development. Even though there’s no “magic bullet,” as Dr. Deborah Birx, the White House coronavirus task force coordinator, put it, the biopharmaceutical industry is making an immediate contribution to save lives. Massachusetts-based biotech and medtech organizations, MassBio and MassMedic have organized massive drives across their member organizations to donate critical PPE to area hospitals from these companies’ own supplies. According to MassBio, over 380 member companies have responded to their appeal. Among the contributions from these organizations’ efforts: N95 masks, gloves, goggles, protective suits, pipette tips, swabs and reagents for storing and testing samples. In Illinois, the biotech organization iBIO is spearheading donations of PPE through its COVID-19 PPE Response Fund; this effort has already resulted in 62,500 items of PPE being donated.

Pharma companies Bayer, Teva Pharmaceutical and Novartis are making critical contributions as well, with donations of large quantities of the drugs chloroquine and hydrochloroquine for use in clinical studies and compassionate care.

Most importantly, biopharm companies are racing to develop COVID-19 therapies and vaccines in efforts that are being described as “heroic”. Companies developing clinical-stage therapies include Foster City, Calif.-based Gilead Sciences (remdesivir) and China-based Ascletis Pharma (combination of HIV drugs danoprevir and ritonavir) Cambridge, Mass.-based Moderna Therapeutics and China-based CanSino Biologics have vaccines that have entered phase 1 development, with over a half-dozen other vaccine makers in preclinical development.

Better Angels or Bad Actors

In this time of uncertainty and fear, the healthcare industries are in the process of regaining some of the respect and public trust that eroded over the past 20-30 years. However, they have to be careful not to squander this opportunity. Already there are rumblings of discontent as bad actors are beginning to put this hard-won goodwill at risk.

The most immediate concern is price gouging. States are scrambling to find ventilators and PPE to shore up their limited supplies. As a result, prices have skyrocketed. In a press conference a few days ago, New York Gov. Andrew Cuomo talked about the challenge of getting ventilators with everyone bidding against each other: “When we started buying them they were about $25,000. Now, they’re about $45,000. Why? Because they’re in such demand and there’s such competition to buy the ventilators . . .”

More insidious is the muzzling of those on the front line. Some hospitals have threatened to fire doctors and nurses if they speak out about the lack of PPE, dire working conditions and their fear of getting infected. Already, one doctor and one nurse have been fired, one for talking to a journalist, the other for emailing colleagues about the need for better PPE. That those on the frontlines are afraid and want their plight to be known is understandable – dozens of doctors and nurses across the globe have already died from COVID-19 and that number will likely climb, particularly given the shortages of PPE.

Uninsured patients treated for COVID-19 are being hit with huge hospital bills. A Kaiser Family Foundation study estimates that the cost of hospital care for COVID-19 will range from around $10,000 for cases without complications to over $20,000 for cases with complications. This comes at a time when millions of people who don’t have insurance are losing their jobs, such as waiters and waitresses, construction workers, janitors and maids. When asked what can be done about these COVID-19 patients who fall between the insurance cracks, Vice President Pence dodged the question; President Trump said that he is “looking at it”.

Then there’s Gilead’s grotesque attempt to secure orphan drug market protections for remdesivir for use in treating COVID-19. In the face of withering criticism, the company backed off on its request for a government-sanctioned monopoly, asking the FDA to cancel the orphan drug designation. Why the FDA would have made such a designation in the first place is hard to understand. Orphan drug designation was originally intended to incentivize development of treatments for rare diseases, where little market incentive would otherwise exist. With projected numbers of US cases in the millions, clearly this is not the case for COVID-19. Watchdog organizations are already raising alarms over the specter of pharma companies “making a killing” profiteering on COVID-19 treatments.

The COVID-19 pandemic is a reminder that healthcare, even in a capitalistic system, is a public trust. Yes, these companies need to make a profit. But they also have a responsibility to provide for the public health. It’s a special responsibility. Not every industry has this responsibility.

The story has only begun to unfold. Lots of decisions will be made, large and small, by companies in the coming weeks.

Hopefully, companies will remember to listen to their better angels and focus on doing good.

Leora Schiff is the Principal of Altius Strategy Consulting. She can be contacted at lschiff@altiusstrategy.com.

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