For the last few weeks, Americans have patiently waited for the new Speaker of the House to explain his overall budget strategy. However, his linguistic evasiveness has spoken volumes, especially regarding healthcare expenditures. His focus on avoiding a U.S. Government shutdown ensured that healthcare issues would remain unaddressed, at least for the remainder of 2023. Now that a continuing resolutions (CR) is set and USG funding will continue until at least Jan. 19 that inattention will end. And in 2024 it is likely that Speaker Johnson will face major healthcare challenges that will rival even the pressure of a government shutdown.
Historically, government shutdowns have been avoided by the passage of omnibus CRs. In this case Johnson’s “laddered” continuing resolution will fund expenses such as the Food and Drug Administration, the US military, Transportation, Housing, Urban Development, Agriculture and Energy programs through January 19th with a February 2nd end for everything else. With this type of legislative “innovation” we are likely to see unusual lawmaking challenges and the following five healthcare issues are guaranteed to complicate the matter even more.
1. Perennial targets for controlling government spending are the third rails of Social Security and Medicare. Johnson, while not publicly advocating for cuts, advocates for the establishment of a bipartisan commission to adjust benefits. If past performance is any indication, beneficiaries have much to be concerned about. Not only are baby boomers expecting to receive their hard-earned Social Security and Medicare benefits, but also the entire country is much less healthy in every age group. One illustrative example is the life expectancy for men falling to 73 years (six years less than for women).
For fiscal year 2020, the Republican Study Committee (which Johnson chaired) called for raising the full retirement age to 69 from the current 67 and early retirement to 64 from the current 62. Under this plan the cost-of-living adjustments (COLA) would rise more slowly and stop entirely for individuals making $85,000 annually. Under the Committee plan, Medicare recipients would face similar age and income adjustments.
While there is understandable concern for individuals should such changes take place, the entire healthcare infrastructure would be at risk as well. Not only individuals but the majority of our healthcare industry which relies on governmental health sustenance.
The Covid-19 pandemic accelerated the rate of change already affecting the U.S. healthcare system by imposing stressors not seen since the turn of the last century. In addition to the immediate stresses of staffing shortages, supply shortages, inadequate monitoring, poor data collection and a host of communication blunders, the hospital industry is going through a period of consolidation. Hospital corporations are acquiring smaller local, regional, and independent hospitals along with a significant number of clinical practices. In the name of efficiency, i.e., greater profit margins, there are fewer hospital beds and hospital staff. The latter must do more with less including a lack of reserve emergency resources.
2. Staffing shortages will compromise care for all and widen the healthcare accessibility gap for the most vulnerable.
The Covid-19 pandemic created a warzone-like environment for doctors, nurses, and other healthcare professionals leaving countless numbers suffering from a form of PTSD. In response, many changed their areas of specialization and left, or considered leaving, the profession entirely. Even with the current decline in Covid-19 hospitalizations, practitioners trying to adjust to the new efficiency model find it challenging. In the event of another mass outbreak, remaining staff still dealing with post-Covid-19 PTSD will be even more likely to leave the profession.
In the two years between 2020 and 2022 about 117,000 of the ~940,000 physicians in the U.S. left the medical profession and another 13% or 107,000 said they expect to leave by 2023. It is unlikely the reduced physician population will be replaced for some time. Medicare and Medicaid, through patient reimbursement, support post-graduate training (residency and fellowship) programs. It is impossible to increase the number of post-graduate positions without a commensurate increase in Medicare and Medicaid payments to hospitals. Most teaching hospital patients rely, at least in part if not totally, on one form of government reimbursement or another. Any cuts to Medicare and Medicaid programs will hobble existing teaching programs and will stifle program expansion.
The total number of medical residents in the U.S. in 2020 was 140,000. The number includes all fields of study from primary care to neurosurgery. Since residencies take from three to seven years to complete, only about 33% of residents or 46,000 enter active medical practice each year, leaving a deficit of 132,000 physicians over the two years between 2020 and 2022. The deficit will continue to grow because of normal annual departures as well as from the premature departures mentioned above.
The nursing professions also feel the system stressors. According to the National Nursing Study, there were ~5.25 million active nurses in the U.S. in 2019. 134,000 quit nursing during the first two years of the pandemic. Another 984,000 nurses indicate they are likely to leave nursing by 2027. That is equivalent to roughly 20% of the total licensed RN and LPN/LVN workforce in the U.S. The University of St Augustine for Health Sciences reported that 1.1 million nurses would be needed by 2022 to address the current nursing shortage. The growing absence of doctors and nurses could force hospitals to reduce or eliminate patient services in response.
Even in pharmacies the pressure is palpable. Pharmageddon is the name given to the three-day strike by 4,500 workers at Walgreens, CVS and Rite Aid that began on Monday, October 30. Employees in other pharmacies wore green in solidarity with the strikers. Michelle Mele, a pharmacy technician in Massachusetts wrote on the pharmageddon Facebook page that workers do not feel safe dispensing medications because the pharmacy chains “have chosen to push harmful metrics and cut hours of employee pay. This has created a working environment in pharmacies that produces fatal errors to our patients, not to mention extended wait times, lack of counseling, and many other annoyances.”
3. Covid-19 isn’t back, because it never left. Though in most cases,the frequency and severity of virus has decreased, it still continues to be active. For the week ending October 21, 2023, 16,186 people were admitted to the hospital in the U.S. and 637 people died. At this rate, 33,124 annual Covid-19 deaths would be substantially lower than 2022, but a more deadly variant could morph into existence at any time. If one did appear, the waning of vaccine immunity and Paxlovid’s diminished effectiveness could put us back to the frequency and mortality rates of 385,000 Covid-19 related deaths in 2020. A surge of that magnitude would overload the current healthcare system and have a devastating effect on the U.S. and world economies.
4. We are facing drug shortages the likes of which we have not seen in a decade. The 10-year trend in active drug shortages has increased to the point where there are more shortages in Q1 2023 than there were in all of 2019. More than 300 drugs have been in short supply since the beginning of this year. The last time the number of drugs in short supply of 300 or more was 2015.
The shortages are in every class of pharmaceutical drugs. For more than half of the drugs, the cause of the shortage is unknown while 18% were caused by manufacturing problems. Since drug manufacturing is an international enterprise, we can expect that a U.S. government shutdown, increasing world conflicts in Eastern Europe, the Asia Pacific, and Mid-East regions, will only cause further problems with manufacture and importation of drugs from abroad, further stressing U.S. healthcare.
Ozempic and other drugs in the same category are prime examples of the disruptive nature of drug shortages. Novo Nordisk, a leading manufacturer of insulin, also manufactures and markets Ozempic and Wegovy. Both are approved in the U.S. to treat the 14.7% of adults who are diagnosed with Type-2 diabetes. Both are in short supply because famous personalities have been using them to lose weight. Mounjaro, another diabetes control drug from Eli Lilly, also is in short supply Though all three are approved for treatment of Type-2 diabetes, Wegovy is the only one approved for weight loss at this time. Mounjaro is under review by the FDA and is expected to be approved for weight loss by end of 2023.
All three drugs are glucagon-like peptide-1 receptor agonists (GLP-1 agonist). They control blood sugar levels and reduce weight by delaying stomach emptying, decreasing appetite, and inhibiting the production of glucagon — the hormone that increases blood sugar.
All three drugs have been on the FDA shortages list at various dosages. Novo Nordisk, which makes Ozempic and Wegovy, has limited the availability of lower starting doses of Wegovy as it prioritizes a continuous supply of the drug for people who already use it. The company’s CEO recently told CNN that it would take years to catch up to demand.
5. The wild card in this case in healthcare is not intentionally forcing a shutdown, rather it is causing an unintended budget shutdown. Both sides in the house have been playing a delicate and dangerous game of forcing the other side to be the ones to accidentally take the final step that inevitably leads to a government shutdown.
More important than the actual dollar cost of a government shutdown is the resultant perception of governmental instability. Once the U.S. loses the confidence of investors, it also loses all credibility as the world’s most stable economy. If Americans continue to experience an erosion of confidence in their government, their healthcare system, and their economic stability, pressure will build. If the pressure is not reduced, a systemic dislocation of unimaginable magnitude will follow. Speaker Johnson has an opportunity to relieve the stress. He also has an opportunity to make it worse.
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