Testimony

AHA Senate Statement: “Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare”

dsamuels_drupal — Wed, 16 Mar 2022 14:38:25 +0000

AHA Senate Statement: “Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare” dsamuels_drupal Mar 16, 2022 - 09:38 AM

Statement of the
American Hospital Association
to the
Finance Committee
of the
United States Senate
“Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare”

March 16, 2022

The AHA is deeply committed to the availability of high-quality, efficient health care for all Americans. Hospitals and health systems, and the clinicians who work in them, rely on lifesaving drug therapies to care for their patients. In addition, researchers in U.S. academic medical centers generate much of the evidence used to develop new drugs. However, an unaffordable drug is not a lifesaving drug.

The AHA continues to work with its members to document the challenges hospitals and health systems face with high drug prices and develop policy solutions to protect access to critical therapies while encouraging and supporting much-needed innovation. We encourage Congress to consider policy recommendations in the following areas.

INCREASE COMPETITION AND INNOVATION

Competition for prescription drugs generally results in increased options for lower cost therapies, particularly through the introduction of one or more generic competitors. We encourage Congress to implement policies that would increase the introduction of generic alternatives and discourage anti-competitive tactics while maintaining incentives for the development of innovative new therapies.

Deny patents for “evergreened” products. Some drug manufacturers attempt to minimize or eliminate competition through product “evergreening.” A manufacturer attempts to “evergreen” a product when it applies for patent and market exclusivity protections for a “new” product that is essentially the same as the original product, such as extended release formulations or combination therapies that simply combine two existing drugs into one pill. What generally happens is that, while the older version of the drug is no longer patent-protected and, therefore, generic alternatives may be offered, drug manufacturers promote the newer version as the “latest and greatest.” Without important information on the comparative value of the newer drug, many providers and consumers switch to the brand-only “evergreened” product after intense marketing by the manufacturer that suggests that the newer version is superior. Patents and market exclusivity rights for products that are simply modifications of existing products should be denied unless the new product offers significant improvements in clinical effectiveness, cost savings, access or safety.
Limit orphan drug incentives to true orphan drugs. Drug manufacturers receive a number of incentives to develop drugs for rare diseases. These incentives, which include waived FDA fees, tax credits and longer market exclusivity periods, are intended to spur innovation of therapies for which the manufacturer may otherwise not recoup their investment due to low volume. These incentives have contributed to the development of innovative, life-saving drugs where no therapies previously existed. However, in some instances, manufacturers have received orphan drug status for drugs that they subsequently marketed for other, non-rare indications. In these instances, manufacturers are receiving the incentives for drugs that are broadly used. For example, Humira (adalimumab), Procrit (epoetin alfa) and Prolia (denosumab) all are approved for orphan drug status; however, since receiving the designation, the drugs also have been marketed for a number of other, non-rare indications. Further, each of these drugs were among the top 10 highest-spend drugs for hospitals and health systems, and each had substantial price increases of at least 15% from 2015-2017.¹

Congress should require FDA to collect information on other intended indications for a drug when evaluating eligibility for orphan drug status. FDA also should be required to do a post-market review at regular intervals throughout the market exclusivity period to determine whether the drug should retain its status as an orphan drug. In instances where the manufacturer is promoting the drug for other indications that do not meet the orphan drug status requirements, FDA should levy penalties, such as requiring that the manufacturer pay the government the value of the tax breaks and waived fees and potentially reducing the market exclusivity period.

INCREASE DRUG PRICING TRANSPARENCY

Payers, providers and the public have little information about how drugs are priced. This gap in information challenges payers’ abilities to make decisions regarding coverage and pricing of drugs, and often results in mid-year cost increases that providers are unprepared to manage. Policies should be implemented to provide greater parity between drug manufacturers and other sectors of the health care system, including hospitals, which already disclose a considerable amount of information on pricing, input costs and utilization.

Increased disclosure requirements related to drug pricing, research and development should be included at the time of application for drug approval. There is very little evidence of what it actually costs to develop a new drug and how those costs factor into the pricing of a drug. Other components of the health care system are held to a much higher transparency standard. For example, hospitals provide detailed data to the Centers for Medicare & Medicaid Services (CMS) via the annual Medicare cost report, which includes information on facility characteristics, utilization, costs and charges, and financial data. Given the significant taxpayer investment in drugs – both through funded research and purchasing through public programs like Medicare and Medicaid – there should be greater transparency parity between drug manufacturers and other health care providers.

Drug manufacturers should be required to submit as part of the drug approval process information on anticipated product pricing for both a single unit and a course of treatment; anticipated public spending on the product (e.g., from government purchasers including Medicare, Medicaid and TRICARE, among others); and information on how the product was priced, including anticipated portion of the product price that will contribute to current or future marketing and research and development costs. In addition, drug manufacturers should be required to provide information on the research that contributed to the development of the drug and specify all entities that conducted research that contributed to the development of the drug, the amount spent on that research and the funding source.

Increased transparency into drug pricing could be used to hold drug manufacturers accountable for fairly pricing products, help calculate the value of a drug, and support future policymaking.

IMPROVE ACCESS THROUGH INFLATION-BASED REBATES FOR MEDICARE DRUGS

The Medicaid program consistently achieves better pricing on drugs than the Medicare program. The primary driver behind the lower net unit costs are mandated, additional rebates that kick in when the average manufacturer price (AMP) for a drug increases faster than inflation. A similar inflation cap should be implemented on the price of drugs under the Medicare program. Under Medicare Part B, such a cap could be operationalized through a manufacturer rebate to Medicare when the average sales price (ASP) for a drug increases faster than a specified inflation benchmark. A similar cap could be placed on increases in the prices of Part D drugs.

This policy would protect the program and beneficiaries from dramatic increases in the Medicare payment rate for drugs, notable past increases included examples like 533% (Miacalcin, used for treating bone disease), 638% (Neostigmine, used in anesthesia) and 1,261% (Vasopressin, used to treat diabetes and bleeding in a critical care environment). This policy also could potentially generate savings for drugs with price growth above the inflation benchmark. According to a 2019 report, the Congressional Budget Office estimated that an inflationary rebate requirement would reduce direct spending by about $35 billion over 10 years.²

BETTER ALIGN INCENTIVES BY TESTING CHANGES TO THE FEDERALLY-FUNDED PART D REINSURANCE PROGRAM

Under the Part D prescription drug program, the federal government covers 80% of the costs for enrollees who cross the out-of-pocket threshold. Insurers and beneficiaries share the responsibility for the remaining 20%, at 15% and 5%, respectively. These reinsurance payments are substantial: in 2013, the federal government’s portion totaled nearly $20 billion for approximately 2 million Medicare beneficiaries.³This program shields Part D plan sponsors from high costs and may create disincentives for plan sponsors to aggressively negotiate drug prices with manufacturers and manage enrollees’ care.

Congress should require CMS to design a pilot project to test a new Part D payment model that either reduces or eliminates reinsurance payments while making appropriate adjustments to the direct subsidy rate. While CMMI has recently taken action in an attempt to modernize the Part D program through rewards and incentives, medication management programs and changes to the Low-Income Subsidy, congressional action would require CMS to test whether shifting more of the financial risk to insurers leads to appropriate reductions in program spending due to stronger negotiations with drug manufacturers or improved care management. This alternative is consistent with a Medicare Payment Advisory Commission recommendation on improvements to the Part D program.

PROTECT THE 340B DRUG PRICING PROGRAM

The 340B program is a critical program that helps eligible providers to care for the patients and communities they serve. The program requires pharmaceutical companies participating in Medicaid to sell certain outpatient drugs at discounted prices to health care organizations that care for high numbers of uninsured and low-income patients or care for specific populations, such as children or patients with cancer or AIDS. 340B hospitals use the savings they receive on the discounted drugs to stretch scarce federal resources and provide more affordable and effective care, just as Congress intended. In fact, 340B hospitals reinvest their 340B savings in programs that are critical for the communities and patients they serve, which can include enhancing patient services and access to care, as well as providing free or reduced priced prescription drugs to vulnerable patient populations. In 2018 alone, 340B hospitals provided $68 billion in community benefits. Despite the 340B program’s proven track record for 30 years, pharmaceutical manufacturers have repeatedly attempted to scale back or significantly reduce its benefits to hospitals and the patients they serve.

Since July 2020, several of the largest drug manufacturers have engaged in unprecedented and unlawful actions to limit the scope of the 340B program by denying 340B pricing through contract pharmacies and demanding superfluous, detailed reporting of 340B drug claims distributed through hospitals’ contract pharmacies. These drug companies have knowingly violated the statute and ignored calls by both the Biden and Trump Administrations to end these harmful actions.

The Health Resources and Services Administration (HRSA) has long authorized 340B covered entities to contract with community pharmacies to dispense drugs to eligible patients in order to expand the reach of the program and ensure access to prescribed medications for their patients. The use of outside pharmacies is especially important for hospitals that are located in and/or serve rural communities, as many of these hospitals do not operate in-house pharmacies, so they must rely on contracting with outside pharmacies to ensure their patients have access to their medications. More than 80% of rural 340B hospitals use contract pharmacies to ensure their patients receive outpatient drugs, as well as other essential services. These contract pharmacy arrangements have also proven especially important during the COVID-19 pandemic when patients have relied more heavily on alternative pharmacy channels such as mail order, online and small localized retail pharmacies. Hospitals have increasingly contracted with such pharmacies to ensure that their patients are able to access their prescribed medications and are not lost to follow-up. For these reasons, it is imperative that these pernicious actions by pharmaceutical companies be stopped immediately and restore access to 340B pricing for hospitals with contract pharmacy arrangements.

The 340B program is now more crucial than ever as 340B hospitals continue to be on the front lines of the COVID-19 public health emergency, despite incurring historic financial and operational challenges. Among these challenges is the high cost of pharmaceuticals. As of January 2022, hospital drug expenses are 22% higher on an absolute basis and 65% higher on a per patient basis compared to pre-pandemic levels in January 2020.

The fact remains that pharmaceutical companies continue to raise the prices of their products and enjoy double-digit profit margins, while 340B hospitals continue to care for the nation’s most vulnerable patients and communities and operate on razor-thin margins. It is imperative for Congress to continue its bipartisan support of the program and ensure that eligible hospitals and their patients can continue to benefit from the 340B program.

CONCLUSION

Thank you for your attention to the ever increasing cost of prescription drugs and consideration of our comments on behalf of hospitals and health systems. We look forward to working with Congress to lower the cost of drugs to protect access to critical therapies.
__________

¹AHA/FAH Drug Survey 2019.
²https://www.cbo.gov/system/files/2019-12/hr3_complete.pdf
³ MedPAC, “Chapter 6: Sharing risk in Medicare Part D,” June 2015.

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AHA Statement “Exploring Pathways to Affordable, Universal Health Coverage Care”

Matthew Diener — Thu, 17 Feb 2022 19:16:05 +0000

AHA Statement “Exploring Pathways to Affordable, Universal Health Coverage Care” Matthew Diener Feb 17, 2022 - 01:16 PM

America’s hospitals and health systems play a central role in delivering health care in this country and are committed to the goal of affordable, comprehensive health coverage for every American. We believe we should build upon and improve our existing system to increase access to coverage of comprehensive health benefits.

The Importance of Health Coverage

Meaningful health care coverage is critical to living a productive, secure and healthy life. Studies confirm that coverage improves access to care; supports positive health outcomes, including an individual’s sense of their own health and wellbeing; incentivizes appropriate use of health care resources; and reduces financial strain on individuals and families.ⁱ Coverage has broader community benefits as well, from ensuring adequate resources to maintaining critical health care infrastructure to being associated with decreased crime. We, therefore, appreciate Congress’ focus on opportunities to close the remaining coverage gaps and achieve comprehensive health coverage for every American.

Despite recent coverage gains, approximately 9% of the U.S. population remains uninsured. Many of the uninsured are likely eligible for, but not enrolled in subsidized coverage, including through Medicaid, the Health Insurance Marketplaces or their employers. For example, millions of the lowest income uninsured could be covered if all states expanded Medicaid.

While the AHA shares the objective of achieving health coverage for all Americans, we do not agree that a government-run, single-payer system is right for this country. Such an approach could upend a system that is working for the vast majority of Americans and throw into chaos one of the largest sectors of the U.S. economy.

Results from a 2019 study give some idea of the financial impact a public option program based on Medicare rates could have on the health care system. The study found that a proposal to create a government-run, public option Medicare-like health plan on the individual exchange could create the largest ever cut to hospitals – nearly $800 billion – and be disruptive to the employer-sponsored and non-group health insurance markets, while resulting in only a modest drop in the number of uninsured as compared to the 9 million Americans who would gain insurance by taking advantage of building upon the existing public/private coverage framework. This coverage proposal would enroll significantly fewer people than a single-payer model, and yet the reimbursement cuts would be catastrophic.

Even if the proposed single-payer program increased reimbursement rates above Medicare’s rates, our members’ experience suggests that the government does not always act as a reliable business partner. Delays in payment and retroactive changes to reimbursement policies leave providers at risk of inadequate payment. Politicization means that providers cannot always trust that the rules of today will be the rules of tomorrow, which presents a challenging – if not impossible – environment for large, complex organizations. Recent examples of the uncertainty of working with government.

We also are deeply concerned that a single-payer model would seriously distract from the important delivery system reform work underway. Hospitals and health systems have invested billions of dollars in technology and delivery system reforms to improve care, enhance quality and reduce costs. Moving to a single-payer model could stymie these efforts by, at best, diverting attention and, at worst, being deemed irrelevant if the government can simply ratchet down provider rates to achieve spending objectives.

Ways to Promote Better Care for America

Health coverage is too important to risk such levels of disruption. The better path to achieving comprehensive coverage for all Americans lies in continuing to build on the progress made over the past decade. To advance our objective of covering all Americans, we support:

Continued efforts to expand Medicaid in non-expansion states, including providing the enhanced federal matching rate to any state, regardless of when it expands. This would give newly expanded states access to three years of 100% federal match, which would then scale down over the next several years to the permanent 90% federal match.
Providing permanent federal subsidies for more lower- and middle-income individuals and families. Many individuals and families who do not have access to employer-sponsored coverage earn too much to qualify for either Medicaid or marketplace subsidies and yet struggle to afford coverage.
Strengthening the marketplaces to improve their stability and the affordability of coverage by reinstituting funding for cost-sharing subsidies and reinsurance mechanisms.
Robust enrollment efforts to connect individuals to coverage. The majority of the uninsured are likely eligible for Medicaid, subsidized coverage in the marketplace or coverage through their employer. We need an enrollment strategy that connects them to – and keeps them enrolled in – coverage. This requires adequate funding for advertising and enrollment efforts, as well as navigators to assist consumers in shopping for and selecting a plan.

We stand ready to work with Congress as we look for ways expand coverage to patients and families.

American Hospital Association, “The Importance of Health Coverage,” October 2019. https://www.aha.org/system/files/media/file/2019/10/report-importance-of-health-coverage_1.pdf

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Statement
of the
American Hospital Association
to the
Subcommittee on Health, Employment, Labor, and Pensions
of the
Education and Labor Committee
of the
U.S. House of Representatives

“Exploring Pathways to Affordable, Universal Health Coverage Care”

February 17, 2022

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AHA Senate Statement: “Protecting Youth Mental Health: Part II - Identifying and Addressing Barriers to Care”

dsamuels_drupal — Tue, 15 Feb 2022 20:22:04 +0000

AHA Senate Statement: “Protecting Youth Mental Health: Part II - Identifying and Addressing Barriers to Care” dsamuels_drupal Feb 15, 2022 - 02:22 PM

Statement
of the
American Hospital Association
to the
Committee on Finance
of the
United States Senate
“Protecting Youth Mental Health: Part II - Identifying and Addressing Barriers to Care”

February 15, 2022

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to submit this statement for the record as the Committee on Finance examines ways to protect the mental health of our nation’s youth. We applaud you for your leadership in this area, and we look forward to continuing to work with you to advance the health of the communities we serve.

While behavioral health care has long been underfunded, underappreciated and stigmatized, the pandemic has intensified the unmet need for services and has led to heightened difficulties for individuals with behavioral health conditions in accessing care.

In freestanding psychiatric hospitals, behavioral health units of acute care hospitals, emergency departments and hospital outpatient departments across the nation, our member hospitals are facing increasing demand for services to help patients deal with anxiety, depression, substance use disorder and other behavioral health conditions. Reported increases in domestic violence and child abuse cases, financial stress, and a lack of community resources have set the stage for an exacerbated behavioral health crisis. For children and adolescents who have faced disrupted daily routines or who see parents dealing with job loss and other stressors, the consequences of the COVID-19 pandemic on their behavioral health are even more pronounced, as is their inability to access needed services on a timely basis.

To amplify the call to address these urgent issues, the AHA has joined the Sound the Alarm for Kids initiative, which comprises more than 50 organizations united to raise awareness and urge immediate action to support the mental health of children, adolescents and their families. We are proud to work alongside these many organizations in this effort.

Over the past two years, Congress has enacted several significant laws aimed at providing relief from the social and economic impacts of the pandemic. Several provisions contained in these laws are designed to address the behavioral health care crisis, but some gaps remain. To further address the issues brought about or intensified by the pandemic, the AHA supports additional approaches to help ensure improved access to needed comprehensive, affordable and quality behavioral health services for youth.

PSYCHIATRIC BED SHORTAGES

As behavioral health needs are increasing across the nation, we see an alarming trend of decreasing behavioral health services in many communities, leading to severe challenges in providing inpatient psychiatric care to children and adolescents. Bed shortages lead to “boarding” in acute-care hospital emergency departments (EDs) and in non-psychiatric units as patients await available inpatient psychiatric beds. Although little data is available regarding boarding times for children and adolescents, our hospital members report untenable crowding in their EDs, with some describing a crisis in their communities.

Many young patients are presenting in the ED with suicidal ideation or after having attempted suicide, but our members report that the patients frequently must wait days or even weeks to be admitted to a psychiatric hospital or unit for treatment. According to the Centers for Disease Control and Prevention (CDC), over the past decade, suicide rates in the United States have increased dramatically. Suicide now ranks as the tenth leading cause of death for all Americans and the second leading cause of death for Americans between the ages of 10 and 34.

The demand for mental health treatment after suicide attempts has increased during the pandemic; as reported by the CDC, the number of ED visits by adolescent girls following suicide attempts was more than 50% higher in 2021 than in 2019. However, at the same time the number of beds has decreased, as some hospitals have had to reduce bed capacity due to COVID-19 concerns, as well close units temporarily to accommodate COVID-19 patients.

PROVIDER SHORTAGES

As with psychiatric beds, the demand for child and adolescent psychiatrists far outstrips the supply. Prior to the COVID-19 pandemic, in 2019, the Academy of Child and Adolescent Psychiatry estimated the number of practicing child and adolescent psychiatrists in the U.S. at 8,300 and the number of youths in need of their services at more than 15 million. That figure fell far short of the U.S. Bureau of Health Professions’ projection that in the year 2020, more than 12,000 child and adolescent psychiatrists would be necessary just to maintain the level of services that had been provided in 2000. Lack of access to providers is even more acute in rural areas, according to the Health Resources and Services Administration, which reports that 61% of areas with a mental health professional shortage are rural or partially rural.

Because the number of Medicare-funded residency slots for all physicians, including psychiatrists, has only increased by 1,000 since 1996, Congress needs to act to increase the number of slots available. The AHA supports legislation that would lift the caps on residency positions, thereby helping to alleviate physician shortages that threaten access to care.

Additionally the AHA urges Congress to establish scholarships, bolster loan forgiveness programs and provide additional financial supports that will encourage providers to specialize in children’s behavioral health care. Congress also should examine payment rates to ensure that reimbursement structures pay providers fairly for the services they render.

The AHA also supports robust funding for the Health Resources and Services Administration’s Title VII and Title VIII programs, including the National Health Service Corps and the nursing workforce development program. To support diversity in the behavioral health workforce, we support increasing funding for Centers of Excellence and the Health Careers Opportunity Programs, which bolster recruiting and retaining underrepresented groups in the health care workforce.

THE CHILD SUICIDE PREVENTION AND LETHAL MEANS SAFETY ACT

In working to care for survivors of suicide and implement preventive services for those who may be at risk, hospitals recognize the importance of identifying and mitigating suicide risk factors, such as ready access to lethal means. However, millions of Americans live in areas with severe shortages of mental health professionals, and these shortages are especially acute in rural and low-income urban communities.

To help remedy this situation, the AHA has endorsed the Child Suicide Prevention and Lethal Means Safety Act (S. 2982/H.R. 5035), legislation that would fund training programs to help health care workers identify those at high risk for suicide or self-harm. The bill also would promote expertise among the emerging health care workforce by providing grants to facilitate suicide prevention training at health professions schools.

MITIGATING THE IMPACT OF VIOLENCE ON CHILDREN AND ADOLESCENTS

Every day, hospitals and health systems provide critical, lifesaving care to victims of violence. However, when violence occurs, the victims are not limited to those killed or physically injured; the impact on families and the surrounding community can affect the health of the entire community. Numerous studies have documented the behavioral and physical health effects on children and adolescents who have been exposed to violence.

Through the AHA’s Hospitals Against Violence (HAV) initiative, our members share information about their efforts to help combat community violence using Hospital-based Violence Intervention Programs (HVIPs). HVIPs work to reduce retaliation and recidivism by engaging patients in the hospital during their recovery. This valuable and effective work continues after patients are discharged, providing an important network of support during their outpatient care.

To reinforce the work of these important programs, the AHA supports the Preventing and Addressing Trauma with Health Services (PATHS) Act (S. 2873), a bill that would provide grants for high-quality, culturally competent trauma support and mental health services for individuals in communities affected by violence. The funds authorized by this bill would assist hospitals and health systems in advancing the work of HVIPs and their goal of fostering safer communities.

INTEGRATING BEHAVIORAL HEALTH AND PHYSICAL HEALTH

Behavioral health disorders have significant impact on the physical health of children and adolescents. Many of our member hospitals and health systems are working to create one system of care with multiple entry points for patients with multiple conditions and to integrate behavioral health services into every patient‘s experience. This approach enables providers to effectively treat the whole patient — both their physical and behavioral health care needs.

As providers work to integrate behavioral health care for children, major factors to consider are developmental challenges and delays, including issues related to autism, speech and sexual reaction. These factors influence how behavioral conditions present and are best treated, as well as which non-medical services children might need to realize improvement, such as speech-language pathology and case management involving a child’s family and support system.

Another major consideration is the influence of, and interaction with, other entities, including the child’s family members, school and the judicial system. For children, any treatment or screening procedures will almost certainly overlap with other institutional protocols.

AT-RISK CHILDREN AND ADOLESCENTS

The needs of at-risk children and adolescents deserve special attention. First and foremost, focusing sufficient resources on their needs, such as eligibility for and access to early screening for behavioral health conditions, will help reduce the likelihood of their involvement in the child welfare or juvenile justice systems. The input of parents, foster parents, the foster care system and schools are essential in ensuring optimal, culturally sensitive behavioral health care for these youth. In addition, close coordination is necessary with programs that support their social needs and provide meaningful health care coverage upon transition out of the child welfare or juvenile justice system. This includes partnerships with crisis intervention organizations that can respond to school-based issues.

ENFORCEMENT OF MENTAL HEALTH AND SUBSTANCE USE DISORDER PARITY LAWS

In addition to needing access to behavioral health care services, children, adolescents and their families need the behavioral health care benefits that our laws mandate. The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, enacted in 2008, requires insurance coverage for mental health conditions, including substance use disorders, to be no more restrictive than insurance coverage for other medical conditions. Most insurers and health plans comply with the more straightforward aspects of the law that relate to cost sharing and numerical limits on treatment, such as annual inpatient day limits — known as Quantitative Treatment Limits.

Unfortunately, health plans and insurers generally are not yet meeting the requirements of the law that govern how they design and apply their managed care rules, called Non-Quantitative Treatment Limits, or NQTLs, to these services. NQTLs are related to benefit plan design, such as requiring preauthorization before services are rendered, or imposing extra review processes for medical necessity or medical appropriateness. To save money, some plans limit coverage for medicines prescribed to treat behavioral health conditions by requiring patients to try less expensive drugs first before “stepping up” to the more costly drug actually ordered by the provider. This approach is called step therapy protocol, and its use can delay needed treatment with often catastrophic consequences for patients.

However, the federal entities charged with enforcing mental health and substance abuse parity laws have not done a thorough job, and insurers have taken advantage of that. To resolve the issue of insurance companies’ noncompliance, we need greater transparency, accountability and enforcement of current laws. In the 116th Congress, the AHA supported the Mental Health Parity Compliance Act introduced by Sens. Chris Murphy (D-CT) and Bill Cassidy (R-LA), legislation whose provisions were incorporated into the Consolidated Appropriations Act, 2021 (CAA). Those provisions require health plans and issuers that cover mental health and substance use disorder services as well as medical and surgical benefits to create a comparative analysis of any NQTLs that apply, and to provide such analyses whenever requested by federal agencies. The CAA also requires the Departments of Labor, Treasury and Health and Human Services to report to Congress annually and issue additional guidance on NQTLs.

Unfortunately, the 2022 report found that none of the comparative analyses reviewed by the federal departments were in full compliance with the law, and none contained required information. The AHA urges Congress to exercise vigorous oversight of the federal agencies responsible for ensuring that health plans comply with the MHPEA and all its reporting requirements. Further, we support an increase in federal penalties for noncompliance to help ensure that patients can receive the behavioral health care benefits they are entitled to under the law.

BATTLING STIGMA

Finally, the AHA continues to fight the stigma associated with seeking behavioral health care. Children and adolescents may not seek the help they need due to the stigmatization of mental health care. Often parents may avoid seeking care for their children due to apprehension that a mental health diagnosis will unfairly label them for the rest of their lives. AHA member hospitals and health systems work to dispel misperceptions about mental health disorders and treatment, and we have launched the People Matter/Words Matter poster series to help health care workers adopt patient-centered, respectful language around behavioral health.

CONCLUSION

As a nation, we are just beginning to fully comprehend the effects of the COVID-19 pandemic on the emotional well-being of the nation’s youth. America’s hospitals and health systems recognize that our collective efforts today to protect the mental health of children and adolescents can have a lasting impact on their lives and the overall health of our communities well into the future. We appreciate the Committee’s efforts to examine this issue and look forward to working with you to advance policies to that end.

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AHA Senate Statement: Recruiting, Revitalizing & Diversifying: Examining the Health Care Workforce Shortage

dsamuels_drupal — Thu, 10 Feb 2022 18:30:30 +0000

AHA Senate Statement: Recruiting, Revitalizing & Diversifying: Examining the Health Care Workforce Shortage dsamuels_drupal Feb 10, 2022 - 12:30 PM

Statement of the
American Hospital Association to the
Subcommittee on Employment and Workplace Safety
of the
Committee on Health, Education, Labor and Pensions
of the
United States Senate
“Recruiting, Revitalizing & Diversifying: Examining the Health Care Workforce Shortage”

February 10, 2022

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to submit this statement for the record as the Subcommittee on Employment and Workplace Safety of the Committee on Health, Education, Labor and Pensions examines America’s health care workforce shortage.

As America enters the third year of the COVID-19 pandemic, health care providers are confronting a landscape deeply altered by its effects. As of Feb. 10, 2022, there have been approximately 80 million COVID-19 cases and over 900,000 deaths in the U.S., with nearly 30 million cases and approximately 110,000 deaths in just the last two months.

Our nation’s hospital and health system workers have been on the front lines of this crisis since the outset, caring for millions of patients, including nearly 4.4 million patients hospitalized with COVID-19. During this time, hospitals have continued to face a range of pressures, with workforce-related challenges among those most critical.

Though managing workforce pressures were a challenge for hospitals even before the pandemic, these challenges have only grown more acute. The incredible physical and emotional toll that hospital workers have endured in caring for patients during the pandemic has, among other issues, exacerbated the shortage of hospital workers. This shortage has become so critical that some states and the federal government have deployed military and National Guard resources to help mitigate staffing challenges at some hospitals. As this shortage has worsened and COVID-19 hospitalizations have reached record levels, labor costs for hospitals have increased dramatically. This combination of factors has been exploited by travel staffing companies and other firms that provide contract labor resources, driving up workforce costs even more for hospitals. Hospitals also have incurred significant costs in recruiting and retaining staff, which have included overtime pay, bonus pay and other incentives. This is occurring at a time when many hospitals and health systems are still facing other immense financial constraints. For many hospitals around the country this has led to an unsustainable situation that threatens their ability to care for the patients and communities they serve.

Health Care Workforce Shortages

Hospitals are facing a critical shortage of workers. Approximately, 1,130 hospitals or 27% of hospitals that reported data on staffing to the federal government indicated that they were anticipating a critical staffing shortage within the week of Feb. 8. Further, 15 states had 33% or more of their hospitals reporting a critical staffing shortage.

Nurses, who are critical members of the patient care team, are one of the many health care professions that are currently in shortage. In fact, a study found that the nurse turnover rate was 18.7% in 2020, illustrating the magnitude of the issue facing hospitals and their ability to maintain nursing staff. The same study also found that 35.8% of hospitals reported a nurse vacancy rate of greater than 10%, which is up from 23.7% of hospitals prior to the pandemic. In fact, two-thirds of hospitals currently have a nurse vacancy rate of 7.5% or more.

Almost every hospital in the country has been forced to hire temporary contract staff to maintain operations at some point during the pandemic. According to a survey by AMN Healthcare, 95% of health care facilities reported hiring staff from contract labor firms, with respiratory therapists being the primary need for many hospitals and a critical team member necessary for COVID-19 patient care.

As hospitals have looked to bring in more staff, job postings for both clinical and non-clinical staff have increased from pre-pandemic levels. Based on data from Liquid Compass analyzed by Prolucent Health, job postings for clinical staff have increased by 45% for nurses and 41% for other allied clinical staff between January 2020 and January 2022. At the same time, non-clinical staff such as environmental service and facilities workers, who play in important role in maintaining hospital operations, have seen job postings increase nearly 40%.

Hospitals were already spending more money on contract labor even before the latest COVID-19 surge. According to a Definitive Healthcare study, contract labor expenses for hospitals have more than doubled over the last decade. However, the prices charged by contract labor firms during the pandemic have become exorbitant as supply is scarce and demand is at an all-time high. For example, average pay for hospital contract nurses has more than doubled compared to pre-pandemic levels. According to Prolucent Health, there has been a 67% increase in the advertised pay rate for travel nurses from January 2020 to January 2022, and hospitals are billed an additional 28%-32% over those pay rates by staffing firms. In fact, in some areas pay rates for travel nurses have been as high as $240/hour or more, which have contributed to the dramatic increase in hospitals' labor costs. Labor expenses are up 12.6% on an absolute basis, and 19.1% on a per patient basis compared to levels in 2019.

With COVID-19 hospitalizations reaching record highs, the staffing crisis currently plaguing our nation’s hospitals is only expected to worsen. In 2017, more than half of nurses were age 50 and older, and almost 30% were age 60 and older. According to Bureau of Labor Statistics data, it is anticipated that 500,000 nurses will leave the workforce in 2022, bringing the overall shortage to 1.1 million nurses. And due to significant shortages of faculty, classroom space and clinical training sites, nursing schools actually had to turn away more than 80,000 qualified applicants in 2019. These data highlight the need to develop and implement longer-term solutions to avoid the further deepening of this crisis, which includes investing in more opportunities and slots for health care workers in the pipeline.

Supporting the Workforce

Because our workforce is our most precious resource, hospitals and health systems are committed to supporting them. That’s why we’ve created programs and developed resources to promote caregiver well-being and resiliency. Examples include helping to pay back student loans, providing child care and transportation, offering tuition reimbursement and training benefits, providing referral and retention bonuses, and supporting programs that address mental and physical health.

Hospitals also are developing new team-based care models that allow health care workers from various disciplines and specialties to provide customized, patient-centered care. This allows them to manage medical and social needs across all settings to improve care and enhance professional satisfaction.

For example, in Virginia, Mary Washington Healthcare collaborated with a local community college on a clinical education model allowing student nurses to support the current nurse workforce before they had graduated, addressing the critical demand for more nurses. In Pennsylvania, Geisinger provides $40,000 in financial support each year for up to 175 employees who want to pursue a nursing career and make a five-year work commitment as an inpatient nurse. And in Maine, Northern Light Maine Coast Hospital invites financial support from the local community to help underwrite the cost of programs to train future nurses and medical assistants and alleviate a crucial shortage of these professionals.

Policy Solutions

Our workforce challenges are a national emergency that demand immediate attention from all levels of government and workable solutions. These include recruiting, revitalizing and diversifying the health care workforce by:

Lifting the cap on Medicare-funded physician residencies;
Boosting support for nursing schools and faculty;
Providing scholarships and loan forgiveness;
Expediting visas for all highly trained foreign health care workers;
Disbursing any remaining funds in the Provider Relief Fund, as well as replenishing the fund to help providers cope with increased staffing costs;
Investigating reports of anticompetitive behavior from nurse-staffing agencies during the pandemic that is further exacerbating critical workforce shortages;
Pursuing visa relief for foreign-trained nurses; and
Supporting the health of physicians, nurses and others so they can deliver safe and high-quality care by providing additional funding and flexibility to address behavioral health needs and funding for best practices to prevent burnout.

We urge Congress to enact the Lorna Breen Health Care Provider Protection Act, which would direct resources to reduce and prevent health care professionals’ suicides, burnout and behavioral health disorders. This bipartisan, bicameral legislation would authorize grants to health care providers to establish programs that offer behavioral health services for front-line workers, and require the Department of Health and Human Services (HHS) to study and develop recommendations on strategies to address provider burnout and facilitate resiliency. The bill also would direct the Centers for Disease Control and Prevention to launch a campaign encouraging health care workers to seek assistance when needed.

In addition, we must support state efforts to expand scope of practice laws to allow health care professionals to practice at the top of their license. Congress also should increase funding for the Health Resources and Services Administration’s Title VII and VIII programs, including the health professions program, the National Health Service Corps, and the nursing workforce development program, which includes loan programs for nursing faculty. Congress also should consider expanding the loan program for allied professionals and direct support for community college education to high priority shortage areas in the health care workforce.

Finally, Congress should expand and increase funding for Centers of Excellence and the Health Careers Opportunity Programs, which focus on recruiting and retaining minorities into the health professions to build a more diverse health care workforce.

Conclusion

The AHA appreciates your recognition of the challenges ahead and the need to examine America’s health care workforce shortage. We must work together to solve these issues so that our nation’s hospitals and health systems can continue to care for the patients and communities they serve.

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AHA House Statement: America’s Mental Health Crisis February 2, 2022

dsamuels_drupal — Thu, 03 Feb 2022 19:49:29 +0000

AHA House Statement: America’s Mental Health Crisis February 2, 2022 dsamuels_drupal Feb 03, 2022 - 01:49 PM

Statement of the
American Hospital Association to the
Committee on Ways and Means
of the
United States House of Representatives
“America’s Mental Health Crisis”
February 2, 2022

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners — including more than 270,000 affiliated physicians,
2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to submit this statement for the record as the Committee on Ways and Means examines America’s mental health crisis.

As America enters the third year of the COVID-19 pandemic, health care providers are confronting a landscape deeply altered by its effects, including the emergence of behavioral health care as an even greater challenge than in previous years. While behavioral health care has long been underfunded, underappreciated and stigmatized, the pandemic has intensified the unmet need for services and has led to heightened difficulties for individuals with behavioral health conditions in accessing care.

To further address the issues brought about or intensified by the pandemic, the AHA supports additional approaches to help ensure improved access to needed comprehensive, affordable and quality behavioral health services.

Workforce

Our health care system is underfunded and understaffed to meet Americans’ behavioral health needs. Patients present with behavioral health care conditions in nearly every setting where they receive care, from emergency departments and acute inpatient units, to specialized psychiatric, geriatric, and eating disorder units. As noted in 2012 by the Agency for Healthcare Research and Quality, about 25% of patients admitted to a general hospital also have a behavioral health diagnosis.

The prevalence of behavioral health issues and their impact on physical health amplify the demand on hospitals and health systems across the continuum of care. Unfortunately, severe shortages in the behavioral health workforce hamper our ability to meet these needs. More than 100 million Americans live in areas with shortages of psychiatrists, as designated by the Health Resources and Services Administration (HRSA). HRSA projects shortages of psychiatrists and addiction counselors to persist through 2030. For hospitals and health systems, the pandemic exacerbated existing behavioral health challenges, with many hospitals forced to decrease the size of their behavioral health workforce due to budgetary pressures.

Additionally, the number of psychiatric beds has steadily decreased over the past few decades. The number of state-funded psychiatric beds per capita has declined by 97% between 1955 and 2016. The paucity of available beds has resulted in a sharp increase in the number of ED visits for behavioral health care services. According to the Agency for Health Care Research and Quality, between 2006 and 2014, the number of ED visits related to behavioral health diagnoses rose by 44%; visits related to suicidal ideation rose by 414%. Our members report that the practice of boarding — keeping patients in an acute-care setting or ED while they await the availability of a psychiatric treatment bed — has also increased significantly in recent years, with pediatric patients enduring the longest waiting times.

To address these shortages, Congress should:

bolster student loan forgiveness programs to support training for behavioral health professionals at all levels;
promote efforts to reduce variability of scope-of-practice laws and support changes that drive integration of care teams;
lift the cap on Medicare-funded residency slots to enhance access to care and help America’s hospitals better meet the needs of the communities they serve. enact the Opioid Workforce Act of 2021 (S. 1438), which would add 1,000 Medicare-funded slots in approved residency programs in addiction medicine, addiction psychiatry and pain medicine. This would increase the number of providers available to address the nation’s substance use disorder crisis.

In the Consolidated Appropriations Act, 2021, Congress created 1,000 new residency slots. The AHA supports the Pathway to Practice Training Program provisions, developed by this Committee, which would establish 1,000 medical school scholarships to promote diversity in the medical workforce and create 1,000 new Medicare-funded residency slots annually, with a substantial number reserved for psychiatry.

Additionally, Congress should increase funding for HRSA’s Title VII and VIII programs, including the health professions program, the National Health Service Corps, and the nursing workforce development program, which includes loan programs for nursing faculty. Congress should also consider expanding the loan program for allied professionals and direct support for community college education to high priority shortage areas in the health care workforce.

The Pandemic’s Toll on Behavioral Health of Health Care Workers

The nation’s entire health care workforce is strained from the ongoing pandemic, and health care workers often suffer emotional and physical stress from treating COVID-19 patients. A National Academy of Medicine study found that between 35%-54% of clinicians report at least one symptom of burnout, more than double the amount of burnout found in other fields.

Another recent study on the experiences of health care workers during the COVID-19 pandemic found that 93% reported experiencing stress, 86 percent reported experiencing anxiety, 77% reported frustration, 76% reported exhaustion and burnout, and 75% said they were overwhelmed. Worry and stress have led to sleep disturbances, headaches or stomachaches, and increased alcohol or drug use, according to a Kaiser Family Foundation Survey.

Through the American Rescue Plan Act (ARPA), Congress has begun to address these issues. The AHA applauds the provisions in the law dedicating $140 million to establish programs to reduce suicide, burnout and substance use disorders among front-line workers, and directing HRSA to develop mental health and substance use disorder training programs for the health care workforce.

We urge Congress to enact the Lorna Breen Health Care Provider Protection Act, which would direct resources to reduce and prevent health care professionals’ suicides, burnout and behavioral health disorders. This bipartisan, bicameral legislation would authorize grants to health care providers to establish programs that offer behavioral health services for front-line workers, and require the Department of Health and Human Services (HHS) to study and develop recommendations on strategies to address provider burnout and facilitate resiliency. Additionally, the bill would direct the Centers for Disease Control and Prevention to launch a campaign encouraging health care workers to seek assistance when needed.

Coverage

The Medicare and Medicaid programs each include policies that inherently treat behavioral health services differently than medical/surgical services in terms of remuneration; these policies should be repealed, including:

The Institutions for Mental Disease (IMD) exclusion, which prohibits the use of federal Medicaid financing for care provided in mental health and SUD residential treatment facilities larger than 16 beds to patients ages 21 to 64. The exclusion is one of the few examples of Medicaid law prohibiting the use of federal financial participation for medically necessary care furnished by licensed medical professionals to enrollees, based on the health care setting providing the services. The 2018 Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act loosened this prohibition by granting state Medicaid programs the option to receive federal matching payments for SUD treatment provided in certain IMDs for up to 30 days over a 12-month period, and this provision is set to expire in 2023. To alleviate the dire shortage of inpatient psychiatric beds, Congress should permanently repeal the IMD exclusion for both SUD and mental health treatment.
The 190-day lifetime limit for inpatient psychiatric hospital care for Medicare beneficiaries. No other Medicare specialty inpatient hospital service has this type of arbitrary cap on benefits. Not only does this restriction limit access to care for many patients with chronic mental illness who will exceed 190 days of inpatient treatment, it also contributes to the stigma and discrimination against patients with mental illness. Currently, Medicare covers only 190 days of inpatient care in a psychiatric hospital in a person’s lifetime. This 190-day limit unfairly creates a barrier to accessing care for beneficiaries who have a chronic mental illness. To remedy this discriminatory policy, Congress should enact the bipartisan Medicare Mental Health Inpatient Equity Act, (S. 3061/H.R. 5674), introduced by Senators Susan Collins (R-Maine) and Tina Smith (D-Minn.) and Representatives Paul Tonko (D-N.Y.) and Bill Huizenga (R-Mich.).

Mental Health and Addiction Parity Enforcement

More than a decade after the passage of a federal mental health and addiction parity law, hospitals and health systems still face numerous barriers in securing appropriate reimbursement from insurance companies, which continue to violate these laws and impose other administrative roadblocks that prevent patients from receiving needed care. In their 2022 Report to Congress on implementation of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), the Departments of Labor, HHS, and the Treasury determined health insurers to be overwhelmingly in non-compliance with that law’s requirements. The report identified specific examples of the inappropriate use of Non-Qualitative Treatment Limitations (NQTLs) that hinder patients’ access to care, such as:

Excluding coverage of certain medicines as treatment for SUD conditions, even though those medicines are evidence-based therapies;
Covering nutritional counseling for medical/surgical conditions like diabetes, but not for mental health conditions where nutritional counseling would be appropriate, such as anorexia nervosa, bulimia nervosa, and binge-eating disorder;
Automatically denying coverage for urine drug testing related to SUD;
Requiring pre-certification for all mental health and substance use disorder outpatient services but only for a few medical/surgical outpatient services; and
Applying unique criteria, such as requiring demonstrable progress for continued-stay coverage, for mental health and substance use disorder treatment, without applying similar criteria to medical/surgical benefits.

The 2022 Report to Congress recommends that Congress impose civil monetary penalties for violations of the law. A provision of the House-passed Build Back Better Act would implement CMPs for such violations. The report also recommends that the Department of Labor be given the authority to directly pursue parity violations by third parties that provide administrative services to health plans. In addition to these recommendations, the AHA recommends that Congress take the following additional actions to ensure compliance:

Establish thresholds for “appropriate” use of the application of NQTLs in order to target potential bad actors for increased scrutiny;
Direct the Department of Labor to use the findings in these cases to develop and disseminate guidance for health plans and require audits of health plans practices based on this guidance; and
Require the exclusive application of streamlined and consistent eligibility criteria based on clinical evidence for admission authorization specific to behavioral health, including a standardized list of documentation necessary to demonstrate medical necessity — under such a requirement, a plan would not be allowed to ask for documentation other than what is listed.

Other payer practices that restrict access to care include overly broad use of prior authorization, automatic denials, inappropriate delays of approvals and insufficient provider networks. To address these practices, Congress should:

Require standardized formats for prior authorization requests with standard fields for required clinical information and responses requiring detailed rationale for denial;
Require the application of standardized claim review processes and deadlines, for example: communication protocols (e.g. use of fax machines instead of electronic transfer protocols only in rare instances), responses within 24 hours for urgent situations and 48 hours for non-urgent, regardless of business hours; and
Require the Department of Labor and HHS to take action against plans found to have high rates of denials or delays that are overturned on appeal or that are in violation of their prompt pay contract terms.

Integration of Physical and Behavioral Health

Behavioral health is linked to patients’ physical health, and both behavioral and physical health conditions are present in many hospitalized patients. To address this growing challenge, hospitals and health systems around the country are adopting integration.

For many hospitals and health systems, the ability to integrate behavioral health services into the daily operations of their affiliated primary care practices is essential. That means supporting their affiliated primary care physicians (PCPs) with evidence-based, standardized behavioral health screening and assessment tools to use at each patient visit. PCPs must be taught to effectively use those tools and apply the information produced by screenings. In addition, hospitals and health systems are establishing a continuum of services to which patients can be referred for further evaluation and treatment. When behavioral health competencies are not physically available on-site, PCPs — particularly those in geographic markets with few psychiatrists or other behavioral health specialists — may be able to access consultations via telehealth technologies. Remote specialists can consult virtually with PCPs about patients or connect directly with the patients virtually. Other hospitals and health systems are opening behavioral health urgent care centers. Some centers are stand-alone, while others are adjacent to, or co-located with, existing urgent care centers.

To further promote integration, Congress should support the development of primary care medical home models and other bundled payment models that explicitly include behavioral health providers.

Electronic Health Records

During the COVID-19 pandemic, it has been even more critical to share patient information and coordinate care. Such care coordination aids in the recovery of millions of individuals who are facing COVID-19-related stress and anxiety. Care coordination is particularly essential as mental health conditions, substance use and chronic medical conditions are often co-morbid. As one example, the American Heart Association has reported that patients hospitalized from heart attacks are three times as likely as the general population to develop depression.

To drive better health outcomes and deliver on value-based care, it is imperative that all hospitals and health systems have the ability to communicate electronically with psychiatric inpatient hospitals and outpatient behavioral health providers. However, to date, behavioral health has not been included in federal health information technology initiatives, making it challenging to provide coordinated care. Many behavioral health providers are using electronic health records, but the field is implementing this technology at a lower rate than other providers. Much of the infrastructure available from major electronic medical records and the technological improvements have not been realized in mental health, as those providers were excluded from participation in the HITECH Act.

The federal government should provide financial assistance to help psychiatric hospitals and behavioral health providers use electronic health records optimally. In addition, the federal government should help ensure that major medical/surgical hospital EMR vendors build out robust behavioral health platforms.

Additionally, we applaud Congress for amending CFR 42 Part 2 to better align with HIPAA, and we urge you to encourage the Administration to promulgate the final rule implementing this alignment as soon as possible.

Conclusion

The AHA appreciates your recognition of the challenges ahead and the need to examine America’s mental health crisis. We look forward to working with the Committee this year on legislation to advance access to quality behavioral health care for all.

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AHA House Statement: Pandemic Profiteers: Legislation to Stop Corporate Price Gouging

dsamuels_drupal — Wed, 02 Feb 2022 15:28:26 +0000

AHA House Statement: Pandemic Profiteers: Legislation to Stop Corporate Price Gouging dsamuels_drupal Feb 02, 2022 - 09:28 AM

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners – including more than 270,000 affiliated physicians, 2 million nurses and other caregivers – and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to submit for the record our comments regarding concerns about anticompetitive conduct on the part of health care staffing agencies, some of which have been exploiting the severe shortage of health care providers during the COVID-19 pandemic. Our concerns range from potential collusion to increased prices way beyond competitive levels and/or egregious price gouging and the impact these behaviors could have on efforts to care for patients and communities.

As we enter the third year of the COVID-19 pandemic, the nation is currently experiencing one of the worst surges of the virus due to the omicron variant. As of January 2022, there have been over 70 million COVID-19 cases and nearly 900,000 deaths in the U.S., with over 20 million cases and approximately 100,000 deaths in just the last two months.

Our nation’s health care workers have been on the front lines of this crisis since the outset, caring for millions of patients, including over 4 million inpatients with COVID-19. During this time, hospitals and health systems have continued to face a range of financial and operational pressures, with workforce-related challenges among the most critical. The AHA is concerned that staffing agencies are exploiting this shortage and driving up workforce costs even more for providers. This is occurring at a time when many hospitals and health systems are still facing other immense financial constraints and personnel shortages. For many health care providers around the country, this has led to an unsustainable situation that threatens their ability to care for the patients and communities they serve.

HOSPITALS AND HEALTH SYSTEMS ARE FACING A CRITICAL SHORTAGE OF WORKERS TO MEET INCREASED DEMAND

As demand for health care remains high, many hospitals and health systems are reporting critical staffing shortages. Nearly 1,400 hospitals or 28% of hospitals that reported data on staffing to the federal government indicated that they were anticipating a critical staffing shortage within the week of Jan. 27. At the same time, patient acuity has increased and hospital stays have accordingly increased in length. According to data from Kaufman Hall, adjusted patient days (accounting for both inpatient and outpatient hospital days) have increased 2.7% from pre-pandemic levels in 2019, while average patient length of stay has increased 8.8% compared to pre-pandemic levels and 9.5% between October 2021 and November 2021, alone.

Nurses, who are critical members of the patient care team, are one of the many health care professions that are currently in shortage. A recent study found that the nurse turnover rate was 18.7%, illustrating the magnitude of the issue facing hospitals and their ability to maintain nursing staff. The same study also found that 35.8% of hospitals reported a nurse vacancy rate of greater than 10%, which is up from 23.7% of hospitals prior to the pandemic. In fact, two-thirds of hospitals currently have a nurse vacancy rate of 7.5% or more. Hospital employment has continued to decline compared to pre-pandemic levels. According to data from the Bureau of Labor Statistics, hospital employment is down 95,600 employees from February 2020.

STAFFING AGENCIES ARE EXPLOITING WORKFORCE SHORTAGES

To help maintain appropriate levels of care for patients, nearly every hospital in the country has been forced to hire temporary staff at some point during the pandemic, including contract nurses, according to a survey by AMN Healthcare. Unfortunately, some staffing agencies seem to be exploiting these shortages by inflating prices beyond reasonably competitive levels – two or three or more times pre-pandemic rates – and reportedly retaining high profit margins for themselves.

According to Prolucent Health, there has been a 67% increase in the advertised pay rate for travel nurses from January 2020 to January 2022, and hospitals are billed an additional 28%-32% over those pay rates by staffing firms. Although our most recent information is that rates throughout the nation are in the range of $200 per hour, there are some reports of staffing agency charges as high as $240 per hour or more. These increased rates are unsustainable and have contributed to the dramatic increase in hospitals’ labor costs since the beginning of the pandemic. Through November 2021, labor expenses increased 12% compared to pre-pandemic levels and 19.5% on a per patient basis.

The conduct of some of these staffing agencies bears all the hallmarks of widespread collusion and perhaps other abuses. The AHA sent a letter to the Federal Trade Commission (FTC) nearly one year ago urging the commission to investigate these reports of anticompetitive pricing by staffing agencies. Even now in the midst of another crushing wave of the pandemic and sustained high prices throughout, the FTC still has not responded to the AHA letter.

Congressional lawmakers also have called for an investigation into price gouging by staffing agencies. On Jan. 25, nearly 200 bipartisan members of Congress sent a letter highlighting their concern that “certain nurse-staffing agencies are taking advantage of these difficult circumstances to increase their profits at the expense of patients and the hospitals that treat them.” The letter calls on the White House to enlist one or more federal agencies with competition and consumer protection authority to investigate the exorbitant price increases by these agencies.

This followed a bipartisan, bicameral letter in November 2021 that asked federal agencies to investigate this conduct to determine: if the price hikes are the product of anticompetitive activity, if there is evidence of price collusion or other anticompetitive practices, if the activity violates consumer protection laws, if increased rates translate to higher pay for contract nurses, the impact these price hikes have had on rural and underserved areas, and if nurse staffing agencies increased their own percentage of profit during the COVID-19 pandemic.

The AHA continues to urge the FTC to investigate these reports of anticompetitive conduct from staffing agencies that are exacerbating workforce shortages and straining the health care system. We also ask that Congress look into this pressing matter and coordinate with the FTC and other agencies where appropriate.

CONCLUSION

The ongoing COVID-19 pandemic has brought unprecedented demands on the nation’s health care system. Preventing staffing agencies from exploiting hospital and health systems’ need for providers would help mitigate some of the financial and operational pressures currently facing hospitals and allow them to continue focusing on critical care for patients. We thank you for your attention to this issue and consideration of our comments on behalf of hospitals and health systems. We look forward to working with Congress to address this important issue.

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“Pandemic Profiteers: Legislation to Stop Corporate Price Gouging”

February 2, 2022

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AHA Senate Statement: Stopping COVID-19 Fraud and Price Gouging

dsamuels_drupal — Tue, 01 Feb 2022 17:19:39 +0000

AHA Senate Statement: Stopping COVID-19 Fraud and Price Gouging dsamuels_drupal Feb 01, 2022 - 11:19 AM

HOSPITALS AND HEALTH SYSTEMS ARE FACING A CRITICAL SHORTAGE OF WORKERS TO MEET INCREASED DEMAND

STAFFING AGENCIES ARE EXPLOITING WORKFORCE SHORTAGES

CONCLUSION

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American Hospital Association
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Committee on Commerce, Science, and Transportation
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U.S. Senate
“Stopping COVID-19 Fraud and Price Gouging”

February 1, 2022

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AHA House Statement: "Caring for America: Legislation to Support Patients, Caregivers, and Providers.”

dsamuels_drupal — Tue, 26 Oct 2021 17:26:31 +0000

AHA House Statement: "Caring for America: Legislation to Support Patients, Caregivers, and Providers.” dsamuels_drupal Oct 26, 2021 - 12:26 PM

More than 20 months after the first cases of COVID-19 were reported in the U.S., the pandemic continues to affect communities across the country. To date, there have been more than 44 million cases of COVID-19 in the U.S. and more than 700,000 deaths. Throughout the pandemic, hospitals and health systems and their workforces have remained on the front lines mobilizing resources to ensure access to care for the patients and communities they serve. Hospitals have provided inpatient care to more than 3 million COVID-19 patients since August of last year.

The pandemic has taken an enormous toll on health care workers, who have seen first-hand the devastating impact of the pandemic. A Kaiser Family Foundation/Washington Post poll found that about 3 in 10 health care workers considered leaving their profession, and about 6 in 10 said pandemic-related stress had harmed their mental health. In addition, a survey by AHA’s American Organization for Nursing Leadership found that one of the top challenges and reasons for health care staffing shortages reported by nurses was “emotional health and wellbeing of staff.”

Another recent study on the experiences of health care workers during the COVID-19 pandemic found that 93% reported experiencing stress, 86% reported experiencing anxiety, 77% reported frustration, 76% reported exhaustion and burnout, and 75% said they were overwhelmed.1 Worry and stress lead to sleep disturbances, headaches or stomachaches, and increased alcohol or drug use.2 Yet only 13% of front-line health care workers received behavioral health services as a result of worry and stress.

A sufficient, healthy workforce is foundational to maintaining access to high quality care, especially as hospitals are strained by crises such as surges in COVID-19 hospitalizations. The AHA has joined #FirstRespondersFirst, the Dr. Lorna Breen Heroes’ Foundation, American Medical Association, American Nurses Foundation and Schwartz Center for Compassionate Healthcare in launching All In: Wellbeing First for Healthcare, a call to action for health care organizations to prioritize workforce well-being.

Bipartisan legislation being considered by the subcommittee today, the Dr. Lorna Breen Health Care Provider Protection Act, aims to reduce and prevent suicide, burnout and behavioral health disorders among health care professionals. The legislation, named for a doctor who led the emergency department at NewYork-Presbyterian Allen Hospital, would, among other provisions, authorize grants to health care providers to establish programs that offer behavioral health services for front-line workers. In addition, the bill would require the Department of Health and Human Services to study and develop recommendations on strategies to address provider burnout and facilitate resiliency, and it would direct the Centers for Disease Control and Prevention to launch a campaign encouraging health care workers to seek assistance when needed. A modified version of this legislation has already passed the Senate, and we urge the House to approve it as well so it can be signed into law.

In addition to this important legislation, the AHA asks that you look at the overall issue of workforce as you consider legislation to support patients, caregivers and providers. Hospitals and health systems face mounting and critical staffing shortages that could jeopardize access to care in the communities they serve. For example, AHA survey data show that between 2019 and 2020, job vacancies for various types of nursing personnel increased by up to 30%, and for respiratory therapists by 31%. These shortages are expected to persist, with an analysis of EMSI data showing there will be a shortage of up to 3.2 million health care workers by 2026. The AHA urges Congress to prioritize funding that supports the health care workforce needs of the country in the wake of the COVID-19 pandemic and into the future. This includes lifting the cap on Medicare-funded physician residencies, boosting support for nursing schools and aculty, expediting visas for qualified international nurses and supporting programs that address clinician well-being.

We thank you for your leadership on behalf of the nation’s health care workforce, and we look forward to working with you to enact this important legislation.

____________________

¹Mental Health America. The Mental Health of Healthcare Workers in COVID‐19, accessed July 5, 2021.
https://mhanational.org/mental‐health‐healthcare‐workers‐covid‐19
²Kaiser Family Foundation. KFF/Post Survey Reveals the Serious Mental Health Challenges Facing Frontline Healthcare Workers A Year Into the COVID‐19 Pandemic, April 6, 2021. https://www.kff.org/coronavirus‐covid‐19/press‐release/kff‐post‐survey‐reveals‐the‐serious‐mental‐health‐challenges‐facing‐frontline‐health‐care‐workers‐a‐year‐into‐the‐covid‐19‐pandemic

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Statement of the American Hospital Association for
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“Caring for America: Legislation to Support Patients, Caregivers, and Providers.”
October 26, 2021

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AHA Senate Statement “COVID-19 Health Care Flexibilities: Perspectives, Experiences, and Lessons Learned”

Matthew Diener — Wed, 19 May 2021 19:48:26 +0000

AHA Senate Statement “COVID-19 Health Care Flexibilities: Perspectives, Experiences, and Lessons Learned” Matthew Diener May 19, 2021 - 02:48 PM

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, our clinician partners – including more than 270,000 affiliated physicians, 2 million nurses and other caregivers – and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to submit this statement for the record. Since the first COVID-19 cases were diagnosed and the pandemic changed the ways in which patients were able to access traditional health care settings, providers were required to navigate significant challenges to ensure their services were still able to reach millions of patients. In response, Congress and the Administration granted various flexibilities intended to improve access and facilitate the delivery of safe, quality care.

As health care providers reflect on lessons learned and plan a post-pandemic course for the future, it is evident that several of the flexibilities have enhanced the patient experience and led to better outcomes. The AHA believes that, if extended, these flexibilities can continue to drive significant improvements in patient care long after the public health emergency (PHE) ends. Given the beneficial impact of those specific flexibilities, the AHA urges Congress and the Administration to make them permanent. In addition, a second group of flexibilities will remain critically important for some time following the PHE and will require a carefully crafted phase-out plan to ensure enough time is provided for a necessary transition. Without action from Congress and the Administration prior to the termination of the PHE, we are concerned that much of the progress made because of the implementation of many of these flexibilities may be unnecessarily halted or even lost. America’s hospitals, health systems and post-acute care providers have taken significant steps to improve the way care can be delivered due to the pandemic, and failing to seize the opportunity presented by the progress made would be a step back for the nation’s health care infrastructure. Following are the AHA’s recommendations for each category of flexibilities.

Flexibilities That Should Be Made Permanent

Telehealth Provisions

The increased use of telehealth since the start of the PHE is producing high-quality outcomes for patients, enhancing patient experience, and protecting access for individuals susceptible to infection. With the appropriate statutory and regulatory framework, this beneficial shift in care delivery could continue to improve patient experiences and outcomes and deliver health system efficiencies beyond the pandemic. The AHA urges Congress and the Administration to consider making these flexibilities permanent.

Telehealth policies should work together to maintain access for patients by connecting them to vital health care services and their personal providers through videoconferencing, remote monitoring, electronic consults and wireless communications. We support the following: elimination of the 1834(m) geographic and originating site restriction; coverage and reimbursement for audio-only services; an expanded list of providers and facilities eligible to deliver and bill for telehealth services, including rural health clinics and federally qualified health centers; a national approach to licensure so that providers can safely provide virtual care across state lines; and, adequate reimbursement for the substantial costs of establishing and maintaining a telehealth infrastructure, among others.

Payment Flexibility

In addition to the payment flexibilities needed to continue effectively offering telehealth services beyond the PHE, further payment flexibility is necessary to ensure access to care for patients. Specifically, Congress and the Administration should consider permanently increasing flexibility for site-neutral payment exceptions for providers seeking to relocate hospital outpatient departments and other off-campus provider-based departments. These steps would permit hospitals and health systems to better and more effectively serve their communities.

Hospital-at-Home Programs

The pandemic forced providers to rethink ways to deliver care safely to all patients, while simultaneously responding to surges in COVID-19 cases. To help providers make necessary adaptations, the Centers for Medicare & Medicaid Services (CMS) created new opportunities for providers to implement hospital-at-home programs.

These flexibilities permit approved providers to offer safe hospital care to eligible patients in their homes, and the results have proved pivotal in caring for COVID-19 and non-COVID-19 patients during the pandemic. While the initial aim of this flexibility was to increase health care capacity while keeping patients safe at home during the PHE, promising outcomes are demonstrating the need for hospital-at-home to be made permanent.

Hospitals and health systems are increasingly interested in standing up hospital-at-home programs, yet many hesitate to do so without assurances that their programs, which are very popular among patients and their families, could continue to exist beyond the PHE. Extending the hospital-at-home flexibilities permanently can engage providers who may be hesitant to implement these programs now and will help transform the way more providers deliver care, while enhancing the patient experience. Given the benefits provided by this program, AHA anticipates considerable additional provider interest and growth of hospital-at-home programs should the flexibilities be made permanent.

Workforce Assistance

The COVID-19 pandemic has exacerbated the strain on an already overworked and understaffed health care workforce. To help mitigate that strain, we support allowing health care professionals to practice at the top of their licenses and permanently permitting out-of-state providers to perform certain services when they are licensed in another state. We also support extensions of the five-year cap-building period for new Graduate Medical Education (GME) programs to account for COVID-19-related challenges and support long-term sustainability of physician training. Permanently extending these workforce flexibilities would help alleviate workforce shortages as the PHE ends.

Review of Certain Conditions of Participation

The PHE has shed light on several shortcomings and outdated practices across the national health care infrastructure; however, it also creates the unique opportunity to reevaluate and improve upon processes based on the lessons we have learned thus far. Conditions of participation (CoPs) are a logical starting point for review and reevaluation, as they serve as the foundation for ensuring high quality care and safety for patients and set the baseline for hospital participation in the Medicare and Medicaid programs. Compliance with the CoPs and the potential for termination from the Medicare and Medicaid programs for non-compliance serve as valuable tools ensuring hospitals are meeting critical safety and quality requirements. However, the past year’s experiences demonstrated the need to modernize certain CoPs. For example, reexamining and updating infection control and life safety code requirements would allow hospitals and health systems to continue to employ innovative approaches, such as allowing for separate facility entrances for potentially infectious patients and minimizing personal protective equipment (PPE) use and infection risk by placing IV tubes outside patient rooms. The AHA has urged CMS to collaborate with providers to determine how specific CoPs can be revamped to improve quality and safety.

Rural Capacity

CMS should continue to support increased bed capacity in rural areas when an emergency requires such action. Rural hospitals should be held harmless for increasing bed capacity during any future emergency, and those providers should be permitted to maintain pre-emergency bed counts for applicable payment programs, designations and other operational flexibilities.

Flexibilities Requiring a Transition Period

Emergency Use Authorization (EUA) Transition

The COVID-19 pandemic placed significant strain on an already fragile medical supply chain and highlighted several substantial flaws in the acquisition process. Many of those impacts still exist today to varying degrees. In response to supply chain disruptions, the Food and Drug Administration (FDA) issued an unprecedented number of EUAs to help mitigate constant disruption and continuous impact. The EUAs covered a broad range of devices, from respirators and COVID-19 tests to ventilators and decontamination systems. These EUAs saved lives by opening up new supply lines to ensure providers have the items they need to safely and effectively care for patients throughout the pandemic. However, the EUAs are not a silver bullet, and additional disruptions will occur post-pandemic. Congress should reassess how the supply chain operates and consider modifications to mitigate further disruptions. To ensure supply chain stability, the FDA should offer full approval to those devices deemed necessary, and provide sufficient transition periods to move away from devices that do not receive full approval.

Personal Protective Equipment

The COVID-19 pandemic illuminated several supply chain shortcomings, not least of which was adequate access to PPE necessary to keep both front-line health care workers and patients safe. In response to the massive PPE shortages, the FDA issued EUAs for a number of items, such as respirators and facemasks. To address the short-and-long-term challenges associated with PPE, the FDA should take steps to ensure a reasonable wind-down of PPE EUA flexibilities to allow the supply chain to recalibrate and providers to use supply on-hand. In addition, the FDA should examine the long-term fragility of the PPE supply chain and consider offering certain non-traditional medical PPE manufacturers the opportunity to receive full medical supply authorization from the FDA. Finally, as this wind-down occurs, the FDA and other federal agencies, including the Occupational Safety and Health Administration (OSHA), the National Institute for Occupational Safety and Health (NIOSH) and the Centers for Disease Control and Prevention (CDC) should work together to ensure a coordinated approach to the transition.

Health Information and Data Sharing

Robust health information and data exchange capabilities among providers and with patients and government agencies are foundational to improving care delivery, supporting better health outcomes and facilitating emergency response. Data exchange capabilities support decision-making at the point of care and the data generated can provide insights into health disparities and inequities at the patient and population health levels. Yet, to realize these benefits, robust, secure infrastructure must be in place for all entities, utilizing a common set of data definitions and standards. Requirements around data collection and sharing also must be well defined and well understood by health care providers and have a clear value proposition. Building this information technology infrastructure requires significant resources, both capital and workforce, and extensive efforts to redesign procedures and workflows and train clinicians and staff across the organization. Until all of these core building blocks are in place across the health information exchange continuum, implementation of new requirements on health care providers, such as the Office of National Coordination for Health Information Technology’s information blocking rules and CMS’ admit, discharge and transfer notification CoP, should be delayed.

Quality Measurement Reporting

During the pandemic, CMS provided hospitals relief from quality reporting requirements, including making quality reporting optional in Q1 and Q2 of 2020, and allowing hospitals to apply for reporting waivers using the pandemic as justification. We note, however, that hospital performance on the measurement programs, like readmissions, hospital-acquired conditions and value-based purchasing, will be affected over multiple fiscal years to come, and it is vital that performance be assessed reliably and fairly. For that reason, CMS should use its statutory flexibilities to not apply payment adjustments in program years where it determines that, as a result of measure reporting exceptions, it has insufficient data to calculate national performance in a reliable manner.

Federal Medical Assistance Percentages (FMAP) Increase

The temporary FMAP increase in the COVID-19 relief laws has provided critical financial support for states to ensure their Medicaid programs can provide coverage for millions of their citizens during the COVID-19 pandemic. The temporary FMAP increase of 6.2 percentage points is set to expire at the end of the quarter in which the PHE ends. To benefit from the temporary FMAP increase, states must meet certain maintenance of effort requirements, including continuous enrollment for those enrolled in the program as of March 18, 2020. State governments, advocates and stakeholders recommend that additional federal funding will be needed for up to a year after the PHE ends. Extending FMAP will provide a smooth process to reevaluate Medicaid COVID-19-related coverage extensions.

Congress addressed a similar situation during the Great Recession of 2008-2009. Then, the FMAP was increased by 6.2 percentage points for 27 months (through the end of 2010) and then extended and tapered down from 6.2 % to 3.2% and finally to 1.2% for another six months ending in June 2011. Congress should consider a comparable approach for states at the end of the PHE. Congress also should consider an enhanced FMAP for states with high unemployment rates. During the Great Recession, states with increases in unemployment rates of 3.5% received an enhanced FMAP above the 6.2%.

Medicaid Coverage, Enrollment and Outreach

The PHE enabled states to leverage Medicaid’s emergency authorities to make temporary changes to their programs that increased access to coverage and care. Most policies adopted by states helped individuals qualify for and enroll in Medicaid coverage. The two major pathways for states to change Medicaid eligibility, coverage and enrollment during the PHE were: Medicaid disaster relief state plan amendments that allow states to modify their state Medicaid plans quickly to change eligibility, benefits, cost sharing and payments; and disaster relief verification plan addenda that allowed state agencies to verify eligibility and use electronic data sources without prior approval from CMS.

The coverage needs facing states – and the policy changes needed to respond adequately – will continue to exist beyond the PHE. To provide continued flexibility, CMS should relax hospital-based presumptive eligibility standards, maximize flexibility for income verification and the use of self-attestation, and continue allowing qualified entities like hospitals to make presumptive eligibility determinations for all Medicaid eligibility groups.

Post-acute Care

Post-acute care (PAC) providers continue to play a key role in the national COVID-19 response. In communities that faced or are facing surges of the virus, they have treated many of the sickest COVID-19 patients following hospital discharge, as well as provided important relief to hospitals and other settings overwhelmed by patients with and recovering from the virus. Concurrently, the prospective payment systems (PPS) of three of the four PAC settings – the long-term care hospital, inpatient rehabilitation hospital, and skilled nursing facility PPSs – have been in the midst of major payment transformations during the PHE. The collective magnitude of the PHE and these PPS redesigns is extensive, and time is needed for policyholders and stakeholders to disentangle and understand the longer-term ramifications of each. Thus far, their combined impact includes, as examples, material reductions in case volume and overall payments, the rise of average levels of patient acuity, facility closures, personnel shifts and revised clinical pathways. For example, AHA analysis shows that, in comparison to prior patterns, case volume for these settings dropped by 6% to 30% while the average case-mix index rose from between 2.5% and 6.9% over the prior year.ⁱ In recognition of this complex dynamic, the recent FY 2022 PAC proposed rule calls upon stakeholders to provide guidance on how to account for both of these overlapping and powerful drivers of change. At this time, it remains unclear which of these and other operational impacts will persist after the PHE, but given their scope and duration, it seems possible that the PAC field will not return to its pre-PHE profile. Given this level of change and uncertainty, key PAC flexibilities should remain in effect during a transition period that follows the official end of the PHE. In particular, such extended flexibilities should include PHE-levels of payment and coverage for highest acuity COVID-19 patients who remain in the PAC setting following the PHE, including those “long-haul COVID-19 patients” for whom the virus has concluded but related symptoms remain.

The AHA is gratified that the Committee is examining the many flexibilities granted during the COVID-19 pandemic. We stand ready to work with the Committee as you consider learnings from these flexibilities and how to ensure that the nation’s health care system can continue to evolve for the benefit of patients and the health of their communities.

These data compare a 12-month period during the PHE, January 27, 2020 through January 26, 2021, to a pre-PHE 12-month period, January 26, 2019 through January 26, 2020. Data source: Medicare fee-for-service claims, Centers for Medicare & Medicaid Services, Chronic Conditions Data Warehouse, https://www2.ccwdata.org/web/guest/home.

Novel Coronavirus (SARS-CoV-2/COVID-19)

COVID-19: Coverage and Reimbursement

COVID-19: Organizational Preparedness and Capacity Planning

COVID-19: Telehealth and Virtual Care

COVID-19: Protecting Health Care Workers

COVID-19: Supplies and Personal Protective Equipment (PPE)

Type

Testimony

Statement of the American Hospital Association for the Committee on Finance of the United States Senate “COVID-19 Health Care Flexibilities: Perspectives, Experiences, and Lessons Learned”

May 19, 2021

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Statement of the AHA on “COVID-19 Part II: Evaluating the Medical Supply Chain and Pandemic Response Gaps”

Matthew Diener — Wed, 19 May 2021 16:22:38 +0000

Statement of the AHA on “COVID-19 Part II: Evaluating the Medical Supply Chain and Pandemic Response Gaps” Matthew Diener May 19, 2021 - 11:22 AM

A strong and reliable medical supply chain is a critical and integral component to delivering safe and effective high quality care to patients; however, it has become increasingly clear that the level of fragility across our national medical supply chain is unsustainable and poses significant risk to hospitals and health systems, as well as the patients and communities they serve.

Hospitals rely on the effectiveness of the various groups that make up the supply chain, including manufacturers, sterilizers, distributors and, in many cases, group purchasing organizations (GPOs). A disruption anywhere in the process has the potential to create a series of prolonged difficulties in supply acquisition for providers, which ultimately can directly affect the patients they care for, the staff who provide the care or even the hospitals’ ability to offer treatment at all. These disruptions can be the result of poor oversight, bad actors, policy initiatives and political motivations, as well as unforeseen and unpredictable events, like the COVID-19 pandemic or severe weather events.

Exacerbating these difficulties is the “lean” or “just-in-time” framework in which the medical supply chain currently operates, meaning there is effectively very little buffer when disruptions occur. Health care providers, distributors and manufacturers have pursued this just-in-time supply chain approach to lower costs so that health care is more affordable, but the pandemic has made clear the risks of such a strategy. When those disruptions occur, providers have little-to-no notice and can be left scrambling to acquire products necessary to perform the core functions of providing health care.

To mitigate these challenges, investment aimed at strengthening the supply chain is crucial. A focus on increasing manufacturing redundancy, diversifying where raw materials are produced and where products are manufactured, and growing capacity of the overall supply chain by “bulking up” and moving away from the “lean” approach will provide significant improvements (see figure 1 graphic). Hospitals and the communities they serve rely on adequate access to life-saving supplies and medications, and without substantial steps to strengthen the current framework, future health emergencies will result in the same shortfall our country recently experienced.

Figure 1: graphic depiction of changes needed to create a more resilient supply chain

Recommendations to Strengthen the National Medical Supply Chain

The AHA urges Congress to take steps to strengthen the nation’s medical supply chain. America’s hospitals and health systems rely on the efficient and timely delivery of supplies so they in turn can deliver safe and effective care, especially in times of emergency. We support increased investments to maintain consistent and continuous access to medical supplies for hospitals and our entire health care system.

Diversify manufacturing sites, as well as sources of critical raw materials, to ensure supply chain sustainability

Currently, the U.S. relies heavily on both China and India for he raw materials necessary to manufacture medical devices and pharmaceutical products. Further, many manufacturers of these products utilize manufacturing facilities located in China or India. The overwhelming reliance on a limited number of countries for the equipment and pharmaceutical products necessary to care for patients in the U.S. raises serious concerns and poses significant risks to patients and health care workers alike should a disruption occur. Congress and the Administration should encourage redundancy in the supply chain through policy initiatives focused on spurring diverse sites of production, including where possible, onshore manufacturing of critical active pharmaceutical ingredients and products.
Support advancements in reuse and reprocessing technologies to mitigate supply challenges while decreasing waste and environmental impact

The COVID-19 pandemic required providers and manufacturers to adapt quickly to minimize the impact of supply shortages on patients. Several adaptations warrant additional consideration and investment to strengthen the supply chain for the future. For example, efforts to reuse or repurpose certain medical devices, like respirator masks, proved critical when supply was scarce. Continued investments in these technologies can help providers navigate future supply shortages while also decreasing the amount of waste associated with the production and discarding of traditional single-use devices.
Invest in new product development

Opportunities exist to incentivize the development of new products that can be manufactured without raw materials sourced in the U.S., thus increasing the reliability and long-term sustainability of our domestic supplies. Additionally, investments in virtual inventory technology programs that function as supply “control towers” could ensure more accurate product visibility and aid in efforts to identify when supply capacity is approaching demand.
Develop and adapt certain data standards to aid in early detection and mitigation of supply shortages

Disruptions to the supply chain can force hospitals and health systems to cancel non-emergent procedures or delay non-emergent care due to a lack of critical supplies meant to keep both health care workers and their patients safe. In those instances, increased adoption of certain data standards, like the Unique Device Identifier (UDI), and computerized supply systems can enhance inventory management, transparency and the early detection of supply shortages with the goal of resolving the issue before it significantly affects patient care. Further, investments in the purchase of product scanning technology at the point of use can allow providers to quickly assess utilization, recognize upcoming shortages and take steps to resolve them. Increased adoption of both the UDI and scanning technologies will improve multi-directional information sharing and data analytic capabilities across the health care supply chain.
Increase end-user inventories and incentivize additional cushion

The current just-intime approach to supply chain logistics functions is outdated. The COVID-19 pandemic highlights the real risks this process has posed to patient and health care worker safety, and the provision of vital hospital services. Steps need to be taken to “feed” the supply chain with the goal of ensuring enough product is available, or capable of being made available, when demand increases. For example, supporting an increase in end-user inventory of critical supplies and medications across the existing manufacturing and distribution infrastructure in the U.S. will help add necessary capacity to the existing supply chain. Further, these actions will decrease the need for large national and state stockpiles, which can be difficult to manage and maintain and present significant operating cost, product expiration and waste issues. Finally, efforts to increase on-hand inventory for end-users allows manufacturers and distributors to increase production capacity, while also putting providers in a position to have enough access to supply in instances where demand spikes but additional measures like the Defense Production Act have not yet been invoked.

Conclusion

The health care supply chain faced unprecedented strain over the past year due to the high demand for personal protective equipment and other medical supplies, both domestically and abroad, during peak periods of the COVID-19 pandemic. Significant federal investment is needed to strengthen the national medical supply chain to ensure the country is prepared for future public health emergencies. We look forward to working with Congress to strengthen the nation’s supply chain resiliency.

Novel Coronavirus (SARS-CoV-2/COVID-19)

COVID-19: Organizational Preparedness and Capacity Planning

Supply chain management

Type

Testimony

Statement of the American Hospital Association for the Committee on Homeland Security and Governmental Affairs of the U.S. Senate “COVID-19 Part II: Evaluating the Medical Supply Chain and Pandemic Response Gaps”

May 19, 2021

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Testimony

AHA Senate Statement: “Prescription Drug Price Inflation: An Urgent Need to Lower Drug Prices in Medicare”

INCREASE COMPETITION AND INNOVATION

INCREASE DRUG PRICING TRANSPARENCY

IMPROVE ACCESS THROUGH INFLATION-BASED REBATES FOR MEDICARE DRUGS

BETTER ALIGN INCENTIVES BY TESTING CHANGES TO THE FEDERALLY-FUNDED PART D REINSURANCE PROGRAM

PROTECT THE 340B DRUG PRICING PROGRAM

CONCLUSION

Key Resources

AHA Statement “Exploring Pathways to Affordable, Universal Health Coverage Care”

The Importance of Health Coverage

Ways to Promote Better Care for America

Key Resources

AHA Senate Statement: “Protecting Youth Mental Health: Part II - Identifying and Addressing Barriers to Care”

PSYCHIATRIC BED SHORTAGES

PROVIDER SHORTAGES

THE CHILD SUICIDE PREVENTION AND LETHAL MEANS SAFETY ACT

MITIGATING THE IMPACT OF VIOLENCE ON CHILDREN AND ADOLESCENTS

INTEGRATING BEHAVIORAL HEALTH AND PHYSICAL HEALTH

AT-RISK CHILDREN AND ADOLESCENTS

ENFORCEMENT OF MENTAL HEALTH AND SUBSTANCE USE DISORDER PARITY LAWS

BATTLING STIGMA

CONCLUSION

Key Resources

AHA Senate Statement: Recruiting, Revitalizing & Diversifying: Examining the Health Care Workforce Shortage

Health Care Workforce Shortages

Supporting the Workforce

Policy Solutions

Conclusion

Key Resources

AHA House Statement: America’s Mental Health Crisis February 2, 2022

Workforce

The Pandemic’s Toll on Behavioral Health of Health Care Workers

Coverage

Mental Health and Addiction Parity Enforcement

Integration of Physical and Behavioral Health

Electronic Health Records

Conclusion

Key Resources

AHA House Statement: Pandemic Profiteers: Legislation to Stop Corporate Price Gouging

HOSPITALS AND HEALTH SYSTEMS ARE FACING A CRITICAL SHORTAGE OF WORKERS TO MEET INCREASED DEMAND

STAFFING AGENCIES ARE EXPLOITING WORKFORCE SHORTAGES

CONCLUSION

Key Resources

AHA Senate Statement: Stopping COVID-19 Fraud and Price Gouging

HOSPITALS AND HEALTH SYSTEMS ARE FACING A CRITICAL SHORTAGE OF WORKERS TO MEET INCREASED DEMAND

STAFFING AGENCIES ARE EXPLOITING WORKFORCE SHORTAGES

CONCLUSION

Key Resources

AHA House Statement: "Caring for America: Legislation to Support Patients, Caregivers, and Providers.”

Key Resources

AHA Senate Statement “COVID-19 Health Care Flexibilities: Perspectives, Experiences, and Lessons Learned”

Flexibilities That Should Be Made Permanent

Telehealth Provisions

Payment Flexibility

Hospital-at-Home Programs

Workforce Assistance

Review of Certain Conditions of Participation

Rural Capacity

Flexibilities Requiring a Transition Period

Emergency Use Authorization (EUA) Transition

Personal Protective Equipment

Health Information and Data Sharing

Quality Measurement Reporting

Federal Medical Assistance Percentages (FMAP) Increase

Medicaid Coverage, Enrollment and Outreach

Post-acute Care

Key Resources

Statement of the AHA on “COVID-19 Part II: Evaluating the Medical Supply Chain and Pandemic Response Gaps”

Recommendations to Strengthen the National Medical Supply Chain

Diversify manufacturing sites, as well as sources of critical raw materials, to ensure supply chain sustainability

Support advancements in reuse and reprocessing technologies to mitigate supply challenges while decreasing waste and environmental impact

Invest in new product development

Develop and adapt certain data standards to aid in early detection and mitigation of supply shortages

Increase end-user inventories and incentivize additional cushion

Conclusion

Key Resources