Healthcare

American Hospital Association/Federation of American Hospitals

Rick Pollack, President & CEO (AHA) and Chip Kahn, President & CEO (FAH)

The COVID-19 pandemic resulted in a variety of historic challenges for hospitals and health systems and the communities they serve in 2020. Though the situation is expected to improve once vaccines and advanced therapies are widely available, hospitals still face difficulties as 2021 begins, while at the same time continuing their mission of providing 24/7, 365 days of care to all patients – both COVID and non-COVID.

The surging number of cases and hospitalization rates have put severe financial strain on hospitals, including, but not limited to: the astronomical costs of preparing for a surge of COVID-19 patients; added expenses due to supply chain and labor market disruptions; months of essential hospital revenue being erased due to the combination of a forced shutdown and slowdown of regular operations for non-emergent care; and the high cost of treating COVID-19 cases, which tend to be incredibly resource intensive.

A pair of reports released in May and June of 2020, projected that hospital and health system financial losses would amount to at least $323.1 billion through the end of 2020. Losses on that scale have seriously threatened hospitals’ and health systems’ financial sustainability. The $178 billion in the CARES Act Provider Relief Fund falls far short of covering these losses – and hospitals and health systems only received a little more than half the $124 billion in funding released by HHS so far.

These losses have been driven largely by sustained lower hospital volume. In December 2020, Kaufman Hall reported that compared to the prior year total adjusted discharges, a blend of inpatient and outpatient utilization, had dropped 10.6%. Meanwhile, the high intensity of care required for those hospitalized with COVID-19 drove an increase in the average length of stay of 8.7%. Those hospitalized with COVID-19 have also been shown to be more likely to have existing chronic conditions, making their treatment that much more complex.

As we enter 2021 with spiking COVID-19 infections and hospitalizations across the country, the long-term impacts of the COVID-19 pandemic on hospitals, health systems and the communities they serve are difficult to project, but it is already clear they will be severe. With some experts predicting that life may not return to normal for most Americans until next fall, the road to financial recovery and stability for America’s hospitals and health systems remains a long one.

Council for Responsible Nutrition

Steve Mister, President & CEO

Both the U.S. and global dietary supplement industry are experiencing tremendous growth, partially as a result of the COVID-19 pandemic. The outbreak gave consumers reasons to take a much more active role in their own health, and encouraged many consumers to begin or to increase their supplement regimens.

Consumer interest was fueled by positive media reports about correlations between higher vitamin C and vitamin D status and less severity of the disease, general interest in boosting immune support, and reports that President Trump received several supplements, in addition to the medications, during his COVID hospital stay. The Nutrition Business Journal projects U.S. industry growth for dietary supplements in 2020 of 12 percent and predicts sales will exceed $54 billion. That’s nearly double the 6 percent growth projected prior to the pandemic. While the rate of growth will decline to more normal levels in 2021 (predicted to be about 6 percent), that is still an enviable level for a mature consumer products category. The NBJ now predicts U.S. supplement sales will exceed $60 billion by 2023.

The increased consumer interest in maintaining their health has fueled not only increased sales, but also brought additional stresses on shipping and distribution, compounded by the disruptions of the pandemic itself. The industry is facing increased strain on its supply chains for raw ingredients, excipients, and even closures and containers.

During the spring and summer, many retailers also experienced frequent out of stocks for the most popular supplements which tested both brand loyalty and loyalty to retailers as consumers searched for substitute products. Online purchasing also soared and is expected to double from 10% to 20% of sales between 2019 and 2023, as consumers sought to avoid in person shopping. This accelerated the shift to more online shopping for supplements and will likely not be reversed even when the pandemic is over.

According to CRN’s COVID-19 consumer survey, more than two in five (43 percent) of dietary supplement users said they have changed their supplement regimens since the start of the pandemic. Of those supplement users who have changed their supplement routines, 91 percent report increasing their supplement intake which includes adding new supplements to their existing routines (46 percent); taking the same supplements more regularly (25 percent); or increasing dose(s) (22 percent).

Pharmaceutical Care Management Association

JC Scott, Chief Executive Officer

Beginning in March, states issued stay-at-home orders and promoted sustained physical distancing measures in response to the coronavirus (COVID-19). Everyday activities, including filling a prescription at a neighborhood pharmacy, shifted. As patients evaluated their prescription drug needs, pharmacy benefit managers (PBMs) facilitated home delivery and early refills of maintenance medications, introduced signature-free industry best practices (for documentation of prescription deliveries) to keep Americans safe, and provided virtual patient care management services and other supports. This resulted in a meaningful increase in prescription (“script”) fill volumes in the first quarter of 2020, particularly for 90-day fills, as compared to weekly average volumes for the first quarter of 2019.

Average script volume fell in April and May, driven by fewer refill prescriptions (as more patients received, and then used, a 90- versus 30-day prescription) and fewer new prescriptions (as physician visits declined with impact to new therapy starts). Refill prescriptions experienced upticks in June and September similar to the initial trend spikes observed in March. Improvements were observed in the volume of new chronic prescriptions, though new acute prescriptions did not normalize akin to broader health care utilization patterns (IQVIA Institute, December 18, 2020). These are national trends, however; local variation reflecting differing state experiences may contribute to variation within the industry.

The COVID-19 pandemic had many economic impacts, including changing health care and prescription drug access preferences and utilization patterns. Similar to the growth in telehealth, the IQVIA Institute found higher growth in use of mail-service pharmacies, including those operated by PBMs, than retail pharmacies for 90-day prescription fills in March (+21% versus -3%), June (+11% versus +5%), September (+22% versus +7%), and December (15% versus -6%).

PBMs continue to represent a valuable economic sector, contributing to affordable prescription drug access and pharmacy services, including work in innovative areas such as specialty pharmacy, community-based behavioral health pharmacy, home infusion, and electronic tools for providers and patients. Overall script volumes continue to approach more normal levels, which may sustain or grow in 2021 as utilization patterns normalize. In line with expected sustained high unemployment, the respective shares in payer channel for medications (e.g., commercial versus government) may shift to government programs in 2021, which PBMs also serve. Brand drug manufacturer list price increases and high launch prices for new medications, including personalized gene therapies, will underscore the industry’s continued value to payers and those enrolled in their plans. The growth in specialty drugs, which will continue to dominate new drug applications and approvals, continues to outpace other drug segments. PBMs are well positioned as payers seek value-based purchasing and improved coordination of the pharmacy care experience for these high-cost drugs often requiring patient education and support.

The PBM sector will continue to demonstrate value and economic impact as it achieves net cost trend reductions for payers amidst these headwinds. PBMs are most effective when they can maximize private-sector tools. Public policy changes that limit employers’ and others’ ability to structure their pharmacy benefit contracts to their needs could undermine PBMs’ essential cost-savings tools.

*(WillisTowersWatson, “Initial estimates suggest an aggregate decline of half a percentage point (77.2 million weekly fills in 2019, as compared to 76.7 million for the January-November 2020 period). (IQVIA Institute, December 8, 2020)