People have increased anxiety and depression from Covid-19 — telehealth can help

Fears about the novel coronavirus, the economic meltdown, and prolonged self-isolation are taking an emotional toll on Americans. Calls to the federal mental health crisis hotline are 900 percent greater than this time last year.

In normal times, one in five American adults deals with mental health issues. Anxiety is the most common mental disorder; 6.8 million people in the U.S. — roughly 3 percent of the adult population — suffer from generalized anxiety disorder.

Anxiety increases in response to global events. There is evidence that Americans felt increased anxiety after 9/11 and suicides increased during the Great Depression and World War II. Financial stress can also exacerbate anxiety and depression and 40 percent of Americans don’t have enough savings to cover a $400 emergency.

But in the unique moment of time we find ourselves in today, Americans are currently dealing with increased stress, decreased cash flow, and an inability to leave their house to seek mental health services.

Tele-health poses an opportunity to address some of those issues.

Read the full piece

PPI Conference Call | Lasting Consequences: The Positive Impacts of Telehealth

PPI, R Street Institute, and the Alliance for Connected Care discuss the potential of telehealth to reach patients where they are — at home. Courtney Joslin, Krista Drobac and Michael Mandel shared how the Trump administration has reduced barriers to accessing telehealth, and what states can do to increase access to telehealth services during the COVID-19 pandemic. They highlight how this can help patients, what hurdles remain, and the limits to care delivery via telehealth.

Paying the Bills for COVID-19: Three Ideas for Protecting Patients and America’s Health Care System

Covid-19 is hitting the United States harder than any other country in the world. Roughly 41,000 Americans have died from the novel coronavirus and more than 50,000 Americans have been hospitalized. Some experts estimate millions more could be hospitalized before the disease runs its course. Each Covid-19-related hospitalization costs between $30,000-$72,000 per person.

However, it is unclear how those increased costs will effect patients in the long term. There will clearly be a large expense in order to deal with Covid-19 cases. However, there has also been a reduction in other types of care due to the limitations on elective procedures and the logistical difficulties of seeking care in the current environment.

As of now, it is unknown whether health care spending in the aggregate will go up or down. Some hospitals might lose money and layoff workers. Ultimately, insurance premiums might stay steady, but they could also increase, draining state coffers, stretching employer budgets, and straining household finances beyond their capacity. And beyond the aggregate changes, any individual person, doctor, hospital, or insurer could see wild and unanticipated swings in either revenues or costs.

The presence of this uncertainty in the country’s largest economic sector should be a call to action. Only the federal government has the national reach and resources to do the job and eliminate most of this uncertainty. The emergency legislative actions taken by Congress so far are not enough.

Read the full piece here.

Op-Ed: COVID-19 makes it clear: Medicaid block grants will make everyone worse off

The Trump administration prepares for the best instead of the worst. During a period of economic growth, instead of preparing for an inevitable downturn, the administration pushed through large tax cuts that benefited corporations and the wealthiest individuals, driving up federal deficits. And after the Ebola outbreak subsided, rather than preparing for a new global health challenge, the White House disbanded the National Security Council’s office of global health security.

And most recently, the administration announced that states could apply for a waiver to convert Medicaid from an open-ended entitlement program to a block grant program, with a set amount of federal funding annually. Under the waiver, the federal government will cap the amount of funding it allocates to states for able-bodied adults, including in some cases pregnant women and families.

COVID-19, the novel coronavirus that has spread to a global pandemic, demonstrates why block grants are irresponsible and hurt the most vulnerable.

Read the full piece here.

America Needs to Mobilize its Medical Production

In order to save lives and mitigate the impacts of the economic shutdown, there is an acute need for national direction to orchestrate and coordinate medical supply production — and it needs to happen quickly.

When the U.S.N.S. Comfort sailed past the Statue of Liberty most Americans felt something — whether it be pride or hope — there is no denying that people felt emotional to a large scale, coordinated response to help a city ravaged by COVID-19.

As this pandemic worsens, state and hospital leaders have been asking for help: they are in desperate need for personal protective equipment (PPE) for health care workers and ventilators to treat sick patients. If the United States is going to protect the health care workforce and return to normal activity, there needs to be huge increases in PPE production and distribution.

In order to save lives and mitigate the impacts of the economic shutdown, there is an acute need for national direction to orchestrate and coordinate medical supply production — and it needs to happen quickly.

Read the full piece here.

The Warehouse Safety Conundrum

This very unique crisis is creating very unique problems. One is how to get food and other essentials from warehouses all over the country into stores and delivered to people’s homes. This is not optional. The supply chain cannot shut down.

Americans are confined to their homes, watching the rising tide of deaths. It’s an existential moment unlike any other in recent history.

What’s keeping Americans from panicking is the knowledge that the lights remain on, the water still flows, and that food and other essentials continue to arrive.

To keep the food/essentials supply chain open,  companies like Walmart, Amazon, CVS, and Lowe’s are hiring in droves. Walmart has announced that it is hiring 150,000 workers for its stores and distribution centers. Amazon is hiring 100,000 workers. CVS is hiring  50,000 store associates, home delivery drivers, distribution center employees and customer service representatives. Lowe’s is hiring 30,000 workers.

In many ways this hiring is giving us a glimpse into the post-pandemic future. Jobs that are disappearing in one sector of the economy are being partly made up in another sector, often at a higher wage.  That part of the economy is still functioning.

On the other hand, the food/essentials supply chain was never set up for social distancing or the current circumstances. It’s not surprising that warehouse and store workers are demanding higher pay, virus-related sick time and safer working conditions, all of which they deserve. They are on the front lines of the war against COVID-19 at a critical moment that no one expected.

It’s essential to keep workers safe and compensate them, but equally essential to keep feeding vulnerable Americans who are waiting out the virus. It’s a tough but necessary balancing act.

 

Getting Back to Basics on Health Care

You can say one thing with certainty about health-care politics and the 2020 election: President Trump and Republicans still want to take away people’s health insurance. If they get their way, millions of Americans would lose coverage under the Affordable Care Act and Medicaid, and many more would be stuck with skimpier health insurance. That’s a stark fact U.S. voters should keep in mind as the coronavirus spreads across the country and threatens to shut down much of our economy. Democrats have fought against this in Congress, at the state level, and in the courts.

The contrast between the two parties couldn’t be clearer: Democrats want to make sure all Americans have health insurance, Republicans don’t.

 

The US medical equipment and supply industry: What happened?

America now depends on overseas suppliers for more than half of its medical equipment and supplies, up sharply from a few years ago. That’s based on a PPI analysis of government trade and industry data, What happened?

As we go through this terrible pandemic, U.S. healthcare providers are suffering from a surprising shortage of medical equipment and supplies.  Even after President Trump invoked the Defense Production Act on Wednesday, there doesn’t seem to be an easy spigot of domestic factory production to turn on, and overseas factories are serving their own hardhit populations.

Part of the problem is that the U.S. has become increasing dependent on overseas sources for its medical equipment and supplies.  Until 2016, the U.S. economy consistently maintained a trade surplus in medical equipment and supplies. But things changed in the past few years (chart).  Demand rose and domestic production expanded, hiring 18,000 new workers since 2015.

But here’s the rub: Domestic production of medical equipment and supplies did not expand enough to meet demand. As a result, the long-time trade surplus in medical equipment and supplies turned into a rapidly widening trade deficit, hitting $7 billion in 2019.

As a result, an estimated 52% of medical equipment and supplies now come from outside the United States.

 

Where is the new surge of imports coming from? It’s not just China. In fact, imports of medical equipment and supplies from Europe have soared by $4.3 billion since 2015, or 33 percent. Imports from Asia (excepting China) are up $2.7 billion, or 43 percent. And of course, with these regions facing their own crisis, the flow of goods has slowed down.

This was not a case of hollowed-out manufacturing–employment in the U.S. medical equipment and supplies manufacturing industry is at an all time high. Nevertheless we didn’t expand fast enough.

In pandemics, like wars, it’s better to have your own factories.

 

 

 

Note: For trade purposes, we track NAICS 3391. For domestic sales and employment, we track the combination of NAICS 339112 and 339113.

Emergency Economics: Fighting a Recession in 2020 and Beyond

INTRODUCTION:

The outbreak of COVID-19, caused by the novel coronavirus, has created a global market downturn and put the United States on track for its first recession since the 2008 financial crisis. Quarantines, social distancing, and other proactive measures that are necessary to contain the pandemic are already limiting commerce and disrupting global supply chains, essentially ensuring that the U.S. economy will contract for at least some period of time in 2020.1 Policymakers must adopt a combination of thoughtful public health and macroeconomic policy measures that will limit the damage caused by both this and future recessions.

Congress has already taken two strong first steps. On March 6th, President Trump signed legislation that provided $8.3 billion in emergency funding for public health agencies and coronavirus vaccine research.2 Now the U.S. Senate is debating the Families First Coronavirus Response Act: a far more expansive bill carefully crafted by House Democrats to further bolster public health agencies and provide economic support to the people and businesses most likely to be harmed by the disease.3 This bill temporarily increases federal Medicaid and food-security spending, makes coronavirus testing available to patients free of charge, expands unemployment insurance benefits, mandates employees afflicted with the virus be given 14 days of paid sick leave, and creates a refundable tax credit to provide them with up to 12 weeks of additional paid medical leave, among many other things.4

Although these measures were a great start, much more will be needed. For example, the sick-leave mandate – which is essential for discouraging potentially infected employees from spreading the disease to their coworkers – covered just one fifth of workers after concessions were made to win Republican support.5 Many otherwise financially healthy businesses face the threat of going bankrupt as the crisis chokes off their cash flows, further increasing unemployment and perpetuating a vicious cycle of weakening demand.6 Millions of Americans may be unable to make their rent or mortgage payments, causing both homelessness and instability in the financial sector.

The Federal Reserve’s target interest rate has been reduced to zero percent, meaning it has already used its most potent tool for fighting a serious recession.7 But fortunately, low interest rates also make it cheaper than ever for Congress to borrow money to provide needed economic stimulus. Importantly, the current crisis is somewhat different than previous recessions in that most consumer spending will be constrained by limits on opportunities for commerce rather than a lack of money in their bank accounts. It is therefore more important than ever that stimulus money be targeted towards those who are most in need and most likely to spend. At the same time, a stimulus package must be aggressive enough to prevent an economic contagion that spirals into another financial crisis, or worse, a second great depression.

The best way to accomplish this goal is through the expansion of “automatic stabilizers” – policies that cause spending to rise or taxes to fall automatically when the economy contracts. These policies are more responsive to real economic needs because they are unconstrained by the political processes that often slow the passage of discretionary stimulus. Moreover, as the economy recovers, well-designed automatic stabilizers will actually reduce federal budget deficits and help pay back the debt that was used to finance stimulus.8 This proven structure prevents stimulus from being prematurely shut off (as it was following the 2008 financial crisis) and removes fiscal concerns as a political impediment to essential borrowing.9

This report provides a framework for new automatic stabilizers and other measures that will both combat the coronavirus recession and better prepare the United States for others that come after it. The Progressive Policy Institute recommends that policymakers prioritize giving relief to people who either lose their job or are already low-income, since both groups have a higher propensity to spend any money they receive than those who are economically secure. People and businesses should be given increased financial flexibility to inject liquidity into the market and prevent unnecessary bankruptcies during the crisis. The federal government should provide relief to cash-strapped state governments so that they are not forced to cut back their own spending and counteract federal stimulus. Finally, policymakers at all levels of government should cut taxes that discourage consumption, particularly those applied to industries hardest hit by the crisis.

READ THE FULL REPORT:

 

Vaccines, Risk, Disruptive Innovation, and Progress

Is the coronavirus about to force us into the Biotech Century? Here’s a follow-up to my previous post.

In response to the coronavirus pandemic, government and private researchers are taking the perhaps unprecedented step of testing the safety of a new coronavirus vaccine in volunteers before testing its safety and efficacy in animals. As one researcher told STAT, a medical news publication:

“This is very unusual,” explained Akiko Iwasaki, a Yale University microbiologist who studies the immune response to viruses. “It reflects the urgency to develop vaccines to counter the Covid-19 pandemic.”

This experiment in accelerated science could fail in two ways. First, the vaccine could turn out to be unsafe or ineffective in the volunteers. That’s not at all unlikely. This particular vaccine is being developed by a new methodology from Moderna. Unfortunately, as the New York Times wrote, “no vaccine made with this technology has yet reached the market.”

The second way that the new vaccine could fail is that it could look safe and effective in clinical trials, be put into widespread use, and then show unforeseen side effects. That could be medically and scientifically devastating, and it can’t be ruled out either.  As STAT notes, medical ethicists are conflicted about the wisdom of accelerated science.

The upside, though, is potentially enormous. A vaccine against COVID-19, even one that is only partially effective, could spare millions of people from dying worldwide, while allowing the global economy to be reactivated.

This vaccine trial is not alone. Accelerated science is going on at all these tests of new coronavirus treatments and vaccines going on all around the globe. Academic researchers, companies and government regulators are willing to throw normal procedure aside because the stakes are so high.

As these tests proceed, we will also learn something important about progress and innovation.  As noted here, we’ve spent close to $2 trillion on biosciences research and development over the past 25 years,  and we haven’t gotten the payoff in better health or economic growth that we expected.

One possibility is that well-intentioned government regulation systematically impeded disruptive innovation in the biosciences, as I argued my 2014 essay “Hacking the Regulatory State” and my 2011 policy brief  on medical innovation. It wasn’t malicious, but as I wrote:

A disruptive innovation, as identified by Clayton Christensen, starts out as less capable than existing technologies, but as the innovation evolves, it gets both cheaper and more powerful.

The first automobiles, for example, were both more expensive and less reliable than a horse. Similarly, the first personal computers were basically toys compared to the existing minicomputers and mainframes. But they got better and cheaper over time.

From that perspective, it’s clear that a government regulatory body with “too-high standards” can have the effect of choking off innovation. Imagine how the history of computing would have been different if Steve Jobs and Steve Wozniak had to prove that the Apple I could meet government performance standards before it could be sold.

FDA standards require both safety and efficacy, meaning that the drug or medical device have to perform better or at a minimum just as well as existing alternatives.

It’s important to note that the first personal computers would not have met FDA-type efficacy standards, and neither would have the first cell phones.  When cell phones were first introduced in the 1980s, they were bulky, heavy devices which retailed for $4000, provided terrible reception and could barely fit in a briefcase, much less a pocket.  By any measure, they were inferior in phone quality to existing wireline services. Today, most people have given up their wirelines in favor of mobile devices.

Under ordinary circumstances, it makes sense to apply tighter standards to medical innovation than to IT innovation. Under ordinary circumstances, people want assurances that a new drug or medical device is safe, and will work at least as well as the alternative.

These are not ordinary circumstances. The tragedy of the coronavirus pandemic is forcing us to try things and make decisions that we would never do in the normal course of affairs.  We are in uncharted territory, and there are no guarantees. We could learn that the regulators were right, and disruptive innovation is the wrong model for medical science. Or we could learn that medical science has advanced far enough to produce vaccines and treatments for new diseases in far less time than normal.  And that would be the dawn of the Biotech Century.

 

 

The Biotech Century Faces a Biological Menace: What We Need to Do Now

Can we expect the biopharma folks to quickly find a good treatment for COVID-19? Is it time to bust up regulatory barriers holding back innovation?

In March 1997, BusinessWeek magazine, now part of Bloomberg,  ran a cover story entitled “The Biotech Century.” The cover language, in part, said “Thanks to fundamental advances in genetics, biology will define scientific progress in the 21st century.”

Bloomberg BusinessWeek, March 1997 cover story

In the subsequent 23 years, biological scientists have achieved notable scientific triumphs, including the sequencing of the human genome. HIV was tamed, HepB has been cured, and gene therapies are slowly coming onto the market. Since that cover, the private and public sectors have spent probably close to $2 trillion on health-related research and development,  a truly astonishing sum.

Nevertheless, the acknowledged innovation leaders in the 21st Century have been info-tech companies like Google, Apple, and Amazon. Pharma companies like Pfizer, Gilead, and Roche have done well, both in terms of beneficial new drugs and business success. But they haven’t captured the popular imagination like the tech firms.

Unfortunately, that’s fair.  Tech applications have gotten cheaper and faster across the board. Meanwhile, bio science has moved really fast, but market applications of the new science have been much slower. Moreover, the promises of faster, cheaper, more targeted drug development seem to have fallen short. Instead, drug development has been getting more expensive and riskier.

There’s no agreement, though, on why the scientific advances have not translated into lower costs and faster drug development. There are three leading hypotheses, not mutually exclusive. First, the intricacies of medicine could be a lot harder and more complicated than scientists thought.  Second, regulatory barriers in bio could be slowing down innovation. Third, the profit motive could be diverting biopharma firms from truly important R&D.

Now the moment of truth for bio has arrived, along with a global pandemic that rages out of control. Tech companies can be helpful in maintaining the infotech infrastructure that allows the essential social distancing. But the real innovative responses have to be carried out by the university labs, the biopharma companies, and hospital researchers.

Some of that has started. Roche and Thermo Fisher have developed new faster tests for coronavirus, which received emergency clearance from the FDA. Companies such as Gilead and Regeneron are developing and testing new treatments at a breakneck pace. And vaccines are going through their initial round of tests.

But it’s not enough.  What we can do to help: Make it clear that innovation and new ideas are encouraged, even risky ones. Legitimate researchers with new tests and new solutions should be encouraged.  And unnecessary regulatory barriers that slow down drug and vaccine development should be temporarily thrust aside.  This is not a time for business as usual.

 

 

 

A Rare Note of Good News–Or, Why the US Isn’t Italy

In recent years I have repeatedly demonstrated that the cost of labor is the main driving force behind rising health care costs in the U.S. ( for example, here). The US health care workforce has grown far faster than the population, even adjusting for aging.  Meanwhile cost control efforts have focused on areas like pharmaceuticals and the number of hospital beds, so that the number of hospital beds per person have been steadily declining even as the population has aged.

These two divergent trends define the nature of our current situation. Take a look at the two charts below.

When it comes to nurses per 1000 population, the U.S. compared well with most of its OECD peers. The healthcare system is doing okay in terms of human capacity–that’s what we have been spending money on. Other OECD figures show the same trends.

But when it comes to hospital beds, we are at the low end, having been squeezing out beds as a cost savings move.

These charts also explain why Italy is being hit so hard, and why Germany is relatively unworried.  Italy is weak on both nurses and beds compared to its European neighbors.  Meanwhile, Germany is strong on both nurses and beds.

More to come.

 

 

House Democrats Have The Right Coronavirus Response

The outbreak of COVID-19 (commonly known as coronavirus) has created a global market downturn and raised the prospect that the United States could enter its first recession since the 2008 financial crisis. Last night, President Donald Trump and U.S. House Speaker Nancy Pelosi offered two competing approaches for securing both the health and economic security of the American people. While the president’s proposals would arguably do more harm than good, Speaker Pelosi and House Democrats should be commended for swiftly developing a comprehensive and serious plan to effectively tackle the crisis.

During the last recession, Speaker Pelosi passed a stimulus bill that used a combination of deficit-financed tax cuts and government spending increases to boost the economy. With interest rates on government debt now below projected inflation, many are calling for her to now take similar action. The problem is that commerce is currently being constrained by proactive measures people are taking to limit the spread of a pandemic, not a lack of money in consumers’ pockets. Additionally, the coronavirus has disrupted global supply chains, which no amount of demand-side stimulus can alleviate in the short term. A unique economic problem requires a unique solution.

Read the full piece on Forbes.

Helping Older Americans: The Role of Point-of-Sale Rebates

This paper discusses possible solutions to the problem of excess out-of-pocket drug costs. We argue that allowing consumers to receive drug rebates directly at the “point-of-sale,” rather than indirectly and opaquely through insurers and pharmacy benefit managers, will help make the healthcare system simpler and fairer.

Like clockwork, Congress holds hearings featuring Americans, both young and old, who are being hit hard by sky-high out-of-pocket drug costs. Surveys uniformly show that pharmaceutical companies are hugely distrusted. Many Americans regard drug costs as one of their biggest problems.

Even while politicians fume about the high prices of prescription drugs, solid statistics derived from multiple reliable sources show that out-of-pocket spending on prescription drugs as a share of household disposable income has fallen to a record low of only 0.3% (see Figure 1). By comparison, in 2005 out-of-pocket spending on prescription drugs was almost 0.6% of household disposable income, almost twice as much.

Nevertheless, some Americans find themselves with astronomical spending on drugs. We analyzed 2017 Medical Expenditure Panel Survey (MEPS) survey data on out-of-pocket prescription drug spending. Our results show that about 1% of Americans each year pay more than $2000 per year in out-of-pocket drug costs. That’s more than ten times the average, and a level that is clearly unacceptable.

[gview file=”https://www.progressivepolicy.org/wp-content/uploads/2020/03/PPI_HelpingOlderAmericans_V6-1.pdf” title=”PPI_HelpingOlderAmericans_V6 (1)”]

Good Politics and Good Policy: Why Progressives Should Support A “Flexible” Domestic Manufacturing Initiative

It’s the S-word–shortages. The greatest manufacturing nation in the world, but we can’t make enough masks and other protective gear for our frontline healthcare workers? The coronavirus crisis points out what many of us already knew–globalization is not enough to provide the flexibility and surge response that the U.S. needs. Apparently in medical emergencies,  countries do what you would expect–cut off exports and keep supplies of critical medical equipment for their own people. And it’s not just China–France and Germany are also restricting exports of medical supplies.

Medical supplies are just the tip of the iceberg here. As has become clear, the U.S. needs a more flexible and diverse manufacturing sector, able to pivot when needed and quickly handle surges in demand and shortfalls in supply. Strategic inventories are all well and good, but you can never predict exactly what is going to happen, whether it’s an environmental disaster or the unfortunate specter of war.

As I wrote in a new column in Forbes, the coronavirus epidemic “has illustrated the fragility of global supply chains, and the potential problems with having too much global production concentrated in China. In February, for example, Coca-Cola, for example, warned of possible disruptions in the supply of sweeteners coming from China. Other industries, from steel to pharmaceuticals, face similar potential problems.”

But we don’t need investment in conventional factories,  which in ordinary times can’t compete. What’s needed is a sustained push for digital manufacturing, which is potentially far more flexible than conventional manufacturing. It’s like the difference between a point-to-point telephone system and an Internet built on general purpose routers and processing node.  The conventional telephone system, built on copper wires, worked very well for making voice calls, but was hard to reposition for other uses.  The Internet can not only handle voice calls, but excels at all sorts of new tasks.

Luckily, here’s one case where good policy is good politics. PPI recently released a new poll conducted by Pete Brodnitz. The poll surveyed 1500 registered voters in Michigan, Pennsylvania and Wisconsin in early-to-mid February, three swing states that will be critical for the 2020 presidential election in November.

The poll showed that  73% of the respondents in these three states favored a federal role in promoting manufacturing-related jobs in the United States, an overwhelming majority. Moreover, the support was stronger among Republicans and independents than among Democrats. Such a program could be crucial in a tight race.

We’re not talking about a conventional industrial policy that picks winners and losers.  Rather, progressives should support the development of a flexible digital manufacturing sector that can quickly adapt to changing circumstances, whether it’s a medical emergency, an unexpected growth in demand for electric vehicles, or political hostilities.  The program would provide short-run demand stimulus to keep people working, medium-term incentives for digital investment (which we wrote about here), and a long-term research program for flexible digital manufacturing processes. Good policy–and good politics.

 

 

 

 

 

 

 

 

 

 

Kane for The Hill: “Presidential candidates should use their platforms to elevate oral health”

The debate over “Medicare for All” has sucked the oxygen from many other important health policy issues. Though 28 million Americans lack health insurance in the United States, there is an untold crisis of more than four times that population — 114 million Americans — without dental coverage.

Millions of Americans are suffering from decaying teeth, gum disease, and chronic pain. Yet, in the Democratic presidential debates thus far, barely a word has been spoken about this crisis. When we spend so much time talking about health care, why is oral health so easy to ignore?

Oral health affects overall health. The consequences of untreated decay and periodontal disease – slowly destructive gum infections – include increased risk of cancers, cardiovascular diseases, Alzheimer’s disease, and premature births. Yet, almost two-thirds of Medicare enrollees, a quarter of children, and 40 percent of adults under the age of 65 don’t have dental coverage.

Read the full op-ed here.