School Boards Should Not Get Blanket Liability Protections for Reopening Decisions

The following is an opinion piece I wrote that was published in the Idaho Press Tribune.

It has long been established in every jurisdiction of our country, that those who provide certain products or services to the public and consumers can be held liable for providing those products or services without the exercise of reasonable care. As a practicing physician, I knew that if I provided a service or procedure to a patient and it did not meet the standard of what an ordinary and prudent physician in my specialty would have provided, and as a result, a patient was harmed, I could be held to account. No physician likes this, and being sued is professionally devastating, but I think we would all admit that we practice better medicine and document our care better because of this potential liability.

There are many things that Sen. Thayn and I do not agree with each other on. There is one thing that we are in agreement on – physicians should not be making policy decisions, e.g., whether to implement stay at home orders and whether and when to open schools. Physicians approach problems differently – we are all trained to do our very best for every single patient and to not harm any patient. Policy decisions necessarily weigh many risks – public health, the economy, social needs, employment, etc. Physicians without public policy and political expertise are poorly prepared to make these decisions.

While physicians should not make these policy decisions, where I strongly disagree with Sen. Thayn is the notion that medical or public health advice should be disregarded or discounted. The Governor, legislators and school boards should not be bound by medical or public health advice for the decisions they need to make, but on the other hand, it is irresponsible to not even consider it. My guess is that if Sen. Thayn needed tax advice, he would solicit that advice from a tax expert. Obviously, he doesn’t have to take that advice, but there is some peril in disregarding that advice. Similarly, my guess is that if he had a painful tooth, he would not take a pair of pliers to his neighbor and ask that the neighbor remedy his tooth problem. At a visit to his dentist, the dentist would diagnose the problem and then present Sen. Thayn with the options and the benefits and risks of each option. Again, the senator need not take that advice, or is free to get a second opinion, but it may be unwise to completely disregard or ignore that advice when doing so can lead to more serious oral health consequences.

So it is with our school boards. These boards are entrusted with the safety of our teachers and students. We are facing a pandemic with a novel virus. We are beginning to see consequences of COVID infections that we have previously been unaware. School openings are a difficult issue. Opening (or not) a school for in-person education requires the weighing of many considerations – financial; health and wellbeing of teachers, students and their families; risks to children of not opening schools, the impact on the economy and workforce, etc. These are not decisions for doctors, but for these boards.

There are times that a physician determines that the standard treatment is not the best option for a specific patient. But, when that is the case, we explain the basis for not using the standard treatment to the patient, and we document it. This should not result in liability if there is a good basis for this deviation. But, if we choose to ignore the accepted and best treatment available without informing our patient as to why, we may be held liable when the patient is harmed, if that harm is the result of our decision. As the legislature considers liability protections for school boards and businesses, I encourage us to require of those we are extending the protections to do the same. Explain to the public and document in their public records the basis for determining that non-medical reasons trump the medical and public health concerns, so that we can hold boards to account and a jury can determine whether that decision was negligent.

What We Think We Know about Immunity for SARS-CoV-2 – How I would explain it to a Fifth Grader

Some physicians have been pushing for people to get antibody tests for COVID in ways that I believe have been irresponsible. Recently, I commented on twitter (@drpatesblog) on yet another case, in which a patient with documented COVID infection was tested for antibodies 40 days following the resolution of his illness, and antibodies were not detectable. One of my followers, an elementary school teacher, asked if I could explain immunity to SARS-CoV-2, the virus that causes COVID, as if she was a kindergartner. I thought about how difficult that would be, but how many people this would help understand these complex concepts if I could. I decided that I couldn’t get it down to a kindergartner level, but perhaps I could explain it at a 5th or 6th grade level. Here is how I did.

The immune system is actually very complex. Most often, people equate antibodies with immunity to something, but antibodies are just one part of a very complicated system, and having antibodies to something doesn’t always mean you are immune to it. So, hear is what we know about the immune response to SARS-CoV-2 for a 5th or 6th grader:

If a bacteria or virus invades your body, and you have never been exposed to that invader before, the first response of your body is to send in ground troops that will try to stop these invaders at your border (your skin or just under your skin if you get cut, or your nose and throat if it is trying to invade your body there, or your gut, if it is trying to make entry there).

The ground troops with their rifles are called white blood cells (or white cells), and they don’t care who the enemy is, they just attack and try to shoot anyone (in this case a bacteria or virus) who doesn’t have the same uniform as the rest of the body (in this case, features that these white cells recognize as being your own body as opposed to an invader).

Just like we have different military forces (Army, Marines, Navy, Air Force, National Guard, etc.) and they all have slightly different roles and tactics to attack an enemy, we have many different types of white cells in our blood, and they each conduct different kinds of warfare against these bacteria and viruses.

Just like our ground troops can throw a hand grenade or fire a cannon and blow up our enemies as well as things around them that we might otherwise not want blown up (like innocent bystanders or buildings, etc.), our white cells start releasing chemical warfare against these invaders of our bodies and they cause some indiscriminate inflammation and surrounding tissue damage, as well, but as an attempt to kill these invaders or at least slow them down.

What our ground troops (white cells) are trying to do is prevent these invaders, in this case a virus, from crossing that boarder (our nasal passages and throat in the case of SARS-CoV-2) and entering into our towns and cities (in this case our cells), where they an take over our food supplies and manufacturing plants that will allow them to make more invaders (viruses) that can then increase their attack on us.

This chemical attack is what makes us feel bad – fever, aches, cough, runny nose, etc.

Now, all this time that our ground troops (white cells) are fighting the invaders (virus) off at our borders with their rifles, hand grenades and cannons, they have already sent the message back to headquarters that we have invaders, a sample of what they look like, and a request that we need some weapons that will specifically target these invaders to stop them before they get into our towns and cities (cells) where they will make more invaders (virus). These weapons will be very specifically targeted to this invader so that they only kill the invader and don’t cause all the collateral damage (destruction of property and injury or death to our own body’s cells and tissues as friendly fire).

HQ then revs up the manufacturing plant and starts making these highly targeted bombs (antibodies) that recognize something that is different that makes up these invaders that is not present in our normal body cells and tissues. This different thing is called an antigen and HQ manufactures these special bombs (antibodies) that only blow up anything that has that particular antigen and leaves everything else alone. It ordinarily takes HQ 7-14 days to make these specialized bombs (antibodies).

In the meantime, our ground troops (white cells) have to hold off the invaders. Sometimes they do, but often times, some of the invaders get into our towns and take over the food supply and start manufacturing new viruses.

Now, if you get an antibody test while you are sick but before HQ has had time to make antibodies, the test will be negative, even though you are infected. This is called a false negative. It is also possible that you had some left over antibodies from a prior invader, but you already defeated that invader, but the antibody test identifies those antibodies as antibodies to this virus because they look a lot alike, even though the antibodies it is recognizing don’t work against this new invader, or don’t work very well. This is called a false positive – the test is telling you that you have the antibodies when these are not the antibodies we are looking for. Unfortunately, that can make someone hang out with someone in close contact who has these invaders because the person thinks they are protected, but these invaders move from the infected person to you and now you become infected.

Now, these bombs (antibodies) come in a number of different kinds. Antibodies do often defeat invaders, but not always. We have examples of other virus invaders where HQ makes plenty of antibodies, but the invaders march on and take over our cities and don’t seem to be slowed down by the antibodies. In the case of this coronavirus, we think antibodies are important, but we don’t know yet. This is a reason to save your money and don’t get an antibody test.

Now, back to the types of bombs (antibodies). It turns out that you need one kind of antibody if the invader is crossing the skin (IgG) and you likely need a different antibody (IgA) if the invader is crossing a mucosal border (your nose or gut). Polio was a gut invader. We developed two different vaccines – a shot and a sugar cube, and it turned out that the sugar cube worked the best, because it caused HQ to make IgA better than the shot did. Everyone talks about IgG and that is what the antibody tests check for, but it may be that IgA is equally or more important – we don’t know. The good news is that in one of the first vaccine trials to be reported, it appears that the vaccine does stimulate a robust response of both IgG and IgA.

Okay, back to the types of bombs HQ is making. In addition to different types of antibodies like IgG and IgA (and there are others), some of these bombs are really powerful killer bombs called neutralizing antibodies, because in a test tube, they keep the enemy from entering into our towns and cities (cells), and if the invaders can’t get into our cells, they can’t make more invaders, so, when we shoot or bomb all of the invaders at our borders, its over because there are no more invaders.

In this regard, recent studies have been disappointing. Of those who have been infected, it appears that only 1 – 10 percent of these people make neutralizing antibodies in levels that based on other infections, we would guess that these would be clearly effective against this virus. Let me add that we don’t know that an antibody is truly a neutralizing antibody in someone’s body just because it is in a test tube. And, we don’t know how important neutralizing antibodies are in the immune response to SARS-CoV-2 (there are other examples of viruses that induce lots of neutralizing antibodies to be produced, yet they don’t slow or stop the infection).

So, if not everyone is making neutralizing antibodies or enough neutralizing antibodies, then what are they making? Well, it turns out that some of these other bombs (antibodies) are like paint balls/pellets, where you shoot the invader and it doesn’t kill them, but they are now marked. Marking these invaders can help other parts of our immune system go after them. This other part of the immune system is called the cellular immune system.

In this case, HQ is not only making highly specific bombs (antibodies – for extra credit, this part of the immune system is called humoral immunity and for credit to skip a grade, that part of the immune system with our troops on the ground at our borders is called innate immunity. It is innate because we are born with it and it does not require ever having been exposed to something to fight it. It is ready to fire on sight), but also highly specialized tanks (T-cells).

Remember, the humoral immunity – antibodies – takes time if you have never been exposed to that invader before. We have to get the body part to HQ, HQ has to design a blueprint for the bombs, and then we have to manufacture the bombs (antibodies) and that all takes about 7 – 14 days.

A recent report showed that a patient who was infected and recovered, but even 40 days after recovering still had not made measurable levels of bombs (antibodies). And, we have seen that in various studies, anywhere from 2 – 16 percent of people who were invaded (infected) did not make bombs (antibodies) that were targeted to this invader (coronavirus), at least not in levels we could measure. So, these people would be said to have a false negative test – in other words, they were infected, but have a negative antibody test. Now, if that was not disappointing enough, we also found in recent studies that if you did make bombs (antibodies), which the vast majority of those who were invaded do, HQ appears to decrease production in much shorter period of time than we had hoped. We would like HQ to keep making the bombs in case, once defeated by our body, the virus is planning to attack us again this fall or next winter. Unfortunately, in 13 percent of those who were symptomatic and 40 percent of those who were asymptomatic, bomb levels dropped to a level that most of our tests could not detect after just 2 – 3 months.

So, what does this all mean? First, we don’t know how important antibodies are in the fight against coronavirus and to our immunity against reinfection. If they are important, then these studies are bad news.

But, since most people are getting over the virus without measurable antibody or with low levels of antibodies, my guess is that another branch of the immune response (cellular immunity) may turn out to be far more important. Before I turn to cellular immunity, let me conclude on antibodies.

Don’t waste your money on an antibody test. Whether it is positive or negative, we have little idea of what either means. And, even if positive, you cannot assume you are immune. You must continue to use precautions. These antibody studies give us little confidence that you will be immune this fall/winter if you did get infected during the first spike of cases back in March/April, if antibodies are important to the immune response.

So, now, lets get to the good news – cellular immunity and vaccines. So, while HQ is mass producing bombs (antibodies), they have also been producing highly specialized tanks (T-cells).

These specialized tanks (T-cells) also come in several types. As, I mentioned previously, the goals of our innate immune system (our troops at the border) is to kill the invaders, or at least hold the invaders from getting to our towns and cities (our cells, where they can take over our manufacturing plants and make more invaders) until HQ has time to produce the specialized bombs (antibodies). Once an invader gets into a city, our innate immune system is not very effective and our specialized bombs (antibodies) generally can’t get inside to capture the invaders. It’s like ISIS getting into a town or city where they can create a stronghold and many barriers of protection as opposed to being out in the open in the unoccupied land by our borders.

So, HQ makes these T-cell tanks while they are making the antibodies. One of these tanks has the ability to find pieces of the invaders and it amplifies the attack in those areas (helper T-cells). Another type of tank can identify which towns or cities (our cells) have been invaded, and while our antibodies can’t penetrate the invader’s hold on the towns, these tanks just blow up the cell and kills all the invaders who are occupying the town (our cells) (these are called cytotoxic or killer T-cells). And, thinking ahead, HQ makes tanks with advanced radar, infrared detection capabilities and other abilities to quickly detect these same invaders again should they ever try to cross our border again once we have defeated them (memory T-cells). The long-lasting antibodies and the helper and memory T-cells are useful, because while the first time we face an invader, the entire range of our arsenal (humoral- antibodies- and cellular – T-cells) takes 7 – 14 days to mount our full response, the next time we see the invader, all of these parts of our immune response can be called to duty almost immediately, so much so, that we often will not get sick or have any symptoms, or if we do, with some unusual exceptions (like Dengue fever), we will only have a mild case.

What we also found out in these recent studies, is that while the antibody response to SARS-Co-V-2 was not particularly encouraging, the cellular response in nearly everyone was. Not only did those who did not mount a very good antibody response develop a good cellular response, but even family members who lived with someone who was infected, but to the best of our knowledge, did not get infected themselves, still developed a good cellular immune response! And, for many viruses, we know that the cellular immune response tends to be more important for viruses, because there are diseases that you don’t produce antibodies, and these patients tend to get serious bacterial infections, but not severe viral illnesses; while there are other diseases for which patients have problems with their T-cells and they tend to get bad and prolonged viral infections, like shingles that will occur in multiple locations (whereas shingles tends to occur only in a single area in those with otherwise healthy immune systems).

Vaccines can often be engineered to trigger specific antibody responses that we want (like neutralizing antibodies against a specific part of the virus that appear to be especially protective against viruses getting into cells), but they also often trigger the cellular immune response. Even if the antibody response declines over a few months, we have many examples (e.g., measles) where the memory cells specific for that virus can persist for many decades, if not the remainder of your life.

So, to sum up:

  1. Don’t get an antibody test – we have little idea what it means (and avoid those who push these tests or claim to be able to tell you what it means).
  2. If you think you had COVID earlier in the year, but didn’t get tested, you probably didn’t (only about 8 percent of such individuals appeared to have actually had COVID), and even if you did, we don’t know whether you could get infected again this fall, so take all precautions.
  3. While results from antibody studies have been disappointing, results of cellular immunity are quite good and we have very good reason to be hopeful and optimistic about current vaccines under development and testing.
  4. In the meantime, the key to slowing the transmission of this virus is putting distance between those who are infected with and shedding the virus and those who are susceptible (and everyone should assume that they are susceptible).
  5. Since we don’t know who is infected and may be shedding the virus (because they may not feel sick yet), if you have to be in proximity to other people, the best option to reduce your chances of getting infected is for EVERYONE to wear a mask. The added benefit is that the same infection control practices for coronavirus are likely to slow down or prevent the spread of other respiratory and influenza viruses that we are likely to encounter this fall.

This is now the point where I apologize to all the fifth and sixth grade teachers for thinking I could teach something as well as they do and to all the immunologists out there for the liberties I took in trying to explain this very complicated matter.

Herd Immunity for SARS-CoV-2

I frequently get asked about herd immunity, what is it; how long will it take us to get to it for this new SARS-CoV-2 virus that causes COVID; and why don’t we just throw caution to the wind, lock up granny and throw COVID parties until we have enough people infected (no one has actually phrased it this way, but you know you were thinking it!) that we now have herd immunity and can go on with our lives?

What is herd immunity?

The concept of herd immunity is used in the context of contagious, infectious diseases (most often viruses) and usually vaccine-induced immunity. The idea is that there are some in our population who may not be able to be vaccinated (e.g., newborns or those who have significant immunocompromise, especially when all we have is a live virus vaccine), those who can be vaccinated but may not develop a robust immune response (in some cases due to limitations of the available vaccine and in some cases the elderly who may not generate the same level of immune response as someone younger) and those who simply refuse to get vaccinated.

Herd immunity describes the point at which enough people in that population are immune (it could be through natural infection, but more often as a consequence of vaccination) that the virus cannot efficiently transmit within that population, so while a single of small group of people may be able to be infected for any of the reasons I stated above, generally you don’t see large outbreaks as we currently are for COVID.

Herd immunity helps protect those who remain susceptible to infection in the population because the large number of immune persons means that these vulnerable individuals are far less likely to be exposed to someone who can transmit the virus to them.

What determines the level of immunity a population needs to have so that we have herd immunity?

It is important to understand a few principles. First, the more contagious a virus is, the higher the level of immunity required in a population to provide herd immunity. For example, measles is one of the most contagious viruses. To avoid outbreaks of measles, we believe at least 94% of the population needs to have immunity.

Second, this was much simpler before we became a global society. Just to illustrate the point, let me make up a scenario. So, my best executive assistant ever just had a baby this month. Let’s say that in Boise, we have great herd immunity for measles. But, let’s say that she decides to go to a resort town in Idaho for the holidays later this year to be with family and to go out shopping for gifts in this resort town. However, this resort town is comprised of antivaccers, and the level of immunity is only in the low eighties. There are other visitors to this resort town and one family brings a child who develops measles while visiting. Measles begins to spread like wildfire (just to put things into perspective, measles is probably about 6 – 7 times more contagious than COVID). While my assistant’s child was not yet at the age to be vaccinated and thus remains susceptible, but was reasonably well protected in Boise, this beautiful little girl is now highly vulnerable in this community they have traveled to. So, when we speak of herd immunity, we are talking about the percentage of immunity within populations, but it is important to know that the virus can continue to spread in populations that have not achieved herd immunity, and susceptible persons may benefit from the protections of herd immunity in one population, but if they move or travel to an area with a population without herd immunity, they will have to take many more precautions since they will no longer have the benefit of protection within the herd.

Third, even within a population with herd immunity, we have examples such as religious and communal living communities within those populations with herd immunity that did not believe in vaccinations and were relatively isolated anyway because those communities were closed and not being exposed to the contagion, but later had significant outbreaks when persons form those communities made an international trip and then returned to their communal setting, bringing the infection with them.

What is the level of immunity in the population needed to protect the vulnerable from COVID?

Short answer, we don’t know. I have seen or heard projections anywhere from 10 – 90%. That doesn’t help us much.

So, most of us have most commonly heard the projection of 60% of the population with immunity to protect the vulnerable from continued outbreaks of COVID. Where did that number come from?

Well, there are mathematical models to predict the levels of immunity required for herd immunity. The simplest is the equation 1 – 1/R0, where R0 (R naught) is the number of people that an infected person will infect when at the beginning of an outbreak, at which time no mitigation strategies have yet been implemented. That number for SARS-CoV-2 is believed to be between 2.2 and 2.7. So, if we plug in R0 = 2.5, we get 1 – 1/2.5 = 0.6, i.e., the projection that herd immunity will require 60% of the population to be immune.

Now, while this is a convenient little equation, you may not be surprised to know that life is more complicated than this and that while this mathematical projection may be directionally correct, as I alluded to above, there are many factors that may contribute to what level of immunity will be required for herd immunity in different settings. For example, differing susceptibility levels in different populations could alter the level of immunity required for herd immunity. If young people are less susceptible to infection, a developing country with a much lower average age might require a lower level of immunity for herd immunity than a more advanced nation with a higher life expectancy. Social interactions can also impact this. In populations living in high density housing, significant crowding, or where people must show up to work sick in order to avoid losing employment, then higher levels might be necessary.

So, let’s go back to our equation, realizing it is not precise, it may not project the level of immunity required for populations that vary significantly from others in terms of their susceptibility, social interactions and risks for exposure, but with that said, let’s see if we can make sense of the range of 10 -90% that you can find out there, depending on whose projections you are taking.

One more thing about R0 before we begin. If a person who is infected infects less than one person on average, the virus is not transmitting efficiently and is unlikely to produce outbreaks and community spread of the infection. In other words, with an R0 of <1, we don’t have a lot of concern about the need for herd immunity. So, if R0 was 1.1 for this virus (which I don’t know anyone who believes that), then the level of immunity for herd immunity would be projected to be 1 – 1/1.1 = 0.1 or 10%. This is why I don’t currently believe that these low-end projections for herd immunity for this virus of 10 – 20%. In addition, while we still don’t know the percentage of Americans who have been infected, if you assume that 40% of all the infections have been asymptomatic (this is a reasonable assumption) and if you look at the confirmed cases of COVID in the country and if you assume that everyone who was infected is now immune (another fact that we doubt is the case), you can end up with an estimate that about 10.8% of the US population has been infected so far. Obviously, we have not achieved herd immunity as COVID cases are soaring around many parts of our country, so projections as low as 10% certainly don’t seem likely.

If you use the range that is commonly believed to be the R0 for this virus of 2.2 to 2.7, then you get a range of projections for the percent of the population with immunity needed to get herd immunity of 0.55 – 0.63, or 55 – 63%. That seems right to me, but as I said, we just don’t know. To the extent that these numbers are somewhere close to the levels of immunity required for herd immunity, we are a long ways off from achieving herd immunity, and given the impact on our economy, health care costs, the burdens on hospitals, the complications that some people appear to be developing post-COVID and the lives lost with just getting to 10 – 11% of Americans infected, there simply isn’t a reasonable basis to support the lock granny up, throw caution to the wind and get back to life as normal proposals to accelerate us getting to herd immunity, if that is even possible.

What do I mean, “if that is even possible?”

Well, herd immunity is based upon durable immunity in the herd. We still don’t know whether people who have been infected with SARS-CoV-2 are immune, and if so, for how long? There has been a lot of talk about antibodies, as if that was the entire basis for immunity (which it is not). But, studies on patients who have recovered from COVID are not particularly reassuring regarding the antibody response. Studies have suggested that not everyone makes antibodies following infection, oftentimes the antibodies produced are not the desirable types of antibodies that we would guess would be protective, even those who do make these best kinds of antibodies often do not produce them at high levels and a significant proportion of those who do develop antibodies experience a significant decline in their antibody levels in as little as two to three months. If antibodies are critical to the immune response against this virus (and I am not sure they are), and if these studies have accurately described the antibody response, then we would likely never have herd immunity through natural infection.

Now, don’t get too discouraged. First of all, our experience, though early, is that we have not seen a lot of cases where we believe a person previously infected with COVID has become re-infected. I don’t rule this possibility out, but if it does occur, it does not seem to be common. And, it may be because we have been chasing the wrong thing – antibodies. Oftentimes, with viruses, we find that the cellular immune response (see my prior blog post about this, as well as a soon upcoming one) is actually the most important. It may be that there are much higher levels of immune protection in our population than we think, since tests for cellular immunity are far more complicated, less available and not able to be performed in other than highly specialized laboratories. Regardless of this, it is very possible that the vaccines will stimulate a strong cellular immune response and a better antibody response than natural infection does, and in fact, with two vaccines for which we have data from early trials, that appears likely to be the case. The next challenge – get enough people vaccinated when a safe and effective vaccine is available that we can get somewhere around 60% of our population with durable immunity to this virus.

Questions for School Boards and School Principals

School leaders and decision-makers all across the country are trying to make decisions about whether to open schools for in-person education, when to open schools, and how to open schools safely both for students and their faculty and staff. These decisions are all the more difficult because unfortunately, for many parts of the country, there is significant community spread of the virus, school boards and leaders for the most part are not public health experts, there are significant political pressures and there are liability risks.

There certainly is guidance available from the CDC and the American Academy of Pediatrics. Obviously, complying with that guidance will be of significant help in defending a liability lawsuit, whereas decisions to depart from that guidance will create greater risk. Further, a decision to depart from the guidance may create job security risks for those leaders who are employed or political risks for those who are elected if we have the kinds of outbreaks and illness that has occurred at summer camps or that ends up contributing to strained hospital capacity. But, even with the guidance, there will be many unanswered questions, and boards and leaders would be well-advised to seek additional guidance from local public health agencies and medical experts.

Even a decision to follow the guidance may be challenging, especially with the fact that face masks and face coverings (for ease, I will subsequently refer to both as “face masks” or “masks”) have unfortunately become a political, emotional, and philosophical issue that strongly divides us, despite wide-spread agreement among medical experts, scientists and public health organizations that face masks, if worn correctly and by a sufficiently large enough percentage of the population, will significantly reduce the transmission of the SARS-CoV-2 virus when it is not possible to physically distance. The challenges for school boards and leaders who cave to the pressure not to mandate masks are that they will potentially be under pressure from teachers’ unions or associations concerned about protecting teachers’ health and lives, and potentially significant liability risks as rules of evidence will generally not allow for experts to introduce these political, emotional and philosophical arguments that are not supported by science or the expert community at large to be introduced in court as a defense.

My best advice to school boards and leaders is to undertake your due diligence, examine the guidance from the CDC, AAP and other reputable public health and medical organizations and then ask the following questions of the medical and public health experts who are advising you on your reopening policies, as a key element of coming to the best policy for your particular school or school district is to be fully informed of the risks and benefits, and a key element of defense in a liability action is to show that you were diligent in asking and considering the advice of experts. It may be helpful to ask and have these questions answered on the record both to demonstrate to the public your diligence, but also to create a record for your potential defense.

  1. Does the degree of community spread that we are seeing in our communities significantly increase the risk of exposure and transmission of the virus in our classrooms and school buildings that would then be likely to increase illness among our school children and staff?
  2. While there is evidence that children, if infected, tend to experience less serious illness, have there been children of the ages of our school children who have experienced severe enough illness to require hospitalization?
  3. If so, is there any effective way that we can identify which of our students could potentially develop serious illness so that we can take additional precautions to protect those students? If so, what would those additional precautions be?
  4. Studies suggest that the majority of children who are infected remain asymptomatic. If so, will symptom checkers or temperature screenings be able to identify those students who might then pose a risk of attending classes and transmitting the virus?
  5. If we cannot identify these students and parents are not aware that their child is sick and therefore know to keep their child home from school, what are the most effective means to prevent an infected, but asymptomatic (or pre-symptomatic) child from transmitting the virus to staff and students?
  6. What lessons can we learn from the outbreaks at summer camps that are applicable to our school reopening?
  7. This fall and winter, like every school year before the coronavirus, children will be exposed to a number of respiratory viruses and we know that many of these will be transmitted among students. Plus, we fully expect to have another influenza epidemic in the US. So, at points in time, the school is likely to have a number of children with fevers, coughs and runny noses. Because of the high disease activity of coronavirus across many parts of the country and disruptions in the supply chain, current testing for coronavirus is quite commonly delayed and often taking as much as 1 – 2 weeks for test results to come back. Since the Trump Administration has not announced any new strategies to address this testing logjam, we might assume that testing will continue to be a challenge this fall. If we have children who are ill, but we have these delays in testing, how are we going to know whether one or more of these children has infection with the SARS-CoV-2 virus and whether classmates and their teacher may have been exposed? I assume that we cannot close the school or quarantine teachers and classmates every time a student has a cold until we can get test results back a week later to confirm that is the case. What would our action be?
  8. One of the concerns about school reopening is that children may be exposed to the virus and while they are likely not to suffer severe illness, they may take the virus home with them. Do we know what percentage of our school’s children live with or stay with a vulnerable adult? Are there additional precautions we need to take for these children?

What You Should Know About Immunity to Severe Acute Respiratory Syndrome Coronavirus Variant 2 (SARS-CoV-2), the virus that causes COVID

Those that follow my blog, follow me on Twitter, listen to me answering listener questions about the coronavirus on radio or watch me on local television news programming will know that I have been an outspoken critic of offering SARS-CoV-2 antibody testing to the general public dating back to March. I still am, and as it turns out, many of the reasons I provided for objecting to the testing are turning out to be supported by recently released research studies. So, with this blog post, I am going to try to help you understand what little we know about the immune response and potential immunity to the SARS-CoV-2 virus, and some of the implications. There is both good news and bad news. If you are not interested in all the background and discussion of the research, you can skip to the bottom for my summary take-away points.

But first, a few disclaimers.

  1. These early studies are fascinating and informative, but not definitive. In other words, they do provide us with insights, but every research study is limited in what information it can provide and how broadly applicable the implications can be. For example, the findings of a study that looks at the response in a laboratory or in an animal may or may not be the exact way the immune system works in a human being. The findings of a study testing adults may or may not be applicable to children. The findings of a study testing persons who were hospitalized may not be the same findings that would have been found in individuals who were less severely ill and did not require hospitalization. You get the idea. So, before we conclude that the research we are going to review is broadly applicable, we need to see this replicated in other studies and in various populations of persons tested to see whether these findings are validated for everyone, or whether there may be important differences in different groups of people.
  2. The field of immunology is extremely complicated, and because this is a summary for lay persons without any particular knowledge of immunology, I will of necessity be oversimplifying my explanations below (my apologies in advance to laboratory scientists and immunologists) and will make no attempt to provide a comprehensive discussion of the immune response.
  3. We must readily admit that there is much that we don’t know and still don’t understand about the immune response to this virus. While it is amazing how much we have learned in just six months about this novel virus, nevertheless, we have only scratched the surface. As more research is conducted, we may learn that things we thought were true today are no longer true in the future.
  4. Finally, the SARS-CoV-2 virus, like all RNA viruses, is rapidly mutating. The overwhelming number of mutations will be inconsequential and will not impact the discussion below. However, there has already been one significant mutation, and there very well be more in the future. When there is a significant enough mutation or mutations to actually constitute a new strain, that new form of the virus can be more or less virulent (the significant mutation I mentioned above resulted in the virus being more infectious [more transmissible], but surprisingly, does not appear to be causing more severe illness), and if the mutations are of extreme significance, it could affect how well our current antibody tests work, how effective our immune response is and how well a vaccine (when we have one) will work.

Okay, here we go.

The first thing we need to do to understand possible immunity to the SARS-CoV-2 virus is understand the parts of the immune system. One of my criticisms of those who have been publicly promoting antibody testing is that they have not been clear with the public and likely contributing to further misleading the public because they tend to place all of the emphasis only on antibodies and seem to imply that having antibodies is to some degree synonymous with immunity. While people are probably most familiar with antibodies when they think of the immune system and immunity, I would make a wager that most people are under the misconception that antibodies = immunity. They do in some cases, but we have many examples where they do not.

First of all, antibodies come in various kinds. The kind most people are aware of is IgG and this has been the target of the current antibody tests. But, IgG has limitations. It cannot attach to a virus that has already gotten into a cell. It also is not present in mucosal tissues, like the gut, which happens to be a huge source of the receptor that the SARS-CoV-2 virus attaches to. To combat SARS-CoV-2 in the lining of the gut, you need IgA, not IgG. None of the current antibody tests check for the presence of SARS-CoV-2-specific IgA antibody.

Even within IgG, there will be many different specific IgG antibodies that target different proteins on the coronavirus – some are specific for the spike protein, some are specific for protein in the envelope of the virus, and so on. In other words, different IgG molecules will attack different parts of the virus. Some of these will be more effective than others, and not all, or even most, will accomplish the end-goal of preventing the virus from entering into a cell where it can replicate and perpetuate itself. Antibodies that do this are called neutralizing antibodies. The currently, widely available antibody tests just test for IgG and are unable, in most cases, to tell us how much antibody someone has and how protective those antibodies are.

The antibody response is just one part of a complicated and interrelated immune response. Antibodies take time to be produced. If you have not been exposed to SARS-CoV-2, then you will have no SARS-CoV-2-specific IgG antibodies in your blood. Once infected, it will take you a week or even more to develop and produce IgG antibodies. In the meantime, your immune system does not just let the virus have its way with your body. We have what is called an innate immune system, which is actually quite robust and complicated, but it recognizes that this virus is not part of you and will begin to attack it. The attack is a general response, not a targeted, specific one, so it can result in the mobilization of many types of white blood cells and chemicals whose role is to produce inflammation and an environment hostile to the virus, including cells that try to swallow the virus and destroy it inside these white cells before the virus can get into other cells that don’t have this capability and instead the virus can hijack its cellular machinery to mass produce new virus. Basically, there is a race between the virus and the immune system with the virus trying to invade the body and enter into cells, where it will be relatively safe (at least from the innate immune system and antibodies (which are called the humoral immune system) long enough to produce large amounts of new virus. Meanwhile, the innate immune response is racing to capture and destroy the virus before it can get into cells to replicate, and if the innate immune response cannot thwart the virus infection, at least buy time for the next part of the immune response called the adaptive immune response, which is a targeted and specific attack against this particular virus both with humoral immunity (antibodies) and cellular immunity (specialized immune cells that can enhance the antibody response and, unlike antibodies, can identify the cells that the virus has entered and kill those cells to stop production of new virus). This innate immune system response can be so intense that it produces wide ranging nonspecific symptoms, such as fever, fatigue, and a sense of feeling ill or unwell.

So, what is wrong with someone who thinks that they had an illness getting a SARS-CoV-2 antibody test to see if they had COVID? Well, it turns out there are plenty of reasons this may not be a good idea.

  1. If you just have an overwhelming sense of curiosity, a hundred bucks to spare, you understand all the limitations of this test and you are committed to continue to practice all of the recommended infection control measures (frequent hand washing, physically distance, wear a mask when you cannot physically distance, etc.), then I actually don’t have an objection to you getting the test.
  2. There is wide variation in the quality of antibody tests. Some are more reliable than others. It is challenging for a non-expert to be able to differentiate the better tests from the ones that are far less accurate. Further, none of these tests have been validated by the FDA. We often have to rely on the manufacturer’s own representations without much information about how they did their own testing and with the realization that they have a tremendous financial conflict of interest with an incentive to make a determination that the test is accurate, and it may not be. As a case in point, one test produced by a very reputable manufacturer and commonly used self-reported the sensitivity of the test as being 97.2 percent, which is considered very good. However, when independently tested, the sensitivity was determined to be only 82.1 percent, which would not be considered to be a good test.
  3. Even with an accurate test, if you test a population that has a low prevalence of infection, a positive test can be more likely to be a false positive test than a true positive test. In other words, the test may indicate the presence of antibodies, but you actually don’t have the antibodies to the SARS-CoV-2 virus. Obviously, it would be dangerous for someone to think that the positive test means they were infected and now are immune and then not take precautions that might now put the person at greater risk for infection. As an example, the pregnancy test is a pretty good test. But, if you test people who are unlikely to be pregnant, for example, a woman who is in her fifties or a woman who has had a hysterectomy, a positive test is more likely to be a false positive than a true positive. To take it even further, imagine that you take one thousand biological men and administer a pregnancy test. You might end up with a handful of positive tests. Obviously, they are not pregnant. It could be a problem in processing the test or a cross-rection with something else that is causing the test to appear positive, but there actually could be a few men who are producing the same pregnancy hormone that pregnant women produce, but it is because the men have a tumor that produces that same hormone, even though they obviously are not pregnant. So, we have to be very cautious in interpreting antibody tests when used on people in Idaho, where it is estimated that perhaps only two percent of the population has been infected.

A significant part of my argument against this testing has been we really don’t know how accurate it is, we don’t know if everyone produces antibodies to infection (e.g., it has been the case with other infections that mild or asymptomatic infections may not result in a significant antibody response, and in fact, many people with COVID have had mild illness or no symptoms), we have the risk to have false positive and false negative tests, and even if someone does make antibodies, we don’t know how much or how good the antibodies are and whether they will confer immunity, and even if so, for how long. Further, one large provider here in Idaho was pushing performing antibody testing on employees and reporting the results to their employer. For the life of me, I cannot imagine why I would want my employer to know my antibody test results. What would they do with that? If I was positive, would they put me in situations where I was more likely to be exposed to SARS-CoV-2 than other employees thinking that I could not catch COVID again? Would the employer decide I didn’t need to have all the expensive and limited PPE that is made available to other employees? I can think of a situation where an employer might want to know if certain areas of its business created high risk and infections, but in my opinion, employers should only receive aggregate rates of positivity and not individual employee’s test results.

It turns out that these recent studies confirm my concerns. While most people who have recovered from COVID do produce some antibodies, the amount and type of antibodies vary widely from person to person. It does appear that those with more severe infections produce higher levels of antibodies, and this is not unique to SARS-CoV-2 infections. However, the studies suggest that 2 – 8.5 percent of those who were infected do not seroconvert (in other words, have a positive antibody test) even weeks following infection. One study of individuals who were infected (confirmed with a PCR test) showed that 10 – 11 percent did not have a positive antibody test after 14 days, and another study of persons who were infected, but remained asymptomatic, showed that at 3 – 4 weeks following infection, about 19 percent of these individuals did not have a positive antibody test for IgG. Similarly and surprisingly, almost 16 percent of those who were symptomatic that they compared this study group to, also did not develop a positive antibody test. Further disappointing was the fact that over 2 – 3 months, 40 percent of the asymptomatic individuals who did initially produce antibodies, no longer produced them in amounts that could be detected by the antibody tests. Similarly, almost 13 percent of those who were symptomatic and initially produced antibody became negative on antibody testing after 2 – 3 months.

While a recent study shows that almost everyone makes some neutralizing antibody, a third of patients make them in very low titers, and only one percent of patients made these types of antibodies in very high levels that would likely be associated with immunity if neutralizing antibodies can confer immunity (which we do not know at this time). Another study of convalescent plasma donors from New York City showed that about 10 percent of donors had very high levels of neutralizing antibodies, but around 16 percent of donors had undetectable levels. Interestingly, this study also showed that antibody levels declined after 3 weeks.

To the extent that antibodies following natural infection are critical to immunity (and, we do not know that they are), the news is discouraging and suggests that most people may have limited protection and for a much shorter duration than we had contemplated. On the other hand, several of the neutralizing antibodies that nearly all persons made following infection were extremely potent, even though most people made them in very small amounts. This is very good news for our vaccine efforts, because if the vaccine can be designed to trigger the production of these particular neutralizing antibodies, then the vaccine may be highly effective.

All the discussion about antibodies and antibody testing ignores the fact that for most viral infections, cellular immunity generally plays an even more important role in fighting and preventing the infection than antibodies do. And, the good news from recent studies is that a very strong cellular immunity response was noted in everyone who has recovered from COVID, even those who had mild illness or who were asymptomatic, including family members who were exposed by a confirmed case in their family, but never determined to have become infected themselves.

Two key parts of the cellular immunity response are the development of helper and memory cells and cytotoxic or killer cells, all of which are specific to this virus. It turned out that everyone tested in this recent study developed specific memory/helper T cells. These cells can cause antibodies to be produced quickly upon exposure to the virus instead of the week or more delay that occurs when the person is exposed the first time to the virus and they can amplify the antibody production against the virus. Seventy percent of all those tested developed killer cells, which are the cells that detect the body’s cells that have been infected by the virus and kill those cells to terminate the replication of the virus. The helper cell response to the spike protein of the SARS-CoV-2 virus was very strong and robust. The good news about these findings is the suggestion that, as opposed to the case if antibody response is critical to immunity, if cellular immunity plays a key or the key role in immunity, many more persons previously infected could be likely to be immune and the duration of immunity may be considerably longer since the antibody levels declined rapidly and significantly with time, but the cellular immunity would likely be much more durable.

So, there remains much more to be learned about the immune response to SARS-CoV-2 and what is required for immunity, and if there is immunity, how long-lasting it will be. However, we certainly have interesting research studies from which we can make some inferences:

  1. A significant number of people appear not to develop antibodies in sufficient amounts that can be detected by the commercially available antibody tests, especially if they had very mild or an asymptomatic infection. This will result in false negative tests.
  2. Even if persons who were infected initially developed antibodies, a significant percentage of people stopped making sufficient levels of antibodies that could be detected after several months. This will result in false negative tests.
  3. We still do not know whether the presence of antibodies means that the person is likely to have immunity, but if it does, it appears that a very small percentage of people are likely to have strong protection.
  4. Even if antibodies do confer immunity, there is reason from these studies to be concerned that this immunity is short-lived, perhaps only lasting for months.
  5. Based upon all of these findings, a positive antibody test has the real potential to create a false sense of security for the person who tests positive, and potentially for their employer, which could cause the individual to take less precautions than he or she otherwise would, but yet the person may not be protected or fully protected, and if it has been months, the person may have lost their immunity.
  6. On a different note, the cellular immunity response (compared to the humoral immunity or antibody response) is far more encouraging, and this leads me to speculate as to whether this could explain why we are seeing relatively low levels of disease activity in some of the earlier hotspots in our country, at a time when many other places in the country are seeing marked increases in cases.
  7. Finally, these recent studies provide encouraging news for our developing vaccine options.

Here are the key take-a-ways:

  1. 2 – 16 percent of people don’t develop a positive antibody test after infection. These people will have false negative tests.
  2. Even if people do develop a positive antibody test after infection, in 2-3 months, 13 – 40 percent of those will have declining antibody levels to the point that they may no longer be detectable on the commonly used antibody tests.
  3. If antibodies are critical to immunity, it appears that only 1 – 10 percent of those infected make the kind of antibodies that we would predict would confer immunity. And, these antibodies, too, appear to decline in just a matter of weeks to months.
  4. While these antibody studies are discouraging, the other branch of immunity (cellular immunity) is very encouraging and studies showed that everyone infected (and even those who had significant exposures to infected individuals) developed a robust cellular immunity response even if they did not develop antibodies, and we have reason to believe that this immunity might be far more lasting than what is likely if antibodies are key to immunity.

So, for now, stay at home and work from home when you can. When you have to go out, physically distance. When you are unable to physically distance, wear a mask or face covering. And, instead of shelling out a hundred bucks for an antibody test that tells you little and provides no actionable results, consider donating that hundred bucks to a COVID relief effort.

COVID-19 Vaccine -Many Questions Remain

We all remain hopeful that a safe and effective vaccine to protect us from infection by the SARS-CoV-2 virus will be available within a year. This is far from certain, however, there reportedly have been promising results in early trials (we know little more than what has been in press releases because results of these studies have not been published in peer-reviewed medical literature yet). It is also promising that more than 150 vaccines, using different components of the virus to stimulate the immune response and different adjuvants that may enhance the immune response and prolong the immunity are being investigated. With so many variations undergoing trials, it offers hope that we may even have a variety of vaccines to choose from for our patients that can be tailored to their particular circumstances (e.g., we cannot use live vaccines in patients who are immunocompromised, and sometimes we find certain vaccines are more effective than others in children or in the elderly).

There remain many questions about these potential vaccines:

  1. When will we have a vaccine?

There has been speculation that we could have a vaccine this fall, perhaps as early as October. That would be wonderful, but very hard to believe. And, when people talk about a date that a vaccine may be available, we really need to be clear about what that means. Is that the date clinical studies conclude that the vaccine is safe and effective? Is it the date when the FDA approves the vaccine? Is it the date when manufacturing of the vaccine begins? Is it the date the vaccine is ready for distribution? Is it the date that the vaccine will be in pharmacies and doctors’ offices? The time over which these events transpire can very well be many months.

2. Will there be a sufficient supply of vaccine?

Given that the entire world will need the vaccine, it is widely believed that there will be limited amounts of vaccine available for some time until enough can be produced. The type of vaccine impacts how difficult it is to produce the vaccine and how long it will take. Given this, the state of Idaho is already beginning to determine priority levels for the vaccine. It is anticipated that vaccine will be prioritized to first responders, health care workers and high-risk individuals. So, when we asked above when the vaccine will be available, another question is when will it be broadly available to the public, as opposed to limited in supply such that it must be prioritized and rationed?

3. How many doses of vaccine will be required?

We don’t yet know. It appears that there is one vaccine that may only require a single dose, but it seems likely that most of the others will require a series of two injections a month apart. This has important implications. First of all, compliance with a two-vaccine series would be anticipated to be less than that of a single vaccination. Secondly, a two-series vaccine would generally be more expensive than a single dose vaccine, and cost may create a barrier to immunization. Finally, given the few manufacturers of vaccine syringes and needles and the anticipated increased demand for influenza vaccine, as well routine vaccinations for children, we might encounter shortages, particularly if the coronavirus vaccine requires a two-injection series.

4. How often will vaccination be required?

Unfortunately, recent studies suggest that the antibody response to natural infection with SARS-CoV-2 virus is very short-lived and that it is very possible that as many as 79 percent of those infected do not generate protective antibodies. There certainly is the potential to produce vaccines that will stimulate an improved immune response with the production of neutralizing antibodies, in addition to other immune enhancing effects, and it is possible that we may be able to promote more durability of the immune response with the right adjuvant. Nevertheless, it is very likely that we are looking at the potential of people needing an annual vaccination or perhaps a booster every two to three years.

5. Will the vaccine be effective in the elderly and immunocompromised patients?

There is a senescence of the immune response with increasing age. We will have to determine whether vaccines generate a sufficient immune response in the elderly, whether they require a stronger dose or perhaps more doses more frequently. Immunocompromised patients generally are not able to be given attenuated live vaccines, so we will need other options, and in fact, there are quite a number of other types of vaccines being studied. How effective those other vaccines are will likely depend upon the nature of the underlying immune deficiency.

6. How critical is IgA to the immune response and protection from SARS-CoV-2, and will the vaccine provoke an IgA response?

What we hear about in the press and media about “antibody tests” are tests that detect the presence of IgG, a type of antibody that is available to attack virus in the blood. However, IgG has two important limitations. It is ineffective at attacking viruses once they enter into a cell, and it is ineffective at attacking virus in tissues, especially the lining of the gut. IgA fulfills the latter role.

This is an important issue because the SARS-CoV-2 virus attaches to a receptor called ACE-2. That protein receptor is in the lining of the nasopharynx, the lungs and the gut. Currently, we believe that the target of the initial infection is the nasopharynx, but can the entryway for infection be the gut? Is IgA important in the defense from infection with this virus, as it is for certain other viruses, like polio? Will the vaccine trigger a sufficient IgA response?

The vaccine development for protection from the SARS-CoV-2 virus is encouraging, but far from certain. There remain many questions. No doubt we will get answers to many of these questions soon.

A Note to Hospital and Health System CEOs and Boards

The Time to Seriously Reevaluate Your Organization’s Strategy is Now

Part IV

This is the last of a four-part blog series on reevaluating your organization’s strategy. If you read the first three blog posts, you have considered the following very important factors as you contemplate what your strategy should be:

  • Your financial repositioning following the pandemic.
  • The financial pressures on the individuals, companies and local governments you serve.
  • The potential impact of the 2020 elections.
  • The potential impact of the Supreme Court’s decision on the constitutionality of the ACA.
  • The threats caused by disruptors and especially private equity and venture capital firms.
  • The changing consumer expectations and their fears about seeking services at hospitals.
  • The upcoming realignment of the health care delivery system, particularly for critical access hospitals, community hospitals and independent physicians.
  • The stability of your relationships with your employed physicians.

So, here is my question for you. I am willing to bet money that you have told your board at sometime in the past that fee for service is the problem and value is the answer, or your boards have heard about this at a conference or from an outside speaker, or you have had consultants that have told you and your board this, and most likely all three are the case. Am I right? If so, do you still believe that? Has anything changed to convince you that the current health care spending is sustainable and that the pressures on politicians to address insurance coverage, health care costs, the viability of social security and Medicare, and drug costs will go away, especially during an economic downturn? Are you convinced that employers are going to continue to willingly incur ever rising health care costs in the face of a downturn in their own business?

If these questions were not enough to get your attention and convince you that you are going to have to make a decision as to whether you continue to milk fee for service for all its worth or whether you change strategic direction and pursue value, let’s consider the numbers. Ask your CFO to create a graph or table or whatever method she wants to portray the numbers and take a look at the following 3 or 5-year trends (up to year-end 2019; let’s not confuse things by including the disruption caused by coronavirus):

  • Inpatient and outpatient episodes provided to Medicare and Medicaid beneficiaries as a percentage of all episodes of care for which there was a payer. (In other words, is there a trend in patients moving onto Medicare and Medicaid, which will obviously impact your revenue per case?)
  • Growth in inpatient services vs. growth in outpatient services
  • Net revenue per adjusted admission vs. cost per adjusted admission

There certainly are parts of the country that have been relatively spared from declining fee for service revenues and/or profitability, but my guess is that the majority of hospitals and health systems have been seeing a shift in payor mix to an increase in lower revenue governmental payers at the expense of higher revenue commercial payers, a movement of services that used to be provided as an inpatient to lower revenue outpatient settings (get ready for a movement of all but the highest risk total hip replacements to the outpatient setting), and rising costs per case that will threaten your profitability if you cannot also get increases in revenue per case, which you will be unable to get from governmental payers.

As has oft been quoted, “never let a good crisis go to waste.” I would urge you to forecast your profitability under fee for service, given what I imagine were deteriorating metrics even prior to coronavirus, but also with the environmental factors I discussed in the earlier blog posts of economic conditions, cost pressures on your customers, new market entrants and disruptors, changing relationships for physicians, and a continued movement of inpatient services to outpatient settings.

Then, I go back to my earlier question – do you still believe that fee for service is the problem and value is the answer? If not, stop saying it. If so, read on, because I am going to argue that now is the perfect time to make the shift in your business model.

I know this is hard. I have led a transformation of my organization’s business model, and it is not easy. We undertook preparations for a shift in our business model for seven years and then pulled the switch on January 1, 2017, moving nearly a third of my health system’s revenue largely to percent of revenue arrangements (think global capitation). You might ask why then and why that much.

Why then was because my team and I and our board saw the writing on the wall. We realized that change was coming and that it would be far better to make that change while we were still doing well in our current business model to help fund early losses that would be associated with a change in business model. Secondly, we expected, and it turned out to be correct, that there would be a first to market mover advantage. Plus, we had used that preparatory time to gain the alignment of our staff and physicians. Everyone knew this was the right thing to do and people were excited to do it.

Why that much was because of human nature. I hear of many health systems who say that the answer is in moving to value, but they only pay it lip service with putting 2 – 4 percent of their revenue at risk. That level of risk is not enough to change behavior of your leadership team, your physicians or your staff. I can assure you that it is difficult to make the investments necessary to manage risk if you only have several percent of your revenue involved. And, the organization will not change its behavior. When you have a downturn in finances, the first response will be to increase volumes.

We know from history that many companies have failed in transforming their business models when they were still doing well in their current business model, even when they were convinced that change was coming.

The reason that health care leaders should look at transforming their business model now is that almost no hospital or health system is doing well in their historical business model today. And, if they look at their 3 to 5-year trends, as I suggested above, I think most will conclude that fee for service was on the decline even before coronavirus. Then, if you consider the changed environmental factors I have presented in the earlier part of this series, I think most will conclude that things do look bleak, at least for the next few years.

But, I always prefer making strategic decisions based on opportunity rather than merely responding to threats (though I think anyone would be foolish to ignore the threats). It turns out that the coronavirus has actually presented tremendous opportunities for being more successful in moving to value now than we had when we did this back in 2017. What are those opportunities?

  • People are currently hesitant to proceed with “elective” procedures. (Note: This is bad for fee for service!)
  • Many people have tried telemedicine services for their health care during the pandemic and they like the convenience and safety of it. (Note, in those cases where payers pay less for telehealth visits than for in-office visits, this is also bad for fee for service)
  • Physicians are currently providing a lot of the services that previously would have been provided in the office by phone or by skipping the office visit altogether. (Again, bad for fee for service) Here is an example. My wife had an open reduction and internal fixation of her humerus in December, just before this outbreak. She was scheduled to come in and see the surgeon for a post-op visit last month, at which time she would have an x-ray to check alignment of her bone fragments. The physician’s office cancelled the office visit and just directed my wife to get the x-ray and then the doctor would call her. We did and it saved us time and convenience. Okay, you might argue, well that visit should have been included in the global surgical services fee, but you are missing the point. How many services were we making patients come in for that weren’t necessary? And, because of the pandemic, we actually have physicians deciding what is necessary and what is not, which is exactly the thinking we want under value arrangements, rather than insurance companies making those decisions under fee for service. Further, most every health system has access problems. This is why urgent care clinics, retail clinics, telehealth providers and other disrupters have been able to capitalize on this opportunity to see patients that health systems otherwise would have seen. But, now, with this change in behavior to not make patients come in to the office that don’t need to be seen despite the incentives under fee for service, under value arrangements, we still meet those patients’ needs less costly without an office visit, but we also have just freed up time to see a patient who does need to be seen who we otherwise would not have seen and they either may have gone to one of these alternative care sites or worse, their condition may have deteriorated by the time we could see them to the point that it is now more expensive to care for.

All of these present opportunities for us to manage risk, to lower costs, to promote better access, and to provide care in ways to patients that they are likely to prefer. And, we can look at other opportunities that disruptors were already beginning to pursue even before the coronavirus outbreak, such as mobile health care services that bring care to the patient’s home and hospital-at-home services.

And, the ultimate beauty of this is that while the disruptors and those who are promoting the disaggregation of health care services can beat us at fee for service, very few of them can or, even if they could, would want to manage global risk arrangements. Health systems are uniquely positioned to do this. And, large employers like Walmart, have already realized what I have been arguing for a decade now. The answer is not in a lower unit price. The answer is in controlling utilization and getting high quality services when they are needed. Fee for service does not incent either of these goals. As other employers come to realize this is true, I think private equity and venture capital firms may be happy they sold their health care holdings several years from now.

You know how you fared under fee for service during this pandemic. How would you have fared under full value arrangements? Well, just compare the quarterly earning reports for hospital companies versus those of the insurance companies. There is your answer. Now, I know you are thinking, but this pandemic is going to end sometime, perhaps next year, and things will go back to normal. If you are thinking this, you need to go back and reread the first parts of this blog series.

A Note to Hospital and Health System CEOs and Boards

This is part III of a four-part blog series entitled, “The Time to Seriously Reevaluate Your Organization’s Strategy is Now.”

The health care delivery system in the U.S. is about to realign. The pandemic has likely accelerated alignment decisions that hospitals and physicians were already considering or would likely soon consider even if it were not for the coronavirus.

With all that has happened, do you remember back to last year and the year before? Do you remember the discussions from leaders all across the country that fee for service was the problem with the American health care system and value was the answer? Now, I should be clear. When I refer to value, I mean risk – downside risk. We won’t align incentives with pay for performance or upside only arrangements and shared savings arrangements are unlikely to work in the long-term, they haven’t so far.

While it seemed that health care leaders across the country and even CMS and HHS agreed that the answer was in moving to value, that was the easy part. The hard part is how? I will have more to say about this in Part IV.

But questions circulated as to how big do you have to be to take on risk? What is the role for a critical access hospital in a value world? What about an independent community hospital? What about independent physicians?

For small or independent hospitals, before the pandemic, the question of survival as an independent entity was largely a strategic one – a question that revolved around the world view of the board and CEO. How long would the world remain the same relative to health care? Could the hospital ride it out in fee for service and maintain its independence for the foreseeable future, or even if change was coming, could we ride it out for now, but still have time to make a different decision later if the world does change? For a number of these hospitals, the pandemic has stressed already challenging financials and now the question may be not only the strategic one, but one of financial survival.

For independent physicians, many may never have faced an existential financial threat to their practice before. The pandemic has likely financially impacted nearly every practice negatively. Unlike hospitals, physician practices do not ordinarily strive to have a significant number of days of cash on hand. They typically have few reserves for a situation like this. Most often, a significant cash flow event will cause physicians to make up for it by reducing expenses (lay off staff) and reducing their incomes, both of which are very unpleasant.

Even before coronavirus, many physicians were considering where health care was headed and what their best options would be. While physicians generally value independence and by nature, like to be the ones in charge and making decisions, independence comes at a cost. Practice expenses increase every year, but except for large groups or physicians in short supply, they often have little leverage with managed care companies and may not see revenues increase enough to cover the increasing expenses. Plus, regulations continue to become more burdensome, submitting claims and collecting payments has generally become more challenging given the number of insurers and the differing rules for each payer, and administration of the office continues to become more complicated and less fun.

After this pandemic, or even during it, many physicians may be rethinking their risk tolerance and may seek greater security and ease of practice administration through employment. Others may wish to remain independent, but may seek other revenue streams to provide greater protection, or at least more control, in anticipation of another disruption to their practice.

So, what does this all mean for health system leaders? First of all, open up your channels for communication. Smaller hospitals may want to have exploratory conversations. Even if your health system is not interested in acquiring that hospital, you will need to consider the implications if that hospital is acquired by one of your competitors.

The other thing is you need to begin conversations with your physicians – both employed and independent. You need to know how these physicians are doing, what they are feeling, what concerns they have and whether your relationship is secure.

One of the first questions is whether they felt supported and protected during the pandemic. Unfortunately, I have heard directly or indirectly from physicians across the country who did not feel supported. Physicians who did not feel cared for and did not feel that they had adequate protections. Unfortunately, there were some isolated instances where leaders did not respond productively to care givers’ concerns about safety. I cannot imagine that those physicians will feel any loyalty to those hospitals or those leaders, if they don’t feel respected and cared for.

Even if the physicians did feel respected and cared for, and I am sure that this is the case for the vast majority of hospitals and health systems, they may have concerns about the hospital’s finances and their long-term viability. They may be concerned that the path to financial recovery means cutting physician salaries, because this is exactly what would have happened in their private practice when they were independent when cash flow was impacted. In my experience, physicians are very unlikely to come to the leaders and express their concerns or worries directly. Instead, they may assume the worst and look for a more stable and secure arrangement. Therefore, you need to have these conversations with your physicians and be open and honest about your situation and your plans to recover.

And, even if the physicians felt respected and cared for, and even if they are not concerned about the financial viability of the hospital, you are unlikely to know who is meeting with your physicians and what they are offering. As I mentioned in Part II, private equity and venture capital firms will be looking for better returns than they can make in the bond or stock markets for the foreseeable future. Health care will be one of the opportunities they pursue. They already were prior to coronavirus. Plus, as I mentioned in that previous blog post, they can play off of patient fears about going to hospitals.

I mean no disrespect to physicians. They are brilliant people and amazing professionals who make tremendous sacrifices for their patients, often at the expense of their families and/or their own well-being. But, as brilliant as they are, they are often unsophisticated about business. These private equity and venture capital firms can make all kinds of representations about how much better life can be, how they will be in charge and making all the decisions, how they will have a seat at the table, how they will be far more secure, and the amazing returns they can expect. I haven’t seen one yet that was upfront with physicians and explained the risks and made clear that the way the firm would make more money is to become more efficient (i.e., staff reductions – all that control physicians thought they were going to have over staff and personnel matters – gone), more productive (i.e., all that control over your schedule and how often you would see patients – gone), add more services (i.e., drive more volume for higher revenue-generating services), and that in 3 – 5 years, when the cash flow and profit margin are increased, the firm plans to sell the practice (i.e., you will have a new owner and you don’t have a say in who that is, it will be whoever offers us the most money).

As part of your review of your strategy, you must reassess your physician relationships. Your strategy will do you no good if you do not have engaged physicians to drive the strategy forward.

A Note to Hospital and Health System CEOs and Boards

The Time to Seriously Reevaluate Your Organization’s Strategy is Now

Part II

In Part I of this series, I encouraged health care leaders and their boards to reevaluate their strategic plans in light of the impact of the pandemic as well as the changes in health care that we likely will face with the new normal. In Part II, let’s continue the exploration of what some of these new pressures will be.

As hospital leaders, facing the tremendous financial pressures that you have experienced with loss of revenues and services, you are likely focusing on increasing your revenues by restarting services, as well as cutting expenses since those lost revenues will take quite some time to recover. Guess what? Almost every company and individual you serve will be doing the same thing. While there are exceptions, most companies experienced a significant loss of revenue and will only slowly be able to regain their business. Individuals, too, have lost work and income and likely have incurred more debt. For those who regain work, their hours may be limited, their commissions may be a lot less, and they, too, are likely looking for cuts to their household expenses. It is not likely that most had met their deductible before the coronavirus shut things down. Meeting their deductible now may be a significant deterrent to them seeking any “elective” services anytime soon.

Given the financial realities we are facing, I would suggest that unlike the past, we cannot “make it up on volume.” We have to think differently. Companies and governments will all be looking for cost reductions and health care costs will be a line item with a target on its back. I would also caution health care organizations to no longer think of ourselves as immune from market forces. I would challenge you to think of one industry or one company that has been successful in the long-term by ignoring consumer’s complaints that their product or service is too expensive for substantial numbers of their customers.

I want to suggest that things are different. I want to point out that disruption was coming to health care and I want to make the argument that coronavirus will only accelerate that disruption. Let me explain.

First of all, let me remind you that disruption was already underway before the coronavirus outbreak. You likely haven’t considered that free standing imaging centers, ambulatory surgery centers, free-standing cardiac cath labs and physician-owned surgical hospitals have largely come about and expanded over the last three to four decades. Even more recent was the development of so-called “micro-hospitals.” Also, more recent, the development of telemedicine and telehealth services. Even more recently, mobile health care services to provide primary care or urgent care to people in their homes and also very recent, the design of hospital-at-home services. We can all think of additional examples of disrupters looking to break into the $3T health care industry to get their bite at this, but making services more convenient, more affordable, and a better experience.

Okay, so no one is surprised by this. What is my point? My point is that coronavirus has just handed them a big helping hand. First of all, patients are already saying that they are going to put off all of those services that make hospitals money under fee for service. Surveys indicate that some will put those services off 3 months, some 6 months and some a year. Oh, and what do you think happens if we do have another bigger, deadlier second wave this fall? You would be foolish to think that patients are not going to consider the appeal of these non-hospital settings to receive care as opposed to hospitals where they take care of patients with COVID, even though their concerns may be unfounded.

Second, given at least an economic recession and possibly a depression, the financial pressures on people and the companies or local governments they work for are going to be immense. The appeal of benefit design to drive employees to lower cost settings will be significant.

Further, coronavirus did a lot to force some people to try out telehealth services who before would not have considered them or preferred an in-office visit. From the surveys I have seen, it appears that many who tried it liked it and may enjoy the convenience of it in the future. If hospitals and health systems don’t make this offering available, there are plenty of telehealth companies who will step in to provide it.

Now, I’ll explore this more in Part III, but let’s consider this. The bond market and the stock market are likely not going to be great investment vehicles for the short-term. There will be a lot of private equity and venture capital looking for places to safely and profitably invest their money. It would be a serious misstep for us not to assume a lot of it will go into health care. This, coupled with physicians who have had their businesses turned upside down, probably for the first time in their careers, will be willing partners to create new opportunities for financial returns that can take advantage of the new market realities.

It is not my intention to only identify the problems facing health systems. I will talk about solutions, but first, it is important to finish exploring these challenges because change is hard, and few are willing to make sufficient changes until forced to do so. I want to make the case that while people naturally tend to believe making changes are risky; I want to make the argument that not making change is riskier.

In Part III, let’s discuss physician challenges and opportunities.

A Note to Hospital and Health System CEOs and Boards

The Time to Seriously Reevaluate Your Organization’s Strategy is Now

Part 1 of a 4-part blog series

First of all, I wish to convey my appreciation to all of you for the amazing response to the coronavirus pandemic. I have always been proud of the important work we do as health care workers, leaders and board members, but I have been even more inspired by the courage, bravery, passion, and dedication to our patients and communities that our physicians and staff have demonstrated during this rapidly evolving and challenging time.

No doubt that your communities are very proud of your organizations and your people. During 2019, the national conversation about hospital prices, while a valid concern, nevertheless put the evaluation of hospital prices in the same category of free-standing imaging centers, free-standing ambulatory surgery centers, and physician-owned surgical hospitals that are, in many cases, little more than glorified ambulatory surgery centers. This was an unfair comparison, but it was also very difficult to communicate why. Very few good things have come out of this pandemic, but one of the good things is either the revelation or the reminder that community, regional and academic hospitals and medical centers are very different, and in fact, are critical to the care of our communities and our nation. During this crisis, it was not imaging centers, ambulatory surgery centers and physician-owned surgical hospitals that got us through this crisis and that are preparing for the “next wave,” but rather these community and regional full-service hospitals that provided emergency care, intensive care and saved countless lives of people infected with SARS-CoV-2 that developed severe illness. While the federal government lent some limited assistance to hospitals in a few hot spots of the country, the reality is that without our community, regional and academic hospitals, the deaths in our country would have been much more staggering than they already are.

Hospitals and health systems have suffered tremendous financial losses during the pandemic already, and as I have written previously, we are far from being through this. Some hospitals will not survive financially; some will survive but through a change in ownership. Nevertheless, we will eventually get through this, life will return to a new normal, and memories of the health care heroes will fade – not that we will ever forget, but just like 9/11, where we were justifiably proud of our first responders and there was justifiable national pride for some period of time, the pressures of daily life and new events and challenges will take over the headlines, and for many, the remembrance of all those who lost their lives and those who were the heroes responding to this crisis has become an annual event on the anniversary in September.

Next year, or whenever it is, the headlines will no longer be consumed by coronavirus (let’s hope!). But, we likely will have an economy hard hit by this pandemic, with small businesses and other companies perhaps still feeling the economic pressures from the fall-out, a focus on managing costs (which will revive the discussions about health care costs), and perhaps still high unemployment. In addition, state and local government budgets will be stressed (which will again bring focus to health care costs) and given what are sure to be tax revenue shortfalls, these governmental bodies will be making cuts to their budgets, including looking for health plan savings.

Additionally, by this time, we will have a presidential election and are likely to have one of the most important Supreme Court decisions ever to be issued – the fate of the Affordable Care Act. Both are of monumental importance to health care leaders and may profoundly impact your organizations. All of this needs to factor into your review of your strategy or renewed strategic planning.

Let’s just remind ourselves of what we are likely to see as we open back up our normal services under the current administration and with the ACA still in effect.

Record numbers of people have lost their jobs or were furloughed. Hopefully, many will be reemployed soon. However, we know that unemployment will be up, which will mean those who have lost their incomes and don’t have other sources are likely to join the ranks of our uninsured or Medicaid expansion populations (for those states that have expanded Medicaid). Some will qualify for advance premium tax credits and subsidies on the public exchanges that will enable them to remain insured. But, regardless of how this all shakes out, it is hard to imagine that we will not see:

  • Increases in bad debt, especially for those who maintain their insurance with high deductibles and significant out-of-pocket expenses or those who lose their insurance and are not eligible for Medicaid (the gap population).
  • Increases in charity care.
  • A marked increase in Medicaid.
  • A continued shift from commercial insurance to Medicare.
  • A shift of commercial coverage with rather broad access networks to exchange plans with narrow networks, which may mean you are now out-of-network for some patients you previously cared for.
  • Decreased revenues from ambulatory and outpatient services as people put off care or planned surgeries.
  • Decreases in revenues as some patients continue to fear coming to the hospital.
  • Patients presenting with more advanced disease as they put off screenings and preventive care (this will increase the number of patients for which the revenues do not cover the costs of providing the care)
  • Patients may present sicker because of deferring coming to the emergency room due to their fears of contracting coronavirus, which will make their care more costly and less likely to be covered by DRG payments or other reimbursements.
  • Decreased operating margins, which will in turn decrease our capital spending on facility renovations, new facilities, new technology and new services.
  • Decrease in days cash on hand due to the decrease in revenues and increased costs managing through this pandemic.
  • Downgrades of bond ratings by rating agencies based on the deteriorated financial performance and metrics, which will increase borrowing costs.

Not a rosy picture, right? It gets worse. Let’s now imagine that Republicans maintain control of the White House and Senate and the Supreme Court strikes down the ACA.

I have not seen the Republican replacement health care plan – or maybe I have, which would be more alarming. Maybe the plan is the bits and pieces we have already seen – association health plans, short-term “skinny” health plans, religious ministry cost share programs and block grants to states for Medicaid.

With striking down the ACA, the public exchanges, advance premium tax credits, subsidies and Medicaid expansion all go away.

So, let’s see how this combination of events would cause me to revise the list of impacts above. Here is the revised list:

  • Significant Increases increases in bad debt, especially for those who maintain their insurance with high deductibles and significant out-of-pocket expenses and those who develop conditions that are excluded form coverage under their new policies, and from or those who lose their insurance and are will almost certainly not be eligible for Medicaid (the gap population) and for whom there is no option of a subsidized exchange plan. Bad debt will also increase due to failure of association health plans or religious ministry cost sharing plans to cover the service after it was provided or as a consequence of their insolvency given their lack of state department of insurance oversight.
  • SignificantIncreases increases in charity care.
  • A marked Some increase in Medicaid.
  • A continued shift from commercial insurance to Medicare.
  • A shift of commercial coverage with rather broad access networks to exchange plans with narrow networks, which may mean you are now out-of-network for some patients you previously cared for.
  • Decreased revenues from ambulatory and outpatient services as people put off care or planned surgeries.
  • Decreases in revenues as some patients continue to fear coming to the hospital.
  • Patients presenting with more advanced disease as they put off screenings and preventive care (this will increase the number of patients for which the revenues do not cover the costs of providing the care) due both to fears of coronavirus, but also the fact that preventive care and screenings will no longer be covered services and will no longer be provided without out-of-pocket expense.
  • Patients may present sicker because of deferring coming to the emergency room due to their fears of contracting coronavirus or limited insurance coverage, which will make their care more costly and the costs less likely to be covered by DRG payments or other reimbursements.
  • Decreased operating margins, which will in turn decrease our capital spending on facility renovations, new facilities, new technology and new services.
  • Decrease in days cash on hand due to the decrease in revenues and increased costs managing through this pandemic.
  • Downgrades of bond ratings by rating agencies based on the deteriorated financial performance and metrics, which will increase borrowing costs.

I have written previously about what I think the outcome of the legal challenge to the ACA should be (uphold the lower court’s determination that the individual mandate is unconstitutional, but preserve the remainder of the statute and merely sever the individual mandate from the statute). But, predicting the outcome with the change in the make-up of the Court since the last time it considered the constitutionality of the ACA has become much more difficult.

All of this must be taken into account for your review of your current strategic plan or for your new strategic plan. But, there is much more to be considered. I will address additional concerns and issues in Part 2 of this blog series.