Jobs report overstates gains for minorities

A weekly research roundup relevant to recent news

There’s much to cheer in today’s jobs report. The U.S. economy added over 900,000 jobs in March and has now regained over 60% of all the jobs lost during the pandemic, according to the Bureau of Labor Statistics. Here’s hoping the latest surge in new COVID-19 cases doesn’t trigger another economic shutdown.

However, the BLS is overstating the gains, according to a new study by the Institute for New Economic Thinking. Its economists warn unemployment among minority groups is significantly higher than reported. Black and Hispanic workers are much less likely to respond to the BLS’s household survey, especially if they’ve been unemployed for a while. This non-response is worst among young black and Hispanic men, the study found.

By adjusting for that bias in the BLS’s numbers, the institute’s economists calculate the black unemployment rate is actually 12.2%, 2.6 percentage points higher than the reported rate of 9.6%. The Hispanic unemployment rate, currently 7.9%, rises to 9.4%. This systematic underreporting of minority unemployment raises the overall unemployment seven-tenths of a percentage point to 6.7% under their adjusted numbers.

(Some) hospitals are doing just fine, thank you

Way back in 2011, the Tea Party-influenced Republican majority in Congress voted a one-time 2% cut in Medicare payments to hospitals. A little over a year later, after extensive lobbying by the American Hospital Association and other hospital groups, legislators postponed that so-called “sequestration” cut – something they’ve done every year since. They did it again this week.

A recent news report shows that some – and I emphasize the word some – hospitals have done fairly well during the COVID-19 pandemic, even though there’s been a large falloff in non-pandemic ER visits and discretionary operations and procedures. The pandemic relief bills passed in 2020 funneled hundreds of billions of dollars to the hospital sector.

The Washington Post story, written by reporters at Kaiser Health News, revealed that many hospitals received more in relief payments from the CURES Act bailout fund than they lost in their day-to-day operations. Their reporting also showed several leading non-profit academic medical centers, including UPMC in Pittsburgh, Baylor Scott & White in Dallas, and the Mayo Clinic in Rochester, Minnesota, could have run hefty surpluses even without receiving large bailout checks.

But that experience is far from universal. “Them that’s got shall have. Them that’s not shall lose,” as Billie Holiday once sang. Modern Healthcare reports non-profit hospitals as a group saw their operating margins shrink to 0.5% in 2020 compared to 2.4% the previous, non-pandemic year. It cited the latest Moody’s Investors Report. Most hospitals kept their heads above water by laying off workers and reducing supply spending. The hospital sector, which employs about 5.2 million Americans, is down about 100,000 jobs from a year ago, according to the Bureau of Labor Statistics.

The hospitals enduring the greatest financial stress are community hospitals without large endowments. Many are losing money even with the bailout checks. Those are also the hospitals where the greatest layoffs are taking place and where workers are under the most stress from the pandemic.

We know nothing about insurer-run Medicaid and Medicare plans

More than 70% of the 75 million people on Medicaid (40% of whom are children) receive their healthcare through plans run by insurance companies. As of January 2020, 39 states have turned their programs over to insurer-run Medicaid managed care organizations because they want the greater financial certainty that comes from making a flat per capita monthly payment for each enrollee.

A scathing new report from HHS’s Office of the Inspector General finds those states remain largely in the dark about what services their managed care contractors provide Medicaid enrollees or how much they pay hospitals and doctors for those services. State reports to the federal government are “incomplete and inaccurate,” the report said, making it almost impossible for HHS, the federal agency that picks up over half the Medicaid tab, to monitor the program for waste, fraud and abuse.

Medicare Advantage plans offered by private insurers, which now cover 43% of all Medicare beneficiaries, do little better, according to the latest Medicare Payment Advisory Commission report (see pg. 29). After receiving their flat monthly fee for every enrollee, the insurer-run plans are required to turn over “encounter” data to the Centers for Medicare and Medicaid Services. Yet the MedPAC analysis found “errors and omissions” in the data make it useless for comparing MA’s performance to the traditional Medicare program.

In its 2019 report, MedPAC’s commissioners recommended CMS start withholding some payments to MA plans until they report accurate and complete encounter data. Neither Congress nor CMS has acted on that recommendation.

Readers flock to COVID-19 studies in medical journals

Headlines over medical journal studies usually provide no clue as to their significance. Case in point: the lead article in this week’s New England Journal of Medicine, “Adjuvant Nivolumab in Resected Esophageal or Gastresophageal Junction Cancer,” reports the new drug increased survival time by about 11 months in patients. The study triggered this breathless story in the New York Times.

Given this deliberate hype-avoidance, it should come as no surprise that a typical article in NEJM, JAMA (formerly the Journal of the American Medical Association) or the British Medical Journal draws about 10,000 page views. That number stayed roughly the same during March to July 2020, when the world was hit by a global pandemic, as it did during the same period in 2019.

But total readership at the three journals soared 557% year-over-year, according to a new research letter in JAMA’s online Open Network. Why? The number of “typical” research articles declined 23% as COVID-19 research studies began filling the pages of the journals.

Physicians, healthcare policymakers, public health officials and others flocked to those world-renowned outlets to get the latest information on the new disease. A typical COVID-19 original research article drew 117,342 pageviews, more than ten times the readership of the journals’ regular fare.

The three authors, all from the Stanford University School of Medicine, worry that “the pandemic may detrimentally affect the broader evidence base because fewer non-COVID-19 research articles have been published.” The Washington Post has already reported some studies have been delayed or cancelled due to the pandemic.