Beyond relief to families, small businesses and certain sectors adversely affected by COVID-19, the bill’s health focus revolved around aiding hospitals, broadening access to telehealth services, supporting health workers, increasing funds for the care of patients diagnosed with COVID-19 and preventing future weaknesses in the medical device and pharmaceutical supply chain.
The bill is the third large-scale effort from Congress to address the pandemic’s impact on the nation. As of early Thursday afternoon, the House had not voted on the bill.
The package includes billions for healthcare:
The package also includes numerous temporary provisions aimed at the healthcare industry, including, in brief:
The aid for hospitals will be welcome as providers cancel procedures and step up spending on equipment and staff in preparation for COVID-19 patients. The shift in service mix is causing concern among some providers around cash flow and liquidity, with possible losses stretching months into the future. The bill allows employers to delay payment of the employer share of the Social Security tax, which could be beneficial to health systems facing liquidity crises.
The $100 billion in grants for hospitals and healthcare providers, to be doled out by HHS, is to be used to “prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.”
But, the bill stipulates that the money cannot be used to “reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.”
What can the money for used for? The funds can pay for building temporary structures, leasing properties or medical equipment and supplies, hiring and training workers, paying for surge capacity, running command centers and retrofitting facilities, according to the text of the Senate bill.
The increased access to telehealth services not only is likely to drive demand during the COVID-19 pandemic but also will make both providers and consumers more comfortable with the technology. The reimagined pricing structure for the service could remain a staple for the service after the immediate need lifts.
With increasing shortages of personal protective equipment (PPE) and other critical medical equipment like ventilators, the CARES Act has tasked the National Academies of Sciences, Engineering and Medicine to study the medical device and pharmaceutical supply chain.
The bill also expands Section 506C of the Federal Food, Drug, and Cosmetic Act, adding additional manufacturer reporting requirements for active pharmaceutical ingredients, in an effort to decrease the likelihood of shortages. The Strategic National Stockpile will receive $16 billion for PPE, critical medical supplies and other vital medicines.
A focus on the drug and device supply chain, as well as the potential for shortages, could have long-term effects on the healthcare industry beyond the current crisis. While the pharmaceutical industry has spent the past decade-plus shifting manufacturing to places like China and India, a new awareness of the consequences of a supply chain far from home could potentially shift a portion of manufacturing back to the US and North America—increasing costs in the near term as infrastructure is moved.