'Startling spread' found in commercial health care prices, with no correlation to quality

By Alan Goforth - Negotiated inpatient and outpatient commercial rates vary significantly across geography, payers, care settings and facilities, a new report from Trilliant Health found. “Longstanding provisions of federal antitrust law have made it difficult, if not impossible, for employers to provide high-value coverage to employees,” said Allison Oakes, Ph.D., chief research officer for the health care analytics company. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Significant Price Variation: The report revealed extreme discrepancies in negotiated rates across the country. For six common inpatient procedures, the average price ratio was 9.1 between the lowest and highest negotiated amounts nationally. Even at the same hospital, payers set substantially different prices: for example, the difference between Aetna and UnitedHealthcare (UHC) averaged the equivalent of 30% of the national median price. These findings highlight that commercially insured patients—and by extension, the employers who fund most coverage—face unpredictable and often arbitrary charges.

2. Cost and Quality Misalignment: An examination of 10 hospitals frequently included in “best hospital” rankings showed no link between what patients (or insurers) paid and the quality of care provided. Instead, higher costs did not equate to higher quality outcomes. The study also compared six outpatient surgeries and found that in every case, the national median rate at ambulatory surgery centers (ASCs) was lower than at hospital outpatient departments, suggesting that less costly care settings often deliver the same services at better value.

3. Implications for Stakeholders: The new transparency data provides tools for more informed decision-making. Employers, especially those that are self-funded, can use the information to meet fiduciary duties under ERISA by evaluating whether they are paying reasonable prices for care. Health systems can benchmark their negotiated inpatient and outpatient rates in real time to stay competitive on both cost and quality. Policymakers, who often rely on Medicare payment benchmarks, can instead make data-driven decisions based on actual market rates, avoiding “bad policy” that stems from incomplete or inaccurate data.

Armed with pricing data, employers may confront new legal obligations when selecting health plans

By Noah Tong - National pricing data show the cost of healthcare services varies greatly by payer, geography, setting and facility, presenting new fiduciary considerations for employers. Since 2022, health plans have been required to release machine-readable files disclosing negotiated rates of healthcare services with providers. Hospitals are also required to release the costs of shoppable services. Read Full Article…

HVBA Article Summary

1. Wide Price Variability Across Providers and Payers: The Trilliant Health report revealed striking disparities in negotiated rates for common inpatient procedures, with costs varying by an average ratio of 9.1 across the country. For example, coronary bypass prices ranged from $27,000 to nearly $250,000, and even within the same hospital, UnitedHealthcare and Aetna could differ by over $15,000. Importantly, researchers did not find a consistent relationship between higher prices and better quality of care.

2. Employers Face Greater Responsibility: The availability of detailed pricing data shifts responsibility toward employers, who now have more leverage—and obligation—to choose cost-effective health plans for their employees. Under the Employer Retirement Income Security Act (ERISA), they must provide benefits that are free from fraud, mismanagement, and unnecessary costs. This comes at a time when some corporations have faced lawsuits for failing to shield workers from inflated drug costs linked to pharmacy benefit manager contracts.

3. Potential for Cost Savings Through Transparency: The analysis showed that ambulatory surgery centers consistently offered lower rates than hospital outpatient departments across five procedures, with colonoscopies alone costing up to 67% less. If employers and employees steer care toward such settings, researchers estimate annual savings could exceed $4.5 billion. These findings suggest that increased transparency could empower market dynamics to reduce overall healthcare spending in the long term.

Despite FDA ruling, compounded GLP-1s are still giving Novo and Lilly headaches on the market

By Amy Baxter - When the FDA took Novo Nordisk and Eli Lilly’s GLP-1 medications off of the drug shortage list, the move should have been a death knell for copycat compounded versions. But then something unexpected took place. Compounding pharmacies found a loophole and continued making off-brand versions of the lucrative weight loss drugs. Months later, compounded GLP-1s are still for sale on direct-to-patient platforms like Hims & Hers. Read Full Article…

HVBA Article Summary

1. Regulatory and Market Dynamics: Compounded GLP-1 drugs, which are not FDA-approved, expanded during shortages of Novo Nordisk and Lilly’s medicines in 2023. Even after the FDA’s grace period ended, compounding pharmacies continued selling “personalized” versions by slightly altering formulas. The FDA now estimates around 1 million U.S. patients are using compounded GLP-1s, raising questions about enforcement and oversight.

2. Business and Competition Impact: Novo Nordisk executives reported that compounded GLP-1s have stunted growth of the branded obesity market and weighed on Wegovy uptake. In Q2, Lilly’s share of the obesity market rose to 57%, giving it a stronger competitive position against Novo. Compounded versions are often much cheaper, with some microdoses sold for $119 per month — about 25% of the branded drug’s starting dose cost. Novo’s direct-to-consumer Ozempic vials, priced at roughly half the list price of its pens, are still losing share to compounded alternatives.

3. Patient Safety and Legal Action: Novo filed 14 lawsuits this month against medical spas, telehealth platforms, and compounding pharmacies, alleging unsafe and unlawful sales of unapproved GLP-1s made with illegal APIs. Both Lilly and Novo argue these compounded versions put patients at risk, with side effects and safety inconsistencies. Meanwhile, companies like Noom claim low-dose compounded semaglutide can reduce side effects, with their data suggesting over 70% of patients could avoid negative reactions at microdose levels. The FDA recently reiterated warnings, labeling compounded GLP-1s “risky.”

Let's reduce prior authorization delays

By Christine M. Cooper – Prior authorizations, or PAs, are an integral part of the healthcare system, designed to manage costs and ensure the medical necessity of treatments, procedures and medications. However, the confirmation process may delay treatment, including urgent care situations that are not emergencies. These delays have become a significant issue for patients, providers and payers alike. Prior authorizations must balance cost efficiency with priority medical access, a challenge that current regulations have not fully addressed. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Calls for Timelier Decisions in Urgent Care: The current 72-hour response window for urgent prior authorization claims fails to reflect the realities of medical need, potentially causing patient harm and provider delays. Advocacy groups like the AMA propose reducing this window to 24–48 hours to ensure more responsive and appropriate care delivery.

2. Need for Clear Distinctions Between 'Urgent' and 'Emergency': Regulatory ambiguity between urgent and emergency medical conditions has led to confusion among stakeholders, sometimes resulting in the misapplication of prior authorization requirements. Clarifying these definitions is key to avoiding delays in emergency care, where prior authorization is never required.

3. Employers' Role in Reform and Oversight: Employers and plan sponsors are positioned to drive change by demanding reforms, implementing performance metrics, and holding payers accountable for authorization delays. Promoting automation and educating employees about the prior authorization process are crucial steps recommended to improve the system's efficiency and fairness.

Trump’s Push for U.S. Drug Manufacturing Expands to Pharma Ingredients With New Executive Order

By Frank Vinluan - Even when a drug finishes its production in the U.S., its active and inactive components often come from overseas. While pharmaceutical companies have been unveiling plans for new U.S. manufacturing plants in response to the Trump administration’s threat of tariffs, few of these plans mention the production of active pharmaceutical ingredients, or APIs. Read Full Article…

HVBA Article Summary

1. Executive Order Scope and Requirements: The Trump administration’s new executive order directs HHS’s Office of the Assistant Secretary for Preparedness and Response (ASPR) to identify about 26 “critical drugs,” update the essential medicines list, and maintain a six-month stockpile of their APIs within the Strategic Active Pharmaceutical Ingredient Reserve (SAPIR). The order also calls for a proposal to open a second SAPIR facility and instructs the Office of Management and Budget to repurpose existing funds for this effort instead of seeking new Congressional appropriations.

2. Current Supply Chain Dependence: While nearly 40% of finished prescription drugs are manufactured domestically, only about 10% of the APIs for those products are produced in the U.S., leaving the majority sourced abroad. The executive order highlights that this reliance on foreign suppliers — primarily India and China — poses risks to national security and public health, particularly in times of global disruption or geopolitical tension. By stockpiling APIs, the administration aims to build resilience against shortages, reduce dependency on adversary nations, and encourage more domestic API manufacturing capacity.

3. Industry Investment and Cost Concerns: Pharmaceutical companies are beginning to expand U.S. API production: AbbVie announced a $195M expansion of its North Chicago facility (operational by 2027), and Eli Lilly is investing $5.3B in an Indiana site to produce APIs for Mounjaro and Zepbound. However, analysts warn the impact of the policy is uncertain until the 26 drugs are chosen and financial details clarified, noting U.S. production of low-cost generics like amoxicillin and acetaminophen could drive up per-pill costs due to higher labor, energy, and compliance expenses.

Net operating revenue rises 7%: What it means for employer health costs

By Allison Bell – U.S. hospitals' revenue and operating margins looked a lot better in the first half of this year than in the first half of 2024, according to Strata Decision Technology hospital financial system data compiled by Kaufman Hall, a Vizient company. Hospitals' overall revenue was 7% higher in the first half than in the comparable period in 2024, and operating profits were 3% higher. Operating profit margin figures were available only by month. Median profit margins increased to 3% in June 2025, from 1.3% in June 30. Read Full Article... ^{_{(Subscription required)}} 

HVBA Article Summary

1. Improved Hospital Revenue and Margins: Data from Kaufman Hall shows that U.S. hospitals experienced a 7% increase in overall revenue and a 3% increase in operating profits in the first half of 2025 compared to the same period in 2024, with median monthly profit margins rising to 3% in June.

2. Potential Relief for Employer Health Plans: Because hospitals account for roughly half of the costs in employer-sponsored health plans, their improved financial performance could reduce pressure to negotiate higher reimbursement rates in 2026, potentially slowing the growth of costs for both fully insured coverage and stop-loss insurance.

3. Outpatient Revenue Growth and Future Uncertainty: Leading hospitals are increasingly generating more revenue from outpatient services, yet the long-term outlook remains uncertain due to upcoming changes to federal Medicare and Medicaid reimbursement rules, which could prompt hospitals to seek higher payments from employer plans in 2026.

Employers expect 10% rise in healthcare costs for 2026: 4 notes

By Andrew Cass - Employers are expecting a median healthcare cost increase of 10% in 2026, according to a survey from the International Foundation of Employee Benefit Plans. The results reflect the responses from 150 corporate and single employers surveyed between July 30 and Aug. 7. Read Full Article…

HVBA Article Summary

1. Projected Cost Increase: Employers anticipate medical plan costs to rise in 2025, with a projected median increase of 8%. This aligns closely with last year’s survey results, suggesting that cost growth remains a consistent and ongoing concern for organizations.

2. Primary Cost Drivers: The top contributors to rising costs include catastrophic claims (31%), specialty/high-cost prescription drugs (23%), chronic health condition utilization (15%), and medical provider costs (11%). Notably, catastrophic claims and specialty drugs have increased as reported factors compared to last year.

3. Strategies and Drug Impact: Among employers citing costly drugs, GLP-1 drugs (59%), cancer drugs (50%), and cell/gene therapies (21%) were identified as leading drivers. To manage these pressures, employers plan to focus on cost-sharing measures, plan design changes, and provider purchasing initiatives.