Daily Industry Report - February 19

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Health & Voluntary Benefits Association®

Jake Velie, CPT
Vice Chairman, President & COO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

Robert S. Shestack, CCSS, CVBS, CFF
Chairman & CEO
Health & Voluntary Benefits Association® (HVBA)
Daily Industry Report (DIR)

Patients See First Savings From Biden’s Drug Price Push, as Pharma Lines Up Its Lawyers

By Arthur Allen - Last year alone, David Mitchell paid $16,525 for 12 little bottles of Pomalyst, one of the pricey medications that treat his multiple myeloma, a blood cancer he was diagnosed with in 2010. Read Full Article…

VBA Article Summary

  1. Founding of Patients for Affordable Drugs: David Mitchell, driven by the soaring costs of his cancer treatment, established Patients for Affordable Drugs in 2016. This advocacy group was pivotal in incorporating drug price reforms into the 2022 Inflation Reduction Act (IRA). Mitchell, having personally faced the financial burden of medication costs, saw a dramatic reduction in his expenses due to the IRA, highlighting the significant benefits of the reforms for Medicare beneficiaries.

  2. Impact of the Inflation Reduction Act: The IRA introduces a comprehensive set of measures aimed at reducing the financial burden of prescription drugs for Medicare patients. This includes capping out-of-pocket expenses, empowering Medicare to negotiate prices directly with pharmaceutical companies, and safeguarding against excessive price increases. These reforms mark the most significant overhaul of the U.S. drug market in recent history, providing both immediate relief for patients and establishing mechanisms for long-term price control.

  3. Challenges and Responses to the IRA: Despite its potential to lower drug prices, the IRA has faced opposition, including lawsuits from pharmaceutical companies and concerns over rising insurance premiums. However, the legislation's emphasis on negotiation, increased transparency, and consumer protection represents a crucial effort to address the high cost of drugs in the U.S. compared to other countries. The ongoing legal and political challenges underscore the complexities of reforming drug pricing, but the IRA's focus on reducing costs and increasing access to medication is a notable step forward in healthcare policy.

HVBA Poll Question - Please share your insights

Would you advise clients to import specialty or high cost brand drugs like Ozempic, Mounjaro, Wegovy from abroad to save 35-50% off U.S. prices of $850, $1,070, $1,670 per month respectively?

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Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question think Eli Lilly’s direct-to-consumer website for Telehealth prescriptions and drug delivery, feel this will somewhat positively affect patient access and disrupt the traditional drug supply chain.

24.03% of respondents are neutral or uncertain, 22.79% feel it will negatively affect patient access and have minimal or adverse effects on the supply chain while 16.61% are highly positive this will affect and and improve patient access and disrupt the traditional supply chain.

Have a poll question you’d like to suggest? Let us know!

Elation Health’s New Integration Brings Drug Pricing Transparency to the Point of Care for PCPs

By Katie Adams - For U.S. consumers, the pharmacy can sometimes be a bit of a scary place. Many Americans have been hit with a ghastly sticker shock at the pharmacy — learning the exorbitant cost of their medication only after they had reached the counter. Read Full Article…

VBA Article Summary

  1. Enhancing Prescription Price Transparency: The collaboration between EHR vendor Elation Health and health information network Surescripts addresses the critical issue of opaque drug pricing, which often leaves patients in the dark about less expensive alternatives or available discounts. By integrating prescription price transparency tools directly into the clinical workflow, this partnership aims to empower primary care clinicians to discuss the financial aspects of medication with their patients at the point of care, potentially alleviating the difficult choices families face between medication and other essential needs.

  2. Focus on Primary Care Providers: Elation Health, which specializes in EHR and technology solutions for primary care, recognizes the importance of supporting primary care physicians in offering transparent prescription drug pricing information. CEO Kyna Fong highlights that cost is a major barrier to medication adherence among patients. By providing primary care physicians with tools to have more meaningful conversations about medication affordability, Elation seeks to improve patient care and adherence to prescribed treatments.

  3. Real-Time Prescription Benefit Tool Integration: The partnership has led to the integration of Surescripts’ real-time prescription benefit tool into Elation’s EHR system, offering clinicians instant access to patient-specific medication coverage and cost information. This integration facilitates on-the-spot adjustments to medication plans based on coverage or cost, including access to formulary data, prior authorization requirements, and lower-cost alternatives. Such capabilities are designed to make the prescription process more transparent and patient-centered, ultimately aiming to reduce out-of-pocket costs for patients.

Survey: Few Health Systems Have AI Governance Policies

By David Raths - In a recent survey, only 16 percent of health system respondents said their organizations have in place a system-wide governance policy addressing the use of artificial intelligence, and even fewer have policies specific to generative AI. Read Full Article…

VBA Article Summary

  1. Navigating AI's Promise and Risks: The Center for Connected Medicine (CCM) at UPMC and KLAS Research conducted a survey with nearly three dozen health system executives to understand their approach to leveraging AI's potential while managing risks to patient data and privacy. Despite the growing interest in AI for reducing clinician documentation burdens and automating administrative tasks, only 16% of respondents reported having a system-wide governance policy for AI, though many have established senior executive governance committees.

  2. Benefits and Governance of AI in Healthcare: The survey highlights the optimism among health system executives about AI's ability to improve efficiency, enhance clinical decision visibility, and automate repetitive tasks. However, it also underscores the necessity of governance and the careful management of patient data privacy and security, with UPMC's Chief Medical Information Officer, Robert Bart, M.D., emphasizing the high standards of data protection upheld at UPMC.

  3. Adoption and Strategic Implementation of AI: A significant portion (70%) of the surveyed executives indicated a preference for adopting AI solutions through EHR vendors for seamless integration. The findings stress the importance of healthcare executives defining clear objectives and benchmarks for AI adoption, with regular evaluations recommended to fine-tune strategies, highlighting generative AI's role as a dynamic tool requiring ongoing attention and adjustment.

Wegovy packing supplier Catalent lays off 300 workers

By Reuters - Engaging in intense exercise might not be the first thing that people fighting cancer think to do, but a new study reports that a workout can help ease cancer-related pain. Read Full Article…

VBA Article Summary

  1. Cost Reduction and Facility Consolidation: The contract drug manufacturer initiated a strategy to cut costs and consolidate its facilities in June, with further actions taken in the second quarter, including job cuts in its Biologics and Pharma and Consumer Health segments.

  2. Financial Impact of Layoffs: Catalent reported an expense of approximately $12 million related to the layoffs, underscoring the financial implications of its cost-reduction efforts.

  3. Performance and Acquisition News: Despite the cost-cutting measures, Catalent slightly exceeded Wall Street's revenue expectations for the second quarter. This financial news came shortly before the company accepted a $16.5-billion buyout offer from Novo Nordisk's parent firm. Catalent plays a critical role as the primary supplier for the fill-finish process of Novo's weight-loss drug, Wegovy, highlighting its significance in the pharmaceutical supply chain.

Safe and Affordable Family-Forming Benefits Provide a Competitive Leg Up

By David Adamson - More than 100,000 doctors have left private practice and become employees of hospitals and other corporate entities since 2019. Today, nearly three in four physicians are employees of larger health care entities or other corporations — a record high. Read Full Article…

VBA Article Summary

  1. Evolving Definitions of Family and Fertility Treatments: The article highlights a significant trend in society's evolving definition of family, moving away from the conventional nuclear family model to embrace a variety of family structures including same-sex partnerships, single parenthood, and professional women choosing to become parents later in life. This shift is accompanied by a growing interest in fertility treatments, adoption, and surrogacy, driven by the desire to have children which transcends all backgrounds, including those of different sexual orientations and gender identities. The demand for affordable and safe fertility care is increasing among medical practitioners to accommodate this diversity.

  2. Workplace Adaptations and Support for Family Forming: Businesses and workplaces are adapting to these societal changes by incorporating family-forming programs into employee benefits. This approach is part of a broader strategy to foster a diverse and inclusive workplace culture, reflecting an understanding of the varied paths to parenthood and the importance of supporting employees through different life stages, including menopause. Such initiatives are seen as essential for attracting and retaining talent in a competitive labor market, contributing to a high-performance workforce, and addressing health equity issues.

  3. Accessibility and Affordability of Fertility Treatments: The article addresses the financial challenges many face in accessing fertility treatments, noting that one in six people experience fertility issues and the high costs associated with treatments like in vitro fertilization (IVF). It calls for making fertility care more accessible and affordable, particularly for lower-income families and those without comprehensive insurance coverage. Employers are encouraged to play a critical role in building a caring culture by offering affordable family-forming programs and comprehensive support, including concierge care navigators, to help employees navigate the complex journey of building a family, thus transforming lives and enhancing business success.

In Fight Over Medicare Payments, the Hospital Lobby Shows Its Strength

By Phil Galewitz and Colleen DeGuzman - In the battle to control health care costs, hospitals are deploying their political power to protect their bottom lines. Read Full Article…

VBA Article Summary

  1. Current Medicare Payment Discrepancies: For years, Medicare has been paying hospital-owned practices about twice as much as it pays independent doctors and facilities for the same medical services, citing hospitals' higher operational costs. This pricing disparity has been criticized for driving up healthcare costs for patients and taxpayers, encouraging hospitals to acquire physician practices, leading to consolidation and higher healthcare prices.

  2. Legislative Efforts and Opposition: The House of Representatives passed a bill including a provision for "site-neutral payments," aiming to equalize Medicare payments regardless of the service location, potentially saving $3.7 billion over ten years. However, hospitals have strongly opposed this, arguing it would necessitate job cuts, service reductions, or facility closures, especially in rural areas where hospitals are vital. This has sparked a significant lobbying effort against the legislation in the Senate, where concerns about the impact on rural healthcare are particularly pronounced.

  3. Stakeholder Perspectives and Future Prospects: While the American Hospital Association and other industry groups argue that higher payments are justified due to their higher costs and standards, critics and some health economists counter that the current system is unjustifiably expensive. The debate doesn't align neatly along partisan lines, with mixed support in the House and cautious views from senators across the spectrum. The push for site-neutral payments reflects broader concerns over healthcare costs and hospital consolidation, with the outcome likely to have significant implications for Medicare spending and the structure of the U.S. healthcare system.

Faceoff Between Anthem Blue Cross, UC Health Shows Hazards of Industry Consolidation

By Annie Sciacca - For weeks, more than half a million Anthem Blue Cross enrollees who receive health care from the University of California were held in suspense. It wasn’t clear whether they would have to find new doctors or switch plans as the health system and one of its largest insurance partners struggled to reach agreement on a new contract. Read Full Article…

VBA Article Summary

  1. Contract Dispute Impact on Patients: UC Health and Anthem were involved in a contract dispute that risked 8 million Anthem members in California losing in-network access to UC Health's facilities, potentially leading to higher out-of-pocket costs for patients. This situation is part of a broader trend where patients often become collateral damage in the healthcare industry's contract disputes, facing increased uncertainty, anxiety, and expenses due to rising labor and equipment costs.

  2. Healthcare Industry Consolidation and Costs: The ongoing consolidation within the healthcare industry, marked by mergers and acquisitions, is leaving patients with fewer choices and rarely results in lower costs. Reports and analyses indicate that such consolidation leads to higher healthcare prices for private insurance, with state regulators observing unsustainable growth in healthcare costs and insurance premiums outpacing wage growth. Despite efforts to control spending, such as California's establishment of an Office of Health Care Affordability, enforcement and tangible benefits for patients seem distant.

  3. Real-life Consequences for Patients: The dispute between UC Health and Anthem had tangible, distressing impacts on patients like Cathy Jordan, a cancer patient who feared losing access to essential in-network care at UC Health. The potential for patients to switch providers amidst treatment was highlighted as incredibly disruptive, with detrimental effects on care continuity and patient outcomes. The resolution of the dispute, with both parties reaching a last-minute agreement, underscores the critical need for a focus on patient welfare in the negotiation processes within the healthcare industry.

Long-term care hospitals can't afford to treat their sickest Medicare patients, AHA says

By Dave Muoio - Traditional Medicare’s bar for reimbursing long-term care hospitals (LTCH) for severely ill, “high-cost outlier” patients has spiked under current payment policies. Read Full Article…

VBA Article Summary

  1. Rising Costs and Projected Losses: The American Hospital Association (AHA) has highlighted in a white paper that long-term care hospitals (LTCHs) are facing significant financial challenges due to the increase in the fixed-loss amount required for an expensive LTCH case to qualify for extra reimbursement. This amount rose by 55% from fiscal year (FY) 2023 to FY 2024 and is projected to increase by another 17% in FY 2025, leading to projected additional losses of $54 million for a sector that receives $2.6 billion annually in Medicare payments. This situation threatens the financial sustainability of LTCHs and their ability to care for critically ill patients.

  2. Potential for Reduced Access to Care: The AHA warns that without meaningful reform, the LTCH field may continue to contract due to unsustainable losses and other financial pressures. This contraction could lead to LTCHs having to limit admissions, particularly of the most critically ill patients who typically would receive high-cost outlier (HCO) payments. Such a scenario risks the sickest patients being unable to access the specialized care they need, potentially exacerbating health disparities among Medicare beneficiaries, especially marginalized populations.

  3. Calls for Policy Reforms: To mitigate these challenges and preserve Medicare beneficiaries' access to LTCH care, the AHA has called for several policy reforms. These include reverting the methodology for determining the fixed-loss amount to one tied to the market basket, which had previously provided more stability for both beneficiaries and providers. The AHA also suggests broadening the pool of LTCH cases analyzed for calculating the fixed-loss amount, reexamining the placement of cases into diagnosis-related groups for payment determination, and urging Congress to increase funding for high-cost outlier cases and index future changes to inflation-related indexes. Failure to implement these measures could lead to widespread consequences across the hospital industry and negatively impact care continuity for severely ill patients.

HHS releases voluntary cybersecurity performance goals to beef up healthcare's digital defenses

By Dave Muoio - The Department for Health and Human Services (HHS) has published voluntary cybersecurity performance goals tailored for healthcare organizations, the first move in the administration’s strategic plan to enhance industrywide cybersecurity. Read Full Article…

VBA Article Summary

  1. Introduction of Cybersecurity Performance Goals: The U.S. Department of Health and Human Services (HHS), through its Administration for Strategic Preparedness and Response, has released a set of cybersecurity performance goals. These goals are hosted on a newly launched gateway website designed to centralize cybersecurity resources from HHS and other government entities. The goals are categorized into "Essential Goals" and "Enhanced Goals," reflecting cybersecurity frameworks, best practices, and strategies developed by the healthcare industry to address common cyber attack vectors against U.S. hospitals.

  2. Voluntary Goals and Industry Support: The voluntary goals aim to guide healthcare organizations in initial protection, response, and mitigation of residual risk, with a roadmap for prioritizing layers of protection at various vulnerability points. Measures include basic cybersecurity training, email security, and network segmentation to combat identity-based attacks, which constitute 80% of cyberattacks on the hospital industry. The goals have garnered quick support from the hospital industry, with endorsements from the American Hospital Association and the Federation of American Hospitals, emphasizing the importance of collaboration and the mutual exchange of cyber threat information and risk mitigation practices.

  3. Future Implications and Industry Reactions: While the goals are voluntary, they lay the groundwork for future enforceable standards and signal a shift towards more prescriptive guidance for healthcare cybersecurity practices. Industry experts view the initiative as a significant step in coordinating health-specific cybersecurity efforts without placing an undue burden on healthcare entities. However, there is concern about potential future financial and patient safety consequences for non-compliance, and the possibility of incorporating these practices into existing regulations and reimbursement programs has elicited mixed reactions from the industry, particularly regarding the financial impact on smaller hospitals.