Daily Industry Report - February 23

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)

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At Private Equity-Owned Hospitals, Hospital-Acquired Conditions Increased

By NIHCM Foundation - Private equity firms’ involvement in the health care delivery system continues to deepen across the country, leading to increased attention from policymakers. In December 2023, the Senate Budget Committee launched a bipartisan investigation into the impact of private equity on hospitals. Read Full Article…

VBA Article Summary

  1. Impact of Private Equity Ownership on Hospital-Acquired Conditions: The study highlights a significant 25% increase in hospital-acquired conditions among patients admitted to hospitals after their acquisition by private equity firms, despite these hospitals having a likely lower-risk patient demographic. This increase includes a notable rise in falls and central-line-associated infections, pointing to deteriorating inpatient care quality under private equity ownership.

  2. Changes in Hospital Operations and Patient Outcomes: Private equity-owned hospitals showed a reduction in the number of surgical procedures performed, particularly orthopedic and bariatric surgeries, while simultaneously experiencing a doubling in rates of surgical site infections—a contrast to the declining rates observed in control hospitals. Despite these adverse outcomes, there was a slight decline in in-hospital mortality rates, attributed to the admission of younger and lower-risk patients, with no significant change in mortality 30 days post-discharge.

  3. Implications for Healthcare Delivery and Policy: These findings are crucial for healthcare policymakers and organizations, underscoring the need for further investigation into the effects of healthcare corporatization on patient safety and care quality. The study suggests that private equity ownership may prioritize operational efficiency and revenue generation over patient care, leading to increased hospital-acquired conditions and potentially compromising patient well-being.

HVBA Poll Question - Please share your insights

What do you believe is the primary factor contributing to the average 20% increase in pharmacy costs as a percentage of total medical spending for businesses:

Login or Subscribe to participate in polls.

Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question “absolutely believe and would engage in the legal importation of specialty medications” when asked if they would advise clients to import speciality 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.

26.83% of respondents have no opinion on the matter or are neutral, neutral or uncertain, 25.25% would consider it, but not too familiar with the process, while 20.41% do not believe or have trust in medications being sourced outside of the U.S. pharmacies.

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

Nearly all doctors feel burnout, but many are encouraged by potential of AI, survey says

By Ashley Capoot - Doctors in the U.S. are struggling to contend with burnout, staffing shortages and overwhelming administrative workloads, but many are optimistic that artificial intelligence could help to ease these problems, a new survey found. Read Full Article…

VBA Article Summary

  1. High Burnout Rates Among Physicians: The Athenahealth survey reveals that over 90% of physicians experience burnout regularly, primarily due to excessive administrative tasks like paperwork. Additionally, 64% of doctors feel overwhelmed by clerical duties, and more than 60% have considered leaving the medical profession due to these pressures.

  2. Impact on Work-Life Balance and Patient Care: Physicians report working an extra 15 hours per week on average outside their normal hours ("pajama time") to keep up with workloads. This has contributed to nearly 60% feeling they lack sufficient in-person time with patients. Moreover, 75% are overwhelmed by excessive communication demands from patients, and 78% cite poor staff retention and shortages as significant issues within their organizations.

  3. Optimism Towards AI and Technology: Despite the challenges, 83% of physicians believe AI could help by streamlining administrative tasks, improving diagnosis accuracy, and identifying patient data patterns. While concerns exist about AI reducing the human touch in healthcare, a substantial portion views AI as part of the solution rather than the problem. This optimism extends to technology in general, with nearly 80% of AI optimists thinking tech helps manage patient workloads, indicating a potential direction for alleviating some of the pressures faced by physicians.

COVID vaccine mandates may have had unintended consequences, researchers say

By Mary Van Beusekom, MS - US state COVID-19 vaccine mandates didn't significantly change uptake, and states with mandates actually had lower COVID-19 booster and voluntary adult and child flu vaccine coverage than those that banned vaccine requirements, an analysis of Centers for Disease Control and Prevention (CDC) data suggests. Read Full Article…

VBA Article Summary

  1. Mandate Effectiveness on COVID-19 Vaccination Rates: In the study involving 19 states with COVID-19 vaccine mandates for targeted groups, researchers found that weekly COVID-19 vaccination rates did not show significant changes before and after the implementation of these mandates. The analysis indicated that the variation in vaccination rates post-mandate implementation was not influenced by baseline attitudes toward the vaccine mandates, suggesting challenges in affecting public health behaviors through mandates.

  2. Impact on COVID-19 Booster and Flu Vaccination Uptake: The study also explored the uptake of COVID-19 boosters and seasonal flu vaccines in states with mandates compared to those banning them. Findings from November 2021 to May 2022 revealed a lower percentage of eligible residents receiving COVID-19 boosters in states with mandates, particularly in states with already lower vaccination levels. Furthermore, an examination of flu vaccination rates during the 2021-22 flu season showed that both adults and children were less likely to get vaccinated in states with mandates than in those without, indicating a broader impact of mandates on vaccine uptake.

  3. Unintended Consequences and Public Health Promotion Challenges: The research highlighted the unintended negative consequences of vaccination mandates, not by directly reducing the uptake of mandated vaccines but by potentially decreasing the adoption of other voluntary vaccines, such as the flu vaccine. These findings emphasize the complexities and challenges associated with promoting public health through vaccination mandates, suggesting that such governmental policies might not always lead to the intended positive outcomes in public health vaccination efforts.

US health tech giant Change Healthcare hit by cyberattack

By Zack Whittaker - U.S. healthcare technology giant Change Healthcare has confirmed a cyberattack on its systems. In a brief statement Wednesday, the company said it was “experiencing a network interruption related to a cyber security issue.” Read Full Article…

VBA Article Summary

  1. Immediate Response to Cybersecurity Threat: Change Healthcare took swift action to mitigate the impact of a cybersecurity incident by disconnecting its systems as soon as the threat was identified. This decision aimed to protect their partners and patients from further harm. The disruption caused by this incident is anticipated to last at least throughout the day it was reported.

  2. Impact on Healthcare Services: The cyberattack on Change Healthcare, a leading healthcare technology company in the U.S., has resulted in significant disruptions across the healthcare sector. Local pharmacies, especially in Michigan, faced outages, and healthcare providers like Scheurer Health were unable to process prescriptions through patients' insurance due to a "nationwide outage." This incident underlines the critical role of Change Healthcare in the U.S. healthcare system, processing 15 billion healthcare transactions annually and affecting one-in-three U.S. patient records.

  3. Corporate and Nationwide Implications: The cyberattack's implications extend beyond the immediate disruptions to healthcare services, highlighting concerns over cybersecurity in the healthcare sector. The incident has drawn attention to the interconnectedness of healthcare technology companies like Change Healthcare and Optum, both owned by UnitedHealth Group. The attack, attributed to likely government-backed hackers, underscores the growing threat of cyberattacks on critical infrastructure and the need for enhanced cybersecurity measures in the healthcare industry.

India pharma companies develop versions of Wegovy to get in on weight-loss windfall

By Rishika Sadam - Indian drugmakers aiming to grab a slice of the burgeoning weight-loss treatment sales pie, both at home and abroad, have begun developing their own versions of Novo Nordisk's (NOVOb.CO), opens new tab wildly in demand Wegovy. Read Full Article…

VBA Article Summary

  1. Expansion of Weight-Loss Drug Market: With the weight-loss market projected to reach or exceed $100 billion annually by the end of the decade, leading Indian generic drugmakers such as Sun Pharma, Cipla, Dr. Reddy's, and Lupin are initiating the development of generic versions of Wegovy, a drug currently in high demand globally due to insufficient supply from Novo Nordisk. This move is in response to the escalating global obesity rates and the quest for simpler weight-loss solutions than diet and exercise. Novo Nordisk's inability to meet the demand for Wegovy in various countries, alongside Eli Lilly's challenges with its weight-loss drugs Zepbound and Mounjaro, underscores the significant market gap these Indian companies aim to fill.

  2. Improving Global Access and Affordability: The involvement of Indian pharmaceutical companies in producing generic versions of weight-loss medications is expected to significantly enhance global access to these drugs and reduce their prices. Analysts anticipate a substantial increase in drug availability once the patents expire, with generic versions to be offered at much lower costs. This development is particularly promising for markets like India, which has high obesity and type 2 diabetes rates, signaling a substantial potential customer base. The expiration dates of Novo's patents for Wegovy vary by region, with the earliest in China by 2026 and the latest in the U.S. by 2032.

  3. Innovation and Market Development Challenges: While companies like Dr. Reddy's and Cipla focus on creating generic versions of Wegovy, Sun Pharma is developing its own novel drug for treating type 2 diabetes and obesity, which will require clinical trials for approval. The Indian market for diabetes drugs is expected to grow significantly, from 316 billion rupees in 2023 to 1.2 trillion rupees over the next decade. However, introducing anti-obesity drugs in the price-sensitive Indian market poses a challenge, as it involves not just capturing but also developing a market for these drugs, contrasting with strategies in other countries where companies typically aim to capture existing market shares.

ACOs want increased participation of long-term and post-acute care providers

By Noah Tong - Accountable care organizations are calling on the feds to increase participation of long-term and post-acute care providers in ACOs and to better incorporate episodic-based payments. Read Full Article…

VBA Article Summary

  1. Enhancing Inclusion of LTPAC Providers in ACOs: The white paper emphasizes the need for the Centers for Medicare & Medicaid Services (CMS) to include provider types less represented in Accountable Care Organizations (ACOs), especially Skilled Nursing Facilities (SNFs) and Long-Term and Post-Acute Care (LTPAC) providers. It suggests removing long-term nursing facility populations from the Medicare Shared Savings Program (MSSP) and other models to better serve these populations with value-based care. Recommendations include utilizing the ACO REACH Model for better risk adjustment and quality measure prioritization for these providers.

  2. Promoting Value-Based Care Through New Payment Models: The paper advocates for voluntary episode-based payment models specifically designed for SNF providers nested within ACOs. These models aim to enhance care coordination, improve discharge planning, and ensure quality of care across various settings. Proposed models should be adaptable to different provider types, include risk adjustments for rural areas, and utilize dynamic pricing mechanisms based on real-time data to encourage participation and improve outcomes in value-based programs.

  3. Administrative Approaches to Episode-Based Payments: Two approaches to administering episode-based payments are discussed: one where the ACO directly contracts with the SNF, bypassing CMS, and another where CMS administers the bundle, facilitating collaboration between ACOs and SNFs. While no consensus was reached, the discussion highlights the potential for SNFs to realize significant savings or losses, suggesting that ACOs should share in these outcomes to promote shared responsibility and success in value-based care initiatives.

America's drug overdose crisis has profound ripple effects

By Caitlin Owens - More than 4 in 10 Americans personally know someone who has died of an overdose, and an estimated 13% of the population have had their lives disrupted as a result, according to a new study in the American Journal of Public Health. Read Full Article… 

VBA Article Summary

  1. Widespread Impact of the Drug Crisis: The epidemic of drug overdoses in America, claiming over 100,000 lives annually, extends its reach far beyond the immediate victims. A study highlights that the crisis's influence on American society has likely been underestimated, with over 125 million Americans knowing someone who has fatally overdosed. This indicates a profound and far-reaching impact, affecting a significant portion of the population and underscoring the epidemic's deep penetration into the fabric of American life.

  2. Political and Social Challenges: The evolution of the drug epidemic into a more lethal crisis has transformed it from merely a public health issue to a contentious political debate. This shift is fueled by the emotional impact on voters and the controversial nature of proposed solutions, such as expanding access to methadone treatment. Major cities, especially in politically liberal regions, are reevaluating their approaches to harm reduction and compassion-first policies in light of the increasing fatalities and contentious policy discussions, highlighting the complexities of addressing the crisis within the political landscape.

  3. The Overlooked Aftermath: While much attention is given to the fatalities and policy debates surrounding the drug crisis, there is a notable lack of discussion regarding those who are left to cope with the aftermath of overdose deaths. The study reveals that more than 40 million adults have experienced significant disruption in their lives due to the loss from overdoses, with an estimated 12.5 million people still dealing with severe or devastating effects. These findings point to a critical need for further research into the specific impacts of overdose loss, which could guide more effective postvention efforts and support services for those affected.

10 drugs now in shortage

By Paige Tweeter - Scientists have issued a warning after finding a common food additive may be associated with an increased risk of cancer. In the U.S, over half of our daily energy intake comes from ultra-processed foods—foods that usually contain a long list of unrecognizable ingredients like preservatives, emulsifiers, sweeteners and artificial flavorings and colors. Read Full Article… 

VBA Article Summary

  1. Shortages Across Various Therapies: The drug supply databases from the FDA and the American Society of Health-System Pharmacists highlight current shortages in several medications, affecting treatments for conditions ranging from cardiomyopathy and acne to testicular tumors and obsessive-compulsive disorder. Notably, Dexrazoxane hydrochloride injection, a therapy for cardiomyopathy, is back ordered without a release date for four solutions, though two solutions from Hikma Pharmaceuticals remain at normal supply levels.

  2. Limited Availability and Out-of-Stock Situations: Erythromycin ointment, an acne medication, shows varied availability, with Armas Pharmaceuticals maintaining stock, Bausch Health Americas and Fera Pharmaceuticals having limited supplies, and Padagis US reporting out of stock. Similarly, the Etoposide solution for injection, used for testicular tumors and small cell lung cancer, has six solutions on back order until spring, with three solutions still available.

  3. Projected Supply Rebounds and Ongoing Shortages: Several medications are expected to see a return to normal supply levels in the near future, such as Fluvoxamine maleate extended release capsules, with Teva Pharmaceuticals anticipating a rebound in early March. However, other medications, such as Olanzapine pamoate extended release suspension for injection, used for schizophrenia, report all solutions unavailable with back orders extending until June, indicating prolonged shortages for certain drugs.

By Todd Bevington and Kim Cochrane - In the modern workplace, the call for employers to take an active role in supporting employee financial wellness is louder than ever. Surveys reveal that a significant 76% of employees believe their employers should play a part in their financial wellbeing. However, only 2 in 5 employers currently offer financial wellness programs, highlighting a crucial gap that needs to be addressed. Read Full Article…

VBA Article Summary

  1. Expansion of Financial Wellness Programs: Traditional employee benefits have focused on retirement savings, but the changing financial landscape and the impact of the pandemic have highlighted the need for a more holistic approach to financial wellness. This includes support beyond retirement benefits to address areas like debt management, home buying assistance, and personal insurance. Personal insurance, in particular, has become critical as it represents a significant household expense, with premiums rising sharply due to inflation, supply chain issues, and extreme weather events. By integrating personal insurance brokers into financial wellness programs, employers can offer more comprehensive support, helping employees navigate insurance complexities and secure adequate coverage.

  2. Addressing Employee Financial Stress: Research indicates that financial stress has a tangible impact on productivity, with employees under financial stress more likely to spend work hours dealing with personal financial issues, and more likely to seek new employment. This underscores the importance of financial wellness programs that can alleviate such stress. Offering a broad range of financial wellness benefits, including personal insurance support, can improve employee retention and productivity by providing employees with the tools they need to manage their financial health effectively.

  3. Aligning with Employee Expectations: There is a growing gap between what employees expect in terms of financial wellness support and what employers traditionally offer. By adopting a holistic approach to financial wellness that includes access to independent insurance brokers, employers can align more closely with employee expectations. This approach not only helps in attracting and retaining talent but also fosters a culture of financial well-being and prosperity, ensuring employees feel supported in all aspects of their wellness - physical, mental, and financial.

Humana sued over alleged 340B underpayments in Medicare Advantage

By Emily Olsen - The 340B program requires pharmaceutical companies to give discounts — which can range from 25% to 50% of the medication’s cost — to providers who serve low-income communities. Read Full Article…

VBA Article Summary

  1. Legal Action Against Humana: Baptist Health, an Alabama health system, has filed a lawsuit against Humana, alleging the insurer underpaid for outpatient drugs provided to Medicare Advantage patients under the 340B drug discount program. The lawsuit claims Humana used a payment model that was invalidated, leading to a financial "windfall" for the insurer due to persistent underpayments to the health system.

  2. Background of the 340B Program and Payment Issues: The 340B program, established in 1992, supports safety-net providers in serving vulnerable groups by offering drug discounts. However, in 2018, CMS cut Medicare payments for drugs acquired under this program, a decision challenged by hospitals and overturned by the Supreme Court four years later. To address underpayments, CMS planned to distribute $9 billion in lump sums to affected hospitals, balancing the budget by reducing payments for non-drug items and services over 16 years, a solution criticized by the American Hospital Association for not addressing financial benefits to Medicare Advantage insurers from the reduced payments.

  3. Controversy Over Medicare Advantage Payment Rates: The lawsuit highlights a broader dispute over how Medicare Advantage insurers, like Humana, compensate hospitals for 340B drugs. Despite the Supreme Court victory for hospitals, the resolution to the payment cuts required balancing measures that critics argue unfairly benefit insurers at the expense of hospitals. The case emphasizes ongoing tensions between healthcare providers and insurers over reimbursement rates and the financial implications of regulatory decisions on the 340B program.