Daily Industry Report - February 29

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)

VIP Admission & CE’s On Us!

New jersey primary care report has national implications

By Christopher Cheney - A recently published report raises alarm about a primary care physician shortage in New Jersey and calls for the adoption of advanced primary care in The Garden State. Read Full Article…

VBA Article Summary

  1. Widespread Shortage of Primary Care Physicians in New Jersey: A report by the New Jersey Health Care Quality Institute highlights a significant shortage of primary care physicians across New Jersey, affecting not just rural but also urban areas. The shortage is particularly acute for family physicians and general internists, with New Jersey and Connecticut having the lowest concentration of family physicians in the country, around 17 per 100,000 people, which is significantly lower than the average in many other states.

  2. Factors Contributing to the Shortage: One of the main factors driving the shortage is low reimbursement rates for primary care services in New Jersey. The state's primary care spending is among the lowest in the country, with Medicaid paying only about 50% of Medicare rates and commercial primary care payment rates at 93% of Medicare rates. This financial challenge has led to difficulties in recruiting and retaining primary care physicians, prompting healthcare systems like RWJBarnabas Health to actively recruit new positions and Virtua Health to offer competitive salaries and benefits to retain trainees.

  3. Efforts to Promote Advanced Primary Care: To address the shortage and improve primary care services, the report recommends supporting advanced primary care models, such as the patient-centered medical home model practiced by RWJBarnabas Health. These models focus on team-based care, integrating various health professionals to provide comprehensive care, including preventive services, management of chronic conditions, and a longitudinal approach to patient health. The report suggests raising Medicaid payment rates to Medicare levels, encouraging the development of advanced primary care, and annually reporting on primary care spending and the use of alternative payment models to promote value-based care.

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!

By Heather Bassett - As the role of AI in healthcare settings continues to evolve and generate debate, stakeholders from all around the industry are wondering what 2024 will bring. Read Full Article…

VBA Article Summary

  1. EHR Integration & Collaboration: The healthcare industry is witnessing a rise in "co-pilot" tools for EHR integration, with notable collaborations such as Microsoft and Epic enhancing MyChart capabilities. This trend focuses on using AI to streamline processes by analyzing discussions between clinicians and patients, sparking curiosity about the prioritization of Generative AI use cases and potential industry partnerships.

  2. Imaging as a Litmus Test for AI Adoption: Radiology is emerging as a critical area for the adoption of AI, particularly with multi-modal models that integrate text and images. Innovations like computer vision in operating rooms automate documentation processes, indicating broader industry readiness for technological advancements.

  3. Flexibility with Data and AI's Role in Healthcare: The article discusses the controversial use of synthetic data and the healthcare industry's need for flexibility amidst slow changes. It highlights the potential of generative AI to revolutionize patient and clinician experiences, despite challenges like bias and data transparency. Additionally, it addresses the impact of regulatory changes, like the CMS 4201-F rule, on the use of AI for medical necessity determinations and the importance of cybersecurity resilience in the face of increasing cyber threats.

It’s Time to Evolve Beyond FMTs and Advance LBPs

By Lee Swem - Fecal microbiota transplants (FMTs) have played an important role in fighting disease. Because they consist of many complex bacterial strains, FMTs offer an optimal ecosystem to successfully engraft and impart therapeutic value upon the host. Read Full Article…

VBA Article Summary

  1. Efficacy and Limitations of FMTs: Fecal Microbiota Transplants (FMTs) have been used since ancient times and have proven particularly effective against Clostridium difficile infections, outperforming antibiotics in some instances. They also show promise in enhancing cancer immunotherapy outcomes. However, the variability of FMTs, along with challenges in development, delivery, and scalability, present significant hurdles. The risk of transmitting pathogens, the difficulty in creating a consistent product due to the unique and variable human gut microbiome, and the invasive nature of delivery methods are notable drawbacks.

  2. Next-Generation Live Biotherapeutic Products (LBPs): To overcome the limitations of FMTs, the focus has shifted towards developing next-generation LBPs, which aim to harness the gut microbiome's power in a safe, scalable, and reproducible manner. These advanced therapies are designed to target diseases through different mechanisms of action, leveraging the complexity of microbial ecosystems for enhanced efficacy. LBPs offer the potential for safer, more consistent treatments across a range of conditions, including cancer, inflammatory bowel disease, autoimmune disorders, and metabolic diseases, by providing a controlled, scalable approach to microbiome-based therapeutics.

  3. Advancing LBP Development and Clinical Success: The transition from FMTs to LBPs represents a critical step forward in microbiome therapy, emphasizing the need for controlled, standardized dosing and the precise measurement of drug materials and host responses. Success in the LBP field requires small, value-creating clinical studies that demonstrate LBPs' unique capabilities without necessitating massive financial resources. Focusing on complex gut consortia to understand formulation, dosing, and engagement of LBPs in the gut microbiome is key to clinical success, with the potential to accelerate FDA approval and improve patient outcomes across various indications.

Viking Therapeutics Obesity Drug’s Data Raise Best-in-Class Expectations

By Frank Vinluan - An experimental Viking Therapeutics obesity drug that hits the same targets as a commercialized Eli Lilly medication has clinical data showing it led to an average 13.1% weight loss after 13 weeks of treatment, results that indicate it could compete favorably with the pharmaceutical giant’s product and others on the market. Read Full Article…

VBA Article Summary

  1. Promising Weight Loss Drug Development by Viking: Viking's mid-stage study of VK2735 showed no plateau in weight loss, suggesting the potential for even greater weight reduction over time. The San Diego-based biotech company plans to discuss next steps with the FDA, buoyed by a significant stock price surge following the announcement. VK2735 belongs to a new class of drugs that mimic gut hormones to stimulate metabolic changes, demonstrating significant weight loss across all doses in a 13-week study involving obese or overweight adults.

  2. Comparative Efficacy and Safety Profile: Preliminary results indicate that VK2735 could offer superior efficacy compared to current options, with significant weight loss observed from the first week and a high percentage of participants achieving over 10% weight loss. While most adverse effects were mild gastrointestinal issues, the drug's safety and tolerability were affirmed, despite a severe dehydration event in one case. Analysts suggest VK2735's potential is maximized with a large pharmaceutical partner, given its promising placebo-adjusted weight loss metrics compared to competitors.

  3. Strategic Moves and Future Prospects: Viking's positive trial outcomes have led to plans for further clinical development and discussions with the FDA. Additionally, an oral formulation of VK2735 is being developed, with Phase 1 results expected soon. These steps underscore Viking's commitment to advancing a potentially best-in-class weight management solution, with the anticipation of Phase 3 trials to confirm the Phase 2 findings and explore the drug's long-term efficacy and safety profile.

A former US surgeon general went to the ER for dehydration and ended up with a $5,000 bill. He called healthcare a 'broken system.'

By Shelby Livingston - Dr. Jerome Adams, who was the nation's top doctor from 2017 to 2021, said he was slammed with an almost $5,000 bill after being treated for dehydration at the Mayo Clinic's emergency department, where he got labs and a few IV bags. He first shared his experience on X (formerly Twitter) in a post that went viral. Read Full Article…

VBA Article Summary

  1. Adams' Emergency Room Visit and its Aftermath: During a work trip in January, Adams experienced lightheadedness after a hike and visited the ER in Scottsdale, Arizona, resulting in a surprisingly high medical bill. Despite being a doctor familiar with the US healthcare system's pitfalls, he found dealing with the bill and hospital billing representatives mentally taxing. This incident underscores the exorbitant costs and lack of price transparency in US healthcare, where patients often cannot anticipate or compare costs, especially in emergencies.

  2. The Burden of Medical Debt and High-Deductible Health Plans: Adams' ordeal highlights the broader issue of medical debt in the US, with millions of Americans owing significant amounts, leading to personal bankruptcy in some cases. His own high-deductible health plan, requiring him to pay $7,500 before insurance coverage begins, exemplifies the trend of shifting healthcare costs to patients, increasing their financial burden and complicating their ability to manage unexpected medical expenses.

  3. Calls for Greater Transparency and Reform: Adams advocates for more clarity on medical billing and stronger protections for patients against unpredictable and varying costs. Despite legislative efforts like the No Surprises Act, he argues for a system where patients have a clear understanding of potential charges before receiving care and where the disparity in costs for the same services at different facilities is addressed. His experience reflects the systemic issues in US healthcare, emphasizing the need for reform to prevent financial strain on patients.

UnitedHealth Group takes Wall Street hit because of investors' fears about Medicare Advantage profitability, Department of Justice antitrust investigation

By Wendell Potter - STAT News today published an op-ed I coauthored with Dr. Philip Verhoef, president of Physicians for a National Health Program, making the point that investors are among the growing number of stakeholders who are souring on big, for-profit insurance companies like the ones I used to work for (Cigna and Humana). Read Full Article…

VBA Article Summary

  1. Investors' Concerns and Financial Losses: Investors have been alarmed by the declining profitability of Medicare Advantage (MA) plans, with major insurers like UnitedHealth Group, CVS Health, and Humana experiencing significant drops in market capitalization following earnings reports that revealed profits falling below expectations. The reports highlighted higher than usual healthcare utilization by seniors enrolled in MA plans as a primary reason for the financial downturn, alongside a decrease in private equity investment in MA, indicating diminishing confidence in the program's profitability.

  2. Department of Justice Investigation into UnitedHealth: The Department of Justice (DOJ) has initiated an antitrust investigation into UnitedHealth Group, particularly focusing on its acquisitions and the potential impact on its compliance with federal regulations. This investigation is part of broader concerns about the consolidation within the health insurance and healthcare delivery industries. UnitedHealth, which has expanded beyond insurance to include healthcare delivery and pharmacy benefit management, is under scrutiny for possibly circumventing federal laws designed to ensure a significant portion of premiums are spent on enrollees' healthcare.

  3. Congressional Concerns and Market Impact: Both Democratic and Republican members of Congress have expressed increasing worry over the business practices of MA insurers, leading to the introduction of bills aimed at addressing overpayments to MA plans. The news of the DOJ's investigation, along with these legislative concerns, has contributed to a continued decline in the stock prices of UnitedHealth and other major insurers, indicating investor apprehension about future regulatory actions and the overall stability of the MA market.

Lose Fat, Not Muscle: Next Test for Lilly’s Zepbound Pairs It With BioAge Drug

By Frank Vinluan - One concern about the GLP-1 class of metabolic disorder drugs is that the weight patients lose includes muscle as well as fat. BioAge Labs wants to test whether its experimental medication, dosed alongside Eli Lilly’s weight management drug Zepbound, can preserve muscle mass. The startup recently closed $170 million to finance a mid-stage clinical trial. Read Full Article… 

VBA Article Summary

  1. BioAge's Drug Development Focus on Aging: BioAge is developing drugs that target aging, with its lead candidate, azelaprag, originally developed by Amgen for heart failure but now being repurposed for preserving muscle mass in the elderly. After licensing azelaprag in 2021, BioAge conducted a Phase 1b study showing the drug's effectiveness in preventing muscle atrophy, leading to a planned Phase 2 trial in collaboration with Eli Lilly using both azelaprag and Lilly's Zepbound to explore further benefits in obesity management based on preclinical success in mice.

  2. Innovative Trial Design and Partnership: The Phase 2 trial marks a shift in BioAge's strategy, now focusing on obesity by combining azelaprag with Eli Lilly's Zepbound, an incretin mimetic. This decision was influenced by BioAge's proprietary discovery platform, which identified a link between the apelin pathway and aging, suggesting azelaprag's potential beyond muscle preservation. This trial, run in collaboration with Chorus and supported by Lilly supplying Zepbound, aims to demonstrate the combined drugs' efficacy in weight loss and improved body composition.

  3. Funding and Broader Industry Context: BioAge's venture into this new trial phase is backed by substantial funding from a Series D round led by Sofinnova Investments, among other investors. This financial support underscores the broader interest and investment in life sciences focusing on aging, obesity, and other health conditions, as evidenced by the financing activities of other biotech firms highlighted in the article. This landscape reflects a vibrant sector seeking to address complex health issues through innovative drugs and therapies, with BioAge at the forefront of exploring aging-related treatments.

Common Ground Healthcare cooperative pursues affiliation with CareSource

By Joseph Kelley - Common Ground Healthcare Cooperative (CGHC), widely recognized as one of the most successful federally designated Consumer Operated and Oriented Plans (CO-OPs) in the nation, has executed a Letter of Intent and is pursuing an affiliation with CareSource to further its mission of service to the people of Wisconsin. Read Full Article…

VBA Article Summary

  1. CGHC's Evolution and Partnership with CareSource: CGHC was established in 2012 as a nonprofit health insurance company with a consumer-centric approach, rapidly becoming the leading Individual Marketplace insurer in Wisconsin within five years. CEO Cathy Mahaffey emphasized CGHC's financial health and the challenges of maintaining affordable premiums while investing in operations. The partnership with CareSource is seen as a strategic move to enhance their member-focused service, owing to shared values of prioritizing members over profits.

  2. CareSource's Growth and Recognition: Founded in 1989 in Dayton, Ohio, CareSource has developed an innovative model emphasizing whole-person care, addressing not only physical health needs but also social determinants like food security and transportation. This approach contributed to its rapid growth as one of the largest Medicaid Managed Care Plans in the U.S., serving over two million members with a range of products. In 2023, CareSource was recognized by Fortune Magazine as one of America's best places to work in health care, highlighting its commitment to improving lives and its successful business model.

  3. Strategic Collaboration for Enhanced Health Insurance Services: The partnership between CGHC and CareSource is poised to leverage both organizations' strengths in offering high-quality, affordable health insurance while focusing on member satisfaction and health outcomes. CareSource CEO Erhardt Preitauer emphasized the company's investment in operations and coordinated care management to eliminate patient and provider hassles commonly associated with health insurance. With Mahaffey overseeing the Wisconsin market, CGHC will operate as an affiliate of CareSource, pending regulatory and member approval, aiming to expand access to effective health care services in Wisconsin.