Daily Industry Report - January 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)

White House AI council meets Monday as legislative action stalls

By David Shepardson - The White House artificial intelligence council is meeting Monday, three months after President Joe Biden signed an executive order that aims to reduce the risks AI poses. Read Full Article…

VBA Article Summary

  1. Progress on AI Initiatives: White House Deputy Chief of Staff Bruce Reed highlighted significant advancements in AI over the past 90 days, following President Biden's directive for swift action and problem-solving. The White House reported that nine government agencies, including Defense, Transportation, Treasury, and Health and Human Services, have submitted AI risk assessments to the Department of Homeland Security as mandated by Biden's executive order.

  2. Legislative Challenges and Data Center Security: Despite the progress, legislative efforts to regulate AI have stalled in Congress, even though there have been many high-level discussions and proposed bills. To address security concerns, the Biden administration proposed new rules for U.S. cloud companies to ensure foreign entities do not misuse American data centers for training AI models. Commerce Secretary Gina Raimondo emphasized the importance of preventing non-state actors, particularly China, from accessing U.S. cloud resources for potentially harmful purposes.

  3. Regulations and Compliance Measures: Biden's executive order includes the use of the Defense Production Act to require AI system developers to share safety test results with the U.S. government if their products pose risks to national security, the economy, public health, or safety. The Commerce Department plans to send survey requests to companies, with a 30-day response deadline. Raimondo warned that non-compliance would be considered a red flag. Major cloud providers like Amazon's AWS, Alphabet's Google Cloud, and Microsoft's Azure will be among those impacted by these regulations.

VBA Poll Question - Please share your insights

What is your opinion on Eli Lilly's direct-to-consumer website for telehealth prescriptions and drug delivery, such as Zepbound? Do you think it will positively affect patient access and disrupt the traditional drug supply chain?

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Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question on how prepared they felt they were for the implementation of the Consolidated Appropriations Act (CAA) and its requirements said “What is the Consolidated Appropriations Act?

37.78% of respondents stated they were “Somewhat prepared, 12.59% shared they were “Not prepared”while only 8.15% felt “Very preparedfor the implementation of the CAA and its 2024 requirements. 

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EXCLUSIVE: Email Reveals Why CDC Didn’t Issue Alert on COVID Vaccines and Myocarditis

By Emily Olsen - The nation’s top public health agency didn’t send an alert about a connection between COVID-19 vaccines and heart inflammation because officials were concerned they would cause panic, according to an email obtained by The Epoch Times. Read Full Article…

VBA Article Summary

  1. Drafted Alert and Decision Not to Send: In 2021, the U.S. Centers for Disease Control and Prevention (CDC) prepared an alert about the risk of myocarditis, a heart inflammation condition, linked to Pfizer-BioNTech and Moderna COVID-19 vaccines. This alert, intended for distribution through the CDC’s Health Alert Network (HAN), was reviewed by agency officials, including the CDC’s director. Despite these preparations, the alert was ultimately not released. Internal communications, specifically an email from Dr. Sara Oliver of the CDC, indicate a reluctance to appear alarmist as a factor in the decision not to send the alert. Senator Ron Johnson criticized the CDC's decision, accusing it of prioritizing public perception over public health, while Kim Witczak, a drug safety advocate, expressed concern over the CDC's transparency and its impact on public trust.

  2. Myocarditis Cases and CDC's Communication: Myocarditis and pericarditis, conditions identified as potential side effects before the vaccines' approval, began to be reported by vaccine recipients in late 2020. Despite signals in the Vaccine Adverse Event Reporting System (VAERS) and warnings from Israel, the CDC's public acknowledgment of these issues was delayed and initially downplayed by Dr. Rochelle Walensky, then CDC director. The CDC did start informing state officials and some doctors about myocarditis issues from April 2021 and considered public communication strategies in May 2021. Emails reveal Dr. Oliver's communication with Moderna and Pfizer, warning them of the CDC's plans to go public about myocarditis cases.

  3. Scaled-Down Response and FDA's Role: Instead of issuing the HAN alert, the CDC chose to publish a webpage titled "Clinical Considerations" on May 27, 2021, acknowledging the reported cases of myocarditis and pericarditis. This decision followed internal discussions and consultation with the U.S. Food and Drug Administration (FDA). The CDC claimed that this webpage reached the same audience as the HAN alert would have, and argued that such a format allowed for updates as more data became available. The FDA later added warnings about myocarditis to the Pfizer and Moderna vaccine labels on June 25, 2021, following federal guidelines that mandate warnings as soon as there is reasonable evidence of a causal association.

‘I don’t see how it ends’: expert sounds alarm on new wave of US opioids crisis

By Chris McGreal - When Dr Art Van Zee finally understood the scale of the disaster looming over his corner of rural Virginia, he naively imagined the drug industry would be just as alarmed. Read Full Article…

VBA Article Summary

  1. Long Battle Against Opioids in Appalachia: Dr. Art Van Zee, a dedicated physician in St. Charles, a former mining town in Virginia, began warning about the dangers of OxyContin, a powerful opioid painkiller, in the early 2000s. He observed firsthand the drug's destructive impact on individuals and families, leading to widespread addiction and societal devastation in central Appalachia. Despite his efforts to alert pharmaceutical executives, federal regulators, and Congress, the crisis only worsened, with newer narcotics like fentanyl exacerbating the situation. Van Zee's disbelief at the industry's indifference highlights missed opportunities to curb what is now the worst drug epidemic in U.S. history.

  2. Failure of Regulatory and Corporate Responsibility: Van Zee's warnings were largely ignored or actively discredited by pharmaceutical companies like Purdue Pharma, which viewed him as a threat to their profits. Despite numerous chances to mitigate the crisis, including a proposal to restrict OxyContin's use, federal agencies and pharmaceutical companies failed to act effectively. This negligence allowed the epidemic to grow, claiming 800,000 American lives over 25 years and potentially a million more by the decade's end. The situation was further worsened by the cozy relationship between the drug industry and medical professionals, regulatory bodies, and politicians.

  3. Ongoing Struggle and the Need for Systemic Change: Despite some progress in treatment options and pharmaceutical companies facing legal consequences, Van Zee remains skeptical about breaking the link between corporate influence and medical practice. He emphasizes the need for structural changes to address the rampant drug marketing and the influence of pharmaceutical companies on medical training and regulation. Van Zee's experience in St. Charles, once a thriving mining town, now illustrates the long-lasting human and social costs of the opioid epidemic, underscoring the urgent need for systemic reform in drug regulation and healthcare practices.

How does health spending in the U.S. compare to other countries?

By Emma Wagner, Mattew McGough, Shameek Rakshit, Krutika Amin, and Cynthia Cox - Wealthy countries, including the U.S., tend to spend more per person on health care than lower-income countries. However, even among higher-income countries, the U.S. spends far more per person on health. Read Full Article…

VBA Article Summary

  1. High Health Spending in the U.S. Compared to Other Wealthy Nations: The United States spends more on health care relative to its economy size than other high-income countries. In 2022, U.S. health expenditures per person were $12,555, significantly higher than any other wealthy nation. The average health spending per person in comparable countries was about $6,651, roughly half of what the U.S. spends. This disparity in spending is notable even when comparing the U.S. to other nations with similar levels of wealth and GDP.

  2. Trends in Health Expenditure Growth Across Nations: In 2022, nearly all peer nations experienced an increase in health spending per capita, with Belgium recording the highest increase (9.6%). The United States saw a 2.9% increase in per capita health spending, which was higher than some nations like Australia, Canada, and the United Kingdom, but much lower than the increase from 2019 to 2020 (9.8%). Over the past five decades, the U.S. has seen a faster growth in health spending as a share of GDP compared to peer nations, especially since the 1980s.

  3. Health Spending and Economic Growth: The COVID-19 pandemic led to increased health spending and economic downturns, resulting in a higher percentage of GDP being allocated to health in both the U.S. and comparable countries. However, as economies recovered, the U.S. saw a decline in health spending as a share of GDP, down to 16.6% in 2022 from 18.8% in 2020. Despite this decline, the U.S. still spends a significantly higher proportion of its GDP on health compared to its peers. Additionally, in the five years leading up to the pandemic, the U.S.'s growth in health spending per capita was higher than the average for comparable countries.

Tech on the Front Lines: New tools help FQHCS close care gaps

By Eric Wicklund - Federally Qualified Health Centers (FQHCs) are often the first point of contact for underserved populations seeking access to care. And often that first impression can make all the difference in accessing care that improves outcomes. Read Full Article…

VBA Article Summary

  1. Expanding Access to Care Through Technology: Over 30 million Americans rely on Federally Qualified Health Centers (FQHCs), Rural Health Clinics (RHCs), and community health clinics for healthcare, often as their only contact point. These centers are increasingly adopting telehealth and digital health tools to enhance patient access and streamline care. For instance, Kenosha Community Health Center, part of the Pillar Health network, has implemented a digital nurse triage service, which efficiently directs patients to appropriate care providers, reducing call times and improving treatment and bed scheduling.

  2. Impact of Digital Transformation on Patient Care and Outcomes: The utilization of digital health technologies is showing tangible benefits in patient care. For example, in Massachusetts, community health centers covering over 300 sites are using a technology platform funded by HRSA grants to monitor patient care across different providers. This platform, developed by Bamboo Health, has led to significant reductions in readmission rates and improved follow-up care. These digital solutions are crucial for managing complex patient needs, chronic care, and addressing social determinants of health (SDOH).

  3. Challenges and Future Prospects: While the integration of digital health tools in FQHCs, RHCs, and community health clinics is improving patient care management and coordination, it also presents challenges, such as managing the influx of data and alerts. However, these challenges are viewed positively, as they indicate progress towards more comprehensive and efficient patient care. The expansion of these digital platforms is expected to enhance the ability of healthcare providers to manage patient care more effectively, particularly in addressing chronic conditions and SDOH.

How Are Payers Approaching Obesity Management?

By Katie Adams - GLP-1 medications like Ozempic and Wegovy remain in high demand and continue to make headlines, even among mainstream media outlets. As the healthcare industry watches closely to see how payers decide to cover the drugs going forward, it’s important to remember that GLP-1s won’t be able to solve the country’s obesity crisis by themselves, payer executives said during a virtual panel held Thursday by Bright Spots in Healthcare. Read Full Article…

VBA Article Summary

  1. Complexity and Fragmentation in Obesity Management: Obesity is recognized by Shelley Turk, from Blue Cross and Blue Shield of Illinois, as not only a chronic but also a complex condition. Ideally, primary care physicians should diagnose obesity and coordinate a team of specialists, including nutritionists, mental health professionals, and endocrinologists, to address its root causes. However, in reality, the management of obesity is often fragmented, with primary care physicians lacking incentives for thorough patient discussions or proper documentation due to traditional compensation structures. Additionally, less than 10% of primary care physicians have training in obesity medicine.

  2. Need for Integrated Data and Personalized Treatment Approaches: Turk emphasizes the necessity for payers, providers, tech companies, and other healthcare stakeholders to integrate data to understand individual obesity stories comprehensively. This integration would enable payers to manage cases more effectively and tailor treatment options for individuals, such as medications, surgery, remote monitoring programs, or nutrition coaching. Similarly, Mamata Majmundar from Evry Health highlights the importance of personalized treatment in creating sustainable health habits and providing necessary tools and resources for long-term success.

  3. Addressing Broader Community and Population Health Issues: Despite the effectiveness of personalized treatments, Majata Majmundar points out the significance of community and population health factors in the national obesity crisis. She suggests that payers should also focus on broader societal issues, advocating for urban planning that promotes walkability and improved access to healthy foods, thereby addressing some of the fundamental environmental factors contributing to obesity.

Senate Probes the Cost of Assisted Living and Its Burden on American Families

By Jordan Rau - A U.S. Senate committee on Thursday launched an examination of assisted living, holding its first hearing in two decades on the industry as leaders of both parties expressed concern about the high cost and mixed quality of the long-term care facilities. Read Full Article…

VBA Article Summary

  1. Federal Oversight and State Regulation of Assisted Living: Unlike skilled nursing homes, assisted living facilities are primarily regulated by states with minimal federal oversight. The Senate Special Committee on Aging, led by both Democratic and Republican leaders, has initiated an inquiry to examine the financial practices and quality levels of these facilities. This inquiry aims to provide consumers with better information for choosing suitable facilities. However, there is a general reluctance among lawmakers to impose direct federal regulation in this sector, such as setting federal standards for staffing and training.

  2. Inquiry Prompted by Reports of High Costs and Quality Issues: Prompted by a New York Times-KFF Health News series, the inquiry, led by Sen. Bob Casey and endorsed by Sen. Mike Braun, seeks to gather firsthand accounts from residents and their families regarding the costs and quality of assisted living. This comes in the wake of reports highlighting the industry's high profitability, with facilities often charging high rates for additional services and many residents paying out-of-pocket due to limited Medicare and Medicaid coverage. Issues of poor care, overworked staff, and financial exploitation have been reported, raising questions about the adequacy of state-level monitoring and enforcement of quality standards in these facilities.

  3. Debate Over Federal Involvement and Industry Response: The hearings and testimonies reveal a growing demand for federal involvement in the sector, especially considering the significant federal funds involved through Medicaid. Experts and advocacy groups argue for improved federal oversight to ensure safe care and dignified living conditions, countering financial exploitation risks. In contrast, industry representatives argue that national standards for assisted living would be impractical and maintain that state oversight ensures strong facility quality. They acknowledge the need for more affordable options and addressing caregiver shortages but emphasize that incidents of neglect and harm are rare. The National Center for Assisted Living asserts that the U.S. method of funding long-term care is flawed and inaccessible for many seniors.

Will self-funded plans get caught up in carrier and TPA legal battles?

By Chris Deacon, J.D. - On January 12, 2024, the Department of Labor (DOL) filed a complaint against Blue Cross and Blue Shield of Minnesota (BCBSM) alleging a series of violations pertaining to the Employee Retirement Income Security Act of 1974 (ERISA). This legal action hasn’t yet drawn much attention, but it is early days and I suspect that will change as the case plays out. Read Full Article…

VBA Article Summary

  1. Key Legal Issues and DOL's Involvement: The article discusses a lawsuit filed by the Department of Labor (DOL) against BCBSM, Inc., highlighting its significance due to the involvement of the DOL rather than employers or plan participants. This case raises fundamental questions about the limits of authority and fiduciary responsibilities of third-party administrators (TPAs) in managing self-funded employee welfare benefit plans. Central to the DOL’s complaint is the allegation that BCBSM exceeded its authorized role by mishandling Minnesota’s provider tax and acting as a fiduciary, thus violating the standards set by the Employee Retirement Income Security Act (ERISA).

  2. Recent Lawsuits Against TPAs: The article also provides an overview of several recent lawsuits filed against other TPAs like Aetna and Elevance Health, reflecting increasing legal scrutiny on their practices. These cases involve allegations of prioritizing financial interests over fiduciary responsibilities, undisclosed fees, and improper claims processing. The outcomes and ongoing legal battles in these cases underscore the growing attention on TPAs’ compliance with ERISA and their role in managing employer-sponsored health plans.

  3. Implications and Future Outlook: The unfolding legal situation, including the DOL’s actions, signifies a push towards more accountability and transparency in the administration of employer-sponsored health plans. With a significant portion of the American population reliant on these plans, the proper management and administration of these plans are crucial. The article emphasizes the importance of regulatory oversight in protecting the interests of plan participants and highlights the ongoing challenges, such as access to claims data and potential conflicts of interest due to TPAs' expanding roles in the healthcare supply chain. The case serves as a pivotal moment in redefining fiduciary responsibilities and the function of TPAs in healthcare plan administration.

35 best hospitals for price transparency

By Alexis Kayser - The top five hospitals for price transparency are located in Maryland, according to a recent ranking from Money. Read Full Article…

VBA Article Summary

  1. Comprehensive Hospital Evaluation: The report, published on January 18th, assessed 115 leading U.S. medical facilities using over 13,500 data points. This extensive analysis aimed to identify the "best" hospitals, with one key criterion being price transparency.

  2. Methodology and Collaboration: The evaluation of hospitals' price transparency was a collaborative effort between the publication, consulting firm Denniston, and the healthcare data team at the nonprofit RAND. This involved comparing the hospitals' publicly listed prices with the actual charges on patient bills, resulting in the development of a unique price transparency measure.

  3. Top-Ranked Hospitals for Price Transparency: The hospitals that received an "A-" grade or better in Money's price transparency analysis were highlighted. These include several notable hospitals like The Johns Hopkins Hospital in Baltimore, University of Maryland St. Joseph Medical Center in Towson, Mayo Clinic Hospital in Rochester, and the University of Washington Medical Center in Seattle, among others. The grades ranged from "A+" to "A-" with several hospitals across various states achieving high marks.

10,000 patients have filed ‘gastro’ claims against Ozempic, Mounjaro drug makers

By Gregg Goldfarb - Novo Nordisk is taking heat for allegedly downplaying the side effects of its popular weight loss drug. Read Full Article…

VBA Article Summary

  1. Rise of Ozempic and Wegovy in Weight Loss: Americans spend billions annually on achieving healthy body composition. Ozempic, a drug initially approved for diabetes treatment by the FDA in 2017, and its derivative Wegovy, have become popular for their weight loss side effects. These drugs, including Eli Lilly's Mounjaro and Zepbound, suppress appetite by slowing stomach emptying, leading to over 9 million prescriptions in the last quarter of 2022. Despite their popularity, some patients are now suing the manufacturers, Novo Nordisk and Eli Lilly, for severe side effects, including acute gastrointestinal illness and other complications.

  2. Litigation and Side Effects Concerns: Patients have reported various side effects from Ozempic and related drugs, such as gastroparesis, gastroenteritis, vomiting, fever, headaches, and chronic dehydration. Over 41 lawsuits have been filed against the drugmakers, with claims that the risks were not adequately disclosed. Novo Nordisk and Eli Lilly counter that the risks were known and included in product labeling. Despite these issues, the companies' stocks have risen significantly, and the drugs remain expensive, reflecting a large market of overweight and obese individuals.

  3. Historical Context and Cautionary Tales: The pharmaceutical industry has previously encountered issues with weight loss drugs. In the 1980s, Dr. Michael Weintraub combined fenfluramine and phentermine, leading to significant weight loss in patients. However, serious side effects, including heart valve defects, were later discovered, resulting in a class action lawsuit and a $3.75 billion settlement. This historical precedent serves as a reminder of the potential risks and uncertainties associated with new weight loss medications like Ozempic and Wegovy.