Daily Industry Report - March 12

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)

Letter to Health Care Leaders on Cyberattack on Change Healthcare

By U.S. Department of Health & Human Services - Dear Health Care Leaders, As you know, last month Change Healthcare was the target of a cyberattack that has had significant impacts on much of the nation’s health care system. The effects of this attack are far-reaching; Change Healthcare, owned by UnitedHealth Group (UHG), processes 15 billion health care transactions annually and is involved in one in every three patient records. Read Full Article…

VBA Article Summary

  1. Impact of the Cyberattack on Healthcare Payments: The cyberattack has significantly disrupted payments to hospitals, physicians, pharmacists, and other healthcare providers across the country, creating concerns about their ability to continue providing care due to cash flow challenges and the need for workarounds. Despite these difficulties, healthcare providers are striving to maintain services.

  2. Response from the Biden-Harris Administration and Call to Action: The Biden-Harris Administration has actively engaged in mitigating the impact of the cyberattack by facilitating solutions for healthcare providers and urging the private sector, including insurance companies and other payers, to take decisive steps to support affected providers. This includes making interim payments, easing administrative burdens, and improving communication and transparency.

  3. Strengthening Cybersecurity Resilience and Support Measures: In response to the cyberattack and broader cybersecurity challenges, the U.S. government has highlighted the importance of cybersecurity resilience in the healthcare sector. Initiatives include the release of a concept paper by HHS on cybersecurity strategy, streamlined processes by CMS to ensure continuity of payments, and encouragement for the healthcare industry to adopt best practices in cybersecurity management.

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!

How Big Pharma is fighting Biden’s program to lower seniors’ drug costs

By Tony Romm - Pharmaceutical giants are mounting a vigorous legal battle against President Biden’s plan to lower seniors’ prescription drug costs, urging federal judges here and around the country to invalidate a new program that aims to reduce the price of medications for high blood pressure, heart disease, cancer and diabetes. Read Full Article…

VBA Article Summary

  1. Legal and Political Landscape: The Biden administration's initiative to allow Medicare to negotiate drug prices, as enacted under the Inflation Reduction Act of 2022, has sparked significant legal challenges from major pharmaceutical companies. These companies argue that the legislation is unconstitutional, infringes on their rights, and could stifle innovation and development of future treatments. This legal battle is expected to escalate to the Supreme Court, highlighting the significant implications for the government's capacity to regulate healthcare costs and President Biden's commitment to reducing financial burdens on older Americans.

  2. Pharmaceutical Industry's Resistance: Major pharmaceutical firms, including Bristol Myers Squibb, Janssen, Novartis, and Novo Nordisk, have launched a series of lawsuits aimed at overturning the new law that allows Medicare Part D to negotiate prices for certain drugs. These companies argue that the negotiation program constitutes an illegal taking of their property and threatens them with excessive financial penalties, potentially undermining their competitiveness and innovation capabilities. This intense opposition underscores the industry's vested interest in maintaining high drug prices and their historical profitability margins.

  3. Implications for Drug Pricing and Innovation: The debate over Medicare's ability to negotiate drug prices centers on the trade-offs between lowering the cost of medications for Americans, who currently pay prices several times higher than those in other industrialized nations, and the pharmaceutical industry's claims that price controls could jeopardize drug innovation and availability. Critics of the industry's stance point to the sector's substantial profits and argue that the negotiation program is a necessary step to address the unsustainable drug pricing model in the U.S., while the industry warns of the potential impact on research and development, particularly in areas like cancer treatment.

New reports detail UnitedHealth's latest acquisitions under shady pretenses

By Wendell Potter - Two newly published investigative reports, by the intrepid reporters at STAT News and The American Prospect, pull the curtains back a little more on the astonishing number of recent acquisitions UnitedHealth has made as it moves deeper and deeper into health care delivery, enabling it to grab ever-increasing chunks of our premium and tax dollars to reward its shareholders. Read Full Article…

VBA Article Summary

  1. Strategic Acquisitions to Boost Profits: UnitedHealth Group has been aggressively purchasing outpatient facilities, especially surgery centers, in areas where it has a significant market share in Medicare Advantage plans. This approach aims to direct more seniors to its facilities, enhancing the revenue from the government and improving its bottom line. This strategy is evident from the acquisition of National Cardiovascular Partners and other surgery centers in key geographic areas, reflecting a deliberate effort to funnel insurance members towards providers it owns for increased profit.

  2. Selective Disclosure Practices: As UnitedHealth grows larger, it discloses fewer details about its acquisitions due to regulatory thresholds that require only material deals to be immediately reported to investors. This practice means that many of UnitedHealth's acquisitions, which contribute to its rapid growth and position as the fifth largest company on the Fortune 500 list, go largely unnoticed by the public. It was only through diligent review of financial documents that the extent of UnitedHealth's acquisition strategy, including the purchase of dozens of outpatient facilities in 2023, was uncovered.

  3. Exploiting Crisis for Expansion: UnitedHealth's acquisition strategy also includes taking advantage of crises affecting healthcare providers. For example, after a hacking incident at Change Healthcare disrupted the flow of information necessary for healthcare providers to get paid, UnitedHealth applied for an emergency exemption to fast-track its acquisition of a medical practice in Oregon facing financial difficulties due to the hack. This move underscores UnitedHealth's broader strategy of expanding its reach and profitability, even amidst situations that put healthcare providers at a disadvantage.

In State of the Union address, Biden to urge Congress to pass measures to lower health care costs

By Bo Erickson - President Biden plans to urge Congress to focus on cost-saving ideas for prescription drugs in his State of the Union address Thursday night, including capping out-of-pocket prescription drug costs for all Americans and allowing the federal government to negotiate the prices of widely used medications. Read Full Article…

VBA Article Summary

  1. Expansion of Drug Price Negotiations: President Biden's proposal aims to significantly broaden the scope of the Inflation Reduction Act of 2022 by increasing the number of prescription drugs, specifically those treating cancer, heart disease, and diabetes, for which Medicare can negotiate prices from 20 to 50. This initiative follows the federal government's ongoing negotiations with pharmaceutical companies over the pricing of ten expensive drugs widely used by Americans, with companies expected to submit counteroffers imminently.

  2. Extension of Prescription Drug Cost Cap: In addition to drug price negotiations, President Biden intends to propose the extension of a $2,000 cap on out-of-pocket prescription drug costs to all Americans with private insurance, a measure set to be implemented for senior citizens in 2025. This move seeks to alleviate the financial burden of medical expenses for a broader segment of the population, transcending the current benefit aimed solely at seniors.

  3. Challenges and Political Context: The implementation of these proposals faces considerable obstacles, requiring substantial legislative action from a Congress that is not only deeply divided but also grappling with basic responsibilities like passing an annual budget. Despite the anticipated call for bipartisan support, the historical context of no Republican support for the 2022 measure indicates potential challenges ahead. These efforts are positioned against the backdrop of the upcoming 2024 presidential election, reflecting the Biden administration's strategic focus on healthcare as a pivotal element of its economic agenda amid public economic dissatisfaction.

Momentum behind hospital-at-home continues to grow, but proponents say Congress needs to act to fuel more investment

By Heather Landi - Francisco Dizon, 77 years old, sat comfortably in his living room as a team of clinicians took his vital signs and administered IV medications to treat his urinary tract infection. While he received medical treatment, his wife, Esperanza, stood close by, speaking with the medical team and graciously offering them something to eat. Read Full Article…

VBA Article Summary

  1. Personalized Healthcare at Home: Francisco, a patient with diabetes facing a urinary tract infection (UTI), chose DispatchHealth's advanced care-at-home program over hospitalization, benefiting from personalized care in the comfort of his home. This approach allowed his wife, Esperanza, to stay by his side, offering him home-cooked meals and a familiar environment, enhancing his comfort and recovery. The program includes daily visits by healthcare professionals and 24/7 access to medical providers, utilizing remote monitoring devices to track Francisco's health in real-time.

  2. Advantages of At-Home Healthcare Services: DispatchHealth's model demonstrates significant advantages, including reducing the need for emergency room visits by 58%, cutting hospital readmission rates nearly in half compared to the national average, and achieving high patient satisfaction rates. The service, supported by mobile technology, delivers hospital-level care to patients' homes, including mobile labs and IV medication, aiming to provide quality, safe, and cost-effective care outside traditional hospital settings.

  3. Future of Hospital-at-Home Programs: Amidst growing demand for at-home healthcare due to demographic trends and the desire to avoid hospital-acquired infections, hospital-at-home programs have gained traction, notably during the COVID-19 pandemic when CMS launched the Acute Hospital Care at Home Waiver. Advocates argue for the permanence of these waivers to continue offering high-quality, cost-effective care at home, highlighting the potential for these programs to alleviate healthcare system pressures, improve patient outcomes, and support aging populations in their homes.

NABIP adopts American Health Consumer Bill of Rights

By Susan Rupe - Saying that it wants to “put the health back in our health care system,” the National Association of Benefits and Insurance Professionals announced its American Health Consumer Bill of Rights during the 2024 NABIP Capitol Conference on Monday. Read Full Article…

VBA Article Summary

  1. Proactive Approach to Healthcare Reform: The National Association of Benefits and Insurance Professionals (NABIP) is presenting a Healthcare Consumer Bill of Rights with a proactive, apolitical stance aimed at ensuring health care remains privately accessible and affordable for all Americans. Mark Gaunya, chairman of the NABIP Delta Force, emphasizes the importance of offering universal healthcare rights that transcend political divides, while CEO Jessica Brooks-Woods highlights the association's evolution from being relevant to essential in the healthcare conversation.

  2. Foundation Principles and Goals: Eric Kohlsdorf, the NABIP president, articulates the goal of the bill of rights as establishing foundational principles for NABIP’s role in transforming American healthcare. The bill seeks to make healthcare comprehensive, equitable, and compassionate, underlining a commitment to promoting health, dignity, and equality as a shared responsibility of individuals and the healthcare sector.

  3. Inclusive and Comprehensive Rights: The Healthcare Consumer Bill of Rights consists of 10 articles, including the right to affordable health care, quality care, privacy, individual autonomy, health equity, education, affordable medication, emergency care, healthcare advocacy, and the recognition of states' rights to regulate healthcare and insurance markets. These articles collectively aim to ensure healthcare services are accessible, of high quality, and equitable, addressing issues like privacy, autonomy, health disparities, and financial barriers to emergency and essential care.

America Worries About Health Costs — And Voters Want to Hear From Biden and Republicans

By Julie Appleby and Phil Galewitz - President Joe Biden is counting on outrage over abortion restrictions to help drive turnout for his reelection. Former President Donald Trump is promising to take another swing at repealing Obamacare. But around America’s kitchen tables, those are hardly the only health topics voters want to hear about in the 2024 campaigns. Read Full Article…

VBA Article Summary

  1. Health Care Costs a Prime Concern for Voters: The article emphasizes that health care costs are a major concern for Americans, with a new KFF tracking poll revealing that health care expenses are the primary worry among Americans, surpassing concerns about gas, food, and rent. Nearly three-quarters of adults, including majorities from both political parties, express anxiety over the ability to afford unexpected medical bills and other health-related costs. This concern is reflective of the broader anxiety over out-of-pocket expenses for health care.

  2. Abortion as a Pivotal Election Issue: Following the Supreme Court's decision to overturn the constitutional right to an abortion, the issue has become a significant health topic that could influence the upcoming elections. The article details how abortion rights have previously mobilized voters and may continue to do so, with states having voted on related amendments and potential nationwide policies being discussed. The divide even within anti-abortion circles regarding the status of frozen embryos highlights the complexity and depth of this issue in the political landscape.

  3. Specific Health Policies and Political Stances: The discussion includes several specific health policy areas that are of concern to voters and could influence election outcomes, such as the affordability of prescription drugs, the popularity and potential expansion of the Affordable Care Act (Obamacare), and the bipartisan popularity of government health insurance programs like Medicaid and Medicare. The article also touches on the opioid crisis, pointing out the differing approaches of Republicans and Democrats towards addiction and substance use disorders, and how these may play into electoral strategies.

Opinion |  Let AI remake the whole U.S. government (oh, and save the country)

By Josh Tyrangiel - My awakening began in the modern fashion — late at night, on YouTube. Months later the video still has just 3,900 views, so I’d better describe it. Read Full Article…

VBA Article Summary

  1. Presentation Turned Futuristic Vision: Retired four-star general Gustave Perna shared a compelling narrative on how he orchestrated the rapid development and distribution of the first coronavirus vaccines under Operation Warp Speed. Despite starting with minimal resources, Perna's collaboration with Palantir utilized artificial intelligence to manage and streamline vast amounts of data, enabling an unprecedented mobilization of resources and vaccine distribution across the U.S.

  2. Challenges and Solutions in Modernizing Government Operations: The article highlights the broader potential of artificial intelligence in transforming government functions beyond crisis management, like Operation Warp Speed. It discusses the current low confidence in various U.S. institutions and suggests AI could vastly improve efficiency and service quality in areas such as IRS inquiries, public health responses, and infrastructure maintenance, amidst skepticism about AI's biases and potential job displacement.

  3. Palantir's Role and the Future of Government Innovation: Focusing on Palantir's pivotal role in Perna's success story, the article underscores the company's capacity to integrate and optimize complex data systems for better decision-making. The broader narrative pushes for a visionary overhaul of government systems using AI, advocating for agile development, regulatory reform, and targeted initiatives (such as improving Veterans Affairs) to enhance government efficiency, responsiveness, and trustworthiness.

RWJBarnabas drops employee GLP-1 coverage for weight loss

By Jakob Emerson - West Orange, N.J.-based RWJBarnabas Health has ended coverage under its employee health plan for GLP-1s when prescribed for weight loss, a system spokesperson confirmed with Becker's. Read Full Article…

VBA Article Summary

  1. Discontinuation of Weight Loss Drug Coverage: RWJBarnabas Health has ceased covering GLP-1 medications for weight loss purposes as of February 1, citing a significant lack of sustained medication adherence among users, which undermines the drugs' effectiveness. The policy change does not impact coverage for those prescribed GLP-1s for diabetes management, highlighting a focused approach on therapeutic use rather than weight loss.

  2. Trend Among Health Systems: This move aligns with a broader trend observed among several health systems and self-insured employers, such as Fairview Health Services, Hennepin Healthcare, HealthPartners, Mayo Clinic, and Ascension, who have also recently ceased or restricted coverage for weight loss drugs. This reflects a growing scrutiny and reassessment of the cost-effectiveness and overall benefit of such treatments within employee health plans.

  3. Commitment to Employee Health and Wellness: Despite the policy shift, RWJBarnabas Health maintains its commitment to the health and well-being of its employees. The organization continues to provide comprehensive coverage for a wide range of clinical services and medications. Additionally, it offers various health and wellness resources, including chronic condition management, health coaching, and fitness support programs, encouraging employees to utilize these offerings to meet their health goals.

AstraZeneca Loses Lawsuit Challenging Drug Price Negotiation by Medicare

By Frank Vinluan - AstraZeneca has lost its lawsuit challenging Medicare’s drug price negotiation program after a federal judge concluded the pharmaceutical giant has no standing to contest the law that created it, nor does the company have a constitutionally protected property interest in the matter. Read Full Article…

VBA Article Summary

  1. Legal Background and Allegations: The decision from the U.S. District Court for the District of Delaware marks the first ruling in a series of lawsuits filed by pharmaceutical companies against provisions of the Inflation Reduction Act (IRA), including constitutional challenges similar to those presented by AstraZeneca. AstraZeneca's lawsuit focuses on the inclusion of its drug Farxiga, used in treating type 2 diabetes, heart failure, and chronic kidney disease, on a list of 10 drugs selected by CMS for price negotiation, a move they argue violates the federal Administrative Procedure Act and the Constitution by potentially hindering incentives for developing new drug uses.

  2. Court's Opinion: Chief Judge Colm Connolly disputed AstraZeneca's claims of harm from the IRA's implementation, stating in his 45-page opinion that hypothetical harms or lost incentives do not constitute concrete injuries. Furthermore, Connolly rejected AstraZeneca's claim that the IRA violates its Fifth Amendment rights, clarifying that the expectation to sell drugs at previously higher prices does not establish a protected property interest, thereby failing to support a due process claim.

  3. AstraZeneca's Response and Broader Impact: Following the court's decision, AstraZeneca expressed disappointment, emphasizing concerns over the ruling's potential impact on patient access to future medicines. The company highlighted its commitment to challenging the decision as part of its effort to support patient access to innovative treatments. This case is part of a broader legal challenge against the IRA, involving several other pharmaceutical companies and industry groups, indicating significant resistance from the pharmaceutical industry against the legislation's efforts to reduce drug costs.