2024 Trends Shaping the Health Economy

By Trilliant Health - The $4.5T (and growing) health economy creates more data than any other part of the U.S. economy. New findings emerge daily but the challenge for health economy stakeholders is to synthesize seemingly unrelated — and often misconstrued — data to understand their strategic and tactical implications. Read Full Article… 

HVBA Article Summary

1. Value Optimization Over Maximization: The report emphasizes that healthcare stakeholders must shift their focus from maximizing their own value to optimizing value for their customers. This means delivering better outcomes at equivalent costs or equivalent outcomes at lower costs, which is essential in a healthcare system facing rising expenditures without corresponding improvements in health outcomes.

2. Economic Framework of Healthcare: The analysis frames the U.S. healthcare system as a "negative-sum game," where increasing costs do not correlate with improved health outcomes. Stakeholders, including providers, payers, and life sciences companies, must understand the importance of value for money, which involves balancing cost, quality, safety, and convenience in healthcare services.

3. Impact of External Pressures: The report outlines potential catalysts for change within the healthcare system, such as legal pressures on employers regarding health benefit costs and consumer demand for transparency and value. The interplay of these factors may drive systemic change and encourage stakeholders to adopt more efficient, consumer-centered care models to remain competitive.

Doctors Seek Additional Obesity Training in Wake of Obesity Patient Boom

By Donavyn Coffey - Gitanjali Srivastava, MD, professor of medicine, pediatrics & surgery, and the medical director of obesity medicine at Vanderbilt University School of Medicine in Nashville, Tennessee, was nearly 10 years into practicing pediatric medicine when she graduated from the obesity medicine fellowship at Massachusetts General Hospital in Boston in 2013. Read Full Article… 

HVBA Article Summary

1. Evolving Perception and Demand for Obesity Medicine: The landscape of obesity treatment has transformed significantly, with obesity now recognized as a chronic disease rather than a lifestyle issue. This shift is driven by increased patient demand for effective treatment options, especially following the FDA's approval of GLP-1 injections, which have shown significant weight loss benefits. As a result, healthcare systems are actively seeking obesity specialists and establishing metabolic health centers.

2. Educational Gaps and Increasing Training Opportunities: Historically, medical training has provided minimal education on obesity and metabolism, leading to a lack of expertise among physicians. However, recent advances in understanding obesity's pathophysiology have prompted a surge in interest for further training. The American Board of Obesity Medicine (ABOM) offers certification pathways, enabling more physicians to incorporate obesity management into their practices and address the growing patient need.

3. Continued Shortage of Obesity Specialists: Despite the rapid growth in the field of obesity medicine and the increasing number of certified specialists, the total number of obesity medicine practitioners remains small compared to the demand. With only 8,263 doctors certified by ABOM, many patients seeking obesity treatments may still struggle to find access to comprehensive care, highlighting the need for ongoing development and support within this specialty.

AG in Texas Is Nation's First to Bring Gen AI Enforcement Action in Health Care

By Chris O’Malley - The first state attorney general settlement with a company accused of deceptively marketing generative AI software serves as a warning that federal regulators aren't the only cops willing to slap cuffs on the nascent technology. Read Full Article… 

HVBA Article Summary

1. Regulatory Landscape for AI: The Texas attorney general’s settlement serves as a significant reminder that existing state laws, like the Texas Deceptive Trade Practices-Consumer Protection Act, can be utilized to regulate AI technologies without the need for new legislation. This highlights a growing trend among state attorneys general to scrutinize AI applications in high-risk areas, especially healthcare, to protect consumers.

2. Transparency and Risk Management: Pieces Technologies is now required to transparently disclose the risks and limitations of its AI products, as well as the data and models used for training. This emphasizes the importance of implementing thorough risk assessments and management policies for organizations deploying AI systems in healthcare, ensuring that they adhere to regulations and maintain accountability to safeguard patient welfare.

3. Implications for Future Legislation: As states consider more specific AI regulations, such as the upcoming Colorado Artificial Intelligence Act, organizations must be proactive in understanding the compliance requirements related to high-risk AI systems. This includes establishing risk management policies, conducting impact assessments, and ensuring transparency to mitigate potential liability and comply with evolving legal standards.

J&J drops 340B rebate plan following government pressure

By Rebecca Pifer - In August, J&J informed disproportionate share hospitals, which care for a large number of vulnerable patients, that it would stop giving them upfront discounts on plaque psoriasis treatment Stelara and blood thinner Xarelto. Instead, starting mid-October the drugmaker would require hospitals to pay the full price for the drugs and issue them a rebate later. Read Full Article…

HVBA Article Summary

1. J&J Abandons Rebate Plan: Johnson & Johnson has decided to scrap its controversial rebate plan for the 340B Drug Discount Program after receiving significant pushback from hospitals and the federal government. This plan aimed to shift discounts for two widely used medications from upfront point-of-sale reductions to after-the-fact rebates, which hospitals argued could delay or prevent them from receiving necessary discounts.

2. Government Intervention and Compliance Issues: The Health Resources and Services Administration (HRSA) threatened J&J with sanctions, stating that their rebate model violated 340B statute. J&J faced potential penalties of approximately $7,000 per violation and could risk losing its pharmaceutical pricing agreement with the government, which would cut its drugs out of Medicare and Medicaid coverage.

3. Ongoing Tensions Over 340B Program: The article highlights the ongoing conflict between drugmakers and hospitals regarding the 340B program, designed to help financially struggling hospitals access affordable medications. While hospitals claim drugmakers are evading discounts, manufacturers argue that the program has been misused. The federal government is considering reforms to enhance transparency and compliance within the program.

CVS lays off 2,900 workers in cost-cutting move. Here's what to know.

By Aimee Picchi - CVS Health said it is cutting about 2,900 employees as part of a goal to reduce costs by $2 billion. The job cuts represents about 1% of the health care company's workforce, a CVS spokesperson told CBS MoneyWatch via email. Read Full Article…

HVBA Article Summary

1. Store Closures and Sales Decline: Walgreens plans to close up to 25% of its 8,600 retail locations due to a shift in consumer behavior, with customers increasingly opting for other retailers for basic items. CVS also reported a 4% decline in same-store sales for non-prescription products in its latest quarter.

2. Job Cuts at CVS: CVS announced it will cut 2,900 corporate jobs, emphasizing that these reductions will not affect front-line positions in stores, pharmacies, or distribution centers. Affected employees will receive severance packages and access to outplacement services.

3. Strategic Review and Potential Breakup: CVS is reportedly conducting a strategic review of its operations, which may lead to a restructuring or breakup of the company. The management is focused on enhancing shareholder value while maintaining its commitment to providing integrated healthcare services.

Employer plans face GLP-1 anti-obesity drug rebate threats

By Allison Bell - Suppliers of popular, expensive new drugs like Ozempic, Wegovy and Zepbound are using threats to take away rebates to keep employer-sponsored health plans from putting the drugs in utilization management programs, according to two large employer plan groups. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Rising Costs and Coverage Challenges: Approximately 40% of U.S. adults are affected by obesity, with the annual cost of covering GLP-1 agonists estimated at $10,000 per patient. Gremminger and Gelfand highlight that employers are aiming to prioritize spending on these medications for those in greatest need while facing challenges from suppliers that threaten drug rebates when utilizing cost-management strategies.

2. Impact of Utilization Management on Drug Pricing: The letter references a North Carolina public employee plan that experienced a 10% increase in prescription spending due to GLP-1 agonist coverage, which added $50 per month for each enrollee. Attempts to implement a utilization management program to control costs were met with the threat of losing rebates, potentially raising the prescription cost by 67%.

3. Call for Senate Investigation: The group leaders express disappointment that employers seeking to provide essential medication coverage are caught between significantly increasing health plan costs or limiting coverage entirely. They urge the Senate HELP Committee to investigate the pricing and rebate practices of drug manufacturers and pharmacy benefit managers following recent hearings on GLP-1 agonist prices.

SIIA releases details of 2024 captive survey

By Captive International - The Self-Insurance Institute of America (SIIA) has released the results of its 2024 Captive Survey, which it says demonstrate consistent and encouraging growth for the industry over recent years. Read Full Article…

HVBA Article Summary

1. Positive Industry Outlook: For the third consecutive year, survey respondents rated their sentiment on the future of the captive industry as a 9 out of 10, indicating sustained optimism and stability similar to previous years, with nearly 90% expressing a bullish outlook.

2. Staffing Trends and Growth: Approximately 64% of respondents added staff in 2023, with notable hires in management, underwriting, sales, and accounting. While this represents a slight decrease from previous years, the total number of staff added nearly doubled compared to last year's figures.

3. Increase in Captive Formations: Captive formations continue to outpace closures, with respondents averaging nearly three new formations for every closure in 2023. Additionally, 38% of respondents reported cell captives as the most common structure formed, showcasing evolving preferences in captive structures.