New York state proposes rules for pharmacy benefit managers

By Insurance NewsNet - The New York State Department of Financial Service has proposed the nation’s most comprehensive set of market rules for pharmacy benefit managers in that state. These regulations establish strong protections for consumers and small businesses including prohibiting abusive contract terms that raise drug costs for consumers and strain small pharmacies, as well as establish network adequacy standards to ensure consumers have access to affordable prescriptions where they live. Read Full Article…

VBA Article Summary

1. Comprehensive Regulatory Approach: New York has taken bold steps to regulate Pharmacy Benefit Managers (PBMs). Starting with Gov. Kathy Hochul's creation of the Department of Financial Services' Pharmacy Benefits Bureau in May 2022, the state has initiated measures to supervise and license the PBM industry. Further legislation in January 2022 laid out specific obligations for PBMs and offered mechanisms for the DFS to enforce these provisions and address concerns from the public and healthcare sector.

2. Key Protections: The latest set of regulations offers robust consumer, pharmacy, and market safeguards. These include:

   • Barring deceptive marketing techniques and ensuring patient access to nearby in-network pharmacies.

   • Preventing unfair contract terms to guarantee local pharmacies receive just compensation.

   • Restricting PBMs from favoring their affiliated pharmacies.

   • Requiring DFS approval for mergers or acquisitions involving state-licensed PBMs.

3. Feedback and Future Steps: With the announcement of the proposed regulations in the State Register, there is now a 60-day period open for public comments. During this time, the DFS welcomes feedback, ensuring that the regulations remain responsive to the needs and concerns of all stakeholders. Those interested can access the detailed proposed regulations on the DFS website.

How AI is already impacting the employee lifecycle

By Dr. Christian Schmeichel - From recruiting and talent management to learning and development, HR is already adopting AI in multiple ways across the employee lifecycle. And no surprise, the numbers tell us there is more to come—and show that implementing this technology is working. According to The Conference Board, almost two-thirds (65%) of CHROs expect AI to have a positive impact on the HR function over the next two years, while a Paychex study found that 75% of HR leaders plan to use AI within the next year. Read Full Article…

VBA Article Summary

1. Enhanced Decision Making with AI: AI streamlines HR functions by swiftly analyzing data, which aids HR leaders in making real-time decisions. This encompasses talent trends, employee performance, and retention information. AI-driven talent analytics result in improved workforce analysis, engagement strategies, succession planning, and performance assessments. A more data-driven approach ensures personal, meaningful, and relevant employee touchpoints based on actual employee feedback.

2. Revolutionizing Recruitment, Training, and DEI Initiatives: AI has significantly transformed recruitment processes, from analyzing resumes to eliminating recruitment bias. This assists HR departments in emphasizing their Diversity, Equity, and Inclusion (DEI) efforts. With AI, job description generation, and candidate anonymization become more efficient, though human oversight remains crucial to counteract inherent biases. AI also plays a pivotal role in onboarding and upskilling employees, tailoring training programs to individual needs, and assisting HR in implementing inclusive policies.

3. Optimizing HR Operations and Reward Systems: AI tools optimize routine HR operations like answering employee questions, updating processes, payroll, and compliance activities. This operational efficiency allows HR professionals to dedicate time to more value-adding tasks. AI's data-driven insights also offer personalization in compensation and benefits. By analyzing performance and preference data, AI tailors benefits packages for each employee, ensuring satisfaction and reducing turnover. The article underscores that while AI is a transformative tool in HR, the human touch remains vital, emphasizing the coexistence of AI and human expertise in HR's future.

Here are 25 Medicare Part D drugs that have skyrocketed in price

By Noah Tong - Medicare Part D drug prices have increased by an average of 226% since market entry. These 25 drugs are responsible for $80.9 billion in total Part D spending in 2021. Read Full Article…

VBA Article Summary

1. Staggering Price Increases: AARP’s Public Policy Institute's new report indicates that pharmaceutical drug prices have seen substantial hikes, placing significant financial burdens on consumers. Notably, prices of 25 name-brand drugs have surged between 20% to 739% over their lifetime, with most surpassing the annual rate of inflation. For instance, the price of Enbrel, a medication for rheumatoid arthritis, has escalated by 701% since its introduction in 1998. Likewise, newer drugs, such as Eliquis and Imbruvica, have seen price increases of 124% and 108% respectively since their launch.

2. Duration on Market and Price Inflation: The research from AARP highlighted a concerning trend – drugs tend to see more significant price increases the longer they remain on the market. Medications available for 20 years or more experienced an average lifetime price hike of 592%. In contrast, drugs on the market for under 12 years saw their prices rise by 58%. Leigh Purvis, AARP’s senior director of healthcare costs and access, emphasized that these annual price escalations accumulate over the years, often overshadowing the already high introductory prices of these drugs.

3. Impact on Consumers and Legislative Response: Individuals enrolled in Medicare prescription drug plans typically take four to five medications each month. Due to the soaring drug prices, many either rely on coinsurance or bear the entire cost if uninsured. Consequently, they are often forced into making difficult choices between necessities like medication, food, or fuel. In response to this crisis, Congress enacted the Inflation Reduction Act, compelling drug companies to offer rebates to Medicare if their drug prices grow faster than inflation. This measure aims to decrease the financial strain on both Medicare enrollees and the Medicare system as a whole. Additionally, the Centers for Medicare & Medicaid Services is poised to unveil the first set of 10 drugs that will be subject to Medicare negotiation, further illustrating the governmental response to drug price inflation.

Instant Pay Benefits Booming in Popularity Among Generation Z Workers

By Caroline Hroncich - The days of waiting two weeks or more for your paycheck to hit your bank account may be numbered. In an increasingly connected world—and one in which workers have higher expectations of their employers—employees are looking for something a little more immediate. Enter instant pay benefits. These programs, which have become more popular in recent years, allow employees to withdraw money directly from their paycheck ahead of their designated payday in exchange for a small fee. Read Full Article…

VBA Article Summary

1. Rising Demand and Benefits for On-demand Pay: On-demand wage access, once primarily popularized by major retailers and restaurants, is gaining traction across various industries. Financial pressures and heightened living expenses have escalated the demand for this perk, especially among younger employees. A 2022 Aquent survey revealed that 57% of the workers considered instant pay benefits important, with an overwhelming 83% of those aged 18-24 emphasizing its significance. Industry experts argue that the widespread use of instantaneous money transfer apps like Zelle and Venmo has set a new expectation among the younger workforce, pushing them to seek immediate access to their earnings.

2. Financial Wellness and Employer Responsibility: The shift towards instant pay isn't solely driven by employee demand. Employers are recognizing their evolving role in ensuring the financial wellness of their workforce. Darlene Miranda of DailyPay articulated that the traditional paycheck schedule doesn't always align with bill cycles, amplifying financial stress. Moreover, the increasing reliance on credit cards, as evidenced by the 6% rise in U.S. adults carrying credit card debt between 2022 and 2023, has underscored the necessity for on-demand pay. It presents a sustainable solution for workers to manage their finances without accumulating debt.

3. Implementation Challenges and the Way Forward: While the demand and benefits of instant pay are evident, integrating this system presents challenges for businesses. Older payroll technologies can hinder a smooth transition to on-demand payment structures. Such a shift also accelerates the cash flow within an organization, potentially straining the company's budget and making them part with cash sooner than anticipated. Additionally, there are tax implications to be considered. Yet, despite these obstacles, experts urge companies, especially those with hourly workers, to evaluate and possibly adopt instant pay benefits. The competitive edge it offers in attracting talent and catering to the evolving demands of the workforce makes it a compelling consideration for forward-thinking businesses.

Healthcare M&A Activity Reaches 3-Year Low, But It Might Pick Up in the Back Half of ‘23

By Katie Adams - M&A activity in the healthcare sector continued to decline in the second quarter of 2023, with the number of deals reaching its lowest point in three years. However, a new report predicted that M&A activity could increase in the second half of this year due to healthcare companies’ continually shrinking valuations and their divestitures of non-core assets. Read Full Article…

VBA Article Summary

1. Decline in M&A Activity with Potential Rise: M&A activity in the healthcare sector saw a notable decrease in Q2 2023, dropping to its lowest in three years with 245 healthcare deals, marking a 7% decline from the previous year and a 41% decrease compared to Q2 2021. However, due to continually shrinking valuations and divestitures of non-core assets of healthcare companies, there could be a resurgence in M&A activity in the latter half of 2023. A further increase might occur in the first half of 2024, especially if the Federal Reserve cuts interest rates.

2. Prominent Megadeals & KPMG's Future Outlook: While the overall deal volume reduced, significant transactions took place. CVS Health's acquisition of Oak Street Health was the largest, valued at $10.6 billion, aiming to bolster CVS's primary care capabilities. Other considerable deals include Optum’s acquisition of Amedisys ($3.3 billion) and TPG and AmerisourceBergen’s purchase of OneOncology ($2.1 billion). KPMG analysts foresee that the shift of clinical services from hospitals to ambulatory surgery centers (ASCs) or office-care settings will greatly influence future healthcare deal-making.

3. Geographical Variations & Buyer Recommendations: Mature markets, like Austin and Las Vegas, have seen a substantial number of procedures transitioned to ASCs and doctor’s offices, making physician groups in these regions particularly enticing for buyers, especially those with ambulatory assets and high patient volumes. In contrast, in regions like Cleveland and New Orleans, where procedures predominantly occur in hospitals, there's a significant opportunity for shifting services to other care sites, leading to higher revenue for independent physician groups. Yet, these immature markets carry risks such as provider concentration disrupting referral connections. KPMG suggests that in these areas, buyers should focus on high procedural volume specialties and partner with payers to support the shift of services outside hospitals.

HHS to invest $100M to train nurses, bolster clinician workforce

By Heather Landi - The Biden administration announced a $100 million investment to train more nurses and grow the workforce as the healthcare industry faces a critical nurse shortage. Officials with the U.S. Department of Health and Human Services (HHS) said Thursday the investments will help address the increasing demand for registered nurses, nurse practitioners, certified nurse midwives and nurse faculty. Read Full Article…

VBA Article Summary

1. Significant Shortage of Nurses: A study indicated that 100,000 nurses left the profession during COVID-19, with a predicted 800,000 more expected to leave by 2027. This compounds the projected shortage of registered nurses in the U.S. as the baby boomer generation ages and the demand for healthcare services increases. By 2031, while the RN workforce might grow by 195,400, the Bureau of Labor Statistics anticipates 203,200 openings for RNs annually due to retirements and workforce exits. A poll highlighted that 94 out of 100 senior health system executives view their nursing shortage as critical. Almost 70% expressed they lacked the necessary nursing staff to address a significant health crisis. This shortage has also resulted in a 20% surge in labor costs for the healthcare system from 2022 to 2023.

2. Efforts to Boost Nursing Education and Training: HHS plans to invest significantly to bolster the nursing workforce. As part of a $100 million initiative, $34.8 million will be distributed to 56 organizations to amplify the number of primary care nurse practitioners, clinical nurse specialists, and certified nurse midwives trained to offer primary care, mental health, substance abuse, and maternal care services. HRSA has dedicated $30 million to 45 organizations through its Nurse Practitioner Residency and Fellowship Program to augment the number of advanced practice nurses trained in primary care. This program aims to replicate the intensive training physicians undergo during their residencies. Furthermore, $26.5 million has been allocated to 88 schools through the Nurse Faculty Loan Program, intending to support and incentivize careers in nursing faculty roles.

3. Targeted Initiatives for Specific Nursing Roles: To bridge the gap between licensed practical nurses (LPNs) and registered nurses (RNs), nearly $9 million will be provided to nine organizations to facilitate pathways for LPNs to become RNs. This will aid in covering costs such as tuition, transportation, and childcare. HRSA is also investing $2.2 million across 64 schools to back a nurse anesthetist traineeship program, focusing on addressing service gaps in rural and underserved areas.

Self-funding: 4 misconceptions & 4 questions

By Bob Love - As a trusted advisor, your role is to keep employers informed about trends and options that may not currently be on their radar. Here are four questions and four common misconceptions to get the conversation started with your clients. Read Full Article…

VBA Article Summary

1. Shift to Self-funding: Due to the rising health care costs and changes in federal policies, many employers with fully-insured plans are facing steep premium hikes. Moving to self-funding can offer employers more control over their healthcare expenses and the flexibility to design benefits that cater to their employees' needs. Before transitioning, it's essential to understand if an employer is a suitable candidate for self-funding by assessing factors like their satisfaction with current coverage, desire for more control over costs, and openness to trying a new approach.

2. Debunking Self-funding Myths: Many misconceptions surround self-funding, including beliefs that only large companies can self-fund, such plans are labor-intensive, or they require significant cash reserves. In reality, smaller businesses can benefit from tailored plans, many administrative aspects are handled by Third Party Administrators (TPAs), and employees may not even notice a difference. Additionally, self-funding does not necessarily mandate large cash reserves as payments are made based on projected medical costs.

3. Introduction to Level-funding: Level-funding serves as an intermediary step for companies transitioning from fully-insured to self-funded plans. These plans combine the predictability of consistent monthly expenses found in fully-insured schemes with the flexibility of self-funding. Level-funded plans help in budgeting and financial planning by having employers pay a fixed monthly fee to a carrier, which covers projected claims, administrative costs, and stop-loss insurance. They allow employers to experiment with the self-funding model, balancing potential risks and benefits, and eventually deciding on the best health care approach tailored to their organization and employees.

Smart healthcare benefits can increase life expectancy by 12 years

By Deanna Cuadra - In the wake of the COVID-19 pandemic, U.S. life expectancy dropped by over two years to 76.4, the lowest it's been in two decades. But Americans still have a shot at living longer, healthier lives than previous generations — especially if employers are willing to rethink their approach to healthcare. By 2040, the average life expectancy in the U.S. could increase by 12 years, with 95% of those years spent in good health, according to consulting company Deloitte. Read Full Article…

VBA Article Summary

1. Prevention-based Healthcare Over Reactionary Care: Neal Batra of Deloitte's Life Sciences and Health Care practice emphasizes the importance of shifting from a "react and respond" model to one that prioritizes prevention. He believes that addressing health concerns before they become significant can make healthcare not only more effective but also less expensive.

2. The Role of Social Determinants: Batra highlights that for effective prevention-based healthcare, employers must take into account the social determinants of health. These are the socioeconomic and environmental factors that affect one's well-being, such as access to fresh food, quality of air, and secure housing. Tailoring solutions based on these determinants, like providing air filters in areas with poor air quality to reduce asthma-related issues, will address the root causes of negative health outcomes.

3. Potential Savings and Improved Health Outcomes: Shifting the healthcare paradigm can lead to considerable savings, with Batra estimating a potential $4 trillion annually for the U.S. health system. Given that employers cater to the healthcare needs of almost half the U.S. population, a prevention-focused approach could significantly increase the health span of an estimated 155 million Americans. While the transition might be challenging, leveraging modern tools like telehealth and health monitoring apps can empower employees to be more proactive about their health.

SEC cyber reporting rule presents compliance, insurance complexities

By Judy Greenwald - Businesses will face challenges complying with a cybersecurity rule issued by the U.S. Securities and Exchange Commission late last month that gives them just four business days to report material cyber breaches, experts say. Read Full Article…

VBA Article Summary

1. SEC's New Rule on Cyber Incident Reporting: Approved by the SEC with a 3-2 vote, the rule mandates companies to determine the materiality of a cybersecurity incident without any unreasonable delay and disclose this by filing an Item 1.05 Form 8-K within four business days. Starting December 18, companies will be required to disclose material cybersecurity incidents, but smaller companies receive a 180-day deferral. The regulation also obliges companies to elaborate on their methodologies for evaluating, identifying, and managing significant threats from cybersecurity breaches in their annual reports, effective from December 15.

2. Expert Opinions on the Rule's Impact and Importance: According to Gary Gensler, SEC Chair, though many public firms already provide cybersecurity disclosures to investors, there's a need for more uniform and useful disclosures. Arturo Perez-Reyes, a senior VP at Newfront Insurance, mentions the previous lack of compliance and views this as a significant shift in transparency and accountability for corporate boards. The rule intends to inform stock markets almost instantly about cyber incidents, a move considered revolutionary by Aloke S. Chakravarty, a partner at Snell & Wilmer LLP.

3. Potential Insurance Implications for Companies: The new rule might influence insurance coverage, particularly in the realms of cyber liability and directors and officers liability insurance. While D&O policies, covering errors and omissions by corporate leadership, may more likely respond, exclusions related to cyber issues in these policies aren’t rare. There exists a gap between cyber and D&O policies, which might widen due to the new rule, leading to a need for inventive solutions by brokers. Companies should ensure they're compliant with the rule and have adequate insurance coverage to act as a safety net against potential violations.

Three Reasons Cities Should Tailor Employee Financial Wellness Programs

By Rivka Liss-Levinson, PhD - With 88% of public sector workers worried about their finances, and 77% of those worried about their finances or financial decisions while at work, employers have good reason to implement an employee financial wellness program or strengthen an existing program. It’s not just the right thing to do – it also makes good business sense. Read Full Article…

VBA Article Summary

1. Addressing Unique Needs by Age Group: State and local government employees under 40 frequently worry about their finances at work, often feel less informed about financial matters, and tend to rely on non-professional sources for financial advice. Tailored financial wellness programs can provide younger workers with relevant information, addressing their specific concerns and introducing them to trusted resources to aid them throughout their careers.

2. Recognizing Variations in Program Preferences: Employee preferences for financial wellness topics and delivery modes differ based on age. For instance, younger workers lean towards interactive online platforms and are more interested in topics like debt, while older workers often prefer in-person programs and are keen on retirement planning. Recognizing and accommodating these variations ensures higher participation and satisfaction across all age groups.

3. Advantage in Talent Recruitment and Retention: Tailored financial wellness programs not only support current employees but can also be a vital tool in attracting and retaining talent. As cities compete for skilled workers, providing tailored financial tools and resources helps keep employees focused on their roles, giving public employers a competitive edge in the hiring landscape.