The Great Grift: More than $200 billion in COVID-19 aid may have been stolen, federal watchdog says

By Richard Lardner and Jennifer McDermott - More than $200 billion may have been stolen from two large COVID-19 relief initiatives, according to new estimates from a federal watchdog investigating federally funded programs that helped small businesses survive the worst public health crisis in more than a hundred years. Read Full Article…

VBA Article Summary

1. According to the U.S. Small Business Administration (SBA) inspector general, over $200 billion may have been stolen from two large COVID-19 relief initiatives - the Paycheck Protection and COVID-19 Economic Injury Disaster Loan programs. This figure is significantly higher than previous estimates and suggests that these programs were particularly vulnerable to fraud, especially in the early stages of the pandemic. The estimate indicates that "at least 17 percent of all COVID-EIDL and PPP funds were disbursed to potentially fraudulent actors." However, the SBA disputes these numbers, claiming that they overestimate fraud and unintentionally mislead the public​¹​.

2. The fraud figures are part of a broader issue of potential losses from pandemic relief efforts. The Associated Press reported that scammers and swindlers potentially took about $280 billion in COVID-19 emergency aid, and an additional $123 billion was wasted or misspent. Notably, 86% of the potential fraud occurred during the first nine months of the pandemic when President Donald Trump was in office. However, Gene Sperling, a senior White House official overseeing pandemic relief spending, suggests that the amount of likely or actual fraud is significantly less, perhaps around $40 billion​¹​.

3. The fraudulent payouts have broader consequences beyond the immediate financial loss. A study found that pandemic relief fraud inflated house prices, with housing prices increasing 5.7 percentage points on average in ZIP codes with high amounts of fraud during the pandemic. This inflation effect extended to consumer spending, potentially fueling inflation more broadly. Meanwhile, efforts are underway to combat fraud, including stricter rules and a proposed $1.6 billion plan to boost law enforcement efforts to pursue pandemic relief fraudsters​¹​.

New playbook arms employers with blueprint for navigating PBM relationships

By Paige Minemyer - Pharmacy benefit managers and their role in the drug supply chain have been under the microscope, and a new playbook aims to arm employers with strategies to strengthen their negotiating power. The guide, released by the National Alliance of Healthcare Purchaser Coalitions, identifies several key strategic recommendations that employers can adopt when looking to better navigate their relationship with PBMs. Read Full Article… 

VBA Article Summary

1. Independent and Transparent Advisers: The guidebook emphasizes the importance of advisers being independent and transparent. This means that advisers should not have conflicts of interest and should provide clear and honest information to their clients. Employers should seek advisers who prioritize their best interests and are accountable for their actions.

2. Contractual Design for Employer's Best Interest: Contracts between employers and Pharmacy Benefit Managers (PBMs) should be structured in a way that safeguards the employer's best interest. The guidebook suggests that contractual agreements should be carefully designed to ensure that PBMs act in the employer's favor, promoting cost-effective pharmacy practices and avoiding practices that may drive up costs.

3. Identified Concerns with PBMs: The guidebook highlights the top 10 concerns associated with PBMs, as identified by an industry advisory committee and purchasers working with the alliance. These concerns include promoting higher-priced drugs over lower-priced alternatives, offering preferred coverage for branded drugs when generics are available, and deploying tactics that encourage waste. The guidebook aims to raise awareness about these concerns and provides recommendations for employers to address them in their contracts and dealings with PBMs.

Using AI to recruit? You’re legally responsible for the bot’s bias, EEOC says

By Paola Peralta - Artificial intelligence is a great tool for employers looking to streamline recruiting and hiring processes. But regulatory powers are reminding employers that it's not the AI that will be held accountable for bias and discrimination. Read Full Article…

VBA Article Summary

1. The Equal Employment Opportunity Commission (EEOC) has warned employers that they will be held accountable for any bias introduced by artificial intelligence (AI) in their recruiting and hiring processes. This is because AI-driven decisions could potentially violate existing civil rights laws, including Title VII and the Americans with Disabilities Act (ADA)​¹​.

2. Approximately 65% of recruiters use AI tools, and 67% believe these tools have improved the hiring process. However, there is significant pushback from employees, with 71% opposing the use of AI for final hiring decisions​¹​.

3. Employers can mitigate the risk of AI-induced bias by asking the right questions when selecting AI tools, and by monitoring diversity metrics after implementing AI. If any significant changes or dips in diversity are observed after implementing an AI tool, the process should be halted and reevaluated​¹​.

Hospital operating margins tick up in May thanks to trimmed labor costs, returning volumes

By Dave Muoio - Nationwide hospital operating margins inched upward again in May thanks to a combination of reduced labor expenses and higher revenues, particularly in outpatient settings, according to the latest monthly industry report from consulting firm Kaufman Hall. The company’s median year-to-date operating margin index rose to 0.3% in May as single-month median operating margin index landed at 1.8%, per the report published Tuesday. Read Full Article…

VBA Article Summary

1. Operating Margins: The company's median year-to-date operating margin index increased to 0.3% in May, with the single-month median operating margin index reaching 1.8%. This indicates a positive trend in profitability.

2. Shift towards Outpatient Care: Comparisons to early 2020 revenue sources reveal a significant shift towards outpatient care. Year-to-date gross operating revenue per calendar day increased by 38% from 2020 to 2023, with inpatient revenue up by 20% and outpatient revenue soaring by 53%. This shift emphasizes the need for hospitals to embrace outpatient care to improve their operating margins.

3. Volume Metrics: Several volume metrics have seen modest increases on a year-to-date basis. The rise suggests that consumers are increasingly comfortable with receiving care inside hospitals. Month-to-month, there was a 2% increase in net operating revenue per calendar day and a 4% increase in gross operating revenue per day. Additionally, there were increases in discharges, emergency department visits, and operating room minutes per calendar day, while the average length of stay decreased by 3%.

Overall, the report highlights the importance of hospitals adapting their long-term business strategies to align with the ongoing shift in patient demand from inpatient to outpatient services. Embracing outpatient care delivery is crucial for hospitals to stabilize their finances and improve their operating margins.

10 clinical trials to watch in the second half of 2023

By BioPharma Dive Staff - A Duchenne gene therapy faces a crucial test, while highly anticipated study results lay ahead in lung cancer, obesity and heart disease. The next six months will be full of dramatic moments for the biotechnology industry. Read Full Article… 

VBA Article Summary

1. Sarepta Therapeutics' trial, EMBARK, for Duchenne muscular dystrophy is significant because the success of this gene therapy, Elevidys, depends on it. Elevidys, recently approved for a narrower group (4-5 years old) than initially anticipated, has to prove its effectiveness in the ongoing trial to remain on the market. If Sarepta's study proves positive, it could lead to loosening the age restrictions on Elevidys. However, if the trial fails, Elevidys could be removed from the market​¹​.

2. BridgeBio Pharma is conducting a trial, ATTRribute-CM, for transthyretin amyloidosis cardiomyopathy, a heart disease. The results of this trial are crucial as they could potentially revive acoramidis, a drug developed by BridgeBio. Previous studies have shown improvements in heart function but failed a key goal, leading to a significant drop in the company's value. This summer, the biotech company is expected to reveal whether patients treated with acoramidis for two-and-a-half years were more likely to stay out of the hospital and live longer. If successful, this could impact Alnylam Pharmaceuticals, whose rival medicine Onpattro is under review but hasn't shown to extend patients' lives yet​¹​.

3. The GEMINI and EvolutionRMS 1 trials by Sanofi and Merck KGaA for multiple sclerosis are important as they are testing BTK inhibitors that have shown potential in treating autoimmune diseases. These drugs, tolebrutinib and evobrutinib, belong to a new class of BTK inhibitors that can penetrate the blood-brain barrier and could be useful in treating various forms of multiple sclerosis. However, safety concerns arose after signs of liver damage were flagged during U.S. trials. Results for these trials are expected later this year or early next year, which could provide clarity on the efficacy and safety of these drugs​¹​.

Obesity drug Wegovy's popularity has US employers rethinking insurance coverage

By Patrick Wingrove - Shawnte struggled with her weight for years before she was prescribed Novo Nordisk’s (NOVOb.CO) diabetes drug Ozempic for weight loss in 2020, helping the former music industry professional from New York lose more than 50 pounds over two years. But last year, the 46-year-old, who asked to be identified only by her first name to protect her privacy, was told her health insurance would not cover her weight loss treatment. She said she was directed to take cheaper weight-loss medications, which aren't as effective. Read Full Article…

VBA Article Summary

1. The rising popularity of obesity drugs like Wegovy and Mounjaro is causing U.S. employers to reconsider their health insurance coverage policies. These drugs, which can cost more than $1,000 per month, have proven highly effective in helping patients lose weight, leading to a surge in their use. The number of new prescriptions for Wegovy, for example, increased from 45,000 in the last week of January to around 135,000 per week in May. As a result, costs for employer-sponsored health insurance have seen a 250% increase in the first two months of 2023 compared to all of 2022. If this trend continues, the costs to employers could rise by 50% even if only half of eligible employees use such drugs​¹​.

2. In response to the rising costs, some companies have introduced additional eligibility requirements for covering weight-loss drugs. They may require patients to try cheaper alternatives or go through structured diet and exercise programs first, and limit access to Wegovy if patients don’t show 4% weight loss in three months. Others have stopped covering off-label use of drugs like Ozempic and Mounjaro for weight loss. Some employers might even withdraw coverage entirely, while others may continue to cover these drugs but with stricter restrictions​¹​.

3. Coverage of weight-loss drugs varies depending on the size of the company and the nature of the healthcare plan. Up to two-thirds of large companies, defined as those with more than 5,000 workers, have been covering obesity drugs for at least three years. However, smaller companies are less likely to cover weight-loss drugs. The federal Medicare healthcare program for Americans aged 65 and older cannot cover weight loss treatments by law, but allows for off-label use of drugs in general. Only 16 states, including California, Pennsylvania, and Michigan, cover Wegovy and other obesity drugs under their Medicaid plans for low-income patients​¹​.

How Often Do Health Insurers Say No to Patients? No One Knows.

By Robin Fields - It’s one of the most crucial questions people have when deciding which health plan to choose: If my doctor orders a test or treatment, will my insurer refuse to pay for it? After all, an insurance company that routinely rejects recommended care could damage both your health and your finances. The question becomes ever more pressing as many working Americans see their premiums rise as their benefits shrink. Read Full Article…

VBA Article Summary

1. Insurers' denial rates, which are a key indicator of how reliably they pay for customers' care, remain mostly unknown to the public. There has been little action from federal and state regulators to change this lack of transparency​¹​.

2. The rate at which insurance companies deny claims is a closely guarded secret. There's no central resource for consumers or employers to look up these denial rates for all insurers. Despite having the power to enforce transparency, state and federal regulators have not done so. ProPublica's investigation into insurance denials has faced numerous obstacles and revealed a disturbing lack of insight for consumers about how their claims are reviewed and denied​¹​.

3. Health insurance trade groups state that the industry supports transparency and complies with government disclosure requirements. However, they have often opposed expanding reporting, claiming it would place undue burden on insurance companies and potentially mislead consumers. Available government data suggests insurers deny between 10% and 20% of the claims they receive, but these aggregate figures don't reveal the variance between different plans or types of medical services. Advocates argue that insurance companies may avoid transparency as refusing payment for medical care and drugs forms a part of their business model, and they are aware that less than 1% of denials are appealed by customers​¹​.

The Workplace Has Changed. Has Your Performance Management System?

By Jim Harter - Traditional performance management systems are set up to rate and rank employees, focusing primarily on their weaknesses. With the rise of the Industrial Revolution bringing processes that enhanced production efficiency, there were good reasons to focus on weaknesses. Leaders were simply using one of human nature’s greatest strengths -- brains hardwired to critique and find fault. Identifying errors has been critical in environments where defect reduction is paramount, particularly in settings where lives and safety are at stake. Read Full Article… 

VBA Article Summary

1. Focusing on weaknesses does not improve employee performance: Only 19% of employees strongly agree that this approach motivates them to do outstanding work. Constant criticism hinders the development of a trusting relationship between managers and employees, especially in remote work environments where personal bonding opportunities are limited.

2. Leading with meaningful feedback based on strengths: Critical feedback is necessary, but managers should prioritize providing feedback that is rooted in team members' strengths. This approach builds trust and increases the likelihood that negative feedback will lead to real development. Many leaders and managers still rely on management systems that assume a one-size-fits-all approach to employee development, neglecting the positive impact of humanistic psychology.

3. The importance of leveraging strengths for engagement and performance: Engaged employees spend a significantly greater portion of their day utilizing their strengths compared to disengaged employees. Gallup studies have shown that strengths matter even more in today's workplaces, with engaged employees spending five times as much of their day using their strengths. A strengths-based approach to performance management does not mean avoiding weaknesses or only assigning preferred tasks but rather heavily emphasizing and leveraging employees' strengths for optimal results. The current workforce expects managers to coach them primarily based on their strengths, particularly in remote work settings.

Medicare Advantage overpayments could top $75B this year: study

By Paige Minemyer - Legislators and policymakers have put payments to Medicare Advantage (MA) plans under the microscope, and new analysis highlights why. Researchers at the University of Southern (USC) California Schaeffer Center for Health Policy and Economics estimate that overpayments in MA could top $75 billion in 2023, or 20%. They say that this makes plain the "urgent need for reform" to the program. Read Full Article… 

VBA Article Summary

1. Lower spending in Medicare Advantage (MA) compared to fee-for-service: The report highlights that individuals who switched from traditional Medicare to MA had lower healthcare spending compared to those with similar health risks who remained in fee-for-service. Approximately 16.9 million beneficiaries who made the switch between 2006 and 2019 had below-average risk scores, and MA plans are paid based on the average risk scores.

2. Overpayments due to favorable selection: In 2020, MA plans were overpaid by 14.4% due to "favorable selection." This indicates that the current payment structure for Medicare Advantage results in higher overpayments than previously recognized. The researchers argue for the need to reform how the plans are paid.

3. Need for reform and potential paths: The rapid growth of MA enrollment poses challenges in basing payment benchmarks on fee-for-service spending. The researchers propose two paths for reform. One option involves revamping the links to average fee-for-service spending by implementing new data reporting requirements for MA plans to improve accuracy and comparability. The other option suggests abandoning the current model and implementing competitive bidding for MA, which would utilize market forces to determine payment rates.

Overall, the researchers emphasize the financial implications and fiscal strain on the Medicare system caused by the skewed distribution of expenditures and the consistent trend of beneficiaries with below-average spending choosing Medicare Advantage plans.