Daily Insurance Report - November 15, 2023
CMS wants feedback on how Medicare drug negotiations should evolve. Researchers, advocates, drugmakers all have notes
By Dave Muoio - Industry and patient stakeholders who aren’t totally on board with the Biden administration’s Medicare Drug Price Negotiation Program are hoping that to-be-determined updates for the coming years tackle their concerns over access, innovation and pricing head-on. Read Full Article…
VBA Article Summary
Medicare Drug Price Negotiation Program Under the IRA: The Inflation Reduction Act (IRA) authorizes Medicare to negotiate the prices of specific drugs, starting with 10 Medicare Part D drugs in 2026, expanding to include more Part B and Part D drugs in subsequent years. This initiative, overseen by the Centers for Medicare & Medicaid Services (CMS), involves developing new guidelines and processes for drug price negotiations and their impact on the market.
Concerns and Potential Impacts of the Program: There are concerns about the potential unintended consequences of the program. These include the possibility of increased out-of-pocket expenses for some patients due to restructuring, the effect on drug development incentives, and the impact on the commercial side of the industry. Industry stakeholders stress the need for CMS to carefully consider these aspects to ensure continued access to innovative treatments and to address the specific needs of all beneficiaries, including those most cost-exposed.
Diverse Perspectives and Discussions on the Program’s Future: The article highlights diverse opinions from healthcare professionals, policy experts, and industry representatives. These discussions emphasize the importance of balancing cost savings for patients with the potential impacts on pharmaceutical innovation and market dynamics. There's a consensus on the need for ongoing evaluation and adjustment of the program to align with its goals of affordability and accessibility, while ensuring it does not stifle the development of new treatments and medications.
A meteoric rise in worker health costs has slowed — but they’re already ‘egregious,’ advisor says
By Greg Iacurci - Costs for some key health insurance components have slowed for workers in recent years. While the deceleration is a positive trend, many workers likely still find current prices unaffordable, experts said. Read Full Article…
VBA Article Summary
Changes in Health Insurance Costs for Workers: There has been a notable increase in health insurance costs for workers in the past years. The average premiums paid by workers have risen by 18% from 2018 to 2023, continuing a trend of increasing costs. Similarly, deductibles and out-of-pocket maximums have also increased, although the rate of increase has slowed recently. For instance, the average deductible for single workers in 2023 is $1,735, up from $1,573 in 2018.
Trends in Out-of-Pocket Maximums and Deductibles: The dynamics of out-of-pocket maximums and deductibles have shifted over time. In the past five years, the rate of increase in deductibles has significantly decelerated compared to previous years. However, the proportion of workers with high out-of-pocket maximums has risen substantially. For example, in 2013, only 4% of workers had an out-of-pocket maximum of $6,000 or more, but by 2018, this figure had increased fivefold.
Impact of Labor Market and Strategies to Manage Costs: The recent slowing in the growth of worker cost-sharing requirements is attributed to a strong labor market, leading employers to offer more competitive health plans. However, despite this slowdown, families may still face financial strain due to high deductibles and other health-related expenses. Consumers are advised to carefully choose their health plans based on their specific needs, considering factors such as frequency of medical care and network availability of their preferred healthcare providers.
Primary care shortfall has ripple effects throughout U.S. health care system
By Alan Goforth - A shortage of doctors and chronic underinvestment means that many Americans are not able to establish a regular relationship with a primary care physician, a new report form the Primary Care Collaborative and the Robert Graham Center found. Read Full Article…
VBA Article Summary
Emphasis on Strengthening Primary Care: The article highlights the importance of enhancing primary care, emphasizing its role in improving health outcomes and reducing costs. Ann Greiner, the president and CEO of a collaborative, advocates for high-touch, personalized primary care supported by technology. The decline in primary care clinicians since 2014 due to factors like burnout and retirement is noted, along with a decrease in spending on primary care from 6.2% in 2013 to 4.6% in 2020.
Impact of Inadequate Primary Care Access: There's a significant focus on the consequences of limited access to primary care, including increased emergency department visits, hospitalizations, premature deaths, and higher health care costs. The article points out that one-fourth of Americans lack a primary care clinician relationship, and 40% did not have a primary care visit in 2019. These issues have been worsened by the COVID-19 pandemic.
Strategies for Rebuilding Primary Care: Experts recommend a multifaceted approach to revitalize primary care. This includes offering more training opportunities and incentives for clinicians to choose primary care, collecting accurate data on the workforce and financing, establishing alternative payment options, addressing barriers like high-deductible health plans, and supporting the current workforce by reducing administrative burdens and fostering diverse teams. Dr. Alison N. Huffstetler emphasizes the need for more clinicians to maintain the nation’s health care system and mentions the decline in U.S. life expectancy, particularly among less educated and lower socioeconomic groups.
PBMs: When Competition Does Not Benefit Consumers
By Rose McNulty - In recent years, the practices of pharmacy benefit managers (PBMs), initially formed to foster competition in the pharmaceutical market and help control drug costs, have been recognized instead as drivers of drug prices in the United States. The issue has even piqued the interest of the highest levels of government, with a recent US House Committee on Oversight and Accountability hearing highlighting self-benefitting, anticompetitive, and opaque practices that providers have been flagging for years.1 Read Full Article…
VBA Article Summary
Discussion of PBM Landscape in Oncology: During the 2023 Patient-Centered Oncology Care® meeting, Erin Trish, PhD, co-director of the USC Schaeffer Center, engaged in a discussion titled "Fireside Chat: Navigating the PBM Landscape: How a Heath Care Economist Sees It." This session, moderated by Stephen Schleicher, MD, MBA, Chief Medical Officer at Tennessee Oncology, explored the complexities of the Pharmacy Benefit Manager (PBM) landscape, particularly its impact on oncology care.
Impact of PBMs on Oncology and Drug Pricing: Trish highlighted the significant role PBMs play in the healthcare system, emphasizing their influence on drug pricing and the patient-oncologist relationship. Concerns raised included high out-of-pocket costs for cancer patients, the impact of prior authorization and other utilization management practices, and the complexity of cancer treatment. Trish pointed out the lack of transparency in drug pricing and the role of PBMs in spread pricing, a practice that obscures the true cost of drugs.
Policy and Market Implications: The conversation also touched on broader policy issues, such as the Inflation Reduction Act (IRA) and its limitations in addressing drug pricing and PBM practices. Trish criticized the IRA's approach to controlling drug prices, suggesting it sends a negative market signal and overlooks the need for incentives for drug manufacturers. She emphasized the need for comprehensive understanding and policy-making that addresses the core issues in the pharmaceutical pricing space, including the role of PBMs.
'Devil is in the details' for Biden's AI strategy, but some experts are skeptical about efforts to regulate the technology
By Heather Landi - President Joe Biden's sweeping executive order on artificial intelligence marks a significant move to address the accountability of how AI technology is developed and deployed. Read Full Article…
VBA Article Summary
Potential and Challenges of AI in Healthcare: The executive order (EO) aims to harness AI's potential in healthcare for faster diagnoses, precise treatments, drug development, and easing doctors' documentation burden. However, the AI industry is currently likened to the "wild, wild West" with minimal regulations, as noted by Patrick Bangert from Searce. This lack of regulation raises concerns about privacy, security, safety, and equity, prompting a need for a regulatory framework to guide AI's responsible use in healthcare.
Regulatory Framework and Executive Order Implications: The EO offers a pathway for addressing these issues, focusing on safety, security, and equity in AI while promoting innovation. It instructs the Department of Health and Human Services (HHS) to establish an AI Task Force to develop policies on AI deployment in health, covering safety, privacy, and security standards. The order, however, has been critiqued for lacking enforcement mechanisms, with some experts like Brigham Hyde of Atropos Health emphasizing the need for transparency and auditability in AI regulation.
Balancing Regulation and Innovation: Industry experts express concerns about the EO's impact on innovation, fearing it might impede progress. The rapid evolution of AI poses significant challenges for regulatory bodies like the FDA, as noted by Luciana Borio from Arch Venture Partners. The discussion also extends to the potential for AI to improve healthcare standards, with experts emphasizing the need for a balance between setting high safety standards and not stifling innovation. The EO is seen as a foundational step for public-private partnerships to develop effective AI guardrails in healthcare.
Why It’s So Tough to Reduce Unnecessary Medical Care
By Markian Hawryluk - The U.S. spends huge amounts of money on health care that does little or nothing to help patients, and may even harm them. In Colorado, a new analysis shows that the number of tests and treatments conducted for which the risks and costs exceed the benefits has barely budged despite a decade-long attempt to tamp down on such care. Read Full Article…
VBA Article Summary
High Cost of Low-Value Care: A report by the Center for Improving Value in Health Care revealed that $134 million was spent on low-value care in Colorado last year. The most significant expenses were for opiate prescriptions, multiple antipsychotics, and vitamin D deficiency screenings. Nationwide, such treatments not only escalate costs but also lead to health complications and hinder more suitable care. This issue persists despite efforts to curb unnecessary testing, partly due to the U.S. health system's structure which incentivizes more care rather than the right care.
Challenges in Reducing Low-Value Care: Despite individual efforts by motivated clinicians, the prevalence of low-value care remains high, accounting for 10% to 30% of the $3 trillion annual healthcare expenditure in the U.S. The Center for Improving Value in Health Care used a calculator for their study which only tracked 58 services identified as low-value, suggesting the actual costs could be much higher. This is exemplified by Children’s Hospital Colorado's experience, which successfully reduced unnecessary CT scans for abdominal pain in children from 45% to 10% through new protocols, despite facing challenges aligning financial incentives and managing patient expectations.
Systemic Efforts to Address Low-Value Care: Various initiatives demonstrate the complexity of addressing low-value care. In Los Angeles County, despite a payment system not based on service volume, unnecessary preoperative tests for cataract surgery were prevalent. The county's health system implemented new guidelines, reducing unnecessary tests by two-thirds. Children’s Colorado created incentive programs with insurers to counter revenue loss from reduced high-cost imaging. These examples highlight the need for systemic changes in the healthcare system to align financial incentives with patient care quality, overcoming the entrenched "more is better" culture.
For the first time, gene-editing provides hints for lowering cholesterol
By Rob Stein - For the first time, researchers have produced evidence that gene-editing can cut high cholesterol, a major risk factor for the nation's leading killer. Preliminary results from a study involving 10 patients born with a genetic condition that causes very high cholesterol found that editing a gene inside the liver can significantly reduce levels of "bad cholesterol." Read Full Article…
VBA Article Summary
Promising Results, Yet Caution Advised: The experimental gene-editing treatment by Verve Therapeutics shows potential in preventing heart attacks and strokes by reducing LDL cholesterol levels. However, experts like Dr. Deepak Bhatt and Dr. Eric Topol emphasize the need for further research to address open questions and uncertainties, particularly regarding long-term safety and effectiveness.
Innovative Approach to Heart Disease Treatment: This new method utilizes CRISPR base-editing technology to precisely alter DNA in liver cells, specifically targeting the PCSK9 gene involved in LDL cholesterol production. The technique represents a significant shift from traditional treatments, potentially offering a one-time therapy for those at risk of heart disease, including patients with familial hypercholesterolemia.
Broader Implications and Concerns: Beyond cholesterol treatment, the success of this gene-editing approach could pave the way for therapies addressing a range of genetic diseases. However, concerns remain about the cost, potential off-target genetic effects, and the ethical implications of widespread gene-editing, especially in comparison to existing, less expensive treatments for conditions like heart disease.
Hospital Pricing Information Consistent Between Transparency-In-Coverage Data And Other Commercial Data Sources
By Yang Wang, Mark Meiselbach, Gerard F. Anderson, and Ge Bai - The Transparency in Coverage (TiC) Final Rule, implemented on July 1, 2022, requires the public disclosure of all in-network negotiated rates from commercial health insurance plans. This regulation addresses price transparency from the insurers’ aspect and complements the hospital price transparency rule. Collectively, these two regulations aim to contain the growth of health care spending in the US by promoting price transparency and competition in the health care market. Read Full Article…
VBA Article Summary
Data Analysis and Sources: The article analyzes commercial in-network facility prices for five common hospital procedures using three data sources: Transparency in Coverage (TiC) data disclosed by insurers, hospital disclosed price transparency data, and the 2021 Merative Marketscan research database. The focus is on a subset of procedures and facilities common to all three sources, examining prices disclosed by five major national insurers. The analysis includes merging TiC and hospital disclosed price data at the hospital-procedure level and comparing the median price and interquartile range for each procedure across the data sources.
Consistency and Comparisons of Pricing Data: The study finds that the commercial prices disclosed in the TiC data are mostly comparable to those disclosed by hospitals and the Marketscan claims data. However, there are some discrepancies, notably in prices for certain procedures and services. The article discusses the need to verify the accuracy of this data, given the discrepancies identified between TiC data and actual commercial claims for some self-insured employers and the variability in cash prices disclosed by hospitals.
Policy Implications and Future Directions: The analysis has significant policy implications, highlighting the potential of TiC data in providing reliable nationwide pricing patterns for healthcare services. The article suggests that with the enactment of the Lower Costs, More Transparency Act and the Consolidated Appropriations Act of 2021, data accuracy could improve over time. These legislative efforts, combined with the availability of accurate pricing data, could facilitate comparison shopping, promote competition, and potentially contain costs in the commercial healthcare market. However, the article also notes that further efforts are necessary to enable patients to benefit financially from comparison shopping, thereby maximizing the effectiveness of price transparency rules.
How benefits brokers can improve workforce wellbeing this open enrollment
By Rachel Chamberlin and Jessica Vanscavish - For most Americans, November means football, friends, and family. But, for benefits brokers, November is notable for another reason…Open Enrollment. For months, benefits brokers have been working behind-the-scenes with clients to help build tailored benefits plans that meet employees’ needs. While every year presents unique challenges when thinking through how to build optimal offerings, the stakes have never been higher—new research from Guardian’s Mind, Body, and Wallet™ report found that employee wellbeing has hit a 12-year low. Read Full Article…
VBA Article Summary
Economic Concerns and Employee Wellbeing: Employees are facing significant wellbeing challenges due to economic and personal finance-related stressors like inflation and debt. These issues are negatively affecting both their mental and physical health, thereby impacting overall wellbeing. Benefits brokers, during Open Enrollment season, have a critical role in supporting employee benefits education and communications, which can help in addressing these wellbeing concerns.
Role of Supplemental Health Insurance: As healthcare costs rise alongside workplace wellbeing decline, supplemental health insurance becomes increasingly vital. Benefits brokers are advising clients on the importance of these plans, such as Accident, Critical Illness, or Hospital Indemnity Insurance. However, offering these plans is just the beginning; educating employees on their benefits is crucial for effective utilization. Benefits brokers should focus on financial wellness in their advisory role, highlighting how supplemental health insurance can alleviate financial stress and improve overall wellbeing.
Effective Communication and Year-Round Support: Despite the availability of supplemental health insurance, enrollment remains low due to ineffective communication about these benefits. Benefits brokers have the opportunity to help employers build more effective communication strategies, focusing on understanding employee demographics, personalizing messages, and leveraging available resources. Additionally, they should encourage employers to focus on benefits education and communication not just during Open Enrollment but throughout the year to ensure messages resonate and improve workplace wellbeing.