Daily Insurance Report - October 12, 2023
CVS Exec: We’re Going To Find Out if Blue Shield of California’s New Drug Model Will Lower Costs
By Marissa Plescia - Blue Shield of California recently launched a new experiment for 2025: It will largely cut out CVS Caremark as its pharmacy benefit manager and will instead put the company in charge of just specialty pharmacy services. Meanwhile, Amazon Pharmacy will be in charge of home delivery of prescription drugs, Mark Cuban Cost Plus Drug Company will create a more transparent pricing model, Abarca will handle the payment of prescription drug claims and Prime Therapeutics will negotiate savings with drug manufacturers. Read Full Article…
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Concern Over Integration Costs and Price Transparency: Creagh Milford, senior vice president of retail health at CVS Health, expressed concern over the distribution of pharmacy benefit responsibilities to various vendors, particularly regarding integration costs. The fragmentation and unbundling of pharmacy benefits, he suggests, might lead to increased overall costs due to the expenses associated with integration. Milford also emphasized the importance of “radical price transparency” within PBMs, health systems, and other sectors in the healthcare system to address cost-related issues effectively.
Role of PBMs in Competition and Price Regulation: According to Milford, Pharmacy Benefit Managers (PBMs), like CVS Caremark owned by CVS Health, play a crucial role in fostering competition in the healthcare market. He pointed out that PBMs contribute to reducing drug prices by creating competition, as evidenced by the ongoing discussions and dialogues with Congress and other stakeholders regarding their functions and impact. These conversations have also served to educate the broader public and policymakers about the roles and importance of PBMs in the healthcare system.
Differing Views on Cost Impact: While Milford anticipates a rise in costs with the adoption of models like that of Blue Shield of California, due to fragmentation and unbundling, others in the industry, like Antonio Ciaccia, president of 3 Axis Advisors, disagree. Ciaccia critiques the traditional PBM model, calling it “convoluted” with inherent conflicts of interest, as large PBMs both set and dispense drug prices while being compensated by drugmakers. He believes that Blue Shield of California’s approach to separating functions might be more effective in addressing these conflicts and potentially more successful in controlling drug costs in the long run.
It's official: Walgreens taps former Express Scripts chief Wentworth as CEO
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Leadership Transition at Walgreens: Walgreens announced that former Express Scripts chief Tim Wentworth is set to assume the CEO role on October 23, following the departure of CEO Rosalind Brewer who stepped down earlier this month. Brewer, who had been pivotal in leading the company through significant initiatives like the COVID-19 vaccine rollout, left the board effective August 31 but will continue to assist in an advisory capacity.
Wentworth’s Expertise and Vision: Tim Wentworth comes with a rich background in the healthcare sector, having served as the first CEO of Evernorth, Cigna’s healthcare services business line established after acquiring Express Scripts for $67 billion. Wentworth was crucial in the integration process post-acquisition. With previous experience at Accredo, Mary Kay, and PepsiCo, he brings profound expertise in the payer and pharmacy space, supply chain, IT, and Human Resources. Wentworth’s vision for Walgreens is to leverage its position to deliver personalized, coordinated care, achieve better outcomes at lower costs, and be the partner of choice in a dynamic marketplace.
Strategic Focus and Growth Phase: Wentworth is joining Walgreens at a critical juncture, as per the company announcement. Walgreens is presently focused on “right-sizing” the business, driving execution, and creating value for various stakeholders, including employees, patients, customers, and shareholders. Stefano Pessina, Executive Chairman of Walgreens Boots Alliance (WBA), expressed confidence in Wentworth's leadership, anticipating he will steer WBA through its next growth phase transforming it into a customer-centric healthcare company.
California Will Again Weigh Single-Payer Health Care in 2024
By Lauren Coleman-Lochner and Eliyahu Kamisher - California state assemblyperson Ash Kalra is preparing to reintroduce a bill early next year that would create a program known as CalCare to provide the same package of health-care benefits to all residents and make the state solely responsible for reimbursing providers. This time around, the effort has more momentum, but still faces a number of obstacles. Read Full Article…
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California's Single-Payer Healthcare Financing Challenges: Implementing a single-payer health care system in California would incur hundreds of billions in new costs, necessitating tax hikes to finance the program. These new taxes would require approval from a two-thirds majority of lawmakers, a difficult achievement even with a Democratic supermajority. Although Governor Gavin Newsom supported single-payer health care during his campaign, he has not commented on current proposals.
The Case for Reform Amid Economic Uncertainty: With ongoing global economic uncertainty, proponents argue that the single-payer system is sensible but necessitates federal government partnership, alongside contributions from unions, doctors, and hospitals. The COVID-19 pandemic highlighted the deficiencies of the existing health system, which is known for high costs without proportional outcomes and a significant disparity in resources between different institutions and patient groups.
Potential Savings from Single-Payer System: According to a report from a commission appointed by Newsom, a universal healthcare system could result in savings for both employers and households. The report estimates that without implementing a single-payer system, California’s healthcare spending would increase by 30%, or $158 billion, over the next nine years. Laurel Lucia, who consulted on the report, anticipates that the state could save over $200 billion in the first decade with a single-payer plan, emphasizing the financial unsustainability of the current system and the urgent need for change.
LIMRA: Just 1 in 5 Retirees Have a Formal Written Retirement Plan
By LIMRA - One of the best actionable steps one can take toward a secure retirement is creating a formal written financial plan. Formal plans help keep consumers on track with their retirement goals and give them peace of mind. Read Full Article…
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Enhanced Retirement Confidence with Formal Planning: New data from LIMRA illustrates a direct correlation between formal retirement planning and increased confidence among investors aged 40 to 75 with minimum investible assets of $100,000. The study reveals that 87% of these investors who have a formal written retirement plan feel assured about enjoying their desired retirement lifestyle. This confidence level slightly diminishes to 70% for those with an informal retirement plan, but is notably higher than for those without any formal planning. Strikingly, the data also points out that only one-fifth of the participating retirees and non-retired workers have committed to developing a formal written retirement plan, highlighting an area that needs further attention and awareness.
Addressing Retirement Concerns Through Planning: Retirement planning is not just about building confidence; it’s also a shield against various retirement risks. Respondents to the LIMRA survey expressed their concerns, with retirees primarily anxious about public policy, including social security and Medicare benefits, and non-retired workers fearing inflation risks (51%) and tax hikes (43%). Those who possess limited investable assets, have less knowledge of financial products, or lack a formal retirement plan are particularly vulnerable to these concerns. Interestingly, female investors, on average, tend to experience more retirement-related worries than their male counterparts. Engaging in meticulous retirement planning can effectively alleviate these concerns and offer a clearer, worry-free retirement pathway.
Increase in Annuity Ownership Among Planned Investors: According to LIMRA’s findings, there’s a robust positive relationship between formal retirement planning and annuity ownership. Investors with formal retirement plans are not only more likely to own annuities (36%), but are also more inclined to purchase these due to the insights and awareness garnered during the planning process, with 70% acknowledging this connection. This proactive annuity acquisition is a response to the recognized need for a guaranteed income stream during retirement. The data suggests a significant shift in investor behavior, with the confidence in guaranteed income covering basic living expenses dwindling over the last six years, leading to a 14-percentage point increase in willingness to convert assets into lifetime-guaranteed income from 2017 to 2023. Through systematic planning, investors can adeptly identify financial risks, ascertain their specific needs, and consequently select the most appropriate annuity products to secure their retirement.
People who’ve had Covid at least 5 times describe how the illness changed with each reinfection
By Aria Bendix - Nearly four years after Covid’s emergence, plenty of people have tested positive at least twice. But an unlucky group has been hit with reinfection after reinfection. Read Full Article…
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Multiple Infections Despite Vaccination and Precaution: The article highlights instances of individuals contracting COVID-19 multiple times, despite vaccination. Individuals such as Reanna Sunford Clark and Brenda Keele experienced different severities and symptoms with each infection. Clark, who works in an environment with high exposure risk, has had six infections with varying intensity, while Keele, with a compromised immune system, experienced worsening symptoms with each infection, undermining the expectation that reinfections should generally be milder.
Unpredictable Symptom Severity in Reinfections: The severity of symptoms in COVID-19 reinfections is unpredictable, with some experiencing milder symptoms and others facing increased severity. For instance, some interviewees reported that their subsequent infections were less severe, but Keele experienced more severe symptoms with each reinfection. Such variability leaves both the infected individuals and healthcare providers puzzled and seeking to understand the factors influencing the severity and frequency of reinfections.
Influencing Factors and Prevalence Unclear: Although the Centers for Disease Control and Prevention identified over 2.7 million COVID reinfections between September 2021 and December 2022, the prevalence and factors influencing multiple infections remain unclear due to inconsistent data tracking across states. The constant mutation of the virus allows it to bypass immunity in some cases, leading to reinfections. The time elapsed since the last vaccination and the exposure to high viral loads are also speculated to influence the likelihood of severe reinfections, but clear patterns have yet to be established.
2024 employer health care costs projected to jump 8.5%: Here’s why
By Dan Cook - How much should employers budget for employee health insurance for the coming year? It’s a question that arises (and an amount that rises) each year as summer fades to fall. The increase for 2024 coverage may be trickier than ever to forecast, given the tumult in the health care business since 2020. Read Full Article…
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Significant Cost Increases Predicted: Aon, a global professional services firm, predicts an 8.5% increase in employer healthcare costs for 2024, higher than other forecasters’ predictions and the 4.5% increase observed in 2023. This projection considers several unique factors: the end of care avoidance during the pandemic peak, expiration of two-year contracts with providers, additional expenses borne by providers due to the pandemic, the introduction of new obesity and diabetes medications, and the increasing costs associated with plan members with chronic conditions.
Key Drivers of the Cost Hike: The expiring two-year contracts, which previously bound providers to earlier service fees, are a significant contributor to the projected cost increase. With these contracts ending, sponsors are expected to incur costs reflecting two years of inflated expenses. Additionally, while general inflation is decreasing, healthcare costs are escalating as medical providers seek larger cost increases from insurers to cover higher wage and supply expenses endured during the pandemic. Furthermore, prescription drug costs, especially for specialty drugs like those for diabetes and weight loss, are rising faster than expected, with some per-member-per-month costs potentially doubling from 2022 to 2023.
Proactive Strategies for Employers: In light of these projections, Aon advises employers to proactively examine and adjust their healthcare benefit strategies. Employers are encouraged to understand their employees’ utilization trends better, particularly concerning chronic conditions that significantly impact overall costs. Employers can adopt various strategies, including guiding members to high-quality, low-cost providers, implementing reference-based pricing contracts for predictability, providing integrated services for high-cost members, and creating value-based designs that incorporate these elements for a comprehensive, long-term approach. Employers should also consider making primary care more affordable to ensure high-cost employees receive necessary care, including mental health services, timely.
How AI Can Fix the Broken Clinical Trial Process
By Eirini Schlosser - The clinical trial process is broken for a variety of reasons, ranging from the difficulty of designing trial protocols to the cost of running them. But one critical (and solvable) issue is finding, enrolling, and retaining the right patients at the right point in time, efficiently. Fifty-five percent of all interventional trials terminated each year are terminated due to lack of patient enrollment. Read Full Article…
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Administrative Inefficiency - The Hidden Barrier: The current administrative systems and protocols in clinical trials inadvertently limit patient access to potentially life-saving drugs. Strict and complex enrollment criteria for trials, requiring patients to meet 30 to 40 separate conditions, significantly slow down the patient recruitment process and make it difficult for many patients to qualify in time. Furthermore, the conventional methods for identifying suitable patients, relying on physician referrals or manual review of patient charts by clinical research coordinators, are time-consuming, costly, and inefficient.
AI - The Future of Efficient Clinical Trials: AI, particularly Natural Language Processing (NLP), offers a powerful solution to the administrative challenges of clinical trial enrollment. NLP can swiftly and accurately review electronic health records to identify patients who meet the specific eligibility criteria for trials. For this to be effectively implemented, trial eligibility criteria must be streamlined and transformed into clear, objective data queries. Through protocol scoping, AI can turn complex eligibility requirements into simple, computer-friendly queries, effectively speeding up patient identification and recruitment processes, without compromising accuracy or precision.
Overcoming Resistance for Progress: Despite the promising capabilities of AI in facilitating and improving the clinical trial process, skepticism and resistance among clinicians persist. Many in the medical community fear that AI might replace human roles and responsibilities. However, the primary function of AI in this context is to efficiently sift through de-identified medical data to identify potential trial candidates. The crucial conversations and decisions regarding treatment and trial participation remain a human responsibility, fostering a collaborative environment where AI tools complement, rather than replace, the expertise and judgement of healthcare professionals. With increased understanding and acceptance of AI, the clinical trial process can be revolutionized, ultimately leading to more efficient drug development and more lives saved.
World Mental Health Day: 39% say they have had to take time off work due to stress in the past year
By Ipsos - While 78% think mental health is as important as physical health, only 34% globally say their country’s healthcare system treats them equally. Sixty-two per cent say in the past year their daily life has been disrupted due to stress and 39% say they have had to take time off work in the last 12 months because of stress. Read Full Article…
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Global Perception and Importance of Mental Health: Drawing from the Ipsos World Mental Health Day survey, which accumulated three years of data, it is evident that there's a growing global consciousness regarding mental health. With 78% of respondents across 31 countries acknowledging mental health’s equal importance to physical health, the study sheds light on shifting perspectives. Despite this, only 34% believe that their respective healthcare systems treat both health aspects equally. This data provides valuable insight into the public’s increasing awareness and concern for mental wellbeing, albeit a noticeable gap in healthcare support and acknowledgment is present.
Geographical Variations in Mental Health Awareness: Different regions display varied levels of awareness and concern for mental health. LATAM countries, particularly Argentina, Colombia, and Peru, have a high sentiment that mental health should be treated equally, yet, paradoxically, LATAM also has a substantial proportion believing physical health receives prioritized treatment. Meanwhile, Asian countries, including Malaysia, Thailand, Indonesia, India, and Singapore, report more balanced treatment between mental and physical health by their healthcare systems. These geographical variations highlight the global discrepancy in mental health awareness and approach, necessitating tailored strategies to address specific regional needs and perceptions.
Stress as a Growing Concern & Gender Differences: The survey exposes stress as a prevailing health concern, with over 62% of participants across 31 countries admitting that stress significantly impacted their daily lives in the past year. Gender differences in experiencing stress are also notable. Women are more likely to report stress affecting their life (36%), feeling depressed, or being unable to cope compared to men (26%). Understanding these gender-based disparities is crucial for developing effective mental health policies and interventions that accommodate the different needs and experiences of men and women. This rising tide of stress, alongside its various manifestations among different demographics, calls for urgent attention and action from healthcare systems worldwide.