Daily Insurance Report - October 13, 2023
House Health Care Legislation Rolls Back the Price Transparency Employers Need
By Marilyn Bartlett and Christin Deacon - Congress agreed to an 11th-hour deal to temporarily fund the government last weekend, giving lawmakers 45 days to focus on their legislative agendas. A top priority in the House of Representatives is health care reform legislation, the Lower Costs, More Transparency Act, whose backers hope to pass the bill by the end of the year. Although the spirit of this bill is appreciated, it ultimately would roll back health care price transparency needed to reduce outrageous costs. Read Full Article…
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Existing Pillars of Transparency Policy: Congress should strengthen the three current pillars of federal health care price transparency policy. These pillars consist of the Hospital Price Transparency rule (effective January 2021), the Transparency in Coverage rule (effective July 2022), and the Consolidated Appropriations Act of 2021. They require hospitals, health plans, insurers, and third-party administrators to disclose actual prices, including negotiated rates and share claims information, empowering consumers, including employers, to make informed health care choices.
Empowering Consumers and Employers: Access to comprehensive health plan prices and claims data empowers consumers and employers, potentially benefiting the approximately 160 million Americans with employer-provided health coverage. Employers can use this data to compare and reconcile health claims with hospital and insurance prices, avoiding overbilling and price gouging. The resulting savings can be shared with employees through lower premiums and higher wages, promoting cost-effective health care.
Successful State Examples: Two states, Montana and New Jersey, have demonstrated the effectiveness of price transparency initiatives. Montana's State Health Plan achieved substantial savings by negotiating rates with hospitals, while New Jersey's public-sector health plan implemented a payment integrity program to protect taxpayer dollars, collectively saving millions. These examples highlight the potential of price transparency in reducing health care costs. However, compliance with transparency rules remains low among U.S. hospitals, necessitating legislative efforts to strengthen and enforce these pillars. The pending Lower Costs, More Transparency Act is cautioned against, as it may weaken these vital transparency measures.
Survey: Ransomware Attacks Increase, But Cloud Compromise More Concerning
By David Raths - A recent survey of 653 healthcare IT and security practitioners found that although ransomware remains an imminent threat to healthcare organizations, concerns about it are actually on the decline relative to other threats. Read Full Article…
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Ransomware Attacks on the Rise, but Not Top Concern: In a recent survey by Proofpoint Inc. and the Ponemon Institute, 54 percent of respondents reported that their organizations experienced a ransomware attack in the last year, up from 41 percent in 2022. However, ransomware has fallen to the bottom of their threat concerns, with only 48 percent of respondents stating it as their top concern, compared to 60 percent in the previous year.
Healthcare Organizations Increasingly Concerned About Cloud Compromise: The survey revealed that healthcare organizations are increasingly concerned about cloud compromise, with 74 percent of participants viewing their organizations as most vulnerable to this threat. Moreover, 63 percent expressed concern about cloud-related threats, marking a significant increase from 57 percent in 2022. Cloud compromise has now become the top concern, up from fifth place in the previous year.
Business Email Compromise (BEC) and Spoofing on the Rise: Concerns regarding business email compromise (BEC) and spoofing attacks have surged, with 62 percent of respondents expressing worry about this threat, compared to 46 percent in the previous year. Despite the growing concern, only 45 percent of organizations have taken steps to prevent and respond to BEC/spoofing attacks. These attacks are particularly worrisome as they are more likely to result in delayed procedures (71 percent), increased procedure complications (56 percent), and longer patient stays (55 percent).
How much is health spending expected to grow?
By Matthew McGough, Meghan Salaga, Cynthia Cox, and Krutika Amin - This chart collection explores how health spending is expected to grow in coming years, based on National Health Expenditure (NHE) projections from federal actuaries. A related chart collection explores how U.S. health spending has changed over time using historical data, and an interactive tool allows users to explore health spending changes over time. Read Full Article…
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Health Spending Slowdown in 2021: Per capita health spending growth slowed significantly in 2021, with an annual rate of 2.6%, down from 9.9% in 2020, mainly due to the COVID-19 pandemic management. This decrease is expected to be temporary, and health spending is projected to rebound, averaging 4.8% per capita annually from 2022 to 2031, slightly above pre-pandemic growth rates.
Prescription Drug Spending Fluctuations: Prescription drug spending saw a spike in 2021, growing by 7.7% per capita, primarily driven by Medicaid prescription drug spending. However, it is expected to slow down to 2.8% per capita in 2023 as Medicaid enrollment decreases and generic drugs enter the market, influenced by the Inflation Reduction Act's Medicare drug price reforms.
Healthcare Spending Impact on the Economy: Health spending as a share of GDP fell to 18.3% in 2021 but is projected to increase to 19.6% of GDP by 2031, making up nearly one-fifth of the U.S. economy. The COVID-19 pandemic and inflation have added uncertainty to these projections, making it challenging to predict future health spending accurately. Growth rates can have a significant impact on per capita spending, with small deviations leading to substantial differences over time. Furthermore, health spending projections for 2030 are considerably lower than previous estimates made by CMS actuaries a decade ago.
3 transformational benefits of employee empowerment
By Scott Redfearn - While the “Great Resignation” has faded from the headlines, the desire for choice among workers that helped fuel this movement will endure. Workplace trends like the “The Big Stay,” “quiet quitting“ or the newest one to catch my attention—”loud laborers” (employees who focus more on self-promotion than tangible work results)—tend to paint a picture of an adversarial relationship between employers and their employees. However, it is important to understand that there’s no power dynamic to be won. When employees are empowered, everyone wins. Read Full Article…
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Elevating Employee Empowerment Beyond Talent Shortages: Employee empowerment should be a year-round focus for organizations, regardless of economic conditions. It's essential for business leaders to view empowerment as more than just a checklist item and instead make it a core objective in their organizational strategy.
Benefits of Employee Empowerment: Prioritizing employee empowerment yields tangible benefits, including increased confidence in company leadership. Transparency and open dialogue between leaders and teams build trust, allowing employees to better understand organizational goals and contribute more effectively to achieving them. This transparency increases the likelihood of employees achieving optimal performance by 2.4 times.
Creating a Desirable Work Culture: Empowerment leads to a work culture that encourages employee retention. Empowered employees feel more connected to their company, fostering a sense of belonging and making them less likely to leave. Providing opportunities for teams to connect and offering flexibility for work-life balance also show employees they are valued, which, in turn, increases their desire to stay with the organization. High motivation is another result of empowerment, as employees feel supported and recognized by their leaders, leading to increased accountability and effectiveness in their roles. Building and maintaining an empowered workforce requires ongoing effort and collaboration between leaders and managers to establish trust and empathy, recognize strong performance, and foster a culture of continuous improvement and engagement. Empowering employees is an investment that pays off in a more committed and engaged workforce, regardless of external economic factors.
Digital health investments shift to disease treatment, workflow solutions and VBC in Q3: Rock Health
By Heather Landi - Digital health founders and investors continue to face a tighter funding cycle with fewer deals and lower check sizes. However, several sectors are emerging as bright spots as investors show an interest in startups exploring new treatment pathways and tackling nonclinical workflow solutions. Read Full Article…
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Declining Funding Total: In the third quarter of 2023, U.S. digital health startups raised $2.5 billion across 119 deals, marking the second-lowest quarter by funding total since the fourth quarter of 2019. This decline continues a trend of reduced funding, with 2023's total reaching $8.6 billion across 365 deals, potentially making it the lowest funding year since 2019.
Changing Investment Landscape: The digital health funding landscape is evolving with more conservative investor behavior. Investors are engaging in fewer deals, negotiating harder on deal terms, and expressing concern about down rounds. Additionally, there's a decrease in midstage series announcements, with the lowest number of series B and C raises on record.
Shift in Focus: Investment in digital health is shifting away from pandemic-era focuses on on-demand healthcare and life science R&D toward supporting disease treatment, nonclinical workflow, and management of complex conditions. Key areas of funding include disease treatment, nonclinical workflow solutions, mental health, nephrology, and value-based care enablement, with particular attention to high-cost therapeutic areas like mental health, kidney care, cardiovascular care, and oncology. Despite some setbacks, the digital health sector is showing signs of stabilization and growth, especially in the public market.
Novo Nordisk’s Star Diabetes & Obesity Drug Shows Promise in Kidney Disease
By Frank Vinluan - The ability of Novo Nordisk’s semaglutide to lower blood sugar and reduce weight has made it a blockbuster seller for addressing type 2 diabetes and obesity. Now it looks like the drug can treat chronic kidney disease. Read Full Article…
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Early Halt of Semaglutide Kidney Trial: A clinical trial assessing the impact of semaglutide on kidney function was halted prematurely following an interim analysis that met predetermined efficacy criteria. The decision to stop the study was made by an independent data monitoring committee, with Novo Nordisk, the pharmaceutical company behind semaglutide, remaining unaware of the specific data, which has not yet been disclosed.
Semaglutide's Mechanism and Previous Success: Semaglutide is a synthetic peptide designed as an analog of the GLP-1 hormone in the human body, used to stimulate the secretion of insulin and regulate blood sugar levels. It is a key component in Novo Nordisk's diabetes drug Ozempic and the weight loss medication Wegovy. This compound has shown promise in various clinical trials, leading to its success in the treatment of diabetes and weight management.
Chronic Kidney Disease Study and Potential Implications: The clinical trial for chronic kidney disease enrolled 3,534 participants from 28 countries and assessed semaglutide's effects as an adjunct to standard treatments for type 2 diabetes and chronic kidney disease. The trial aimed to measure various primary and secondary endpoints, including kidney function decline, dialysis or transplant need, and mortality. This development could have significant implications for the treatment of chronic kidney disease, a condition currently lacking FDA-approved therapies, and for Novo Nordisk's expanding portfolio of semaglutide-based products, including its potential use in addressing cardiovascular risks. However, it's important to consider the potential risks associated with semaglutide, such as acute kidney injury and gastrointestinal reactions, as highlighted in previous clinical studies and research findings.
Overall employee wellbeing is key: Employers answer the call for help
By Kristen Beckman - Despite current economic pressure, employers do not plan to cut their investments in wellbeing programs, especially in light of the toll the pandemic has had on the physical and mental health of employees. According to the 14th annual Employer-Sponsored Health & Wellbeing Survey conducted by Fidelity Investments and Business Group on Health, 90% of employers said current economic pressure would not lead to a reduction in their investment in wellbeing, and 31% planned to increase their investment. Read Full Article…
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Mental Health Program Expansion: The top priority for employers in their wellbeing initiatives is the expansion of mental health programs. This reflects a growing awareness of the importance of mental health support in the workplace, especially in the post-pandemic world.
Financial Incentives for Wellbeing: A significant 73% of employers are planning to offer financial incentives to encourage positive wellbeing actions among their employees. These incentives primarily include gift cards, cash equivalents, Health Reimbursement Arrangements, and Health Savings Account funding, with an average incentive of $716 per employee. Lifestyle spending accounts (LSAs) are emerging as a new form of incentive, with 8% of employers introducing them this year, and more considering them in 2024.
Resurgence of Onsite Wellbeing Initiatives: Onsite wellbeing initiatives, which were limited during the pandemic, are set to return to pre-COVID levels by 2024. Employers are planning to reintroduce offerings such as onsite yoga or meditation classes (61%), onsite fitness classes (similar percentage), onsite health fairs (62%), and onsite counseling or therapy (35%). This reflects a commitment to holistic employee wellbeing and support as employees adapt to the changing work environment.
UnitedHealth Sued by US Labor Department Over Claims Denials
By John Tozzi - A UnitedHealth Group Inc. unit improperly denied payment for emergency room visits and urine drug tests, the US Department of Labor alleged in a lawsuit. Thousands of people were improperly denied benefits under plans administered by UMR Inc., a UnitedHealth subsidiary that manages health plans for employers, according to the suit filed Monday. Read Full Article…
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Unusual Department Action: The Department of Labor's recent case against UMR represents an unusual step for the department, as it typically oversees health benefit plans funded by companies themselves, rather than through insurers. This action is significant, given that approximately two-thirds of US workers receiving health benefits are covered by such plans, which are exempt from state insurance regulation, and federal intervention is rare.
Denial of Medically Necessary Claims: The investigation found that UMR denied payment for "medically necessary claims." This action has raised concerns about whether participants in employee benefit plans are receiving the services they contracted for to meet their and their families' medical needs, prompting the Department of Labor to take action.
Violation of ERISA: The Department of Labor's lawsuit alleges that UMR's handling of claims, particularly in denying urine drug screen and emergency visit claims, violates the Employee Retirement Income Security Act (ERISA), which governs self-funded health plans. The department seeks to compel UMR to change its claims procedures and re-adjudicate those denied since 2015, highlighting the importance of ensuring fair and appropriate handling of health benefit claims under ERISA regulations.