PBMs, PhRMA trade blame over drug costs in House hearing

By Rebecca Pifer - Members of the House Oversight and Accountability Committee skewered the head of the major pharmacy benefit manager lobby in a hearing on Tuesday over PBMs’ role in rising drug costs, including practices like rebates and spread pricing, as Congress inches closer to enacting legislation to reform the industry. Read Full Article…

VBA Article Summary

1. The Blame Game Between PBMs and Drugmakers: A recent hearing by the House Oversight and Accountability Committee on Pharmacy Benefit Managers (PBMs) highlighted an ongoing battle over who is to blame for rising healthcare costs. PBMs have been increasingly criticized for their opaque contracts and controversial business practices, including rebate arrangements that may drive up consumer costs. While representatives from both PBMs and pharmaceutical manufacturers were present at the hearing, each attempted to shift the responsibility to the other party. J.C. Scott, representing the Pharmaceutical Care Management Association (PBM lobby), argued that PBMs retain only 6% of the drug dollar and pass most savings to plan sponsors and employers. On the other side, Lori Reilly from PhRMA pointed out that the 6% figure doesn't consider profits from specialty pharmacies and argued that PBMs rarely pass negotiated discounts to patients. Amidst this heated debate, Rep. Robert Garcia, D-Calif., succinctly summed up the atmosphere, stating, "Both Big Pharma and PBMs are at fault."

2. The Growing Problem of Industry Consolidation: Rampant consolidation in the PBM industry has raised additional concerns among lawmakers. Caremark (owned by CVS), Express Scripts (owned by Cigna), and OptumRx (owned by UnitedHealth Group) now control approximately 80% of the market. Rep. Jamie Raskin, D-Md., emphasized that such consolidation has led to anticompetitive markets, allowing PBMs to leverage their market power to profit at multiple points of the pharmaceutical supply chain. The concern extends to the survival of independent pharmacies, which are often reimbursed below the cost of acquiring a drug, leading to the fear of "pharmacy deserts," particularly in rural areas.

3. The Urgent Need for Congressional Action: Despite the tension and disagreements among stakeholders, there appears to be bipartisan support for reforming PBMs, particularly from a transparency standpoint. Several bills aimed at PBM reform, such as healthcare transparency legislation, are currently under consideration in Congress. However, concerns remain that hastily implemented reforms might have unintended consequences, potentially driving up costs even more. Rena Conti, a health economist and associate professor at Boston University, cautioned lawmakers to approach reforms carefully, citing a recent Brookings report that warned against unintended consequences like PBMs seeking new revenue streams.

The current political climate suggests that the momentum for reforming the PBM industry is growing. Rep. James Comer, R-Ky., captured the sentiment well, "We need to have robust debate about this, we need to continue to have dialogue, we need to start exploring options, and we need to get something done."

10 Ways AI Is Advancing Healthcare

By Ariel Katz - The explosion of generative AI in healthcare—largely due to the exponential growth of medical data, a shortage of healthcare providers and advancements in technology, according to the World Economic Forum (WEF)—holds so much promise. Though it may seem daunting, especially with many headlines focusing on negative aspects, there are many beneficial uses for AI in healthcare as well. Read Full Article…

VBA Article Summary

1. Enhancing Diagnosis and Personalizing Treatment: AI algorithms are supporting clinicians in making more accurate and faster diagnoses. Natural Language Processing (NLP) technology is helping radiologists interpret scans with higher precision. Furthermore, by analyzing a patient's medical history and other variables, AI is aiding in the formulation of personalized treatment plans that consider a wide array of factors including genetic predisposition and lifestyle.

2. Accelerating Research and Clinical Trials: AI is drastically reducing the time and cost associated with drug development and clinical trials. By analyzing large volumes of data, generative AI helps forecast the properties of novel proteins and drugs, leading to more effective treatments. AI algorithms are also optimizing the clinical trial process itself, identifying ideal trial sites and investigators, thereby making the trials more efficient and cost-effective.

3. Streamlining Administrative Work and Improving Access: AI is automating repetitive tasks, freeing clinicians to focus on patient care. At the same time, it is making healthcare more accessible. AI-powered telemedicine platforms and chatbots are enabling remote consultations, thereby providing healthcare services to underserved and remote areas.

How Health Insurers Have Made Appealing Denials So Complicated

By Cheryl Clark for ProPublica - Health insurers reject millions of claims for treatment every year in America. Corporate insiders, recordings and internal emails expose the system and its harm. Have you ever had a health care claim denied by your insurer? Ever tried to appeal it? Did you wind up confused, frustrated, exhausted, defeated? Read Full Article…

VBA Article Summary

1. The Complexity of Health Insurance Appeals: The article explores the daunting challenges patients face when trying to appeal insurance denials for medical treatments or procedures. Even a seasoned health care reporter, who delved into the labyrinthine world of health insurance appeals, found the process to be overwhelming and fraught with inconsistencies. The lack of a universal appeal process across different types of insurances — from self-funded plans to government-provided options like Medicare and Medicaid — adds to the confusion, making it difficult for even experts to navigate.

2. The Human Cost of Systemic Inefficiency: The complicated appeals process isn’t merely an administrative hurdle; it comes with a real human cost. Patients in need of urgent care often have to wait longer due to delayed approvals or denials. In the case of chronic conditions such as cancer, the delay could have life-altering or even life-ending consequences. This is exacerbated by the perception that insurance companies strategically delay processes to save money, even at the cost of patient wellbeing. Doctors and hospitals sometimes need to employ dedicated teams just to handle the volume and intricacy of appeals, diverting resources that could otherwise be used for patient care.

3. The Need for Advocacy and Reform: Despite the challenges, there are avenues available for patients to advocate for themselves. Legal experts and consumer advocates suggest that understanding the specific details of one’s own insurance plan and actively engaging in the appeals process can make a difference. They also recommend that consumers report and complain to relevant government regulators when they believe they've been unfairly denied, as this could be integral to bringing about systemic change. However, the overarching takeaway is that legislative reform is urgently needed to simplify the appeals process, making it accessible and fair for all.

Raising the stakes in the high-stakes game of employee benefits

By Gentry Lynn - If open enrollment were a poker game, would you go all in? Sure, you’ve got your insurance guide, online enrollment system, and benefits fair. But are you willing to see what’s behind the river card? The secret to a successful open enrollment season might not be in the cards you’re holding, but in the way you play the game. Read Full Article…

VBA Article Summary

1. The Importance of Communication and Education: In the realm of employee benefits and open enrollment, having an excellent package of offerings isn't enough. Employers must make a concerted effort to communicate the value of these benefits to their employees. A lack of communication can lead to underutilization and dissatisfaction, essentially rendering your "good hand" useless. Quality communication makes the difference between employees merely being aware of their benefits and actually understanding how to maximize their use, thereby increasing both value and satisfaction.

2. Value on Investment (VOI) and Return on Investment (ROI): Instead of focusing solely on the cost of benefits, employers should consider their value and return. VOI and ROI metrics aren't just about dollars and cents but also take into account softer measures like employee satisfaction, engagement, and retention. By effectively communicating the value of what’s already on offer, organizations can improve these metrics without necessarily changing or adding to their benefits packages.

3. Adopting a Strategic Approach: Just as in poker, success in open enrollment season isn't based on the cards you're dealt but how you play them. Organizations need a year-round strategy for engagement, reminding employees of the tools available to them, and teaching them how to make informed choices. This strategic approach to communicating benefits can significantly impact employee satisfaction, even more than the richness of the benefits themselves, according to Watson Wyatt's research.

By Gia Snape - The life and health (re)insurance industry has been rapidly transformed by technological advancements in the last decade, with one expert flagging innovations like artificial intelligence (AI) and machine learning as game changers. Read Full Article…

VBA Article Summary

1. Digital Transformation as a Major Trend in Insurance: Senan O’Loughlin, executive vice president of US mortality markets at Reinsurance Group of America (RGA), identifies digital transformation as the most impactful trend in life and health insurance. With advancements in technologies like AI, machine learning, and automation, the insurance industry is poised for significant changes in product improvement, underwriting processes, and customer experience.

2. AI as a Game-Changer for Personalization and Efficiency: O’Loughlin sees AI as a particularly potent technology in the industry. While AI is not a silver bullet, he believes that its responsible use can serve more people and substantially improve customer experience. This can be achieved through tailoring insurance solutions to individuals and automating time-consuming processes, which will ultimately make insurance products more accessible and desirable.

3. Passion for Broadening Access to Financial Protection: With over 30 years of senior management experience in the insurance and reinsurance sector, O’Loughlin remains passionate about the industry's social impact. He emphasizes that the advanced technologies not only improve the business side of insurance but also have a profound social impact by expanding access to financial protection. This passion aligns with his career-long commitment to improve insurance products and services for the benefit of customers.

Financial wellbeing crisis: Don’t overlook your middle-class workers

By Charles Lattimer - One day, while on lifeguard duty at Virginia Beach, I saw a man named Jack and his son swept out to sea, struggling in deceptively calm waters. As he strove for shore while keeping his son afloat, raw panic flashed in his eyes. The beach seemed to recede with each desperate stroke. Jack’s gaze met mine, a silent “HELP ME” radiating across the waves. If they drowned, the fault would be mine. Read Full Article…

VBA Article Summary

1. Overlooking the Middle Class: A Blindspot in Financial Wellness Programs: The article illuminates a common oversight in companies' financial wellness programs: a focus on financially vulnerable employees at the expense of the often-ignored middle-class workers. These workers are uniquely caught in a precarious financial situation—they earn too much to qualify for social assistance but not enough to build sustainable financial security. Just like the lifeguard who misjudged a seemingly fit swimmer's ability to handle the ocean's rip currents, HR departments may overlook this group when crafting financial wellness initiatives.

2. The Consequences of Neglecting the Financial Health of the Middle Class: Ignoring the financial struggles of the middle-class workforce has ripple effects that harm not only the employees but also the organizations they work for. According to PwC's 2023 Employee Financial Wellness Survey, financially stressed employees are likely to suffer from mental and physical health problems, negatively impacting productivity, engagement, and retention rates. As the article notes, financial stress leads to absenteeism, presenteeism, and high turnover—all of which can cost companies in the long run.

3. Actionable Steps for a More Inclusive Financial Wellness Strategy: The article provides a detailed roadmap for HR executives to enhance the financial wellbeing of their middle-class employees. These steps range from rethinking traditional frameworks around financial instability to ensuring equitable banking access and addressing short-term financial challenges. The goal is to provide a more nuanced and holistic approach that takes into account the specific challenges faced by the middle class, enabling them to build sustainable savings and fortify themselves against financial instability.

6 self-funding strategies to transform health plans

By Rob Gelb - The United States already has one of the world’s most expensive health systems – and with projections of 47% growth in U.S. health expenditures by 2028, it may feel like there’s no end in sight. The skyrocketing costs of care has many self-insured employers considering more affordable alternatives to traditional benefit plans and provider networks. NFP’s 2022 U.S. Benefits Trend Report showed that most employers are ready and willing to implement new cost-containment measures, with almost two-thirds feeling a sense of real urgency to make a change. Read Full Article…

VBA Article Summary

1. Data Transparency is Crucial for Cost-Effective Health Plans: The article highlights that lack of transparency in healthcare data is a significant problem, contributing to wasteful spending. The solution lies in a top-to-bottom data transparency model that allows all stakeholders, including plan, provider, payer, and member, to have access to relevant information from the outset. This collective understanding leads to better cost-saving measures, speedier payments to providers, and members having a clearer understanding of their healthcare options.

2. Smart Network Design Reduces Debt and Increases Quality: With many Americans struggling with healthcare debt, the article suggests that self-insured employers need tailored provider networks designed to offer low to no-cost options for members. It emphasizes the need for data-driven care navigation to guide members to quality, affordable healthcare options. Smart network design leads to lower stop-loss premiums, reduced plan spending, and more accessible care for members.

3. Consumer Empowerment through Digital Tools: The article argues that true consumerism can be achieved by treating members like online shoppers—offering them a variety of choices and clear information. Tools like digital front door care apps give members the information they need to make informed decisions, including provider lookups, telehealth options, and real-time out-of-pocket costs. This level of engagement encourages members to take control of their healthcare choices, resulting in better health outcomes at lower costs.

Work stress has scary implications for your heart health—especially if you’re a man

By Alexa Mikhail – Stressful work environments do more long-term harm than meets the eye. They may increase men’s risk for heart disease—the leading cause of death in the U.S. In a newly released study, two workplace factors influenced men’s incidence of heart disease: job strain and effort-reward imbalance. Men with stressful jobs who don’t feel adequately rewarded, such as through salary, face twice the risk of heart disease compared to those not working under those conditions. Read Full Article…

VBA Article Summary

1. Comparative Risk Levels: According to the study published in Circulation: Cardiovascular Quality and Outcomes, men with stressful jobs or those who feel that their efforts at work are not adequately rewarded face a 49% increased risk of heart disease. This risk is comparable to that posed by obesity, underlining the gravity of workplace stressors on cardiovascular health. The study, conducted over 18 years, analyzed 6,500 white-collar workers, making its findings highly credible and comprehensive.

2. Defining Work Stressors: Mathilde Lavigne-Robichaud, the author of the study, elucidates two types of workplace stressors that are particularly detrimental to heart health. "Job strain" refers to a work setting where employees face high demands but have low control over their roles, while "Effort-reward imbalance" occurs when the perceived rewards, such as salary and recognition, do not match the level of effort invested by the employee. These stressors are becoming increasingly common, given current economic volatility and challenges like return-to-office mandates and layoffs.

3. A Call for Proactive Measures: As a substantial part of one's life is spent at work, the study emphasizes the urgent need for employers to address stressful work environments. This call to action is further supported by alarming statistics, like the fact that 44% of surveyed employees feel "a lot of stress," and nearly half dread going to work at least once a week. Health experts, including Dr. Eduardo Sanchez from the American Heart Association, stress that the workplace should be considered a critical focus area for improving cardiovascular health, echoing the call for comprehensive wellness programs and policies.

Rising use of weight-loss and diabetes drugs boosts profits for Cigna

By John Tozzi - Cigna sees rising demand for new obesity and diabetes drugs known as GLP-1s that will boost earnings, according to a company executive. "GLP-1 utilization does continue to build," Cigna CFO Brian Evanko said during a call with analysts on Thursday. For Cigna's Evernorth Health Services segment, which includes pharmacy benefits and specialty-pharmacy services, it's "a positive contributor to our earnings." Read Full Article…

VBA Article Summary

1. Rising Costs for Healthcare Payers: The increasing use of medications like Novo Nordisk's Ozempic and Wegovy, and Eli Lilly's Mounjaro for conditions such as diabetes, obesity, and cardiac health is raising concerns among health insurers, employers, and government programs. These stakeholders are wary of the financial implications, as the drugs often come with high price tags.

2. Coordinated Care Programs: In response to the rising demand and costs, Evernorth CEO Eric Palmer announced the launch of a new program aimed at managing diabetes, obesity, and cardiac health conditions in a more coordinated way. This program intends to streamline treatments and potentially control costs, although its effectiveness remains to be seen.

3. Insurance Coverage Hesitancy: Despite their potential for treating weight-loss and associated conditions, the new class of drugs is met with skepticism by most health insurance providers. Only a quarter of private insurers currently cover these medications, often with restrictions on duration or prerequisites for eligibility. Furthermore, public options like Medicare do not offer coverage for these weight-loss drugs, although legislation is under consideration to change this.