From targeting the Affordable Care Act to clamoring for COVID relief funds, annual federal healthcare lobbying expenditures have risen a staggering 70%. Nearly $714 million has been spent influencing legislation to favor the industry and maintain obscene profits. Who’s spending all this money? Read More about Annual Health Care Lobbying Rises 70% to a Whopping $714 Million

Multiple studies affirm that millions of Americans are underinsured or completely uninsured. These grim results include the 54% of the population covered by employer health plans. While outrageous healthcare and premium costs are part of the problem, it’s clear employers need to step up and do better. Read More about What Good is Health Insurance That Robs Benefits and Hurts Health?

In the ongoing battle for talent acquisition and retention, 2 in 3 employers plan to expand their employee benefits program in the next 12-18 months. Yet 8 in 10 say out-of-control health care costs impede their ability to stay competitive. Is it really possible to compete without overspending? Absolutely! Read More about How to Fund Competitive Benefits to Attract and Retain Talent

According to the National Institutes of Health, telehealth services have been around since the 1920s using the limited technologies of their time. A century later, virtual care has become commonplace thanks to the global pandemic… and it is here to stay, especially for mental health services.

A study published by the Centers for Disease Control and Prevention shows that in the first three months of 2020, telehealth usage grew 154% over the same period in 2019. While much of the initial surge was related to COVID-19 (contagion, social distancing, staffing shortages, etc.), 93% of telehealth patients sought care for conditions other than COVID-19 during the 2020 study period.

Clearly patients appreciate the convenience and benefits of telehealth for a multitude of services. What about practitioners? How do they perceive the value of telehealth as a way to deliver care?

The Journal of the American Medical Association surveyed mental health, primary care, and specialty care providers to learn more about their experience. Questions covered telehealth quality and ease of use as well as the proportion of care delivered via phone, video, and in-person visits.

At the time of the survey, mental health practitioners had significantly more telehealth encounters (40.3%) than other types of providers, likely because “telehealth was being used for MH (mental health) care well before the onset of the COVID-19 pandemic.”

Survey results show that mental health practitioners:

• Prefer video visits over phone visits for remote care by as much as 86.4%
• Rate the quality of video visits as equivalent to (up to 50.1%) or better than (up to 41.7%) in-patient visits for both new and established patients
• Report fewer challenges to delivering phone and video care (5.6%—26%) compared to primary care (7.6%—9%%) and specialty care (13.7%—63.8%) providers

While efforts are being made to reduce barriers to telehealth in general, employers can take action now by including coverage for free remote behavioral health services in their employee health plan, thus removing a financial barrier to seeking this important care and improving employee satisfaction.

While patients grapple with runaway costs and the indignities of the U.S. healthcare system, the largest health insurance firms posted solid year-over-year earnings growth for the first half of 2022. In fact, experts don’t think they’ll struggle at all despite worrisome economic conditions.

These same experts also believe insurers with diverse revenue streams will stay strong as they absorb the impacts of lower enrollment as a result of inflation; rising medical costs; a possible recession, which could reduce employer-based enrollment; and the resumption of Medicaid eligibility redeterminations.

Why the disparity between insurers and the insured?

The answer is two-fold, according to Ge Bai, Ph.D., a professor at Professor at Johns Hopkins Carey Business School and Johns Hopkins Bloomberg School of Public Health.

In an interview with AIS Health, Bai points out that “insurance companies, because of their market position, are able to pass on inflation impacts to their end consumers.” Plan sponsors and ultimately, their members, bear the brunt of higher costs while insurers pocket greater profits.

Bai also articulates what many hesitate to say… that insurance companies “have pretty much captured customers. It’s not a very competitive market.” With little competition and no incentive to change current business practices, the greed and inequity will surely continue.

Employers and plan sponsors cannot rely on monopoly legacy insurance companies to care about their best interests. They need to take a more progressive approach and find an employee health plan that does care, especially with today’s rising inflation and the possibility of recession.

Consumers cheered when the Hospital Price Transparency rule took effect in January 2021, requiring that facilities publish their payer-specific negotiated rates for drugs and services. Despite the positive news, there remains a blatant lack of compliance that continues to keep patients in the dark.

Everyone deserves a less costly, more compassionate health plan, especially those being treated for cancer. To follow up on how well the new rule was driving transparency, JAMA Internal Medicine conducted a study of private-payer prices for 25 commonly used cancer therapies at 61 cancer treatment centers so designated by the National Cancer Institute.

In its review of the JAMA study, Cancer Therapy Advisor summarizes the results by saying, “A majority of National Cancer Institute (NCI)-designated cancer centers violated federal law last year by failing to disclose payer-specific prices for cancer therapies.” By year-end, only 44% had disclosed private-payer prices for at least 1 of the 25 top-selling therapies. The remaining 56% remained utterly opaque and in defiance of the rule.

The JAMA study further estimated the acquisition costs for each of the 25 therapies and the extent to which they were marked up by the hospitals administering them. Median markups across all centers and payers ranged between 118% to a whopping 634%. Negotiated prices also varied considerably between payers at the same center.

JAMA concludes by stating, “The findings of this cross-sectional study suggest that, to reduce the financial burden of cancer treatment for patients, institution of public policies to discourage or prevent excessive hospital price markups on parenteral chemotherapeutics might be beneficial.”

It’s important to ensure that employer health plan sponsors pay fair prices not only for medical services and retail pharmacy drugs, but also for all drug claims on the medical plan, like those used for cancer treatment.

Advisors and employer health plan sponsors are best served by health plan administrators like Vitori Health that incorporate reimbursement controls for drugs delivered in facility care settings. This can have a significant impact in reducing overspending for employers and patients going through difficult life and death treatments.

In a unanimous and bipartisan decision, the Federal Trade Commission (FTC) will investigate the secretive practices of six of the largest Pharmacy Benefit Managers (PBMs) in the country. Diverse stakeholders are hopeful this action will unravel years of corruption and reduce prescription drug prices.

The FTC demanded records detailing the business practices of CVS Caremark, Express Scripts, Optum Rx, Humana, Prime Therapeutics, and MedImpact Healthcare Systems. The action has been praised by plan sponsors, pharmacy industry groups, and community pharmacy owners who are subject to clawbacks and additional fees that limit competition and consumer choice.

Of particular concern is the growing trend toward vertical integration… a closed loop in which PBMs are owned by or affiliated with large national health plans. They are also integrated with mail order and specialty pharmacies, significantly expanding their profits and reach in the pharmacy supply chain.

Lina M. Khan, Chair of the Federal Trade Commission, summarizes the situation in this recent quote. “Although many people have never heard of pharmacy benefit managers, these powerful middlemen have enormous influence over the U.S. prescription drug system. This study will shine a light on these companies’ practices and their impact on pharmacies, payers, doctors, and patients.”

Practices to Implement Now

While the FTC conducts its long overdue investigation of the self-serving predation of legacy PBMs, employers and plan sponsors can seek out pharmacy benefit plans that take a more equitable and contemporary approach.

Plans should incorporate these key management features:

• A plan design driven by lowest net cost + medically-appropriate drug procurement and transparent administration
• Rx pricing technology that departs from discounts off fictitious prices created by PBMs under investigation
• A formulary based on comparative effectiveness, not one filled with high-cost drugs that are essentially bribed by rebates
• Rigorous clinical management with manual, evidence-based prior authorization controls vs. the auto-authorization used by the troubled legacy PBMs
• Built-in advocacy for securing manufacturer financial assistance and alternative drug sourcing channels for high-cost and specialty medicines

The FTC confirms that PBM operations have been “difficult or impossible to understand for patients and independent businesses across the prescription drug system.” Employers should be encouraged by the Rx management options currently available and the industry-wide changes that are likely to result from the FTC’s probe.

While there is an imperative for immediate accountability, the immortal words of Reverend Dr. Martin Luther King, Jr. remind us that “the arc of the moral universe is long, but it bends toward justice.”

A study published in JAMA Health Forum reveals that pre- and post-sale rebates from prescription drug manufacturers to commercial health plan sponsors are steadily increasing. Far from reducing out-of-pocket expenses for patients, this convoluted backroom strategy actually makes things worse.

The study succinctly describes how this complex dynamic negatively affects members. (The bold emphasis is ours.)

“Prescription drug manufacturers routinely offer post-sale rebates to pharmacy benefit managers (PBMs) and health insurance plans. While drug rebates can reduce plans’ net costs, rebates do not reduce patients’ cost sharing, which is usually based on pre-rebate list prices set by drug companies. Drug rebates can incentivize drug manufacturers to inflate list prices and PBMs to distort drug formularies to favor high list price and high rebate therapies.”

This can also create equity issues for consumers buying individual plans as well as members covered by an employee health plan.

A related Axios article quotes Ge Bai, accounting professor at Johns Hopkins Carey Business School and one of the authors of the study, as saying, “We have the sick people paying more than their fair share for the drug and the rebate goes back to the plan to reduce premiums for the healthy.”

To build a better formulary, it’s best not to include drugs that are not supported by sound comparative effectiveness research. Follow evidence-based clinical guidelines for prior-authorization of drugs and step-therapy to use less expensive, equally effective medicines first.

Most would agree with the common adage that you get what you pay for, but that’s not the case when it comes to paying for healthcare in America. U.S. spending per capita is up to four times higher than other wealthy countries and yet shockingly, we have the absolute lowest life expectancy of them all.

One contributing factor is that Americans suffer higher death rates from smoking, obesity, homicides, opioid overdoses, suicides, road accidents, and infant mortality. In fact, low-income Americans die at a younger age than poor people in other developed nations because of deep poverty and less access to healthcare.

The other half of the equation is a system that delivers sick care instead of health care and reaps billions of dollars in profits driven by outrageously high fees, opaque pricing, and dubious business practices. And that’s not about to change anytime soon, despite crushing consumer medical debt and rising health plan costs for American employers.

Employers should seek out health plans that are designed to lower the cost of care and improve outcomes. When members spend less on premiums and out-of-pocket costs, they have more resources available to take better care of themselves — from quality food to the pursuit of mental and financial health. Such plans allow people to embrace wellness and bend the life expectancy curve to their advantage.

Medical debt is devastating the credit integrity of American consumers. The Consumer Financial Protection Bureau (CPFB) has taken steps to mitigate this doom loop and the three major credit reporting agencies are now taking action as well, no doubt in response to a greater focus on medical debt.

Transunion, Equifax, and Experian have decided in unison that:

• All paid medical debt will be removed from credit reports.
• Effective July 1, 2022, the time in which to report any outstanding medical debt will be increased from six to 12 months.
• Effective July 1, 2023, outstanding medical debt less than $500 will not be reported at all.

Do No Harm

Consumer healthcare debt is most often incurred by those who are least able to afford it and are most vulnerable to being persecuted for payment. In fact, much healthcare debt should not even be classified as such.

A large proportion of this so-called debt should have been covered from the beginning by hospital financial assistance programs (FAPs), which are mandated by law for non-profit hospitals. These hospitals receive immensely valuable tax-exempt status in return for their commitment to provide services of equal value to patients with financial need.

Research has shown that hospitals fall egregiously short of these charitable commitments. Many neglect to even inform patients that such FAP programs are available to them. Multiple articles and studies, including research conducted by Johns Hopkins University, reveals a “wide variation in charity care provision” and that “many government and nonprofit hospitals’ charity care provision was not aligned with their charity care obligations arising from their favorable tax treatment.”

Moving Forward

Personal credit report relief and similar efforts by the CFPB are promising progress in an area of significant collateral damage caused by the dysfunctional U.S. healthcare business machine. However, bigger strides are needed to protect individuals from the predation and profiteering inherent in our healthcare system.

It’s time to eliminate the financial injury caused by medical debt that’s endured by working Americans. Patients will benefit from next-generation health plans that use advanced, fair market payments for providers, and offer advocates to help patients receive all hospital financial assistance for which they are eligible.