Concerns Rising About Drug Management In HDHPs

Cost of medications a top concern for HDHP sponsors | BenefitsPRO

Source: BenefitsPRO, by Scott Wooldridge

Companies that offer high-deductible health plans (HDHPs) are seeing significant dissatisfaction from employees when it comes to drug utilization management, a new report has found. The report also noted that employer sponsors of HDHPs are paying attention to this dissatisfaction, as well as developments such as the Great Resignation, when it comes to designing benefits.

The study, by Pharmaceutical Strategies Group (PSG), an EPIC company and sponsored by RX Savings Solutions (RxSS), is called the Trends in Drug Benefits Report. For the report, PSG surveyed 153 benefits leaders, representing plan sponsors of an estimated 35.1 million covered lives.

Dissatisfaction seen from enrollees

The study outlined some possibly troubling developments with HDHP drug management and utilization.

For example, 57% of respondents cited member acceptance as a barrier to holding down costs and managing pharmacy benefits. Part of what might be driving the lack of support is the use of formulary exclusions. The use of such exclusions—which are intended to hold down overall pharmacy costs but can aggravate plan members who have to find alternatives—is highly unpopular, the study found. A large percentage of respondents, 69%, said member dissatisfaction was their top challenge with formulary exclusions. And that’s a problem, since 81% of companies in the survey said their plans had formulary exclusions.

Other problems with HDHPs and drug coverage, according to the survey, was lack of affordability before the plan’s deductible was met (22% of respondents), and lack of member understanding in using HDHPs (19%).

The employers’ viewpoint

Perhaps because of member dissatisfaction, plan sponsors have become less positive about HDHPs. “Thought the majority of respondents reported offering a HDHP, they expressed mixed views on whether these plans achieve their advertised aims,” the study said. “Only 35% of respondents agreed or strongly agreed that HDHPs are an effective way to manage overall drug trend. A somewhat larger percentage (51%) agreed or strongly agreed that HDHPs are an effective way to help members become better health care consumers and make wiser medication choices.”

The report added that these responses have changed since the last survey in 2018. In that study, 41% of respondents thought HDHPs helped manage drug trend (pharmaceutical costs to members) and 58% said HDHPs helped members become better health care consumers.

The study also found that companies that sponsor health plans seem to be paying attention to the concerns of their employees. The survey showed that 41% of respondents said the importance of member experience has increased somewhat or greatly since the start of the COVID-19 pandemic. A smaller number, 27%, reported that the Great Resignation has impacted their benefit strategy.

“Plan designs evolve, solutions come and go, and priorities shift. At the end of the day, consumers shoulder an increasingly unsustainable share of medical and pharmacy costs,” said Michael Rea, PharmD, founder and CEO of RxSS. “The research conducted by PSG will help inform drug benefit design decisions that work toward an elusive but important goal, one that is underscored by the impact of COVID-19 and the Great Resignation.”

Rising Google Searches For Procedures Suggest Recovering Demand, Analysts Say

Google Accused of Enabling Piracy With Images Search Feature | TimeSource: Healthcare Dive, by Nick Paul Taylor

Dive Brief:

  • * Searches on Google for 20 common, nonemergent procedures are above pre-pandemic levels, providing another data point that indicates demand is recovering, according to analysts at Needham.
  • * The analysts believe Google Trends data may indicate the level of consumer interest in certain procedures, leading them to track the resource to understand changes over time. U.S. searches for orthopaedic, general surgery and cardiovascular procedures were at 114%, 112% and 101% of their pre-pandemic levels, respectively, in the last analysis.
  • * Earlier analyses suggest the data may bode well for future sales at medical device companies. The data previously have correlated with medtech financial results, with slumps and rises in search numbers in step with drops and increases in revenue.

Dive Insight:

The most recent medtech industry earnings season was characterized by improving results. After struggling with the impact of omicron early in the year, many companies had a recovery in demand as the quarter progressed, leading some orthopaedic businesses to post sales that matched or topped pre-pandemic levels and businesses across the industry to report that the recovery continued into April.

Google search data potentially provides a window into what is coming next. The idea is that the search results show whether consumer interest is falling or rising and, in doing so, offer insights into future sales of medical devices.

The latest analysis found nonemergent procedure searches are up on both the pre-pandemic period, defined as the first seven weeks of 2020, and on a trailing 90-day basis. Over the 90 days through last week, Google searches for the 20 procedures tracked by the Needham analysts rose 8%, with hernia repair having the greatest improvement and nephrectomy faring the worst.

Searches related to orthopaedics, general surgery and cardiovascular procedures gained 12%, 6% and 9%, respectively, over the analyzed period. The figures are similar to the analysis covering the 90 days through the end of April, with orthopaedic searches decelerating by one percentage point and general surgery and cardiovascular gaining two percentage points and one percentage point, respectively.

The rise in orthopaedic searches over the past 90 days suggests the recovery in demand seen during the first three months of the year may have continued into the second quarter. Still, patient demand likely is just one of the forces that will shape results in the second quarter and after, company executives have said.

“We do expect that staffing pressure will continue to be a challenge throughout the year, just not as intense, I think, as what we thought when we started the year,” Zimmer Biomet CEO Bryan Hanson told analysts on a quarterly results conference call.

U.S. Hospitals Struggle to Absorb Pandemic-Era Rising Costs

Fitch: COVID-19 resurgence threatens nonprofit hospitals' margins, credit  ratings | Fierce HealthcareSource: Bloomberg, by Carey Goldberg

U.S. hospitals are struggling to absorb rising costs for labor, drugs and supplies as the pandemic drags on, the American Hospital Association said Monday in a report.

Labor costs per patient jumped by 19% in 2021 from 2019, and supplies rose by over 20% per patient during that period, according to the report. Nursing expenses shifted heavily toward travel nurses. The travelers’ share of nursing budgets rose to 39% in 2022 from 5% in 2019.

The federal government has allotted more than $170 billion to help hospitals through the pandemic, but many say they are still losing money, especially after the omicron wave earlier this year. HCA Healthcare Inc. cut its annual adjusted earnings forecast on Friday amid higher labor costs, sending shares 22% lower.


“The dramatic rise in costs of labor, drugs, supplies and equipment continue to put enormous pressure on our ability to provide care to our patients and communities,” AHA Chief Executive Officer Rick Pollack said in the statement. The association represents nearly 5,000 hospitals nationwide.

In Massachusetts, the state hospital association on Monday detailed its own financial woes, reporting that in January and February, as omicron hit, hospitals lost $430 million overall, despite federal relief money.

In January, 42 of 47 hospitals surveyed lost money and February was almost as bad, the Massachusetts Health and Hospital Association reported.  Governor Charlie Baker is proposing an additional injection of $250 million in federal money for distressed hospitals.

Coronavirus Cases On The Rise In L.A. County, Prompting Calls For Spring Break Caution

Coronavirus cases on the rise in L.A. County, prompting calls for spring  break caution - Los Angeles TimesSource: Los Angeles Times, by Luke Money, Rong-Gong Lin II

Coronavirus cases are once again on the rise in Los Angeles County, according to data released Monday, prompting officials to urge residents to keep up safety protocols as the spring break holiday season arrives.

Data show that for the seven-day period that ended Monday, an average of 960 new cases were reported daily countywide, which equates to 67 cases a week for every 100,000 residents. That’s up 23% from the previous week, when L.A. County reported an average of 783 cases a day.

Caseloads of this magnitude remain a far cry from the tens of thousands of new daily infections during the height of the Omicron surge. In mid-January, L.A. County was reporting 42,000 new coronavirus cases a day.

Nevertheless, the trendline is the source of some concern, especially given the proliferation of BA.2 — an Omicron subvariant estimated to be 30% to 60% more contagious than the earlier version that swept the globe last fall and winter.

Scientists are also now tracking an even more potentially contagious subvariant, XE, which some early estimates indicate may be 10% more transmissible than BA.2.

“The evidence is becoming clearer that given the current approved vaccines and the reality of a mutating virus, some of us will need to boost our immune systems a couple of times during the year in order to be optimally protected,” county Public Health Director Barbara Ferrer said in a statement. “This includes those infected with Omicron over the winter, since natural immunity … also wanes over time.”

Given that many residents are likely to travel or gather in the coming weeks — either for spring break or to mark holidays such as Easter, Ramadan or Passover — Ferrer said it remains important to “do our very best to make use of the powerful tools at hand, vaccinations, boosters, testing, and masking, to keep ourselves and those most vulnerable to severe illness, as safe as possible.”

There are more than 1.7 million L.A. County residents age 5 and up who haven’t received a single vaccination dose, and an additional 2.8 million vaccinated residents who haven’t received a booster, even though they’re eligible for one.

L.A. County’s coronavirus case rate hit a post-winter surge low of about 609 cases a day from March 18 to 24. That was about two weeks after the region ended its universal requirement to wear masks in indoor public spaces — one of the last counties in California to do so.

Since then, the countywide case rate has ticked upward, a development officials have said is likely fueled by a combination of waning immunity, the loosening of masking rules and the spread of BA.2.

The daily reported caseload is just one of many metrics health officials utilize to track and assess the pandemic’s trajectory. Another, the proportion of conducted tests that are confirming coronavirus infection, has also inched up slightly as of late, but remains low at 1%, county health officials said.

And while cases have crept up a bit, the number of people hospitalized with COVID-19 countywide has continued to trend downward. As of Sunday, 265 coronavirus-positive patients were hospitalized countywide — down about 8% from a week ago.

Experts in California have said there are unmistakable signs of an uptick in coronavirus cases in the state. But whether this latest uptick ultimately proves to be a temporary blip or the harbinger of something more significant, however, remains to be seen.

For the weekly period that ended Thursday, California was averaging about 2,800 cases a day, or 50 cases a week for every 100,000 residents, up 9% over the prior week.

Orange County’s case rate is also increasing. Orange County’s case rate is about 134 cases a day, or 30 cases a week for every 100,000 residents, up 12% over the prior week.

San Francisco, which now has one of California’s highest case rates, on Thursday was recording about 127 cases a day, or 102 cases a week for every 100,000 residents, a 6% increase over the prior week.

A coronavirus case rate of 50 or more cases a week for every 100,000 residents is considered substantial, while a rate of 100 or more is considered high.

Dr. Robert Wachter, chair of UC San Francisco’s Department of Medicine, tweeted Thursday that the percentage of asymptomatic patients testing positive at UC San Francisco’s hospitals had risen to 2%, up from 1% in late March.

“If you’ve let guard down, time to be more careful,” he wrote.

By Monday, the rate had dipped back down to 1.6%, Wachter said in an email. That means that in San Francisco, there’s a 28% chance that at least one person attending a party with 20 asymptomatic people will test positive for the coronavirus.

Some experts are optimistic that the case numbers so far offer glimmers of hope that this spring will not bring a second Omicron surge on the magnitude of those seen elsewhere — such as Britain, where hospitals have once again come under strain.

Dr. Eric Topol, director of the Scripps Research Translational Institute in La Jolla, tweeted Saturday that “it’s clear that wave 6 (BA.2), yet still in the works, will not resemble” the fifth surge of the pandemic, or last winter’s Omicron surge.

But Myoung Cha, chief strategy officer for San Francisco-based Carbon Health, disagreed with “confident takes … that this surge won’t be big.” He noted many people this year are self-diagnosing with at-home tests — the results of which are not reliably reported to the government.

By contrast, lab tests conducted at official facilities are automatically reported to the authorities.

“The current case rates are massively undercounted versus prior surges,” Cha tweeted Sunday.

As is the case anytime COVID-19 shows signs of resurgence, the question on many people’s minds is when, or whether, health authorities may consider reimplementing restrictions.

In Philadelphia, where cases have jumped by more than 50% over the last 10 days, officials on Monday announced the return of an indoor mask mandate, effective April 18.

Philadelphia had preexisting criteria in place that would trigger a return to a mask order when average new cases a day exceeded more than 100 and when cases have risen by more than 50% in the previous 10 days. On Monday, officials reported that the city of 1.58 million people was averaging 142 new cases a day, or 63 cases a week for every 100,000 residents.

Philadelphia Mayor Jim Kenney said the return of the mask mandate in indoor public settings was needed to prevent higher case rates.

“Our city remains open; we can still go about our daily lives and visit the people and places we love while masking in indoor public spaces,” Kenney tweeted.

A number of universities in the Northeast have announced a return to universal mask policies. Columbia University, Georgetown University and American University have announced the return of indoor mask requirements recently.

So far, officials in L.A. County and the state have not indicated that conditions warrant the imposition of new measures or mandates — though, in both cases, they still urge residents to mask up indoors while in public.

Speaking with reporters last week, though, Ferrer said people should be concerned about the rise in the number of school outbreaks countywide. There were 14 new outbreaks in K-12 schools in L.A. County for the week that ended Thursday. For the previous week, there were four.

She noted that in some other settings where masking is still required — like nursing homes and homeless shelters — there has not been an increase in outbreaks.

Ferrer also expressed some optimism that a second increase in Omicron cases this spring wouldn’t be as bad as the winter surge. People who have been infected with the earlier Omicron subvariants earlier this winter, BA.1 or BA.1.1, are likely to have a degree of immune protection against the latest Omicron subvariant, BA.2, at least for the near future.

“I am hopeful … that given what we’ve seen and what we’re doing, we should be able to avoid a really big surge,” Ferrer said.

In a round of interviews with morning network shows, Dr. Ashish Jha, the incoming White House COVID-19 Response Coordinator, said he’s “not overly concerned right now” about the rise in cases nationally.

“Case numbers are rising. … We were expecting this, because we saw this in Europe a few weeks ago,” Jha said on NBC’s “Today” show. “But the good news is: We’re coming off of some very low infection numbers. Hospitalizations right now are the lowest they have been in the entire pandemic.

“So we’ve got to watch this very carefully. Obviously, I never like to see infections rising, I think we’ve got to be careful, but I don’t think this is a moment where we have to be excessively concerned,” Jha said.

Employment-based Health Coverage Holds Steady

Although health insurance coverage rates are rising, the percentage of Americans with employment-based coverage remains unchanged, according to a report by the Employee Benefits Research Institute (EBRI). In 2014, 88% of non-elderly people people were covered, up from 84.6% in 2013. Twelve percent of people under 65 were uninsured in 2014, down from 15% in 2013. Among the entire population, 13% had individual coverage in 2014 compared to 9% in 2013. There was no change in the percentage of the non-elderly population with coverage through an employment-based health plan. More people were covered by employment-based coverage in 2014 than in 2013 because of population growth, but the percentage with employment-based health coverage was unchanged at 62%.

The Challenges Faced by Self-Employed Baby Boomers

Steady Revenue from Individual Policies

Twenty-six percent of self-insured Baby Boomers say that rising healthcare costs have reduced their ability to save, and 35% say that the rising cost of health insurance has hurt their business, according to a survey by Ameritrade. The study also reveals the following about self-employed Baby Boomers:

  • 63% don’t have the benefits of traditional employment (paid vacation, a better health benefit package, better insurance, professional support).
  • 51% want the next president to reduce healthcare costs, 64% don’t expect their needs to be among the president’s top five priorities.
  • 52% work long hours; 41% are never able to completely turn off work; 40% cope with constant financial pressure; 39% have had to prioritize their business over their personal life; and 30% have had to spend less time with their family.
  • 76% were traditionally employed before they set up their own businesses.
  • 77% say they could still be traditionally employed if they wanted.
  • 57% say that political and economic changes over the past three to five years are affecting their business.
  • 40% don’t support a $15 minimum wage hike. Thirty percent say it could hurt their business.
  • 20% say that the effects of government regulations have worsened compared to three to five years ago.
  • 61% are more anxious about saving money for retirement now; 59% are more anxious about earning a steady income from their business; and 53% are more anxious about expanding their business.
  • 57% say that political and economic changes, over the past three to five years, are affecting their business.

Out-of-Pocket Healthcare Spending Reaches $416 Billion

Americans spent $416 billion in out-of-pocket healthcare costs in 2014. With a growth rate of 8%, it will reach $608 billion by 2019, according to a report by Kalorama Information. Out-of-pocket spending includes direct expenditures, office co-pays, hospital visits, drug purchases, and premiums.

Premiums make up the largest category of spending, but co-payments and direct payments are growing.  Direct payments are expected to grow 9.5% per year, as employers add high deductible plans. Co-payments are expected to grow 9.5% annually as plans raise co-pays and subject more products and services to co-payment. Premiums will expand by 7.1% per year.

According to Hewitt Associates, HMOs will seek double digit monthly premium increases as they face an exodus of young, healthy employees. Rx medications comprise 43% of total out-of-pocket health care costs, followed by office-based procedures at 26%. Hospital stays comprise just 1% of the average person’s out-of-pocket health care spending, although these expenditures are considerably higher for people with the highest health care expenditures.

Last Updated 08/10/2022

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