Drug Firms Resist Price Disclosure

Drug CostsWhile the Department of Health and Human Services has asked drug manufacturers to disclose list prices for most drugs they feature in television commercials, the industry’s largest trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), has countered with an offer to include content directing consumers to a new website where pricing information could be found.

The Administration’s request requires that list prices be featured in text on the screen in television ads for drugs covered by Medicare and Medicaid costing more than $35 per month. A great deal of debate has developed, with PhRMA arguing that featuring list prices would confuse consumers by making them think they have to pay more than they actually would. HHS is still accepting comments on the proposal.

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UnitedHealth will begin passing drug discounts to plan participants

This article was published on March 13, 2019 on BenefitsPro written by Max Nisen.

The health-care policy environment is shifting in a dangerous way for insurance giants. A seemingly small change in how drugs are paid for could be the beginning of a response.

UnitedHealth Group Inc., the largest U.S. health insurer, announced Tuesday that its pharmacy-benefit management arm OptumRX will mandate that all new employer health-plan clients pass the drug discounts it obtains for them directly to plan participants. That’s a big shift from the current system, under which OptumRX and other PBMs negotiate prices with drugmakers and hand the resulting rebate checks to clients to use as they wish. PBMs profit from this arrangement, and have an incentive to favor heavily rebated drugs. That pushes drugmakers to hike prices, and patients are exposed to artificially inflated costs.

UnitedHealth’s new policy means lower drug costs for more people. But it has broader implications. It smartly preempts Trump administration efforts to reform rebates, and shows that the industry can make needed changes ahead of pushes for an even bigger government-led overhaul of the way they do business.

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Increasing costs and unhappiness with the status quo are motivating the administration’s regulatory effort to end rebates in Medicare. It is also thinking about forcing insurers to reveal the hidden prices they negotiate with hospitals, which would wreak havoc on their ability to negotiate. Consumer dissatisfaction also behind broader reform efforts championed by Democrats, such as Medicare for All. Such plans are distant threats, but they are present and existential enough to weigh on shares.

Making the switch to so-called point-of-sale rebates for new clients is a big and unique step for UnitedHealth, and it builds on its January transition of a different subset of its business. While the impact will be small at first as existing clients can stick to the old system, the new model could eventually impact as many as 18 million Americans, according to a research note from Royal Bank of Canada analyst Frank Morgan.

UnitedHealth says people already on its point-of-sale plans save an average of $130 per eligible prescription and that medication adherence is up by as much as 16 percent. People are happier and healthier when they can afford to take their medicine, and are more likely to avoid larger medical costs down the line.

If the administration’s efforts on rebates succeed, UnitedHealth will face less disruption and have more experience in making a new business model work. Slower rivals such as CVS Health Inc. and Cigna Inc’s Express Scripts – which offer point-of-sale rebates as an option but don’t mandate it – may suffer. Already in February, CVS attributed part of its weak 2019 guidance to the impact of shifting drug-pricing trends on its PBM as drugmakers held back on price hikes under political scrutiny.

Plans that offer point-of-sale rebates have a chance to focus more on reducing overall costs for both patients and payers, especially when integrated with an insurance plan. This isn’t going to make insurers and PBMs beloved overnight, or produce instant systemic cost-savings. But UnitedHealth is taking a needed and bigger step toward a better and more patient-friendly system.

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How Is Your Health Plan Responding to Millennials?

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You might be surprised to hear that millennials represent one third of the American workforce, but Pew Research Center confirms it. If your health benefit plan hasn’t adapted to the needs and lifestyles of these young people, you’re missing an opportunity to boost retention, build loyalty and enhance wellness.

For starters, it’s important to realize that 45% of young adults age 18 to 29 do not have a primary care doctor. They do, however, have a smartphone and you can bet they use it to access the internet constantly. With online sources like WebMD offering so much healthcare information, it’s no wonder that millennials are likely to self-diagnose and even treat one another at home before seeing a doctor. If young people can find much of the healthcare information they need in the palm of their hand, you can bet they expect to find benefits and enrollment information easily accessible as well.

They Want Information Now
Just like so many of us who have come to expect an immediate response to everything, millennials who do need a doctor expect the visit to happen quickly and easily. According to PNC Healthcare, this explains why 34% of millennials prefer to use a retail clinic rather than waiting several days to see a primary care physician in their office – a rate twice as high as baby boomers. It would also seem to point to an increased use of telemedicine.

Cost Matters to Millennials
Millennials face more than their fair share of financial pressures and take their finances seriously. Surveys show they are more willing to request a cost estimate prior to choosing a treatment option than baby boomers or seniors ever were. This not only makes cost transparency tools important, but it’s a very positive trend that should contribute to lower claim costs going forward.

Whether it be treatment options, provider access or cost of care, the demand for health and benefit plan information will only increase as more and more millennials enter the workforce. In order to respond to change, self-funded employer groups will need the resources of an independent TPA that can combine the right plan design with more personalized, interactive communications and more innovative ways for younger employees to access the more personalized care they will need going forward.

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Getting Creative Can Attract Talent

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With unemployment for college-educated people age 25 and above at just 2.2%, it’s been a long time since we’ve seen a jobs market this tight. To attract and retain workers in this environment, growing companies are offering more than just competitive health benefits, and this is especially true for smaller companies forced to compete with larger companies.

Executive search firms have shared examples of employers going above and beyond their health plan by offering additional compensation to cover a candidate’s projected out-of-pocket medical expenses going forward. Technology-related firms in competitive markets are adding wellness benefits like on-site clinics or pre-arranged access to nearby fitness centers. For early to mid-career employees, companies are expanding their family leave or flex-time policies to provide easier transitions for young parents returning to work.

Flexibility and More

Whether it be more paid time off or arranging your work day to meet outside demands on your time, flexibility is becoming increasingly important, especially when you’re dealing with millennials or X-ers. Equally important to young workers is the culture present at an organization and the opportunity to make a difference – to know that what they are doing is helping their community or the world at large.

From unique apprenticeship programs at manufacturing and industrial companies to help with retiring outstanding student debt, more employers are looking for creative ways to gain an edge that will appeal to qualified, prospective employees. In a really tight job market, it pays to be creative.

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Drug Cost Information Bills

dgb_drugcostsIn late Fall, the President signed two bills that should make it easier for pharmacists to help customers find the lowest cost, appropriate medications. The “Know the Lowest Price Act of 2018” and “Patient Right to Know Drug Prices Act” bills are designed to crack down on “gag clauses” that prevent pharmacists from telling patients about more affordable options for prescription drugs. Having developed a “drug pricing blueprint” to promote greater price transparency, the President praised these bills as representing significant steps in that direction.

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Are You Encouraging Members to Shop for the Best Care and the Best Price?

It can be as easy as handing them a check for a percentage of savings.

In last month’s HCU, we discussed the flexibility that self-funding provides – emphasizing that within regulatory parameters, self-funding gives the employer significant power over plan design, selection of providers, ways to incentivize plan members and much more.

These days, more and more employers are choosing to reward employees who do their homework and find high quality care at more affordable prices. We’ve all heard about joint replacements in major markets ranging in price from $11,000 to $120,000 or hospital charges for baby deliveries varying from $8,000 to $35,000. Or how about the $300 nebulizer that can be found on Amazon for $118 – need we continue?

While naysayers are quick to complain about employees who seem oblivious to the healthcare cost crisis, smart employers are encouraging their members to become part of the solution.

Many incentivize employees to help lower prescription drug costs by waiving copays on generics. Encouraging the use of Telemedicine and Minute Clinics goes a long way to help reduce Emergency Room utilization.

Still other plans are giving a significant percentage of their savings back to every employee who chooses a recommended hospital for a costly procedure. This can amount to hundreds or even thousands of dollars – real money!

These measures are not rocket science. Rather they are good old-fashioned common sense – no different than choosing one credit card over another because it gives you cash back on your purchase. We respond to incentives all the time and so do your employees.

To learn how Diversified Group helps self-funded employer groups turn members into responsible healthcare consumers, just give us a call.

Tell Us How You Feel!

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States Crack Down on Balance Billing

Healthcare CostsCurrently, only 21 states offer some protection against balance billing and most existing laws apply to emergency services required from out-of-network providers. Few, if any, address balance bills received for treatment by an out-of-network provider in an in-network hospital. In Pennsylvania, the Governor and General Assembly have introduced two bills aimed at taking consumers out of the middle of the reimbursement process. These bills have come after several other states have adopted more comprehensive laws that prohibit balance billing entirely.

Some measures addressed in Connecticut, New York, Maryland, Florida and New Jersey include:

  • Protections in emergency department and in-network hospital settings
  • Prohibiting providers from balance billing and requiring carriers to hold their members harmless
  • Adopting reimbursement rate standards and a payment dispute resolution process
  • Applying these laws to all types of managed care products, including HMOs and PPOs

The goal of the proposals is to keep covered persons out of the middle of carrier-provider payment disputes. In non-emergency procedures, healthcare facilities in New Jersey are required to disclose whether they are in-network and advise the covered person to ask if their physician is in or out-of-network. Individual healthcare professionals must inform the patient if they do not participate in the person’s plan network and provide a billing estimate and applicable CPT codes. With healthcare costs continuing to rise and a lack of federal regulations, we can expect more states to take measures to protect healthcare consumers. We will strive to keep our clients informed as changes develop.

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