From Washington, DC

• The American Hospital Association News informs us,
  • “The Centers for Medicare & Medicaid Aug. 15 announced it negotiated lower prices with drug makers for 10 high-cost, sole-source drugs, with the new prices becoming effective in 2026 for individuals with Medicare Part D coverage. The drugs treat conditions such as heart disease, diabetes and cancer, and about nine million Medicare beneficiaries use at least one of the 10 drugs selected for negotiation. The new prices are estimated to save $1.5 billion in out-of-pocket costs for individuals with coverage. A CMS fact sheet includes more information about the newly negotiated prices. The agency last year announced the first list of 10 Medicare Part D drugs subject to price negotiations.”

• STAT News cautions,
  • “The White House is touting just how much its new Medicare negotiation process cut drug prices. The problem is the numbers it’s using don’t actually mean much.”
  • “In a striking side-by-side comparison, President Biden tweeted out a graphic showing newly negotiated prices that Medicare will pay for 10 drugs including blood thinners, cancer treatments, and diabetes medications, among others. The table compares the new prices to the list price of the medicines last year, showing discounts ranging from hundreds to thousands of dollars. 
  • “However, Medicare generally doesn’t pay list prices for medications. Currently, prescription drug plans negotiate discounts off of the list prices at a smaller scale than the new program — but those prices are secret, even in a public program.
  • “The White House did release more meaningful overall numbers tied to the amount Medicare actually pays for drugs that show discounts of roughly 22% on the 10 drugs collectively, compared to what the program paid last year. That’s more modest than the exaggerated discounts based on list prices that show price reductions of up to 79%.”

• In any case, why didn’t Congress align the effective dates for the enormous consumer improvements in Part D, discussed yesterday, with the “negotiated prices”?

• Govexec tells us,
  • “The Biden administration on Wednesday announced a new initiative aimed at improving the hiring process for federal job applicants, hiring managers and other agency HR officials alike, as the White House continues to search for ways to speed up the process and better compete for top talent.
  • “Strategic human capital management has been on the Government Accountability Office’s famed High-Risk List, a biennial report highlighting issues that present potential liabilities of at least $1 billion for the federal government, for more than two decades. In 2021, GAO found that the government had actually regressed in its effort to address difficulties in hiring new federal workers during the final two years of the Trump administration.
  • “The Office of Personnel Management and Office of Management and Budget worked jointly on the effort, announced Wednesday in a memo to agency heads entitled “Improving the Federal Hiring Experience.” The document encompasses plans to improve strategic workforce planning, making it easier for potential job applicants to find jobs they are interested in and making the hiring process both faster and more transparent for jobseekers, as well as making hiring less agonizing for the hiring managers and other human resources personnel.”

• The Food and Drug Administration announced,
  • “Today, the U.S. Food and Drug Administration marked a milestone building on Phase I of its voluntary sodium reduction targets and issued draft guidance for Phase II in a data-driven, stepwise approach to help sodium reduction across the food supply. Prior to 2021, consumer intake was approximately 3,400 milligrams per day on average, far higher than the limit recommended by the Dietary Guidelines for Americans of 2,300 milligrams per day for those 14 years and older. If finalized, the new set of voluntary targets would support reducing average individual sodium intake to about 2,750 milligrams per day. This reduction is approximately 20% lower than consumer intake levels prior to 2021. 
  • “The Phase II voluntary sodium reduction targets follow an initial set of targets issued in October 2021. The initial set of targets encouraged the food industry to reduce sodium levels in a wide variety of processed, packaged, and prepared foods. Preliminary data from 2022 show about 40% of the initial Phase I targets are very close to or have already been reached indicating early success of this effort.”

• FedWeek explains the uncommon exceptions to the FEHB Program’s five-year rule which governs whether a federal employee can continue FEHB coverage into a civil service retirement with the full government contribution.

From the public health and medical research front,

• CNN reports,
  • “Americans, and especially those under age 35, are changing their tune on alcohol use, with a growing share endorsing the view that moderate drinking is bad for health — and a new study backs them up.
  • “According to a Gallup poll released Tuesday, almost half of Americans, 45%, say that having one or two alcoholic drinks a day is bad for a person’s health. That’s the highest percentage yet recorded by the survey, which has been conducted 10 times since 2001.”

• The National Institutes of Health (NIH) Director, writing in her blog, discusses “Mapping Psilocybin’s Brain Effects to Explore Potential for Treating Mental Health Disorders.”
  • “Psilocybin is a natural ingredient found in “magic mushrooms.” A single dose of this psychedelic can distort a person’s perception of time and space, as well as their sense of self, for hours. It can also trigger strong emotions, ranging from euphoria to fear. While psilocybin comes with health risks and isn’t recommended for recreational use, there’s growing evidence that—under the right conditions—its effects on the brain might be harnessed in the future to help treat substance use disorders or mental illnesses.
  • “To explore this potential, it will be important to understand how psilocybin exerts its effects on the human brain. Now, a study in Nature supported in part by NIH has taken a step in this direction, using functional brain mapping in healthy adults before, during, and after taking psilocybin to visualize its impact. While earlier studies in animals suggested that psilocybin makes key brain areas more adaptable or “plastic,” this new research aims to clarify changes in the function of larger brain networks and their connection to the experiences people have with this psychedelic drug.”
  • The blog explains the latest research.

• Per an NIH press release,
  • “The National Institutes of Health (NIH) has launched a program that will support Native American communities to lead public health research to address overdose, substance use, and pain, including related factors such as mental health and wellness. Despite the inherent strengths in Tribal communities, and driven in part by social determinants of health, Native American communities face unique health disparities related to the opioid crisis. For instance, in recent years, overdose death rates have been highest among American Indian and Alaska Native people. Research prioritized by Native communities is essential for enhancing effective, culturally grounded public health interventions and promoting positive health outcomes.”

• The New York Times reports that “In an experiment that surpassed expectations, implants in an ALS patient’s brain were able to recognize words he tried to speak, and A.I. helped produce sounds that came close to matching his true voice.” Truly amazing.

• Per Healio,
  • “Women with vs. without cognitive impairment had more intense menopause symptoms.
  • ‘Lower BMI, sexual activity, exercise, hormone therapy use, and higher education were tied to lower cognitive impairment odds.”

From the U.S. healthcare business front,

• Modern Healthcare reports,
  • “Employer-sponsored health plan costs are expected to rise 9% in 2025, totaling more than $16,000 per employee before cost-saving measures, according to professional services and consulting company Aon.
  • “Aon predicts that demand for prescription drugs such as glucagon-like peptide-1 agonists and growth in medical claims for high-cost treatments such as gene and cell therapies are among the main drivers of rising costs for employers.
  • Janet Faircloth, senior vice president of innovation and integrated solutions for Aon, said employers are expected to apply cost-saving strategies used in previous years, including raising out-of-pocket costs for employees and bidding between insurers for the best price.
  • For 2024, Aon predicted health plan costs would increase by 8.5%, but the firm projects employer cost-saving efforts are likely to hold the increase to 6.4% overall.
  • “We generally see a 1% to 2% reduction from the initial trend expectation after employers make their changes,” Faircloth said.
  • The International Foundation of Employee Benefit Plans released a similar report Thursday, estimating employer-sponsored health plan costs would rise 8% in 2025 due to the same factors Aon cited.

• Here are links to the Aon study, the International Foundation study, and an Aon affiliate’s 2024 pharmacy benefits trends report.

• Per Healthcare Dive,
  • “Health insurers have invested heavily in building out their Medicare and Medicaid businesses in recent years, tempted by the prospect of healthy margins and growing membership in the government-run insurance programs.
  • “But privately run Medicare Advantage and safety-net Medicaid plans are seeing their profitability shrink amid ongoing operational pressures, creating a sharp reversal in expected fortunes — much to health insurance executives’ chagrin.
  • “For much of the past year, insurers bemoaned the headwinds in MA as seniors using more medical care caused spending to snowball. But in the second quarter, many payers suggested Medicaid has become a bigger problem, as states remove ineligible beneficiaries from the safety-net coverage, sickening insurers’ risk pools and saddling them with higher costs.”

• Beckers Payer Issues illustrates the fact that “The CEOs of the six largest for-profit insurers have different perspectives on Medicare Advantage.” 

• Per a Health Care Cost Institute announcement,
  • “Technological medical advancements have shifted an array of procedures previously rendered in inpatient hospitals to ambulatory surgical centers (ASCs). For example, same-day procedures (e.g., cataracts surgery) that do not require an overnight hospital stay and musculoskeletal procedures, such as arthroscopy, are commonly performed at ASCs. 
  • “Because they operate independently of brick-and-mortar hospital facilities, ASCs are considered “off site.” Compared to procedures rendered in hospital outpatient departments, ASC’s receive lower reimbursement. For low-risk procedures, ASCs may be a cost-efficient site of care. Recent market analysis found that procedures at ASCs have grown over time and now account for half of all outpatient surgeries. 
  • “In this brief, we compare employer-sponsored insurance (ESI) ASC reimbursement amounts for a subset of procedures to Medicare fee-for-service (FFS) payment for the same procedures. We find that, on average, ESI pays two times more than Medicare FFS for procedures provided at ASCs. If ESI reimbursed at Medicare average rates, spending would have been nearly $9 billion lower in 2021.”

• Per Beckers Hospital Review,
  • “Cleveland Clinic saw an operating income of $45.3 million at a 1.2% margin in the second quarter of 2024 for the three months ended June 30, a 312% increase from a $21.4 million operating loss (-0.6% margin) during the second quarter of 2023, according to its Aug. 16 financial report.
  • “Total revenue for the system was $3.9 billion in the second quarter of 2024, up from $3.6 billion during the same period last year. 
  • “Net income for the health system was $187.8 million for the three months ended June 30, 2024, up from $145.2 million during the second quarter of 2023.
  • “Expenses increased 8% to $3.7 billion, with salaries, wages and benefits also increasing 8% to $2.3 billion. Cleveland Clinics outstanding and long term debt was $5.4 billion, the report said.” 

• Per MedTech Dive,
  • “Neuronetics said Monday it has agreed to merge with Greenbrook TMS to acquire treatment centers that use its mental health devices.
  • “Greenbrook provides transcranial magnetic stimulation (TMS) and other mood treatments from 130 sites. Neuronetics sells a TMS device to treat major depressive disorder (MDD).
  • “William Blair analysts said in a note to investors that the merger changes Neuronetics’ profile “from device-centric to a device-service business operating brick-and-mortar facilities.”

• Per Reuters,
  • “Eli Lilly (LLY.N) has sent cease-and-desist letters to U.S. healthcare providers in recent days to stop the promotion of the compounded versions of its drugs for weight loss and diabetes, as their supply increases, the company said on Wednesday.
  • “The letters were sent to telehealth companies, wellness centers and medical spas selling compounded versions of the drugmaker’s popular treatments Zepbound and Mounjaro, a spokesperson told Reuters.”