Good morning, Huddler. This will be my first Thanksgiving with a fully-vaccinated family — as yours (hopefully) will be, too. Here are some political topics I plan to bring up as soon as I sit down: - Should access to health insurance in the U.S. be a fundamental right?
- Should Medicare be able to negotiate drug prices?
- Do you think the Supreme Court must stand with Roe v Wade in its upcoming Mississippi abortion case?
- Should J&J have to pay $465 million for its role in the opioid crisis (which has now led to around 100k American deaths in just one year)?
Reply back to this email with hot topics you plan on bringing up at the family dinner. 🦃 In today's Huddle: - CVS will close 900 stores as the company shifts focus to its HealthHubs.
- Medicare Part B premiums will increase 15% in 2022, the largest increase ever.
- Insuretech companies faced hefty medical loss ratios in Q3.
-- Jared Dashevsky, a Workweek
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BUSINESS CVS to Close 900 Stores, Beef Up HealthHubs
CVS announced it would close around 900 stores over the next three years to adapt to its growing number of customers purchasing goods online. The company will focus more on its digital services and HealthHubs — I just hope they digitize their pages-long receipts. The Deets
The pandemic shook up the consumer market: consumers now prefer online shopping vs in-person shopping. “Online shopping” includes prescriptions, personal care items and telehealth. CVS recognizes its consumers’ changing needs and behaviors and will back down on its retail-end and beef up its digital solutions and HealthHubs. One analyst wrote: We see this as consistent with our expected long-term strategy for CVS, moving to grow managed care and care delivery while shrinking legacy brick-and-mortar retail business.
CVS plans to operate three core stores: MinuteClinics, HealthHubs and traditional retail. The company already operates over 1,000 MinuteClinics and plans to have over 1,000 HealthHub locations by the end of the year. These HealthHubs, which offer primary care, ancillary staff and a suite of services, are key to CVS becoming the strongest healthcare company in the U.S. My Two Cents
CVS’s new focus will allow the company to refine its position in nearly every aspect of the healthcare value chain, from insurance to pharmacy and primary care to consumer goods. Soon you won’t be able to think “healthcare” without thinking “CVS.”
INSURANCE Medicare Part B Premiums See Record-breaking Spike
Monthly premiums for Medicare Part B will increase by $21.60 in 2022, the largest dollar increase in the health insurance program’s history. This will be a 15% increase, bringing premiums from $148.50 to $170.10. Why the Hike in Price?
The Centers for Medicare and Medicaid Services (CMS) provides some explanations for the jump in Medicare Part B premiums: - $$$$: Healthcare costs for Medicare enrollees have increased due to higher prices and utilization of services during the pandemic.
- Give us the money back: Congress provided enough funding to Medicare Part B in 2021 to limit the increase in monthly premiums to around $3 per month (a nice thing to do during a global pandemic). However, Congress wants CMS to start paying that money back in 2022, so the organization needs the money to do so.
- The Drama Drug: CMS is proactively setting aside money to pay for Biogen's new and highly (I do mean highly) controversial Alzheimer’s drug, Aduhelm, set at $56,000 per year.
Next Steps
We’ll find out in January if CMS chooses to cover Aduhelm. Until then, expect the 15% increase in Medicare Part B premiums.
PUBLIC HEALTH Q3 Was a Little Rough for Insuretech
Leading insuretech companies Bright, Clover and Oscar reported Q3 medical loss ratios (MLR) of around 100%, despite reporting strong year-over-year revenue growth. The MLR is the proportion of revenue insurance companies spend on clinical services instead of admin costs and profits. So, a high MLR may be a sign that companies aren’t managing their revenues well. Let’s Talk Numbers - Oscar’s MLR was 99.7%, up from 90.5% at this
time last year. Their YOY revenue growth was 336%.
- Bright’s MLR topped 103%, up from 90% at this time last year. Their YOY revenue growth was 206%.
- Clover’s MLR reached 102.5%, up from 86.7% at this time last year. However, the company’s MLR has been down-trending during 2021. Their YOY revenue growth was 153%.
Why Such High MLRs?
The spike in delta variant cases and their associated high costs are partly to blame for the high MLR. Additionally, these insurers have had difficulty accurately assessing the risk of new members who joined during the extended special enrollment period, which lasted from February through August. New members who joined were more likely to use more health services, thus driving up payers’
expenses on care. MLRs will likely come down as Covid-19 cases settle and insurers more accurately adjust risk for new members going into 2022.
OUTSIDE THE HUDDLE - Political partisanship predicts Covid-19 vaccination status better than just about anything else, including race, education level and insurance coverage.
- The FDA approved the first drug for achondroplasia, a genetic cause of dwarfism. With only about 3,000 potential patients in the U.S., the price tag for Voxzogo will be north of $300,000.
- AppliedVR is changing the game with its virtual reality tool to treat lower back pain. The company recently received FDA authorization and $36 million in funding.
- The Mayo Clinic embraced “remote” and had significant success with its remote patient monitoring program. Expect this trend to last.
- Here’s one you probably haven’t heard before: there has been a confirmed case of monkeypox in the US. It’s the second time this year, here’s what you should know.
THE WEEK AHEAD - Monday: Learn how to write a “Letter to the Editor” to promote a cause you’re fighting for.
- Tuesday: Nutrition is important: check out this WHO event on sustainable food systems for children.
- Wednesday: Start prepping the turkey.
- Thursday: Happy Thanksgiving! I’m thankful for you and the rest of our Huddlers. Check out the top of this email for some touchy topics to bring up at Thanksgiving dinner.
- Friday: Fat Cat Friday!
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