Tax Exemptions for Not-for-Profit Hospitals: Are they Worth it?

It’s a question lots of folks inside and outside of healthcare are asking these days.

On September 28, the AHA Today headline read: “Report: Nonprofit hospitals value to communities 10 times their federal tax exemption” Their answer:

“An EY report prepared for the AHA shows that tax-exempt hospitals and health systems delivered $10 in benefits to their communities for every dollar’s worth of federal tax exemption in 2020, the most recent year for which comprehensive data is available. It represents an increase from $9 in benefits from the prior year despite efforts in battling the COVID-19 pandemic.”

The AHA study was released by coincidence the same week a study by Hopkins and TCU researchers was published in JAMA Network that quantified hospital exemptions for local, state and federal taxes at $37,3 billion for 2021. The federal portion in their calculus was $11.5 billion, or only 30.7% of total exemptions. In its recap, the study also pointed out that more than 50% of the tax exemption benefits was enjoyed by 7% of all not-for-profit hospitals—those that are bigger and in states where adjustments for Medicaid and Medicare underpayments are highest. The research team concluded:

“This study highlights the wide variation of nonprofit hospitals’ tax benefit across states, its high concentration among a small number of hospitals, and the primary role played by state and local taxes. Policy efforts to strengthen nonprofit hospitals’ taxpayer accountability are likely to be more effective when pursued at the local level. The detailed standardized estimation road map can be used by various stakeholders to estimate tax benefit for external valuation and reporting purposes, updated as laws change, and improved upon as better data sources become available.”

The headlines about the JAMA study imply the answer to the key question above is “NO”

• The $37.4 Billion Tilted Playing Field For Nonprofit Hospitals The $37.4 Billion Tilted Playing Field For Nonprofit Hospitals (forbes.com)
• JAMA study: Nonprofit hospitals get big federal, state tax breaks| STAT (statnews.com)

Reporting like these implies that not-for-profit hospitals—especially big ones– enjoy tax exemptions that may or may not be offset by the community benefits they provide. It’s a theme being amplified by critics (Arnold Ventures, Lown Institute, Patient Rights Advocates, et al), health insurers, employer health coalitions and in Congressional hearings where not-for-profit operators have been scrutinized. Favorite targets have been excessive CEO compensation, aggressive patient debt collection activities, levels of charity care, adequacy of price transparency, high administrative costs and others that are referenced as pretext for revisiting the worthwhileness of hospital tax exemptions. (See Quotables section below for example of pretext for JAMA study)

My take:

Two points on these studies: First, the results of both studies relative to quantifying the amounts of tax exemptions are supported by their respective methodologies and are plausible. The major distinction in the two studies, besides the year upon their data is based, is how exemptions are calculated: the JAMA study includes state and local tax exemptions along with federal taxes asserting that a more accurate/complete assessment. By contrast, the AHA study used only the federal tax exemptions since, presumably, its primary audience is federal lawmakers in Congress. It’s notable that the federal portions in both studies are roughly the same. Here’s a high-level comparison of the two studies:

	JAMA	AHA
Major premise	State and local exemptions should be considered along with federal in calculating total hospital exemptions	Hospital federal tax exemptions are far surpassed by the community benefits provided
Study Sample	2927 NFP hospitals	2432 NFP hospitals
Tax Year	2021	2020
Total Exemptions	$37.4 billion (Federal, State, Local) federal income tax ($11.5 billion; 31%), sales tax ($9.1 billion; 24%), property tax ($7.8 billion; 21%), state income tax ($3.7 billion; 10%), charitable contributions ($3.2 billion; 8%), bond financing ($2.1 billion; 6%), and federal unemployment tax ($200 million; <1%).	$13.2 billion (Federal)
Total Community Benefit	Not Analyzed	$129 billion

 

Second, the intent of the studies is profoundly different. The AHA study seeks to quantify the total community benefits provided by hospitals relative to their federal exemption: its 10-to-1 ratio is the study’s “gotcha” and is intended to influence how Congress thinks of NFP hospitals.  It’s also offers a defense for AHA members that have experienced harsh criticism in the past 3 years—especially the muti-hospital systems that brave been called out in national media coverage.

The JAMA study did not focus on a ratio; instead, it focused on quantifying the amount of state and local exemptions that should be considered by policymakers in addition to their federal exemptions.  Notably, this study quantifies wide variation in which hospitals benefit most when local, state and federal exemptions are included and proposes that policies around NFP hospital tax exemptions be delegated in part to state and local determinations (as is already the case in at least 3 states).

The implications of these studies are significant:

1. Attention to tax exemptions for not-for-profit hospitals is an issue that’s not going away. It is a subject about which critics enjoy wide latitude in calling out wild variation in what’s reported as “community benefit” by hospitals in their Form 990 filings.
2. How community benefits are defined, calculated and applied to NFP hospital finances is a necessary deliberation. Employers that pay 1.6 to 2.5 times Medicare rates for their employee benefits, so conceivably hospitals offset most/much of their Medicare losses with private insurance. Are hospitals double dipping? And should state and local tax exemptions be a central focus in revisiting tax exemptions for hospitals, thus engaging state and local officials in NFP tax exemption policies? Revisiting the community benefit formula seems inevitable.
3. Big not-for-profit/tax exempt hospitals and health systems face a uniquely hostile competitive and regulatory environment. Though the majority (60%) of hospitals are tax exempt, the prime target for vocal critics and regulators are large, not-for-profit multi-hospital systems that operate nationally or regionally. Their brands are familiar. Their CEOs are prominent. In most cases, they have consolidated independent hospitals for 3 reasons: 1- to improve their reimbursement leverage with insurers, 2-to optimize their purchasing power with suppliers and share operating efficiencies and 3- to share operational and capital risks associated with new businesses as the health system evolves.  In the process, they’re big targets and most are playing defense. Strategies for fully accountable health and wellbeing systems that are comprehensive, affordable, transparent and effective are aspirational for many who choose to play offense despite formidable headwinds.

The Boards and leaders in each not-for-profit hospitals must account for the tax exemptions they currently enjoy and anticipate changes that limit them in the future. These studies point clearly to that inevitability. And each must answer this question for their organization objectively: are our tax exemptions truly worth it to the communities we serve, or simply a financial maneuver to use our money elsewhere?

 

Paul

PS: I wrote this report while hunkered down in Asheville from Hurricane Helene which ravaged my community 5 days ago.  It’s amazing how having no electricity, water, cell-phone, no TV, internet and transportation for 5 days prompts appreciation for simple things like a hot shower and great cup of coffee, and how cut-off from everything you are overnight—the important stuff like Campaign 2024 and the conflict between the Israel and Lebanon, and the less important, like college football or PGA President’s Cup.

It’s a war zone here: downed trees, washed out roads and bridges, long-lines for gas and food, communities washed away and so much more.

I find myself thinking about the electricians and public works folks who are working 7/24 to get us back to semi-normalcy, the hospital frontline caregivers and first responders who are taking care of the thousands who are displaced, injured, missing or dead, the clerks at Ingles and gas stations that handled 4-hour waiting lines for cash-only transactions. The 70 out-of-town nurses HCA Mission has called in to help its avalanche of patients and so much more.

The healthcare system is a mess and needs fixing before it collapses. But gratefully, in times like these in Asheville, all is set-aside as everyone tries to pick up the pieces to get through another day.

 

Resources

Estimation of Tax Benefit of US Nonprofit Hospitals | Health Care Economics, Insurance, Payment | JAMA | JAMA Network

New EY Analysis: Tax-Exempt Hospitals’ Community Benefits Nine Times Greater Than Value of Federal Tax Exemption *June 6, 2022 12.4 v 110 for 2019

New EY Analysis: Tax-Exempt Hospitals’ Community Benefits Nine Times Greater Than Value of Federal Tax Exemption | AHA June 6,2022 12.4 billion tax exemption vs. $110 billion benefit based on 2019 data

JAMA study: Nonprofit hospitals get big federal, state tax breaks| STAT (statnews.com) Elizabeth Plummer, PhD, CPA^1,2; Mariana P. Socal, MD, PhD³; Ge Bai, PhD, CPA^3,4  JAMA. Published online September 26, 2024. doi:10.1001/jama.2024.13413

 

Sections in today’s report:

• Quotables
• Economy
• Hospitals
• Physicians
• Policy
• Polling
• Population Health
• Prescription Drugs
• Workforce

Quotables

Re: rationale for attention to NFP health systems: “Prior research has questioned the adequacy of nonprofit hospitals’ charity care and other community benefit based on comparisons between nonprofit and for-profit hospitals. Some nonprofit hospitals have also engaged in revenue-enhancing activities that are generally not expected from nonprofit entities, such as declining charity care to eligible patients and garnishing wages for unpaid medical bills. Policymakers, courts, and other stakeholders are increasingly interested in valuing nonprofit hospitals’ tax benefit to help gauge how much charity care and community benefit should be expected in return. In October 2023, US Senator Bernie Sanders criticized nonprofit hospitals for taking advantage of their tax exemptions by underproviding charity care and overpaying executives. In April 2023, the US House Committee on Ways & Means held a hearing on nonprofit hospitals’ tax-exemption issues. In August 2023, several US senators requested that the Internal Revenue Service investigate nonprofit hospitals’ potential abuses of their tax-exempt status  At the state and local levels, nonprofit hospitals have come under increased scrutiny and pressure as communities see how hospitals’ property and sales tax exemptions directly decrease funding for public schools, transportation and infrastructure, and other state and locally directed services. Some states have created minimum spending requirements to justify nonprofit hospitals’ tax exemptions. In February 2023, the Pennsylvania Commonwealth Court rejected property tax exemptions for 4 nonprofit hospitals…”

JAMA study: Nonprofit hospitals get big federal, state tax breaks| STAT (statnews.com) Elizabeth Plummer, PhD, CPA^1,2; Mariana P. Socal, MD, PhD³; Ge Bai, PhD, CPA^3,4  JAMA. Published online September 26, 2024. doi:10.1001/jama.2024.13413

Re: hospital not-for-profit tax exemption: “All of America’s hospitals and health systems are cornerstones of their communities — delivering not only around-the-clock care and essential services but a broad range of critical health, social and other programs that advance community health. Nonprofit hospitals have a special obligation to those they serve and this new analysis from EY shows these efforts are more than a worthy investment and that improving the health of their communities remains at the heart of the mission of the hospital field.”

Rick Pollack, President and CEO, American Hospital Association AHA Today

Re: 2025 U.S. economy: “The election is a precursor to reorganizing the U.S. tax code by the end of 2025. Next year will be more important for tax policy than any other year, with the exception of 1913 when we created the income tax. We’re currently facing $4 trillion of tax cuts that are expiring at the end of 2025, as well as a $2 trillion budget deficit. If the government chooses not to intervene, we will see an increase in the income tax rates, a return of the Alternative Minimum Tax, a halving of the standard deduction and child tax credit, as well as significant decrease in the estate tax exemption.”

Dan Clifton, Head of Policy Research at Strategas The Road to November: Election Insights from Strategas (bairdwealth.com)

Re: hospital debt collection; “A nonprofit health system had aggressively pursued patients’ medical debts until an NBC News investigation  last week brought light to how their lives had been turned upside down. Now, the company is forgiving thousands of those debts, NBC News reported .

For years, Atrium Health in North Carolina had taken drastic measures to collect medical debts, like placing liens on patients’ homes….

This happened to one patient, Terry Belk, back in 2005…Belk was one of 11,500 patients in six states whose debts were forgiven. Over the next few months, Atrium will release the liens, starting with the oldest cases. Atrium spokespeople have said that liens and litigation against patients were last resorts.

Anti-Pharma Bus Tour; Rapamycin for Longevity? Hospital Forgives Debt After Pressure | MedPage Today September 25, 2024

Re: Price controls in Campaign 2024: “If the goal is better health outcomes at lower total cost of care—something CMS has been attempting to achieve for over 40 years—Vice President Harris’ price control policy proposals are not the answer. Instead, they are just more of the same. And while there is a role for government oversight—to ensure that organizations are held accountable and operate transparently—price controls are a step beyond what is necessary for effective regulation. They distort the market without bringing down the total cost of care. When regulators artificially control prices in one place, creative firms will find ways to make money in other areas.

Piecemeal solutions, that force change in one area without coordination across the healthcare ecosystem, will continue to fail to solve underlying problems. “

The Hidden Costs of Healthcare Price Controls (forbes.com)

Re: college rankings impact: “Few franchises in American higher education are as contentious as the U.S. News rankings. Over the decades, their publisher has faced trouble with manipulated data, complaints about murky methodologies, accusations of revenge and the foundational question of whether it is appropriate to rank colleges.

To U.S. News, which retired its print newsmagazine in 2010, the rankings are a bastion of its largely bygone influence…

Indeed, to students and their parents, the rankings can be tools for narrowing college searches, and status symbols surrounding admissions to certain schools. To university leaders, the rankings are often publicly heralded but privately detested. To regulators, including Education Secretary Miguel A. Cardona, the rankings are responsible for “an unhealthy obsession with selectivity” and the development of “the false altar of U.S. News and World Report.”

And to almost everyone outside U.S. News, they are opaque and, ultimately, almost uniformly misunderstood.”

U.S. News & World Report Released Its College Rankings – The New York Times (nytimes.com)

Economy

Deloitte forecast: “Despite persistent concerns surrounding the durability of growth and interest rate policy, the US economy remains fundamentally strong. While real gross domestic product growth slowed in the first quarter of this year, growth rebounded to a strong 3.0% in the second quarter. All available evidence suggests policymakers may have managed to bring inflation under control without causing a recession.

Deloitte’s baseline scenario remains relatively positive. The boom in factory construction will continue to boost the economy’s potential in the coming years. In the short term, a faster pace of interest rate cuts by the Fed should allow households to take on more debt and support continued growth in consumer spending. Coupled with elevated government consumption, we expect the US economy to grow by 2.7% this year.”

US Economic Forecast Q3 2024 | Deloitte Insights

Altarum Health Sector Economic Indicators: highlights from the September 2024 briefs.

National health spending growth moderates; home health care growth remains high:

• In July 2024, national health spending was 7.1% higher than in July 2023 and represented 17.6% of GDP.
• Nominal GDP in July 2024 was 5.6% higher than in July 2023, growing 1.5 percentage points more slowly than health spending.
• Personal health care spending growth in July was 7.3%, year over year, with utilization growth continuing to outpace price growth.
• Growth among major spending categories was highest by far for home health care, at 18.2%, year over year. Spending growth on each of the other major categories was below 10%, with spending on hospital care growing the slowest, at 5.7%.

Health care prices continue to rise faster than economywide inflation

• The overall Health Care Price Index (HCPI) increased by 2.7% year over year in August, down 0.2 percentage points from a month prior.
• Economywide inflation fell, with year-over-year growth in the overall Consumer Price Index (CPI) decreasing to 2.5% and growth in the Producer Price Index (PPI) dropping to 1.7%.
• Among the major health care categories, prices for nursing home care (3.8%) and dental care (3.5%) were the fastest growing, while physician and clinical price growth was the slowest (1.3%).
• For major payers, year-over-year Medicaid price growth (5.7%) exceeded services price growth for private insurance (3.2%) and Medicare patients (1.7%).
• The implicit measure of health care utilization growth was 4.5% year over year in July, equal to the revised June value.
• Home health care utilization was, by far, the fastest growing component, increasing 15.9% year over year.  This category was followed by physician and clinical services (6.7%), prescription drugs (5.6%), and nursing home care (5.1%), while hospital care and dental services trailed the other categories at 2.7% and 2.6%, respectively.

The health care industry only added 30,900 jobs in August 2024, a below-average month for the economy overall

• In August 2024, health care industry employment increased by 30,900 and non-health care industries added 111,100. These figures were both well below monthly averages for the previous 12 months.
• August’s health care job growth was led by ambulatory health care services, which added 23,900 jobs, followed by hospitals, with 9,600 jobs.
• Nominal health care wage growth in July 2024 was 3.5% year over year, with growth rates of 4.1% in nursing and residential care facilities, 3.6% in hospitals, and 3.4% in ambulatory health care services

September 2024 Health Sector Economic Indicators Briefs | Altarum

Hospitals

CMS: Readmissions penalties down: Fewer hospitals will face high readmissions penalties in 2025 for the 3^rd consecutive year. Highlights of Friday’s CMS’ announcement:

• For fiscal 2025, the number of hospitals included in the agency’s Hospital Readmissions Reduction Program is the lowest it has been in five years, with 100 fewer facilities participating than in fiscal 2021.
• The hospital readmissions performance period for fiscal 2025 pulls in claims from July 2020 through June 2023. The report is based on a rolling three-year time period so the most recent one is the first to only include data generated after the start of the COVID-19 pandemic.
• For the upcoming year, 7% of hospitals will be charged penalties of 1% or more, compared with 7.5% last year. Meanwhile, 71.6% of hospitals will be charged penalties of less than 1% on their readmissions. That compares with 70.1% of hospitals in fiscal 2024.Another 21.4% of hospitals will not be assessed penalties. A year ago, 22.4% of hospitals received no penalty.
• The average readmission penalty for hospitals with the highest proportion of Medicare-Medicaid dual-eligible patients is 0.31%. For hospitals with the lowest number of dual-eligible patients, the average penalty is 0.32%. During fiscal year 2024, those two groups were assessed penalties of29% and 0.34%, respectively.

CMS www.cms.gov

Fitch: Hospital workforce stabilizing: In its latest labor tracker, Fitch Ratings reported that hospital staff payrolls have been steadily expanding and now represent a 6.7% increase relative to the pre-pandemic month of February 2020. Hospitals added 18,650 jobs per month for the 12-month period through August, compared with 14,510 during the previous year-long stretch.

“Still, the latest data from the U.S. Bureau of Labor Statistics indicates a measure of equilibrium, with hospitals adding 9,600 positions in August — roughly in line with pre-pandemic levels. Meanwhile, ambulatory settings added 24,000 positions.

The expansion of hospital payrolls has been manageable lately due to tempered wage increases; Fitch wrote. Year-over-year employee earnings rose by 3% in 2024, compared with 4.2% in 2023, which was a period of intensified efforts to attract and keep hospital employees as a tactic to diminish the need for expensive contract labor.”

Reports on healthcare labor trends indicate an improved outlook for hospitals | HFMA

Seward CEO held in contempt: The full Senate voted unanimously during a Sept. 25 hearing to hold Dallas-based Steward Health Care CEO Ralph de la Torre, MD, in contempt. This is the first time since 1971 that the Senate has held someone in criminal contempt.

The vote comes after the Senate Committee on Health, Education, Labor and Pensions voted Sept. 19 to push two resolutions regarding contempt charges against Dr. de la Torre and Steward to the full Senate.

The criminal contempt resolution will now be referred to the Justice Department to criminally prosecute Dr. de la Torre for not complying with the subpoena, a spokesperson for Sen. Bernie Sanders, the HELP committee chair, told Becker’s.

The HELP committee also passed a resolution Sept. 19 for civil enforcement of the subpoena. Civil enforcement will require a separate report from the Senate’s legal counsel to ensure Dr. de la Torre’s compliance, the spokesperson said.

Senate votes unanimously to hold Steward CEO in contempt (beckershospitalreview.com)Voya

 Physicians

Medscape: Millennial physician compensation:  Average annual earnings for millennial physicians under age 40 increased 4% from $326,000 in 2022 to $338,000 in 2023. Highlights:

• Average earnings for primary care physicians increased by around 5% from $257,000 in 2022 to $271,000 in 2023.
• Average earnings for specialists remained relatively flat at $355,000 in 2022, rising only to $357,000 in 2023.
• Among all physicians surveyed, male physicians earned $374,000, on average, in 2023, compared to female physicians, who earned $302,000, on average.
• Physician paychecks are best in the Midwest at $343,000 and worst in the Northeast at $300,000.
• 49% of physicians felt they were compensated fairly for their work while 51% said they didn’t.
• About one-third of physicians said they worked medical side jobs for money.
• Physicians who received average incentive bonuses reported that their average bonus was $39,000.
• Specialists said they still carry student debt. Among specialties, 67% of family medicine practitioners are still carrying debt, while only 19% of ophthalmologists still carry debt.

“How Much Green Comes with the White Coat?” Sept. 27, 2024 www.medscape.com

Polling

Study: Public vs. private opinions on politics: “A majority of Americans (58%) believe most people cannot share their honest opinions about sensitive topics in society today. And they are not wrong: Not only do 61% of Americans admit to self-silencing, private opinion methods reveal that every single demographic group is misrepresenting their true opinions on multiple sensitive issues. College graduates and political independents are the least comfortable sharing their private views in public. “

Social+Pressure+Index (squarespace.com)

JD Power: Telehealth satisfaction high overall but highly variable: Per the J.D. Power 2024 U.S. Telehealth Satisfaction Study released last week:

• “Overall satisfaction varies widely: Overall patient satisfaction with direct-to-consumer telehealth providers is 730 (on a 1,000-point scale), which is down one point from 2023…patients are experiencing significant variability in their perceived quality of care and ease of accessing care.
• Convenience is king, but barriers persist…The top barriers making the telehealth experience difficult are internet/cellular connectivity difficulties (25%); limited services provided (25%); and data security concerns with personal/medical information (15%). Overall, 65% of telehealth patients experienced at least one barrier during their telehealth visit.
• Biggest gaps in experience:  74% of those having an easy experience with a medication review said they would use telehealth again, while only 58% who had a difficult experience said they would use it again. When following up on a chronic condition, 44% of patients who had an easy experience said they would use it again, while only 28% of those who had a difficult experience said they would use it again.
• Experience varies across socioeconomic and demographic groups: Overall satisfaction with telehealth providers is highest among patients covered by Medicaid, those living in urban environments and those in Gen Y and Gen Z. Satisfaction is lowest among patients covered by Medicare and private insurance, those living in suburban environments, and those in the Boomer and older generations. “

2024 U.S. Telehealth Satisfaction Study | J.D. Power (jdpower.com)

Pew: news sources: “A declining share of adults are following the news closely, and traditional media audiences for newspapers, TV and radio are shrinking. Digital devices are now the most common way Americans get news…Nearly 90% of adults say they often or sometimes get news from a smartphone, computer or tablet, per Pew vs. 65% for television, 42% for radio and 25% for print publications.”

Pew Research www.pew.org

KFF: Healthcare in campaign 2024: “As we get closer to the 2024 presidential election, healthcare reform remains a top priority for voters. The cost of drugs, doctors and insurance is the top issue for Democrats (42%) and Republicans (45%), according to Kaiser Family Foundation health system polling.”

KFF Polling. www,kff.org

Policy

Drug price verification for Medicaid scrapped: The Biden administration has abandoned its proposal to require drug companies to disclose the prices and research costs of drugs that are driving up spending in state Medicaid programs.

Pharmaceutical companies and lobbying groups heavily pressured the Centers for Medicare and Medicaid Services to abandon the drug price verification surveys. State Medicaid officials and researchers supported the regulation so they could address high-priced drugs are affecting their budgets the most and negotiate extra rebates with drugmakers.

The decision to scrap the rule highlights how the Biden administration was not willing to take on a unified drug industry that is still separately attacking the government’s Medicare drug negotiation program. The about-face also comes after a consequential Supreme Court decision made it easier for the health care industry to litigate federal rules they don’t like. Medicaid programs spent $44 billion on drugs in 2022, a 39% increase from 2019, according to data analysis from KFF

Medicaid drug price survey proposal axed after pharma pressure | STAT (statnews.com)

Tax credit extension proposed: U.S. Senators Jeanne Shaheen (D-N.H.) and Tammy Baldwin (D-Wis.) have introduced the Health Care Affordability Act, which aims to permanently extend the Affordable Care Act’s enhanced premium tax credits for marketplace coverage.

The credits, originally extended through the Inflation Reduction Act, are set to expire at the end of 2025. If they are not renewed, over 20 million Americans will see higher health insurance costs, with an estimated 3 million losing coverage and about 9 million paying more, according to a news release. Identical legislation was introduced in the House by Rep. Lauren Underwood (D-Ill.).

The tax credits increased subsidies for individuals earning between 100% and 400% of the federal poverty level and expanded eligibility for those earning above 400% of the FPL.

Population health

Weight loss drug coverage by employers: “The weight loss craze fueled by highly effective new medicines has forced a big dilemma onto employers: Cover these costly blockbuster drugs and bank on positive outcomes, or withhold paying for the hotly desired treatments for workers and risk backlash.

It’s a complex decision given the novelty of glucagon-like peptide-1 agonist drugs, commonly known as GLP-1s, and the significant swath of the U.S. population likely eligible to use them. This unprecedented phenomenon is driving employer concerns as they brace for a 7.8% surge in healthcare costs next year.

More employers that cover these $1,000-per-month weight loss medications are partnering with vendors to set standards beyond Food and Drug Administration requirements, alter benefit designs, limit prescriber networks and manage lifestyle programs. That’s where specialty companies are stepping in.

Employers seeking solutions to control spending on treatments for cancers, genetic diseases, mental health conditions and other diseases isn’t new. But the explosion of interest in GLP-1s such as Novo Nordisk’s Wegovy and Saxenda, their exorbitant costs, and the number of people who meet FDA guidelines to take them is unmatched.”

Wegovy, GLP-1 costs create opening for vendors to manage care | Modern Healthcare

Study: Food insecurity and inflation: “The food insecurity rate reached 13.5 percent of US households in 2023, representing two years of increases and the highest level since 2011. Policymakers should rightly draw attention to these increases in attempts to understand whether policy levers exist to reverse these trends. Based on our analysis, we conclude that like the increase in food insecurity rates in 2022, annual inflation rates that remained above historic levels are the key factor driving the food insecurity rate increase, especially over the long term.  This holds despite inflation, while much higher than recent historical patterns, being lower in 2023 compared to 2022.”

Household Food Insecurity Rises Again – Inflation, especially for households ineligible for safety net programs, to blame September 24, 2024cosm.aei.org/household-food-insecurity-rises-again-inflation-especially-for-households-ineligible-for-safety-net-programs-to-blame

ACP::Pain management measure validity needed: “The American College of Physicians (ACP) embraces performance measurement as a means to improve quality of care. ACP believes that a performance measure must be methodologically sound and evidence-based to be considered for inclusion in payment, accountability, or reporting programs. However, a plethora of performance measures that provide minimal or no value to patient care have inundated physicians, practices, and systems with the burden of collecting and reporting data…There is a need for a higher standard for a performance measure when reputation and reimbursement are on the line. “

Quality Indicators for Pain in Adults: A Review of Performance Measures by the American College of Physicians | Annals of Internal Medicine (acpjournals.org)

Prescription Drugs

Sanders and Prescription drug prices: “While grilling Novo Nordisk’s chief executive over the price of its blockbuster diabetes and weight-loss drugs, Ozempic and Wegovy, Vermont Sen. Bernie Sanders alleged that 40,000 people a year in the US could die if the company doesn’t make the medicines more affordable. It was the latest in a series of hearings Sanders has led with pharmaceutical company CEOs about the price of medicines in the US, which are higher — often by multiple times — than in other wealthy countries. Sanders noted that the list price for a four-week supply of Ozempic is $969 in the US, but the drug can be purchased for $155 in Canada and $59 in Germany. Similarly, Wegovy’s list price is $1,349 in the US, but it’s $186 in Denmark, $140 in Germany and $92 in the UK, he said.”

CNN Five Things September 25, 2024 view.newsletters.cnn.com/messages/

Novo Nordisk weight loss drug in Danish economy: “Unrelenting demand for Novo Nordisk’s diabetes and weight loss drugs has made Novo Nordisk the most valuable company in Europe, surpassing luxury conglomerate LVMH last year.

The Danish pharma giant helped boost the nation’s GDP in 2023 and is expected to do so again in 2024. The Nordic country’s largest bank, Danske Bank, forecast earlier this year that Denmark’s GDP will grow 2.1% in 2024, due primarily to Novo Nordisk.

In 2023, Denmark’s GDP grew 1.8% — and much of its boost is owed to the pharmaceutical industry. Without pharmaceuticals, the agency says, the country’s GDP would have instead fallen 0.1%.

Addressing concerns that Denmark could face similar challenges with its reliance on Novo Nordisk, Frederiksen emphasized the country’s economic diversity. “A good thing is that our export portfolio is spread across several areas that are less sensitive to the business cycle than in other places,” she said.

Denmark is also home to other major companies like Carlsberg, AP Moller-Maersk (AMKBY+1.67%), Vestas Wind Systems (VWDRY+0.13%), and Lego.”

Ozempic maker Novo Nordisk’s size isn’t a risk to Denmark economy, PM says (qz.com)

Study: Paxlovid awareness: “Oral Paxlovid (nirmatrelvir-ritonavir) is highly effective at preventing hospitalization and death from COVID-19, yet it has been remarkably underused, even by patients at highest risk from COVID-19, since its December 2021 introduction in the US. The reasons behind this underuse are still unclear. To examine public awareness and perceptions of Paxlovid that might help explain its underuse, we conducted a nationally representative survey of 1,430 US adults in July 2023. A majority of respondents (85%) had no or low awareness of Paxlovid, including 31% who had never heard of it. Even among those who were aware of the drug, many held misperceptions about its effectiveness (39%), adverse effects (86%and requisite timing (61%) that could lead to underuse. Lower awareness and misperceptions were more common among medically vulnerable and disadvantaged populations who might benefit most from Paxlovid access, including adults unvaccinated against COVID-19, those with lower levels of education, and Black and Hispanic or Latino adults. Results suggest that Paxlovid underuse may be partly driven by a lack of effective public communication to generate awareness and knowledge about the drug, leading to low demand. As Paxlovid loses full government subsidies, further public outreach is needed to ensure that the public accesses it when needed.”

A Majority of Americans Have No or Low Awareness Of Paxlovid, The At-Home COVID-19 Treatment | Health Affairs

FDA approves First-in-Class Antipsychotic for Schizophrenia: Last week, the US Food and Drug Administration (FDA) announced approval of Cobenfy (Bristol Myers Squibb), a first-in-class antipsychotic approved for schizophrenia. The drug targets cholinergic receptors as opposed to dopamine receptors, which has been the standard of care for more than 30 years. It combines xanomeline, an oral muscarinic cholinergic receptor agonist and trospium chloride, an oral pan-muscarinic receptor antagonist. It was developed by Karuna Therapeutics, now part of Bristol Myers Squibb.

FDA approves Bristol Myers and Karuna’s schizophrenia drug, in milestone for psychiatry – Endpoints News (endpts.com)

 

Workforce

WSJ: Healthcare workforce sign-up bonuses: “Healthcare tops the list of industries offering signing bonuses, according to Indeed job listings. Although hiring has cooled, organizations are still offering sign-on bonuses more often than during pre-pandemic years. And while some industries are desperate for qualified candidates, others have used bonuses to keep starting salaries down…

Advertised in nearly 4% of jobs posted on Indeed in July, signing bonuses are less common than they were in 2023 but still higher than the 1.7% rate in July 2019.

Healthcare roles are most likely to see signing bonuses on Indeed. This includes a $2,000 bonus offered for pediatric nurses in Honolulu and a $100,000 bonus for a physician with experience treating patients with HIV at one California clinic.

Healthcare tops the list of industries offering signing bonuses, according to Indeed job listings, The Wall Street Journal reported Sept. 19.