Skip to main content
The Keckley Report

The Four Core Beliefs of Hospital-Employed Physicians

By September 16, 2024No Comments

In my report June 10, I wrote: “The major sources of physician discontent are administrative hassles and unwelcome clinical oversight that create dissonance. They conflict with a false sense of autonomy that the majority of physicians imagined when choosing medicine. Cuts to reimbursement, participation in alternative payment models and medical inflation are manifestations of a system in which ‘suits’ are intruders who make rules, exact handsome salaries, generate corporate profits and distance physicians from patient care purposely… “

This assessment remains true today. Discontent among physicians is palpable and it’s magnified by a growing sense of financial despair among many clinicians. And it poses a unique challenge to hospitals that now employ more than half of America’s physician workforce.

In the “good ole days”, hospitals provided a place for physicians to ply their trade. They were credentialled to practice their chosen specialty, granted special parking, food and amenities and treated as the hospital’s most welcome customer. Made sense: physicians controlled most patient decisions about the hospital services they use. Physicians controlled the hospital’s revenue, sustainability and bonuses earned by administrators. Insurers brought privately-insured patients to doctors who charged them 1.6-2.5 times what Medicare paid and physician income was not threatened. That was then. This is now.

Today, insurers play a larger role. Consumer expectations have changed. Policymakers are paying more attention. And demand has shifted from inpatient services to outpatient, home and office settings for health and wellbeing services in addition to acute care. And the current forecast by CMS through 2032 predicts spending for hospitals will increase at a compound rate of 5.7% vs. 5.6% for physicians adding more hospital-physician financial tension to the system. Both well-above inflation and CDP growth prompting heightened pressure to spend less.

In anticipation, consolidation of hospitals into multi-hospital systems has been a staple in recent years: only 1 in 5 hospitals is independent these days, and most of these are small, rural or otherwise destined to independence for their uncertain future. Whether public, investor-owned or not-for-profit (or tax exempt as some prefer), the economic realities of running hospitals coupled with the regulatory constraints imposed by state and federal law forced all to re-think their future. And, for most, employing physicians directly was a means to an end of staying alive while the dust settles.

But the unintended consequence of physician employment is soured relationships between the employed physicians and their hospital: their financial and emotional security has become tangled up by interactions with hospital leaders and former peers appointed to oversee their work. And their views about their hospital have morphed to negativity based on four underlying beliefs:

  • Hospitals spend too much on overhead and executive salaries and not enough on direct patient care.
  • Hospitals are run poorly: we could run them better but they don’t listen to us.
  • Hospitals get rate increases from Medicare and physicians get screwed.
  • Hospitals need us more than we need them. But they don’t understand that.

On March 9, 2024, President Biden signed the Consolidated Appropriations Act, 2024, which included a 2.93% update to the CY 2024 Physician Fee Schedule (PFS) Conversion Factor (CF) for dates of service March 9 through December 31, 2024. But physicians saw that as not enough since their overhead increased even more. And for 2025, CMS is proposing to reduce average payment rates under the MPFS by 2.93% compared to the average amount reimbursed for these services in CY 2024 based on CY 2025 MPFS conversion factor decrease of $0.93 (or 2.8%) from the current CY 2024 conversion factor.

Understandably, physicians are upset. They’re not delusional that private insurers will make up the difference nor imagining hospitals will divert funds their way from brick, stick and tech priorities. But they’re speaking out expressing their views to anyone who’ll listen.

For hospitals that employ physicians, the issue of their financial anxiety requires urgent attention–not as one of many alongside 340B, site neutral payments and others but as the one at the top of the list. The issue is not whether physician income relative to other professions and average households is high. The issue is about managing physician expectations about their livelihood realistically and practically while improving their clinical acumen as professionals.

The core beliefs held by employed physicians about their hospitals may not be fair, objective or accurate, but they’re no less deeply felt and impactful. Hospital boards and C suite leaders would be well-served to refresh plans accordingly.

Paul

Resources

Sections in today’s report:

  • Quotables
  • Alternative Payments
  • Consumers
  • Hospitals
  • Insurers
  • Investing
  • Physicians
  • Policy
  • Polling
  • Prescription Drugs
  • Public Health

 Quotables

Re: Not-for-profit hospital tax exemption: “Many Catholic health systems, which are tax-exempt, pay their executives millions and can charge some of the highest prices around — while critics say they scrimp on commitments to their communities. “

KFF Health News September 12, 2024 https://kffhealthnews.org/news/article/catholic-hospitals-charitable-mission-high-care-costs

Re: Trump on ACA: “Obamacare was lousy health care. Always was. It’s not very good today. And what I said, that if we come up with something, we are working on things, we’re going to do it and we’re going to replace it. What we will do is we’re looking at different plans. If we can come up with a plan that’s going to cost our people, our population less money and be better health care than Obamacare, then I would absolutely do it… have concepts of a plan. I’m not president right now.”

Trump’s undelivered health care plan September 12, 2024 https://www.axios.com/2024/09/12/trump-health-care-plan-obamacare-replacement?

 

Alternative payment models

Study: Behavioral health access in ACOs: We conducted a longitudinal cohort study of a national sample of traditional Medicare beneficiaries ages eighteen and older, using the Medicare Current Beneficiary Survey (MCBS) for 2016–19…39

After adjustment, new ACO enrollment in the following year was associated with a 12.2-percentage-point (24.4%) lower likelihood of having an evaluation and management visit with any clinician for depression or anxiety and a 9.8-percentage-point (22.7%) lower likelihood of having an evaluation and management visit for depression or anxiety with a primary care clinician…Better-designed incentives are needed to motivate Medicare ACOs to improve mental health treatment.”

No Improvement in Mental Health Treatment or Patient-Reported Outcomes at Medicare ACOs for Depression and Anxiety Disorders | Health Affairs

 

Consumers

Census Report: Household income: In Income in the United States: 2023 released last week, the Census Bureau reported:

  • “Real median household income rose to $80,610 in 2023, the first annual increase since 2019 before the COVID-19 pandemic. The 2023 median incomes of Hispanic ($65,540) and Black ($56,490) households were not statistically different from 2022 and remained the lowest among all race and ethnic groups. The only group with higher income in 2023 was non-Hispanic White households, with an increase of 5.7% to $89,050. Median income of Asian households did not change either but it remained the highest ($112,800) among all race and Hispanic origin groups.
  • …the median income of Asian households was 1.27 times greater than that of non-Hispanic White households in 2023. This ratio was down from 1.34 in 2022, narrowing the median income gap between Asian and non-Hispanic White households. The ratio of Hispanic to non-Hispanic White household income decreased from 0.77 in 2022 to 0.74 in 2023, widening the median income gap between the two groups. The ratio of Black to non-Hispanic White household income in 2023 (0.63) was not statistically different from 2022 (0.65).”

Median Household Income Increased in 2023 for First Time Since 2019 (census.gov)

CPI: August 2024: Highlights of the August CPI report:

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis, the same increase as in July.
  • Over the last 12 months, the all-items index increased 2.5% before seasonal adjustment. The index for shelter rose 0.5% in August, the food index increased 0.1% in August, after rising 0.2% in July.
  • The energy index fell 0.8% over the month, after being unchanged the preceding month. The index for all items less food and energy rose 0.3 percent in August, after rising 0.2% the preceding month
  • Other indexes with notable increases over the last year include motor vehicle insurance (+16.5 %), medical care (+3.0%), recreation (+1.6%), and education (+3.1%).

Consumer Price Index Summary – 2024 M08 Results (bls.gov)

WSJ: household debt: “Signs that Americans are struggling to keep up with their bills are setting off alarms on Wall Street.

Shares of consumer-lending companies slid this past week after executives raised warnings about lower-income borrowers who are struggling to make payments…

Investors have been on high alert for any clues that a recession is in store after two years of higher interest rates. The Federal Reserve is expected to start lowering rates at its meeting this coming week, but some investors fear it might have waited too long.

On top of soaring prices for groceries and just about everything else, people have been dealing with higher interest rates on their credit cards. The average rate as of May was 21.51%, according to Fed data, up from around 15% in 2019.

That helps explain why some are finding it harder to keep up with payments, particularly those who don’t earn so much. Around 9.1% of credit-card balances turned delinquent over the past year, the highest rate in over a decade, according to an August report from the Federal Reserve Bank of New York.”

Americans Are Falling Behind on Their Bills. Wall Street Is Alarmed. – WSJ

Rental costs: 2023 American Community Survey (ACS): “The real median gross cost of renting — rent plus the average monthly cost of utilities and fuels adjusted for inflation — grew faster annually (3.8%) than real median home values (1.8%) in 2023 for the first time in 10 years– the largest annual real increase in rental costs since at least 2011.

Every year from 2011 to 2019, real rent costs increased less than 3.0%. In 2022, after the peak of the COVID-19 pandemic, rent grew 1.0% — only one-fourth of the 2023 increase (Table 1).

Despite this large spike, the share of renter income spent on rent and utilities remained at 31.0% in 2023, an indication that renter household incomes kept pace with rent hikes Most states saw no significant change in the ratio of gross rent to renters’ income…

From 2022 to 2023, the number of renters grew, while median household income was not significantly different. However, this measure includes the income growth of nonrenters, and the income growth of renters and nonrenters may have differed.

The number of renter-occupied housing units increased by 0.9% in 2023. While changes to the cost of owning a home, such as higher interest rates or home values, could push households away from home ownership and toward renting, the share of households renting remained constant at 34.8% between 2022 and 2023.”

Largest Annual Real Increase in Gross Rental Costs Since 2011 (census.gov)

McKinsey: wellness market: “In the United States alone, we estimate that the wellness market has reached $480 billion, growing at 5 to 10% per year. 82% of US consumers now consider wellness a top or important priority in their everyday lives, which is similar to what consumers in the United Kingdom and China report (73% and 87%, respectively).

This is especially true among Gen Z and millennial consumers, who are now purchasing more wellness products and services than older generations, across the same dimensions: health, sleep, nutrition, fitness, appearance, and mindfulness

Doctor recommendations are the third-highest-ranked source of influence on consumer health and wellness purchase decisions in the United States. Consumers said they are most influenced by doctors’ recommendations when seeking care related to mindfulness, sleep, and overall health (which includes the use of vitamins, over-the-counter medications, and personal- and home-care products).”

The top wellness trends in 2024 | McKinsey

 

Hospitals

Overhead: “Recent data from Strata Decision Technology show that administrative costs now account for more than 40% of total expenses hospitals incur in delivering care to patients.”

Skyrocketing Hospital Administrative Costs, Burdensome Commercial Insurer Policies Impacting Patient Care September 2024 https://www.aha.org/system/files/media/file/2024/09/New-Analysis-Shows-Hospitals-Performance-on-Key-Patient-Safety-Measures-Surpassing-Pre-pandemic-Levels.pdf

Hospitals sue HHS for DSH underpayments: In a lawsuit filed last week, 80 hospitals allege new the federal government unlawfully changed Medicare disproportionate share hospital payment calculations to include care provided to Medicare Advantage patients. The hospitals allege HHS reduced DSH payments by an estimated $3 billion to $4 billion over a nine-year period by retroactively including so-called Medicare Advantage days in calculations for payments issued prior to Oct. 1, 2013, according to the complaint filed in the U.S. District Court for the District of Columbia.

Medicare Advantage inpatient rule prompts DSH pay lawsuit | Modern Healthcare

California AI bills pass, require use disclosure to consumers: Multiple bills in California targeting artificial intelligence could have significant implications for providers and digital health companies operating in and out of the state…. The bills would require providers to disclose when AI is used for patient communication, instruct organizations to test models for bias and provide a structure on how developers may be held liable for harm. Details:

  • Healthcare-focused bill would require AI disclosures: AB-3030: Healthcare Services: Artificial Intelligence would require a licensed or certified healthcare provider to disclose their useof generative AI when using it for patient communications.
  • AI Transparency Act looms for large entities:SB-942 California AI Transparency Act is less targeted on healthcare but would require entities operating in the state with more than one million monthly website visitors or users to disclose which content of theirs was generated by AI. The legislation would require these organizations to also create an AI detection tool and help users assess if content was generated by AI.
  • Silicon Valley fears proposed AI safety bill: A third AI bill, SB-1047 Safe and Secure Innovation for Frontier Artificial Intelligence Models Act, would give the state’s attorney general power to bring legal action against AI model developers and provide whistleblower protection for employees, contractors and subcontractors disclosing information to regulators.

What California’s AI bills mean for digital health startups | Modern Healthcare

Atrium (NC) medical debt strategy gets attention: “The largest health system in North Carolina simply wasn’t interested in canceling its patients’ medical debt. That is, until the state government dangled billions of dollars in incentive payments.

Other health systems have gotten just cents on the dollar to cancel unpaid bills they probably couldn’t collect on anyhow — take Cook County, Ill., which aims to pay about a penny per dollar to cancel an estimated $1 billion of medical debt.

Atrium Health’s decision to hold out paid off. As part of the state’s new Medicaid expansion, North Carolina will instead pay hospitals full price for erasing $4 billion in medical debt. The program uses federal funds and imposes some requirements on hospitals to bolster their financial assistance for people with low incomes.

North Carolina’s proposal has been held up as an example by Democratic presidential candidate Kamala Harris, who has proposed canceling medical debt by working with states. The plan was developed under Democratic Gov. Roy Cooper, who was considered as a potential vice-presidential pick.”

North Carolina’s experience shows how big nonprofit hospitals could use their political influence to ensure that they make money off of a broader national initiative. If they succeed, taxpayers could end up paying hospitals for medical bills that should have been covered by charity programs for poor patients, or that could have been canceled far more cheaply. Nonprofit hospitals already receive tax breaks and discounts on medications to help cover the cost of caring for patients that can’t pay.”

“Why bail out these multibillion-dollar nonprofits for not doing the job they were supposed to do to start with?” said North Carolina Treasurer Dale Folwell, a Republican…”

Medical debt forgiveness could mean big paydays for hospitals | STAT (statnews.com)

Hospital safety: Per the Vizient Clinical Database analysis of data from 1300 hospitals that submit their inpatient discharge data:

  • “Despite being sicker and more complex, hospitalized patients in the first quarter of 2024 were on average over 20% more likely to survive than expected given the severity of their illnesses compared to the fourth quarter of 2019.
  • Hospitals’ efforts to improve safety led to 200,000 Americans hospitalized between April 2023 and March 2024 surviving episodes of care they wouldn’t have in 2019.
  • Hospitals’ central line-associated bloodstream infections (CLABSI) and catheter-associated urinary tract infections in the first quarter of 2024 were at rates lower than those recorded in the fourth quarter of 2019.
  • Ongoing improvement has led toa 60%-to-80% increase in breast, colon and cervical cancer screenings in the first quarter of 2024 compared to the fourth quarter 2019.”

New Analysis Shows Hospitals Improving Performance on Key Patient Safety Measures Surpassing Pre-Pandemic Levels www.aha.org

 

Insurers

MA 2024 Bonus payments:  Medicare Advantage insurers will receive an estimated $11.8B in bonus payments from the Centers for Medicare and Medicaid Services this year linked to their star rating performance during the 2023 plan year– down 8% from the total CMS distributed to health insurers last year. The bonuses will account for less than 3% of payments made to health plans this year, the report said.

Americans could see relief from surprise ambulance bills under new proposal (axios.com)

Medicare Advantage Star Rating adjustment for super-seniors: “In 2020, there were 23 million adults older than 75 in the US, and this group is growing at an annual rate of 2.13%. In 2019, a person who reached the age of 65 could expect to live for an additional 19.6 years.

These trends are important because, while most Medicare beneficiaries are healthy and functional, many—particularly those 75 and older—have considerable morbidity, diminished quality of life, and a high degree of caregiver burden…In 2023, 51%of Medicare beneficiaries elected to enroll in a Medicare Advantage (MA) plan—up from 19% in 2007—and these numbers continue to increase…relying on Star Ratings alone to assess the quality of MA plans misses key quality indicators that are important to older adults with complex health needs. Currently, about half of Stars HEDIS measures do not apply to people older than age 75, We believe the quality of MA plans should be assessed with measures that fully reflect the characteristics, needs, and priorities of increasingly large numbers of diverse, medically complex Medicare beneficiaries…A Different Framework To Improve Quality In Medicare

Age-Friendly Health Systems (AFHS)… The AFHS framework promotes evidence-based care delivery for older adults by aligning their needs, values, and preferences with the “4Ms”: What Matters, Medication, Mentation, and Mobility. The AFHS framework emphasizes engaging family caregivers and promotes communication across provider settings. More than 4,000 hospitals, practices, convenient care clinics, and nursing homes have developed a plan to implement the 4Ms, and 2,149 have documented delivery of age-friendly care

The final core measure set includes 25 proposed measures. With three exceptions, the proposed set includes measures recognized by the programs highlighted above and currently used to varying degrees by health systems and plans. Notably, there is a scarcity and sometimes absence of measures for dementia, mobility decrements, frailty, and caregiving; this reflects critical gaps created by insufficient evidence and measurement science resources.”

A Core Measure Set for Age-Friendly Health Care Delivery | Health Affairs September 13, 2024

 

Investing

Pitchbook: Healthcare IT investing: Healthcare IT growing in importance Although healthcare IT has historically accounted for a smaller proportion of healthcare PE deal activity than healthcare services (providers), the vertical has grown in importance in recent years and has been more resilient. We recorded 25 healthcare IT platform buyouts in the first half of 2024 compared with 28 in healthcare services over the same period. For healthcare services, these figures represent a projected annual dealmaking pace more than 2.5x slower than what we saw in 2021, while healthcare IT is only 25% off 2021’s pace. Furthermore, we expect the tide to keep shifting in favor of healthcare IT as regulatory uncertainties and limited exit opportunities for larger healthcare provider assets push…

Although the healthcare IT vertical presents a mixed picture in terms of opportunity and risk—as described below—we expect the vertical to play a growing role in healthcare PE portfolios over the next few years…When add-on and minority equity deals are included, PE sponsors announced or closed an estimated 69 healthcare IT deals in Q2 2024, keeping pace with the previous three quarters. Although sponsors remain in a risk-off stance overall, the healthcare PE market became more seriously active in Q2, and we expect to see the pace of deal announcements pick up modestly in the second half of the year. Moreover, with the broadly syndicated loan market back online and rate cuts imminent, we can expect a steady flow of larger deals…. Soft valuations for anything resembling digital health in the public markets—especially in contrast with some of the more aggressive multiples that sponsors have paid lately for premium healthcare IT assets in buyout deals—may also facilitate additional take-privates. In the lower middle market, we are beginning to see more examples of a phenomenon we have anticipated for a while: PE firms and PE-backed companies acquiring VC-backed startups.

Q2_2024_Healthcare_IT_Report.pdf (pitchbook.com)

 

Physicians

Physician compensation in 2024, 2025: CMS cut overall physician pay by 1.25% for 2024. The rule updates the Medicare conversion factor to $32.74, a 3.4% decrease from 2023. Additionally, some physicians could face more cuts due to the cost-performance category of the merit-based incentive payment system, which could potentially reduce Medicare payments by up to 9%.

Physician pay cuts will likely continue next year. In July, CMS released its annual proposed changes to the physician fee schedule for 2025, which includes a proposed 93 cent (2.8%) conversion factor decrease from 2024. The proposed physician fee schedule conversion factor for 2025 is $32.36, down from $33.29 in 2024.

The 10 specialties with the most salary growth in 2024 saw year-over-year pay increases between 7.2% for psychiatrists and 12.4% for hematologists, but still many physicians aren’t happy with their current pay, according to Doximity’s 2024 “Physician Compensation Report.” Around 35% of physicians said they were not satisfied with their current compensation, and 62% said their current pay did not reflect their level of expertise and the amount of effort required in their roles.

According to May 12 data from the Bureau of Labor Statistics, the Consumer Price Index, also known as inflation, increased by 3.4% in the last year. This means the 13 specialties that saw year-over-year pay increases of 3.4% or less — such as gastroenterologists, urologists and rheumatologists, all with pay increases of 2%, according to Medscape’s “Physician Compensation Report” — essentially received pay cuts compared to their salaries last year.

Overall, physician reimbursement amounts per Medicare patient decreased around 2.3% between 2005 and 2021 when accounting for inflation, according to a new study from the Harvey L. Neiman Health Policy Institute.

While some physician specialties experienced reimbursement growth, 16 experienced reimbursement declines. Of these, 13 experienced reimbursement declines despite higher volumes per beneficiary. These included psychiatrists, cardiologists, urologists, OB-GYN, internal medicine, internists, pulmonologists, radiologists, gastroenterologists and anesthesiologists.

Bad news for physician reimbursements (beckersasc.com)

 

Policy

Regulation of prescription drug advertising: “Drug ads have been ubiquitous on TV since the late 1990s and have spilled onto the internet and social media. The United States and New Zealand are the only countries that legally allow direct-to-consumer pharmaceutical advertising…Manufacturers have spent more than $1 billion a month on ads in recent years. Last year, three of the top five spenders on TV advertising were drug companies.

Such promotion was banned until 1997, when the FDA reluctantly allowed pharmaceutical ads on TV, so long as they gave an accurate accounting of a medicine’s true benefits and risks, including a list of potential side effects…

The Federal Trade Commission, which oversees ads in other sectors — from banking to contact lenses — is more active in suing to halt those it considers deceptive or misleading. In recent years, it sued to prevent unsupported claims on stem cell treatments for arthritis and false or misleading information about some health insurance plans. But it has no jurisdiction over direct-to-consumer drug advertising.…

Common sense and the sort of truth-in-advertising standard we apply in other sectors could be a suitable first step. Take ads that promise patients with advanced cancers “a chance to live longer.” A more truthful ad might say that studies are equivocal or, as the widower of one patient drawn in by an ad wrote in an op-ed article: “an outside chance for people with advanced lung cancer to live just a few months longer.” And they’re not likely to be hiking or hitting the beach during that time.

With TV Drug Ads, What You See Is Not Necessarily What You Get – KFF Health News

Mental health parity revision: Last Monday, the Biden administration released the final version of the Mental Health Parity and Addiction Equity Act (MHPAEA). Among other provisions, the final rule “make[s] it clear that health plans need to evaluate their provider networks, how much they pay out-of-network providers, and how often they require – and deny – prior authorizations,” the White House said. The rule says that health plans cannot use more restrictive prior authorization or other medical management techniques, or narrower networks  to make it harder for people to access mental health and substance use disorder benefits compared with their medical benefits

Mental Health Parity Rule Lauded by Healthcare Groups | MedPage Today

Georgia Medicaid work requirement: “Georgia is the only state that requires certain Medicaid beneficiaries to work to get coverage. Republicans have long touted such programs, arguing they encourage participants to maintain employment. About 20 states have applied to enact Medicaid work requirements; 13 won approval under the Trump administration. The Biden administration has worked to block such initiatives.

The Georgia Pathways to Coverage program shows the hurdles ahead for states looking to follow its lead. Georgia’s GOP leaders have spent millions of dollars to launch Pathways. By July 29, nearly 4,500 people had enrolled…

That’s well short of the state’s own goal of more than 25,000 in its first year, according to its application to the federal government, and a fraction of the 359,000 who might have been eligible had Georgia simply expanded Medicaid under the Affordable Care Act, as 40 other states did…

The program’s lengthy questionnaires and technical language are confusing, guidance is opaque, and tools to upload documents are tricky to navigate, according to interviews with health insurance enrollment specialists conducted for the Georgia Budget and Policy Institute….Georgia’s experiment comes after a 2018 effort in Arkansas to implement work requirements on an existing Medicaid expansion population led to 18,000 people losing coverage, many of whom either met requirements or would have been exempted.”

The First Year of Georgia’s Medicaid Work Requirement Is Mired in Red Tape – KFF Health News September 13, 2024

 

Polling

Campaign 2024 voter issues: The economy and inflation continue to dominate the list of issues that voters are focusing on during this year’s presidential election with four in ten voters (38%) saying it is the most important issue determining their vote in the 2024 presidential race. Following the economy is threats to democracy (22%), immigration and border security (12%), then several individual health care issues including abortion (7%), Medicare and Social Security (7%), and health care costs, including prescription drug costs (5%). Altogether, health care issues are seen as the most important issue by about one in five voters (19%). Gun policy (3%) and the war between Israel and Hamas in Gaza (2%) rank the lowest among the issues included in the list provided to voters.

KFF Health Tracking Poll September 2024: Harris v. Trump on Key Health Care Issues | KFF

2024 Bentley-Gallup Business in Society Report: Based on a Gallup Panel web survey completed by 5,835 adults in the U.S., aged 18 and older, conducted April 29-May 6, 2024:

  • “In 2024, 63% of Americans see businesses as having a somewhat positive (41%) or extremely positive (22%) impact on people’s lives. This 63% is unchanged from 2023, but is an 8-percentage-point improvement over 2022, when 55% of Americans reported the same.
  • Americans attach the highest importance to businesses making money in ethical ways (79%) and providing high-quality healthcare benefits to employees (71%). Smaller majorities believe it is extremely important for businesses to prioritize employee-oriented practices, such as offering mental health benefits (56%), avoiding major pay gaps between CEOs and workers (56%) and offering flexible work arrangements (52%).
  • Less than half of Americans think businesses are doing an excellent or good job in any of the abreast which Americans attach the highest importance.”

Gallup-Bentley University Research HubGallup-Bentley University Research Hub

Schroders’ U.S. Retirement Survey: Based on 498 retirees conducted March 15- April 5, 2024:

33% are concerned that financial stress will impact their overall health and 26% have lost sleep worrying about their financial situation

47% report their retirement expenses are higher than expected, while 49% think Medicare would cover more healthcare than it did.

44% of retirees believe they have saved enough, 24% are unsure, and 32% are convinced they have not accumulated enough savings. Their top concerns are…

  • Inflation lessening the value of assets (89%)
  • Higher than expected healthcare costs (85%)
  • A major market downturn significantly reducing assets (76%)
  • Not knowing how to best generate income and/or draw down assets (69%)
  • Outliving assets (68%)

Nearly 50% of American retirees underestimated their healthcare costs — and how far Medicare would stretch. 3 simple ways to protect yourself (msn.com)https://www.schroders.com/en-us/us/institutional/media-center/schroders-retirement-study-finds-inflation-taking-toll-on-retirees/

 

Prescription Drugs

Global, U.S. pharmaceutical market scale:

  • Worldwide pharmaceutical market: $1.6 trillion in 2023
  • North America share of worldwide market: 53.3%
  • US market
  • R&D Investment by 20 largest pharma companies: $145 billion in 2023 (up 4.5% from 2022)
  • Cost to launch as new drug in 2023: $2.3 billion
  • US drug prices are 256% of 32 comparable countries (190% after rebates and discounts): highest for brand-name originator drugs
  • Federal lobbying expense in 2023: insurers $130 million, drug companies $385 million

CBOH Innovation Without Affordability Innovation? (unc.edu)

Drug advertising legislation proposed: Senators Richard Durbin, D-Illinois, and Mike Braun, R-Indiana have drafted the Protecting Patients from Deceptive Drug Ads Online Act to close loopholes that prevent the FDA from stopping false or misleading online promotions.

Currently, the FDA can only target false or misleading posts by influencers or telehealth companies when they have an established financial relationship with the manufacturer of the drug, the senators said. The restriction prevents the FDA from going after influencers who promote specific prescription drugs to gain a following or seek alternative payment arrangements

Senators target online drug ad influencers in draft legislation (fiercepharma.com)

BioSecure Act passes: Last Monday, the US House of Representatives passed the Biosecure Act with broad bipartisan support. that forces biopharma companies to cut ties or restrict their work with Chinese contract manufacturers WuXi AppTec, WuXi Biologics and three genetic sequencing companies by 2032.

Endpoints News — House passes Biosecure Act; Moderna outlines more cost cuts; What’s happening at #ESMO24; and more (endpts.com)

Study: PBM market concentration: “Despite evidence that 3 PBMs (CVS Caremark, Express Scripts, and Optum Rx) accounted for 79% of prescriptions in the US in 2023 and growing concerns about the role of the highly concentrated PBM market on rising out-of-pocket costs and pharmacy closures, information on whether and how PBM concentration varies across payers is limited. This study analyzed PBM market concentration separately for commercial insurance, Medicare Part D, and Medicaid managed care in 2023. Findings:.

“In 2023, all 3 payer markets for PBM services were highly concentrated, but concentration varied and was highest in Medicare Part D. While CVS Caremark held the dominant share in all 3 payer markets, each of the PBMs appeared focused on a different payer: Express Script’s largest share was in the commercial market, while Optum Rx’s and CVS Caremark’s were in Medicare Part D and Medicaid managed care, respectively. These findings underscore the importance of considering payer-specific concentration when evaluating PBMs’ anticompetitive practices, as the 3 top PBMs may be pursuing different market strategies. The dominance of a few large PBMs across all payers and a smaller PBM (SS&C Health) in Medicare Part D alone has important antitrust implications. These findings could inform federal policies, including proposed legislation that would prohibit unfair and deceptive PBM business activities4 and the Federal Trade Commission’s ongoing investigation of PBM anticompetitive practices.”

Pharmacy Benefit Manager Market Concentration for Prescriptions Filled at US Retail Pharmacies | Pharmacoeconomics | JAMA | JAMA Network

Prescription drug approval process, R&D spend: U.S. vs. Europe: Europe’s drug sector is among the largest in the world, but the U.S. is surging ahead in key market areas — biologics, drugs for rare diseases and advanced therapies based on genes, cells and tissues. The U.S. is also much quicker to approve new drugs, with a median time of 334 days compared with 430 in Europe. The U.S. private sector spends 0.45 percent of gross domestic product on pharma research compared with 0.11% in the EU.

The challenge hospitals face – POLITICO

 

Public health

Suicide rates and socioeconomic status: Nearly 50,000 people in the U.S. died by suicide in 2022, making it the second leading cause of death among people ages 10 to 34. A report from the CDC released September 10 noted that Americans’ socioeconomic realities may impact their risk of suicide. The report found that suicide rates were lowest in counties with the highest levels of health insurance coverage, internet access, and household incomes. These same factors were particularly associated with lower suicide rates in populations that are at disproportionately high risk for it, including American Indian or Alaska Native populations, white people, and males.

Vital Signs: Suicide Rates and Selected County-Level Factors — United States, 2022 CDC September 10, 2024 https://www.cdc.gov/mmwr

Census Report: Health Insurance Coverage in 2023: Highlights:

  • Most people, 92.0% or 305.2 million, had health insurance, either for some or all of the year
  • Private health insurance coverage continued to be more prevalent than public coverage, at 65.4% and 36.3%, respectively.
  • Of the subtypes of health insurance coverage, employment-based insurance was the most common, covering 53.7% of the population for some or all of the calendar year, followed by Medicaid (18.9%), Medicare (18.9%), direct-purchase coverage (10.2%), TRICARE (2.6 %), and VA and CHAMPVA coverage (1.0%)
  • While the private coverage rate was statistically unchanged between 2022 and 2023, the employment-based coverage rate declined by 0.7% to 53.7% in 2023. At the same time, the rate of direct-purchase coverage increased by 0.3% points to 10.2% in 2023. The 2023 public coverage rate was not statistically different from the rate in 2022. Whereas, Medicare coverage increased by 0.2% percentage points to cover 18.9% of people. The uninsured rate for children under the age of 19 increased by 0.5% to 5.8% between 2022 and 2023.

Health Insurance Coverage in the United States 2023, US Census Bureau September 2023 https://www2.census.gov/library/publications/2024/demo/p60-284.pdf?mkt_tok=NzEwLVpMTC02NTEAAAGVfMkD8frR5WPRLzR9tfpVVwAw7jGvRQyN1twUV88_yDnzriyfLZl3gteM5a7q0G02GEQnFINWi_5FixM6ASi7ZqjTP-0FiTxkANNFUc7c7001UQ