Money, peer pressure, and guilt: How UnitedHealth pushed doctors to diagnose more Medicare patients
In late 2020, an email from a UnitedHealth Group manager detailed the “#1 PRIORITY” for one practice. The goal was for doctors to document older patients’ chronic illnesses to generate more revenue from the federal government. As an incentive for seeing more patients, emails promised “ADDITIONAL BONUSES!!” Also, receiving a “SHOUT OUT!!” The latest investigation in the STAT Health Care’s Colossus series exposes UnitedHealth’s corporate strategy to enlist its doctors to pile money-making diagnoses onto patients covered by Medicare Advantage, the federal health care program for older adults that’s run by private insurers. Since the government pays insurers more for sicker patients — a system known as risk adjustment — the company uses its unrivaled control over its doctors to make those patients look as sick as possible on paper. “Effectively what you’re incentivizing is sicker patients, or at least sicker appearing on paper, which I think is a joke,” said Nick Jones, a doctor who used to work at a UnitedHealth practice. Read morefrom my amazing colleagues Tara Bannow, Bob Herman, Casey Ross, and Lizzy Lawrence.devices A controversial approval for Novocure’s deviceFrom my colleague Adam Feuerstein: The FDA yesterday expanded the approval of Novocure’s Optune electrical field medical device to include the treatment of metastatic non-small cell lung cancer.The new marketing clearance is based on the results of a Phase 3 study, called LUNAR, that showed Optune prolonged median overall survival by 3.3 months in patients with lung cancer that progressed following initial chemotherapy.The study achieved its primary goal with statistical significance, but when the data were presented in 2023, some lung cancer experts said the results were uninterpretable and outside current clinical practice because nearly 70% of participants hadn’t received initial treatment with an immune checkpoint inhibitor such as Merck’s Keytruda.The Optune device, which is also referred to as tumor treating fields, consists of four wired patches that are applied with skin adhesive to the upper body, surrounding the lungs. When connected to an external, battery-powered generator, the patches create an electrical field tuned to interfere with the cell division of tumor cells, while sparing healthy cells. Patients are instructed to wear the device for up to 18 hours per day.Optune was approved initially to treat certain types of brain tumors. In lung cancer, it will be sold under the brand name Optune Lua. from AXIOS:Walgreens fights to regain retail trafficBy Tina Reed Illustration: Lindsey Bailey/Axios Walgreens is dramatically shrinking its retail footprint and revamping its front-of-store product mix in a bid to fend off competition from online and other rivals who’ve upended the pharmacy business.Why it matters: The moves announced on Tuesday reflect big chain pharmacies’ challenge to revive their core businesses amid sluggish demand, workforce crunches and shrinking prescription payments.CVS is eyeing a breakup of its massive business, and Rite Aid recently emerged from bankruptcy after shedding many of its locations.Driving the news: Walgreens CEO Tim Wentworth said on Tuesday the company is focused on simplifying and focusing its business, viewing physical stores and its digital channels as central to its strategy.”The customer has evolved. Demographics and preferences have shifted, and we need to reposition and operate our stores accordingly,” Wentworth told analysts during an earnings call on Tuesday.Last quarter, officials said, Walgreens removed eight national brands from store shelves and replaced those products with items from “preferred partners” or its own store brand.The company launched 300 of its own store-branded products in 2024 and plans to launch another 300 before the end of the fiscal 2025.The strategy resembles the way pharmacy benefit managers use their formularies to drive up margins and push high-value products, Michael Cherny, senior research analyst at Leerink Partners, told Axios.Yes, but: What happens in the front of the store doesn’t matter very much if Walgreens and its competitors continue struggling with the fundamentals of the pharmacy business at the back of the store, Rohan Kulkarni of HFS Research told Axios.Walgreens’ executives have left the door open to divesting some aspects of their business to generate cash and are still sitting on a number of valuable assets, including a stake in primary care company VillageMD, analysts note.Read moreSome pharmacies may skip cheap Medicare drugsBy Maya Goldman Illustration: Sarah Grillo/Axios More than half of independent pharmacies are considering not stocking the first 10 drugs that were subject to Medicare price negotiations over concerns they’ll have to absorb upfront costs.Why it matters: If the drug stores decide it’s not worth it to carry these drugs, seniors could have a harder time benefiting from the first round of reduced drug prices that take effect in 2026 — especially as more chain pharmacies close.The big picture: Independent pharmacies will absorb more than $27,000 in average monthly costs to stock the drugs, then have to wait at least a month for manufacturer rebates to come through, the trade association estimates.The drugs in question include the popular diabetes medications Jardiance, Januvia, Fiasp and Farxiga; the blood-thinners Eliquis and Xarelto and treatments for arthritis, psoriasis, Crohn’s disease and blood cancer.Where it stands: 51% of independent pharmacies say they are “strongly” considering not stocking the drugs on Medicare’s negotiation list because of cost considerations, according to survey results published Tuesday.Another 40% said they’re “somewhat” considering not stocking the drugs.Between the lines: Independent pharmacists this summer asked Medicare administrators to ensure that they’d be reimbursed for the cost of acquiring and dispensing drugs on the price negotiation list.The final guidance, released earlier this month, does not require dispensing fees for the negotiated drugs.Read more from Politico: WALGREENS TO SHUTTER 1,200 STORES — Retail pharmacy giant Walgreens will close about 1,200 locations over the next three years, the company said Tuesday, about 1 in 7 of its stores.“We are focusing on stabilizing the retail pharmacy by optimizing our footprint,” Walgreens Boots Alliance CEO Tim Wentworth said in a statement. Wentworth took over as CEO last year and has tried to take the company in a better financial direction.The bigger picture: The move comes amid broader challenges for retailers like Walgreens and Walmart that have tried to broaden their standing in health care. Many, including Walgreens with its VillageMD clinics, have experimented with new ways to deliver health care. In April, Walmart said it would close all its 51 health centers and telehealth arm, saying the health division isn’t a sustainable business model.CVS Health also said Tuesday that it would close more than two dozen pharmacies, Healthcare Dive reported, and discontinue some infusion services.Primary care typically runs on slim margins. Analysts have been skeptical that retailers can scale retail primary care models nationwide.“This has been a part of healthcare that’s been struggling to be profitable. It has become less essential to have a neighborhood pharmacy right near you,” Craig Garthwaite, professor of strategy at Northwestern University’s Kellogg School of Management, told Pulse. “Standalone primary care is a really hard place to make money right now.” A message from PhRMA: CybersecurityCOST OF CHANGE — The toll of the massive cyberattack on Change Healthcare in February has cost parent company UnitedHealth Group nearly $2.5 billion, the company said in its earnings report Tuesday.That includes more than $1.7 billion in direct response costs. John Rex, chief financial officer, said the company is still working to bring transaction volumes at billing processor Change Healthcare back to pre-attack levels.The background: The attack stemmed from the failure to implement two-factor authentication, leading to widespread disruptions in provider payments nationwide.Cyberattacks have surged in the sector, threatening patients’ lives and health care organizations’ bottom lines. Lawmakers in Congress have proposed sweeping legislation that would require HHS to enforce minimum cybersecurity standards in the health care sector. Public HealthRSV ANXIETY SOFTENS — After a surge in RSV cases in the 2022-2023 respiratory virus season fueled heightened concerns about the virus, public concern about it is waning, according to a new nationwide survey from the Annenberg Public Policy Center of the University of Pennsylvania.The U.S. saw an early surge in respiratory syncytial virus in the season beginning in 2022, which led to a spike in hospitalizations. The virus typically causes mild symptoms but can be severe in infants and older adults. There was also a shortage of RSV vaccines last fall after manufacturer Sanofi underestimated demand.According to the survey, U.S. adults’ concern about themselves or family members contracting the virus rose after that surge but has fallen this year. Despite the dip in concern about RSV, worries about Covid-19 and flu haven’t faded, the survey found
Illustration: Lindsey Bailey/Axios Walgreens is dramatically shrinking its retail footprint and revamping its front-of-store product mix in a bid to fend off competition from online and other rivals who’ve upended the pharmacy business.Why it matters: The moves announced on Tuesday reflect big chain pharmacies’ challenge to revive their core businesses amid sluggish demand, workforce crunches and shrinking prescription payments.CVS is eyeing a breakup of its massive business, and Rite Aid recently emerged from bankruptcy after shedding many of its locations.Driving the news: Walgreens CEO Tim Wentworth said on Tuesday the company is focused on simplifying and focusing its business, viewing physical stores and its digital channels as central to its strategy.”The customer has evolved. Demographics and preferences have shifted, and we need to reposition and operate our stores accordingly,” Wentworth told analysts during an earnings call on Tuesday.Last quarter, officials said, Walgreens removed eight national brands from store shelves and replaced those products with items from “preferred partners” or its own store brand.The company launched 300 of its own store-branded products in 2024 and plans to launch another 300 before the end of the fiscal 2025.The strategy resembles the way pharmacy benefit managers use their formularies to drive up margins and push high-value products, Michael Cherny, senior research analyst at Leerink Partners, told Axios.Yes, but: What happens in the front of the store doesn’t matter very much if Walgreens and its competitors continue struggling with the fundamentals of the pharmacy business at the back of the store, Rohan Kulkarni of HFS Research told Axios.Walgreens’ executives have left the door open to divesting some aspects of their business to generate cash and are still sitting on a number of valuable assets, including a stake in primary care company VillageMD, analysts note.Read moreSome pharmacies may skip cheap Medicare 
Illustration: Sarah Grillo/Axios More than half of independent pharmacies are considering not stocking the first 10 drugs that were subject to Medicare price negotiations over concerns they’ll have to absorb upfront costs.Why it matters: If the drug stores decide it’s not worth it to carry these drugs, seniors could have a harder time benefiting from the first round of reduced drug prices that take effect in 2026 — especially as more chain pharmacies close.The big picture: Independent pharmacies will absorb more than $27,000 in average monthly costs to stock the drugs, then have to wait at least a month for manufacturer rebates to come through, the trade association estimates.The drugs in question include the popular diabetes medications Jardiance, Januvia, Fiasp and Farxiga; the blood-thinners Eliquis and Xarelto and treatments for arthritis, psoriasis, Crohn’s disease and blood cancer.Where it stands: 51% of independent pharmacies say they are “strongly” considering not stocking the drugs on Medicare’s negotiation list because of cost considerations, according to survey results published Tuesday.Another 40% said they’re “somewhat” considering not stocking the drugs.Between the lines: Independent pharmacists this summer asked Medicare administrators to ensure that they’d be reimbursed for the cost of acquiring and dispensing drugs on the price negotiation list.The final guidance, released earlier this month, does not require dispensing fees for the negotiated drugs.Read more from Politico:
AI Reply
Leave a Reply