The analysis by the Office of the Actuary at the Centers for Medicare and Medicaid Services, published online Wednesday by Health Affairs, notes that strong growth in Medicaid and commercial insurance spending was offset by declining supplemental funding related to the coronavirus pandemic.
Growth in 2022 was faster than the 3.2% rate of growth in 2021, but much slower than the 10.6% rate of growth in 2020 as the pandemic raged.
The 4.1% spending increase in 2022 was also much slower than the year's 9.1% growth in the gross domestic product. Healthcare spending's share of GDP also dropped to 17.3%, lower than 18.2% share in 2021, and 19.5% in 2020, the highest share in history. Per capital health spending grew 3.7%.
"Healthcare expenditures since 2020 have reflected volatile patterns associated with the COVID-19 pandemic and the federal government's response to the public health emergency," Micah Hartman, a statistician in the CMS Office of the Actuary and first author of the Health Affairs article, says in a media release.
"The growth in healthcare spending in 2022 of 4.1% was more consistent with the pre-pandemic average annual growth rate of 4.4% over 2016-19," Hartman says. "It remains to be seen how future healthcare spending trends will materialize, as trends are expected to be driven more by health-specific factors such as medical-specific price inflation, the utilization and intensity of medical care, and the demographic impacts associated with the continuing enrollment of the baby boomers in Medicare."
The analysis notes that growth in total healthcare spending in 2022 reflected a slowdown in personal healthcare spending that was more than offset by faster growth in non-personal healthcare spending.
The slowdown in personal healthcare spending was pegged to slower growth in the hospital care spending, which fell from 4.5% in 2021 to 2.2% in 2022. Also, dental services spending fell from 18.2% in 2021 to 0.3% in 2022, and physician and clinical services fell from 5.3% in 2021 to 2.7% in 2022.
Non-personal healthcare spending accelerated in 2022 due largely to a turnaround in the net cost of insurance, the analysis shows.
Other highlights:
Medicaid spendingincreased 9.6% in 2022 after growth of 9.4% in 2021 and 9.3% in 2020. From 2019-22, cumulative Medicaid spending increased 31%, or 9.4% per year on average, and enrollment accounted for most of the growth as it increased 24.6%. Private health insurance spending increased 5.9% in 2022 after an increase of 6.3% in 2021 and a decline of 0.8% in 2020.
The uninsured population declined in 2022 for the third straight year, falling from 28.5 million in 2021 to 26.6 million in 2022, while the insured share of the population increased to 92%—a historic high. Marketplace enrollment grew by 1.7 million people in 2022, and employer-sponsored insurance grew by 1.5 million people, accounting for 86% of total private health insurance enrollment and 88% of spending. Medicaid enrollment grew by 6.1 million people in 2022.
Private health insurance spending(5.9% growth)—reached $1.3 trillion in 2022 and accounted for 29% of total health expenditures. Total private health insurance spending increased 5.9% after 6.3% growth in 2021. Private health insurance spending for medical goods and services grew 5.6% in 2022 after growth of 10.1% in 2021. The slower growth was driven by spending for hospital care, physician and clinical services, and dental services, all of which grew more slowly in 2022 than 2021, when a pent-up demand for elective surgeries and procedures forgone in 2020 increased. Per enrollee, private health insurance spending increased at a rate of 4.3% in 2022 after growing 5.9% in 2021.
Medicare spending (5.9% growth)—reached $944.3 billion in 2022, accounting for 21% of total national healthcare expenditures. Total Medicare spending increased at a slower rate in 2022, 5.9%, compared with 7.2% growth in 2021. Per enrollee Medicare expenditures increased 3.8% in 2022, compared to 5.4% growth in 2021. Medicare spending for personal healthcare increased 4.9% in 2022 compared with 9.4% growth in 2021, driven by slower growth in spending for hospital care and physician and clinical services. Fee-for-service Medicare enrollment continued to decline for the fourth consecutive year, decreasing 3.0% in 2022 after falling 3.8% in 2021. Medicare private health plan enrollment grew 8.5% in 2022 compared with a 10% increase in 2021.
Medicaid spending (9.6% growth)—reached $805.7 billion in 2022, accounting for 18% of total national health spending. Medicaid spending increased 9.6% in 2022—the third consecutive year of growth above 9%. Medicaid spending for goods and services increased 9.9% in 2022 (the same growth rate as in 2021) as spending growth for hospital care slowed, offset by a faster rate of growth for other health, residential, and personal care services. On a per enrollee basis, Medicaid spending averaged 1.7% during 2020-22, in part because of large increases in enrollment of qualifying children and adults, who tend to have lower per enrollee expenditures than disabled and elderly enrollees.
Out-of-pocket spending (6.6% growth)—reached $471.4 billion in 2022, accounting for 11% of total national health expenditures. Out-of-pocket spending increased by 6.6% in 2022 after an 11% increase in 2021. Slower growth for dental services, durable medical equipment, and physician and clinical services were the primary contributors to the overall slower growth in out-of-pocket spending in 2022 following rapid growth in 2021.
Hospital spending (2.2% growth)—reached $1.4 trillion in 2022, representing 30% of overall healthcare spending. Growth in expenditures for hospital care was 2.2% in 2022, lower than the 4.5% growth in 2021. The slower growth in 2022 reflected a decrease in hospital care spending by private health insurance, Medicare, and Medicaid and by a decline in other private revenues.
Physician and clinical services spending (2.7% growth)—reached $884.9 billion, or 20% of total healthcare expenditures in 2022. Spending growth increased 2.7% in 2022, the slowest rate of growth in almost a decade and lower than the increases of 5.3% in 2021 and 6.6% in 2020. This slower growth is due to a slowdown in the use of services and slower growth in prices. Spending for independently billing laboratories slowed in 2022 because of reduced COVID-19-related testing.
Retail prescription drug spending (8.4% growth)—reached $405.9 billion in 2022 and represented 9% of overall health spending. Growth in retail prescription drug spending was 8.4% in 2022, faster than the 6.8% growth in 2021. The increase in spending growth for retail prescription drugs was due to several factors, including faster growth in utilization and prices as well as shifts in the mix of drugs purchased.
The 77,000 job gains in November was well above the average 54,000 jobs healthcare created over the past 12 months.
Healthcare accounted for nearly 40% of the 199,000 new jobs created in the United States in November, federal data show.
The 77,000 new jobs reported to the Bureau of Labor Statistics in November is well above the 54,000 average monthly gain over the past 12 months.
Within healthcare, ambulatory care services continued to lead in job creation, accounting for 36,000 new jobs for the month. Hospitals accounted for 24,000 jobs, and nursing and residential care accounted for 17,000 jobs.
The better-than-expected job gains in the overall economy in November lowered the unemployment rate to 3.7%, BLS says, with 6.3 million people reporting as unemployed, about 100,000 fewer than reported in October.
The 199,000 new jobs in November is below the monthly average of 240,000 new jobs over the past 12 months, but it is in line with growth in recent months, BLS says.
Big job gains also were seen in government (49,000), leisure and hospitality (40,000), and professional services (15,000) social services (16,000). Manufacturing gained 28,000 jobs, reflecting the return to work of striking auto workers.
The retail sector was the big loser in November, shedding 38,000 jobs, including 19,000 lost jobs in department stores, and 6,000 jobs at furniture, home furnishings, electronics and appliance retailers.
The average hourly earnings for all employees on private nonfarm payrolls in November rose by 12 cents, or 0.4%, to $34.10. Over the past 12 months, average hourly earnings have increased by 4%. The average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4%, to $29.30.
November and October job numbers are considered preliminary by BLS, and subject to revisions.
Experts believe that targeted incentives could alleviate longstanding and chronic supply challenges.
A panel of experts told the U.S. Senate Finance Committee this week that targeted incentives and policy shifts by Medicare and other federal government agencies could play a critical role in reducing the nation's chronic shortages of generic drugs.
Inmaculada Hernandez, PharmD, PhD, professor at Skaggs School of Pharmacy and Pharmaceutical Sciences at UC San Diego, told the committee that "generic manufacturers solely compete to sell their product at the lowest price, generating a 'race to the bottom'".
"That price erosion is aggravated by the consolidation of purchasing entities," Hernandez says.
To alleviate the problem, Hernandez says the federal government has several options, and should start by providing low-interest, performance-based, and potentially forgivable loans to incentivize rebuilding the nation's generic drug infrastructure."
In addition, Hernandez says the government should revise drug pay-for-performance reimbursement models "to incentivize the selection of products manufactured in resilient and mature supply chains."
"Supply chain resilience and maturity are crucial for supply stability and continuity," she says. "Supply stability and continuity are elements of value because, when we initiate a patient on a treatment, we not only value the product available for the initial dose, but also the continuity of supply so that a patient can complete the treatment course."
Marta E. Wosińska, PhD, a senior fellow at The Brookings Institution, concurred with Hernandez and told the committee that "CMS should encourage hospitals to place more weight on reliability of manufacturing supply through a pay-for-performance program under Medicare."
Under such a program, Wosińska says hospitals "would be scored on their behavior on two measures: do they buy from reliable manufacturers and do they buffer their inventory."
"Hospitals would be measured on their performance retroactively, on their behavior before the first signal of each shortage that occurs," she says. "The scorecard would then feed into an end-year sliding-scale payment adjustment based on a hospital's performance relative to its peers. Hospitals should largely expect to cover their participation costs, with top performing hospitals exceeding those cost."
Allan Coukell, BSc (Pharm.), senior vice president for public policy at Civica Rx, also noted that "policy responses should focus on changing the current system that causes shortages because it favors low prices over resiliency of supply."
Along those lines, Coukell told the committee that nonprofit Civica Rx, created five years ago by health systems to address chronic drug shortages, has created a roadmap worth emulating when purchasing generics. That guidance includes measures to ensure: at least a six-month buffer inventory; that generic sterile injectables are priced sustainably; support for domestic manufacturing; and "market demand" from drug makers who are less likely to have quality failures.
"If Congress were to create a targeted program to support domestic manufacturers to develop essential products that are at high risk of shortage … domestic manufacturers would then be ready to manufacture on short notice once a shortage starts," Coukell says. "In this way, Congress could create an insurance policy against future shortages at the cost of a one-time investment of $3 million to $4 million per drug."
As consumers struggle with soaring drug prices, AstraZeneca Q3 profits doubled to $1.37 billion.
The pharmaceutical industry is enjoying record profits while simultaneously pursuing lawsuits challenging the Biden administration's efforts to make drugs affordable for Medicare beneficiaries, a patient advocacy group says.
In stark contrast to reports of record profits, Funk notes that 3-in-10 Americans say they can't afford drugs. That has not stopped leading drug makers, including AstraZeneca and trade association PhRMA, from challenging drug price negotiations mandated in the Inflation Reduction Act.
"Another day, another drug company brags of billion-dollar profits while suing to stop the historic Biden law working to lower drug costs for struggling seniors,"Funk says."Big Pharma and their lackeys in Congress are fighting tooth and nail to undo the Inflation Reduction Act's Medicare Drug Price Negotiation Program so that companies can keep squeezing maximum profits out of seniors, including many choosing between food and medicine."
AstraZeneca's Farxiga, used to treat type 2 diabetes, heart failure and chronic kidney disease, is one of the first 10 drugs selected for the initial negotiations. The presumedly lowered prices are projected to save nearly 19 million Medicare Part D enrollees $400 a year by 2025.
Accountable.US says its own research has previously found that the five-biggest U.S.-based pharmaceutical companies spent $112 billion in R&D from 2019 through 2021, and $125 billion on stock buybacks and dividends over the same period.
"Based on their own earnings reports, it's clear these price hikes are just a way to extract more money from patients in need and redistribute it to wealthy shareholders," Funk says.
AstraZeneca and PhRMA on Thursday did not respond to HealthLeaders' request for comment.
"Too many corporations motivated by greed have jacked up prices despite enormous profits, and Big Pharma is among the worst offenders," Funk says. "Congressional Republicans should be celebrating the historic Biden law allowing Medicare to negotiate cheaper drug prices, not helping pharma CEOs and lobbyists undo it in pursuit of more political donations."
Accountable.US is funded by the social activist private equity New Venture Fund.
The healthcare sector continues to be a job-creating dynamo.
Healthcare accounted for nearly 40% of the 150,000 jobs created in the U.S. economy in March, new federal data show.
Overall job growth in the national economy slowed in October, well below the 258,000 monthly average for jobs gained over the past 12 months, according to the Bureau of Labor Statistics' monthly report on job growth.
The 58,000 healthcare jobs created in October was more than the 53,000 monthly average for new jobs in the sector over the past year, BLS says.
Within healthcare, ambulatory care services continued to lead in job creation, accounting for 32,000 new jobs for the month. Hospitals accounted for 18,000 jobs, and nursing and residential care accounted for 8,000 jobs.
The unemployment rate in the overall economy held steady at 3.9% in October, BLS says, with 6.4 million people reporting as unemployed, unchanged from September. Big job gains also were seen in government (51,000), leasure and hospitality (19,000), and professional services (15,000) social servoces (14,000). Manufacturing jobs fell by 35,000, reflecting the fallout in the automotive parts manufacturing sector owing to the United Auto Workers strike.
The average hourly earnings for all employees on private nonfarm payrolls in October rose by 7 cents, or 0.2%, to $34. Over the past 12 months, average hourly earnings have increased by 4.1%. The average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.3%, to $29.19.
October and September job numbers are considered preliminary by BLS, and subject to revisions.
Unfortunately, the drug shortages are more expansive than that.
A U.S. Senate report released in March found 295 active drug shortages at the end of 2022 for pharmaceuticals ranging from more than a dozen cancer drugs to Children's Tylenol and representing a 20% increase from the 246 drug shortages reported at the end of 2021.
The data, compiled by the American Society of Health System Pharmacists, also found that drug shortages worsened in 2022, growing from 114 to 160 reported shortages, a 40% increase.
These shortages have consequences for public health.
A recent survey of nearly 200 clinicians, pharmacists, and procurement specialist compiled by nonprofit ECRI and its affiliate Institute for Safe Medication Practices found growing concerns that the shortages are hurting patient care, across several specialties, including surgery and anesthetics (74%), emergency care (64%), pain management (52%), cardiology (45%), hematology and oncology (44%), infectious diseases (39%), and obstetrics and gynecology (37%).
Half of the respondents in the ECRI survey report having to delay or cancel surgical procedures and drug treatments, such as chemotherapy, one-third say they aren't able to provide optimal treatment because of drug shortages, and one quarter say they know of at least one error related to a drug, supply, or device shortages.
"While medication and supply shortages have been widely reported across healthcare, we now know with certainty that these shortages are causing preventable harm and have the potential to cause even more if they are not addressed soon," says ECRI President / CEO Marcus Schabacker, MD, PhD.
"There are strategies hospitals can use to reduce the impact of shortages, but they are a deviation from standard practice and resource-intensive—two characteristics that themselves can increase the likelihood of preventable harm," he says.
The problems the drug supply chain faces are very much like the problem shortages of personal protective equipment and single-use clinical supplies.
There are several explanations for the shortages, including product quality and sanitation issues, drugmakers abandoning cheaper generics, and natural disasters. However, the biggest single hurdle – and the hardest to clear -- is that most of the shortages begin outside of United States, limiting our options for corrective measures.
In a Johns Hopkins podcast examining drug shortages, Mariana Socal, MD, PhD, a policy researcher and associate scientist at the University's Bloomberg School of Health Policy and Management, noted that the "drug supply chain typically starts far away from the U.S."
"Our research has found that over 85% of all of the active ingredients needed to produce generic drugs for the U.S. are produced overseas," Socal says. "These ingredients are then transported to a second player—the facility that will then manufacture the finalized product."
Any single kink in this long, complex, multinational supply chain can derail the entire process. Until the U.S. can find a meaningful, effective solution that can safeguard the supply chain, Socal says providers will have to make do with incremental improvements.
"Other than the companies coming back online and producing the drugs we need, I'm not confident right now that we have a good long-term strategy. This is just a Band-Aid," she says. "And I'm worried for my patients that this could keep happening and could potentially worsen with each shortage, given what we're seeing now."
Physician-advocates say that lifting the ban would provide a counterwight to the ongoing consolidation of traditional hospitals.
Congress is considering lifting a 13-year ban on physician-owned hospitals, and though the odds are long that any action will occur soon amid the chaos in the U.S. House, powerful stakeholders on both sides of the issue are sharpening their talking points.
A discussion draft introduced this month in the House Health Subcommittee would amend the Stark Law’s ban on physician self-referrals for Medicare and Medicaid patients"for certain rural hospitals that are located a certain distance from an existing hospital or critical access hospital."
No action has been taken on the draft, sponsored by U.S. Rep. Michael C. Burgess, R-TX,and it’s not clear if any action will be taken this year. That hasn’t stopped stakeholders on both sides of the issue from pre-emptively offering very different perspectives.
In a joint statement this month,Chip Kahn, president / CEO of the Federation of American Hospitals, and Stacey Hughes, executive vice president of the American Hospital Association, say that the Stark Law was enacted to ensure "a level playing field in the service of higher-quality, more affordable, and improved access to care for patients."
"And, it is why in 2010 Congress closed the law’s 'whole hospital' exception loophole, prohibiting physicians from referring Medicare and Medicaid patients to new hospitals in which they have an ownership interest, and limiting the growth of existing POHs," they say.
The hospital associations say the Stark Law is needed to prevent POHs from "further expanding their practices of selecting the healthiest and most profitable patients, driving up utilization, and deferring emergency services to publicly funded 911 services or general acute care hospitals when their patients need emergency care."
"POHs cherry-pick healthy and wealthy patients, they provide limited emergency services and are ill-equipped to respond to public health crises, and they increase costs for patients, other providers, and the federal government," the associations say.
Docs Fire Back
There are about 240 physician-owned hospitals nationally, and they represent about 5% of the roughly 5,700 hospitals in the United States.
Physician advocates for POHs say that lifting the ban would counter the ongoing and accelerating consolidation of traditional hospitals and offset the rise in physician employment, both of which have increased healthcare costs for consumers.
The American Medical Association and a slew of state physician associations say repealing the POH ban "will inject much-needed competition into the market by allowing physician-owned hospitals to compete."
"Lifting the ban on physician-owned hospitals would allow physicians to open new hospitals as well as acquire existing hospitals, and in doing so implement alternative care delivery and payment models that create efficiencies that benefit consumers while enhancing care," the AMA says.
"Competition created by new or expanded physician-owned hospitals through lower costs or higher quality services—or both—will induce traditional hospitals to upgrade their offerings or risk losing market share. Allowing physicians to acquire hospitals, particularly those in rural areas whose future might be uncertain, would protect access to care that might otherwise be lost."
The POH lobby cites a report commissioned by the Physician’s Advocacy Institute and The Physicians Foundation which estimates that POHs generated $1.1 billion in savings in 2019 compared to traditional hospitals when examining the total cost of care for 20 of the most expensive conditions for Medicare patients.
Physician stakeholders also complain that POHs were unfairly used as a bargaining chip by the Obama administration to gain support for the ACA from the hospital lobby.
"Permitting new physician-owned hospitals could promote desperately needed innovation in care delivery, flexibility in hospital supply during emergencies, and increase competition for physician labor, presenting a counterweight to the existential crisis of our time: burnout and the loss of physician autonomy," the AMA says.
"Physicians are in the best position to make decisions with and for their patients, so it’s not surprising that Congress is considering allowing new physician-owned hospitals that align the interests of ownership and practicing physicians to improve patients’ care," says PAI Vice President Michael J. Darrouzet, CEO of the Texas Medical Association.
"Now, Congress has another reason to act. Hospitals owned by physicians promise significant cost savings when it comes to Medicare patients’ most expensive medical conditions. Better quality and notable cost savings to patients and taxpayers is a clear signal that physician-owned hospitals is a policy worthy of adoption," Darrouzet says.
GNC Health will offer Basic, Plus, and Premier tiers under the expansion, with prices ranging from $35 a year for Basic to $60 a month for enhanced family plans in Premier.
Vitamin and nutrition supplement retailer GNC is expanding its virtual health business and offering three-tiered plans for individuals and families, the Pittsburgh-based company announced Monday.
GNC Health will offer Basic, Plus, and Premier tiers under the expansion, with prices ranging from $35 a year for Basic to $60 a month for enhanced family plans in Premier.
Members can schedule free telehealth appointments with board-certified clinicians for common ailments at no additional cost. More than 400 prescription drugs will be included with zero copay and thousands of other drugs will be discounted by as much as 80% at retail pharmacies nationwide.
"We envision GNC Health as a way to broaden our consumer reach and bring people meaningful health and wellness solutions because everyone deserves the opportunity to Live Well," said Allison Bentley, senior director of strategic programs, GNC Health. "With GNC Health, we're supporting our consumers' health and wellness journeys while keeping our core brand relevant and top-of-mind."
Three Tiers
Here's a detailed look at the services offered under GNC Health’s three-tiered plans.
Basic – GNC Health Basic is for individuals for an annual fee of $34.99 that provides unlimited access nationwide, including:
Free Virtual Urgent Care
Free Virtual Lifestyle Care
100+ $0 prescription medications
Plus – GNC Health Plus charges between $10 and $30 a month and includes all the services in the Basic plan, plus:
Free virtual urgent care
Free virtual primary care
400+ $0 prescription medications
Access for up to 6 immediate family members
Premier – GNC Health Premier charges $40 a month for individuals and $60 a month for families, includes all the services in Basic and Plus, plus free access to virtual mental healthcare and virtual physical therapy.
Customers already enrolled in GNC PRO Access will continue to receive the Basic membership plan, with the option to upgrade to a higher tier.
The nation's three largest pharmacy chains have announced plans to close nearly 1,500 underperforming stores.
It wasn't long ago that the expansion into primary care by the nation's leading retail pharmacy chains was seen as a threat to traditional providers.
However, a spate of financial woes, leadership shuffles, staff shortages and related store closings at CVS Health, Walgreens Boot Alliance, and the recent bankruptcy filing by Rite Aid have prompted the chains to pull back on their primary care initiatives.
Combined, the nation's three largest pharmacy chains have announced plans to close nearly 1,500 underperforming stores.
The problems facing the three retail pharmacies are similar, and include rising drug prices, pressure from insurers, post-pandemic changes in customer behavior that have reduced store traffic, and an alarming spike in shoplifting.
In February, traditional primary care providers were warned about the incursions by these nontraditional providers. An American Hospital Association-commissioned report placed Walgreens and CVS among a handful of big retailers and payers, including Amazon, Walmart, and UnitedHealth Group, that were identified as major disruptors in the primary care sector.
"The nation's largest retail, payer and tech disruptors once again invested billions of dollars in healthcare in 2022, continuing to build out their visions to transform the field," the report said.
CVS had planned a major expansion in the primary care market in 2024 following its $10.6 billion acquisition in May of Oak Street Health, the value-based, primary care platform.
Walgreens had a similar strategy with the creation of Walgreens Health and a $5 billion majority stake in VillageMD, acquired in October 2022, an acquisition that then-CEO Roz Brewer called “a new strategy to transform our core businesses.”
"Our strategy leverages an ecosystem including our trusted brands, exceptional assets, healthcare expertise and scale, integrated with a range of new talent, capabilities, resources and an intensified focus on operational excellence to drive long-term sustainable profit growth," Brewer said.
However, those aspirations have not panned out for CVS, Walgreens or Rite Aid, as all of them have reported ongoing financial underperformance this year.
Walgreens
Last week, Walgreens, rocked by financial woes, a leadership shakeup, the wobbly launch of a value-based care initiative, and pharmacists in open revolt, named veteran healthcare executive Tim Wentworth as its new CEO, effective October 23.
Wentworth replaces Brewer, who left abruptly in early September after less than three years at the helm. Following her out the door were CFO James Kehoe and CIO Hsiao Wang.
During an Oct. 13 call with investors, Walgreens announced plans to close 60 VillageMD clinics and exit five markets in 2024 to cut at least $1 billion in costs as it pivots its strategy with Wentworth.
Two days after naming Wentworth CEO, the drugstore chain released its Q4 earnings report, showing a net loss of $3.1 billion for the year, compared to net earnings of $4.3 billion for the 2022.
"Our performance this year has not reflected WBA's strong assets, brand legacy, or our commitment to our customers and patients,” Walgreens interim CEO Ginger Graham said at the time.
“In just six weeks, we have taken a number of steps to align our cost structure with our business performance, including planned cost reductions of at least $1 billion, and lowered capital expenditures by approximately $600 million.”
CVS
The C-suite shuffle at CVS Health continued this week with the announcement that CFO and President of Health Services Shawn Guertin is taking a leave of absence “due to unforeseen family health reasons.”
In his stead, Tom Cowhey, SVP of Corporate Finance, has been named interim CFO, and Mike Pykosz, CEO of Oak Street Health, has been named interim President of Health Services, the Woonsocket, RI-based company announced.
“Our thoughts are with Shawn and his family during this difficult period,” CVS Health President / CEO Karen S. Lynch said. “The Board and I have every confidence that Tom and Mike will ensure we continue to execute our strategy seamlessly while we give Shawn time to be with his family.”
However temporary, the executive shuffle at CVS comes two weeks before the company will report its Q3 findings on Nov. 1.
In August CVS announced a restructuring plan that will eliminate 5,000 jobs to save $600 million, as it released a disappointing Q2 earnings report which showed a net income of $1.9 billion, a 37% decline year-over-year.
During the August investors call, Lynch said CVS wants to trim up to $800 million in expenses in 2024 while shifting resources to expand Oak Street Health.
"These actions enable us to reallocate resources and invest in critical growth areas, such as health services and technology, which are the biggest enabler of our strategy," Lynch said on a call. "We've taken meaningful steps executing on our long-term strategy with tangible proof of the value of our unique integrated offering."
Guertin was appointed president of Health Services on Sept. 7 as part of a reorganization that expanded the roles of several senior executives.
That September reorganization also saw Chief Pharmacy Officer Prem Shah named president of Pharmacy and Consumer Wellness; Chief Customer and Experience Officer Michelle Peluso charged with enhancing patients' end-to-end experience across the company's service channels; and Brian Kane taking over as president of Aetna, a move that was announced in April.
Rite Aid
Also this week, Rite Aid, hobbled by $4 billion in debts, filed for bankruptcy on Sunday with plans to close hundreds of underperforming stores and sell Elixir, its pharmacy benefits subsidiary.
Court documents show that Rite Aid lost $1 billion in the months ahead of its bankruptcy filing, and the chain warned investors that it may not be able to keep the business operational.
Rite Aid paid $2 billion for Elixir in 2015, but analysts believe the company won't recoup even half that much in the sale.
“Rite Aid's bankruptcy filing follows years of underperformance compared with its drug retail peers, yielding a weakened competitive position, elevated financial leverage and limited cash flow generation,” FitchRatings said this week.
Of more than 2.3 million primary care visits, 51% used telemedicine (19.5% video and 31.3% telephone).
In-person follow-up visits were a bit higher after telemedicine consultations when compared with in-person primary care visits, but that varied by specific clinical condition, according to a study published today in Annals of Internal Medicine.
The study, compiled by clinicians at Kaiser Permanente in Oakland, CA, and funded primarily by a grant from the Agency for Healthcare Research and Quality, sought to discern how well telemedicine addresses patient needs post-COVID public health emergency.
The study examined a large, integrated health care delivery system with more than 1,300 primary care providers, between April 2021 and December 2021 (including the COVID-19 pandemic Delta wave). Researchers examined the electronic health records of more than 1.5 million adult patients, of whom 26% age 65 or older, 55% were woman, 22% were Asian, 7.4% were Black, 22% were Hispanic, 46.5% were White, 21.5% lived in less-affluent neighborhoods, and 31.8% had a chronic health condition.
Of more than 2.3 million primary care visits, 51% used telemedicine (19.5% video and 31.3% telephone). Medications were prescribed in 47% of office visits, 38% of video visits, and 34.6% of telephone visits.
After the visit, 1.3% of in-person visits, 6.2% of video visits, and 7.6% of telephone visits had a 7-day return in-person primary care visit; 1.6% of in-person visits, 1.8% of video visits, and 2.1% of telephone visits were followed by an emergency department visit. Differences in follow-up office visits were largest after index office versus telephone visits for acute pain conditions and smallest for mental health.
Treatments administered included medication or antibiotic prescribing and laboratory or imaging ordering. Follow-up visits included in-person visits to the primary care office or emergency department or hospitalization within 7 days.
Outcomes were adjusted for sociodemographic and clinical characteristics overall and stratified by clinical area (abdominal pain, gastrointestinal concerns, back pain, dermatologic concerns, musculoskeletal pain, routine care, hypertension or diabetes, and mental health).
In the study setting, telemedicine is fully integrated with ongoing EHRs and with clinicians, and the study examines an insured population during the late COVID-19 pandemic period. Observational comparison lacks detailed severity or symptom measures. Follow-up was limited to 7 days. Clinical area categorization uses diagnosis code rather than symptom.
