Andrew Shea

As CVS earnings demonstrated today, expect significant changes to Medicare Advantage plans next year. No, CVS is not existing retail clinics "At a time when other large retail health players are exiting the market, including competitor Walgreens (WBA) and most recently Walmart (WMT), CVS is committed to growing its healthcare services through the Oak Street primary care business — which will open up to 60 more locations this year, Lynch said." From the earnings call: "Brian Kane, president of CVS's insurance brand Aetna, said the company is weighing a number of options to battle the headwinds from Medicare and that it isn’t alone in doing so. “There’s going to be a lot of discussion I imagine in the industry, certainly here at Aetna, about what product is ultimately viable,” Kane said. "We are very focused on margin over membership," he added. Kane outlined a number of actions CVS could take to help improve its profits, such as exiting certain counties, slashing benefits — including flex spend cards — and increasing premiums, all of which would result in lower membership. Kane added that all competitors are likely to take similar actions, which puts CVS on an even playing field when enrollees look at plan options next year. We do think there’s going to be disruptions, we do think it's going to necessitate premium increases, and that’s why there’s so much uncertainty about where the ultimate industry goes from an MA perspective in terms of membership,” he said."

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The #MedicareAdvantage landscape is set for a significant shake-up in 2025 due to a confluence of factors. These changes have led several insurers to pull back, resulting in product closures and market exits that will affect over 1.8 million members. This new #OWHealth article examines the impact on the Medicare Advantage market and explains why it is crucial for insurers to reassess their strategies to ensure long-term viability. Read more here > https://owy.mn/3Y6tjnA

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Basic “explainer” on Risk Adjustment and a RAF conundrum. This article from The Commonwealth Fund does a good job of providing the basics of risk adjustment. It also calls out one of the major contributors to patient outcomes that isn’t captured in traditional risk models, the Social Determinants of Health (SDoH). They do a great job on this, so I won’t summarize it here. However, I think there is another factor that isn’t captured that I wanted to discuss and would appreciate some different perspectives. I’d love to get some thoughts on the following. Maybe I am simply being pedantic. The issue not mentioned in the article that I think current methodologies of risk adjustment miss is duration and management of disease. A patient with a new diagnosis of diabetes, for example, now has an elevated risk of numerous complications over their lifetime. However, that risk in year 1 after the initial diagnosis is much lower than the risk at year 10. Current risk models don’t take that escalating risk into consideration, keeping the risk adjustment fixed regardless of duration of underlying diagnosis. In addition, there are few scenarios that will impact me differently as the provider: 1) Management of this patient’s diabetes has been poor for the prior 9 years and now my group “inherits” this patient at year 10. 2) My team has helped this patient manage their diabetes very well for the past 9 years. 3) For the past 9 years, this patient’s prior group had managed their diabetes well but they have now switched into my group. As noted above, in scenario 1, that “new” diagnosis of diabetes severely underestimates this patient’s risk of needing expensive resources this upcoming year. I will be adversely impacted from something that is clinically obvious (duration of a disease increases risks) but which is not captured in the current data. To go one step farther, in frameworks 2 and 3, there is a gap between what the patient’s risk would have been without 9 years of great care and what it likely is now. However, there is no recognition of this work. That is to say, if the patient switched to a group that did a terrible job of managing diabetes, they’d receive the same risk adjustment in year 10 as my group would receive after all of our time, effort and resources had been dedicated to keeping this patient healthy. If the patient’s healthcare needs in year 10 are low because of our efforts, shouldn’t we receive more credit than a group that simply gets attribution? And, what about the prior group? How are (were?) their efforts recognized? Please share your thoughts in the comments.

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This is quite incredible to see. Very few #CMMI demonstrations can point to any savings at all. And “…MSSP savings go further than savings generated by Medicare Advantage…” #ACO #VBP #Primarycare #MSSP #healthcareinnovation

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Blue Health Intelligence, a data analytics and software company, undertook an evaluation of almost 170,000 unique GLP-1 users for weight loss, notes less than half of those prescribed stay on the medication for 12 weeks or more. Younger adults were less likely to continue the drug, whereas those who were prescribed the medication by an endocrinologist or obesity medicine specialist were more likely to continue for longer. Indeed, this data states 30% of patients dropped out of treatment after the first four weeks, and 58% at 12 weeks. Those who dropped out are unlikely to achieve clinically meaningful weight loss.  The likelihood of continuance was further exacerbated for those with health inequities or who lived in underserved health regions. The data comes from Blue Cross Blue Shield Association members participating in Plans that provided coverage of these products, from 2014 through to end of 2023. Razia Hashmi, vice president for clinical affairs at Blue Cross Blue Shield wants to ‘…paint a clearer picture of what makes somebody successful.’ The missing piece here is why the patients stopped – side effects, failure to achieve initial weight loss, stigma and discrimination, or coverage issues related to cost and access. My longtime friend, colleague and bariatric surgeon at Stanford University, Dr. Dan Azagury rightly states ‘…The goal is for patients to stay on this for a significant amount of time. Most likely… beyond 12 weeks.’ https://lnkd.in/ediQskQx

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More than a million people will probably have to find new coverage as major insurers cut costs and pull back from markets for Medicare Advantage plans, according to new reporting from Tom Murphy and Amanda Seitz for The Associated Press. "Any price shift will hit a customer base known to switch plans for premium changes as small as $1," said Fran Soistman CEO of the online insurance marketplace eHealth, Inc.. Read more in this new story out today here: https://lnkd.in/gQ3ZHczw #medicare #medicareadvantage #AEP #openenrollment #partD #healthinsurance #healthcoverage #healthcareoptions #broker #medicareadvantage #medicare #medicaresupplement #medicareinsurance #medicareforall #medicareagent #healthcare #medigap #obamacare #medicarehospital #insuranceagent #medicaresupplements #medicarepatients #medicaid #medicaretreatment #medicareaccepted #finalexpense #seniorcare #medicarequestions #retirement #health #seniors #insurancebroker #medicareplans #medicareanswers #getmedicarehelp

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💹 Tuesday morning, CVS reported its Q1 earnings, and the stock has dropped 18% as Wall Street did not like them leaning into Medicare Advantage at a time when it is riddled with challenges. Check out my substack but below are some of the takeaways. 👬 Similar to the Humana call, they documented many of the headwinds as they look to try to build their integrated network with CVS, Aetna, Caremark, Oak Street and Signify. Despite a revenue growth of $3 billion, reaching over $88 billion, net income took a significant hit, halving from $2.14 billion to $1.11 billion. Click on my substack for the full takeaways from the call with the highlights below: 📈 Key Highlights: ➡ Membership growth to 26.8 million, driven by 800k new MAPD enrollees (lost 300K Medicaid Members YOY) ➡ Revenue from premiums increased by 25%, despite the financial setbacks driven mainly by the 800K new Medicare members they fished out of the open enrollment period. ➡ They had a 580 basis point increase in the Medical Benefit Ratio (90.4%) from the elevated utilization in the Medicare population. The strategic acquisitions like Signify and Oak Street to bolster Medicare offerings are so early days and were not able to offset the headwind ➡ Similar to Humana and UNH, they are going to exit some geographies that are not as profitable along with price for a smaller range of services for 2025 Medicare bids. 🚀 Looking Ahead: - CVS plans operational adjustments aiming for a 4%-5% margin in the MAPD sector, despite expecting to operate at a loss in 2024 of 3%-4%. The longer term goal here will not be achieved in 2025 but is set for 2026 and beyond similar to other MAPD providers. - They are enhancing their pricing strategy for higher utilization in 2025 (probably not a great open enrollment coming for Aetna) and they have their fingers crossed for improving STAR ratings to potentially add $700 million in revenue next year. This was not a great call for CVS, as many expected some of their 2023 acquisitions to begin to bear fruit but in hindsight they bought a meme coin or stock (Medicare Advantage) at the peak as many of the MAPD challenges are major headwinds. I look for them to survive and advance in 2024 with the longer term goal of executing on their strategy. As always, feel free to reach out with your comments and input along with subscribing to my substack. #healthcare #marketaccess #earnings https://lnkd.in/gsf26HaJ

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Great breakdown from McKinsey & Company here on current Medicare Advantage dynamics. TL;DR they have some levers but margins are as thin as they've been in recent memory in 2024. McKinsey called out the following as challenges for MA players moving forward: -Little to no rate increases from CMS -Broker commissions changes -V28 changes -Star ratings (the biggest near-term lever) -Utilization trends -Part D and other regulatory changes Source: https://lnkd.in/g9U4h2Gp

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“So... Apple is entering the hearing space!” For the past two weeks, I've been flooded with messages asking how Apple's latest announcement will impact Concha Labs. Another consumer tech giant is stepping into the hearing space, but what does this really mean? With over 1.5 billion people affected by hearing loss globally, this is a massive market. Yet, like mental health, hearing loss is something people don’t talk about much. If you ask anyone who’s tried hearing aids, you’ll likely hear stories of frustration—they’re often disliked because of impersonal sound quality. For me, they were always too loud or too quiet, and I could never find the “right” fit. This isn’t new. Apple, like Bose before them, will likely face similar challenges in replicating the status quo. Despite their audio expertise, Bose entered the hearing aid space but exited due to the same hurdles. Bluetooth earpieces, with their short battery life and social awkwardness, also highlight how hard it is to create a practical, long-term solution. But here’s the good news: more attention on hearing health, thanks to Apple’s announcement and the OTC Hearing Aid Act, is a win for everyone. It’s sparking conversations about hearing loss—something I kept hidden for decades. Concha Labs' hearing aids are nearly invisible, like contact lenses. When I tell people I’m wearing our product, they’re always shocked because they don’t notice them, even with my hair up! (And this goes for the guys who wear them, too!) What’s clear to me is that while awareness is growing, real innovation comes from solving actual user pain points. That’s where Concha Labs comes in: we offer a fully personalized hearing experience, much like how Spotify revolutionized music personalization beyond iTunes. Our solution is designed for real-world usability—comfortable, discreet, personalized, and customizable in multiple sizes and colors. Created by people who were tired of the status quo (like me!), our Concha Sol hearing aids are made for those who want something better. So, if you’re tired of the same old hearing aids, let Concha Labs empower you to hear clearly. We promise, you’ll notice the difference. 😉 Amy www.conchalabs.com #hearing #hearingaids #apple #conchalabs #invisible #otchearingaids #startup

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This is HUGE. In the U.S., nearly 80% of prescription claims are processed by three "Pharmacy Benefits Managers (PBMs)" - Caremark (CVS), Express Scripts (Cigna), and Optum Rx (UnitedHealth Group). Together, they dominate the lucrative pharmaceutical supply chain and manipulate it to their financial benefit. Now this - according to STAT News and other media outlets reporting today: "The U.S. Federal Trade Commission filed a lawsuit against the largest pharmacy benefit managers and their group purchasing organizations for allegedly anticompetitive practices that 'artificially inflated' the price of insulin and, consequently, impeded patient access to the life-saving treatment. The administrative complaint accused CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx of creating a “perverse” system of rebates that favored insulin that was sold at higher list prices in order to 'line their pockets' at the expense of patients, who were forced to pay more for the medication." I wish the FTC success, and I implore Congress, the Biden Administration and whoever occupies the White House following the upcoming Presidential election to break the stranglehold 'Big Health' has established on U.S. healthcare. This is a stark example of the harm it causes patients, employers, and our nation's economy. #health, #PBMs, #FTC

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With over 2 million members displaced by major healthcare players exiting underperforming Medicare Advantage markets, regional insurers face both a challenge and an opportunity. This influx of high-cost members demands innovative solutions to manage chronic conditions like diabetes and heart failure effectively. At Circadian Health, we’re helping regional insurers navigate this disruption with virtual-first specialty care, reducing costs and improving outcomes for the most complex members. This market shake-up isn’t just a challenge—it’s a chance to redefine care delivery. Discover how regional insurers can transform disruption into opportunity—read more on our blog. #MedicareAdvantage #HealthcareInnovation #VirtualCare #CircadianHealth #ValueBasedCare #HealthEquity

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There has been an uptick in the number of people asking to join the Consumer-First Health Group think tank chats. If that's any indication, Consumer Experience is coming to the forefront again as healthcare leaders are seeking more clarity on how it can fuel their growth strategy. I think one reason these chats are valuable is because we START by looking at what consumers really want with their health and then work backwards to understand what services need to be designed and built, rather than starting with the lens of what traditional medicine currently offers and trying to force new demand for services that don't truly meet their needs. **BIG DIFFERENCE.** These chats are also valuable because we inform our dialogue with our own personal encounters with the healthcare system. Nothing helps people understand what progress still needs to be made better than hearing how it is working (or not working) in our own real lives. Primary care wait times are just a number until they're being described by a community member in pain who can't be seen for weeks. GLP-1's are merely a hot topic until a community member helps us see the hype and better understand the myriad ways that it's improving their life beyond weight loss. Health and wellness are universal. We need more chats like this. We want your perspective. We invite you to be a part of it. MESSAGE ME.

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"CVS Health blamed the declines on higher usage and more costly claims related to its Medicare Advantage policies." More dominos falling... It's simple math Hospital costs keep accelerating Utilization due to sickness keeps increasing Yet rimbursement via government programs is going DOWN! This is business 101 And you don't need a crystal ball to see what's coming... #Healthcare #business #hr #benefits #ceo #insurance #Medicare

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Changes are coming to how Star ratings are measured for #MedicareAdvantage plans. According to a recent McKinsey report, there will be a shift towards reweighting member experience measures, putting more emphasis on clinical and pharmacy metrics. This means MA plans will have to step up their game in those areas to maintain those coveted 4+ Star ratings. MA plans might combine in-person care with virtual care strategies to deliver whole-person care while maintaining the same quality both virtually and in person, since fragmented virtual care experiences are expected to lower Star ratings. Look out for #healthinsurance plans offering more #telehealth services in the near future to keep their Star ratings high. It should be top notch, too: Lackluster virtual services will render the additions a moot point.

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Risk Adjustment alarm bells should be ringing for 💊 RxHCCs 🔔 🔔 🔔 Change is here 🔊 I wonder if all Medicare Advantage operators have a full comprehension of the implications the #InflationReductionAct has on a plans direct subsidy. In other words, the initial estimates show that Risk Adjusted revenue in Part D will go from around $1.97 pmpm (PY23') to between $110 and $130 pmpm (PY25') !!! Has this message managed to trickle down from finance and actuarial to risk adjustment operations? There is a huge importance now in implementing retrospective and prospective processes to drive RxHCC opportunities. Folks should be making sure they are beginning to: ✔ Update suspecting and recapture logic for RxHCCs ✔ Update education for provider and coders ✔ Revisiting Value-based arrangement to incorporate changes ✔ Reassessing coding guidelines ✔ Incorporating RxHCC EDPS quality checks From a lot of conversations thus far with Risk Adjustment leaders, it seems only a small select few are aware of this huge change.

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