Employers feel the side effects of drugmaker control over Wegovy, Ozempic costs
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It would help tremendously if the US changed the rules and made it so most people got insurance directly and not through their employer.
Are they? That sounds right for how long they're with an employer, but if I move companies I'm probably going with the same insurance carrier under the new company's plan. The total list of carriers [0] is pretty dang small (and not every licensed company is doing new policies).
Even if what you say is true it seems like reciprocity would make up for it - Company A pays and Company B benefits like you say, but for every situation like that there's a situation where Company B pays and Company A benefits.
[0] https://www.insurance.ca.gov/01-consumers/110-health/20-look...
At least middle sized companies seem to change insurers commonly enough that both my wife and I have had our employers change said insurers in the middle of our employment.
source: i'm in the health insurance industry
Right. And (IIUC) those profits are set at 10% of revenue, not revenue - costs.
That creates perverse incentives to increase premiums above all else.
At least opex is in the calculation, California utilities don't even have that. It goes a long way to explaining why I pay 50c/kwh in sf (CA private) vs 15c in Sacramento (municipal) or Nevada (private without cost+)
I think my larger point, that jacking up premiums increases revenue, thus increasing the opex/profit pool (regardless of the percentages) is a perverse incentive to jack up premiums as much as possible
As in a 3-5 year (which is about what I've seen with ACA premiums) doubling of premiums, thus doubling the potential profit pool without increasing opex in any way. In fact, the use of third parties to provide "pre-approval" for an increasing number of drugs, tests and procedures reduces opex, leaving more of that 20% for profits.
In fact, my insurer has consistently raised premiums while squeezing providers who are now charging separate fees (meaning additional co-pays for me) for stuff that was once included in a single fee (one example is charging an "outpatient facilities fee" in addition to the copay for seeing a doctor. Increasing my costs, while the insurance company can just shrug and say, "that's not covered, suck it up!"
Meanwhile, doctors (especially GPs) are over-scheduled (my GP is scheduled to see every patient in 20 minutes or less), allowing the practices to charge for seeing more patients -- increasing their profits -- at the expense of patient health.
And heaven forfend having multiple related issues which require more than one specialty -- you're just shunted from specialist to specialist without much (if any) communication and a shrug if something unrelated to the specialist's area comes up.
The point is that the whole industry is fraught with perverse incentives that drive up costs, reduce the quality of care and a laser focus on the wrong stuff (i.e., services provided vs. holistic health outcomes).
It's disgusting and harms people. You'd think that by now we'd have decent healthcare. But the perverse incentives pushing toward financialization of, well, pretty much everything medically related, are actually impacting the average lifespans of Americans.
And more's the pity.
One could point out though, it kind of incentivizes them to no longer negotiate prices as hard. This makes benefits more expensive, growing the total size of their 20%.
But on the other hand, pointing out the idea of holistic health outcomes, increasing benefit payouts to those kind of processes is something incentivized by this rule. Adding a lot of these more "fringe" holistic health benefits, like telehealth nutritionists gym membership subsidies and what not, also grows the benefit payout side and then lets them take more total profit. But there's no free lunch here, those benefits are largely coming from the premiums being collected.
Also, a lot of these insurers don't even end up getting any of that 20% some years. The first few years after the ACA pretty much every insurance company had some big losses. It has been a while since I looked at the industry, but they're not always making massive money margin-wise.
Don't take my comment as me endorsing the current system. Its dumb and broken and I hate it.
Maybe I'm missing something here, but other things being equal, just increasing premiums allows for a larger opex/profit pool.
20% of $100 is $20 and 20% of $200 is $40. Yes, they'd still need to spend (using my made-up numbers) $160 instead of $80 on care/benefits, but the profit pool still increases -- a perverse incentive to raise premiums.
>One could point out though, it kind of incentivizes them to no longer negotiate prices as hard. This makes benefits more expensive, growing the total size of their 20%.
Absolutely. That points up the perverse incentive to raise premiums and highlights the lack of incentive to reduce costs.
>But on the other hand, pointing out the idea of holistic health outcomes, increasing benefit payouts to those kind of processes is something incentivized by this rule. Adding a lot of these more "fringe" holistic health benefits, like telehealth nutritionists gym membership subsidies and what not, also grows the benefit payout side and then lets them take more total profit. But there's no free lunch here, those benefits are largely coming from the premiums being collected.
I guess I should have been more specific when using the word "holistic." I meant it in the sense of treating the whole person (with a focus on the outcome of such treatment) rather than just specific symptoms. I wasn't talking (or even thinking) about nutritionists and gym memberships and stuff like that. Those aren't bad ideas, but are geared toward healthy people.
Those with specific conditions (e.g., vascular disease, cancer, hepatitis, HIV, etc.) manifest with other issues that, while they are exacerbated by a specific condition, aren't successfully treated by addressing that condition(s). Addressing ancillary issues (which may be at least as, if not more, debilitating than the condition one may be treated for by any particular specialist) along with the "primary" issue in a holistic (rather than specific treatment for specific issues while ignoring other issues -- which is one of the perverse incentives of paying by the procedure rather than the outcome) fashion.
I won't get into details here, but recent events in my own life have pointed up how fractured medical care is and how difficult it is to navigate (especially when your GP is allotted 15-20 minutes with you every six months or so) side-effects of various treatments/procedures/drugs that have specialists shrugging their shoulders and saying, "that's not my specialty. I did my job. If you're not recovering/getting healthy, that's not my problem. Go see someone else."
There are no incentives for medical practices to provide comprehensive management of health issues because the only person who is (theoretically) paid to do so, isn't given the time or the resources to do so. Everyone else just wants to do their specialist thing and walk away.
That's the wrong way to do medicine.
My apologies if I wasn't clear about that in my previous comment.
>Also, a lot of these insurers don't even end up getting any of that 20% some years. The first few years after the ACA pretty much every insurance company had some big losses. It has been a while since I looked at the industry, but they're not always making massive money margin-wise.
That's absolutely correct. In fact, most insurers (at least in my area, a large, dense, urban area) have left the ACA market and those that are left struggle to maintain their viability -- mostly by screwing over their customers.
So yeah. I mostly agree with you. But that doesn't help me or the million of others who pay exorbitant premiums for mediocre medical care.
I'm pretty angry about it, but short of moving somewhere with universal health care, I'm not sure how to address that.
So they're still not just increasing profit by jacking up premiums, they have to actually find another $80 of benefits to pay out. If subscribers don't have those costs, they can't just increase premiums. If they raise prices to $200 but only end up with $90 of benefits to spend they have to cut a refund.
While that's true, such a situation isn't very common[0].
Only a small percentage of people receive rebates, and those that do don't necessarily get much in the way of a rebate
It's anecdata, but my premiums have nearly doubled in the past four years, with no additions to coverage (in fact, my insurer informed me that while my premiums were going up by 15% in 2024, I would receive less coverage than in 2023. The only reason I maintained my coverage with them is because I have an ongoing issue and I'd prefer not to be forced to change providers until the issue has been fully addressed.
So yes, just raising premiums doesn't guarantee more profit, but it certainly enables it and, at least in my case (which, again is just anecdata) means higher premiums and less coverage. Something doesn't seem right here.
And that something is how we've implemented healthcare in the US.
[0] https://www.healthinsurance.org/obamacare/billions-in-aca-re...
This seriously needs to happen. Before we can have ANY other reform, this needs to happen.
Unfortunately it will never happen, as it’s insanely politically unviable as almost no one wants that to happen. It’s the ultimate free market approach, but then people would have to pay for something they “get for free”. And once they realized how insane the system is, and how much everything actually costs, you might see knock on effects from that. Some bad, some good. It would be an experiment for sure.
Single payer is more realistic, even if it doesn’t do much to affect many of the underlying issues.
Why would they? They often pass the cost increases to the employees and employer-tied healthcare it's a useful retention tool as people are far less likely to quit if their treatments would suddenly become very expensive.
Up to a limit.
In well compensated white collar industries like Software, Life Sciences, and even Hardware, a good health plan can be a major differentiator or ensure strong employee retention, because a $20-30k raise is basically $12-18k after tax (not bad, but not worth the amount of headaches)
I know some larger companies in the Bay Area that don't pay as competitive as Netflix but provide BCBS at a very low cost.
[0]: Though it wasn't broadly employers that opposed both the public option for the ACA or Medicare 4 All, but insurance companies and adjacent services most specifically.
[1]: Though, there is some notion (though no hard evidence) that bigger businesses can use it as retention and recruitment tool (https://www.marketplace.org/2021/06/10/why-dont-u-s-business...) I don't think their ability to recruit top talent rests solely on healthcare options, however.
[2]: https://www.epi.org/publication/medicare-for-all-would-help-...
[3]: Though Automakers and other manufacturing companies likely benefit regardless of size: https://www.autonews.com/article/20050328/SUB/503280747/japa...
[4]: https://www.blhct.org/about
[5]: Such as business owner(s) political ideology (in either direction), tax policy implications and the like.
What I'm saying is obviously speculation, but it's based on the following:
- large fortune 500 companies are the ones with actual political power. The vast majority of businesses are far less likely to be able to lobby for significant policy change.
- that said, if this was an actual issue wrt to budgeting and such, I'm sure the bean counters would have already lobbied internally for external lobby for universal healthcare, if that makes sense. The silence from the big players on this subject tells me they're more than willing to pay for their employee healthcare, otherwise they'd already have eliminated this cost center. So, they do have an incentive to maintain the status quo.
- their ability to recruit kinda stopped after ACA. Before that, major players had 100% free healthcare, which was an actual recruitment advantage. Nowadays, it's pretty uniform so it does not matter. HOWEVER, I personally have some anecdata about folks who stay in big tech because they have kids with special needs, care which would be super expensive if they wanted to move to some small startup or even a government job.
On this specifically, what I have read on the subject suggests that most businesses simply aren't evaluating this to begin with, even big ones, but the ones that have, such as the big 3 Automakers, are actually for universal health care (since it significantly reduces their costs for employee benefits, especially for retired workers) and other big businesses with manufacturing interests. Many large employers like state governments would really benefit from federally implemented universal healthcare as well and they do lobby for this.
I simply think that the insurance and adjacent industries have such targeted lobbying on this that other lobbying is more easily ignored, since GM for instance, isn't spending millions to specifically lobby for universal healthcare, while insurance companies and adjacent industries that benefit from the status quo directly lobby consistently spending millions against it, quite specifically
Access to healthcare is part of your compensation in the US.
I would have to quit if my company wasnt providing a reasonable medical coverage because these costs can otherwise bankrupt a person in this country
Which is, itself, due to acts of Congress. Our system is the product of intentional design.
Because companies could no longer compete via wages, they began competing with fringe benefits -- health insurance being chief among them. It's been that way ever since.
Your insurance would be functionally quite similar if you purchased it in the private market, and its relative cost compared to your company's premiums depends on your age (and smoker status) compared with the average at your company.
But the upshot is that your cash compensation is probably quite a lower because your employer is paying for your healthcare bills. This bundling doesn't necessarily serve you or your employer, though if you're an older employee with dependents who are also covered, you may be benefitting from an implicit subsidy by younger employees without dependents.
And they in reverse benefit from me paying a higher tax bracket because of my higher income. This is one of those tradeoffs we all make in a society.
We'd all be better off at the end of the day if healthcare was separated out from work and we'd just pay it out of taxes directly, like every other reasonable country out there.
...ooookay? Not sure how to process this defensive take, but at least you make it clear what demographic you belong to.
My point was entirely financial: on the (heavily regulated) open market, health insurance for older folks is more expensive than for younger folks, while companies typically pay the same premium for each individual employee regardless of age.
I'm not making any claims about whether younger employees benefit from this weird arrangement---which is what you seem to be addressing here---just noting that they would pay less on the open market than their employers are paying on their behalf, while older employees would likely pay more.
(I say this as a parent who very much benefits from employer-sponsored healthcare.)
The quality of care for Medicaid patients is generally crap. Go and ask your doctor if they accept Medicaid patients, or even those on ACA plans. I'd wager the answer is a big 'no'.
The differences in quality of care and levels of access are stark, with most Employer subsidized insurance >> ACA plans >> Medicare >> Medicaid.
For many industries, especially blue collar, it would actually be much better for employees to do ACA plans as they would pay much less for their healthcare post subsidies.
The ACA has been such a boon for small businesses and entrepreneurs - before ACA you basically couldn't get insurance. Now it is actually a non issue.
Sorry for the late reply. That may be true in your state[0], but in mine all the insurers that have employer plans (although providers made sure to ask whether your plan was ACA or not -- "we don't accept ACA plans!" before then) have left the ACA marketplace. I admit that they did try to raise premiums 20-30% a year before quitting the marketplace -- I declined to pay that much more, although premiums have risen that much and more with the insurers still on the ACA marketplace.
So, while there may be places where the ACA provides decent coverage at a reasonable rate, there are other places (sadly, like where I live) that it does not.
On the whole, I'm glad the ACA exists, as it provides insurance to many who could never have afforded it in the past.
That said, it's far from what we really need -- a single payer system like Medicare, but for everyone.
[0] I live in New York.
That's absolutely the case. I have an ACA plan and in order to get decent coverage (as well as a $600 deductible and $5900 annual out-of-pocket costs) along with significant co-pays for hospitals and durable medical goods, I pay nearly $15,000/year.
And premiums just keep going up and up -- something like 15-20%/year, while more and more stuff (all radiology[0], many drugs and pretty much anything other than routine care and consults) requires pre-approval from third-parties engaged by the insurance company who generally take several weeks to make determinations, which can significantly delay urgently needed care.
Even worse, many providers refuse to accept plans sold on ACA marketplaces, which, in many cases, leaves the providers who are accepting Medicaid[1] and Medicare[2]. Those are generally not the top tier, despite the huge premiums (in my case, nearly USD$1100/month -- just for me) charged by the insurers.
Here in the US, we need a single-payer solution in the worst way. The profit motive for healthcare distorts things in so many ways -- with patients getting poor coverage/care and providers getting squeezed by insurers to tweak their quarterly numbers. It's disgusting.
[0] https://en.wikipedia.org/wiki/Radiology
[1] https://en.wikipedia.org/wiki/Medicaid
[2] https://en.wikipedia.org/wiki/Medicare_(United_States) (not to be confused with the AU program of the same name -- they aren't similar)
My employer paid for health care has that same monthly cost for my entire family with a $1500 out of pocket max. I don't think you have the first clue how much money that $8500 difference is for the average american.
Plenty of people are on treatments that absent insurance (in the US) become unaffordable the moment you don’t have actual good insurance (ACA care is basically “don’t go bankrupt through accident/emergency). Couple that with the massive cost you get when you switch to having to buy multiple plans and you get trivially screwed.
You cannot easily lose employer provided insurance, and that’s part of what keeps wages low.
That said, if you're on minimum wage, you're getting other subsidies for the plan and might qualify for Medicaid anyways, so honestly looking at this average cost and comparing incomes is already a pretty useless comparison anyways. You'd have to know what all you qualify for which will vary from state to state. So nobody getting paid minimum wage is spending $477/mo for health insurance.
They won't. Sure it's expensive, but it gives them control over employees. Losing benefits is a fear for a lot of people. Gaining benefits is a badge of honor for some people.
No, employers like it this way.
My proof point is based mostly on reddit forums where there are repeated complaints about insurance coverage of their medications, although I am seeing some success with coverage for Mounjaro -- which interestingly I think is the most expensive.
https://reddit.com/r/Ozempic/search?q=insurance&restrict_sr=... https://reddit.com/r/loseit/search?q=insurance&restrict_sr=o... https://reddit.com/r/Mounjaro/search?q=insurance&restrict_sr...
As others in this thread has pointed it, it could end up being a cost-savings measure for insurance companies if weight loss medications prevent other more costly obesity related complications down the road.
One obvious way to reduce prices would be to have the largest customer negotiate better prices, right? Fun fact: Medicare was not allowed to negotiate drug prices until 2022. [0]
[0] https://www.kff.org/medicare/issue-brief/explaining-the-pres...
If you want to see the sordid history of this restriction read the “Legislative History” on Wikipedia. [0] tl;dr the congressman responsible for this provision in the 2003 law was subsequently hired as chief lobbyist for the Pharmaceutical Research and Manufacturers of America.
[0] https://en.wikipedia.org/wiki/Medicare_Prescription_Drug,_Im...
I was on Ozempic for a few months, and I absolutely did lose 10 lbs a month while I was on it. It is a miraculous drug. Of course, after a few months my insurance company dropped coverage.
I started gaining 1 lb a week. After a few weeks I went back to my Dr. and asked if there was anything that could be done.
She put me on Welbutrin and Metformin. Its the same drug combination which they use as an aide to stop smoking.
Its working great. I'm only losing about 5lbs a month now, instead of the 10lbs on Ozempic. But it sure beats the hell out of gaining 1lb a week. And I lost 70lbs so far!
The only side effect I had was....I lost all interest in smoking :-( The drugs work by reducing how much dopamine your brain releases due to pleasurable stimuli. So you tend to get less jollies out of anything you liked doing---eating, smoking, or even procrastination! Yeah, I procrastinate way less too, its just not as pleasurable as getting stuff done is anymore.
Basically, it's the drug of choice for Puritans. Less temptation on the 7 deadly sins, and more work ethic. So there's that. But if you've ever seen somebody die by congestive heart failure, you know its waaaay better than that.
I don't know about you, but for me, anything which requires extreme self-control, 24/7, eventually fails.
If it's just a matter of changing habits, yeah that is hard, but it works. It takes a lot of self-control to change a habit, but once you have established a new habit pattern, you do it automatically.
Even if its not a matter of habit--like you avoid cheating on your wife by just not hanging out with beautiful women--that works too. It takes self-control, but not continuous self-control.
But continuously, actively, fighting against one of your strongest urges takes energy and depletes your willpower. I've been able to do it for 3-6 months, but after that I just cave.
I'm in the same boat as you but with ZebBound. EliLilly makes the starter dose (2.5 mg) accessible but all other doses are unavailable. I suspect their strategy is to get people to have a good first month then go screaming to their employers when they can't continue.
I'm transitioning to the Bupropion / Naltrexone combo and while I'd like to stay with ZebBound I would still be happy if it works half as well as ZebBound (at 1/10th the cost!).
>North Carolina initially wanted to save money by limiting prescriptions to patients who first tried lifestyle management programs to lose weight
This is exactly the kind of diversion program that the manufacturers are holding over the head of insurers. Manufacturers are basically saying "allow everyone to get it or else we take away your discounts."
Edit: looks like they still have a great program, including mental health, obesity and weight loss counseling, and a variety of other great services! https://healthy.kaiserpermanente.org/southern-california/lea...
The drugs do.
Given what happens to healthy-weight immigrants who move here, it sure looks like our viable policy options are “substantial retool our whole society” or “drugs”. The former has approximately no momentum behind it.
Smart money’s on the answer being “yes—plus some other stuff”. Where do you even start?
More than any one factor, this is one of the biggest, if not thee biggest one. Get people out of cares and walking around to do daily things like going to work, or shopping for groceries etc. and you naturally get more movement (and interaction) in your day. This compounds over time and encourages other movement.
Of course food matters (you can't exercise away a bad diet after all) but we actively encourage stationary activities by not having public spaces that are designed for movement and activity on foot / bicycle / other physically active options
Probably a few of these things wouldn’t have such a bad outcome, but we’ve likely got a lot of problems all contributing to something much worse than the simple sum of their individual harms.
People, in general, want a shot or pill to make their problem go away. Short of a shot or pill for motivation and self care, commercial solutions will be preferred.
Every overweight person I know at one point or another has dieted. And lost significant weight.
This is what Google Gemini reports. Seems to line up with my life experience.
"According to a 2022 survey, 44% of Americans are on a diet, and 80% have been on one in the past. "
The difficulty is always in maintaining the long term.
5 years. 10 years. Till you die.
https://www.scientificamerican.com/article/unexpected-clues-...
Outside of ConditionCare,, they also have monthly webinars (sleeping better, starting a walking program. etc)
How much will they save from obesity-related diseases?
I also realized I was having a full blown panic attack every Friday night (the day after my injections), waking up and throwing up and crying thinking I was going to die. It’s dumb but it took me about a month to realize it was related to the Wegovy. I’ve been off it for about nine months now.
It did keep me from gaining weight, I’m up 30 pounds since I stopped taking it, back to where I was, but hey if it does work for you I’d say go nuts.