payers

Amelia Kinsinger

Most people know Medicare is the government-run insurance program that provides healthcare coverage to those over age 65 in the US. But many don’t understand its counterpart, Medicare Advantage.

Medicare Advantage is the private-run, government-funded alternative to traditional Medicare, which allows commercial insurers to offer plans to seniors. While it follows many of the same rules as traditional Medicare, the private version offers extra benefits like dental, vision, and possible lower cost-sharing.

Enrollment in the program has increased significantly in recent years, and more than half (51.6%) of all Medicare beneficiaries are now enrolled in Advantage plans.

It was created in part to lower government spending. Instead, the program has turned out to be extremely expensive.

Join us as we take a closer look at how we got here.—MA

      

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retail pharmacies

Marcello Bevilacqua

These days, it seems like everyone is talking about specialty drugs. But what about the pharmacies that distribute them?

Specialty pharmacy started as a niche industry in the 1970s. But as more specialty drugs were invented, it grew hugely profitable. Specialty drugs now make up about 2% of prescription volume but account for approximately between 40% to over 50% of pharmacy dispensing revenue, according to a July 2024 interim staff report from the Federal Trade Commission (FTC). That same report found specialty dispensing revenue reached $237 billion in 2023.

Experts say specialty pharmacies can help patients who need more assistance than the average retail pharmacist can provide. But as profits have grown, so has scrutiny.

“I think it probably varies from drug to drug, but in general, within the US healthcare system, we have a major value problem where we spend a lot of money and don’t necessarily get the outcomes that we would expect for the amount of money that we spend,” Allison Oakes, chief research officer at healthcare data analytics firm Trilliant Health, told Healthcare Brew.

So what makes a pharmacy special? Keep reading here.—CC

      

pharma

Marcello Bevilacqua

Pharmacy benefit managers (PBMs) have come under a lot of pressure lately. They’re accused of raising drug costs and pushing independent pharmacies toward closure. But how did they get so much power?

PBMs negotiate drug prices on behalf of health plans and pharmaceutical manufacturers. They create formularies, which list which drugs health plans cover and reimburse.

Decades ago, PBMs were independent operators, but now, the biggest ones are vertically integrated with healthcare conglomerates, giving these companies major control over drug prices and reimbursement.

The three largest PBMs are all owned by health insurance companies. OptumRx is owned by UnitedHealth Group, Express Scripts is owned by Cigna, and CVS Caremark is owned by CVS Health, which includes Aetna.

The Federal Trade Commission (FTC) reported in 2024 that UnitedHealth Group, CVS Health, the Cigna Group, and Humana—four of the largest healthcare conglomerates in the US—control 22% of all health expenditures.

“There’s very little transparency when there is all this vertical integration,” Lovisa Gustafsson, VP of making healthcare affordable at healthcare research foundation the Commonwealth Fund, said. “We can’t see all of the behaviors behind the scenes and really understand where money is being made.”

Keep reading for more on the challenges posed by vertical integration.—CM

      

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vital signs

Francis Scialabba

Today’s top healthcare reads.

Stat: 760,000. That’s how many individual ACA enrollments are to be canceled by the Trump administration, which alleges that they’re fraudulent or improper. (the Wall Street Journal)

Quote: “Cancer don’t pause while the paperwork’s in progress. There’s something especially painful thinking about how much time I spent fighting healthcare instead of being with Mason. I was forced to become a PBM, insurer, research expert, all while trying to be his mother.”—Tabitha Lowe, a Texas resident whose son died of a rare cancer, on how the family’s PBM denied coverage for a special medication (KFF Health News)

Read: A decline in nursing home bed availability is becoming particularly acute in rural areas. (the New York Times)

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