The Self-Insurer June 2024

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The Rise of Hybrid Healthcare Delivery


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The Rise of Hybrid Healthcare Delivery


medical clinics can prove to be a huge capital expense for self-insured employers, which is why many smaller and midsize businesses have banded together to share near-site facilities. But with virtual care now being integrated into this brick-and-mortar model, onsite clinics are becoming a more affordable option – reflecting a larger trend afoot in primary care, urgent care, inpatient care, specialty care and behavioral health.

Provider on Demand offers a window into the convergence of onsite medical clinics and telehealth. The startup’s novel approach features a lower-cost alternative to the traditional


corporate clinic in the form of a soundproof brushed aluminum frosted glass pod to ensure privacy. It can be installed within 100 square feet of floor space at any business and is staffed by an onsite medical technician who can draw blood, take vitals and assist a boardcertified physician who virtually instructs patients through physical examinations from a large TV screen.

Describing it as “the iPhone of healthcare,” chief research officer Robb Dies says the aim is to provide a concierge level of care onsite for employees and their families. “We find that people don’t want to call in sick, miss work, and take themselves or a family member to their physician,” he explains.


This hybrid model is part of a new movement whose rethinking of healthcare delivery fuses operational efficiency with appropriate care delivery. “We’ve seen over the past five to seven years what we call “medical cabins” or medical kiosks,” reports Larry Boress, executive director of the National Association of Worksite Health Centers.

Sometimes, these arrangements involve a completely self-serve unit in an employer’s office or shopping center where someone can sit down in front of a screen to talk with a provider and use their equipment to take their own vital signs. In other cases, a nurse or sports trainer helps guide the patient through the visit.

“Clearly, it’s an opportunity to connect with people, particularly mental health providers, because there’s so few of them around,” he says. “But what we’re finding is that it’s not just Teladoc; it’s telechiropractic, tele-acupuncture, tele-dermatology – almost all the fields now enable you to supplement or offer these kinds of services.”

About one-third of employers of all sizes and every type of industry have some form of onsite and near-site, mobile, virtual or shared center medical clinic, according to Boress. In addition, he says roughly 60% to 70% of employers with more than 5,000 lives have or want some form of health providers coming onsite.

Anywhere from 16% to 20% of these facilities are run, managed and staffed by employers, while about 60% contract with thirdparty providers, he reports. Others offer a total turnkey operation wherein they hire providers, build and renovate and handle services, he adds, while 18% to 20% use hospitals, health systems or private medical groups to deliver this kind of care.

All major vendors and providers that deliver care now have as part of their scope of services a virtual component that offers employers the ability to extend services beyond headquarters, particularly to those who are in hybrid workplaces, Boress notes.


Melding virtual and in-person care is a powerful combination from a mathematical standpoint alone, says Kim Darling, chief growth officer of Recuro Health, which has created a virtual-first care delivery platform and is

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Hybrid Healthcare Delivery

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rolling out a hybrid product that has a clinic network structured similar to an employee assistance program benefit model.

She references UnitedHealth’s CEO Andrew Witty’s plan to launch virtual-first primary care in 2022, noting that it makes sense cost-wise for an entity that large to have telehealth reimbursement under the hood. With telehealth visits costing $25 to $45 vs. $70 to $150 for brickand-mortar medicine, she says the savings quickly add up.

“I recently looked at a client that has 53,000 doctor visits a quarter,” she recalls. “If you can just peel off 10% to 20% of those and put them in a bucket where the reimbursement is $25 to $45, you’re saving millions of dollars in claims cost.”


The potential for improved outcomes is another consideration for the rise of hybrid health. A study published in Health Affairs tethering telehealth to more doctoroffice visits, care continuity and medication adherence, alongside fewer ER visits for Medicare patients, could help reshape strategies in the commercial insurance market. These findings are being used to argue in favor of a congressional extension of pandemic-era telehealth flexibilities that are scheduled to expire at the end of 2024.

However, stand-alone virtual and brick-and-mortar models are facing their share of headwinds. Consider, for instance, how major U.S. retailers such as Walmart, Walgreens and CVS recently shuttered instore clinics, while Optum abandoned virtual care, and Teladoc and Amwell have each faced setbacks.

The hybrid model that Provider on Demand has rolled out to employers was envisioned with the understanding that telemedicine has extreme limitations – that chatting with a doctor on the phone for several minutes does not constitute a proper patient examination. “Physicians, nurse practitioners and physician assistants are not excited about being on the other end of a phone call trying to diagnose somebody with a sore throat and not being able to do any tests or appropriately evaluate the patient,” Dies says.

Telehealth usage soared to about 90% of clinical care during the pandemic, then fell steeply to about 25% or 30%, observes Jonathan Wiesen, M.D., founder and chief medical officer of MediOrbis, a global specialty telehealth company. Still, he notes that it’s up nearly 15% or so from pre-pandemic levels, which “speaks to the overall importance of taking care of patients in the best way possible.”

Given the inherent challenges associated with telehealth, one industry observer believes that semantics matter when explaining what is happening in the onsite and near-site clinic space. “It’s important to distinguish between telehealth and virtual care because virtual care in our clinic world where it intersects is seeing that same provider that you would see in person,” observes Carol Cox, VP of business development for CareATC, a national leader in onsite healthcare services. “It gave our doctors other options to be able to treat that person and be convenient.”

Prior to the pandemic, she says telehealth was a niche commodity with low utilization before everyone stood up and took notice that it was an additional option that was worthy of investing in. Nowadays, she notes that behavioral health providers are in great demand, “and so how do we make it convenient for them to be able to work with our providers and actually set up a virtual visit right then when that person has that immediate need?”

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Hybrid Healthcare Delivery
Carol Cox VP of Business Development for CareATC

The fact that people are increasingly comfortable with virtual visits is helping move the needle on untreated behavioral health conditions. “Before the pandemic, the no-show rate for behavioral health was 11%,” Cox reports. “It dropped to 6% after the pandemic, which, while not great, is still a 5% positive difference.”


When evaluating the impact of onsite or near-site clinics, Boress says the focus is moving away from return on investment (ROI), wherein employers wonder just how quickly they can recoup their capital investment from building and opening their own facility. They’re now more concerned about the value of that investment, which shows up in a lower number of emergency room visits, keeping people on the job, more preventive screenings, reduced health risks, higher employee engagement and satisfaction, and improved productivity.

While ROI generally ranges from 1:1 or 1:1.5 to as high as 1:4, he says much of it depends on how willing the employer is to become engaged, promote these services and incentivize employees to take advantage of them. Savings from clinic utilization show up in a variety of ways, including reducing A1C scores or increasing the number of flu shots.

By drastically lowering the overhead of running a full-blown onsite medical clinic staffed by a handful of providers and nurses, which also can require a huge upfront expense, Dies’s company is focused on helping employers leverage their investment in a hybrid health clinic.

“We offer a low PMPM that will cover not just the employee that the company is paying for but all of their family members,” he reports, noting that savings are found in the avoidance of large claims associated with major ER claims and hospital admissions.

There’s little doubt that onsite or near-site clinics also serve as a talent-management tool and avenue through which to

Hybrid Healthcare Delivery
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become an employer of choice, particularly in communities or markets with labor shortages.

“It really helps with recruitment and retention and enables employers to save in many ways,” Boress believes. “This often becomes the most treasured benefit for employees because over 60% don’t charge anything at all for any of the care, lab services or drugs that are provided, and 40% charge a minor amount just to make sure people show up for appointments. Usually, you can see somebody the same day or the next day.”


The next phase of development will be for telehealth providers to take on risk, embrace more value-

based care, and partner with provider groups that need or desire capacity, according to Darling. Another huge issue is pure access. In the target-rich environment of Orange County California where she lives, Darling says it can take as many as four to six weeks just to get a doctor’s appointment, regardless of what’s wrong with the patient.

“How do you how do you maximize that capacity the right way? It’s very difficult to do in a brick-and-mortar setting,” she explains. “There are a lot of bodies that are involved.”

The virtual component allows health plans to arrange provider calls much quicker than a brick-and-mortar model, she says, dramatically shrinking the access problem, which significantly reduces the cost of care.

Ultimately, Darling believes the holy grail of hybrid health will be virtual providers partnering with brick-and-mortar providers and agreeing upon a risk point that brings value to the risk bearer, whether that’s an insurance company, or the actual provider group is taking risk and bring value to the member. However, she believes the arrangement is probably two or three years away from coming to fruition.

She says the best way to provide solid expertise is partnering with a regional provider group that has local expertise, understands their population and has the data to increase engagement. Building in a

Hybrid Healthcare Delivery

virtual-first approach to partnerships with John Hopkins, Baylor Scott & White, UCLA, or any other trusted brand-name entities across the U.S. will speed access to cost-effective care that’s more convenient, comprehensive and higher quality than operating in a virtual or brickand-mortar silo, she opines.

“We’re at the precipice of a new model in virtual healthcare,” Darling notes. “You start out by adding virtual healthcare specialties. There’s a lot of fragmentation in digital health right now. And I think if they come together, whether it’s through acquisition or a roll-up strategy, they can create a virtual PPO where the rates are low enough.”

As technology evolves, the possibilities for operational efficiency will mount. Darling says AI symptom checking is going to be on a different level. She has heard countless stories of patients who have seen anywhere from two to as many as 16 doctors unable to pin down a definitive diagnosis. The fact is that doctors do not have enough

time to read all the pertinent publications to stay on top of the latest industry developments to sharpen their diagnostic skills.

“We’re going to see an amalgam of front-end technology that will triage the patient more efficiently and get into diagnosing in a much more efficient and accurate manner than what happens today,” she adds.

Bruce Shutan is a Portland, Oregon-based freelance writer who has closely covered the employee benefits industry for more than 35 years.

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Specialty Pharma:

Cost and Risk Management Opportunities


pharma – the insurance industry category of medication and treatments for rare, complex diagnoses that often require special handling and administration – has been growing at a record-breaking pace. Incentives are leveraging the latest technologies and spurring the development of treatments such as biologics, biosimilars, and gene- and cell-based therapies, which is increasingly challenging insurers’ ability to predict, control, and manage the costs of these treatments.

Today’s specialty drugs treat a wide and growing range of conditions and needs, from rare diseases to innovative and targeted treatments for cancers, inflammatory diseases, and more. This particular niche launched in earnest in 1983 with the passage of the Orphan Drug Act, which incentivized pharmaceutical companies to investigate treatments for diseases affecting fewer than 200,000 individuals in the U.S.

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Additional incentives introduced over the years, including the Accelerating Rare disease Cures Program (ARC), established in 2022 by the U.S. Food & Drug Administration’s Center for Drug Evaluation and Research, and the 2023 establishment of the Office of Therapeutic Products (OTP), which aims to improve oversight of and expertise in gene and cell therapies and other biologics, have also accelerated the development of these drugs.

Not surprisingly, claims related to the rare and non-rare (but difficult to treat) conditions for which these drugs are being developed have been rising. In 2022, according to CVS Health Payor Solutions, 50% of new drug approvals were for drugs to treat orphan diseases, and at least half of all payor pharmacy costs currently derive from the 2.5% of insureds on specialty medications.

Hundreds of such new drugs are also currently underway for more than 13 conditions. CVS Payor Solutions is projecting that by 2025, 606 new drugs, 211 supplemental specialty pharmacy indications for existing drugs, 34 new gene therapies, and 30 biosimilars will have received FDA approvals. The specialty pharmacy market overall is also expected to grow at a compound rate of 35% in 2025. Much of the segment’s growth, says specialty pharmaceutical consultancy AscellaHealth, will come from gene therapies, drugs for cancers

(particularly blood cancers), autoimmune disorders and noncancer blood disorders, and neurological disorders.


Many of the newest drugs are giving new hope to patients and their families, but in the past ten years, high list prices for these drugs have imposed significant financial risks for payors. Drug utilization data for Medicare Parts B and D from the Center for Medicare and Medicaid Services (CMS) from 2014 to 2021 (Chart 1) showed that annual costs for covering specialty and nonspecialty cancer drugs rose by approximately 11.7%, compared with 8.4% for non-cancer drugs.

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Both metrics include unit cost, utilization and enrollment trends but exclude the impact of drug rebates, which are not transparently reported to CMS and other stakeholders. Of these, the highest-cost cancer drugs, which we define here as typically costing commercial markets in excess of $100,000 per year or more, experienced an annual unit cost-plus-utilization-plus-enrollment trend of 24.4%. This particular trend drove the overall average increase in costs for the highest-cost specialty drugs to approximately 16.3%, versus the highest-cost non-cancer drug trend, which was about 10.0%.

While the cancer category is the leading one of continued high specialty pharma trends, certain other rare conditions also have high-cost drug treatments:

• Hypophosphatasia is a rare genetic disorder resulting in defective teeth and bone mineralization. Hypophosphatasia treatment Strensiq (asfotase alfa) is typically the highest-costing chronic treatment. In 2023, a course of treatment with Strensiq could cost around $2.5 million. Crysvita, which treats x-linked hypophosphatasia, has typical annual cost levels of around $500,000.

• The many hemophilia A and B factors on the market have annual costs that typically range from $400,000 to over $1 million. The recently approved one-time gene therapies – Hemgenix (etranacogene dezaparvovec-drlb) for hemophilia B and Roctavian (valoctocogene roxaparvovec) for hemophilia A, have list prices of $3.5 million and $2.9 million, respectively. New hemophilia treatments also include lifestyle-improving features such as extended-release so patients may require less frequent treatments, which could lower long-term costs despite the higher unit price for these extended-release alternatives.

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• Other rare blood clotting disorders, such as Von Willebrand disease, continue to have very highcost treatments, such as Tretten ($1.2 to $1.4 million annually), Coagadex ($1.1 to $1.3 million annually), and Vonvendi ($500,000 to $700,000 annually).

• Lipodystrophy is a rare syndrome that causes a person to lose fat from portions of their body and possibly gain abnormal fat deposits in other parts of the body. The lipodystrophy treatment Myalept (metreleptin) typically costs more than $1.2 million for a full-year treatment course.

• Four of the multi-dose treatments for Duchenne’s muscular dystrophy, one of the most severe forms of inherited muscular dystrophies – Exondys 51 (eteplirsen), Vyondys 53 (golodirsen), Amondys 45 (casimersen), and Viltepso (viltolarsen) – are dosed by patient weight, which means costs can vary widely. Typical one-year costs can range from $700,000 to $2.3 million annually. The one-time gene therapy option Elevidys (delandistrogene moxeparvovec-rokl), approved for ages 4 and 5, has a $3.2 million list price.

• A treatment for Progeria, the rare syndrome that causes children to age rapidly, Zokivny (lonafarnib), typically costs more than $900,000 for a full-year course of treatment.

• Pompe disease, the glycogen-related condition that causes severe muscle weakness and wasting, has several treatment choices with annual costs ranging from $350,000 to up to $1 million. The lowest to highest cost treatments are: Myozyme (alglucosidase alfa), Nexviazyme, (alglucosidase alfa), Pombliti (cipaglucosidase alfa-atga) plus OPFOLDA (miglustat), and Lumizyme (alglucosidase alfa).

• Patients with generalized myasthenia gravis, a disorder characterized by drooping eyelids and facial weakness and fatigue, who have become resistant to corticosteroids or can no longer tolerate their side effects, can seek certain higher-cost treatments. Annual charges for Ultomiris (ravulizumab-cwvz) and Soliris (eculizumab), two frequently used treatments, can range from $400,000 to $750,000, with Ultomiris on this lower end of the range despite its more convenient delivery regimen. Newer treatments available in the U.S. are Vyvgart (efgartigimod), Rystiggo (rozanolixizumab-noli), and Zilbrysq (zilucoplan), which are expected to fall near or below the annual cost of Ultomiris.

• Patients with the blood diseases paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS), or the inflammatory disease neuromyelitis optica spectrum disorder (NMOSD) who use Soliris often incur high claims costs. Ultomiris is less costly and more convenient to use and is also used for PNH and AHUS. Competition in these conditions is expected to continue as more drugs are approved and more patients change drugs.

• Treatments for hereditary angioedema, which causes rapid swelling of the hands, feet, limbs, or face, can range in cost from $500,000 to $1 million annually. They include: Firazyr (icatibant injection), Orladeyo (berotralstat), with Haegarda (C1 esterase inhibitor subcutaneous [human]), Berinert (C1 esterase inhibitor [human]), Cinryze (C1 esterase inhibitor [human]), Takhyzyro (lanadelumab-flyo), Ruconest (C1 esterase inhibitor [recombinant]), and Kalbitor (ecallantide).

In terms of cancer, the highest-costing patients usually receive escalating treatments ending with bone marrow transplants, which sometimes incur adverse reactions requiring further hospitalization. In addition, the costs of cell therapies (also known as CAR Ts), which are increasing in access and use, are akin to

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those for bone marrow transplantation, but have further upward financial pressures due to the costs of the CAR T treatment itself.

That said, it is relatively rare to encounter specialty drugs for cancer with costs at the extreme levels seen in the non-cancer conditions. High and rising cancer drug cost levels have, however, recently been experienced for the following:

• Elzonris (tagraxofusp-erzs), a treatment for blastic plasmacytoid dendritic cell neoplasm, a rare form of acute leukemia, may cost approximately $3 million for an entire year course

• Kimmtrak (tebentafusp-tebn), a treatment for the eye cancer uveal melanoma, may cost nearly $1 million for a full-year course

• Folotyn (pralatrexate) for relapsed or refractory peripheral t-cell lymphoma may cost more than $800,000 for a full-year course

• Demser (metyrosine), for symptoms of pheochromocytoma (adrenal gland tumors), may cost over $800,000 for a full-year course. A patient who also uses Dibenzyline (phenoxybenzamine) may incur claims costs as high as $1 million.

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Chart 3: Medicare Part B and D Drug Spending on High-Cost Cancer Drugs, 2014-2021

Chart 3: This chart demonstrates how Medicare spending on ten 10 cancer drugs and other costly cancer drugs – those that typically cost over $100,000 per year per patient commercially – are playing a material role in elevating U.S. healthcare spending. Biosimilar introductions, competition, and Medicare’s IRA negotiations may succeed in dampening the current cancer specialty drug spend trajectory.

From RGA’s experience with high-cost claims, cancer drugs have higher overall trends due to several factors:

• Higher annual costs for newly approved cancer drugs

• Higher unit cost trends

• More use of drugs to treat cancer in place of surgeries, radiation, and chemotherapy

How can health plans mitigate these costs and risks?

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When cases have high excess drug claims, there are strategies to make sure that the health plan is maximizing value:

• Curating formularies. Biosimilars and generics are often available to compete directly with certain drugs. Once approved, direct writers should ensure that their formularies adopt generics and biosimilars quickly to make lower-cost alternatives available and encourage price competition. Plan design incentives are also recommended to encourage patient use of lower-cost alternatives, such as lower co-pay tier placement. Sometimes, cutting high-cost brand names from a formulary is worthwhile. For example, candesartan is generically available to treat moderate blood pressure, but brand-name candesartan versions can cost eight to 15 times more than the generic, unnecessarily costing some health plans tens to hundreds of thousands of dollars a year.

• Address the “where” for certain drugs. Health plans should examine whether certain drugs are optimally accessed through a retail pharmacy, a specialty pharmacy, or certain hospitals, as the same drug can cost drastically more when administered by certain providers. This is where benchmarking can help health plans cut costs.

• Look for and react to atypically high charges. Outlier analysis is a powerful tool for identifying bad actors, human error, or claims system errors. In one case RGA recently encountered, a patient’s cost for post-transplant immunotherapy was eight times more than normal but was corrected by working with the third-party transplant network vendor.

• Watch J Code drug costs. While Congress and state legislators have increased their scrutiny of pharmacy benefit managers over the past two years, more outlier drug claims are being encountered among physician- and facility-billed drugs (J Code drugs) than retail drugs. Sometimes, these egregious cases should imply network exclusion consequences for certain providers or facilities, or at least provider contract implications and intermediary remedies.

• Watch General J Codes. When first approved, most non-retail drugs are billed using the general J codes J3490, J3590, or J9999 until a specific code is assigned. As general codes are usually not flagged by claims systems, charge levels net of discounts can be incorrectly high. Health plans would benefit from reviewing general J Code claims, particularly high-dollar ones.

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What is clear is that planning for and executing specialty drugs requires strong and careful oversight. New high-cost treatments and therapies are coming faster than ever and cases with excessive costs are increasing, which is challenging portfolio management.

Most important? Everyone is looking for a magic bullet. Unfortunately, to date, no one has found one yet. For payors, tightening basic practices and relying on good cost and utilization management is the best bet.

Strong prior authorization will validate the right drug for the patient and the most cost-effective treatment administration site. Many

specialty drugs can be safely administered in the patient’s home rather than at a clinic or hospital, where costs are much

Monitoring for generic J codes that may slip past claim system flags, allowing for higher-thanusual payments, can also help control specialty pharm costs.

Mary Paquette serves as executive director, ROSE Program Strategy and Quality, U.S. Group Re Rose. Kristi Bohn is RGA’s vice president and lead actuary – healthcare excess, U.S. Group Re.

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Specialty Pharma


TheTgrowth of the cannabis industry and the reluctance of the federal government to legitimize the industry have created serious issues with insurance coverage of cannabis businesses. Premiums have remained high, and coverage can be patchy. This has made captive insurance an attractive option for the industry.

In its 2023 report by the Center for Insurance Policy and Research, the National Association of Insurance Commissioners states:


Demand for cannabis is increasing dramatically. Thirty-eight states and the District of Columbia (D.C.) have legalized some form of medical marijuana. Recreational marijuana is legal in 19 states and D.C. The division between state and federal status makes it difficult for businesses to receive inclusive, affordable coverage and often leaves policyholders with restrictive plans.

The report continues that because of restrictions on banking, cannabis-related businesses can be forced to operate on a cash-only basis, increasing the possibility of theft and liabilities.

The Secure and Fair Enforcement (SAFE) Banking Act, which would allow CRBs access to financial institutions› products and services, was passed by the House of Representatives in 2021 but currently awaits action in the Senate.

The proposed Clarifying Law Around Insurance of Marijuana (CLAIM) Act would expand insurance coverage options for businesses and remove federal barriers for insurers to conduct business with cannabis-related companies that are legal in their respective states. The CLAIM Act also awaits further action.

To ease restrictions on cannabis, the Biden administration has announced that the U.S. Drug Enforcement Administration will move to recognize the medical uses of cannabis and reclassify the drug from a Schedule I to a Schedule III but will not legalize cannabis for recreational use.


There is an increasing need for captives, said TJ Frost, president of Symphony Grow, the Specialty Business of Symphony Risk Solutions. “With the cannabis industry being where it is today – a multi-billiondollar industry and a lot of multi-state operators and publicly traded companies – millions are being spent on insurance premiums,” he said. “But they don’t have the traditional benefits other businesses have.” Captives, he said, are a way for these organizations to control their fate when it comes to their risk portfolio.

That lack of clarity led Frost to begin working with surplus lines markets, with a focus on finding the right insurance partners for cannabis companies.

“I was one of the first to get into the cannabis insurance market in 2013,” he said. “I’ve wanted to launch a cannabis captive for ten years but finally had success in doing so. We built an exceptional team with the right knowledge and expertise to get this over the finish line,” Frost said. “We looked at all the necessary options before approaching reinsurance and captive management, and it finally worked out.”

Their captive program, Symphony Grow, was officially announced in early March 2024.

Symphony Grow, he said, gives companies several options to choose from. “We can do singleparent captives. If the client wants to own their own company captive, we have the ability to do that. We can also do group captives and segregated cell captives, in addition to placing traditional property & casualty insurance coverages.”

Frost said, “We currently have multi-state operators and publicly traded companies. They have been interested in looking at the captive and the cost analysis of a captive.” These are companies spending $1 million plus in insurance premiums. “They see the greater benefit of being in a captive or owning their own captive,” he said.

The response from the industry, he added, has been favorable. At a recent international conference for the cannabis industry, in fact, “We held 37 meetings in two and a half days that were focused on the captive. So, the word is out, and it is extremely positive for us.”


Smaller companies in the cannabis market also have options with captives. “Groups we are looking at are in a specific size range – 52 up to 1,000 lives, enrolled employees,” said Dane Bernhardt, director of data and analytics at HUB International Insurance Services.

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Hub, he said, established an employee benefits group captive in 2019. “Our stop-loss partner in this is Berkeley. They have identified the risks for the cannabis industry to be better than the average pools,” he noted. “And so, they are bullish about the risk and invested in this program.”

Part of that, he said, stems from an analysis by Tillinghast, “which found that the actuary models determined that the demographics that workers in the cannabis industry tend towards the younger side.”

He added that they found the level of large claims to be more manageable and that “the demographics joining this industry are more health conscious, and I believe that is the largest component.”

The captives are open to any cannabis-touching group, “such as retail, point of sale, technology solutions, it’s an open book,” Bernhardt added, “We want to spread out the risk as much as we can and with as many participants as possible. So, we’re not restrictive as to who in the cannabis industry can join, and we find that this helps balance out the risk.”

One of the biggest challenges, he said, is the rate of consolidations in the cannabis industry that continue to occur. “We’re seeing a lot of growth in the industry, and we’re starting to see more need for stability emerge. Previously, it’s been more of a short-term game in terms of consolidating.”

Captives are good for both the short and long term, Bernhardt said. While most people don’t see them for the short term, “We work with a real estate firm that leases growing facilities to cannabis companies, and we’ve seen a lot of savings from some of the cost containment tools we’re able to put in place in the captive programs.”

With these, small groups “can behave like much larger organizations and go into a funding model that is essentially unbundled,” he added. “They have control over their plan documents and their plan design, and they also have access to cost containment tools that they would not have access to in any other funding model. We’ve seen tremendous savings in the short term,” Bernhardt said.

JUNE 2024 25


Whether in the cannabis business or the insurance world, “A lot of people view federal legalization of cannabis as imminent, something that will happen soon,” said Rich Golz, principal for Symphony Grow, who focuses on designing and implementing risk management and insurance programs. “By extension, that will be what gets the large traditional insurance markets into the space.”

While some believe that because of this, there is no rush to form a captive, “I don’t see it that way,” he said. “We’ve been following legislation and progress at the federal level for the past five years, and movement has been extremely slow. There doesn’t seem to be a large appetite for progress.”

An indicator, Golz added, is the inability to pass SAFE banking measures, “which would essentially enshrine federal guidance and give banks and institutions, like insurance companies, the explicit okay to work with cannabis businesses.”

Since even that has been difficult to get support for, “I think we are at least five years away from federal legalization in any form,” he said.

Golz observed that the recent announcement of the DEA’s move to reschedule cannabis from Schedule I to Schedule III does have some important impacts for operators and is a big step in the right direction. “That being said,” he noted, “I would not expect an influx of new capacity or insurers. Most who aren’t currently participating are avoiding cannabis because it is federally illegal, and this move doesn’t change that.”

Once legislation changes do come about, Golz believes there will be a delay before a number of insurers begin to accept cannabis submissions. “Many of them are not looking at the industry or building the data now; they are ignoring it until the federal status changes,” he said. “So, there’s still a huge runway where this insurance market is going to be underserved.”

Even where coverage is more commercially available, he added, “There are reasons why most Fortune 500 companies use captives. At a certain size, it still makes sense to start building that asset instead of paying insurance every year. They can also get access to reinsurance.”

His clients are also looking at the competitive advantages of a captive, “where they are better able to control costs and insulate themselves from market changes, and also to build an asset and control their destiny in terms of coverage, and to better protect the business,” Golz said.

Caroline McDonald is an award-winning journalist who has reported on a wide variety of insurance topics. Her beat includes in-depth coverage of risk management and captives.





IIf your employee benefits budget is bursting at the seams with the additional expense of costly GLP-1 prescription weight loss drugs, it may be time to re-think their inclusion.

While people have long been searching for an easy “cure” for obesity, and these popular diet pills -- typically injections -- appear to be the newest magic bullets, there are several significant caveats. A safer, long-term solution that has stood the test of time and stands above all the costly, upstart quick fixes is the Mediterranean lifestyle.


“GLP-1 is a great tool that provides quick results, but the downside is that, if behavioral solutions are not added, the same poor eating habits will bring back the same problems,” advises Dr. Will Clower, a behavioral neuroscientist and CEO, Mediterranean Wellness (MedWell), a company he founded in 2003 based upon the principles of the Mediterranean approach to nutrition, diet, stress, and activity. “People have two choices: add lifestyle behavior changes or take the shots and bear the expense, basically, forever.”

GLP-1 agonists are currently the most sought-after and effective antiobesity medications, although the $1,000+ monthly expense could be a lifetime expenditure for plan sponsors on behalf of members. Currently, only liraglutide (Saxenda), semaglutide (Wegovy), and tirzepatide (Zepbound) are approved for weight loss, although some other GLP-1 drugs may be prescribed off-label. The drugs are in such high demand there is even a nationwide shortage, making them difficult to obtain. Not everyone has the same results, and these can differ based on many factors, including diet, health status, and activity level.

Jim Wachtel, chief revenue officer, Health EZ, provides this guidance: “Coverage of these drugs is a business decision that should not be made in a vacuum. If you decide against coverage, there may be short- term savings with long-term implications for the benefit strategy. Conversely, a decision to cover the drugs requires clinical support and resources to have the best results possible, including improved quality of life for members.”

Achieving optimal benefit design is key to the decision-making process. In his role at Health EZ, the independent TPA that designs custom, self-funded benefit plans, he stresses the significance of understanding client needs and identifying goals.

“Companies have varying objectives, ranging from clinical endpoints to cost-containment and risk management strategies, so this coverage

decision impacts many areas of operation,” says Wachtel. “It is important to remember that every business strategy plays a role in how member health is affected today and into the future. Over the next ten years, today’s risks can turn into tomorrow’s costs.”

Any time a company embarks on a new benefit, such as the GLP-1 drugs, he emphasizes how important it is to understand all the factors that affect implementation.

“Very often, a decision of this magnitude requires hightouch support and programs to influence behavioral changes,” he concludes.


Jamie L. Holowka, B.S., Pharm.D., director, clinical strategy and underwriting, Complete Captive Management Services, LLC. warns, “These GLP-1 drugs have the potential for serious side effects that could result in death or hospitalization. This class of medications should NEVER be used with a personal

29 JUNE 2024

or family history of medullary thyroid cancer, personal history of Multiple Endocrine Neoplasia, type 2 or pregnancy.”

She points to additional warnings that are reported to include:

• Monitor for the development of Thyroid Disease

• Acute Pancreatitis

• Acute Gallbladder Disease

• Hypoglycemia

• Kidney Injury

• Increased Heart Rate

• Suicidal Behavior and Ideations

• Retinal Disorders may be worsened

• GI pain or slowness, which may include nausea, vomiting and diarrhea, as well as interactions with other medications. She further cautions, “These medications should only be approved in conjunction with lifestyle changes, including counseling. When medications are stopped, 100% weight gain may result. Clearly, the long-term effects of weight loss medications are either not fully understood or are harmful. Determining the best way to manage obesity may cause many to wonder when

medications are part of the solution. Treatment options for adults should always include lifestyle modifications.”

As employers finalize their drug formularies, Holowka recommends that GLP-1 injections are best used in conjunction with wellness programs and counseling, adding, “Lack of coverage may lead to a risk for obesity, weight-related diseases.”

Beyond just the overall immediate health, there are many long-term consequences or comorbidities of obesity, such as type 2 diabetes, hypertension, heart disease, high cholesterol, major adverse cardiac events (MACE), kidney disease (may require dialysis and transplant), gallstones, cancer (colorectal, uterine, kidney, pancreatic, etc), sleep apnea, chronic pain and mental wellness.

Holowka and her team developed the chart below, which describes some of the solutions and related costs for addressing obesity:

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≥ 25 kg/m2 with weight-related problems Lifestyle

32 THE SELF-INSURER Generic Name (Brand
Administration Type % Weight Loss4-7 % Rebound Weight Gained After Stopping Medication8,9 Estimated Yearly Price10-19
Depends on eating
Depends on eating
$0 -
Dulaglutide (Trulicity ) injections ≥ 5% within 72 weeks 66% > $13,200 Exenatide (Bydureon ) (Byetta ) injections ≥ 5% within 72 weeks 66% $12,000 Liraglutide (Victoza ) (Saxenda )* injections ≥ 5% within 72 weeks 66% > $14,300 Lixisenatide (Adlyxin ) injections ≥ 5% within 72 weeks 66% $9,600 Semaglutide (Ozempic ) (Wegovy )* (Rybelsus ) Injections oral ≥ 5% within 72 weeks 66% > $10,800 Tirzepatide (MounjaroTM) injections ≥ 5% within 72 weeks 66% > $13,200 Bupropion/Naltrexone (Contrave )* oral ≥ 5% within 56 weeks 100% unless lifestyle changes are made $2,250 Orlistat (Alli )* (Xenical )* oral ≥ 5% within 12 weeks 100% unless lifestyle changes are made $212.40$3,600 Phentermine/Topiramate (Qsymia )* oral ≥ 5% within 12 weeks 100% unless lifestyle changes are made $2,600$2,900 Stimulants oral varies 100% unless lifestyle changes are made varies BMI
weight-related problems Lap Band surgery 70% ≥ 30% after ten years $14,500 Sleeve Gastrectomy surgery 70% ≥ 30% after ten years $14,900 Roux-en-Y (Gastric Bypass) surgery 70% ≥ 30% after ten years $15,000$30,000 *FDA-approved
Modifications Recommendations
daily caloric
and physical activities
and lifestyle habits
or ≥
kg/m2 with weight-related problems
≥ 40 kg/m 2 or ≥ 30 kg/m 2 with
for weight loss

The World Health Organization (WHO) defines obesity as an abnormal or excessive fat accumulation. According to the Centers for Disease Control and Prevention (CDC), obesity prevalence is:

• Children and adolescents (12 - 19): 19.7%

• Adults (20 - 59): 39.844.3%

• Older adults (60+): 41.5%

According to the National Institutes of Health, being overweight is defined as having a Body Mass Index (BMI) between 25 and 29.9, or for obesity, a BMI of 30 or higher. Excess body weight is linked to a heightened risk of chronic disease, including cardiovascular, Type 2 diabetes, metabolic syndrome, kidney disease, fatty liver, respiratory disorders, osteoarthritis, and some cancers.


“Obesity carries extreme implications for employers and their teams,” says Jakki Lynch, RN, CCM, CMAS CCFA, director cost containment, Sequoia Reinsurance Services, citing a recent report that estimates obesity cost US employers and employees $425.5bn in 2023. The study found that of the 158 million employees working in the private and government sectors, 30% were classified as obese, and 34% were overweight.

“The direct costs of obesity are healthcare expenditures for medical treatment, preventative services, diagnostic testing, bariatric surgeries, and medications,” continues Lynch. “Evidence from previous studies shows that weight loss can significantly reduce the risk of obesity-related complications and chronic diseases. Diet management, exercise, behavior modification programs, bariatric surgery, and prescription drug treatment are the major interventions that are used to help people lose weight. While the newly approved drugs for weight management have recently gained considerable attention, they do not come without considerations for cost and health complications.”

Lynch points to some of the common side effects of GLP-1 drugs, including gastrointestinal symptoms — nausea, vomiting, diarrhea, and constipation, which can be difficult to manage and, as a result, may lead to discontinuing the medication. However, more serious side effects of GLP-1 agonists include pancreatitis, gastroparesis, bowel obstruction and gallstone attacks.

Elina Onitskansky, founder & CEO, Ilant Health, a valuebased obesity management and cardiometabolic health company, advises, “Employers confronted with the dual challenges of managing obesity related costs like diabetes, heart disease, and musculoskeletal issues, and the skyrocketing demand of expensive GLP-1 medications would benefit from adopting a nuanced approach to treatment.”

33 JUNE 2024
Jakki Lynch RN, CCM, CMAS, CCFA

She says the focus should be on identifying and engaging members with the greatest clinical and financial value from treatment, matching them to the right care across the full treatment spectrum, from behavioral therapy to medications to surgery, and supporting those members in driving outcomes from treatment.

“Done correctly, individualized obesity treatment can drive nearterm financial value, support employee engagement and productivity, and improve equity,” she continues. “Done incorrectly, it can be yet another ineffective – and costly – attempt to drive weight management.”


Lynch says the complications associated with weight loss drugs can have a significant financial impact on plan sponsors, with millions of dollars in cost for surgical intervention with extended hospital stays for management of the complications.

“Additionally, studies indicate patients experience a two-thirds regain of their body weight a year after stopping one particular drug (Wegovy),” she advises. “Plan sponsors should consider reasonable coverage policies and patient case management to address these costs and the impact on members.”

She says that losing weight is achievable and sustainable by incorporating less restrictive lifestyle changes with healthier eating habits and exercise to gradually lose weight over time and keep it off.

“For example, a healthy diet featuring natural, unprocessed foods, plant-based with adequate protein, whole grains, healthy fats and

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no simple sugars – essentially, the Mediterranean Diet -- is ranked number one for nutritional completeness, health risks and benefits, long-term sustainability and evidence-based effectiveness by a panel of leading medical and nutrition experts, specializing in diabetes, heart health and weight loss,” says Lynch.

Research continues to show the Mediterranean Diet, based on healthy foods and physical activity, is the best prescription for a long, healthy life. Focusing only on partial adoption, simply eating more of the foods on the plan, and being more active are impactful health goals.

“Employers can proactively address the options to support weight management in a holistic

way through ongoing communication with their members and effective pharmaceutical benefit oversight,” she concludes.


With the Mediterranean approach now hailed year after year as the healthiest approach to weight loss, healthy hearts, and diabetes control, Will Clower says employer demand for MedWell programs has skyrocketed,

“What is really working is a dual approach that addresses the same problems from two important directions: clinically and behaviorally,” says Clower, who serves on the faculty at the Victoria University of Wellington, where he serves as a “Wellness Ambassador” for the University with the overall goal of improving the wellbeing of reducing health disparities and care gaps, and improving the overall approach for clinical, mental, and behavioral wellbeing.

“Our MedWell program combines these two elements to achieve short and long-term goals,” Clower explains. “By integrating a healthy lifestyle behavior with nurse counseling, and sometimes incorporating

35 JUNE 2024


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the power of weight loss drugs to get started, members finally get a holistic solution for the whole person.”

He emphasizes that plan sponsors want a solution that works for members, “But they don’t want to have to pay for injections indefinitely. By adding the healthy behaviors of the MedWell approach, they save money and give members a lifelong solution for lifelong health.”

Industry leaders who have implemented the MedWell approach in the workplace have been highly complementary:  Alberto Columbi (PPG) has attested, “The best wellness program we have ever had”; Tricia Griggs, (Aflac) said, “The best program I have ever seen”; Richard Butler (City of Pittsburgh) has confirmed, “I highly recommend Mediterranean Wellness.”

To help employers gauge results, MedWell conducts an employee survey at key points in the patient experience with results that reflect the data below:

The Mediterranean Wellness approach is affordable and easily implemented, and it provides fully customizable wellness platforms

for organizations ranging in size from 50 to 50,000. By integrating wellness initiatives with a full suite of options that are customized for specific plan needs, companies can take advantage of a wellbeing education module, wellbeing challenges, “Know Your Numbers” biometrics module, health risk assessment, incentive management, telehealth, and most recently, at-home testing, programs.

“It has been my dream to see these principles of Mediterranean wellness enacted across rosters of wellness education content, engaging challenges, and one-on-one health coaching,” states Clower. “Combining holistic content with clinical guidance, site-level wellness champions and incentive-based wellness awards creates exactly the kind of enthusiasm across an organization that is needed to sustain a lifestyle in the long term.”

The prevailing sentiment is that it is not advisable for employers to simply release their employees out in the world and wish them luck taking an expensive diet drug.


The Mediterranean Diet is truly a way of life, with its origins tied to how the inhabitants of countries along the Mediterranean Sea, such as Italy, live. Because these areas are so lush, the main principle is grounded in eating plant-based foods.

“Food staples in the Mediterranean diet include plenty of produce, whole grains, beans, nuts and seeds — and of course, extra virgin olive oil,” explains Clower. “Interestingly, wine is a feature of the Mediterranean diet, and a glass is regularly consumed with meals. Though everything is included in the Mediterranean diet, as far as meats go, they lean on fish and chicken.”

He says it’s far easier to stick to long term than other diets, and in addition to weight loss, data shows the Mediterranean diet also reduces the risk of regaining weight or the onset of type 2 diabetes, lowers heart disease risk, provides gut microbiota support and reduces markers of inflammation.

“It’s important to adopt the behavioral habits of this lifestyle approach and also get regular exercise,” he advises. “Watching meal portions is also key.”

A study published in the journal Nutrition and Diabetes found that following the Mediterranean diet for five years can decrease abdominal fat and the likelihood of

37 JUNE 2024

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weight gain. Looking at the Mediterranean diet versus a low-carb one, another study in a peer-reviewed Journal found that being on the former led to losing double the amount of weight compared to the latter.

“The Mediterranean diet can help with long-term weight loss, with some participants losing between 9–22 pounds after a year,” explains Clower. “And it is actually shown to help people live longer.”

Clower also refers to a JAMA study that showed the Mediterranean Diet was associated with reduced allcause and cause-specific mortality.

“This is the first study to provide strong evidence for a beneficial effect of higher conformity with the Mediterranean dietary pattern on risk of death from all causes, including deaths due to CVD and cancer, in a US population,” adds Clower. “Live longer and in better health – that’s quite an endorsement.”


Employers are still deciding whether and how to cover these new drugs. Notably, however, Medicare does not cover drugs used for weight loss. While employers cover the use of GLP-1 drugs as a treatment for diabetes, the debate around providing coverage for them as an obesity treatment lingers. Mercer reports that GLP-1 medications approved by the U.S. Food and Drug Administration could contribute between 50 and 100 basis points to the overall cost trend.

Surveys show varying results for coverage:

• In the Mercer survey of nearly 1,900 employers, representing about 134,000 employer health plan sponsors, U.S. employers, on average, have budgeted a likely 5.2% rise in these costs for next year. Currently, around two-fifths of large employers cover GLP-1 medication for the treatment of obesity, and another 19% say they are considering it.

• In another survey conducted last year by Accolade, most HR decision-makers (81%) said they felt their employees would be interested in GLP-1s, and 43% said they intend to cover the drugs in 2024, up from 25% in 2023. Companies emphasize that combining the medications with other lifestyle treatments is the answer and assert that the drugs alone aren’t a silver bullet.

• Yet another survey from Virta Health, including 60 Chief Medical Officers, Chief Pharmacy Officers and actuarial leaders from major national and regional insurers, shows 43% of health plan leaders are predicting 100% or more growth in GLP-1s for weight loss and obesity at their organizations in 2024.

Collectively, the surveys conclude GLP-1s is projected to be a top three drug spend in 2024 despite the fact that these medications represent the most expensive drug class this year. They also concur, however, that lifestyle programs should be used as a first line therapy for obesity, prior to prescribing a GLP-1.

In the face of high costs, large employers nationwide have started offering limited coverage and increasing cost-sharing of the drugs. For example, the state of Connecticut and Labcorp, a laboratory services company, have opted to implement clinical lifestyle programs that offer access to providers

39 JUNE 2024

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and personalized care plans for weight management. Others, like Purdue University, are requiring employees to meet a certain body mass index threshold to qualify for drug coverage. These programs, like MedWell, can also help employees maintain longterm lifestyle changes while allowing employers to realize the massive healthcare savings to be had from reducing obesity.

Randa Deaton, the Purchaser Business Group on Health’s vice president of purchaser engagement, advises, “Most organizations want their plan members to have access to weight-management options, however, they also want to ensure that it’s clinically appropriate and accompanied by the medical and lifestyle modification supports to ensure long-term safety and efficacy for the individual.”


The high price points of popular weight loss drugs ignited a response from Sen. Bernie Sanders, the Vermont Independent who chairs the Health, Education, Labor and Pensions (HELP) Committee. Acknowledging the work of scientists in developing these drugs that have the potential to be a game changer for millions of Americans struggling with type 2 diabetes and obesity, Sanders declared that as important as these drugs are, they will not do any good for the millions of

patients who cannot afford them. He also noted that manufacturers charge far less for the same drugs in other countries. For example, one month of Ozempic runs $969 in the United States but just $155 in Canada and only $59 in Germany.

Policymakers in many countries are studying different solutions to the question of access to GLP-1s and other weight loss drugs. However, given the fragmentation in U.S. healthcare, a broad policy may prove to be difficult. Several countries, including Belgium and Great Britain, have taken steps to ban or discourage the use of these products for weight loss and instead prioritize their distribution to patients with diabetes. Neither the US federal government nor individual states have yet to make similar moves, leaving it up to health plans to arrive at their own decisions.

A recent study published in The New England Journal of Medicine outlines a clear path that stakeholders can follow around these drugs. The researchers found that focusing solely on patients who have diabetes may not be the most ethical or effective way to distribute these drugs.

The study is built on four “fundamental ethical values” that inform the model: preventing or reducing harm, offering equal moral concern, prioritizing disadvantaged groups, and rewarding social contributions. With those principles as the foundation, the researchers established four tiers based upon the need for a fair allocation of these products, offering a framework that could guide physicians and professional societies aspiring to ethical prescribing of the drugs.

Laura Carabello holds a degree in Journalism from the Newhouse School of Communications at Syracuse University, is a recognized expert in medical travel and is a widely published writer on healthcare issues. She is a Principal at CPR Strategic Marketing Communications.

41 JUNE 2024

Sources’t%20recommended%20if,to%20 humans%20isn’t%20known associated,in%20discontinuation%20of%20the%20drug

Two decades of data confirm Mediterranean diet cuts hypertension risk ( used%20for%20weight%20loss%20in%20the%20U.S.%20and%20peer%20nations

Senate launches investigation into high prices of Ozempic and Wegovy in the U.S. (

Employers feel the side effects of drugmaker control over Wegovy, Ozempic costs - POLITICO

Wine and cheese may help prevent cognitive decline - TODAY

Here’s what ‘fair allocation’ for GLP-1s could look like (



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PPicture this: You walk into your local pharmacy to refill a crucial mental health medication, only to be told that it is unavailable, and they do not know when it will be back on their shelves. Or imagine this nightmare scenario: You bring your child into a nearby hospital for chemotherapy, where a receptionist tells you that, after this treatment, you are going to have to reschedule every other appointment because they must start rationing their life-saving chemo drugs – they are going to run out soon. People across the country are facing situations exactly like these, and a plethora of others, as the national drug shortage climbs into unprecedented territory.

While Americans encounter this kind of trouble at pharmacies, hospitals, clinics, urgent care facilities, and other places they receive medical services, they’re strategizing about thinking outside the box to get the medicine they desperately need until things get back to normal. However, as industry insiders know, that might be easier said than done—there is no magic bullet, and it will not be a quick fix.


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While drug shortages may seem particularly acute lately, and the recent situation has been repeatedly in the news, unfortunately, this is not new. There have been several notable years of drug shortages. For instance, 2014 was a particularly bad year; in the third quarter of 2014, there were 320 active drug shortages. More recently, in the second quarter of 2023, there were 309 active shortages. When there is a significant shortage, it can be hard to right the ship, and a snowball effect can easily happen.

Still, there was a national record set in the first quarter this year, when March ended with a total of 323 drugs officially in shortage. The question remains, though: how did the situation become so dismal? There is no easy answer to that either. Here are just some of the biggest culprits we can identify:

1. Production issues (which can include anything from natural disasters to plant shutdowns);

2. Rising rates of sickness (think supply and demand);

3. Reduced ordering capacity (necessary legislation against opioid abuse begets smaller dosage amounts); and

4. Middlemen pricing and competition (a common industry complaint, which can lead to fingerpointing).


Production issues will always be an intangible problem that the pharmaceutical industry will have to deal with and something they can rarely plan. For instance, Puerto Rico is a significant manufacturing base for Big Pharma, and its infrastructure is still reeling from the aftereffects of Hurricane Maria, which severely damaged a large saline bag factory. Saline is often used to clean wounds and in intravenous bags to provide fluids, and the bags were compromised. And then there was last summer’s tornado that destroyed a North Carolina Pfizer plant, affecting that production line for years to come. But this is not just caused by natural disasters – the Food and Drug Administration (“FDA”) also performs routine inspections of drug manufacturing facilities and is currently working through a pandemic-caused backlog.

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When facilities fail or otherwise have deficiencies, those plants halt production, often leading to material or drug shortages.

There is also a simple economics theory at play – sometimes, the demand for a drug (or piece of equipment – there is also a rising medical equipment shortage) outpaces what is currently available. That issue is manifesting rapidly across the country in numerous ways. Perhaps most prominently, thanks to social media platforms, people are sharing experiences and encouraging others to seek mental health treatment, which has lent itself, in part, to a yearslong ADHD drug shortage.

Similarly, a celebrity concentration on weight loss medications has also cropped up. Furthermore, a national syphilis outbreak is significantly affecting a low injectable antibiotic supply. On top of that, a national fight against opioid abuse and settlement rules has meant that pharmacies are limited to a certain number of narcotics when stocking their shelves. As such, manufacturers will not over-produce.

Finally, because many of the poor-quality problems that cause shortages involve generic drugs (the most commonly used and cheapest), generic manufacturers are often priced out. Since companies make much less money and pharmacy benefit managers (“PBMs”), or middlemen, get a cut when there is a scarcity, it often makes more sense for pharmaceutical companies to either stop making generics or upgrade to producing higher quality drugs. Generic lines are the most vulnerable to shutdowns – because they are so heavily used, they are going to affect the most people.


According to the two most recent United States Census Bureau Household Pulse Surveys, Louisiana, West Virginia, and Alaska residents are having a particularly hard time finding the drugs and


equipment they need. Meanwhile, 14.6 percent of Americans overall are suffering from prescription drug shortages.

So, how are they coping? Overall, 49 percent are either delaying or completely stop using their medications and 24 percent are rationing where possible. The survey indicated Missourians are the most likely to stop taking medications (three in five), while Washington residents are paying more for pricier substitutes (nearly one in four).

This reality has forced some to go out of their health plan’s network. On the other hand, this has empowered others to be more engaged with their health plan benefits. In fact, some PBMs have experienced exceptionally high engagement during this stressful period, as individuals have prudently started calling their insurance carriers to see what they can do to find their prescriptions.

As for hospitals, a second quarter 2023 National Comprehensive Cancer Network report showed that 93 percent of cancer centers experienced a carboplatin shortage, while 73 percent faced a cisplatin shortfall – both are used in combination in chemotherapy treatments. Only 40 percent of providers received an indication of a timeline from manufacturers.


In March 2023, the Senate Committee on Homeland Security and Governmental Affairs published a report on the threat drug shortages can pose to national security; If our drugs are unreliable, shortages persist, Americans become sick, and our nation becomes vulnerable. This February, the House Committee on Ways and Means held a hearing, including expert testimony on the risks drug shortages pose and possible congressional solutions.

Things came to a head in April when the Biden administration, with the Department of Health and Human Services (“HHS”), released a plan to create two non-governmental organizations to upkeep a rating system and incentivize manufacturers and hospitals that maintain supply chains and avoid shortages. This may counter the risk of a shortfall, as the strategy is to buy drugs in large quantities instead of at the last minute. Despite this approach, some industry leaders believe the plan does not adequately address quality issues and may adversely affect smaller hospital systems that lack the resources to keep up.

While it is promising that steps are being taken at a government and industry level, significant progress is still to be made. Certainly, consumers should check the FDA’s shortage list (on its website) to see if their prescriptions are included and call their doctors and insurers for further guidance. Thankfully, though, the government and the industry are starting to listen.

As a Health Benefits Consultant for The Phia Group, LLC, Kate MacDonald drafts, edits, and analyzes self-insured health plans to ensure compliance with industry standards. She is a regular contributor to the company’s newsletter. She previously wrote for The Cape Cod Times.

49 JUNE 2024

Medical Stop Loss from Berkshire Hathaway Specialty Insurance comes with a professional claims team committed to doing the right thing for our customers – and doing it fast. Our customers know they will be reimbursed rapidly and accurately – with the certainty you would expect from our formidable balance sheet and trusted brand. That’s a policy you can rely on.

Reimbursement done right.
The information contained herein is for general informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any product or service. Any description set forth herein does not include all policy terms, conditions and exclusions. Please refer to the actual policy for complete details of coverage and exclusions.



SIIA boasts a very active and dynamic membership. Here are some of the latest developments from the companies powering the selfinsurance industry.

51 JUNE 2024
Luminare Health: A New Day in Employee Benefits service, transparency, and value that has always guided our team. And now, with the backing of one of the biggest names in the industry, HCSC, we’re doing even greater things. Come join us. Connect with us today at LH-3176-0524 ©2024 Luminare Health BenefitsSM

SIIA boasts a very active and dynamic membership. Here are some of the latest developments from the companies powering the selfinsurance industry.


Young Consulting, a leading vertical SaaS company in the stoploss market, proudly announces its rebranding to Connexure. This strategic rebranding reflects the company’s commitment to embracing connectivity, innovation, and enhanced service offerings in the evolving landscape of stop-loss insurance solutions

At Connexure, we unite the self-funded medical ecosystem through integrated technologies, processes, and data insights. Our mission is to foster connections, drive innovation, and empower our clients to navigate the complexities of the stop-loss insurance market with confidence and clarity.

“This rebranding represents a pivotal moment for our company as we continue to evolve and innovate in the stop-loss ecosystem,” said Mark Larsen, CEO of Connexure. “Connexure embodies our core values of curiosity, courage, collaboration, and exceptionalism. We are dedicated to unifying the self-funded medical ecosystem and delivering value-added solutions to our clients.”

With their suite of solutions, carriers can underwrite and administer policies, brokers can shop coverage, and third-party administrators (TPAs) can submit and track claims for reimbursement, all while knowing their systems are connected and in sync with their industry counterparts. “Connexure aims to further leverage its platform to create a customer-centric seamless experience for the overall ecosystem of carriers, brokers, and TPAs. With a dominant presence serving the carrier market, we are in the perfect position to create this win-win for the overall network,” said Mahesh Bhirangi, COO of Connexure.

“We believe in the transformative potential of connectivity to drive positive change in the stop- loss insurance market,” added David Young, Founder of Connexure. “Through Connexure, we are committed to fostering a dynamic network of industry stakeholders to promote innovation, collaboration, and mutual success.”


Gauge Capital announced that it has partnered with the management team of Lucent Health to provide growth capital and recapitalize the Company. Founded in 2014 and headquartered in Nashville, TN, Lucent is a leading thirdparty administrator and costcontainment solution provider to self-insured employers across the U.S. The Company has established itself as a partner of choice through its ability to help employers reduce healthcare costs while simultaneously improving the member experience and health outcomes. Gauge acquired Lucent from a consortium of investors led by NaviMed Capital of Washington, D.C.

“We founded Lucent with a customer-focused mission of relentlessly pursuing lower healthcare costs for our customers and an improved experience for their employees. We’re proud of the success we’ve had achieving this mission and eagerly anticipate leveraging the resources and support offered by Gauge to accelerate our growth,” said CEO Brett Rodewald. “The Gauge team understands Lucent’s vision for the future and embraces our commitment to delighting our customers by providing innovative, data-driven

JUNE 2024 53 NEWS


Targeted strategies maximize co-pay assistance programs and discounts that reduce up to 40% of specialty drug spend.


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solutions that address both the costs and complexities of the healthcare system.”

David Friedman, Partner at Gauge Capital, added, “Brett, Alex and the entire Lucent team have done an impressive job of executing the vision they created when they founded Lucent 10 years ago. We have been highly impressed with the comprehensive cost-containment solutions that Lucent has built and believe Narus Health, Lucent’s care management platform, will continue to fuel growth and differentiate Lucent from its competitors. We are thrilled to partner with the entire management team to grow and build the business, and we believe there are several exciting organic growth and M&A opportunities to pursue that will further enhance Lucent’s ability to reduce costs while enhancing the member experience for its customers.”




BRM Specialty Markets is extremely excited to announce Silvana Herbert as Director of Underwriting for BRM.

With over a decade of stop-loss experience, Silvana brings extensive knowledge of the stop-loss industry from her work at TPAs, brokers and carriers. She previously worked as a client consultant, managing plan cost containment and plan design for self-funded clients. Most recently, Silvana worked as a Sr. Underwriter at a carrier, managing a premium block of 10M+. Silvana is a graduate of Gwynedd Mercy University with a degree in Applied Psychology.

Silvana commented “I am honored and excited to be a part of the BRM team. I share a passion for community and inclusion that BRM offers to all of their clients and staff and happy to be a part of the history of their continued growth and success.”

Roman McDonald, CEO of BRM, added: “We are very lucky to have Silvana as part of our BRM family. She brings a wealth of knowledge and experience to the team, and her expertise will be key as we continue our expansion strategies and product diversification in 2024.”


ParetoHealth, an innovative risk financing platform for employee health benefits, today announced a strategic expansion of its executive team. The company is adding Will Bondurant as CFO and Sara Wajnberg as Chief Product Officer as it continues its rapid growth. Bondurant brings relevant domain expertise as the former CFO of Apree Health, an advanced primary care company. Bondurant began his career at McKinsey & Company and, prior to Apree, was the CFO of digital health pioneer and health navigation company Castlight Health.

“Bondurant and Wajnberg bring expertise that will accelerate our growth as we redefine employee health benefits and chart a better way to self-insure,” said Andrew Cavenagh, Chief Executive Officer of ParetoHealth. “We are thrilled to welcome them to the team and look forward to their contributions.”

55 JUNE 2024 NEWS
Silvana Herbert Director of Underwriting, BRM

“It is a privilege to join ParetoHealth in its fight on behalf of small and mid-sized employers,” said Bondurant. “I am inspired to be part of a team challenging the status quo to improve health for the American workforce.” Wajnberg also brings a wealth of employee benefits expertise as the former Chief Operating Officer of employee benefits technology platform Nayya. She also brings a unique understanding of the intersection of insurance, healthcare, and technology from her long tenure as Chief Product Officer of OscarHealth.

“ParetoHealth is committed to helping medium-sized businesses provide affordable, high-quality health benefits to employees,” said Maeve O’Meara, President of ParetoHealth. “Adding leaders like Wajnberg and Bondurant will help us innovate and scale as we continue to grow our community of employers with our consultant partners.” “I am excited to leverage my experience in healthcare technology to innovate and build on the incredible momentum ParetoHealth has built in the market,” said Wajnberg. “I look forward to working closely with our talented team to deliver on our promise of less risk and greater value to medium-sized employers.”


AscellaHealth, a global partner that delivers proven end-to-end solutions to both life sciences and healthcare companies to enhance the quality of life for patients with complex, chronic conditions, today announces the addition of key executives to its leadership team, raising the bar and resetting standards for managing pharmacy costs through a comprehensive suite of services for regional health plans and at-risk providers.

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• Bob Gilkin, SVP, AscellaHealth, will design and lead the implementation of trade and specialty strategy positioning.

• Steve Seiden, VP, AscellaHealth, will architect and direct the Company’s role as program manager of specialty pharmacy programs for limited distribution drugs (LDDs).

With over 20 years of experience in the pharmaceutical and healthcare industries, US WorldMeds, LLC/ HEMA Biologics, LLC, RedHill Biopharma Inc., Synergy Pharmaceuticals Inc. (Bausch Health), Gemini Healthcare, LLC., AstraZeneca, LP and Coventry Health Care, Inc. (Aetna), Gilkin brings a wealth of knowledge in commercial operations and market access. His strategic leadership will drive the implementation of innovative payer strategies and models, as well as facilitate partnerships with LDD contracts.

Seiden brings the expertise and strategic insights developed during his career in pharmacy operations with experience at BioMatrix Specialty Pharmacy and Elwyn Pharmacy. In this new role, Steve will focus


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on identifying specialty pharmacy opportunities, supporting the transition to new pharmacy fulfillment services and spearheading the development of hospital and health system service offerings.


ClearPoint Health announced that Phile Giles will be the company’s new chief growth officer.

The company develops and scales clinically integrated captives, including clinical providers in the sponsorship of medical stop-loss captives. In his role as chief growth officer, Giles is tasked with leading ClearPoint Health’s enterprise sales organization.

“Phil’s unparalleled expertise and strategic foresight in alternative risk and captive insurance are exactly what ClearPoint needs as we embark on this next phase of growth,” said Jeb Dunkelberger, CEO of ClearPoint Health.

“His profound alignment with our mission and vision promises to significantly propel our efforts to innovate within the alternative risk

industry, ultimately benefiting a broad spectrum of employers with both standard and highly customized insurance solutions.”

“Joining ClearPoint Health marks a significant milestone in my career, deeply aligned with my passion for seeking out innovative and impactful opportunities within the sector,” Giles said.

“I am eagerly anticipating leading the growth initiatives at ClearPoint, contributing to the transformation of employer health insurance, and driving our collective mission forward. “This

61 JUNE 2024

opportunity to make a substantial difference, in alignment with ClearPoint’s forward-thinking ethos and commitment to excellence, is incredibly exciting."


Brown & Brown is pleased to announce that Katy Wong has been named National Pharmacy Practice Leader, a newly created position. In this role, Katy will drive business and customer engagement strategies, lead the

development of pharmacy benefit-related innovation and intellectual capital and further strengthen the firm’s pharmacy consulting capabilities. Based in Las Vegas, Nevada, Katy reports to Mark Abate, a managing partner for Brown & Brown.

Katy joins Brown & Brown from Cigna, where she served as chief pharmacy officer. In this role, she led the creation, adoption and evaluation of clinical pharmacy programs, products and services. Katy’s successful 26-year career at Cigna included numerous roles of increasing responsibility, including vice president, broker/consultant relations, senior clinical director, account management and sales, and manager for managed care operations.

“We are very pleased to welcome Katy Wong to Brown & Brown,” said Barrett Brown, president of Brown & Brown’s Retail segment. “Her proven track record of growth and success will greatly enhance our ability to help customers better navigate the dynamic and challenging employee pharmacy benefit space.”




“I am excited to join Brown & Brown at a time when pharmacy benefit plan design and management continues to be a top issue for both our customers and their people,’ said Katy. “The speed of innovation in pharmaceutical offerings and coverage brings treatment advancements but provides significant issues surrounding cost, access, efficacy and employee well-being. I look forward to further strengthening our trusted advisor status among our pharmacy benefit customer group.”


The Phia Group’s CEO, Adam V. Russo, was presented with the Be A Beacon Award at the Free Market Medical Association (FMMA) Annual Conference in recognition of his outstanding leadership and achievements in transforming healthcare.

The award represents those who have gone above and beyond in their support and promotion of the free market movement, with award recipients chosen by the FMMA Founders. FMMA said of this year’s

recipients, “We are grateful for your leadership and vision, and this award is a well-deserved recognition of your invaluable contributions!”

Adam Russo commented, “I was proud and honored to receive the Be A Beacon award this year, especially from an organization that has so many innovative leaders. This award is a reflection of The Phia Group’s continual innovation and commitment to excellence in every aspect of our organization.”





John Capasso

President & CEO

Captive Planning Associates, LLC


Matt Kirk


The Benecon Group


Amy Gasbarro


Stacy Borans

Founder/Chief Medical Officer

Advanced Medical Strategies


Mark Combs


Self-Insured Reporting


Orlo “Spike” Dietrich Operating Partner

Ansley Capital Group


Deborah Hodges President & CEO Health Plans, Inc.


Mark Lawrence President

HM Insurance Group


Adam Russo CEO

The Phia Group, LLC


Beth Turbitt

Managing Director Aon Re, Inc.



Captive Insurance Committee

Jeffrey Fitzgerald Managing Director, SRS Benefit Partners

Strategic Risk Solutions, Inc.

Future Leaders Committee

Erin Duffy Director of Business Development


Price Transparency Committee

Christine Cooper CEO

aequum LLC

Cell and Gene Task Force

Shaun Peterson

VP Head of Worksite Solution

Pricing & Stop Loss Product

Voya Financial

* Also serves as Director

JUNE 2024 65




Sidhartha Sinha CEO

Avant Health Chicago, IL

Christopher Jones Manager

Confirmidy Jamestown, TN

Kellie Wirsig Director Compliance Texicare Health Insurance Company Austin, TX

Brian Thomas Managing Director TripleTree Bloomington, MN

Do you aspire to be a published author?

We would like to invite you to share your insight and submit an article to The Self-Insurer! SIIA’s official magazine is distributed in a digital and print format to reach 10,000 readers all over the world.

The Self-Insurer has been delivering information to top-level executives in the self-insurance industry since 1984.

Articles or guideline inquires can be submitted to Editor at

The Self-Insurer also has advertising opportunties available. Please contact Shane Byars at sbyars@ for advertising information.


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Life Is Not Without Risk.

Unforeseen complications could take a routine surgery from $25,000 to nearly $1 million in costs.*

John didn’t think his routine surgery would result in a life-threatening situation. Neither did his self-funded employer.

Catastrophic claims can arise unexpectedly. If the plan has the right Stop Loss protection in place, focus can remain on achieving business goals and welcoming John back when it’s time. When you work with the experts at HM Insurance Group, you can have confidence that the claims will be paid. Find more on

MX3410512 (02/24)
*Cost estimate based on HM Insurance Group historical Stop Loss data and additional industry observations, January 2024. In all states except New York, coverage may be underwritten or reinsured by HM Life Insurance Company, Pittsburgh, PA, or Highmark Casualty Insurance Company, Pittsburgh, PA. In New York, coverage may be underwritten or reinsured by HM Life Insurance Company of New York, New York, NY. The coverage or service may not be available in all states and is subject to individual state approval. SECURE FINANCIAL PROTECTION WITH OUR INSURANCE AND REINSURANCE OPTIONS: Employer Stop Loss: Traditional Protection • Small Group Solutions • Coverage Over Reference-Based Pricing HM Specialty: Assumed Accident and Health Reinsurance • Provider Excess Insurance

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