Cigna Plans to Sell Medicare Business, WH Aims to Lower Sickle Cell Therapy Costs

February 07, 2024 - Cigna will sell its Medicare plans for billions of dollars, according to an announcement from HCSC.

The independent licensee of Blue Cross Blue Shield Association revealed that it had plans to purchase Cigna's Medicare businesses--including but not limited to its Medicare Advantage and Part D plans--for $3.3 billion. The deal still has to jump through regulatory hurdles before it can be finalized.

Meanwhile, the White House is pursuing new strategies to lower costs for patients with sickle cell disease. Million-dollar price tags prevent most patients from accessing new cell and gene therapies. A new model from CMS aims to make these treatments more affordable.

Also, with administrative spending on the rise, a prominent healthcare nonprofit is calling for more automation. And the Department of Health and Human Services (HHS) embraces the Food As Medicine approach through three new partnerships.

Kyle Murphy 

Hello and welcome to Healthcare Strategies | Headlines edition.

In today's episode we have:

• White House Sets Sights on Lowering Sickle Cell Therapy Cost
• Increased Administrative Spending Strengthens Call for Automation
• Cigna Makes Moves to Sell Medicare Business
• HHS Embraces Food is Medicine Movement

Hello, listeners. This is Kyle Murphy, vice president of editorial at Xtelligent Healthcare Media and, as always, I am joined by Kelsey Waddill.

Together 

Oh, hello.

Kyle Murphy 

Can't believe it's already February. Well, it's been February for a few days.

Kelsey Waddill 

Yeah.

Kyle Murphy 

But it's already flying by.

Kelsey Waddill 

It's the first Healthcare Strategies | Headlines February day. So that's all that matters.

Kyle Murphy 

That is correct. And this is the year of getting things done. So let's get right into it, shall we?

Kyle Murphy 

All right. On February 2, 2024, the Biden-Harris administration announced plans to improve access to treatments for sickle cell disease despite high costs.

So, the Centers for Medicare and Medicaid Services [CMS] stated that sickle cell disease will be the initial focus of the cell and gene therapy access model. HHS Secretary Xavier Becerra emphasized the need to streamline access to cell and gene therapies for over 100,000 Americans with sickle cell. Casgevy, the first CRISPR-based gene editing therapy for sickle cell disease, and transfusion-dependent beta thalassemia [TDT] costs about $2.2 million

Kelsey Waddill 

Man.

Kyle Murphy 

Million. This cost is high compared to the lifetime treatment costs for the two conditions, $1.7 million and $5.0 to $5.7 million respectively. Although gene therapies could reduce long term financial burdens and treatment challenges, their initial costs limit patient access. Similarly, high costs are seen with other therapies like Hemgenix for hemophilia B at $3.5 million, and Skysona for cerebral adrenoleukodystrophy at $3.0 million. CMS administrator Chiquita Brooks-LaSure noted that the potential of gene therapies to transform lives and reduce long term health care costs, as well as stressing the importance of increasing access to these treatments.

Kelsey, health equity is a major focal point in health care, what do you make of the federal government's role in ensuring that the disease that impacts a historically marginalized group is accessible and affordable, despite the high initial price tag?

Kelsey Waddill 

I was gonna say, so much for being accessible when it's millions of dollars. Obviously, the patient--I would, one would hope--the patient is not going to be responsible for millions of dollars. But starting it out at millions of dollars means that they're going to be responsible for a lot no matter what it whittles down to at the end. And you gotta believe that health insurers are not going to want to cover a large portion of that. So I think obviously, yes, the government has a role to play here, potentially, especially for historically marginalized groups that don't have access, in general, to good health insurance coverage to begin with, much less to strong healthcare treatment plans and drugs like these that could be life transforming. But eventually, somebody's got to confront the companies that are making these and setting the price tags about the price tag. There's only so many times that the federal government can help us out--

Kyle Murphy 

Oh, 100 percent.

Kelsey Waddill 

--before we actually address the real issue.

Kyle Murphy 

Yeah. What's the cost of social good?

Kelsey Waddill 

Yeah.

Kyle Murphy 

Can't put a price tag on that can you?

Kelsey Waddill 

No, no.

Kyle Murphy 

It's a tough one, but I would think eliminating a disease would be an achievement to humanity and that's something that we should all support. Alright, let's get to number two.

Kelsey Waddill 

Number two! Increased administrative spending strengthens call for automation.

The CAQH Index report indicates a 50 percent increase in healthcare administrative spending in 2022, reaching $82.7 billion. This rise is attributed to staffing shortages, cybersecurity threats, and increased time required for transactions post COVID-19.

Kelsey Waddill 

For context, a widely cited 2019 study in the Journal of the American Medical Association estimated that administrative waste in the US healthcare system ranges from $760 billion to $935 billion annually, which accounts for roughly 25 percent of total healthcare spending.

Kyle Murphy 

Yikes.

Kelsey Waddill 

Yeah. Despite improved electronic adoption and healthcare transactions administrative costs rose due to the time needed for completion. Provider time constituted over three-quarters of this increase. Challenges like staffing shortages, requiring more time for less experienced employees, and security threats in hybrid work environments contributed to the higher costs. The healthcare industry could save an estimated $18.3 billion by optimizing electronic transactions. CAQH recommends continued electronic adoption, focusing on AI--

Kyle Murphy 

AI!

Kelsey Waddill 

--of course, and machine learning, and targeting transactions with high electronic savings potential.

Kyle, you've worked on the billing and insurance related side of the healthcare for the past few years, covering that. What do you make of these, these latest findings from CAQH?

Kyle Murphy 

I'm troubled by the fact that with workforce shortages, there hasn't been more done to address the human problem. Yes, you can automate certain tasks. That's that goes without saying, but you still need people healthcare is dependent on people. So I feel like the pandemic is catching up. And the fact that folks have either left the workforce seeking, you know, greener pastures elsewhere, not going into the workforce at all. So I think we've got a cultural problem, which we talked about last week or maybe a week before, where there needs to be something done to support workers, making sure they're actually spending their time on meaningful tasks, providers actually providing care, and administrative people dealing with administrative things, and automating those tasks that don't need a human touch in making healthcare a lot more efficient. And I would say effective, because it's more personal. Yeah. And it's more interactive.

Kelsey Waddill 

It kind of sounds like a broken record about AI all the time. But I feel like this is the kind of thing where actually this is what it's meant for.

Kyle Murphy 

Oh, 100 percent, 100 percent automation. Technology is great insofar as it allows human beings to flourish. If it doesn't, then what is it?

Kelsey Waddill 

What is it? Who knows?

Kyle Murphy 

That's the big existential question.

All right, let's get on to more big business in healthcare. Everyone likes a good transaction, don't we? Cigna makes move to sell Medicare business.

The health payer giant Cigna, one of the top five largest health insurers in the United States, is planning to sell its Medicare business to HCSC, an independent licensee of the Blue Cross Blue Shield Association. Nothing has been finalized yet, but the plan is that HCSC will purchase sickness Medicare businesses for $3.3 billion.

Kelsey Waddill 

Billion. With a B.

Kyle Murphy 

Well, you could cover sickle cell with that.

Kelsey Waddill 

Yeah. Oh boy.

Kyle Murphy 

Cover sickle cell. Could take care of sickle cell there.

That includes sickness Medicare Advantage business, Medicare supplemental benefits plans, both Part D plans and care allies. Both Cigna and HCSC leaders said that the deal aligns with their goals. Good. I'm great, according to me. HCSC will significantly increase its Medicare membership, adding 3.6 million Cigna members to HCSC's 1 million existing Medicare beneficiaries, and Cigna will be able to focus on its services and health benefits platforms. The deal came not long after Cigna's talks with Humana about a merger failed.

Kyle Murphy 

Kelsey, what do you make of this latest deal-making?

Kelsey Waddill 

I think it's an interesting move on Cigna's part. Medicare Advantage is very oh my gosh, what is the word that I'm looking for?

Kyle Murphy 

It can be lucrative.

Kelsey Waddill 

Profitable, profitable.

Kyle Murphy 

Yeah, but it's also challenging.

Kelsey Waddill 

Yeah. And there's a lot of--especially as the crackdown on Medicare Advantage is happening right now-- there's a lot of scrutiny around Medicare Advantage, Medicare in general. So you could say that they're trying to get out from underneath all of that. But I think also, we've seen in the past couple of years, health insurers doing a lot of this dealmaking to identify themselves set themselves apart, and creating their own identity. And I think it'll be interesting to see what Cigna decides to focus on.

Kyle Murphy 

Yeah, I wonder if there's been so much consolidation in the Medicare Advantage space where there are folks--these certain health plans--that don't have the lion's share have just realized, "you know, what, we're closed out. Let's go to employer-sponsored health plans, other lines of business where we can compete and grow." Because you know, Medicare has a finite number of lives. It's significant, but why would you want to jump through all those regulatory hoops if you don't have to? I think a lot of these businesses are risk-averse, and having to deal with the federal government and audits and things like that seems to be costly. So leave Medicare to the businesses that have already kind of thrived and move on to to other places where, you know, you can be--maybe there's more innovation that supports kind of what they've done historically. I would think Medicare Advantage people could benefit from that, but maybe it just says a lot more about how tough it is to to really succeed in that space.

Kelsey Waddill 

Yeah, maybe they're getting ahead of things. Maybe this will be something that a lot of other payers start doing, too.

Kyle Murphy 

Only time will tell.

Kelsey Waddill 

Only time will tell.

HHS embraces the food is medicine movement. At HHS's most recent Food As Medicine summit, the department revealed three new partnerships to advance Americans' nutritional well-being.

First, for those who might not be familiar, what is the concept behind Food As Medicine? Basically, it centers on how nutrition informs health outcomes. So this is distinct from food insecurity, which has been highlighted in a lot of social determinants of health efforts, which focuses on the impact of the lack of access to food. This is more about what kinds of foods are being consumed.

So, HHS will partner with Instacart, the Rockefeller Foundation, and Feeding America. These partners will help research the efficacy of Food As Medicine programs, assess Feeding America's specific, existing Food As Medicine program, and overall support HHS's Food As Medicine efforts. The partnerships will embrace the five guiding principles of HHS's [Food As Medicine] efforts that the department laid out in a previous summit. They will support the underlying philosophy that nourishment, access to healthy food, awareness about the relationship between nutrition and health, investing in under-resourced communities, and building sustainable nutrition-related solutions--that's five--leveraging a variety of partners are all key to healthiness, both personal and communal.

Kelsey Waddill 

Kyle, what are your thoughts on the Food As Medicine movement that has been picking up speed in the last couple of years?

Kyle Murphy 

Well, I'm curious, is this an issue of food being too expensive, or people not buying the right food or the right food not being available to them?

Obviously, United States has an obesity problem. That's one thing. So maybe we're not eating the right foods or eating too much of the wrong foods, that's one thing. But are we really getting at the fact that nutrition has been overlooked as a foundational right that you have in this country? Like, everyone needs nutrition, but for some reason it's been treated as a commodity when it is absolutely necessary. I think, you know, you and I are joking about the fact that--is food actually medicine? No, food is a requirement, a prerequisite for living to survive.

Kelsey Waddill 

Yeah.

Kyle Murphy 

So, I wonder if it's more along the lines of nutrition and making sure that the variety of foods that are key to a healthier diet, maybe that's the right way to look at it. But people I think, you know, if you look at, you know, it's 2024. It's an election year. Food prices, energy prices are always where consumers are hardest hit. And there's been a lot of inflation in those areas. So, I wonder if there's that component to it as well. But we also know that there's been a lot of greed-flation. And sometimes the foods that are easiest to access aren't the best foods for you, right? You have ultra-processed foods have gained a lot of attention recently. And those have been shown not to work well on the human body. In fact, it does the opposite.

So I would say that, you know, this is a good move, but I think we're really getting to the point where people probably need 1) money to buy food and then 2) places to buy the right food. And those two things are conflicting at all times. I don't think anybody in their right mind is choosing to be like, "Oh, I'm gonna take this the unhealthiest option." When if you could, you could choose a better one. Well, you know, we know for a fact that in the absence of food, laughter is still the best medicine.

Kelsey Waddill 

Oh! So we're good!

Kyle Murphy 

Worse comes to worse, just make jokes. We're good. We're good. We already have a solution and it's free.

Kelsey Waddill 

Unless you want to pay us for our comedic efforts. I think that would be great.

Kyle Murphy 

Well, that concludes today's episodes of Healthcare Strategies | Headlines. Kelsey, it's been good seeing you.

Kelsey Waddill 

Good to see you, too, Kyle!

Kyle Murphy 

Alright, take care everybody.