Amazon Cuts Hundreds of Jobs in Their Healthcare Division

Amazon Health Services Senior Vice President Neil Lindsay shared in a memo that the company is reallocating resources to focus on innovation and improving customer experiences in its healthcare division. As a result, the corporate giant is eliminating to the several hundred jobs at Amazon Pharmacy and One Medical.

Amazon has said the impacted employees will receive financial support, benefit continuation, and career assistance. Over the past several years, Amazon Health Services has seen significant growth in its healthcare businesses, including Amazon Pharmacy, One Medical, and Amazon Clinic. Recent initiatives like RxPass and expanding Amazon Clinic nationwide have been drivers for that expansion.

Despite a series of job cuts across various units within Amazon, the company’s leadership has tasked One Medical with reducing operating losses and saving an additional $100 million this year. Amazon acquired One Medical in a $3.9 billion deal in 2022 as part of its broader expansion into healthcare.

Source: Fierce Healthcare

Senators Looking for Progress Report on PBM Investigation

Prompted by Senator Chuck Grassley's (R-IA) long-standing concerns about the impact PBMs have on prescription prices, the Federal Trade Commission (FTC) began investigating the six largest Pharmacy Benefit Managers (PBMs) in June 2022. In January, a bipartisan group of senators, including Grassley and Maria Cantwell (D-WA), wrote to the FTC requesting an update on the investigation.

The FTC's investigation aims to understand how vertically integrated PBMs affect prescription drug access and affordability. The investigation involves CVS Caremark, Express Scripts, Optum Rx, Humana, Prime Therapeutic, and MedImpact Healthcare Systems. Grassley's office highlights that three of these companies control nearly 80% of the market, emphasizing the lack of transparency in PBM operations.

While the FTC spokesperson stated that investigations often take years, the senators urged the FTC to expedite its study. In addition, senators want the FTC to provide progress reports to enhance transparency as well as address concerns about whether or not anticompetitive harms are happening to consumers.

Source: BenefitsPro

Small Business Finds Innovative Healthcare Solution

Hendry Marine Industries (HMI), a small business in Florida, realized its 300 employees weren't taking advantage of all their preventative healthcare options. The HR director set out to find a solution and found one at a conference. The solution has increased employee participation but wasn't without its bumps in the process.

HMI secured the services of Walk On Clinic which provides on-site medical clinic services. HMI had the new clinic operating once a week and tried incentivizing employees to use the services. Utilization remained low, and HMI identified that employee trust was a key factor. Employees were uncertain if the clinic would share their health information with the company. To bridge this trust and alleviate these fears, HMI used employees who had used the clinic as ambassadors. The more the ambassadors shared their stories, the better utilization became.

Large companies with on-site medical clinics report 59% in employee attraction and retention. While it may not be financially feasible for every company to have an on-site clinic, it’s worth looking into how similar programs could work for your company.


Humana Reports a $591 Million Loss in Q4

Humana, one of the largest insurers, reported significant losses in the fourth quarter of 2023. These losses totaled $591 million compared to $71 million the previous year. Humana attributes the losses to soaring medical costs in its Medicare Advantage business, reflecting industry-wide dynamics.

Humana states that contributing factors to increased costs include higher inpatient hospital stays, increased use of physician services, outpatient surgeries, and supplemental benefits. Humana attributed higher medical costs to broader trends in the Medicare Advantage sector, which they claim are made worse by regulatory changes from the Centers for Medicare & Medicaid Services (CMS).

CEO Bruce Broussard highlighted the need for insurers to adapt to these challenges, potentially through price increases or benefit reductions. Despite uncertainty about the future, Humana remains focused on managing costs, adjusting to regulatory changes, and maintaining its financial stability in the long term.

Source: BenefitsPro

Johnson & Johnson Sued by Own Employee Over Prescription Benefits

Johnson & Johnson (J&J), one of the world’s major pharmaceutical companies, faces a lawsuit from one of its employees alleging that the company's health plan overpaid for prescription drugs, resulting in wasted money for workers. The lawsuit claims that J&J failed to leverage its buying power to negotiate lower prices for medications on its health plan. As an example, the J&J health plan allegedly agreed to pay over $10,000 for a drug for the treatment of multiple sclerosis available for $40 at retail pharmacies.

The lawsuit, filed by J&J employee Ann Lewandowski, accuses the company of breaching fiduciary duties and seeks class-action status to represent other affected workers. J&J representatives have not yet commented on the lawsuit.

This case highlights the rising legal risk faced by US employers over the management of company-sponsored health plans. Typically employers or unions have sued heath plan providers, but this lawsuit could be the first by an employee against a prominent company for such claims. The lawsuit alleges that J&J's health plan overpaid significantly for certain types of drugs, blaming the company for squandering its bargaining power and agreeing to pay more than necessary. As this case progresses, similar lawsuits are possible in the future.

Source: BenefitsPro

Advocate Aurora in Illinois Sued for Anticompetitive Tactics

A proposed class-action lawsuit against Advocate Aurora Health alleges that the health system utilized its market dominance to stifle competition and impose high prices on commercial health plans and their members in Wisconsin. Filed in a Wisconsin federal court, the lawsuit accuses Advocate Aurora Health of forcing commercial health plans to include all its expensive facilities in-network, suppressing competition, and acquiring new facilities to further raise prices.

The plaintiffs argue that without legal intervention, Advocate Aurora Health will continue using anticompetitive tactics to raise prices and fund acquisitions and executive compensation.

The lawsuit claims that Advocate Aurora Health's actions negatively impact Wisconsin's economy and healthcare system and seeks compensation for commercial health plan members and an injunction against unlawful practices.

However, Advocate Aurora Health denies the allegations, stating that the lawsuit lacks merit and that they have collaborated with health insurers to provide more options for patients while improving safety, quality, and cost-effectiveness. The health system recently completed a merger with Atrium Health, forming Advocate Health, the fifth-largest nonprofit health system in the U.S.

Source: Becker’s Hospital Review

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