​The 2024 Lockton National Benefits Survey features responses from 1,611 employers across the U.S. The employers represent a variety of industries, group sizes and ownership structures. Their responses reflect their different philosophies on how to attract and retain talent while managing the cost of their health and welfare benefits. 

Here is the Insights Report

A class action lawsuit was just filed against drug manufacturer Johnson & Johnson (J&J) in its capacity as an employer and plan sponsor.

The suit alleges that J&J breached its fiduciary duties by not taking proper measures to ensure its plan costs were reasonable as well as failing to exercise prudence in selecting its pharmacy benefit manager (PBM) and agreeing to undesirable contract terms. Specifically, the suit accuses J&J of mismanaging its employees’ drug benefits, resulting in employees significantly overpaying for certain drugs. 
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This lawsuit is an example of the recent uptick in impending lawsuits regarding compliance with recent transparency rules, reinforcing the need for ERISA fiduciary governance.

To help navigate these responsibilities, Lockton held webcast that walked through the key steps of proper fiduciary governance for employers. Click here for a replay of the webcast

​We have also created a Fiduciary Governance Toolkit to help ensure clients are well-versed on and are meeting their fiduciary duties. The Lockton Fiduciary Governance Toolkit includes:

• A roadmap for establishing a health and welfare plan committee to formalize plan decision-making.
• A checklist of key plan administrative functions that welfare benefit plan fiduciaries are responsible for managing.
• Sample policies to address common and uncommon situations.
• Sample welfare plan governance committee minutes to illustrate how to document prudent fiduciary processes to avoid big headaches later.

If you have questions or would like to speak with one of Lockton's Compliance attorneys, please reach out at [email protected] or 617-840-4515

On February 15th, NEEBC orchestrated the region's first-ever employer focused Oncology Symposium, hosted at the Dana-Farber Cancer Institute in their Jimmy Fund Auditorium. The sold out event provided employers actionable insights to promote early detection and treatment, reduce oncology costs and how to best support employees, families and caregivers on their cancer journeys.

Leading experts discussed how organizations navigate the complex world of oncology care and focus on the ever-evolving world of oncology benefits:

• New innovations in cancer prevention and early detection
• How concordant care leads to better outcomes
• The impact of social determinants of health on cancer treatments and follow up care
• How to design a benefit plan to drive maximum value and managing costs 

​As cancer rates continue to rise, it’s important to remember that employees are increasingly concerned about cancer. This event was a learning opportunity for employers to increase understanding so that they can make a difference in cancer care for their workforce. 

Some of the survey feedback on the event was:

• “Took away both long-term goals and ideas, as well as immediate, actionable items.”
• “One of my top 3 NEEBC events ever!”
• “Important topic done within an excellent session.”
• “This was fantastic!”
• “Great speakers and moderators.”
• “Eye opening!”
• “The balance, variety of perspectives, and ‘art & science’ of it all was just wonderful.”
• “Excellent storytelling throughout.”
• “Extremely informative for employers on how to support employees’ needs and challenges.”
• “I literally didn’t want to leave.”

Some key takeaways for the Symposium are

The Critical Importance of Early Detection in Cancer Treatment
The discussion underscored the stark difference in survivability rates between early and late-stage cancer diagnoses, highlighting colon cancer as a case study where Stage 1 survival rates are at 91%, compared to only 13-14% for Stage 4. The panel noted that currently, only four types of cancers have approved and reliable screenings (colon, breast, cervical, and lung), leaving a significant gap as 72% of cancers do not have early detection tests. Further discussion centered on emerging technologies, like DNA-based blood and urine tests, that aim to fill this gap, offering hope for early detection across more types of cancer. The discussion around the FDA's breakthrough designation for Grail and the focus on high specificity to reduce false positives in testing are part of the efforts to improve early detection.

The February sun was shining, temperatures in the mid-forties as I arrived at the Hanover Inn. Back in town for the 2024 Tuck Center for Private Equity and Venture Capital Conference. My midday arrival allowed me to take a few laps around Occum Pond and the campus. Sadly, most of the snow had melted and the prospects for Carnival ice sculptures were dim. I’m sure the students were ready to revel in their long winter weekend. I know I did “back in the day”.
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​Blue Shield of CA has a new PBM prescription for their 4.8M members – “flipping that (the current pharmacy supply chain) on its head.” according to CEO Paul Markovich.
 
The health insurer announced a move away from CVS as their PBM and is instead replacing it with multiple partners:

• CVS – will continue to be the pharmacy dispensing specialty medications
• Abarca – will be the claim adjudication platform
• Mark Cuban Cost Plus – will be responsible for the retail pharmacy network development and management
• Prime Therapeutics – will be responsible for rebates (Prime is part of Ascent GPO with Cigna/Express Scripts)
• Amazon Pharmacy – will be the mail order pharmacy

In a recent interview with The Wall Street Journal, Blue Shield's CEO, Paul Markovich, highlighted the challenges within the current pharmacy supply chain, characterizing it as a complex and opaque structure designed to maximize profits for its participants. “The current pharmacy supply chain is a forest of opacity and profit,” said Paul Markovich, Blue Shield’s chief executive officer “It is overwhelmingly complex, it is designed to maximize the earnings of the participants.” His company’s new setup, he said, will be “flipping that on its head.”

Blue Shield has unveiled a groundbreaking initiative that aims to bring greater transparency and efficiency to their pharmacy benefit management strategy.

Key highlights of Blue Shield's new setup include:

1. Diverse Partnership Approach: Blue Shield is diversifying its partners to manage different aspects of their pharmacy benefit management. The new partners include CVS for specialty medications, Abarca for claim adjudication, Mark Cuban Cost Plus for retail pharmacy network development, Prime Therapeutics for rebates, and Amazon Pharmacy for mail-order services.
2. Transparency and Cost Control: By breaking down the components of their pharmacy benefit management, Blue Shield intends to enhance transparency and provide insights into the cost structure of each part. This strategic move could potentially address the lack of visibility into cost breakdowns that often plague the traditional pharmacy supply chain.
3. Employer Implications: While this unique model might be challenging to replicate in its entirety for larger organizations, smaller Pharmacy Benefit Managers (PBMs) have been adopting similar approaches. Some employers have found success in outsourcing specific components of their pharmacy benefit management while retaining control over others. This decentralized approach often results in increased transparency and decreased conflicts of interest between the PBM and the plan sponsor.
4. Industry Watch: While Wall Street analysts are observing this transformation closely, it's yet to be seen if other large organizations will follow suit in the near term. Blue Shield's initiative will likely be scrutinized for its potential to deliver savings and operational efficiency while upending the status quo in the pharmacy supply chain.

Why would Blue CA move this direction?
By breaking apart the components, the new approach can provide more transparency into the cost of each part of the pharmacy benefit. Wall Street analysts don’t believe other large organizations will follow suit in the short term but will be watching closely to see if the new decentralized approach can be executed appropriately and is delivering on the projected savings.
 
What could this mean for employers?
It will be difficult for most employers to replicate this exact model. However, some smaller PBMs have taken the approach to outsource different components themselves. For example, they may own the adjudication platform but outsource the network, rebates, and specialty pharmacy. Some employers like this model as they believe the costs are more transparent and it reduces conflicts of interest between the PBM and the plan sponsor.
 
Lockton Pharmacy Point of View:
We are generally supportive of this approach and have implemented similar structures / components with some health plans clients. By breaking up the sole PBM, there is greater transparency for the cost associated with each component of the pharmacy benefit. Employers can select the best of each vendor to perform these functions. This strategy more likely to be effective for larger, more forward leaning groups. We don't see it working for smaller clients (at least not for right now).
 
Some operational questions

• Mark Cuban Cost Plus will need to build out a retail network that does not exist today. Currently they only have less than 10K pharmacies set up to take their discount card. Will members have adequate access in CA and nationwide?
• Will the member experience be impacted by the separation of these components and having to deal with multiple vendors?
• Will the obligation to pay fees to five vendors offset the drug cost savings that may ensue from more transparency?

 
Adam Fein wrote a great article on this move on his Drug Channels blog "A Reality Check on That Blue Shield of California Announcement"

Watch Part 1 and Part 2 of our videos to learn... 
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What's Really Driving Employer Health Plan Costs?

• The reinsurance / stop-loss market is reactive and fractured. 0.6% of employees drive 35% of costs (1% = 1/3) “Purple Zebra Unicorns” show up as complex cases consistently across geographies, industries and employer sizes. 
• Life saving therapies and medications are remarkable. The insurance market is not set up for or can account for these longitudinal cases which can last decades and cost millions.  Reinsurance is grounded in covering unknown rather than known risks.

How to improve the cost and quality in complex cancer cases?

• Dana-Farber & Lockton want to help through the clinical journey and do more for “people swirling in the system” – 17% of referrals to Dana-Farber are misdiagnosed primarily due to incorrect reading of the pathology. Rereading of the pathology by Dana-Farber specialists closes this gap. 
• Population Health & Disease Management aren’t enough – we need a person level strategy to manage these claims / costs. Amazing new technologies for early detection and intervention (tests from companies such Galleri or Grail) are part of Dana-Farber’s early detection program. This program wants to disrupt the treatment model to prevent death and improve quality of life. “Future state is a proactive model”.

What makes Lockton's approach unique?

• Traditional monitoring of high cost claims like using a “50% report” (waiting for claims to reach 50% of a specific stop-loss level) are reactive and outdated. Through use of data, predictive analytics and outreach from clients, health plans and navigators, Lockton developed 5,900+ clinical and financial triggers and have performed more than 20,000 clinical reviews referring thousands of patients to high quality providers. The resulting savings for our employer clients is $342M to date and climbing. 

Other topics we discussed include;

• Cancer remains the costliest condition since 2010
• The number of cancer claimants increased 39% from 2018 to 2021
• Due to delayed/missed screenings, we may see up to a 44% increase in new cancer diagnoses this year, including more late-stage cancers
• The top two categories (Malignant Neoplasm and Leukemia, Lymphoma, Multiple Myeloma) are responsible for 29% of total stop loss reimbursement in the past four years
• Dana-Farber is only hospital in the Top 4 for Adult and Pediatric cancer treatment
• More than 50% of all oncology drugs have a contribution from a Dana-Farber researcher
• At any time, over 1,100 clinical trials are being run now including innovative cancer screens like Color, Grail and Galleri 
• Direct Connect is a FREE program from Dana-Farber and will work no matter your zip code (nationwide plus 130 countries)
• Across written second opinions performed by Dana-Farber, only 3% fully agree with care plans from local oncologists – 97% have some level of discordance with these local physicians

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According to the National Cancer Institute, 39.5% of men and women will be diagnosed with cancer at some point during their lifetimes.
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The uptick in cancer rates nationwide is one of the reasons why Lockton partners with Dana-Farber to help manage access, treatment, patient / family support and costs of cancer.

On June 20th, we will present the details of how we're teaming up to fight cancer. Dana-Farber will review their employer focused programs and Lockton will lay out our Complex Claims / Centers of Distinction approach for self-funded companies.

Meeting will be held from 12:00 to 2:00pm. Lunch will be provided and a parking voucher will be available. A tour of Dana-Farber will take place following the meeting for those interested.
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Location - 44 Binney St, Boston, Massachusetts  02115

Guests will learn about Dana-Farber's Direct Connect Program. Designed for employers, Dana-Farber Direct Connect is a free direct access and navigation program that improves access to our worldleading oncologists and specialized care.

Lockton will present our Complex Claims Specialty and Centers of Distinction for self-funded clients.  These services include 

• Purchasing Strength
• Claims Cost Reduction
• Claims Management

Lockton has established streamlined direct referral relationships with some of the country's top institutions including Dana-Farber, Cleveland Clinic and Mayo Clinic to facilitate reviews of cases where members appear to be having difficulty getting the right diagnoses and/or best-fit treatment recommendations.  

To learn more or register for our event, please email [email protected]

Mental health and emotional well-being were consistent themes throughout Lockton’s 2023 Global Benefits Forum hosted in San Diego. We kicked off Day 1 with a terrific keynote speaker, Eric Potterat, Ph.D., who addressed us on “Learned Excellence: The Key Performance Optimization Factors of High Performing Individuals and Teams”.  The key traits he presented (Grit, Mindset, Adversity Tolerance and Balance / Recovery) will help me.

Eric knows a thing or 2 about high performance having spent his career helping elite organizations—from the Navy SEALS to the World Series Champion Los Angeles Dodgers—develop the personal traits that drive elite performance.

Eric has also worked with hundreds of business executives, NASA, firefighting organizations, and world-class athletes from every sport, including gold medalist Nathan Chen and the U.S. Women’s Soccer team.

He began by asking us, “What is mental toughness?” It seems like a simple question—until we try to define it. He explained that even though we all know mental toughness when we see it (pictures of super achievers and heroes like Sully Sullenberger flashed on the screen), we can’t always explain what it is. Pressed to define it, most of us will describe mental toughness as poise under pressure, stress tolerance, or the ability to limit distractions and stay confident and composed. The reality is those are all end states. And with life now in a state of uncertainty, the question now becomes, how do we reach those end states and stay there? ​

The key traits shared by all high performers are Grit, Mindset, Adversity Tolerance, and Balance / Recovery For each trait, he explained the science and insights that make them such important differentiators and then synthesized the core of each trait with clear takeaways.

How to increase your Grit? “The foundation of becoming grittier is working outside of your comfort bubble.”  In other words, get comfortable being uncomfortable. When we identify true motivators, and determine our passions / purpose, we are orders of magnitude closer to meeting our goals. Key attributes include the ability to delay gratification as well as see setbacks as opportunities.
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What does having a growth Mindset really look like? “The hallmark of elite performers is a thirst for useful feedback.” Carl Dweck defined for the world a Growth vs. Fixed Mindset. Folks with Growth Mindsets see challenges vs. threats and obstacles / setbacks as a chance to learn, stretch and grow. ​

​There is promising work and research being done regarding resilience accelerators including drinking tart cherry juice to promote deeper sleep and brain neuroplasticity, float / sensory deprivation tanks, metadata and physiology / surveillance apps and “forest bathing” i.e., go for a walk in nature.
Eric’s work is proprietary and he’s finishing an upcoming book covering the core aspects of elite performance and it is expected in early 2024. I can't wait to read it.