Axios Vitals: Cyber costs

Plus, States roll back COVID rules | Monday, March 06, 2023

Open in app View in browser   Presented By PhRMA   Axios Vitals By Tina Reed · Mar 06, 2023 Welcome back to the work week, Vitals readers. Today's newsletter is 815 words or a 3-minute read.     1 big thing: As cyber attacks on health care soar, so does the cost to protect against them Illustration: Aïda Amer/Axios   Health systems buffeted by labor and supply chain costs and broader economic woes have another unwieldy financial problem: the soaring costs of cyber insurance. Why it matters: It may not be sexy — or the first thing you think about when cybercriminals wreak havoc on hospital infrastructure. But the sheer scope of the problem, and insurers' reluctance to cover losses stemming from ransomware attacks, is hitting hospitals in a very real way, Moody's Investors Services points out. What they are saying: "The cost of insurance is rising and it's coming at the worst time for health care. There's not a lot of wiggle room," Matthew Cahill, a Moody's analyst. Since 2019, there have double-digit jumps in premiums, sometimes more than doubling all at once. A report from Property Casualty 360 last week indicates those insurance costs have finally begun stabilizing in the first quarter of 2023 for the industry. But individual health systems continue to report major upticks in their premiums, Omid Rahmani, an associate director with credit rating agency Fitch Ratings, told Axios. "Costs are decelerating. That tells a general part of the story," Rahmani said. "But one of the factors that is leading to that is that insurance is becoming unaffordable or frankly unavailable for a lot of small- to medium-sized issuers." Zoom in: Insurers have been requiring health systems to harden their defenses in order to secure coverage, through steps like stronger data backup strategies, multi-factor authentication, employee security training and breaking up networks into easier-to-secure segments. They've also been adding major restrictions to coverage including refusing to cover nation-state backed cyber attacks. Yes, but: Even so, some hospitals are deemed too risky to insure, experts say. "The gap between those with adequate resources to protect their information systems continues to increase," said Soumitra Bhuyan, an associate professor at Rutgers University. "Many of these hospitals are critical access hospitals or hospitals in rural areas," he said. "They don't have enough resources to secure their IT systems and may be unable to recover if a breach happens." Go deeper.     2. States roll back COVID rules in health settings In another sign of the times, three of the most progressive states plan to roll back their COVID requirements in health care settings. Driving the news: California, Oregon and Washington are among states formally ending mask requirements within the next month. California is also lifting COVID vaccination requirements for health care workers. New York ended its requirements in February. What they are saying: "We have now reached a point where we can update some of the COVID-19 guidance to continue to balance prevention and adapting to living with COVID-19," California Department of Public Health director Tomás Aragón said in a statement. Yes, but: The California Nurses Association slammed the decision, calling it a "failure of public health leadership." "Abandoning these standards is a counterproductive and unscientific approach to curbing the spread and evolution of Covid-19," Bonnie Castillo, executive director of the nurses union said in a statement.     3. Diabetes docs embrace new drug class Illustration: Shoshana Gordon/Axios   A class of diabetes drugs that has gained popularity — and notoriety — for its ability to help people lose weight is changing the standard of care for patients with diabetes, the Wall Street Journal reports. Driving the news: After years of recommending the generic anti-diabetic medication called metformin, the American Diabetes Association now says doctors can prescribe drugs like Ozempic and Wegovy first for Type 2 diabetics. "It's a fundamental departure from the classical approach of trying to fix the blood sugars, which is what we used to focus on because it's all we really could do," Marie McDonnell, director of the diabetes program at Brigham and Women's Hospital in Boston, told the WSJ. The drugs have also driven a shift in how doctors think about treating obesity, viewing it as a disease rather than a lifestyle choice, Axios' Caitlin Owens writes. The newer drugs are an improvement on metformin when it comes protecting the heart and kidneys. Yes, but: The newer drugs can have monthly list prices around $1,000, and demand outpaces supply, which can make accessing the drugs challenging.     A message from PhRMA Insurers and PBMs don't pay full price for your medicines. So why do you?     Insurers and pharmacy benefit managers (PBMs) get discounts on medicines. Surprised? These savings can reduce the cost of some brand medicines by 50% or more, but insurers and PBMs aren't required to share these savings with you. See what else they don't want you to know.     4. Data du jour: Consumers crave wellness category Data: McKinsey Health and Wellness Survey; Chart: Axios Visuals Wellness is increasingly a key priority for consumers, according to the latest research from consulting firm McKinsey & Co., Axios' Sami Sparber writes. The big picture: The estimated spend on wellness products and services is more than $450 billion in the U.S. and rising at more than 5% annually, McKinsey found. Digestive or gut health, women's health and sexual health are among the areas driving more of that spending and purchasing power, Anna Pione, a partner at McKinsey, tells Axios. Between the lines: Millennials are the key group to watch. They prioritize health and wellness more than any other generation, Pione says.     5. While you were weekending Illustration: Aïda Amer/Axios   💰 Medicaid clawbacks collect $700 million a year from poor and middle-class Americans. (NPR) 💻 Online service BetterHelp is refunding customers for sharing their health data. (USA Today) 👀 Authorities are seeking to arrest a woman with tuberculosis for refusing care. (Washington Post)     A message from PhRMA Insurers and PBMs don't pay full price for your medicines. So why do you?     Insurers and pharmacy benefit managers (PBMs) get discounts on medicines. Surprised? These savings can reduce the cost of some brand medicines by 50% or more, but insurers and PBMs aren't required to share these savings with you. See what else they don't want you to know.   Did someone forward this email? Subscribe here. Thanks for reading, and thanks to senior editor Adriel Bettelheim and senior copy editor Bryan McBournie for the edits. Dive deeper into the future of health care Axios Pro is your personal health care industry analyst, here to help you make the news actionable and anticipate future outcomes. Subscribe today.   Axios thanks our partners for supporting our newsletters. Sponsorship has no influence on editorial content. Axios, 3100 Clarendon B‌lvd, Arlington VA 22201   You received this email because you signed up for newsletters from Axios. To stop receiving this newsletter, unsubscribe or manage your email preferences.   Was this email forwarded to you? Sign up now to get Axios in your inbox.   Follow Axios on social media: