Cost of 340B To Payers, Humana Saves $11 Billion W/ Value Based Care, Alphabet Sells Reinsurance Venture

Happy Monday, everyone! IQVIA’s study identified the average cost of 340B per covered life, which is lower than ZorroRX’s average savings per plan member—a great reminder of the impact we’re making. Excited to kick off the week. Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(IQVIA) The Cost of the 340B Program to States

 A new IQVIA study finds that the 340B Drug Pricing Program significantly increases costs for employer-sponsored health plans and state and local governments. The report estimates that 340B utilization, which displaces manufacturer rebates, raised costs for employers and workers by $6.6 billion in 2023, with additional costs of $1 billion for government plans. Some states see up to 43% of drug sales involving 340B discounts, translating to per-beneficiary cost increases ranging from $13 to $152. Proposed state contract pharmacy legislation could further increase 340B spending by $1.9 billion for employer plans and $273 million for government plans. Full Report

(Medical Economics) Value-Based Care Cuts Hospitalizations by 32%, Saves $11 Billion

Humana’s 11th annual Value-Based Care Report highlights the success of value-based care (VBC) models in improving patient outcomes and reducing healthcare costs. Medicare Advantage patients in VBC arrangements saw 32% fewer hospital admissions and 11.6% fewer emergency visits compared to non-VBC patients, with increased preventive care screenings and better chronic disease management. In 2023, VBC saved an estimated $11 billion—25.8% in medical costs versus Original Medicare—allowing for expanded benefits like lower premiums and at-home care. Physicians also benefited, earning up to 241% above Medicare’s fee-for-service rates. With higher patient satisfaction and reduced physician burnout, Humana calls for broader adoption of VBC as the future of sustainable, patient-centered care. Full Article

(CNBC) Alphabet’s Verily Sells Granular Insurance to Elevance Health

Alphabet’s health tech subsidiary, Verily, is selling its stop-loss insurance business, Granular Insurance Company, to Elevance Health as part of a broader restructuring. Launched in 2020 with financial backing from Swiss Re Group, Granular provided self-funded employers with medical stop-loss and reinsurance solutions using proprietary technology. The sale follows Verily’s struggles to find a sustainable niche, having previously shifted from health hardware to pandemic response and now precision medicine. Full Article.