Health Care

Companies’ health care costs are rising steeply, leading finance chiefs to look for alternative ways of attracting and retaining employees, according to The Wall Street Journal (subscription). 

What’s going on: “Health-insurance costs, which are among the largest expenses for many U.S. companies, are projected to rise around 6.5% for 2024, according to consulting firm Mercer.”

• “The surge … may add significantly to costs for employer plans that Mercer said already average more than $14,000 a year per employee. Many companies are expected to take on most of the increases … ”

​​​​​​​ Why it’s happening: In addition to inflation and higher interest rates, rising health care price tags are the result of a combination of higher labor costs in hospitals and elsewhere in the health care system, a rise in elective care (which declined during the global pandemic) and a demand for new drugs.

The response: Finance officers are largely seeking ways to manage the growing costs without “add[ing] pressure to employees’ budgets as health care costs rise,” according to the Journal.

• Whether that will be possible in the longer term will depend mainly on the state of the labor market and how high prices rise.
• Some companies are considering sharing the increased cost burden with employees, while others are pushing preventive care as a way to save money down the road. 

The last word: “Manufacturers feel a deep commitment to providing high-quality health care to their employees despite the increased costs of doing so,” said NAM Director of Domestic Policy Julia Bogue.

• “The NAM recently released ‘Manufacturers on the Front Lines of Communities: A Deep Commitment to Health Care,’ which details industry-wide health benefits and trends, as well as federal policy proposals that could jeopardize manufacturers’ ability to continue offering health care plans.”

The Justice Department has reached an agreement with the American Civil Liberties Union that would give benefits to thousands of migrant families separated at the border under the previous administration’s policies, according to ABC News.

What’s going on: “Under the proposed agreement, the Justice Department says, new standards would be established to limit migrant family separations in the future. The settlement would prohibit separations unless there are concerns regarding the wellness of the migrant child, national security issues, medical emergencies or in the case of criminal warrants.”

• The deal—on which a federal judge must still sign off—would also cover any medical costs incurred because of the separations.
• If approved, it would stay in effect for six years. 

Why it’s important: “[U]nder the settlement, more than 3,900 children and their families would be eligible for temporary relief from future deportation for up to three years, with a chance to renew. Members of those families would also be granted work authorizations.”

• More than 75% of the originally identified families that were separated have either been reunited or given the information they need to reunite, according to a Biden administration official.
• “The agreement further expands the number of families that will be eligible for humanitarian parole and reunification, meaning that the ACLU and other organizations will be receiving information on separated families that was previously unknown,” according to ABC News.

Previous policy: A policy in place for four months in 2018 “mandated prosecutions for all suspected illegal border crossings, which led to parents being deported while their children stayed in U.S. custody or were placed in foster care.”

The last word: “The NAM has long called for policy that explicitly prohibits the separation of minor children from their parents, which is what we lay out in ‘A Way Forward,’ our immigration-policy document,” said NAM Director of Domestic Policy Julia Bogue.

America’s aging population is one reason consumer spending has remained robust even as the Federal Reserve has raised interest rates, The Wall Street Journal (subscription) reports.

What’s going on: As of August, a record 17.7% of the U.S. population was 65 or older.

• Senior citizens, whose finances tend to be relatively robust, “accounted for 22% of spending last year, the highest share since records began in 1972 and up from 15% in 2010,” according to Labor Department data cited by the Journal. 

Why it’s important: “Our large share of older consumers provides a consumption base in times like today when job growth slows, interest rates rise and student-debt loan repayments begin again,” Susan Sterne, chief economist at Economic Analysis Associates, told the news outlet.

Longer lives, more spending: In addition to living longer, the elderly are more active than ever before, spending on traveling, hiking, cruises, e-bikes and more.

• “The average household led by someone age 65 and older spent 2.7% more last year than in 2021, adjusted for inflation, according to the Labor Department, compared with 0.7% for under-65 households.”

Recession buffer: Baby boomers have amassed more than $77 trillion in wealth, according to the Fed—and some economists say that money will help prevent an economic recession.
 

Life expectancy in the U.S. started falling even before the global pandemic—and it’s continuing to decline, according to The Washington Post (subscription).

What’s going on: According to a yearlong investigation by the Post, “[a]fter decades of progress, life expectancy—long regarded as a singular benchmark of a nation’s success—peaked in 2014 [in the U.S.] at 78.9 years, then drifted downward even before the coronavirus pandemic. Among wealthy nations, the United States in recent decades went from the middle of the pack to being an outlier. And it continues to fall further and further behind.”

• While the opioid crisis and gun violence are contributing to the rising death toll, heart disease and cancer have remained the leading cause of death among people aged 35 to 64.
• Meanwhile, diabetes and liver disease are becoming more common killers.

A worrisome increase: “In a quarter of the nation’s counties, mostly in the South and Midwest, working-age people are dying at a higher rate than 40 years ago, The Post found.”

• The trend is exacerbated by economic divisions. In the early 1980s, the nation’s poorest people were 9% more likely to die than their wealthier counterparts. Today, they are 61% more likely to die.

What we can do: “Medical science could help turn things around. Diabetes patients are benefiting from new drugs, called GLP-1 agonists . . . that provide improved blood-sugar control and can lead to a sharp reduction in weight. But insurance companies, slow to see obesity as a disease, often decline to pay for the drugs for people who do not have diabetes.”

• The FDA has approved several such drugs so far, including Novo Nordisk’s Ozempic and Wegovy and Eli Lilly’s Mounjaro.

Manufacturers can take specific steps to improve the resilience of the health care supply chain, the NAM’s latest health care study found.

What’s going on: The study—conducted by the Manufacturing Policy Initiative at Indiana University—analyzes data from the COVID-19 pandemic, when manufacturers in the U.S. had to produce large quantities of critical health care equipment under difficult, fast-evolving conditions.

Building resilience: The study found that to prepare the supply chain for a future disruption of similar magnitude, manufacturers should focus on seven areas:

• Speed: Manufacturers must be able to satisfy demand quickly.
• Information: Manufacturers require timely access to accurate information.
• Cost: Firms face the costs of taking action within the supply chain, as well as the costs of managing market unpredictability and policy environment uncertainty.
• Networks: Partnerships can support information sharing and networks to help manufacturers navigate the disruption.
• Size: Supply chain challenges can look different for small, medium-sized and new manufacturers than for larger, established firms.
• Technology: Tech can help manufacturers increase production, improve efficiency and speed up innovation.
• Flexibility: Responses can come from unexpected sources and need a flexible policy environment.

The NAM says: “Policymakers should utilize these lessons to bolster our supply chain for the next disruption,” NAM Chief Economist Chad Moutray said. “This analysis … reveals that there are key policy actions needed to strengthen the manufacturing supply chain. Research shows a more balanced regulatory agenda, with an emphasis on clarity, predictability and coordination, will help mitigate the effects of the next disruption.”
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Washington, D.C. – The National Association of Manufacturers released a new study outlining steps to improve health care supply chain resilience to allow manufacturers in the United States to better prepare for and adapt to the next disruption. The study analyzes lessons learned from the COVID-19 pandemic, during which manufacturers across the United States produced critical health care supplies in a highly unpredictable environment that affected every industry level.

“During the COVID-19 pandemic, manufacturers in the United States helped lead our response and recovery and learned many lessons in the process,” said NAM Chief Economist Chad Moutray. “Policymakers should utilize these lessons to bolster our supply chain for the next disruption. This analysis, which was conducted by the Manufacturing Policy Initiative at Indiana University, reveals that there are key policy actions needed to strengthen the manufacturing supply chain. Research shows a more balanced regulatory agenda, with an emphasis on clarity, predictability and coordination, will help mitigate the effects of the next disruption.”

Key Themes

Seven key lessons from the pandemic can be examined for future efforts to build resilience:

• Speed matters: Manufacturers need to be able to serve demand quickly.
• Information matters: Manufacturers need timely access to accurate information.
• Costs matter: Firms face the costs of taking action within the supply chain, as well as the costs of managing market unpredictability and policy environment uncertainty.
• Networks matter: Partnerships can support information sharing and networks to help manufacturers navigate the disruption.
• Size matters: Small and medium-sized manufacturers and new firms can be differently—and uniquely—challenged compared with established larger manufacturers.
• Technology matters: Technology can enable manufacturers to enhance production, innovate or improve efficiency, as well as support broader efforts to build partnerships.
• Flexibility matters: Responses can come from unexpected sources and need a flexible policy environment.

Areas of Opportunity

The report identifies four key areas of opportunity to enhance health care supply chain resilience:

• Fostering a conducive regulatory environment: Manufacturers and their partners need clear and streamlined regulations as well as a flexible regulatory framework in advance of the next disruption.
• Supporting partnerships for stronger information sharing and networks: Sustained information channels between manufacturers and policymakers will improve access to information for all parties and mitigate disruptions.
• Ensuring a healthier “baseline” industry: Small business plays a pivotal role in the U.S. Robust entrepreneurship and scaling of new manufacturers contribute to a more competitive industry.
• Prioritizing changing workforce needs: Workforce development must be prioritized so that manufacturers can pivot across product lines and sectors to meet the needs of the next disruption.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Around 15,000 people are diagnosed every year in America with glioblastoma, a particularly aggressive form of brain cancer. At Novocure—a global oncology and medical device company with its North American flagship facility located in Portsmouth, New Hampshire—scientists and manufacturers have developed a device to revolutionize the way these tumors are treated.

The breakthrough: Novocure’s founder Yoram Palti developed an innovative treatment called Tumor Treating Fields therapy—an approach that uses electric fields to kill cancer cells while sparing healthy ones.

• For adult glioblastoma patients, the device, called Optune^®, consists of wearable, portable adhesive arrays and an electric generator that can be carried in a bag.

• “Unhealthy cells and healthy cells have different properties,” said Frank Leonard, president, CNS Cancers U.S. at Novocure. “If you can create the right type of electric field, you can exert force and destroy cancer cells as they divide.”

Value added: Crucially, Tumor Treating Fields therapy is being studied together with other therapies, giving patients access to an optimal mix of treatments.

• “You get the best of both worlds with a device intervention and a drug intervention,” said Leonard. “Patients can wear this device consistently while using Temozolomide, which is the current standard of care chemotherapy agent used to treat glioblastoma.”

Low risk: Unlike drug therapies, which can present a range of adverse effects, Optune^® has few side effects beyond mild-to-moderate skin irritation beneath the transducer arrays. As a result, patients can receive the treatment continuously for extended periods of time to attack cancer cells.

• “Typically, the limiting factor in treating cancer is dose-limiting toxicity—for example, you can only take one or two chemotherapies at the same time because they’re so toxic,” said Leonard.

Getting heard: The company’s device was featured in the award-winning short film “Rare Enough,” which tells the inspiring story of cancer survivor DJ Stewart and his journey in battling glioblastoma.

• Stewart is a Kansas City–based skateboarder who was first diagnosed with glioblastoma in 2019. Thanks, in part, to Tumor Treating Fields therapy, his life expectancy—once only 13 months—has been prolonged significantly. DJ now serves as a community outreach coordinator for the Head for the Cure Foundation.

Next steps: Novocure believes that Tumor Treating Fields therapy holds significant promise for other types of cancer as well. The company is developing additional wearable devices that could treat countless patients around the world.

• Lung cancer trials have shown promising results recently, and the company expects to learn more in the coming months from clinical trials involving ovarian cancer, metastases from lung cancer and pancreatic cancer.

• “We started working first in one of the rarer, yet most aggressive, forms of cancer. There are around 15,000 patients diagnosed with glioblastoma in the U.S. each year,” said Leonard. “But pre-clinical data suggests that Tumor Treating Fields can work with all different tumor types.”

A look to the future: Wearable anti-cancer devices offer an exciting new frontier in the fight against life-threatening diseases, and an important field where manufacturers can make an enormous difference.

• “In these really aggressive cancers, we still are making advances—and advanced devices that require sophisticated engineering and complex global manufacturing have a role to play,” said Leonard. “There’s a lot the manufacturing industry can do to improve the outcomes of patients, and they should be recognized for that work.”

A new COVID-19 vaccine is set for a September release as cases of the new virus variant “Eris” rise nationwide, according to Reuters (subscription).  

What’s going on: “Some public health experts hope that Americans will welcome the new shot as they would a flu jab. But demand for the vaccine has dropped sharply since 2021 when it first became available and more than 240 million people in the U.S., or 73% of the population, received at least one shot.”

• Health care providers and pharmacies will begin offering the updated shots—which target XBB.1.5, “a sub-lineage of the still dominant Omicron variant”—in the second half of next month.
• The new vaccines still need authorization by the U.S. Food and Drug Administration and recommendation by the Centers for Disease Control and Prevention.

Why it’s important: Though the COVID-19 public health emergency ended in May and the private sector has taken on “much of the duty of vaccinating America,” virus-related hospitalizations are up 40% from June’s lows.

• “CDC Director Mandy Cohen said last week in a podcast that … Americans should view these shots as an annual measure to protect oneself, in line with the annual flu shot.”

Consumer credit rose more than anticipated in June, according to USA Today.

What’s going on: “Overall credit increased $17.8 billion, topping economists’ average forecast for a $13 billion gain, to $4.977 trillion in June, the Fed said late Monday. May’s borrowing also was revised up by about $2 billion.”

• However … despite the June rise, “overall credit increases have moderated over the past year, showing the Fed’s aggressive interest rate hikes to squelch spending and lower inflation are working.”

“Nonrevolving” credit: Nonrevolving credit—lump sums repaid only once, such as those for school tuition and car purchases—jumped by $18.5 billion to $3.735 trillion, largely on the strength of auto sales.

Short-term debt: Short-term debt, such as credit card debt, fell in June for the first time in more than two years, to $1.262 trillion. This is likely due to the sharp increase in credit card interest rates, according to a report cited by USA Today.

The big picture: Consumer spending has stayed steady despite rising inflation owing to savings built up during the global pandemic.

New plans from internet providers are part of the Biden administration’s effort to increase access to broadband and reach more users, according to The Wall Street Journal (subscription).

What’s happening: “Twenty internet providers, including AT&T Inc. [and] Comcast Corp. … agreed to improve subsidized high-speed internet plans they offer to millions of unconnected households.”

• The move is part of the Affordable Connectivity Program that was launched as part of last year’s bipartisan infrastructure plan.
• The infrastructure plan allocated $14 billion to the program as part of the effort to bolster America’s broadband network.

The goal: The Affordable Connectivity Program has failed to reach most of its eligible subscribers because people most in need have no access to the internet and aren’t aware that they’re eligible for a major discount. An important part of the new plans is ensuring that they’re accessible to the most users.

• “Many of the companies, which cover more than 80% of the U.S. population, agreed Monday to either boost the internet speeds that they offer through the program or to cut their rates to $30 a month for low-income and other households that qualify.”

Who’s eligible: An estimated 48 million households are eligible for the subsidy. According to the Federal Communications Commission, about 11.5 million households have already signed up for the subsidy.

• The Biden administration has launched a new website, GetInternet.gov, to provide information to Americans about signing up for the subsidies.

The NAM’s view: The NAM has been a strong supporter of expanded access to broadband for years, citing its importance in the policy blueprint “Building to Win.”