UVM Health to end employee coverage for weight loss drugs

The hospital system said the decision followed a lengthy review of medical and financial information and input from a panel of experts.

UVM Health will stop covering some medications used for weight loss under its employee health plans beginning in September, a move the hospital system says will reduce costs by $19 million a year.

The change affects more than 10,000 workers and family members covered through the network. UVM Health said the shift is intended to help hold down insurance premiums, even as employees who use the drugs will have to pay the full cost themselves.

The hospital system said the decision followed a lengthy review of medical and financial information and input from a panel of experts. Phil Rau, a UVM Health spokesperson, said the move is part of a broader effort to control the expense of care across the organization, including the cost of employee benefits.

Coverage will remain in place when the medications are prescribed for diabetes, according to Kevin Kelleher, vice president of human resources.

The policy comes as the health network faces major financial strain. UVM Health includes three Vermont and three upstate New York hospitals, along with a home health and hospice division and many clinics. Dr. Steve Leffler, the system’s president and CEO, has said the flagship hospital in Burlington loses about $460,000 a day. An independent review also concluded that the organization needs to trim spending by $100 million annually for three years to stay afloat. Earlier in June, the system eliminated 142 jobs, generating $9.5 million in savings, and Leffler has said additional reductions are likely.

For employees who rely on GLP-1 drugs, the decision could be significant. Haley Duquette, a nurse with UVM Home Health and Hospice, has taken Zepbound for more than two years to lose weight. She said the medication has changed her life and that it has always been covered for her. Under her plan, the monthly copay is $30, and she has lost 70 pounds. She said paying the full price would be difficult to absorb and that staying in her job matters because few other employers provide similar coverage.

Melissa Lavallee, an administrative and financial assistant at the network, said her husband uses a GLP-1 through her insurance to treat sleep apnea. She said he has lost more than 100 pounds and no longer deals with the lower back and knee pain that had bothered him for years.

The drugs, first developed for type-2 diabetes, are now also approved for obesity and related conditions. They have been linked to improvements in areas such as sleep apnea, arthritis and heart health. But the medications can be expensive, with monthly out-of-pocket costs often ranging from $800 to $1200, and the list price for Zepbound can reach $1,086 a month before insurance or purchasing discounts.

UVM Health pointed to research from consulting firms Mercer and PSG in support of its decision. Rau said the system also believes many patients without type-2 diabetes discontinue the drugs within a year, limiting the chance of long-term benefit.

The announcement came the same day Medicare began a pilot program to study coverage of GLP-1s for weight loss. That program will examine whether the health gains from the medications can offset their high price through lower overall medical spending.

But research has not yet produced a clear answer. A set of studies from the National Bureau of Economic Research found no drop in total healthcare spending for people who started a GLP-1, and one paper found non-drug spending increased. Researchers linked the rise to higher outpatient costs even though spending on other prescriptions declined.

UVM Health told employees not to stop taking the medications abruptly and instead to speak with a clinician about next steps.