Like the recent Alzheimer drugs that threaten to bust the Medicare budget, GLP-1 medications are a ray of hope for millions of people but a nightmare for payers. More and more insurers are limiting the use of GLP-1 drugs to their original purpose: diabetes treatment. This article explores the GLP-1 dilemma to ask what the U.S. health care industry can do to control costs.

Resisting the future

Let’s look at the amazing recent claims made for GLP-1 drugs. Their treatment for diabetes, which all insurers cover, is well established by studies. The medications are also used for weight loss, with FDA approval or off-label, and many people have lost far more weight on the drugs than they could through other means. But in addition, there is strong evidence that these drugs “improve outcomes in people with cardiovascular, kidney, liver, arthritis, and sleep apnea disorders.” A recent survey further suggest that people taking the GLP-1 drugs are less likely to become addicted, or if already addicted, less likely to be hospitalized or suffer overdoses. This makes intuitive sense: if a drug can diminish cravings for food, why wouldn’t it diminish cravings for other ingested substances?

Being under patents, GLP-drugs can easily cost more than $1,000 per month. They are so successful that a significant number of patients pay this out of pocket. The cost of the medications drove a recent deal between pharma companies and the U.S. federal government. In many countries, including China and India, some GLP-1 medications are going generic—but in the U.S., patents will be extended for an unknown length of time.

There are other downsides to GLP-1 drugs too. They have side effects that can get painful enough to cause some people to quit the drugs. People who cease using them tend to gain back all the weight (which is why many doctors try to pair the drugs with behavioral therapy).

Therefore, a lot of insurers, some of whom tentatively funded the use of GLP-1 drugs for weight loss, have decided to restrict their coverage to the original diabetes treatment. The Centers for Medicare & Medicaid Services (CMS), which historically has not covered weight loss drugs, has re-affirmed that it won’t pay for GLP-1 drugs for anything except diabetes. Kaiser Permanente says that it doesn’t cover the GLP-1 drugs for weight loss, although there are ways to challenge the policy.

In my own state of Massachusetts, Blue Cross Blue Shield declined to cover the drugs for weight loss, and the organization providing health insurance for state workers, the Group Insurance Commission, followed suit. (Federal cuts to Medicaid certainly contributed to the funding crunch, but the drugs would have been a challenging budget item in any case.)

A Moral and Financial Dilemma

The health care system eats up more of the economy in the U.S. than any other country. As a percentage of GDP, health care was 18% in 2024, and has come close to 20%. It’s easy to say that payers should cover anything that can be potentially helpful, but that just isn’t feasible. The U.S. economy is like a 100-pound runner trying to wend her way through a race carrying a 25-pound kettlebell.

A lot of the problems in health care are high costs concealed as other phenomena: for instance, the frequent closures of hospitals and long-term care facilities. A common sequence of an events is for a private equity firm to buy the facility and then make cuts and degrade care until the facility is forced to close. Although it’s convenient to blame the private equity firms (who have never done much to win public sympathy), the underlying problem is that the health care facilities were underfunded to start with, a problem particularly endemic to organizations that depend on Medicaid and Medicare. In other words, we’d be paying even more for health insurance if facilities were funded to the level that would cover their costs.

Many authors have projected the results of this crisis on the economy and the public, although different commenters assign the blame to different familiar actors. The multiplicity of suspected culprits indicates that high costs are a systemic problem in which all actors carry some blame, but no single actor can fix it.

Although most economically advanced countries organize their health care better, aging and shortages of staff have created problems for many.

Once the need for triage is posed, sacrificing coverage of GLP-1 medications for weight loss make sense because:

• Alternative treatments for obesity are available, notably behavioral therapy. Long-term successes are disappointingly rare, but it can be done.
• Obesity has many known impacts detrimental to health, but in itself it isn’t life-threatening. To make the situation more complicated, there’s a sociopolitical movement to accept high body weight without stigmatization or “medicalization.”
• Outside of diabetes and weight loss, the benefits of GLP-1 drugs for other conditions will depend on further study.

We must match empathy, which causes us to urge coverage for treatments that can help people, with a quest to reduce costs. The goal is to enable the health care people need by delivering it more efficiently. Doing so is by no means simple, though—if it had been, the U.S. would have done it long ago. Fixing some of the root causes of illness (such as pollution, the economics of food production, and stressful working conditions) would be even harder. Let’s look at some common recommendations for improving health care.

Streamline billing and insurance

The irrationalities and inefficiencies of the U.S. insurance system are familiar to doctors and patients alike. The impact has been quantified, too; one set of researchers said, “A simplified financing system in the U.S. could result in cost savings exceeding $350 billion annually, nearly 15% of health care spending.”

Imagine that you went to the gym every day and were faced with a totally different set of equipment with a bewildering set of controls. That’s what it’s like for the coders and billers in U.S. health care. Introducing another middleman (pharmacy benefit managers) must inevitably increase costs, as much as they swear that they’re saving payers money.

By the way, we really shouldn’t call the payers “insurance” anymore. Insurance is for events like fires that one hopes will never happen, and that don’t actually happen often. In contrast, we know we all need health care, and we’re just spreading the costs over many years. The problem is we can’t afford it, even distributed over a large population and a long time.

CMS has tried to simplify prior authorization and make it more like a vending machine instead of a roulette wheel. Other aspects of billing could also be rationalized. The logical extreme of this movement is universal, single-payer coverage. However, by ending competition, monopolies tend to increase bloat and ultimately costs.

Still, there is no revenue cycle utopia. Somebody, whether in a private company or the government, will have to review claims to make sure the doctor is requesting appropriate tests and treatments. There’s always a good reason for an MRI; you might turn up something!

Standards of care are wonderful, but patients are unique and there must be channels for requesting special care. So billing is going to require doctors’ time and attention, plus that of other experts throughout the supply chain. Standards can also provide the wrong incentives: when diagnostic manuals list specific symptoms that must appear in order to assign a diagnosis, scads of patients miraculously turn up matching precisely those symptoms.

I think that universal coverage is a fine goal, but if we just add patients to the system without actually making them healthier, we’ll exacerbate the coverage problems we’re now seeing. Lower-income people deserve coverage, but poverty (as everyone who has been poor knows) leads to a higher risk of poor health. Bringing people out of poverty is a prerequisite to curing their conditions, and that’s a daunting task.

Reduce chronic conditions

The main causes of death have shifted historically from acute conditions (tuberculosis, postpartum sepsis) to chronic conditions (diabetes, congestive heart failure). By now, “Ninety percent of the nation’s $4.9 trillion in annual health care expenditures are for people with chronic and mental health conditions.”

So let’s eliminate Type II diabetes, CHF, and all the rest! All we need is to change our diets, overcome addiction to smoking and other drugs, get a personal trainer, put away our screens, and sleep through the night!

You go first.

It’s clear why this is difficult; probably more difficult than taking on the forces that prevent reform of the insurance system. Health care reformers have put forward bold structural changes to improve our behavior. Let’s see where each is headed and the barriers it faces.

Preventative care

Early detection can head off many serious diseases by advising patients to alter their behavior, or provide medications for symptoms such as high blood pressure. For this reason, insurers offer many common generic medications free of charge, and the Affordable Care Act funds regular visits to a PCP without a copay. The challenges that remain include:

• Getting busy people to the doctor. Telemedicine often fills this gap. But lots of people still miss appointments because they have work or children to care for, feel too bad to come or too good to think they need to come, get distracted for other reasons, or fear the costs of treatment. (Haven’t you ever been charged for a visit that was supposed to be “preventative”?)
• Getting patients to follow through with treatments. It’s commonly found that only “50% of patients prescribed chronic medications stick to their treatment plans.” The same site says, “medication nonadherence is linked to up to 25% of all hospitalizations.”
• Allowing time to adequately explore patient needs. PCPs and pediatricians are historically underpaid and underappreciated. Because not enough doctors choose those disciplines (or all disciplines, for that matter), the ones who soldier on are increasingly burdened with too many patients and too much bureaucracy. We’ve seen a proliferation of new clinical disciplines that support the physician while requiring less training, but we haven’t kept up with demand. In short, the strategy of preventative care is thrusting the responsibility for chronic conditions and their costs onto one of the most vulnerable and overstressed parts of the health care industry.

Digital monitoring and behavioral support

Engineering minds look for structural solutions to complex problems, and technology usually plays a role. To humanists who believe that the personal connection between clinician and patient is the cornerstone of medical care, the technology advocates promise that they’re just automating the routine and burdensome parts of the day to free up the clinician for what they want to do. The advocates also recognize patient fears that they’ll be pigeonholed into digital slots, and try to allay those fears by promising more patient access and control. One promising area for digitization and AI is detecting and deterring fraud.

The digital intervention into health care, sometimes called connected health, is a complicated machine with many mong parts. Through devices attached to their bodies or scattered through their homes, patients report data that is fed into doctor’s electronic health records, then run through analytics to recommended behaviors or treatment changes that are then routed back to the patient.

Therefore, one of the biggest challenges of the technological solution is the technology itself. First, clinicians must get patients to accept all those devices, and payers to cover their use. In 2015 it was reported that, “About 42 percent of people quit using their fitness trackers within six months.” Compliance might have improved since then with the introduction of Apple Watch.

After that, it’s difficult to get data into and out of legacy EHRs, and institutions often refuse to share data that can contribute to analytics. (The institutions usually cite privacy concerns for withholding data, but more often it’s due to proprietary hoarding.) Finally, it takes enormous expertise to calculate the analytics that turn that data into actionable recommendations, especially taking into account the patient’s life and the institution’s social setting. AI has the potential to make all this work, but meanwhile it introduces more complexity, risk, and uncertainty—and after all that, the doctor has to accept liability for the outcomes.

The goal of the digital interventions is the “hospital without walls,” where a patient gets support and recommendations every few minutes or hours instead of once a year. Psychological research has long shown that small, fast feedback improves a person’s performance more than general, long-term recommendations. That insight feeds the popularity of video games—and many say, social media—and indeed many technologies love the idea of “gamifying” health care. I attended a conference called Games for Health for several years.

One can find studies for digital monitoring medicine that reliably demonstrate their effectiveness, but the studies usually cover only a few months of the patient’s life. We’ll need more time to find out what works long-term.

Ultimately, improving chronic health means wrenching people away from the pleasures or comforts that led them to eating or smoking too much or hanging around on the couch in the first place.I’m reminded of Bertolt Brecht’s famous satirical line, “Wouldn’t it then be easier for the government to dissolve the people and elect another?”

Furthermore, not everybody has a choice. A lot of illness is exacerbated by how people are treated by their employers, their landlords, and the institutions in their area. In recent years the health care field has started talking about social determinants of health, but doctors have little say over whether local markets offer fresh foods (a few experiements are underway), much less over whether a power plant opposed by the community gets built.

Cap treatment costs

It certainly seems that hospital prices are too high. The news is full of stories of people who found themselves using an out-of-network ambulance or specialist and going bankrupt over it. But flagging hospital costs obscures a tremendous income gap: hundreds of hospitals in the country (particularly in rural areas where health care coverage is already thin) are at risk of closing, while a few famous hospitals rake in money and expand (although even these are often in the red).

Pharmaceutical companies are another favorite target, particularly since they manipulate the patent system to preserve high prices.

An industry as big and important as health care needs regulation, but it’s highly regulated already, and regulations rarely take into account the costs of compliance. Additionally, drug companies and biotech firms warn that intervening in a complicated and uncertain market introduces the risk of stifling innovation, and their warning should be taken seriously. Uncertainties about major upheavals in regulation can dissuade investments in drug development, whose average time has been estimated at seven or even as high as fifteen years.

Price negotiation, where two parties are engaged in a business push-and-pull and are considering the pros and cons of a deal, is different from capping prices by fiat. Every health care institution negotiates prices except, it seems, the federal government, and it’s a positive development for the federal government to start doing the same.

Reduce end-of-life expenditures

A common claim in health care is that costs are high because we waste money on futile treatments for people on their way out. One article cuts this expectation down to size, saying, “approximately 13% of the $1.6 trillion spent on personal health care costs in the United States was devoted to care of individuals in their last year of life.” That percentage isn’t negligible, but the cited article also goes on to analyze possible remedies and concludes that we couldn’t save much money. The article recommends focusing on chronic conditions, not end-of-life care in particular.

Promote consumer control over health care dollars

Many proposals for health insurance reform pair cutbacks in government subsidies with a policy of directing more money directly to the recipients of healthcare. There might be some logic to this plan if one postulates that prices are high because neither insurers nor health care providers have an incentive to rein them in. But you and I, even when spending our own money, can’t force providers to lower prices or even find out what providers are charging. (There is practically no transparency or choice for patients in health care pricing.) Many parts of the country are lucky to have access to even one health care provider for a given procedure.

Buy out the pharmaceutical manufacturers

Sometimes a health crisis affects society so much that governments drive innovation; Operation Warp Speed during the COVID-19 vaccine is the classic example. (It has nearly been forgotten in the wake of more recent efforts by its very proponents to weaken epidemic response and vaccine development.) Compulsory licensing, usually employed for HIV and AIDS medication, has produced a lot of successes.

Governments are unlikely to take responsibility for drug development in general. We already have a drug development system that depends on independent public research, which in turn depends on government funding. That’s the economic structure that needs to be defended and expanded.

Develop new cures

The rosiest hope for health care is to find miracle cures that eliminate disease. Ironically, GLP-1 medications represent just such a miracle cure, albeit with side effects and other problems listed at the beginning of this article. Other candidates for miracle cures include mRNA research, which of course has been seriously reduced, and genetic testing. But breakthrough treatments tend to cost a lot (even millions of dollars per patient).

We can’t reasonably hope for a new kind of health care; we have to figure out how to fund the one we’ve got. GLP-1 drugs were not the first advance to place burdens on the system, and they are not likely to be the last. But payers cannot ensure the continuation of the system by resisting progress either.