Health Care is Like a Game of Whack-a-Mole®

During a recent staff meeting, I told my team that health care is like a game of Whack-a-Mole^®. The second you knock down one problem, the next one pops up. From rising costs to increased regulation, the health care moles are popping up more and more these days. Unfortunately, the hammers that health plans once used to control them are getting weaker and weaker.

Mole #1

The biggest threat to the quality and cost of the care you receive is Big Pharma. I’ve said it before and I’ll say it again: Left alone, drug costs will bankrupt our system. The good news is that the American public is starting to wake up to the problem.

A recent survey by the Kaiser Family Foundation found that seven in 10 people support policy changes aimed at lowering drug prices. The survey goes on to say that 86 percent of people want a law on the books that would require pharmaceutical companies to detail where the money is going.

Sound familiar? The Affordable Care Act – among other state and federal regulations – requires health insurance companies to not only disclose where they spend money, it sets limitations on profits as well. If you’re a health plan CEO like me, you might be wondering, if we have to do it, why not them?

Six states, including New York, have introduced legislation in support of drug price transparency. If approved, the laws would require pharmaceutical companies to open their books and disclose exactly how much money is being spent on things like marketing, lobbying, research, and administrative expenses. While the public is largely supportive of this type of law, politicians have been overwhelmingly silent on the issue. That’s not surprising when you consider the fact that drug companies doled out $32 million in campaign contributions last year alone.

Mole #2

The effects of hospital consolidation on the quality and cost of care has been the subject of increased debate and research. While many hospital execs will argue that consolidation leads to improved efficiencies and lower costs, across the country we have been seeing just the opposite.

In fact, a recent study by Northwestern University’s Institute for Policy Research found that, on average, physician prices increase nearly 14 percent after a merger, with roughly 25 percent of that cost directly related to price exploitation. That is, larger health systems are demanding more money because they are the biggest – or only – game in town. The study goes on to find that there is NO evidence to suggest that integration leads to cost decreases, even four years after a merger.

Mole #3

Ironically, some of the biggest and most daunting challenges to the cost of health care have come in the wake of the not-so-Affordable Care Act. Not only did the law add a multitude of new taxes and fees ($14.3 billion by 2018) to the system, it also mandated that insurers cover a myriad of costly new benefits.

Here in New York, the ACA also meant the expansion of the Medicaid program and the creation of an entirely new government entity known as New York State of Health^TM.

While most of us can agree that Americans deserve access to better health care coverage, we must come to terms with the fact that these added benefits and expanded services cost A LOT of money. To make health care more affordable, elected officials must stop putting upward pressure on health insurers, who, by the way, want people to be healthy, which will ultimately lower costs. Instead, they should look at the true moles in health care and knock them down.

Photo by Jeffrey Kontur / CC BY