August 09, 2017 News

Ummm, guys, this thing is still broken …

Have you ever found yourself in the middle of a meeting, daydreaming about what’s ahead for the weekend? Have you ever caught yourself scrolling through your Facebook newsfeed, only to realize that 10, 20, or even 30 minutes have evaporated? It’s easy to get distracted. Our lives are incredibly busy and we’re inundated with information.

As a health plan CEO, a big part of my job is to pay attention, stay on top of the news, and not get distracted. But lately, even I’m getting discouraged by what seems like a lack of action on a very important topic.

Last week, the Republican-controlled Senate failed in its attempt to repeal parts of the Affordable Care Act. The party has been promising to repeal the law for years, citing the ACA’s inability to actually make health care affordable. But when push came to shove, the GOP didn’t deliver, and the cost of care continues to rise.

You might be asking yourself, what’s next? While I can’t predict what Washington will do, we cannot ignore the problems that got us here in the first place. Let’s recap.

Remember the outrage?

In 2015, Americans were up in arms when the unabashed founder and former CEO of Turing Pharmaceuticals, Martin Shkreli, raised the price of a life-saving AIDS treatment by 5,000 percent. Shkreli became the “most hated man in America” and served as a wake-up call that something needed to be done to stop Big Pharma’s irrational price-setting practices.

One year later, we allowed it to happen again when the makers of EpiPen increased the cost of an epinephrine auto injector by 1,000 percent. Mylan pharmaceuticals purchased the rights to the EpiPen in 2017 when the drug cost just $50. Today, that same prescription will cost you $500.

Here in Albany, we’re playing a game of Whack-a-Mole as health plans – like CDPHP® – deploy a variety of strategies to keep Big Pharma in check. CDPHP had the idea to hire former pharmaceutical reps to run counter detail on the industry. Among other things, our reps help educate physicians about alternatives to some of the more expensive brand-name drugs. The tactic has proven successful and saved millions of dollars, but it’s not enough to keep up with the machine that is the drug industry. You can read more about this strategy in a recent New York Times article, Selling Doctors on Cutting Drug Costs.

The urge to merge

It’s not just Big Pharma getting in the way of affordable care. Today, 33 cents of every premium dollar goes directly to hospitals, which are consolidating at an unprecedented rate. In addition, 90 percent of hospital markets are considered highly concentrated and more than half of all physicians are now employed by a hospital or a health system. Evidence shows that this type of consolidation often leads to higher prices and lower quality.

As a physician-run health plan, CDPHP understands the pressures that physicians face to join hospitals and other larger health systems. That’s why we’re working hard to help physicians remain independent by moving them to value-based payments so that they’re reimbursed for the quality of care they provide, not the quantity. The strategy has paid off, as our Enhanced Primary Care program, a nationally recognized patient-centered medical home model, now includes more than 200 local physician practices and more than 800 clinicians, all of whom are being rewarded for high-quality, affordable care.

Taxes, fees, and mandates, oh my!

Still, there’s one more cost conundrum that we can’t seem to get our hands around. That is, the taxes, fees, and government mandates that continue to cause premiums to soar.

Earlier this year, I told you about a new law that requires health insurers to send a two-page disclaimer to our 400,000 members, reaffirming the fact that we don’t discriminate. The regulation – section 1557 of the ACA – requires the disclaimer be included in “all significant communications.” CDPHP estimates that this regulation alone will cost the plan more than $2.5 million a year. If you think that’s bad, you won’t be pleased to learn that 7 percent of every dollar you spend on health insurance goes directly to government taxes and mandates.

I know that’s a lot of information. And I know you’re getting sick of hearing me say the same thing over and over. But now more than ever, it’s important that we do not get distracted and stay focused on strategies that will improve the quality of care, all while reducing costs.

John D. Bennett, MD, FACC, FACP
About the Author

John D. Bennett, MD, FACC, FACP, is president and CEO of Capital District Physicians’ Health Plan, Inc. (CDPHP), an award-winning, physician aligned, not-for-profit health plan based in Albany, NY. Bennett has held the position since 2008 after serving more than 10 years as chair, vice chair, and board member for CDPHP. During his tenure, CDPHP has been ranked among the top-performing health plans in New York and the nation, most recently named #1 in Customer Satisfaction in the 2023 J.D. Power Member Health Plan Study. Under his leadership, CDPHP has also become known as a model employer regionally and nationally and was recently named among the top five Best Companies to Work for in New York by the Society for Human Resource Management, as well as Forbes Best-in-State Employers 2022. Prior to joining CDPHP, Bennett served as founding member and CEO of Prime Care Physicians, PLLC. During his tenure, he co-led a team of 25 cardiologists and helped grow the practice to a 100-physician multi-specialty group. Bennett is board certified by the National Board of Medical Examiners and the American Board of Internal Medicine, with subspecialties in internal medicine and cardiology. He earned his medical degree at SUNY-Downstate Medical Center, Brooklyn, and a Bachelor of Science degree at Rensselaer Polytechnic Institute. Bennett completed an internship and residency in internal medicine and a fellowship in cardiovascular disease at Albany Medical Center. He is a Fellow of the American College of Cardiology and the American College of Physicians. Bennett is currently board chair for the Center for Economic Growth and the Capital Region Chamber, and vice chair for the Palace Theatre. Bennett also serves on the boards of the New York eHealth Collaborative (NYeC), the Alliance of Community Health Plans (ACHP), America’s Health Insurance Plans (AHIP), Rensselaer Polytechnic Institute, and Russell Sage Colleges. Bennett is a member of the New York Public Health and Health Planning Council where he helps shape decisions related to New York State's public health and health care delivery system. Well-known locally and nationally for advancing health care innovation, Bennett was recently named to Crain’s New York Business 2021 Notable in Health Care, as well as the Albany Business Review’s Power 50 list.

2 Responses to “Ummm, guys, this thing is still broken …”

  1. Lynda Goodness

    In regard to the law requiring CDPHP to send a two page disclaimer reaffirming that they don’t discriminate with “all significant communication,” I will be flooding my elected officials with letters stating the waste they have created by making this a law. I, unfortunately, see several practitioners for various reasons, and I resent the fact that you send me the additional two sheets of paper with every EOB I get. Not only is it additional garbage on my end, but the time and money required to get these printed, add these to the envelope, pay the additional postage (I sometimes get several EOB’s at once, in a large brown envelope, and that 2 page disclaimer is with every single one,) is preposterous! In addition, it is adding to the destruction of our environment by cutting the trees to make the paper!! I would much rather that money being spent be used to reduce out monthly premiums or help with the exorbitant cost of my insulin and heart medication! If it weren’t for my physician samples, I would be without the medication I need because I can’t afford them. I love and trust CDPHP, and hope that I can continue with the company, but if our premiums and copay go up again, and the “donut hole” is reduced, I’m going to be in trouble.


    Lynda C. Goodness

    • John D. Bennett, MD, FACC, FACP

      Hi, Lynda –

      Thank you for your comments. I couldn’t agree with you more. Sadly, our elected officials continue passing laws that – while seemingly well-intentioned – often add costs to the system.

      I am also sorry to hear that you’re having trouble affording your medications. Unfortunately, this is an all too familiar story. I want you to know that CDPHP has in-house pharmacists and nurses who are available to discuss all of your medication/health care needs, and they may be able to suggest lower-cost options. To reach our single source referral line, please call 1-888-94-CDPHP.

      Thank you,

      Dr. Bennett

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