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.
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.