Doc turned in­surer CEO: Drug pric­ing ‘im­moral and of­ten il­le­gal’

Modern Healthcare - - Q & A -

Dr. John Ben­nett, pres­i­dent and CEO of Cap­i­tal Dis­trict Physi­cians’ Health Plan (CDPHP), has run the Al­bany, N.Y.-based not-for-profit health in­surer since 2008. Ben­nett rep­re­sents a firm with 450,000 mem­bers and $2.2 bil­lion in rev­enue, and he’s emerged as one of the more out­spo­ken board mem­bers of Amer­ica’s Health In­sur­ance Plans. Mod­ern Health­care re­porter Bob Her­man re­cently caught up with Ben­nett af­ter he made some provoca­tive state­ments about the drug in­dus­try on CDPHP’S blog, where he posts reg­u­larly. This is an edited tran­script.

Mod­ern Health­care: You wrote that drug prices are “un­con­scionable” and the ac­tions of phar­ma­ceu­ti­cal com­pa­nies “im­moral and of­ten il­le­gal.” Why?

Dr. John Ben­nett: That is based on what I be­lieve are solid med­i­cal ethics. We see peo­ple charg­ing what­ever the mar­ket will bear. I re­mem­ber hav­ing dis­cus­sions in med­i­cal school. What would you do if you were a re­searcher and you de­vel­oped a cure for can­cer? What would be an ap­pro­pri­ate charge for that? Are you al­lowed to take ev­ery­thing pa­tients can give you to let them live? I just don’t think it is right.

MH: How is drug pric­ing af­fect­ing your com­pany?

Ben­nett: We have is­sues. Co­pay coupons seem like a con­sumer-friendly thing to do. But when they’re at­tached to a pol­icy which raises the price of the drug any­where from 70% to 380%, then we have a prob­lem. While con­sumers think they’re get­ting a free ride, their in­surer is now pay­ing ex­or­bi­tant in­creases on the back­end.

We have a lot of sin­gle­source gener­ics for which only one or two com­pa­nies make the drug. It’s fas­ci­nat­ing how the prices of th­ese drugs seem to go up in tan­dem, whether generic or brand name. We had a hep­ati­tis C drug on the mar­ket, So­valdi, and it was priced at $84,000. Then a new drug came out. You would think, with com­pe­ti­tion, it would be priced lower. No, it’s priced higher. It’s not only the spe­cialty drugs, like those for mul­ti­ple scle­ro­sis, can­cer, hep­ati­tis C and rheuma­toid arthri­tis. It’s things like al­buterol for asthma. Peo­ple should not be fooled into think­ing that the Martin Shkreli case at Tur­ing Phar­ma­ceu­ti­cal was iso­lated, or that it’s lim­ited to or­phan drugs or rare things.

MH: What rec­om­men­da­tions do you have to change phar­ma­ceu­ti­cal pric­ing?

Ben­nett: Con­sumers need to be ed­u­cated. We are a not­for-profit. Our pre­mi­ums are highly reg­u­lated and can­not be above a cer­tain per­cent­age of our ac­tual med­i­cal-claims costs. We need a sim­i­lar thing in phar­ma­ceu­ti­cals.

Let’s find out what phar­ma­ceu­ti­cal com­pa­nies truly spend on re­search and de­vel­op­ment, not what they have re­ceived for free from the Na­tional In­sti­tutes of Health or uni­ver­si­ties, and not what they have bought from other com­pa­nies. Ob­vi­ously, they need to mar­ket. They need to pay their ex­ec­u­tives. But let’s bring it to light, make it trans­par­ent. And there needs to be some lim­its on how much profit they can take.

MH: Har­vard Pil­grim Health Care, a New Eng­land-based health in­surer, re­cently signed a value-based con­tract with Am­gen for its new choles­terol­low­er­ing drug. Es­sen­tially, the in­surer will re­ceive big­ger re­bates if the drug doesn’t show the type of re­sults for plan mem­bers that it did dur­ing clin­i­cal tri­als. Will CDPHP pursue this?

Ben­nett: We would look to do sim­i­lar deals. We’ve not got­ten any re­sponses from phar­ma­ceu­ti­cal com­pa­nies when we’ve tried that. We’ve also been ap­proach­ing some med­i­calde­vice makers.

MH: The Na­tional As­so­ci­a­tion of In­sur­ance Com­mis­sion­ers is fi­nal­iz­ing model leg­is­la­tion to en­sure that health plans have ad­e­quate provider net­works. How do you view nar­row net­works and the de­cline of pre­ferred provider or­ga­ni­za­tions?

Ben­nett: We do not have any nar­row net­works right now. As a physi­cian-spon­sored health plan, our goal has al­ways been to raise the qual­ity and ser­vice level of all of our physi­cian providers. We also have a lot of com­mu­ni­ties where there are very few providers. Most of our com­mu­ni­ties have one hos­pi­tal, at most two. Who are you go­ing to ex­clude? So, we have con­cen­trated on rais­ing the

“As a physi­cian-spon­sored health plan, our goal has al­ways been to raise the qual­ity and ser­vice level of all of our physi­cian providers.”

bar for all of our providers and tried to move to val­ue­based con­tracts.

MH: Will your rates stay com­pet­i­tive?

Ben­nett: We have a pretty good mar­ket share in our re­gion. We’re try­ing to im­prove not only the qual­ity and ser­vice, but the eco­nomic ef­fi­ciency of our pri­mary-care prac­tices. We have a pro­gram called En­hanced Pri­mary Care, based on the pa­tient­cen­tered med­i­cal home, with a value-based con­tract. It’s a global riskad­justed pay­ment per mem­ber per month, and the bonuses we give to those prac­tices are based on the triple aim: qual­ity, pa­tient ex­pe­ri­ence and ser­vice, and cost ef­fi­ciency.

Pay­ers should be able to have some flex­i­bil­ity in cre­at­ing value net­works. It’s be­com­ing in­creas­ingly dif­fi­cult, how­ever. Provider con­sol­i­da­tion makes it very hard for a payer, par­tic­u­larly in some of the smaller mar­kets like ours, to pick a side.

MH: Providers ar­gue that con­sol­i­da­tion will lower prices and costs.

Ben­nett: There are nu­mer­ous stud­ies to show that, un­for­tu­nately, al­though provider con­sol­i­da­tion is of­ten touted as in­tend­ing to lower costs, it rarely, if ever, does. Provider con­sol­i­da­tion his­tor­i­cally has al­most never led to lower pre­mi­ums.

MH: What about in­surer con­sol­i­da­tion?

Ben­nett: You could look at it that way, or you could also look at it as try­ing to bal­ance things out. An­them and Cigna, they’re so broad through­out the na­tion, that all of their mar­kets are go­ing to look dif­fer­ent. In our mar­ket, they have very lit­tle pen­e­tra­tion, so the im­me­di­ate ef­fect of that will not be very great on CDPHP.

If you have a mar­ket where you have one dom­i­nant hos­pi­tal sys­tem which has been de­mand­ing very high prices, merg­ing the two pay­ers is a coun­ter­bal­ance or a coun­ter­vail­ing thing that could be con­sumer­friendly. I would ar­gue that in­sur­ance con­sol­i­da­tion could lead to lower prices more than provider con­sol­i­da­tion. You could have some mar­kets where the merger of the big five in­sur­ers drives prices down.

MH: That sounds like a back-door ar­gu­ment for a sin­gle-payer sys­tem.

Ben­nett: I am definitely not say­ing that. Do you really want the gov­ern­ment to be the ar­biter of what ser­vices you get? I think you need a reg­u­lated mar­ket.

MH: Your Medi­care Ad­van­tage plan is pretty highly rated, with 4.5 stars for 2016. What has CDPHP done to achieve that high rat­ing?

Ben­nett: We part­ner with our providers. We have a cul­ture in which peo­ple know that they have to do the right thing for the mem­bers in all of their de­ci­sions. They have to treat the mem­ber the way a doc­tor treats a pa­tient.

We pro­vide very high­touch cus­tomer ser­vice. We fol­low up on ap­peals doggedly and make sure that the mem­ber is heard. We part­ner with our providers around high­qual­ity care, give them the tools they need, and the data they need to do ap­pro­pri­ate preven­tion and screen­ing for our mem­bers. If you think about that, ev­ery day, those things all per­co­late through the cul­ture of the or­ga­ni­za­tion.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.