We must bring down the cost of health care

Over the last several decades, health care has grown increasingly unaffordable for consumers, employers and state and local governments in Connecticut. It has reached the point where over half of our residents report cost-related health care worries in the last year, and medical debt has become the leading cause of personal bankruptcies. The status quo is unacceptable and unsustainable.

Comparing our health care system to other countries shows that the biggest contributor to this affordability crisis is the prices charged for services and drugs by health care providers and drug manufacturers. As one leading health care economist famously stated, “It’s the prices, stupid.” No other wealthy country in the world comes close to our level of per-person health care spending, and yet most countries have far better health outcomes. The time has come to stop shifting blame, stop making excuses, and take bold action to rein in health care costs for the benefit of every resident and business in Connecticut.

Every party in the health care ecosystem, including insurance companies, doctors, hospital systems, employers, drug makers, pharmacy benefit managers, governments, and consumers, must acknowledge that things need to change for the well-being of our residents and the sustainability of our high-quality system of care. If you’re not part of the solution, you’re part of the problem.

On Feb. 3, leaders from Governor Lamont’s administration joined with members of the General Assembly and local and national health care experts to discuss solutions to this affordability crisis.

A consensus emerged that has the potential to put us on a path to leading the nation in affordability solutions, and more importantly to provide relief to residents of Connecticut struggling to afford their health care and their prescriptions.

This includes:

1. Support competition in health care sector

Health system consolidation has led to some improvements in efficiency and coordination, but the evidence is clear that it has also led to price increases. Large health care systems increase their bargaining power with insurers and make it difficult to maintain reasonable price increases. We need to ban contracting terms that allow large health care systems to stifle competition and increase prices.

2. Enhance transparency

For too long, health care prices and corporate structures have been cloaked in secrecy. Connecticut has an advantage here with the establishment of our all-payer claims database, and our well-established Certificate of Need program, but more needs to be done. Pharmacy benefit managers, 340b drug participants, and private equity interests continue to drive industry consolidation and make it more difficult for purchasers and consumers to understand their costs of care.

3. Eliminate unnecessary fees

Hospital outpatient costs are one of the three main drivers of health care cost increases in Connecticut. Part of these costs are so-called “facility fees” charged by hospital systems at outpatient facilities that are not associated with an actual hospital campus. Eliminating these fees could save consumers as much as $400 million in unnecessary charges.

4. Cap prices and fees

Most health care consumers have experienced so-called “out-of-network” charges. That is, charges not covered by insurance when the provider is not “in network.” By capping what a provider can charge for out-of-network services, we can save consumers money and ensure more providers remain “in network” with our major insurance products.

5. Tackle the problem from multiple angles

The health care system in the United States is incredibly complicated, and no single strategy alone will “solve” the affordability problem. States need to tackle health care costs from several angles, and test and try as many solutions as possible to bring costs under control.

Governor Lamont’s health care legislative and budget proposals will address each of these five areas. Collaborating with all the stakeholders involved, he has proposed solutions that are supported by the data, that focus on the needs of the residents of Connecticut, and tackle head-on the crisis we face in health care costs. Working together while keeping our residents at the center of the conversation, we can tackle affordability and preserve what is best about our health care system.

Dr. Deidre Gifford is executive director of the Connecticut Office of Health Strategy and Governor Lamont’s Senior Advisor on Health and Human Services.