After years of deliberation, Connecticut’s plan to cap healthcare costs has finally identified the drivers of those costs in our state. But the Steering Committee, dominated by healthcare industries, still isn’t brave enough to hold the overspenders accountable. They want the profitable industries to come up with ideas to lower their own costs (what could go wrong?). The committee’s big idea is for taxpayers to pour more money into their services. But not surprisingly, throwing good money after bad doesn’t work to lower costs.
It’s not clear how anyone thought this group would work to control healthcare costs. To be fair, this Steering Committee is a creature of the prior Office of Health Strategy (OHS) administration. We have higher hopes for the new leaders.
At OHS’s latest Steering Committee meeting, they finally came to their big idea to address cost control – plans for a “public hearing” to hold overspenders to account. But predictably, the Steering Committee whiffed on their responsibilities. Let’s break that down.
First, the June 28 “public hearing” is not a real public hearing. The public has no role. We can show up and watch, but the questions will all come from OHS and, potentially, the Steering Committee. I’ll probably watch remotely from home where I can mutter under my breath.
It’s important to note that the Steering Committee is dominated by the groups that OHS blames for driving up healthcare costs. It’s not news to anyone paying attention that the healthcare industries are responsible for skyrocketing healthcare costs. But, after swatting away all the silly questions and nitpicking excuses, the Committee has grudgingly come to acknowledge that hospital and prescription drug prices are to blame.
Before we hear about COVID burdens and losses, it’s important to note that all the overspenders have been very profitable, last year and historically. One is laying off workers but still has money to buy three competitors.
At the meeting, after all the evidence was presented, members were asked to propose questions for the overspenders at the “public hearing.” You could hear a pin drop – nothing – silence. I suppose some members were just happy not to be on the list this year. Others were processing that they were. Everyone else was quietly waiting to read the room before making any comments. The consultants and staff had to beg for responses.
The Committee’s eventual questions bent toward process and search for relevance, e.g. “what will our role be?” and “was our cap on costs mentioned in contract negotiations?” They asked what the overspenders’ plans were to control costs and profits (that always works). Other questions centered on what the overspenders see as their one or two biggest obstacles to achieving the Cost Cap. (I’m betting they need more subsidies from taxpayers.) The injustice of Medicaid “underpayments” was offered as a softball question, while the Steering Committee doggedly refuses to accept the overwhelming evidence that increasing Medicaid rates doesn’t reduce commercial rates. The health systems just keep the money. They also offered an opening for increasing state primary care subsidies, ignoring the evidence that increasing funding to primary care, while it may be a good thing to do, doesn’t reduce total spending.
Just one member, an insurer representative at that, was brave enough to point out that increasing anything, even primary care, has to be matched by lower spending on specialists and hospitals – or it defeats the purpose. Making healthcare better for some but impossible to afford for others, is just shifting the burden.
Before we hear about COVID burdens and losses, it’s important to note that all the overspenders have been very profitable, last year and historically. One is laying off workers but still has money to buy three competitors.
Even if the committee doesn’t, I have some questions that OHS and the Committee members are free to use.
- How much do you spend on administration versus medical care or developing drugs? How much has administration and profit grown over the years? What is the value for patients and consumers of that spending on administration?
- Given the strong evidence that consolidation leads to price escalation, and since you’ve been identified as an overspender, will you be unravelling your massive monopolies?
- How much do you pay executives compared to the people who provide care and the workers who support them?
- What are you doing with your profits to improve the health of communities and reduce the need for your products?
- How can you afford sizeable capital investments if money is so tight? Your lenders must be confident that you’ll continue to be profitable in the future. What do they know?
“Name and shame” reports don’t work if there’s no shame. I get that Connecticut is the Land of Steady Habits. We tilt toward the status quo and hope for the best. But we’ve tried that for decades and we’re still digging deeper holes. There is a genuine fear of offending powerful industries and understandable worries that next year it could be them in the hot seat. But we have to get over it and ask hard questions if we hope to have any chance of controlling costs.
