State officials tried to get a better glimpse of what’s driving healthcare cost increases, but a hearing Wednesday largely raised more questions than answers.
The Office of Health Strategy held its first ever hearing to look at some of the findings from its March report that found costs in the commercial health care market jumped 18.8%. That’s well above the 3.4% target the state has set and it ranked as the highest increase among the handful of states that have health care benchmarks.
“We have been trying to cut health care costs in the state of Connecticut for decades, but we’re still not able to do that,” said Sen. Heather Somers, R-Groton, a ranking member of the legislature’s Public Health Committee.
The purpose of Wednesday’s hearing was to examine the data and find policy recommendations for lawmakers and Gov. Ned Lamont’s administration.
Officials from Yale-New Haven Health and Hartford HealthCare, the state’s two largest health networks, pushed back on some of the report’s findings, though.
The report identified the two networks as being key drivers because of cost increases in 2021 tied to inpatient care. Officials said the methodology behind those findings were flawed.
“We throw those terms around and oftentimes we’re not understanding the problem,” Hartford HealthCare Chief Clinical Integration Officer Jim Cardon said.
He said a major flaw is that many people delayed seeking medical attention in 2020, meaning they needed higher levels the following year.
At the same time, efforts to steer patients to more cost-effective outpatient options means those patients with more severe needs would skew the data. Yale-New Haven Health Chief Financial Officer Gayle Kosyla agreed, saying the March benchmark report is “misrepresenting what’s going on with the cost of health care.”
OHS Executive Director Deidre Gifford acknowledged the state is still trying to figure out how to evaluate costs, and that includes properly weighing data.
She said her office will work with analysts on “creating a market basket that’s standard” before its next report is due in March.
Still, Families USA Frederick Isasi pushed back some of the hospitals’ stance. He said healthcare costs have risen 50% over the last five years in Connecticut, well outpacing wage growth.
“Do you see the idea that if you can’t afford care, then it’s not accessible?” he asked the health officials.
He also questioned the two systems on the role consolidation has played, noting hospitals around the country are buying doctors’ offices. Networks often send patients to their hospitals for routine services, including imaging, and charging large facility fees.
Cardon said Hartford HealthCare has been building ambulatory surgery centers to reduce the need for more expensive inpatient or hospital care.
The panel also questioned Bristol Myers Squibb, maker of the blood thinner Eliquis, over what’s driving prescription drug increases.
OHS identified Eliquis and the immunosuppressive Humira as two key drivers in health care costs. Abbvie, maker of Humira, declined OHS’ request to attend the hearing.
Bristol Myers Squibb Senior Vice President Chris Mancil said his company is not to blame.
“Contrary to popular belief, drug manufacturers are not the engine of healthcare cost growth in America,” he said, blaming middlemen in the pharmaceutical industry instead.
He said the public often focuses on list price, or the amount customers pay, but don’t account for rebates and discounts manufacturers offer from their net price. He said Bristol Myers Squibb offered $115 million in discounts and rebates for Eliquis.
But he refused to offer up the net price for Eliquis or any other drugs when panelists asked, citing confidentiality agreements.
That drew frustration from the panel.
“I think it’s only fair to the state of Connecticut to articulate a ballpark figure of, you know, what the actual net price is at the pharmacy,” said Anna Kaltenboeck, principal and head of drug reimbursement practice with the health care and research consultants ATI Advisory.
Mancil said he’d like to work with state officials to get a better understanding of the difference between the net and list prices, but also said Bristol Myers Squibb wanted to protect its confidentiality agreements.
The legislature in recent years has tried to address the issue of pharmaceutical benefit managers and others negotiating lower prices with manufacturers, but pocketing the difference instead of passing the savings to customers.