April 13, 2017

Hospitals, insurers grapple with affordability puzzle

Matt Pilon
Matt Pilon
Hartford HealthCare CEO Elliot Joseph found some common ground Wednesday during a discussion about healthcare costs with insurers and others. From right to left are: UnitedHealthcare's Elizabeth Winsor, Quest Diagnostics' Stephen Rusckowski, Aetna's Jonathan Mayhew, Joseph, CareCentrix's John Driscoll, Yale New Haven Health's Marna Borgstrom, and panel moderator Jeff Gitlin of PwC.

Health providers and insurers are often at odds, but at a midweek healthcare forum in Southington, the two sides said they agree on at least a few things.

During Wednesday's public discussion organized by the MetroHartford Alliance's Connecticut Health Council, the CEOs of Connecticut's two largest hospital systems and executives from Aetna, UnitedHealthcare and several other companies concurred on the following:

  • Health care is becoming increasingly unaffordable for consumers and employers, and further cost-shifting onto either party is becoming increasingly unfeasible;

  • An unprecedented level of collaboration between business interests, government and patients will be needed to transform the fee-for-service status quo; and

  • Uncertainty over federal healthcare policy could make things worse.

Elliot Joseph, CEO of Hartford HealthCare, detailed various efforts his system has made to find efficiencies and reduce costs, but he said the problem is much larger than any one entity. U.S. health care is a market, and one that he says lacks the proper incentives.

"We're dealing with a payment system that rewards the wrong behaviors and an unorganized delivery system that can't produce the right kind of behaviors that people who are spending most of the money need to receive," Joseph said.

Seated next to him, Marna Borgstrom, CEO of Yale New Haven Health System, agreed.

Borgstrom said many factors pushing up costs are outside of any hospital or insurer's control. Poverty and other social determinants are often tied some of the most expensive chronic conditions.

"We can work to make health care more efficient and higher value, but we have to have broader policy decisions to deal with the underlying causes of higher uses of health care," Borgstrom said.

The current payment system doesn't incent seemingly simple things that will produce long-term benefits, such as ensuring chronic patients have transportation to the pharmacy, or the right food in the fridge, said Stephen Rusckowski, CEO of Quest Diagnostics.

Joseph said Hartford HealthCare has embedded behavioral health experts in primary care offices and physicians to ensure homecare patients take medications properly. Those things save money in the long run, but the question is for who? He said those initiatives are a cost rather than a revenue stream for Hartford HealthCare.

"There's no revenue stream to do the right thing," Joseph said. "I talk to my friends [in state government] and they say 'I don't care, do the right thing.' "

"That's not how the market works. We need to incent the right behaviors," he said.

Jonathan Mayhew, director of national account for Aetna, agreed but said the transition is difficult.

"Social determinants are the future, but it is a journey, and it's not a very fast thing to do," Mayhew said. "It's a cost today."

Elizabeth Winsor, CEO of national accounts at UnitedHealthcare, said the spread of high-deductible health plans has been an attempt to incent consumer behaviors, but she said rising costs are a problem.

"I really see right now that there is a tipping point with large employers, that they can no longer pass this cost onto their employee base," Winsor said. "We need to collaborate, to bring together employers with providers and payors to try to do something different to bring down costs."

As if the puzzle weren't complicated enough, President Donald Trump's proposal to reform Medicaid could throw another wrench into the mix.

If beneficiaries lose coverage, the costs will shift onto the rest of the system.

"It will have a ripple effect through everything we try to do," Mayhew said. "It could get a whole lot worse before it gets better if we don't have some regulatory stability."

Perhaps the most urgent voice on the panel was John Driscoll, CEO of healthcare network manager CareCentrix, who predicts consumers will increasingly push back against what they are getting for their money.

"The entire industry has grown and been subsidized and overpaid to provide a lousy service experience," Driscoll said. "At some point soon, people might see this as issue of justice. Anyone in health care is morally responsible for helping accelerate the transition to value."

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