OUR STATE has a chance to make big changes in our health care system right now – the kind of transformation that can only come about in a crisis.
There’s no question we’re in a critical moment. The new federal tax and spending bill is likely to pose extraordinary challenges to our hospitals, health plans, and ultimately, many of our neighbors in the Commonwealth who will need health care in the years to come.
But our problems predate the legislation President Trump signed earlier this month.
There has long been a chasm between government reimbursement for care and its actual costs – and that gap has long been filled by commercial plans like ours, with our employer customers and members picking up the tab. That structure is straining under recent unprecedented cost increases for drugs and medical care.
Businesses are forced to make painful choices between investing productively in new hires, wage increases, new equipment — or sinking their funds into health insurance.
A recent poll we commissioned found 40 percent of Massachusetts residents say they’ve delayed getting care due to the cost. Many say they’ve faced a choice between paying for medical care or housing, food, or gas.
Hospitals are short-staffed, paying more for people, devices, medications – everything it takes to provide our state’s famously world-class care.
Many not-for-profit health plans are experiencing unsustainable losses as they strain to cover rising costs for care. Last year, Blue Cross lost $400 million, the biggest loss in our history.
There’s never been a greater need for us to work together and do things differently. There’s no better place, either.
We have an excellent track record in our state of collaboration between health plans, clinicians, business, labor, and policymakers.
Landmark health reform led to near-universal coverage here. And the value-based care model widely adopted in our state — largely replacing the old fee-for-service system — slowed cost increases, spurred innovation, and improved quality for many years.
But that’s under threat now.
So how do we build a more affordable system that can withstand old and new pressures?
- Enforce the state health care spending benchmark: It’s intended to protect consumers from unaffordable annual cost increases. But the benchmark, established as part of health care reform legislation in 2012, has been breached for so many years it’s been rendered nearly meaningless. Let’s strengthen our regulators’ enforcement capability with real penalties and performance improvement plans for health plans and health providers that exceed the benchmark.
- Control what we can. Private insurers don’t have to wait for state action. We can commit to keeping the average price increase we pay providers below the 3.6 percent state benchmark. This month, my company notified providers in our network that we intend to do exactly that.
- Establish a pharmacy drug affordability board to review high-cost prescription drugs and set limits to how much the costs can grow.
- Explore ways to live within a budget for health care services. Some states have had success setting price controls, including Rhode Island and Maryland. We may choose another route, but evaluating innovative options, with curiosity and transparency, can help catalyze meaningful change.
- Develop and require payment models that reward outcomes over volume to ensure patients are getting the right levels of care at the right time in the right setting. Value-based care has proven effective in primary care and offers potential in other areas as well.
- Expand independent lower-cost treatment options including primary care, urgent care, and ambulatory surgical centers to relieve the long wait times and overcrowded emergency rooms at our hospitals and doctors’ offices.
- Learn from the collapse of Steward Health Care to ensure for-profit health care organizations in our state enhance the quality of care and decrease the cost.
In short: We need to ensure our system is as strong and resilient as possible today, before federal government and market forces exert even more pressure tomorrow.
Building that system will take deep collaboration between our state’s hospitals, drug companies, not-for-profit health plans, policymakers, regulators, and employers.
We can’t just ride out this storm. The headwinds are too strong. But we can come together to harness the power of this moment for meaningful change.
Sarah Iselin is president and CEO of Blue Cross Blue Shield of Massachusetts.
