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July 11, 2023
Sustainable Health Care Costs Peterson-Milbank Program for Sustainable Health Care Costs Spending Growth Target Performance
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Last month, the Connecticut Office of Health Strategy (OHS) held its first Cost Growth Benchmark Hearing to discuss health care affordability challenges in the state with consumers, employer purchasers, and representatives of the health care industry. The public hearing process was established in law last year as a new element in the state’s cost growth program to formally identify specific factors and entities contributing to increasing health care costs. The public hearing focused on findings from a recent OHS report showing that the state’s total spending exceeded its 3.4% cost growth benchmark by 2.6% in 2021, the most recent year for which data are available.
Connecticut is one of eight states leading health care cost growth target programs designed to bring transparency to health care spending and point to ways to make health care more affordable. “By committing to a target, states and their partners are bringing transparency to health care spending and provides a goal for sustainable health care cost increases,” says Milbank Memorial Fund program officer Rachel Block. “The idea is to ensure that cost increases don’t rise faster than wages, the economy, or state revenues.”
According to the OHS report, key drivers of spending growth in Connecticut included per capita spending growth in the commercial market, which rose by more than 18%. This included a 30% increase in commercial spending in hospital outpatient settings and 20% increase in inpatient hospital settings, as well as rises in pharmacy spending.
The intent of the hearing was to underscore declining affordability of health care for Connecticut residents, as well as the individual and collective roles of drug manufacturers, hospital systems and insurers in lowering health care costs in the state. However, the hearing also highlighted ongoing barriers to change. In a panel on pharmaceutical pricing, a representative of drug manufacturer Bristol-Myers Squibb said that he was unable to provide the net price for any of its drugs because of confidentiality agreements, underscoring the need for more transparency in this market. Invited drug manufacturer AbbeVie declined to attend.
Office of Health Strategy Executive Director Deidre Gifford and Frederick Isasi of Families USA moderated a discussion with the Hospital of Central Connecticut and Yale New Haven Hospital that looked at the rising hospital prices. Drivers such as consolidation, inflation, and an increase in care utilization following the COVID lockdown were cited. The hospital spokespeople also suggested that the data was not risk adjusted appropriately.
During the third panel moderated by Gifford and David Seltz of the Massachusetts Health Policy Commission, representatives of insurance companies Aetna, Anthem, Cigna discussed cost drivers, as well as their role in meaningful value-based care and efforts to promote advanced primary care and cost-efficient providers. The insurers confirmed that the benchmark was being discussed in contract discussions with providers. According to Seltz, one reason to raise the benchmark in these conversations is not only to have a goal but also to “keep an eye on the people who are actually paying the cost our health care system.”
Finally, provider organizations including Integrated Care Partners, Community Health and Wellness Centers of Torrington, Southern New England Healthcare Organization (SoNE HEALTH), and Community Medical Group, a federally qualified health center, participated in a roundtable discussion about the affordability imperative moderated by Anna Doroghazi of AARP Connecticut. Participants discussed the need to improve data collection around the social determinants of health (SDoH) to better understand the trends and allocate resources appropriately. Panelists also discussed the importance of sharing data and highlighted how access to behavioral health data is often missing from health care decision-making.
Policy solutions discussed including evolving telemedicine policies, standardizing quality measurement programs at the state level, improving health information exchange and processing, and providing support to care delivery models that reimburse community health workers because of their potential to address SDoH.
A key theme was the need for everyone in the state to participate. “It takes a team, it takes a small village, and everybody needs to be engaged in the process from the employer all the way down to the patient,” said Lisa Trumble, president and CEO of SoNE HEALTH. “Everybody that touches the dollar in between. Because if we follow the dollars, there’s probably opportunity in every single unit of the dollar to make it more efficient, to bring more accountability.”
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