Opinion
Explanation of Benefits

Health Care System Is Starting to Show Its Cracks

It probably was the flu, but the escalating rhetoric and calls to action feel different.

Health Care System Is Starting to Show Its Cracks

Yes, health care costs a lot. And you don’t always get good service or results. An unexpected spike in blood pressure—likely caused by a viral infection—sent me to the emergency room in January where I waited six hours to be told I was fine. Although I still felt crappy, I was pleased with the diagnosis.

I took a hit on my co-insurance, but I did walk out with two prescriptions (one I’ll never use) and a second portal to use (whose login and password I already forgot and that won’t share personal health information with my first portal, whose login and password I forgot years ago).

The experience again reminded me why I loathe using the health care system unless I feel like I’m going to drop dead any second. It’s expensive. It’s wasteful. It’s disjointed. Like programmers writing software for themselves rather than for users, the health care system was designed for those who run it and work in it, not for those who use it (namely, patients) or pay for it (mostly employers).

I’m not telling you anything you don’t know already. What is new is that I’m finally starting to see cracks in the status quo. The long-entrenched, stakeholder-heels-dug-in, rally-the-troops health care system is starting to really feel the heat.

One crack was a 22-page report released by the Washington-based Health Care Cost Institute on Jan. 23 (bit.ly/2rtuzoN). The HCCI’s 2016 Health Care Cost and Utilization Report said total health care spending per person rose 15 percent, to $5,407, in 2016 from $4,701 in 2012. HCCI attributed the increase “almost entirely” to higher prices rather than increased use of services. The HCCI’s figures are based on 4 billion claims from 40 million people who have employer-sponsored health insurance from four carriers.

Over that five-year period, prices for prescription drugs rose 27.2 percent, followed by a 17.1 percent jump for outpatient care, an 11.2 percent hike for professional services like physician office visits, and an 8.3 percent price increase for inpatient hospital care.

A fissure came a week later, on Jan. 30, when Amazon, Berkshire Hathaway and JPMorgan Chase announced plans to launch a new company whose initial focus will be on “technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent health care at a reasonable cost.” (bit.ly/2DUklUf ) There’s been a lot of speculation about what exactly the new company will do—and whether the new company will have any impact at all. But the mere fact that three heavy-hitters called rising health care costs “a hungry tapeworm on the American economy” sent a lot of health care CEOs scrambling to look at their strategic plans and traditional business models.

Another crack appeared Jan. 18, when four big not-for-profit health systems announced plans to create their own generic drug company (bit.ly/2mVcPhx). The players are Ascension, Intermountain Healthcare, SSM Health and Trinity Health. The systems said the company will be an FDA-approved manufacturer that will make generic drugs directly or by subcontracting with existing drug manufacturers. The systems attributed the unusual move to the desire to exert more control over the cost and supply of the generic medications they provide to patients.

A Jan. 29 report from Vizient, the Irving, Texas-based group purchasing organization, projected that health systems like the aforementioned four will face a 7.4 percent increase in the prices they pay for prescription drugs from July 1 through June 30, 2019 (bit.ly/2FzjR2c).

Ever on the defensive, the Pharmaceutical Research and Manufacturers of America, or PhRMA, launched a new website, LetsTalkAboutCost.org, on Jan. 24 to “educate consumers” about why prescription drugs cost as much as they do (onphr.ma/2DETmvW). The site says hospitals mark up prescription drug prices charged to patients by nearly 500 percent. That’s a very visible split in the veneer.

How are insured employees coping with higher premiums, co-payments, co-insurance levels and out-of-pocket medical expenses? Some 68 percent say they’re trying to take better care of themselves, according to an Employee Benefit Research Institute (EBRI) survey of 1,518 adults with employer coverage (bit.ly/2s0lXGn). That was the most frequently cited response. Other responses, according to EBRI’s Health and Workplace Benefits Survey released Jan. 25, are:

  • Choosing generic drugs more often (63 percent).
  • Going to the doctor only for more serious conditions or symptoms (63 percent).
  • Talking to the doctor more carefully about treatment options and costs (56 percent).
  • And my favorite, delaying going to the doctor (55 percent).

Less popular ways to deal with higher health care costs are:

  • Looking for cheaper health care providers (34 percent).
  • Not filling prescriptions or skipping medication doses (33 percent).
  • Looking for cheaper health insurance (32 percent).

Now, whether all this cracking in the status quo leads to fundamental changes in the way health care is delivered and financed in the U.S. remains to be seen. But it’s pretty clear that I wasn’t the only person whose blood pressure spiked in January. tcbmag

David Burda (twitter.com/@davidrburda, dburda@msp-c.com) is editorial director, health care strategies, for MSP-C, where he serves as the chief health care content strategist and health care subject matter expert.

Comments

J.V. Toscano
Good article, However, chart has two glaring mistakes in the "less"-"more" area.
4/3/2018 1:35:29 PM

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