healthcare

Face the Facts: How is CT Working to Lower Rising Healthcare Costs?

Sen. Tony Hwang (R-Fairfield) breaks down a new progress report on how CT is doing when it comes to meeting our healthcare cost growth benchmarks.

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Keeping a close eye on cost is important for every household budget, every small business, every local government. And the one thing that can impact all of those is the high cost of healthcare.

As we've learned from the Affordable Healthcare Act, coming up with the solution is not easy.

Connecticut lawmakers are now trying to tackle it with something called the benchmarks. But what is it?

Senator Tony Hwang (R - Fairfield), who is a ranking member on the Insurance and Real Estate Committee, breaks it all down.

Mike Hydeck: Nice to see you in person instead of on Zoom. So Massachusetts does benchmarking. We've heard about it from them. What is it? And why did we decide to do it?

Tony Hwang: Benchmarking simplified is data collection. And it is a process in which we are looking at all costs of healthcare, and collecting data to give us some idea of what are the causes of the cost, and then how we proceed to address it and reduce it. But I want to compliment the governor's office in collaboration with the Senate Republicans. Benchmarking has been a discussion for the past three or four years. The governor initially put it in his executive order. We codified it last year in a bipartisan effort. What we have today is a result of that process. Benchmarking data came out.

Mike Hydeck: So that's the first report. So when you look at the first report, the governor had a goal of increasing costs across the board for about 2.9 or 3%. The real number came closer to 7%. So that's a big gap, right? But this is the first data collection.

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Tony Hwang: Michael, it's even a bigger number when you look at the commercial spending, which is the private and the self-insured marketplace. That grew at 18.8%. And what that tells you is everybody you talk up and down Main Street understand that healthcare is unaffordable. This is beyond what we anticipated. But what's really also glaring from the data point is our Medicaid expenses only grew by .08. Isn't that fascinating?

Mike Hydeck: Why is that? How do you justify that?

Tony Hwang: Because obviously, the government artificially controls their marketplace and keeps that marketplace down. But ultimately, just like in a balloon, right, you reduce cost on one bit by artificial kind of processes. The other marketplace pays. I truly believe that the uneven system of not true market, really camouflages cost. But unfortunately, it's borne by the commercial marketplace. When you look at that increase in number, it reaffirms what people have said all along. Healthcare is unaffordable everywhere in this country.

Mike Hydeck: And it's incredibly unaffordable here, which is really interesting. How difficult is it to try to regulate these major insurance companies? They're all based here, which means not only do they have cost control, but they employ a lot of our citizens. So they're among the biggest employers in our state. Is it difficult to try to regulate them?

Tony Hwang: No doubt that the expertise that we have in our insurers are world renowned. They're the best of the world in that arena. But could they do better? Absolutely. And what we have is a lack of transparency in how they do their business. If you're telling me you need rate increases, but at the same time, you're rewarding your senior executives millions of dollars, it's like our utilities. There's an inconsistency. You're making money off the backs of hard earned working people, but at the same time your executives are reaping in millions and millions of dollars. And they're tone deaf. What I mean by that is, how could someone who's struggling with the perils of healthcare for their loved ones get a rejection from a note or from an email? There is that insensitivity. So health insurance is another factor that we saw in benchmark that is a source of cost containment. They need to do better, they need to utilize technology in an efficient way. But it's got to be done in a fair basis. The two other areas that are important are prescription drugs. We have pharmaceutical companies that create wonders, obviously the COVID vaccine from Pfizer, it's a source of pride and obviously safety.

Mike Hydeck: But in that food chain, you have the benefit managers, so that adds a cost. The middle management layer.

Tony Hwang: Pharmacy benefit managers, acronym PBMs, are the underlying middle players. They get rebates. They have price spreading. When you think about billions and billions of dollars of pharmaceutical companies that give in coupons and rebates and our PBMs pocket the difference. And where is that savings to the consumer? Look when you have people with $2,000 of prescription bills that need to meet on a monthly basis, it's unaffordable, it's unsustainable. You have to choose between your health or putting food on the table. That's not a decision anyone should make.

Mike Hydeck: So what kind of recourse do we have? Whether it's the pharmacy benefit managers. Whether it's clarity on coding when it comes to a bill from the hospital or a doctor? What kind of recourse do lawmakers have, do citizens have? Where do we go?

Tony Hwang: We are looking at proposals. The Senate Republicans have proposed bills relating to PBMs. Understanding the spread pricing and the couponing and rebate, and also asking for our pharmaceutical companies how we can incorporate generics, but at the same time reimbursing them for the research and development that they have put in to create these kinds of incredible medicines to save lives and make differences. So it's a delicate balance. But something is askew.

Mike Hydeck: Insulin was invented how long ago and until recently, it was still incredibly high priced. That's a case in point. All right, one last question before we go. I want to give you two sides of the story before I get you to respond. There's a report in ProPublica, the journalism website, about Cigna specifically from here in Connecticut. They use a computer programmed to reject tens of thousands of claims per month without even reading the case file. Now, I did talk to a signal spokesperson who told me most of the cases are routine tests like a vitamin D test, things like that. There isn't a lot of information in those files that they reject. They also provided a statement from the chief medical officer of Cigna Healthcare, which reads in part, "We disagree with the mischaracterization of our process of accelerating payment claims for routine, low-cost screenings. It allows us to automatically pay providers for claims that are submitted with the correct diagnosis codes, and prioritizes our medical directors' time for their complex reviews." Should your committee be reviewing this process?

Tony Hwang: Well, I think first and foremost, it reaffirms the tone deafness. You're making decisions about people's lives and well being and you're doing it by a artificial intelligent process that may increase your efficiency, but at what cost to the psychology and the well being of individuals? And I think we have to have a balance between where the marketplace goes and for government regulation. But when things are askew, but the company needs to get an awareness that you can't find all the solutions by technology. You are ultimately still about the healthcare business. And it's about people. It's not a widget. It's people's emotions and feelings. And unfortunately, it shouldn't be a business. It should be a process where people depend on you to be healthy and safe.

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