Table of Contents
Bipartisan Policy Center
Taming Health Insurance Costs for Employers and Employees
Event Page and Recording Here
Thursday, October 27, 2022 | 1:00-2:00 PM EST
On October 27, 2022, the Bipartisan Policy Center (BPC) held an event to discuss possible solutions to the difficulties employers and their employees experience in the private healthcare market. The BPC released a report containing policy recommendations for the issue, entitled Improving and Strengthening Employer-Sponsored Insurance (ESI). Experts in healthcare economics and private insurance markets discussed these recommendations.
- Price transparency is necessary for a functioning private healthcare market.
- Individual patients do not have the necessary leverage to change the healthcare system, but providing price transparency to policymakers and employers can catalyze change.
- While much of the healthcare system is consolidating, there is an opportunity for regulatory policy, particularly with vertically integrated systems, to allow for more competition.
- Employers have traditionally relied on intermediaries to interact with the healthcare system, but they have a growing desire to fight for high-value care for their employees.
- Marilyn Serafini: Executive Director, Health Program, BPC
- Sabah Bhatnagar: Senior Policy Analyst, BPC
- Alan Weil: Editor-in-Chief, Health Affairs (Moderator)
- Christopher Whaley: Economist, RAND Corporation
- Elizabeth Mitchell: President and CEO, Purchaser Business Group on Health
- Katherine Gudiksen: Executive Editor, The Source on Healthcare Price and Competition at UC Hastings College of Law
Marilyn Serafini’s Introduction
The majority of American adults get insurance through their employers. However, as healthcare costs are rising, it is difficult for employers to continue benefits. Increasing health insurance prices decreases the real wages of employees, negatively impacting employees and their employers.
Sabah Bhatnagar’s Presentation
Insurance costs are increasing in response to rising hospital and pharmaceutical costs, markets in which employers have no leverage to lower the costs. So, ESI must be strengthened by:
- Increasing transparency in the healthcare system.
- Empowering employers with payment pricing tools
- Addressing market power dynamics
- Providing other options for health insurance affordability.
The BPC report included the following recommendations to achieve these goals:
- Require HHS to make a payer/provider centralized data repository for pricing/quality data.
- Allow public tracking of health care ownership to determine how private equity investments impact the pricing and delivery of healthcare.
- Leverage existing Department of Labor authorities to boost accountability for the stakeholders involved in managing health benefits.
- Empower federal agencies to manage healthcare consolidation effectively.
- Prohibit anti-competitive contract language in insurer contacts with providers.
- Direct agencies to guide uptick in high-performance networks.
- Encourage multi-payer networks.
What role does transparency play in controlling prices for ESI, and how will the BPC recommendations respond to barriers to achieving transparency?
Most of the current market dysfunction gets attributed to the lack of price transparency. While policymakers have decided price transparency is a pressing issue, most suggest providing price transparency to beneficiaries to allow them to shop smart. However, price transparency should be available for policymakers to regulate the market and address systemic issues.
How much is the lack of transparency impacting the market? Is hoarding information a competitive advantage?
Hoarding or obscuring information does provide a competitive advantage to hospitals and health plans. However, policymakers at the federal and state levels need sufficient information to understand where to focus their policy efforts and companies need complete information to make quality decisions about purchasing care at scale.
Is a payer database approach promising? What should the databases include to be effective?
There is potential in payer databases, particularly those with price and utilization data. Individual states and multiple state coalitions have created comparable databases, proving this approach is doable and scalable. Colorado’s All Payer Claim Database (APCD) is a great model, as it successfully aligns prices with value and allows the state to regulate healthcare provision.
Is there a viable policy agenda for addressing market consolidation? Is the market already too consolidated to impact?
Because the market is so consolidated, policies addressing prices may be most impactful. However, there is still room for market oversight, particularly within states or through antitrust enforcement of nationwide entities to promote market competition. Vertical consolidation is arguably more worrisome, and will require particular care in addressing.
As consolidation is difficult to undo, how can we regulate prices in a consolidated market?
Beyond deconstruction of consolidated markets and price caps, affordability standards, out-of-network rate caps, and taxation of excessive provider rates are also viable policy levers to pursue.
Do market strategies change when considering the pharmaceutical market?
In pharmaceutical pricing, PBMs may be more of an issue than patent lengths and launch prices, as PBMs are failing in their roles as cost managers. Pharmaceutical markets are also more complex than the insurance or hospital markets. Price transparency is still necessary to negotiate prices.