Health care spending

States reluctant to target hospital costs in employee health plans, new study finds

Hospital prices are cited most frequently by state plans as their top cost driver, but state negotiators are more likely to target other forms of health care spending when it comes to curbing costs, a new study found  (Source: “States don't want to tackle high hospital costs,” Axios, June 17)

According to a new study by Georgetown's Center on Health Insurance Reforms, state health plan administrators are “fully aware that hospital prices are the primary driver of the steady increase in the cost of employee health benefits. Yet they remain focused on secondary drivers such as excessive or inappropriate utilization.”

State employee health plans are often the largest employer purchasing insurance in their state, so in theory, should have significant clout when negotiating prices. But according to the report, plan administrators say it is hard to go after these prices because of a lack of competition between hospitals, hospitals' political clout and employee pressure to keep broad provider networks.

Surprise billing laws may lead to increased health care costs, experts warn

New state laws designed to protect patients from being hit with steep out-of-network medical bills may contribute to higher health care costs and premiums, some researchers warn (Source: “Laws to Curb Surprise Medical Bills Might Be Inflating Health Care Costs,” Stateline, May 20).

Lawmakers and advocates who pushed for surprise billing laws say the measures have protected consumers from some of the most egregious bills, which can climb into the hundreds of thousands of dollars. But some researchers recently have raised alarms that doctors and other medical providers are leveraging state laws that rely on arbitration to increase in-network fees, thereby raising health care costs for everyone.

Eighteen states (including Ohio) have passed surprise billing laws since 2014, most of them in the past three years. Last year, former President Donald Trump signed a federal version that covers self-funded health plans, including those offered by many employers, as opposed to the individual and commercial health plans regulated by states.

Ohio ranks near bottom in latest HPIO Health Value Dashboard

Ohio ranks 47 in the nation in health value compared to other states and D.C. according to the latest edition of the Health Value Dashboard, which was released earlier this week by the Health Policy Institute of Ohio.

“Ohioans live less healthy lives and spend more on health care than people in most other states,” according to the Dashboard.

Ohio has consistently ranked near the bottom on health value in each of the four editions of the Dashboard. Ohio’s overall health value ranking was 47 in 2014, 46 in 2017 and 46 in 2019. 

The Dashboard found that Ohio’s healthcare spending is mostly on costly downstream care to treat health problems. This is largely because of a lack of attention and effective action in the following areas:

  • Children. Childhood adversity and trauma have long-term consequences
  • Equity. Ohioans with the worst outcomes face systemic disadvantages
  • Prevention. Sparse public health workforce leads to missed opportunities for prevention

The Dashboard is a tool to track Ohio’s progress toward health value — a composite measure of Ohio’s performance on population health and healthcare spending. In ranked profiles, the Dashboard examines Ohio’s rank and trend performance relative to other states across seven domains. In addition, through a series of equity profiles, the Dashboard highlights gaps in outcomes between groups for some of Ohio’s most systematically disadvantaged populations.

The Dashboard includes examples of nine evidence-informed policies that could be adopted by Ohio policymakers and private-sector partners to make Ohio a leader in health value.

ACEs cost Ohio $10 billion a year in healthcare costs, new HPIO analysis finds

First-of-its kind analysis by the Health Policy Institute of Ohio has found that if adverse childhood experiences (ACEs) are eliminated, more than $10 billion in annual healthcare and related expenses could be avoided in Ohio.

The analysis is included in a new HPIO policy brief, Adverse Childhood Experiences (ACEs): Economic Impact of ACEs in Ohio. The study also found that focusing action on reducing ACEs, particularly those associated with behavioral health, can yield significant savings. For example, more than $4.5 billion in annual spending to treat depression in Ohio is attributable to ACEs.

“The research is clear that ACEs result in both significant health and economic impacts,” the brief states. “Economic costs from ACEs are incurred across the public and private sectors, including substantial costs to the healthcare system. The economic burden of ACEs also impacts the state child protection, behavioral health, criminal justice and education systems, as well as private sector businesses. By preventing and mitigating the impacts of ACEs, policymakers and others can put Ohio on a path towards improved health value.”

The brief is the second in three planned briefs as part of HPIO’s Ohio ACEs Impact Project. In August 2020, HPIO released the first brief, Adverse Childhood Experiences (ACEs): Health impact of ACEs in Ohio.

HHS finalizes price transparency rules

Health insurers will be required to publicly post, in advance, the price for the most common services and procedures, under a rule finalized by the federal Department of Health and Human Services on Thursday (Source: “New Trump policy will force insurers to disclose prices up front,” The Hill, Oct. 29).

Patients will eventually have access to new information about cost, including an estimate of their cost-sharing liability, through an online self-service tool. Currently, this is information that patients typically receive only after they get those services, through an explanation of benefits form.

Beginning in 2022, insurers will be required to make available data files on the costs of various procedures, to better allow for research studies, and to help developers design tools to let patients compare costs across insurance plans. The requirement will take effect for 500 of the "most shoppable" services beginning in 2023, and then for all services starting in 2024.

Fighting climate change could avoid 4.5 million early deaths in U.S., study finds

The U.S. stands to avoid 4.5 million premature deaths if it works to keep global temperatures from rising by more than 2 degree Celsius, according to new research from Duke University (Source: “U.S. could avoid 4.5M early deaths by fighting climate change, study finds,” The Hill, Aug. 5).

The same study found working to limit climate change could prevent about 3.5 million hospitalizations and emergency room visits and approximately 300 million lost workdays in America.

Drew Shindell, a professor at Duke University, informed lawmakers during testimony Wednesday that action to limit climate change would amount to “over $700 billion per year in benefits to the U.S. from improved health and labor alone, far more than the cost of the energy transition.”

Shindell, who conducted the study alongside researchers at NASA, unveiled the findings during a House Oversight Committee hearing on the economic and health consequences of climate change. 

Study: Health costs could be down $575B because of COVID-19

The COVID-19 pandemic could reduce health care costs nationwide by up to $575 billion in 2020, according to a new report by a national consulting and actuarial firm (Source: “COVID-19 could cut health care costs by up to $575B,” BenefitsPro, April 28, 2020).

Analysts from Seattle-based Milliman Inc. said that the lingering health crisis caused by the novel coronavirus was leading patients to put off elective procedures, in a trend that would “dwarf” the added costs of COVID-19 testing and treatment.

The study, titled “Estimating the financial impact of COVID-19 on 2020 healthcare costs,” found that deferred care would result in a net reduction of $140 billion and $375 billion in health care costs through the end of June. The total reduction at year’s end would ultimately depend on pent-up demand as procedures resume in the second half of 2020, but a second wave of infections could push that number as high as $575 billion, the report said.

“While the testing and treatment of COVID-19 patients is increasing health care costs across the country, these expenses are dwarfed by the cost reductions resulting from the deferral of nearly all elective care and other care that can be delayed,” said Doug Norris, principal and consulting actuary.

Insurance premiums to spike in 2021 because of COVID-19, report forecasts

The cost of COVID-19 testing and treatment is likely to squeeze U.S. health insurers' profits, which could lead to higher premiums in 2021 (Source: “COVID-19 could prompt higher 2021 insurance premiums, benefit cuts,” Modern Healthcare, March 23, 2020).

A new report from Covered California, the state's Affordable Care Act marketplace, projected that commercial insurers and employers across the United States could face a $34 billion to $251 billion bill for coronavirus testing and treatment this year. Their best estimate is $103 billion.

Absent any federal action, those costs could prompt commercial health insurers to increase premiums between 4% to 40% in 2021 to make up for increased medical claims and stay solvent, according to the report.

The report by Covered California's chief actuary John Bertko focuses on costs for the commercially insured, which includes about 170 million Americans who receive coverage through their jobs and the individual market. It doesn't address the separate and likely significant costs to Medicare, Medicaid or other public programs, though Bertko said those costs would be "huge."

Task force formed to address prescription drug costs

As Ohio continues to combat skyrocketing prescription drug costs, a new panel of government, business and consumer advocates is exploring ways to provide greater price transparency and ensure potentially life-saving medications are affordable and accessible (Source: “State task force tackling high prescription drug costs,” New Philadelphia Times Reporter, Feb.  26, 2020).

The Prescription Drug Transparency and Affordability Advisory Council met for the first time Wednesday, tasked with making recommendations to Gov. Mike DeWine and state lawmakers by June 30.

“What we hope to achieve at the end of the process is a series of recommendations that we as the state, the administration and the legislature, can use to help identify opportunities for cost savings,” said Matt Damschroder, director of the Ohio Department of Administrative Services and council chairman.

Ohio spends about $3.5 billion a year on prescription drugs for state employees, injured workers, Medicaid beneficiaries, incarcerated prisoners and others. Medications are purchased by half a dozen state agencies, including the departments of Medicaid and Mental Health, Bureau of Workers’ Compensation.

Study: Out-of-pocket costs for childbirth skyrocket in past decade

The average out-of-pocket costs of childbirth and maternal care among women with employer health insurance rose nearly 50% between 2008 and 2015, a new national study found (Source: “Childbirth comes with staggering out-of-pocket costs,” Columbus Dispatch, Jan. 13, 2020)

The average out-of-pocket costs of childbirth and maternal care among women with employer health insurance increased from $3,069 to $4,569 — 49% — between 2008 and 2015, the latest date for which statistics were available, according to a study published last week in the journal Health Affairs. The rising costs are largely attributed to the rise of high-deductible health plans.

“The magnitude of those costs were really striking,” said Dr. Michelle Moniz, the lead author of the study and an assistant professor in the Department of Obstetrics and Gynecology at the University of Michigan.

When it came to vaginal delivery, average out-of-pocket costs increased from $2,910 in 2008 to $4,314 in 2015, according to the study. Out-of-pocket costs for C-section births increased from $3,364 in 2008 to $5,161 in 2015.