Post by Admin/ Traveler on Oct 23, 2018 16:42:31 GMT
(Trav here - I had to figure out a shorter title than the original article shows. LOl. Because this article doesn't directly deal with every state, but with Montana, I'm going to only copy and paste a few of the opening paragraphs to hopefully get you interested in reading the article, because parts of this article I believe applies in a general manner. For more details/the full article, please follow the link just below)
In financial crisis, Montana grandma beats health care cost
"Montana hired a former insurance insider who pushed back against industry players who keep costs high"
"Marilyn Bartlett took a deep breath, drew herself up to her full 5 feet and a smidge, and told the handful of Montana officials that she had a radical strategy to bail out the state’s foundering benefit plan for its 30,000 employees and their families.
The officials were listening. Their health plan was going broke, with losses that could top $50 million in just a few years. It needed a savior, but none of the applicants to be its new administrator had wowed them.
Now here was a self-described pushy 64-year-old grandmother interviewing for the job.
Bartlett came with some unique qualifications. She’d just spent 13 years on the insurance industry side, first as a controller for a Blue Cross Blue Shield plan, then as the chief financial officer for a company that administered benefits. She was a potent combination of irreverent and nerdy, a certified public accountant whose Smart car’s license plate reads “DR CR,” the Latin abbreviations for “debit” and “credit.”
Most importantly, Bartlett understood something the state officials didn’t: the side deals, kickbacks and lucrative clauses that industry players secretly build into medical costs. Everyone, she’d observed, was profiting except the employers and workers paying the tab.
Now, in the twilight of her career, Bartlett wanted to switch teams. In her view, employers should be pushing back against the industry and demanding that it justify its costs. They should ask for itemized bills to determine how prices are set. And they should read the fine print in their contracts to weed out secret deals that work against them.
The way health care works in America, most employers cede control of health care costs to their health insurers, to the hospitals that treat their employees and to the companies they pay to manage their benefits. The costs are a dense thicket that few employers feel equipped to hack through. So, they don’t.
This failure helps explain why Americans pay the highest health care costs in the world — and why the tab continues to increase, year after year. Employers fund these costs through employee compensation packages, so the math is typically bad news for workers: Rising health costs mean fewer wage increases and less take-home pay. Montana was no different.
And so Bartlett pitched a bold strategy. Step one: Tell the state’s hospitals what the plan would pay. Take it or leave it. Step two: Demand a full accounting from the company managing drug costs. If it wouldn’t reveal any side deals it had with drugmakers, replace it.
Bartlett’s strategy would expose a culture in which participants fail to question escalating costs and the role each part of the health care industry plays in them. ProPublica and NPR are investigating these little-seen aspects of the health insurance industry and the way Americans pay for medical care. Previous stories have examined how health insurers profit from big medical bills and how the industry is teaming up with data brokers to rate how much patients cost based on their lifestyles."
"Bartlett would be taking on some of the state’s power players: hospitals and health insurers — and their politically connected lobbyists. If her plan didn’t work, the state and its employees were in trouble. If it did, it could create a blueprint for employers everywhere.
Bartlett knew employers have negotiating power that few of them use. The health care system depends on the revenue produced by the surgeries, mammograms, lab tests and other services it provides, and it can ill afford to lose it. Bartlett got the job. She would call the industry’s bluff."
" Today, about 150 million Americans get their health benefits through their employers. The industry is dominated by what some call the “BUCAH” plans — Blue Cross Blue Shield, UnitedHealth Group, Cigna, Aetna and Humana. Half a dozen health insurers currently sit near the top of the Fortune 500, with combined annual revenue of about half a trillion dollars.
Despite the money at stake, many employers have, wittingly or not, deferred to the industry. Decisions about health benefit plans are usually made by midlevel human resources managers, who may not understand the forces in the medical industry operating against them. They’re often advised by insurance brokers, who are traditionally funded by the industry. And they’re trying to keep the peace for employees — who demand convenient access to the care they need. It’s a recipe for inertia.
The conventional wisdom is that insurance companies want to reduce health care spending. In reality, insurers’ business plans hinge on keeping hospitals and other providers happy — and in their networks — often at the expense of employers and patients.
... Michael Thompson, president of the National Alliance of Healthcare Purchaser Coalitions, which represents groups of employers who provide benefits to more than 45 million Americans. And, he says, they rely on the advice of industry experts instead of digging into the details."
"Montana, like many large employers, self-funds its plan. That means it pays the bills and hires an insurance company or other firm to process the claims. More than half of American workers are covered by self-funded plans. As the boss in this arrangement, Bartlett assumed she’d have access to detailed information about how much the plan, which was managed by Cigna, paid for procedures at each hospital. But when she asked Cigna for its pricing terms with the hospitals, Cigna refused to provide them.
Its contracts with hospitals were secret, Cigna representatives told her. That didn’t sit well with Bartlett, she recalls. “The payer cannot see the contract,” she says, “but we agree to pay whatever the contract says we will pay.”"
"Bartlett ultimately settled on a radical solution: The plan would set its own prices for the hospitals.
In the illusory world of hospital billing, the hospitals typically charge a high price for a procedure, then give insurers in-network discounts. These charges and discounts might be different for each procedure at each hospital, depending on who has more leverage during negotiations.
The discounts, however, are meaningless if the underlying charges aren’t capped. When Bartlett looked at a common knee replacement, with no complications and a one-night hospital stay, she saw that one hospital had charged the plan $25,000, then applied a 7 percent discount. So, the plan paid $23,250.
A different hospital gave a better discount, 10 percent, but on a sticker price of $115,000. So, the plan got billed $103,500 — more than four times the amount it paid the other hospital for the same operation. Bartlett recalled wondering why anyone would think this was okay.
Under Bartlett’s proposed new strategy, the plan would use the prices set by Medicare as a reference point. Medicare, the federal government’s insurance for the disabled and patients over 65, is a good benchmark because it makes its prices public and adjusts them for hospitals based on geography and other factors. Montana’s plan would pay hospitals a set percentage above the Medicare amount, a method known as “reference-based pricing,” making it impossible for the hospitals to arbitrarily raise their prices."
In financial crisis, Montana grandma beats health care cost
"Montana hired a former insurance insider who pushed back against industry players who keep costs high"
"Marilyn Bartlett took a deep breath, drew herself up to her full 5 feet and a smidge, and told the handful of Montana officials that she had a radical strategy to bail out the state’s foundering benefit plan for its 30,000 employees and their families.
The officials were listening. Their health plan was going broke, with losses that could top $50 million in just a few years. It needed a savior, but none of the applicants to be its new administrator had wowed them.
Now here was a self-described pushy 64-year-old grandmother interviewing for the job.
Bartlett came with some unique qualifications. She’d just spent 13 years on the insurance industry side, first as a controller for a Blue Cross Blue Shield plan, then as the chief financial officer for a company that administered benefits. She was a potent combination of irreverent and nerdy, a certified public accountant whose Smart car’s license plate reads “DR CR,” the Latin abbreviations for “debit” and “credit.”
Most importantly, Bartlett understood something the state officials didn’t: the side deals, kickbacks and lucrative clauses that industry players secretly build into medical costs. Everyone, she’d observed, was profiting except the employers and workers paying the tab.
Now, in the twilight of her career, Bartlett wanted to switch teams. In her view, employers should be pushing back against the industry and demanding that it justify its costs. They should ask for itemized bills to determine how prices are set. And they should read the fine print in their contracts to weed out secret deals that work against them.
The way health care works in America, most employers cede control of health care costs to their health insurers, to the hospitals that treat their employees and to the companies they pay to manage their benefits. The costs are a dense thicket that few employers feel equipped to hack through. So, they don’t.
This failure helps explain why Americans pay the highest health care costs in the world — and why the tab continues to increase, year after year. Employers fund these costs through employee compensation packages, so the math is typically bad news for workers: Rising health costs mean fewer wage increases and less take-home pay. Montana was no different.
And so Bartlett pitched a bold strategy. Step one: Tell the state’s hospitals what the plan would pay. Take it or leave it. Step two: Demand a full accounting from the company managing drug costs. If it wouldn’t reveal any side deals it had with drugmakers, replace it.
Bartlett’s strategy would expose a culture in which participants fail to question escalating costs and the role each part of the health care industry plays in them. ProPublica and NPR are investigating these little-seen aspects of the health insurance industry and the way Americans pay for medical care. Previous stories have examined how health insurers profit from big medical bills and how the industry is teaming up with data brokers to rate how much patients cost based on their lifestyles."
"Bartlett would be taking on some of the state’s power players: hospitals and health insurers — and their politically connected lobbyists. If her plan didn’t work, the state and its employees were in trouble. If it did, it could create a blueprint for employers everywhere.
Bartlett knew employers have negotiating power that few of them use. The health care system depends on the revenue produced by the surgeries, mammograms, lab tests and other services it provides, and it can ill afford to lose it. Bartlett got the job. She would call the industry’s bluff."
" Today, about 150 million Americans get their health benefits through their employers. The industry is dominated by what some call the “BUCAH” plans — Blue Cross Blue Shield, UnitedHealth Group, Cigna, Aetna and Humana. Half a dozen health insurers currently sit near the top of the Fortune 500, with combined annual revenue of about half a trillion dollars.
Despite the money at stake, many employers have, wittingly or not, deferred to the industry. Decisions about health benefit plans are usually made by midlevel human resources managers, who may not understand the forces in the medical industry operating against them. They’re often advised by insurance brokers, who are traditionally funded by the industry. And they’re trying to keep the peace for employees — who demand convenient access to the care they need. It’s a recipe for inertia.
The conventional wisdom is that insurance companies want to reduce health care spending. In reality, insurers’ business plans hinge on keeping hospitals and other providers happy — and in their networks — often at the expense of employers and patients.
... Michael Thompson, president of the National Alliance of Healthcare Purchaser Coalitions, which represents groups of employers who provide benefits to more than 45 million Americans. And, he says, they rely on the advice of industry experts instead of digging into the details."
"Montana, like many large employers, self-funds its plan. That means it pays the bills and hires an insurance company or other firm to process the claims. More than half of American workers are covered by self-funded plans. As the boss in this arrangement, Bartlett assumed she’d have access to detailed information about how much the plan, which was managed by Cigna, paid for procedures at each hospital. But when she asked Cigna for its pricing terms with the hospitals, Cigna refused to provide them.
Its contracts with hospitals were secret, Cigna representatives told her. That didn’t sit well with Bartlett, she recalls. “The payer cannot see the contract,” she says, “but we agree to pay whatever the contract says we will pay.”"
"Bartlett ultimately settled on a radical solution: The plan would set its own prices for the hospitals.
In the illusory world of hospital billing, the hospitals typically charge a high price for a procedure, then give insurers in-network discounts. These charges and discounts might be different for each procedure at each hospital, depending on who has more leverage during negotiations.
The discounts, however, are meaningless if the underlying charges aren’t capped. When Bartlett looked at a common knee replacement, with no complications and a one-night hospital stay, she saw that one hospital had charged the plan $25,000, then applied a 7 percent discount. So, the plan paid $23,250.
A different hospital gave a better discount, 10 percent, but on a sticker price of $115,000. So, the plan got billed $103,500 — more than four times the amount it paid the other hospital for the same operation. Bartlett recalled wondering why anyone would think this was okay.
Under Bartlett’s proposed new strategy, the plan would use the prices set by Medicare as a reference point. Medicare, the federal government’s insurance for the disabled and patients over 65, is a good benchmark because it makes its prices public and adjusts them for hospitals based on geography and other factors. Montana’s plan would pay hospitals a set percentage above the Medicare amount, a method known as “reference-based pricing,” making it impossible for the hospitals to arbitrarily raise their prices."