2020 is not a year for employers to be shy—there’s too much at stake. Healthcare and pharmacy prices continue to rise along with rates of mental illness, maternal mortality and substance use disorders. Purchasers cannot afford to conduct business as usual. It’s time for bold change.
It’s difficult for a lone employer or other healthcare purchaser to have a loud enough voice to drive market change. While you may ask what your contracted health plans are doing to improve things, it may feel like your questions get lost in the noise. There are two ways to be better heard: Ask the right questions and ask the same ones as other leading purchasers to turn up the volume.
What are the right questions to ask? The tough ones. Here are the topics employers should address with their health plans this year.
Reducing healthcare prices
Healthcare prices are high and rising, largely due to the consolidation of providers and the resulting market power that allows them to charge higher prices. As a result, care has become increasingly unaffordable for millions of Americans, and it’s only getting worse. Health plans negotiate on your behalf with these providers and market dynamics make it challenging for them to stem the increases entirely. Ask your health plans if they have a specific price or trend reduction goal? If so, what is the goal and by when do they expect to achieve it? What are their best-performing deflationary strategies? Are they phasing out anti-competitive clauses (e.g., prohibitions of reporting price and quality information or plan designs that could steer patients away from them) in their contracts with healthcare providers?
Getting patients to the right, high-value providers
Between looking at your own data and seeing the results of the RAND Hospital Price Transparency Study, you know by now that price and quality of care varies significantly across healthcare providers. Most health plans have developed centers of excellence to guide members to higher-value specialty care. These centers will only benefit your population if they use them. Ask your health plans to quantify the utilization of their facility-based centers of excellence and to describe how they use information on quality performance, benefit incentives or other means to direct members to these designated providers.
Moving provider payment methods to downside risk
While there have been sweeping changes to the methods plans are using to pay providers, most of these alternative payment methods have an upside only—the promise of more payment for meeting quality standards. Many experts, and our own research, suggest that we won’t see major improvements in the performance of healthcare providers until they also take on downside risk—potential losses if they overspend. Ask your plans about their goals for downside risk. When do your plans intend to reach their goals and what specific strategies are they using?
Support for procuring healthcare services separately
Given how much variation there is across providers, some employers and other healthcare purchasers are procuring a subset of healthcare services outside of their traditional plan relationship. As they seek best-in-class solutions to offer to their populations, purchasers turn to creating direct contracts with providers or indirectly through independent vendors. Survey data suggest this trend among purchasers will continue. These partnerships pose new challenges for all involved; data need to be shared, care must be coordinated, and plan members must understand their choices. Ask your plans how they are supporting purchasers who go outside of the usual health plan relationship to obtain specific healthcare services for their plan members.
Incentives to improve maternity care
Maternal health in the U.S., and specifically maternal mortality, is worse than other developed countries (and some developing countries). The maternal mortality rate more than doubled from 10.3 per 100,000 live births in 1991 to 23.8 in 2014. Each year in America, more than 700 women die from pregnancy-related complications; two-thirds of those deaths are preventable. Health plans have historically done very little to create strong financial incentives for healthcare providers to adhere to clinical guidelines during labor and delivery. Ask your health plans what percent of dollars they paid for maternity care go to hospitals with contracts that include incentives to adhere to clinical guidelines (e.g., blended or bundled payment).
Access to mental healthcare
The prevalence of mental health conditions reached an all-time high in 2017, when 46.6 million Americans reported living with a mental illness. This translates to nearly one in five people. Even the most committed purchasers face sizable barriers to delivering high-value mental healthcare to the members of their populations. In particular, the shortage of mental health providers and long wait times to see a provider are challenges for patients seeking care. Ask your health plans what they are doing to improve access to mental healthcare.
Treatment for substance use disorders
Americans are now more likely to die from an accidental opioid overdose than to die in a motor vehicle crash. Substance use disorders beyond opioids continue to pose health challenges. In the past year, almost 21 million Americans aged 12 or older needed substance use treatment, yet only one in eight who needed it received treatment at a specialty facility. The good news is that opioid use disorder, along with alcohol and tobacco use disorders, can be treated with multiple FDA-approved medications that reduce the risk of addiction and overdose. Ask your health plans what proportion of in-network providers who treat substance use disorders have a waiver to prescribe Medication Assisted Treatment.
These are the issues keeping employers up at night. Don’t suffer in silence. Ask these questions the next time you meet with your contracted health plans. Include them in requests for information and proposals you use in your health plan procurement process. Insist on progress in these areas in your contracts with health plans. Join forces with your peers to create a consistent set of asks that create a strong business case for health plans to meet your needs in these areas. After all, there is strength in numbers.