America… the land of the free and the home of the world’s highest health care costs and lowest life expectancy. While you may be familiar with such global comparisons, you may be surprised by the wide disparities in health care quality, affordability, and access, between and even within our states.

The State of Our Health Care

A recent WalletHub study ranked the best and worst states for health care based on these and other criteria including infant mortality rate, doctors and dentists per capita, and the number of adults who have not seen a doctor or dentist in two years. The results are alarming, and the challenge is daunting.

The study includes an interactive table that can be sorted by rank, cost, access, and outcomes. The top two performers are Minnesota and Rhode Island, which are among the top 10 in all four categories. In three out of four categories are Colorado, Connecticut, Maryland, Massachusetts, and Vermont.

Results at the other end of the spectrum are more nuanced. Massachusetts, for example, has high costs but ranks #1 in access and outcomes. Others, like Alabama, Alaska, Louisiana, Oklahoma, and Texas, rate the most poorly in three out of four categories.

Shrinking Access to Maternity Care

While the WalletHub study focused on health care in general, the March of Dimes dug deeper into maternity care. This is especially important because in poorly rated states, there is a direct relationship to high infant mortality rates.

The March of Dimes study identified what it calls “maternity care deserts.” These locations are defined as “any county without a hospital or birth center offering obstetric care and without any obstetric providers.” Obstetric providers include obstetrician-gynecologists, certified nurse midwives, and certified midwives.

It’s hard to imagine that nearly 7 million American women of childbearing age now live in a county with limited or no maternity care services. One-third of U.S. counties, more than half of which are rural, are now maternity deserts. And that number is growing as local and regional hospitals get gobbled up by large hospital systems.

Employers can take an active role in mitigating the nation’s healthcare mess, at the local and individual levels, by choosing an integrated employee health plan with national coverage. It’s best to seek out a next-generation health plan designed specifically to reduce overspending while improving access to quality health care, regardless of location.

Given the difficulty navigating our broken healthcare system, a preferred employee health plan should also include high levels of member support. From answering questions to locating qualified providers, members deserve personalized assistance to get the best care at the lowest cost.

A new study shows that 71% of US employers expect moderate to significant increases in healthcare costs over the next three years, including a 6% rise in 2023. While the need to manage costs is clear, it’s shocking that 1-in-4 employers plans to shift costs to employees through higher contributions.

As quoted in the WTW study, “Employers must focus on changes that go beyond addressing their employees’ needs to also support efforts to attract and retain talent during a tight labor market.”

Increasing premium contributions effectively reduces employee income and quality of life, and is contrary to a growing focus on making employee benefits more affordable. It’s certainly not the best way to win the war for talent and boost employee satisfaction and retention.

In addition to higher payroll deductions, 23% of employers surveyed have further eroded employee earnings and freedom of choice by increasing out-of-pocket costs for non-preferred labs, providers, and facilities. Another 19% expect to do so by 2024. Boxing employees into narrow networks is never popular and does little to effectively balance cost management with health care affordability.

Doing the Right Thing for Employees

Employers have a fiduciary responsibility under ERISA to manage plan expenses on behalf of plan participants. At the same time, they need to seek competitive advantages and avoid future risk. A next-generation health plan is a strategic tool for meeting these goals by countering inflationary pressures and making health care affordable without reducing benefits.

While 27% of respondents currently use programs to combat fraud and waste, such capabilities can be fully integrated into a modern health plan to ensure sustainable savings and help prevent such abuse from happening in the first place.

The same is true for concierge support services, which help employees navigate the healthcare system and get more value from their health plan. A key driver of employee satisfaction, this essential service is currently only offered by 21% of respondents, with another 25% expecting to do so by 2024.

Employers willing to let go of their “devil you know” mindset can deliver better, more affordable health care for their employees and successfully fight the rising costs and low transparency of legacy health plans.

Technology leaders and top executives from US hospitals and health systems met recently to focus on healthcare affordability and transforming the patient financial experience. Although many good ideas were generated, the definition and expectation of affordability clearly varies by stakeholder.

Participants in the leadership summit acknowledged that “healthcare in the U.S. is notoriously expensive, including for many people covered by insurance — a reality underscored by the role medical debt plays in more than 60 percent of bankruptcies.” Yet for these constituents, affordability means “enlightened” payment plans that “focus on maximizing the repayment success of the patient.” In other words, let’s improve the odds of the patient paying a bill that is outrageously and unnecessarily high.

The Rapid Rise of Medical Credit Cards

The healthcare industry is increasing its use of technology to improve what it calls the “patient financial experience.” Direct-to-provider payment plans are still the norm, but they are rapidly being replaced by medical credit cards whose lines of credit roughly equal the amount of the patient’s bill.

Research for an article in Crain’s Chicago Business revealed that Synchrony Financial, one of the largest issuers of medical credit cards, reported a 50% increase in purchase volume (from $8 to nearly $12 billion) from 2015 to 2021. The author predicts that it’s just a matter of time before medical credit cards overtake payment plans as the preferred financing method. But preferred by whom?

Hospitals love them because they get paid up front and incur lower transaction fees: a single swipe for a one-time payment vs. 60 swipes for a five-year payment plan. These cards are also promoted (with training provided by the card issuers) by dentists, cosmetic surgeons, and providers whose charges are out of pocket or subject to high deductibles. Even veterinarians are in on the game.

So while hospitals and providers clear outstanding charges from their books, their alliance with medical credit card companies pushes patients into a debt vehicle that’s not in their best interest. The ethics get murkier for nonprofit hospitals who should be providing acceptable levels of free care and services to the community in exchange for substantial tax relief.

Do Patients Benefit from Medical Credit Cards?

Patient reaction to medical credit cards is decidedly mixed. While some appreciate the convenience, others feel they were preyed upon or misled about the terms of their debt, specifically the no-interest introductory period and when interest charges begin accruing. Patients report being pushed to open an account during point of care, including in the emergency room or at discharge.

Kristen Schell, who was profiled in the Crain’s article, says she was pressured into charging urgent gall bladder surgery to a medical credit card, despite being in the financial field for 15 years and “knowing better” that it was not prudent.

Consumer credit experts say medical credit cards should be the last resort for paying a large medical bill. Interest rates are higher: CareCredit is close to 27% while regular credit cards average 19% to 20%. And once medical debt hits a credit card of any kind, it is indistinguishable from consumer debt.

This is a very important consideration for anyone supposedly concerned about the patient financial experience. Consumers rejoiced when the three major credit reporting agencies agreed to remove medical debt from credit reports. However, this only applies to money owed directly to a hospital, care provider, or collection agency. It does not apply to medical debt on any type of credit card. Once charged, it’s just a massive amount of debt in the patient’s credit history that’s viewed less favorably by credit card bureaus.

Transparency and True Affordability

The most encouraging outcome of the leadership summit was a push toward price transparency. Participants acknowledged that “patients still have surprisingly little visibility into what they owe, why they owe it, and how they can pay for it in a way that fits within their budgets.” Additionally, patients “rarely have an opportunity to inform themselves what a consultation, a lab test or an intervention will cost them.”

Technology and artificial intelligence chat bots are being touted as mechanisms to digitize and improve the patient financial experience. And while the technology may be ready, the industry is not. An executive from a Chicago-based health system made the following observation.

“Organizations are putting their prices out there and patients are looking at quality and at what it might cost them, but the problem is they don’t understand the full cost because there’s all this back work with payers about what their true out-of-pocket will be.” In reality, better payment predictive analytics are needed for these efforts to have any real value to consumers.

From a patient perspective, knowing real and accurate costs in advance doesn’t necessarily make them reasonable or affordable, but such transparency is a step in the right direction in that it supports better financial decision making when it comes to health care.

Helping Employees Navigate the System

Employers should consider these two highly effective ways to help protect the financial and health interests of their employees.

• Improve financial literacy through direct education and a compassionate, member-focused health plan that unburdens plan administrators by offering unlimited access to personalized support services during open enrollment and beyond.
• Implement a next-generation employee health plan designed around accountability, transparency, cost-containment and guaranteed savings that prioritizes employer and member needs over those of the healthcare industry.

Americans spend about $500 billion a year on prescription drugs with no visibility into the processes that set prices or the comparative effectiveness of drugs approved for the same clinical purpose. This opaqueness makes it impossible to ensure that prices are aligned with the value a drug provides.

PBMs are primarily responsible for this lack of transparency by adding cost through spread pricing and creating drug formularies based on the rebates they receive from manufacturers. The good news for employer health plan sponsors and their members is that some researchers are trying to change this.

In their review of research by the Center for Evaluation of Value and Risk in Health at Tufts Medical Center, Health Affairs notes that there is no single entity in the U.S. that makes drug coverage and pricing decisions. This is compounded by the mix of private and public payers that follow different rules, and a system that grants monopolies to drug manufacturers and allows them to charge whatever the market will bear.

A Way Forward

The way out of this mess is to build prescription drug formularies that consider comparative effectiveness research and cost. The researchers support the science-driven approach that is advocated by the Institute for Clinical and Economic Review (ICER) and is used by next-generation Rx plans to deliver better value and better outcomes.

ICER is an independent, non-profit research organization founded in 2006 at Harvard Medical School. It evaluates the clinical and economic value of prescription drugs, medical tests and devices, and health system delivery innovations. ICER believes that when drug pricing reflects how well the drug improves patients’ lives, it will incentivize transformational innovation by rewarding pharmaceutical companies for developing more highly effective drugs. Without such philosophical and economic shifts, Americans will continue to pay too much for drugs that do too little.

ICER has developed a recommended health-benefit price benchmark (HBPB) for U.S. drug prices, net of rebates and discounts. This is certainly a step in the right direction but as we know, rebates and other PBM practices are little more than a scam. Additionally, of all the drugs ICER has assessed, only slightly more than 25% were priced within their HBPB range.

Brokers and advisors can empower employers by offering prescription drug plans that deliver value based on cost and comparative clinical efficacy. It’s time to replace the predatory practices and overriding profit motive of PBMs with formularies that prioritize drugs offering the best overall value based on comparative data, next-generation payment technology, smart sourcing, and evidence-based improvements in patient outcomes and savings.

Contact Vitori Health for information about our non-PBM VitoriRx plan that does all this and more.

The Health Rosetta is an innovative blueprint for high performance health plans that is transforming the benefits experience for employers and plan members. Vitori Health supports this mission and is proud to sponsor and attend the upcoming Health Rosetta Summit in Denver.

Our shared mission can be summarized as simplifying the path to lower costs and improved financial performance through better benefits, improved outcomes, and higher quality care for employees. The Health Rosetta framework contains these foundational components and is constantly evolving to include more and better components, case studies, data, best practices, and related solutions.

Gathering to Do Good

The Health Rosetta Summit will take place on August 15-17, 2022 in Denver, Colorado. The outstanding speakers and robust content will focus on how “Transparency Rebuilds the American Dream” and is a proven path to delivering world class health care to employees at significantly less cost.

The goal is for attendees to collaborate with the CEOs, union and civic leaders, and benefits advisors who have “transformed health plans from the #1 driver of inflation, poverty and bankruptcy to the top driver of restoring hope and well-being.”

Vitori Health is proud to sponsor and participate in this exceptional event. Attendees visiting the Hydration Station can pick up an eco-friendly water bottle and enjoy a variety of beverages to stay healthy and hydrated throughout the summit.

We are also hosting a raffle at the Hydration Station for an inflatable stand-up paddleboard. Just scan the QR code and use our Dynamic Financial Impact Calculator to estimate savings using Vitori Health. Downloading the results automatically enters attendees in the raffle.

We look forward to strengthening our connections to member advisors, employers, solutions providers, and ecosystem guests at this Health Rosetta community-building event. It’s time to scale simple, practical, and proven fixes to the healthcare system!