How Employers Plan to Address Rising Prices of Private Health Insurance

[Music] hello i'm mata gavidia today on the mgh life sciences medical world news the american journal managed care is pleased to welcome elizabeth mitchell president and ceo of the pacific business group on health based on the latest study by rand corporation examining hospital pricing data it was shown that prices paid to hospitals for privately insured patients by employers with significantly more than what medic medicare would have paid can you discuss the significance of these findings and why those who are privately insured are paying more at

this time this is just quantifying what we've known for decades it's you know proving in theory what we know happens in practice uh it is very important though because it does quantify it and they charge more because they can uh they are getting as much as they can out of private purchasers and frankly the the intermediaries who have been acting on the employer's behalf have failed to control costs and it's it's not sustainable

i guess i just you know if i were speaking to large health systems i guess i would just ask at what point do you take it upon yourselves you know as a professional obligation or community obligation to moderate your prices because the economic pressure on employers and families during and postcoded is extraordinary and the employers are trying to put money back into their core business and preserve jobs and increase wages and

the the health systems just seem to be you know price gouging as long as they can get away with it so i i guess i would just say it's a it's a known dynamic it is really um it is increasingly challenging and employers are looking for ways to basically go direct to providers and get around some of these problems and to build on that how can employers leverage this information to better construct their health plans

so one of my board members about a week ago said we now have an obligation to do neuro networks choice has always been a driver in benefit design and there is a growing recognition that quality is so variable and price is so variable that they are seeing it as their obligation to narrow networks to only high quality high value providers so it's a real um

shift in thinking and i think you're going to see more and more of that and they're not relying on um intermediaries to do it for them they are looking to basically take it on themselves to understand the quality not everyone can do this this is a big lift and remember purchasing healthcare is not their day job they build computers they build airplanes they sell groceries and yet they are bearing the brunt of the cost of the us health care system

so they are looking to us to partner to identify how do you find the highest quality providers and work directly with them as these findings come from ren's 2.0 study with a 3.0 study currently in the works what factors will the pacific business group on health be monitoring and looking forward to seeing for the next study well i i will say that many of our members who had wanted to participate in 2.0 were actually blocked from doing so by their health plans their healthcare

wouldn't let them share the data i mean when you think about that it's pretty outrageous because it's their data but their i think will be growing participation um and to get you know even better insight and more comprehensive picture um and i think you'll see them ready to act on it i think one question is you know if there is a public option or any other sort of you know major developments on the policy front will that shift costs even further so

you know higher prices on a smaller uh percentage of the market um that's something that we are also looking at what's going to happen um depending on where the federal government goes um but again they are committed to purchasing health care that truly enables the health of their employees you know our members spend collectively a hundred billion dollars a year for over 15 million americans they are committed to their health and

well-being they are trying to for example identify and purchase optimal mental health care um they know they have to take on social determinants they know they have to intervene in the market on their employees behalf and they will i think they will only be sort of more creative and more assertive going forward and lastly do you have any other concluding thoughts i will say overall employers

given the pressures of the pandemic the economic pressures on their core business are prepared to do things they haven't been before disruption of employees has always been a major concern but there are ways to identify and buy top quality health care that they are looking at now that that will be new and disruptive in the market i think there is also just a

disappointment that the industry didn't fix itself and frankly um you know things are getting worse for employers not better so they are going to take an increasing leadership role in driving transformation to learn more visit our website agmc.com i'm matthew video thanks for joining us