Healthcare Transparency_Updates from Washington

 How lack of transparency can lead to roadblocks on flexibility in benefit design, compliance, and lower health care costs. Hear the latest on what is going on from policymakers to make improvements in this area across the board.

Transcription:

Deanna Cuadra (00:07):

All right. Good morning everyone. Welcome to day two. Appreciate you guys starting your morning with us, and welcome to our panel Healthcare Transparency Updates from Washington. I'm Deanna Cuadra, Senior Reporter with EBN. Today we're going to discuss how the US healthcare system's, lack of transparency, creates barriers to affordable and effective care. We're also going to discuss what our policymakers are doing or not doing, so you can be prepared. Today I'm joined by Melissa Bartlett, senior Vice President on health policy for the ERISA Industry Committee, otherwise known as Eric. Melissa has served as the council for the US House of Representatives Committee on Energy and Commerce, and prior served as a HIPAA privacy program specialist, the Department of Health and Human Services Office for Civil Rights. We were also joined by Peter, a partner global FinTech Company, Acrisure the fastest growing assurance brokerage at 2023. Peter has served as the president of the Local National Association Assurance and Financial Advisors Association. He is a member of the Orange County Employee Benefits Council and the National Association of Health Underwriters. To say these two are experts in healthcare would be an understatement, so we're very fortunate to have them join us today. We'll go ahead and start to go with a pretty blunt question for our panel. Is the US healthcare System in any way transparent? Has recent legislation like the hospital price transparency rule really made a difference?

Peter Freska (01:35):

You're in Washington. go Ahead.

Melissa Bartlett (01:40):

Ahead. So I would say that in DC right now, Washington Transparency really is the buzzword, and it's not just hospital transparency. You'll see that there's credible interest right now in anything transparency related in healthcare. So on the house side of Capitol Hill, the house has a bipartisan bill that they've been trying to put to the floor for a vote. The house is a little busy these days trying to keep the government funded past Saturday, so it hasn't quite happened yet, but that bipartisan measure would extend transparency requirements to hospitals, health insurers, and PBMs. So there really is an incredible amount of bipartisan interest in really forcing some significant transparency reforms across healthcare stakeholders. This year. The Senate also has done a pretty good number of measures as well across four different committees of jurisdiction. It's just not quite as far along in packaging those measures up to one Senate bill that can move on the Senate floor.

(03:17)

But it too, I anticipate this fall we'll look to try to push forward some transparency bills too. So transparency is everywhere in Washington these days, and I think when you see that level of bipartisanship and what is otherwise a fairly cantankerous environment on the Capitol Hill, it tells you that members of Congress in the House and the Senate are hearing from their constituents back at home in their states and their congressional districts that transparency is warranted, that this isn't a partisan issue, that people are concerned about the rising costs of healthcare. They're concerned about their out-of-pocket costs. I know that Eric's member companies are concerned about the cost to employers to keep premiums low and make sure their workers can afford access to care as well. So yeah, I think there are very real concerns about even the transparency measures that have come forward in our end law. To date, there's more that can be done for sure.

Peter Freska (04:38):

I guess I'll be the pundit or the skeptic on a lot of this. We represent about 320,000 employers in the US and when we talk to our employers, especially when they have large healthcare spends or the insurance companies are coming to them with large increases in their costs, they always want data. They want to know what's going on. In the fully insured world, in most markets in the US, you get pretty much no data. So if you're the large company with thousands of employees that are self-funded, you'll get data. But that said, we've had the a many years ago now, 10, 12 years ago, 13 years ago, and we're having the same conversation we had for the 10 years leading up to ACA about affordability. And a lot of the transparency rules draw concerns about affordability in healthcare, and we're still spending almost 20% of our GDP on healthcare.

(05:34)

So $4 trillion going out. All of that to say transparency rules came in two years ago, and according to CMS latest studies, they're saying 70% of hospitals are meeting the transparency rule requirements. You go to outside sources that review the data from CMS, and they're saying anywhere from 15 to 25% of healthcare systems are actually meeting the transparency requirements because there's a lot of NAS on their data that the hospitals put in there because they say they don't do those procedures and things of that nature. So if you look at where there's huge discrepancies in transparency or how people are interpreting transparency from CMS to any other organization that's interviewing or reviewing this data, there's still a massive discrepancy as to what transparency actually is. So it's great that the folks that we elect keep that in mind. We elect these officials that are using the laws to make sure that we can get transparency rules in force. CMS to date has only issued two, maybe it's changed since I last heard, but two fines, penalties to hospitals, 500 letters. Oh, it's four now, but we have some, what, six 8,000 hospitals in the us. So the enforcement of the transparency rules is lacking at this point.

Melissa Bartlett (07:04):

Yeah, and I would say if I could just pick up off a few points that Peter made. The first is yes, and so what the house bill includes language that would essentially codify the hospital transparency rule and make it teether in its penalties and its enforcement and its reporting inquirer.

Peter Freska (07:26):

It's a technical term, right? Teether?

Melissa Bartlett (07:27):

Yeah, it's a Washington term teeth year. And so the hope is for members of Congress that with a little bit more than it being in the statute, that perhaps four will jump to 400, or maybe because of the threat of great penalties, everyone will start reporting meaningful data. I don't know which leads to my next point, which is what good is. I think one of the things that Eric, what we have been saying and that largely in the context of the need for more PBM meaningful transparency and accountability reforms is that reporting for reporting's sake does nothing. Right? And so what large employers, and I probably don't need to tell many of you this, but what are the experience for many plan sponsors has been in terms of accessing data from their service providers, from their plans or PBMs in terms of the data, is that it's not really all that transparent or meaningful, right?

(08:48)

And so you can get a whole bunch of data, but if it's not accurate, if it's not to date, if it's not complete, what is it for? So if it's not informative, if it's not relevant, if it doesn't help you to make the decisions that you need to make, and in the case of self insured or self-funded ERISA health plan sponsors, they're under a fiduciary duty to protect plan assets and to basically do right by their plan participants. They take that duty very seriously. So they need to see the data. They need to see how decisions are being made on how the investments of the plan assets are being determined for the health benefits of their workers. And either the data is incomplete, the data is not there, or it is inaccessible to them by their own contracted partners. And that's a real frustration. And so out of all of this, it's not enough just to require people to be transparent and report information or report data. It has to be the right data. It has to be useful data. It has to actually do something that will lead to lower costs and lead something that will allow employers to make the right types of decisions they need to really direct good decision making in terms of being able to provide affordable healthcare for their workers.

Peter Freska (10:33):

Melissa, you're right on with this data, because the tranches of data that are being released by the healthcare, the hospitals, the health systems as well as the insurance companies are massive amounts of data. So unless you have big data computing capabilities, it's very hard to really boil it down to the simple level of, okay, we have scripts here in San Diego. We have Sharp, who's got the best cost for a hip or knee replacement or a cabbage coronary artery servicing, so called servicing like you're taking in your car to the shop, who has the best price and who has the best quality? If Scripps charges 30% more, 40% more, do they really have the better clinical outcomes on those services? Is it worth paying anywhere from 45,000 to $400,000 for that coronary artery bypass surgery? That's the variation that we see in this data. And there are companies out there that are trying to pull this data together. If you haven't heard a company called Trilliant Health, they're pulling this big data together and really trying to drive and say, okay, if you're in San Diego or if you're in Chicago, if you're in the Orlando markets, let's look at what those services really cost and how then as an employer could say, Hey, we want to send our folks to the right place for the right price for the right clinical outcome because healthcare, we don't have that transparency yet. We're working on it, but we don't have it yet.

Melissa Bartlett (12:15):

Yeah, and I would just say hot off the presses yesterday, I was just checking my notes, but one area where there's been some frustration around being ready to really report full and meaningful data has been in the transparency and coverage rules as well as the consolidated appropriation act, transparency requirements for health insurers and whether there would be duplication and multiple reporting streams, and then what cost does that add to the system ultimately that employers and end users will have to bear and will it be meaningful data and how many different reports are going to be generated, et cetera, et cetera. And the government's been hard at work trying to create the systems and make it all work. And for the last couple of years, I guess the plans have been given a pass the health insurers on reporting prescription drug data. And yesterday the Department of Labor announced that the pass is over and that health insurers will now be required to report prescription drug pricing data as well publicly, and that they don't see that there's any duplication with the other reporting requirements that have been enacted.

(13:45)

So you're going to see a lot more drug pricing data, I think coming out into the market, which is interesting when you also think about how much attention has been paid and how much political attention is paid to the IRA's Medicare prescription drug negotiation and knowing what part D prescription drug costs and prices are and the role of the government in negotiating drug pricing. Now as employer sponsor plans, I don't have much to say about that. Our workers are obviously in the commercial market, but I will say that now we're seeing as of this announcement tomorrow, you're going to see a lot, I mean the commercial market, if anyone wondered the number that Eric uses when we talk about and when we talk to members of Congress and the agencies, I believe it's like 178 million people get their insurance through employer sponsored plans in America. So it is way exceeds the Medicare population, the Medicaid population, the individual population. So

Peter Freska (15:11):

Interesting twist on that, if you don't mind, Melissa, is there, we have, it's being referred to as the silver tsunami. We have about 10,000 people a day turning 65. And so the commercial insurance model where there is that 170 ish million folks, all of your employer or employee lives insured through the commercial space, estimates are saying that that is a declining population as people age out of the workforce with the silver tsunami continuing 10,000 a day through 2029, 2030, and then the population that's coming in, the babies that are born about 10,000 a day, about half of those are going on Medicaid versus commercial insurance. So we have about a 5,000 life discrepancy that's gradually happening over time when we look at all the data, look at all the numbers. So of course the commercial insurers, which have had a boon over the last several years are concerned about that.

(16:09)

But all that to say, back to the pharmacy piece of things, drug costs continue to rise. And one of the things that we don't really talk about publicly is that 80% of the pharmacy market, the PBM market is controlled by three companies. You guys know the names, do you Optum CVS and Express Scripts? Did I miss one? No, those are the three. And they control about 80% of the market. So if you say I'm using Express scripts or some other Smith Rx or some of these other PBMs that are out there, they're still being backed up and serviced by maybe Optum or most of them are. So with that much market control, it'll be interesting to see how all of this plays out with new pharmacy rules and transparency and negotiations that happen because there is a massive amount of control in a very small section of the economy.

Deanna Cuadra (17:11):

It sounds pretty bleak.

Melissa Bartlett (17:14):

It's not all terrible.

Deanna Cuadra (17:15):

US healthcare tends to sound bleak. So I want to then ask for the benefit leaders in the room, for the HR leaders in the room, what are some solutions employers can seek? Right now, no one can predict what policies are going to come through. Congress certainly is never in a rush to do anything. How can employers take advantage of little crumbs of transparency that we do have?

Melissa Bartlett (17:44):

Do you want to start with this one since I started last time? Sure.

Peter Freska (17:47):

So when we sit down with a lot of what we talk about is understanding the risk that they have, and we really think employers should change the conversation from, oh, how much am I spending on healthcare to what's the highest best use of their healthcare dollars? If you're spending a million dollars or 10 million or a hundred million depending on your organization, those dollars need to be spent properly. When we look at organizations like the, used to be called the Pacific Business Group on Health or Premier Business Group on Health, they picked out four centers across the country to do hip and knee replacements. And employers that are in those organizations can have a plan that says you're going to go to heck Kaiser of all places at Sand Canyon right here in Irvine, California, just up the road a couple hours up the road for a hip and knee.

(18:38)

You can go there and it's not going to cost you anything out pocket, but if you go to your local hospital, Baylor Scott in Texas or wherever you are, you're going to pay your co-insurance and copays. It's going to cost you a significant amount of money to get that hip and knee replacement. So what we see is the data, if we back into that data question we were talking about a minute ago, if we can look at the data and say, okay, these facilities are getting the best clinical outcomes, let's guide your patients there. Let's look at what we'll call domestic US domestic tourism in healthcare. Let's go to the Oklahoma Surgery Center for that shoulder that they warranty actually, or that hip knee that they warranty. Oh, and their prices are posted online for that service right now. You can go look up how much does it cost to get your hip replacement and they warranty those services.

(19:30)

Why do we have this in when we take our car in for service, but we don't have it when we go in for service, there's no transparency in how much it's going to cost me because I'm used to paying that copay, that deductible, that co-insurance, oh, when I have a $5,000 or $10,000 out-of-Pocket max. So when we're talking to employers, we want to make sure they understand where their dollars are being spent. That's where we really believe even smaller employers, those under 500 employees can really look at captive health insurance, where they get transparency in what they're spending on their healthcare versus the fully insured market where they don't have that transparency. And so really sitting down and understanding the risk that they have using a variety of AI tools, gradient AI, for example, GRX, there's a variety of tools that we can utilize with your population to understand where their drug spend is, where their healthcare spend is, and what the predictive modeling will show. So it goes back to the data and using the tools that are available to you.

Melissa Bartlett (20:35):

Yeah, I don't know that I have any real granular examples to give you other than to keep your eye on some of the vertical integration that's happening among your PBM and service providers and to ask the questions about, again, getting to the data, but obviously biosimilars is a very important, effective cost saving tool for many of your employees. However, given vertical integration, which I think Peter was alluding to with the three big PBM companies in the market right now, they're all actually part of and under the ownership of three large for-profit health insurance companies, they each sort of track up, right? So CVS is part of Aetna, Optum is part of United and Express script. Express Scripts is part of Cigna. And then when you look further, each of those sort of parent insurance companies also have subsidiaries that are specialty pharmacies maybe or primary care groups.

(21:55)

And so you really start seeing this whole ecosystem that evolves around one privately held company, one privately held company, and that's when you get into the patient steering. And that's where employers, our members are very concerned because you don't see the data, so you don't really know what's going on, but you have a sense that perhaps decisions are being made around coverage of drugs, tierings of drugs, which pharmacies patients are being steered to based on some of that ownership interest. And so questioning, well, are my workers getting adequate access to biosimilars? Asking those questions, seeing where are my workers getting their primary care? Are they in network? If they go outside of these partnered groups, then those are important questions. I think all employers should be asking right now because it's really easy to just see the pretty slide from folks that package it up and they say, look at all this money we're saving you over here. But behind all of that is really a whole business model that's probably happening, and it's very important to ask those questions.

Peter Freska (23:15):

What's interesting as employers, it's kind of scary because the workforce is the workforce and you start using terms like steerage or narrow network or all these different things. Like you can only go to this pharmacy to fill your drugs. Like, well, employees get scared and HR teams get scared as to how employers are going to react. So it is a balance. You need to continually evaluate what the best thing is for your organization, and it could change year to year. The last few years, a lot of stuff changed. Telehealth became much more prevalent across the entire world, 4000% increase. And so when we look at working with employers and how we can create these transparency models so that they know what's going on so that the employees know what's going on, we try and bring in both the cultural impact of your employer, your employee group, how it's going to impact them and their families, and everybody that is insured, as well as that economic, the financial piece of you as the employer that's paying the vast majority of the cost as it comes to healthcare. So where are these dollars being spent? Kind of to my earlier comments.

Deanna Cuadra (24:34):

Alright. Well before I possibly dive into my last question, I want to give the audience a chance if they have any questions for our panel, it's healthcare. So any question would be valid, a valid question going once, no questions, going twice. Oh.

Audience Member 1 (25:01):

Hi there. You talked about how the number of people, there's the silver tsunami, right? We have a lot of people going onto Medicare and then not nearly enough people coming onto commercial plans given people on Medicaid and stuff like that. So for employers, what kind of role do you see them playing in addressing some of these healthcare costs? Because I think sometimes the thing that we see, at least on the consultant side is that employers can sometimes be receiving plans, be receiving innovation. What can they do to drive things? Because with more and more technology and virtual delivery companies, there's more suppliers of healthcare services, there's fewer commercial lives and there's just more and more pressure, I think being put on the actual providers of healthcare which could benefit employers because they're now more in the driver's seat to really put these things to their advantage, get more value and decrease some of the costs that they're spending.

Peter Freska (26:02):

I can start with that. I think the biggest piece that I would hope and pray for with employers is don't accept the status quo. We sit with employers all day every day and be it the CFO to CEO to CHRO, whomever it might be, they're concerned rightly so in many respects, to make that next step to provide something that's different than what they've been doing for the last 5, 10, 20, 30 plus years. So if employers can embrace change and embrace what's coming now, then they're going to be ahead of the curve. So don't accept status quo. Expect more of your consultants, your carriers, your network providers, drive them request and require them to provide you more to do more because you're the ones that are controlling the purse strings for them. You're the ones that are really in charge. And you have to, as an employer, make sure that you are the one in charge and so many times status quo wins out versus what is really going to make a difference for the future of your employees.

(27:16)

I was on a renewal call with an employer about 2,500 employees. They finally moved self-funded just a year ago, and they are trending flat zero. We talked to the CFO about contributions and we're saying there's no reason to contribute. They're actually trending better than expected. So that's a 2,500 multi-state employer. Same situation holds true with small employers with 30, 40, 50, a hundred employees. Again, don't think that you have to be the Boeings of the world or Disney's or whatever that is to have these programs. These programs are available down market to everyday closely held companies because those are the ones that are really making the difference. 99% of companies in the US are 500 or fewer employees. So that's the focus that we really need to look at as to how they're going to make a difference for that 170, 180 insured lives, really how to provide them healthcare versus just spending on having a health expense. Sorry, anything to add?

Melissa Bartlett (28:23):

Yeah, I don't have much to add to that other than I think I would probably get back to, I guess my last comments, which was what should you be generally aware of and thinking about in terms of what kind of keeps me up at night and thinking about the employer market and what's to come? And I think about right now, I field a lot of calls from our members that are concerned about the gag clause, attestation requirements that are coming at the end of the year and not feeling comfortable because when despite being much larger than 2,500 people, they don't have the power you would think to be able to go to their very own contracted partners to say, Hey, I need to know, I need to see the data, how you made these decisions because I have to sign my name. I have to sign an attestation to the government that I say, this is all on the up and up.

(29:33)

And that's kind of a scary thing. I mean, that's you as a person, but it's also you as a company. And that's a very real liability. And I worry that in this climate around transparency, that everyone is sort of in their transparency hole. The hospitals are fighting on the hill now saying, don't put more transparency requirements on us. The plans are saying the same thing, the PBMs are using every dollar in their might, and they have a lot of dollars to fight politically to kill these bills. And in the meantime, the employers are just saying, Hey, we just want to get the information we need that we're required under law to have to be able to sign our names on forms to give to the government much less. Is it actually a good thing for us to have because we could actually lower cost or make better decisions, like in your case, the smaller guys about better models of healthcare for our employer.

(30:31)

So I track a lot of the lawsuits that have been filed around the country recently and are reported on, and they're all about employees, attorneys that have determined that they're going to find workers that are going to sue the plan on behalf of the plan beneficiaries because some PBM or some service provider has made a decision on behalf of that employer plan sponsor to cover a drug or to overpay a network of providers or whatever. And the courts always say, you know what? That's not their responsibility because they're not covered under ERISA. They're just a contractor to you and there's nothing you can do about it. And if ERISA were ever to fall for national employers, God help us all. So that's what keeps me up at night. So I'm really hoping that we can get to an equilibrium where we get the data we need to ensure that plans are operating the way that they need to ensure that plan assets are robust and employees are getting the best affordable healthcare that they can get.

Peter Freska (32:05):

Everything you said is, I agree with plans need to do what they can. I'll be the one that say, I think we still have one of the best healthcare systems in the US for many reasons. We have some of the best doctors in the world, we have some of the best facilities in the world, we have the best drugs in the world. The question isn't, do we have the best of these things? It's how do we best access them and how do we pay for it responsibly? And as employers, that falls onto you because you're insuring more than half of our population in the commercial plans. So we need to continue to drive forward and make those hard decisions that break this status quo that we've been in. So we're not sitting here 10 years from now saying, oh yeah, insurance costs went up, health insurance costs went up. Another a hundred percent.

Deanna Cuadra (33:01):

Alright, well that's all the time we have for today, but I want to thank Melissa and Peter for a great conversation and thank you you guys for joining us.

Melissa Bartlett (33:10):

Thank you.