This week during our Tennessee House Insurance Committee chaired by Robin Smith we listened to testimony from Dr. Van Horn, an Associate Professor of Management (Economics) and Executive Director of Health Affairs at Vanderbilt Owen Graduate School of Management. Dr. Van Horn spoke passionately about the need for more transparency as a part of health care reform.
You may recall this past summer, President Trump issued an executive order on healthcare price and quality transparency, much of it due to the insights and analysis offered by Dr. Van Horn. The professor was also on hand at the White House last summer for the announcement of two new rules requiring hospitals and insurers to make their negotiated prices public.
Sadly, many hospitals and insurance companies are doing everything they can to force the Trump Administration and the Centers for Medicare & Medicaid Services (CCMS) to stop their plan to force negotiated price disclosures.
Many hospitals and insurance companies believe the president’s proposal to make hospitals post their prices for medical services would be bad for business and patients. Fortunately, economists and patients themselves see price transparency as a good thing—after all, who purchases a dinner, a home, clothes, or a car without first knowing what the price is and possibly shopping the competition for a better deal.
During his presentation, I had the opportunity to ask the professor a few questions: “Dr. Van Horn, my late father who served in WWII often used the term ‘cattywampus,’ have you ever heard that term? How has our healthcare system become so, cattywampus?” There was a chuckle in the crowd (I thought everyone knew what cattywampus meant). I went on to explain how Nashville and Middle Tennessee have become hubs for healthcare with great hospitals and many innovative healthcare startups, but we still have problems.
I went on to explain how my family has been personally affected by the high cost of healthcare. First, I shared the story of my sister Vickie, who is in a nursing home with three others in one room at a cost of $6,000 each month and has lost
EVERYTHING, and how her insurance company that started with an “H” wasn’t there for her despite her having faithfully paid her premiums. I explained that we are taking care of my 88-year-old Scotch-Irish mother and that she doesn’t want to go to the doctor because of what she refers to as a ‘racket’ (However, I do appreciate Dr. Patterson and Dr. Sing who have provided great compassionate care to her).
Across our country, patients are frustrated with the increased costs and lack of transparency within our health care system and are asking for solutions.
Can anyone think of a worse business model than our current healthcare system? When an entire industry is afraid to disclose their prices, common sense tells me they have something to hide.
Last year I contacted Ralph Weber, CEO of Medibid Inc. and author of several books, including Rigged: How Insurance Ruined Healthcare (and how to fix it). I called Ralph to ask for advice and his thoughts on what we, as a state, could do to improve our healthcare system. That is what led to House Bill 1366 on referenced-based pricing, which we feel has the potential to save the state’s taxpayers $80 to $100 million dollars.
Ralph has served on many healthcare panels, including one I attended a few years ago in Nashville with Newt Gingrich, who served as the 50th Speaker of the United States House of Representatives.
There is no doubt a lack of transparency in our healthcare system today.
Maybe that explains why BlueCross BlueShield of Tennessee has filed an antitrust lawsuit against our state’s executive director of the Department of Finance & Administration and 100 state employees in an attempt to block the release of 2018 claims data related to the state’s employee health plans by Chairman Martin Daniel — a move they believe violates their contract with the state along with several federal laws.
Chairman Daniels watched testimony of House Bill 1366 when it was presented by Ralph Weber a few months ago. Our office made similar requests for information and thankfully, Chairman Daniels, who is known as a “bulldog” when it comes to getting answers, signed onto the legislation and started asking questions. Martin, myself and a few other lawmakers were concerned upon learning that on examination of state employee claims revealed an “extraordinary difference in claims paid for similar services.” (See BlueCross Lawsuit article by Nashville Post: https://bit.ly/2xbalmX)
Ralph’s testimony pointed out many disparities between claims within our state’s healthcare plan and showed various outliers. I recently read the story of James Schlieper in a CBS report, who drove five hours from Central Texas to a surgery center across state lines for his hernia surgery —a procedure his catastrophic insurance wouldn’t pay for. The local hospitals back home quoted him cash prices of over $30,000. Schlieper went online and found the Surgery Center of Oklahoma’s cash price was roughly $3,000.
“It’s like [the] a la carte menu at a Mexican restaurant,” Schlieper said, laughing. “It’s great. What do you want? That’s how much it costs.”
Rising healthcare costs, lack of transparency, suppressed competition, our aging Baby Boomers and the need for better healthcare outcomes is at a crisis level. As individuals age 65 and older spend, on average, three times more on healthcare per person than working-age individuals and five times more than children, it is clear that this path is totally unsustainable.
In 2018, President Trump said, “We should also require drug companies, insurance companies, and hospitals to disclose real prices to foster competition and bring costs down.”
I am proud that President Trump initiated a campaign on ways to drive down drug prices and find savings for patients. Ironically, right after the President made the announcement, more than a dozen major drug makers enacted price freezes, rollbacks, and price reductions. His administration’s efforts helped to lower prescription drug prices for the first time in nearly 50 years.
In 2018 President Trump signed two pieces of legislation into law, both measures, the Know the Lowest Price Act and the Patient Right to Know Drug Prices Act, aim to end the drug industry’s so-called gag orders of pharmacists, which prevent them from discussing cheaper price options with consumers. These price options include discussing whether a medication may be less expensive if using insurance or paying out-of-pocket.
Although there is considerable amount of work to do regarding healthcare. It’s an issue that sooner or later, we will all face in our lives.