Armed With Transparency Data, Purchaser Groups Focus on Rising Prices

by Peter Johnson

 

Amid growing medical cost trend and broad fears of inflation, two major purchaser groups have unveiled initiatives to coordinate plan sponsors in an effort to lower health care prices. Managed care experts tell AIS Health that purchasers’ frustration with high prices are valid, but they don’t expect prices to come down any time soon with inflation and other macroeconomic trends set to wash over the health care sector.    Price transparency data, studies could enable new action   The National Alliance of Healthcare Purchaser Coalitions (NAHPC) recently released a “playbook” white paper for regional purchaser groups and employers seeking to rein in price increases. NAHPC’s largest member, the Purchaser Business Group on Health (PBGH), also rolled out a new plan to manage costs.  Mike Thompson, president and CEO of NAHPC, tells AIS Health that newly available price transparency data and prominent pricing studies by the RAND Corporation and the National Academy of State Health Policy (NASHP) prompted the white paper, which summarizes various cost control strategies and endorses policies such as state hospital price regulation through public utility statutes.  “We’ve got unprecedented information on what’s happening with hospital prices, both in terms of where they’re at and how high they are, and how they vary by hospital, as far as what do they actually need to manage their operations. It’s quite astonishing to see the gap between what they need to break even and what they’re able to charge or have been charging in the commercial sector, particularly to employers and plan sponsors,” Thompson says.   The goal of the white paper, Thompson says, is to “help [plan sponsors and purchaser groups] understand what their rights and responsibilities are as fiduciaries [and] giving them a clear understanding of what [pricing information] is available,” while also helping them know “what are our options from a market standpoint or a policy standpoint?”  Survey: Plan sponsors are worried about rising prices  There appears to be a good deal of concern from plan sponsors regarding health care costs. According to a new survey by consulting and brokerage firm WTW, 67% of U.S. employers “plan to prioritize controlling rising healthcare benefit costs over the next three years.” “We have had a problem with overall prices in the United States, which has been getting worse for two decades,” says Jeff Levin-Scherz, M.D., population health leader at WTW and an assistant professor at Harvard’s School of Public Health. “Despite the fact that this is a huge problem, a huge concern, we are still seeing high prices and increases of prices — and, frankly, the result of the pandemic is going to make things worse.” Levin-Scherz isn’t surprised to see a renewed focus on pricing from plan sponsor groups.  “I think that an issue that plan purchasers have had for a long time is, it’s relatively hard to compare prices. There are a whole variety of reasons why it’s getting easier,” he explains, naming recent regulations mandating health care price transparency as perhaps the biggest. “Over time, I’m hopeful that some smart people are going to make these much more accessible, and that will help exert some downward price pressure on the providers that charge the most.”

 

From Health Plan Weekly

 

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