Executive insight on rising health care costs lacking

The pandemic may have contributed to skyrocketing health care costs around the country, but local health care officials seem incapable of discerning exactly why prices for medical care in the Nutmeg state’s largest cities were higher that the national median or in New England, except to blame others for the problem.

The issue was on full display Wednesday during an Office of Health Strategy hearing on the high cost of medical care in Connecticut where Stratford resident Margaret Lewis’ voice swelled with emotion as she testified.

A former marketing executive until she suffered a stroke in 2015 at the age of 55 and was forced to go on disability, Lewis said she is fortunate that her husband has a job at Sikorsky Aircraft and that the couple has health care coverage.

That coverage comes with a deductible. So early in 2021, when Lewis went to pick up a prescription for the drug Entocourt, she knew it would require an out-of pocket payment because she and her husband hadn’t met their deductible yet for that year,

What she didn’t expect was the $3,000 charge for the drug, which she needs to properly digest food. Though she ultimately ended up finding a way to lower the cost, Lewis said her experience illustrated that the cost of health care in Connecticut “has gotten out of hand.”

“Why is the cost so high for something that is necessary for the life, the existence of Connecticut consumers,” Lewis said of prescription drugs. “I was desperate to keep myself alive and having to choose between paying for a prescription or paying for food, rent or a mortgage is an unfair choice. There is something wrong with our system; there has to be a way for all of us to work together (to fix it).”

Michael Bailit, president of a Needham, Mass. health care consulting firm that bears his name, told OHS officials that health care prices for Connecticut metro areas in 2020 were higher than the national median for 189 cities across the country as well as Boston, Springfield and Worcester in Massachusetts and Providence, Rhode Island in New England. The average health care premium for family coverage in Connecticut is $24,000 a year, Bailit said.

But despite higher commercial costs and Medicaid investment by Connecticut hospitals, “we can not say that the quality of care here is better than those other two states,” he said.

“High health care costs are an access problem, Bailit said. “They are not just a financial problem.”

But a full day’s worth of testimony that included representatives of insurance companies, two Connecticut hospitals and a pharmaceutical executive, yielded little in the way of detailed potential solutions. The hearing participants were asked to take part in the hearings because the Office of Health Strategy had identified their industries as being primary drivers of rising health care costs in the state.

“We have been trying to cut health care costs for decades  and we’re still not able to do that yet,” said State Sen. Heather Somers, R-Groton, told OHS officials. “There is no easy single way to do this and say we’re going to fix everything.”

What the hearing did produce was a good deal testimony in which those testifying blamed other segments of the health care sector for being the primary drivers of rising health care costs in Connecticut.

“I’m a little struck by the (lack) of accountability your organizations have for your role in this,” Deidre Gifford, executive director of the Office of Health Strategy, told insurance industry representatives. “There has been a lot of finger pointing here. We have an expectation of vigorous participating from all of you because we need action.”

Chris Mancill, a senior vice president with pharmaceutical giant Bristol-Myers Squibb, said drug makers provide “extraordinary savings” to health care organizations in the form of rebates and discounts on what the list price of any drug is. 

“Few of the savings that these middle men see through the discounts and rebates provided are passed along to patients,” Mancill said. Mancill blamed Connecticut’s high cost of health care on what he referred to as “insurance design problems.”

“Co-payments are dramatically higher than what they should be,” he said. “We recognize that medicines are only helpful if patient can (afford to) access them. And insurers require individuals to go through multiple therapies before arriving at what the doctor and patient wanted to do in the first place.”

 Those testifying also said COVID-19 has been a factor in the rising health care costs in the state.

Duncan Stuart, president of Aetna’s New England Market, said staffing shortages associated with the pandemic have driven up hospital costs.

“In an operating room, during the time you are talking about (2020 and 2021), you’re paying more for all the nurses there, than you are for the doctor,” Stuart said.

Dr. James Cardon, Hartford Healthcare’s chief clinical integration officer, said officials there “spend everyday thinking about the cost of care and what is actionable.” 

Gail Kosyla, chief financial officer with Yale New Haven Health, said one reason why Connecticut’s health care costs continue to rise is because many patients are more sickly when they are admitted to hospitals than they were before the pandemic.

Both Kosyla and Cardon said hospital consolidation in Connecticut hasn’t driven up health care costs in Connecticut as a result of reduced competition. Patients actually benefit from the efficiencies created by consolidation among hospitals, Kosyla said,

Yale New Haven Health is currently seeking approval from the Office of Health Strategy for its $400 million plan to acquire hospitals in Waterbury, Manchester and Vernon from Los Angeles-based Prospect Medical Holdings. And Hartford Health Care is the midst of a court battle with St. Francis Hospital and Medical Center, which sued its larger competitor for alleged anti-trust violations.