Writing about what is new in health care is not really a challenge. The relentless pace of mergers and acquisitions has continued from 2017 into 2018, and the deals seem more far-reaching and impactful.
We have gone from hospitals becoming health systems and buying up local physician practices to megadeals like the recent announcement that health insurance giant Cigna plans to buy pharmacy benefits manager Express Scripts for $67 billion. That is a lot of hydrocodone and Prilosec.
For many years health care was a local business. Unless facing an unusual diagnosis or rare condition, most people stayed close to home when seeking care. Hospitals were typically one of the larger employers in a community, and physicians were organized in independent practices based on their specialty. If you needed medicine, you relied on your local pharmacist.
But in today’s integrated models, each step of the treatment process is controlled by the health system.
And there are some advantages to this integrated model of care. Test results and outcomes of visits with specialists are more easily viewed by the treating physician and can speed up the treatment. Integrated delivery systems also can detect situations where conflicting drugs are prescribed or too many drugs have been prescribed.
Considering the recent trend of drug addiction and death, this is a real positive. Supporters argue that all these advantages will improve the health care experience for the patient and lead to an overall improvement of the health of the community.
The mantra today seems to be bigger is better. But is it really?
Half of all medical expenses in the United States are paid for by employers, and their struggles to control costs are well documented. But each year they continue to pay more.
This is why big companies like Berkshire Hathaway, Amazon and JP Morgan are entering the health care space to try to create solutions for their own employees. The good news for them is that they are very large public companies, and they will be able to work with their choice of vendors to create fixes that work for them.
But what about the average employer? What is out there for them?
We know that the average employer in Lancaster County has 84 employees. As these megadeals continue to dominate our market, the number of options for health insurance coverage has dwindled. These megaplayers also have very smart people helping to make sure they succeed.
The other disturbing trend in the pharmacy space is that people are finding it cheaper to pay cash for their prescriptions than run them through their pharmacy benefit plan.
A recent study by the University of Southern California Schaeffer Center for Health Policy & Economics found that in 2013 consumers overpaid for their prescriptions 23 percent of the time, with an average overpayment of $7.69 per transaction.
The study analyzed purchases by 1.6 million people over a six-month period, and the total overpayment was $135 million. This money is going from your pocket directly to the pharmacy benefit manager. Where is the accountability?
There are no easy fixes to these challenges, but understanding the painful points can be very helpful to creating working solutions.
That is why the Central Penn Business Group on Health so strongly supports both price transparency and data analytics. If you really understand where your costs are coming from, you are in a much better position to work on solutions.
And, while we are not Berkshire Hathaway, Amazon and JP Morgan, aggregating the data for our region will give us the insights we need to work together on equitable solutions for all stakeholders.
• Diane Hess is executive director of the Central Penn Business Group on Health, an affiliate of the Lancaster Chamber.