In healthcare it is common knowledge: the remedy for any malady first requires an admission there is one, followed with as much information as possible to identify, classify, and quantify symptoms so progress can begin toward a cure.
The same is true for Connecticut’s complex, costly, and sometimes inefficient healthcare system, a network of doctors, specialists, other professionals, hospitals, clinics, other facilities, and insurers, upon which residents rely for preventative , restorative, critical, and emergency care services.
Flaws in Connecticut’s healthcare system must be acknowledged, identified, specified, and categorized before any meaningful remedy is possible. That requires a level of transparency not yet seen in Connecticut.
With that in mind, the state Office of Health Strategy (OHS), in compliance with Governor Lamont’s Executive Order No. 5, issued in January, is working to document the growth of healthcare costs to establish benchmarks to help control that potentially crippling variable. The order also requires quality benchmarks so that reducing the rate of cost growth is checked alongside optimizing the equality of healthcare and well-being in Connecticut.
Connecticut’s work is based on that of states that already have in place or are developing benchmarks. This work is done in public meetings with advice from a wide array of stakeholders including state agencies, employers, consumers, insurers, foundations, and providers.
Connecticut ranked sixth nationally for healthcare spending per capita between 2005-2019. For a family of two adults and two children, the cost of healthcare rose by nearly three and a half times the median wage increase. While Connecticut ranks well, generally, in healthcare surveys, underneath the surface are major affordability and quality issues, particularly for people of color. The current system includes built-in disparities based upon race, culture, ethnicity, income, and geography that lead to poorer healthcare quality and health outcomes, at significant expense.
When a family spends half its monthly income on housing and childcare – as is typical, according to the Self-Sufficiency Standard for Connecticut 2019 – and then as much as a third of what’s left for healthcare, there simply are inadequate funds for groceries, clothes, transportation, utilities, incidental expenses, discretionary spending, or saving.
Consider the case of a self-employed, Type I diabetic patient who pays $2,700/month for health insurance – under a COBRA arrangement – and finds it justifiable, because it covers an insulin pump, monitor, and prescriptions that would otherwise cost her much more than $2,700/month.
When the patient learned that a medically necessary procedure was ‘excluded’ from her coverage, she asked multiple providers what it would cost her, and all charged nearly the same amount, $20,000. The patient could not get anyone on the phone to answer questions, and wondered whether to use her retirement savings to pay for the procedure. Her $2,700 premium is not atypical because the cost of her coverage is tied to the prices charged for healthcare services, prices that are mostly shielded from public view and growing at a rate that is unsustainable, particularly for prescription drugs.
Spiraling, unpredictable healthcare costs and resulting volatility also undermine economic viability more broadly. When healthcare costs grow faster than the economy, wages remain depressed, employers may offer lower-cost, less comprehensive coverage, and workers pay more for coverage – and then have less money available for anything else. Employers consistently raise the issue of affordable and high-quality healthcare as keys to securing a stable workforce and locating their businesses in our state.
To try and save money, some Connecticut families currently engage in ‘care rationing’ to avoid necessary treatment, risking deteriorating health and more expensive treatment instead.
On a larger scale, governments may cut discretionary spending to cover growing healthcare costs for employees, retirees, and dependents. The current coronavirus pandemic, challenging the state’s healthcare system and taxing its ability to cover costs, provides a valuable case study. In Connecticut’s eventual recovery, benchmarking the rate of cost growth control will be crucial, as will more efficient use of finite healthcare resources, and improved health and well-being for state residents.
To this end, Executive Order No. 5 also requires the state to set a statewide primary care spending target to: prioritize well-care visits, early detection, timely treatment; to support investment in technology such as telehealth and electronic health records; to make it possible for primary care providers and patients to address health-related needs, not typically thought of as healthcare, like housing and transportation issues, that lead to poor health outcomes and costlier healthcare, and; to coordinate healthcare by including other providers on their teams, such as community health workers pharmacists, behavioral health providers, and nutritionists.
While benchmarking is not a cure-all, it is a viable long-term strategy to launch transparency into healthcare costs and quality. OHS cost growth and quality benchmarks will usher in unprecedented transparency and oversight among all stakeholders. The resulting scrutiny should provide incentives to reduce inefficiencies, rein in excess administrative costs and help shape a better healthcare delivery and payment system.
Slowing down the rate of growth of healthcare spending while improving quality and increasing our primary care investment should increase longevity and effectiveness for Connecticut’s healthcare system – it is also the key to sustained economic vitality going forward. Setting benchmarks will pay dividends on both counts.
Victoria Veltri is Executive Director of the Office of Health Strategy.