The Providence Business News Health Care Summit provides an opportunity to, as one speaker said, “look at the forest rather than the trees.” Here are several observations of the event.
The first is that Rhode Island is fortunate to have sophisticated physician groups practicing evidence-based medicine that eliminates low-value services where appropriate. These important clinical initiatives range from the Care Transformation Collaborative-Rhode Island that is helping to reorganize primary care practices, to the Rhode Island Quality Institute’s work on developing a functional health-information exchange.
Rhode Island also benefits from engaged health insurers and government, brokers that work effectively with employers, and businesses providing financial support for many of these initiatives while offering wellness programs to their employees.
The second observation is there seemed to be agreement among the panelists that although the rate of increase in our health insurance premiums may have moderated under the Affordable Care Act, affordability remains a major challenge. This belief is supported by data from the Kaiser Family Foundation showing Rhode Island family health insurance premiums rose from 16 percent of median family income in 2006 to 22 percent of median family income in 2015.
The 2016 results will be released shortly, and given that median family income does not increase rapidly year over year, it is safe to assume that the trend has not been reversed. Additional support came from comments made during the summit that more than 85 percent of the individual insurance sold on HealthSource RI requires subsidy.
The third observation is that many of the panelists felt they have far more clinical metrics than they have metrics measuring cost. Yet many recognize fee-for-service payment continues to increase premiums.
The fourth observation is that even when speaking about affordable health insurance, hospital costs remained an “elephant in the room.” Two panelists did mention “hospital consolidation” and the “institutional impact” without going into further detail.
Hospital consolidation is an important issue because current research demonstrates it leads to higher prices. The “institutional impact” is also important because hospital costs represent almost 50 percent of the delivery-system expenses covered under health insurance premiums, and hospital overhead costs represent approximately 50 percent of total hospital expenses.
Almost five years ago, the R.I. Executive Office of Health and Human Services commissioned a study that concluded Rhode Island has 200 too many hospital beds. The study’s finding is also supported by the fact that, on average in 2016, hospitals across the state experienced an occupancy percent in the low 60 percent.
The PBN summit showcased a robust array of clinically focused activities directed at improving quality, reducing low-value care and reducing use of high-cost services such as hospitals. The summit also highlighted important strategies involving changes in health insurance benefits and wellness programs offered by employers, insurers and benefit professionals.
These efforts need to be augmented by an equally robust array of activities focused on reducing hospital overhead costs that will strengthen hospitals and contribute to health insurance prices people can afford.
Albert Charbonneau is executive director of the Rhode Island Business Group on Health. Previously, he was a CEO and chief operating officer of urban and rural hospitals.
