A one-of-a-kind website demystifies the shadowy realm of healthcare pricing and competition.
In 2015, healthcare expenditures in the United States exceeded $3 trillion, a whopping 17 percent of gross domestic product and the highest price tag in the world by 50 percent or more, according to a recent Commonwealth Fund report. There’s no easy fix. But UC Hastings’ Jaime S. King and Anne Marie Helm aim to make a difference by documenting the complex forces driving healthcare costs on the independent, nonprofit website The Source on Healthcare Price & Competition.
“We want The Source to be a catalyst for change—a one-stop shop for information that can help people see the bigger picture, whether they’re doing research, drafting policy, working on litigation, or are just curious about our incredibly complicated and dysfunctional healthcare system,” said King, co-director of the UCSF/UC Hastings Consortium on Law, Science & Health Policy and the site’s executive editor.
An initiative of the Consortium, The Source provides up-to-date coverage of health pricing news and analysis. The depth of the site’s content reflects the complexities of the U.S. healthcare system—where the players include insurers, providers, legislators, regulatory agencies, employers, trade unions, consumers and the courts.
“It’s a challenge to stay on top of it all,” noted Helm, the site’s managing editor. “That’s where we come in. This is a shifting time in healthcare, so we try to highlight key events, trends and research and make them accessible to our readers. Major insurance companies are attempting to merge. Health systems and providers are consolidating. States are moving to have an impact on insurance prices and on price transparency.”
To read everything on The Source could take weeks, but visitors can get an overview on its blog, which spotlights major events and other notable news, and offers a monthly roundup of must-read articles and reports.
One of our goals is to help people think three or four steps ahead instead of reforming healthcare pricing one move at a time.
“Sometimes, it’s like a game of policy Whack-a-Mole—one thing gets fixed and another problem pops up,” King said. “One of our goals is to help people think three or four steps ahead instead of reforming healthcare pricing one move at a time.”
At stake? Despite huge costs, Americans are less healthy than citizens of other wealthy nations: The average life expectancy is 78.8 years, versus 80.4 to 83.4 for countries such as Denmark and Japan, according to the Commonwealth Fund report. And the United States has the highest rates of infant mortality, obesity and older adults with two or more chronic health conditions. The Affordable Care Act has cut the ranks of the uninsured, but one in four insured Americans now has a high-deductible plan with potentially budget-breaking out-of-pocket requirements. Insurance premiums are set to rise by 11 to 49 percent in many markets in 2017. And the rates we pay for routine care can vary by a few hundred to tens of thousands of dollars within the same state.
By 2024, the Centers for Medicare & Medicaid Services estimates that nearly $1 of every $5 spent in the United States will be spent on healthcare. King doesn’t believe that rising costs should be blamed entirely on overuse of services. “Over-utilization is part of the issue, but that’s been brought under better control in recent years,” she said. “The bigger factor is growing market power in the hands of providers and insurance companies.”
Trade Secrets and Gag Clauses
The Source went live in 2014 after King helped a pair of UCSF researchers look into the lack of healthcare pricing transparency.
“The researchers couldn’t get numbers. Providers and insurers would tell them, ‘I’m prohibited by contract from giving you that pricing information,’ or, ‘This is a trade secret, and I can’t answer that question,'” King said. “We kept finding this great research on how prices weren’t available. But we found that groups working on the issue were stuck in their own silos. Researchers didn’t always fully understand the ways the law could be used to keep the information secret, while the lawyers we talked to weren’t aware of all the research about the lack of price transparency and its impact on healthcare.”
These revelations inspired The Source. Acting Chancellor and Dean David L. Faigman, the Consortium’s founding director and an expert in health and science law, was an early advocate for the website. King contacted Helm, whom she knew from Emory Law School. “Anne Marie was one of the brightest and most capable people I worked with on Law Review,” King said. “She has an impressive background in business fraud and complex litigation from her years at Cadwalader, Wickersham, & Taft in New York and Washington, D.C. I was excited to work with her again.”
Their skill sets dovetail beautifully. “I look at things from a litigation and government-enforcement angle, while Jaime looks at issues from a policy perspective,” Helm said. “We complement each other. That makes The Source highly effective.”
Connecting the Dots
The Source excels at tracking and connecting pricing developments that crop up in individual state houses, courtrooms and insurance markets across the country. News stories provide anecdotal details while the site’s analyses, blog posts and useful databases connect the dots to reveal trends.
One example: Helm is following cases involving healthcare providers allegedly wielding their market power to negotiate anticompetitive contracts with insurers that steer consumers away from lower-priced/higher-value hospitals and healthcare providers. Grocery workers’ union UEBT has filed a class action against Sutter Health, the dominant healthcare provider in Northern California. In UFCW & Employers Benefit Trust v. Sutter Health, the union (which pays providers directly for workers’ health expenses) claims Sutter has negotiated anticompetitive terms that keep the union from encouraging workers to choose lower-cost providers.
It seems to me the insurers are consolidating to gain greater market power in the face of the huge, consolidated provider groups that are now calling the shots.
“The same issue emerged in North Carolina in June,” Helm said. “The Justice Department’s Antitrust Division and the North Carolina Attorney General’s Office filed suit against Carolinas Healthcare System—the dominant provider in the Charlotte area—challenging similar contract provisions. Meanwhile, a bill was introduced in the California State Senate last session addressing the issue, and we expect it to come up again this fall.”
The Source doesn’t shy away from issues that seem wonky—like the status of All-Payer Claims Databases (APCDs), electronic systems that aggregate claims and administrative data from public and private payers. While some insurance companies make price information available on their websites, APCDs—now adopted by some 22 states—are helping to improve price transparency by compiling data at a larger level. Blog posts on The Source note that APCDs can benefit consumers in a number of ways, especially because they serve as valuable cost-comparison tools.
“To the extent that APCDs facilitate price shopping when used as consumer price-comparison websites, there is evidence that transparency regulations can drive down prices for common, uncomplicated elective procedures,” the blog stated.
In late 2015, King testified before a congressional subcommittee about the proposed mergers between health insurance giants Aetna and Humana, and between Anthem and Cigna. “It seems to me the insurers are consolidating to gain greater market power in the face of the huge, consolidated provider groups that are now calling the shots,” she said. “Insurance companies frequently claim that mergers lead to greater efficiency and lower prices, but the data from past mergers demonstrate that prices almost always go up for consumers.”
The Source has become a model for the kinds of projects the Consortium aims to take on. King noted: “We were looking to dedicate our efforts to projects that would offer valuable education and training opportunities for students and further our own research interests, all while providing a public service that aims to improve our healthcare system. We are delighted that The Source has successfully accomplished all three.”
As a student in the Health Policy and Law degree, you are a member of the Consortium. Will you be joining us in an incoming class? Check out how to apply!