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Presidential Candidates: Take the Pledge to Serve ‘We the People’

This Op-Ed was published by the Des Moines Register on August 21.

I write this not as a Republican, nor as a Democrat – I’m politically agnostic. When it comes to addressing healthcare, a critical election issue, Iowa voters have the first crack at drilling down and asking presidential candidates for details on how costs will be meaningfully lowered, who will be covered, what will be covered, how it will be paid, and how higher-quality care will be delivered consistently to all populations.

The candidates we eventually elect must thoroughly analyze the details of their plans, including the possibility of unintended consequences that will invariably result. Acknowledging the pros and cons of the plan they support is both honest and crucial.

For presidential candidates to successfully make it out of Iowa and live to compete in future primaries and caucuses, Iowans must require each to articulate the specifics of their plan. Generic responses of supporting “Medicare for All” or “Single-Payer” does little to inform voters, other than allow candidates to merely checkoff one of many issues they support. In healthcare, the devil is definitely in the details.

During the Democratic debates this summer, many candidates singled out insurance and pharmaceutical companies as being responsible for the cost predicament we have across the nation. In fact, Sen. Bernie Sanders, (I-Vt), pledged to reject any donations over $200 from political action committees, lobbyists and executives of insurance and drug companies. Sen. Sanders called on other Democratic candidates to do the same.

Per Sanders’ pledge, “Candidates who are not willing to take that pledge should explain to the American people why those corporate interests and their donations are a good investment for the healthcare industry.”

This pledge, although well-intentioned, does not go far enough. The narrative that insurance companies and pharmaceutical manufacturers are the lone villains is grossly naïve because it excludes other major contributors to the cost problem – hospitals and physicians.

Healthcare prices in the U.S. are considerably higher when compared to other industrialized countries, and a large part of this comes from those providing this care. In fact, providers do not want their negotiated fees with private payers to be transparent, largely under the guise that once prices are publicly known, costs would go even higher because lower-paid providers may want better deals through higher prices. This is merely a convenient approach to keep prices opaque and largely unknown. This status quo only benefits the intended stakeholders, not most Americans.

According to MapLight, a nonpartisan research organization, the American Medical Association and the American Hospital Association are the fifth and sixth largest lobbying spenders over the past decade. In the first half of 2019, the AMA has spent $11.5 million on lobbying while the AHA has spent $10.2 million. The AHA amount is equal to the combined lobbying contributions of three large insurance organizations: America’s Health Insurance Plans, Blue Cross and Blue Shield Association and UnitedHealth Group. Since 2008, the AMA has spent almost $228 million in lobbying, while the AHA spent over $205 million.

Sen. Sanders and all candidates (congressional included) should pledge to avoid donations and other influential contributions from all key healthcare stakeholders, including the AMA and AHA. Candidates must distance themselves from external influences that undermine a system that needs to be designed for the people, not by special interests.

These three foundational healthcare cornerstones – cost, coverage and quality – are the overriding factors that should determine whether our reformed healthcare system is run solely by the government, as some “Medicare for All” proposals tout, or through public-private reforms that improve or replace the existing Affordable Care Act (ACA).

Candidates of all parties – do the right thing – rid yourselves of conflicts of interest and represent all Iowans and Americans.

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2019 Iowa Employer Benefits Study©
Employers Report 7.1% Increase in Health Premiums

Today, we issued our 20th Iowa Employer Benefits Study© results. As with past studies, the wealth of data is immense. This year’s study found that Iowa employer health insurance premiums increased an average of 7.1 percent from 2018 to 2019.

The 7.1 percent increase is an average that factors in employers receiving no rate change, an increase or decrease in their health premiums. This number represents the average increase in premiums employers received PRIOR to making design changes to their medical plans – such as increasing cost-sharing arrangements with employees.

The 2019 Iowa Employer Benefits Study© found that average annual premiums for employer and employee contributions (combined) were $7,017 for single coverage and $19,335 for family coverage. Since 1999, the year this study began, the single premium has increased by 240 percent while the family premium has jumped by 251 percent. (NOTE: In a number of slides below, the year 2017 was excluded because no survey was performed.)

During the post-ACA period (2011-2019), total family premiums increased by 45.4 percent, while employees with family coverage experienced a 30.5 percent increase to their payroll-deducted premiums. Employers continue to make sizeable contributions to keep the employee cost ‘manageable.’ This information is depicted in the following graph.

How did Iowa employers respond? They continue to ratchet up employee cost-sharing arrangements by increasing employee premium contributions and plan-sharing responsibilities, which results in higher deductibles and out-of-pocket maximums.

For the first time in this study’s history, employers were asked to gauge their ‘cost-shifting fatigue.’ On a 10-point scale, where 1 means the employer has a minimum cost-shifting fatigue and 10 means the employer has reached its limit of shifting costs to employees and is now considering to no longer offer health coverage, Iowa organizations reported their fatigue level was 3.5 out of 10. Despite experiencing rate hikes for years, Iowa employers are not yet likely to discontinue offering health coverage. Below is a slide that depicts employer responses by employee-size categories.

Iowa employees were asked to contribute an annual average of $1,313 for employee-only coverage, while employees with family members were asked to pay $5,794 annually. Over the course of 20 years (1999-2019), employee contributions have increased by 196 percent for single coverage and 173 percent for family coverage.

The overall 2019 statewide weighted-average deductible for single coverage is now $2,192, while the family weighted-average is $3,975. Since 2004, deductibles for both single and family have risen by 288 percent and 235 percent, respectively.

The post-Affordable Care Act (ACA) period (2011-2019) reveals the deductibles continue to climb for both single and family coverages, approximately 46 percent and 25 percent respectively.

In addition to revealing updated results for dental coverage, group life insurance, short and long-term disability coverages, the 2019 Study also reveals whether Iowa organizations offer a large number of work-life and convenience benefits in their workplace setting. The top five benefits offered by Iowa employers include:  Jury Duty Leave (89.2 percent), Bereavement/Funeral Leave (87.5 percent), Unpaid Leave (83.7 percent), Maternity Leave (72.6 percent), and Personal Days (63.6 percent).

The above information is just a small fraction of our survey results. The complete 2019 Iowa Employer Benefits Study© is available for purchase and download on this site.

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‘Medicare For All’ Can Be a Common Enemy to Unite ‘Foes’

It is both comical and infuriating to watch how key healthcare stakeholders react to two different, but highly inter-related subjects: 1) Medicare For All, and 2) Who is at fault for outrageous medical prices. Stakeholders in healthcare include hospital systems, provider groups, health insurance companies and pharmaceutical and device manufacturers. Employers are another major stakeholder, but much too often, they are largely excluded when it comes to contractual relationships between many of the aforementioned players.

When many of these stakeholders are asked who is at fault for charging high prices for medical services, each will conveniently step into a circle and point fingers at one another, as if they are participating in a circular firing squad. It seems that someone else is always at fault, but never the accused.

However, when asked about the growing ‘Medicare For All‘ proposals, commonly believed to eliminate private insurance and ‘socialize medicine,’ many of these same stakeholders will quickly hold hands in support of something centrally sacred to their collective well-being, as if they are military comrades in the HBO mini-series, “Band of Brothers.” These stakeholders’ words and actions are quite transparent about protecting their own self-seeking interests.

Below are just a few examples of this love-hate relationship between various healthcare stakeholders.

Medicare For All

Former Secretary of State, Condoleezza Rice, was quoted as saying, “We need a common enemy to unite us.”  For stakeholders who are frequently at odds with each other, such as medical providers are with insurance companies when it comes to contractual reimbursement arrangements, the relationships can be confrontational, if not outright brutal. However, for various reasons, both typically view Medicare For All as a major threat to their profitable well-being, if not survival. Given what is at stake with a ‘Single-Payer’ system that presumably would be controlled by federal bureaucrats, providers and insurers have found this ‘common enemy’ to mask their mutual differences with each other.

On April 16, UnitedHealth Group CEO David Wichmann warned Democrats that Medicare For All would destabilize the nation’s healthcare system. As mentioned in The Hill, Medicare For All would be a “wholesale disruption of American healthcare [that] would surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system, and limit the ability of clinicians to practice medicine at their best.”

Insurance companies are greatly threatened by the many proposals initiated by progressive Democrats to expand Medicare to the entire U.S. population, most likely greatly reducing the role of private insurers. It must be noted, however, even with any given Medicare For All program implemented, private insurers would most likely be chosen as subcontractors to administer the program, but the profit motive would be greatly reduced from today’s standards.

Not to be outdone, a major counterpart to private insurers, the American Hospital Association (AHA), have similar views to Wichmann’s. AHA President Rick Pollack wrote in February that Medicare For All proposals “could do more harm than good to patient care.” Additionally, this one-size-fits-all approach could disrupt coverage of 180 million Americans who are currently covered by employer plans, and that physicians and other providers “may limit the number of Medicare or Medicaid patients they see because of chronic government underpayment.”

When lobbyists from both stakeholders were recently on stage together in Nashville addressing the Medicare For All topic, such as Matt Eyles (CEO of America’s Health Insurance Plans (AHIP)) and Chip Kahn (CEO of the Federation for American Hospitals), one could almost detect John Lennon’s epic song, “Give Peace A Chance” in the background. Kahn discussed a new organization that he formed, Partnership for America’s Health Care Future, and its purpose of ‘counter-messaging’ against the Medicare For All movement. Eyles acknowledged that AHIP was one of the first groups to become part of this new organization.

Healthcare Prices – Who is at Fault?

The camaraderie found in Medicare For All quickly vanishes when stakeholders are simply asked why healthcare prices are so high. This healthcare ‘hot potato’ can quickly determine just how deep-seated relationships are (or not) between major industry players. The April 15 cover of Modern Healthcare appropriately illustrates fingers pointing at each other, deflecting the price question and placing the blame elsewhere. Additionally, when leaders from Pharmacy Benefit Managers and the Pharmaceutical Research and Manufacturers of America (PhRMA) have appeared in front of the Senate Finance Committee during the past few months to justify their pricing methods, both pointed fingers at one another (insurers also), making sure that their respective organizations and industry were not to blame.

Deflecting responsibility and other self-preservation behaviors will only add to the desire to seek alternative solutions that can reform a grossly underperforming and bloated healthcare system. Stakeholder organizations and industries must decide whether they want to be part of the solution – or, at their own peril – continue to pursue their ‘business-as-usual’ behavior that benefits no one – but themselves.

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