Why Benchmark?

Healthcare is unaffordable in Connecticut. The year to year increase in healthcare cost per person has exceeded that of median household income in the last 20 years, that is, 4.8% versus 2.0% per year. The state’s economy grew an average 3.3% per year over 20 years.[1]  This trend is unsustainable.  The recently released self-sufficiency report by the Office of Health Strategy and the Office of the State Comptroller, shows that the cost of basic needs such as healthcare, housing, transportation and food increased faster than median earnings between 2005 and 2019 in every Connecticut city and town. This uncontrollable healthcare cost growth has significant negative consequences, including but not limited to:

  1. Employers depressing workers’ wage growth to cover the cost of health insurance coverage increases.
  2. Employers offering less comprehensive coverage because of the high and increasing costs of offering health insurance.
  3. Consumers health insurance premiums and out-of-pocket spending consuming more of their household income and resulting in less money for everything else.
  4. Consumers with commercial coverage delaying or avoiding necessary care because they can only afford – or are only offered – coverage with large deductibles and co-insurance.
  5. State government cutting spending in human services, public health, housing, public safety etc. to cover growing healthcare costs for state employees and dependents, and subsidizing Access Health CT plan costs.

Limiting healthcare cost growth is an economic imperative that will help businesses compete and families better afford a high quality of life in Connecticut. Moreover, the COVID-19 pandemic has challenged our healthcare system in more ways than imaginable. As the recovery evolves, it will be more important than ever to rein in the ever-increasing prices of healthcare services, frivolous spending, and inefficient utilization of our finite healthcare resources. 

The benchmark is a necessary step to rein in costs by bringing about an unprecedented level of transparency and oversight across all stakeholders, holding organizations accountable for excessive growth, and giving incentives to redesign care delivery and payment models. Healthcare cost containment is critical to the longevity and effectiveness of Connecticut’s healthcare system.

There is no evidence of reduced healthcare utilization from benchmarking costs. Furthermore, since the benchmark has been in place in Massachusetts, hospital inpatient admissions, and emergency department and outpatient visits have been largely unchanged, indicating utilization has not reduced as a result of the state’s benchmark.[2] Unrestrained cost growth and higher prices in Connecticut have delayed access to necessary care because people cannot afford it.  Setting a total health care cost growth benchmark is essential for Connecticut to assess spending patterns and work to maintain a more sustainable path forward. 

Connecticut is considered a high-quality-of-care state compared to many states, there remains wide variation among populations, particularly for people of color. For instance, Hispanics and Blacks have higher rates of preventable hospitalizations and diabetes prevalence than their White peers.[3] Such variations may be eliminated by providing better quality primary care. Also, preventable hospitalizations add to the cost of care. Controlling cost growth is only one part of creating better healthcare for all Connecticut residents.  We also need to improve the quality of care for better outcomes.

Finally, the Connecticut and U.S. healthcare systems are largely focused on specialist care.  Research has demonstrated however, that greater investment in primary care as a percentage of overall healthcare spending leads to better patient outcomes, lower costs, and improved patient experience of care. Other states have strengthened their healthcare system by supporting improved primary care delivery and shifting an increasing percentage of total spending allocated towards primary care.

 

 


[1] Office of Health Strategy. June 2020. Cost Growth Benchmark Technical Team Meeting #5. https://portal.ct.gov/-/media/OHS/Cost-Growth-Benchmark/CGB--TT-Meetings-2020/June-16-2020/CT-OHS-TT-Meeting-5-v6.pdf retrieved 7/6/2020.

[2] Massachusetts Health Policy Commission. March 2019.  Hearing on the Potential Modification of the Health Care Cost Growth Benchmark.  https://www.mass.gov/doc/presentation-hpc-benchmark-hearing-3132019/download retrieved 7/7/2020.

[3]United Health Foundation. America’s Health Ranking 2019 Annual Report. Accessed at https://www.americashealthrankings.org/explore/annual/measure/Diabetes/state/CT on 6/25/2020 


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