Connecticut should not be in the managed risk business

During this coronavirus crisis, government will direct many of the most critical functions in our state and nation, and we will come to rely on it for policing our communities, overseeing our hospitals and public health systems and supporting our educational systems. 

Amidst all this chaos and uncertainty, there is a statewide legislative initiative that proposes having the state take on a role as a bearer of risk and a provider of risk management in our healthcare system. The timing and potential liability to taxpayers couldn’t be worse. The initiative to create a health care public option should be defeated.

I’ve worked in the healthcare consultancy field for over 35 years with over 2,000 employer groups throughout New England and can tell you first-hand that the worst thing we could do right now is to further disrupt the Connecticut health care marketplace and cause untold negative consequences.

Simply put, the state of Connecticut should not be in the business of managing risk. The existing health care industry employs an excellent infrastructure of professional risk managers whose full-time job it is to manage and bear risk. Much of that expertise and human infrastructure is centered in the central Connecticut region and plays a large part in our local economy. In contrast, the state’s health plan is expensive, and there is nothing to substantiate promises that this public option will provide lower costs. In fact, additional risk borne by this plan will merely be backstopped by taxpayers. 

The state of Connecticut Health Employee Plan should be used to manage the health care needs of state employees. Extending the plan to disparate businesses would severely destabilize the current health care options that individuals and businesses need at this very trying time. The state should not be taking on additional risk and risk management responsibilities. Ultimately, taxpayers pay for any risk that is assumed by the state.  

Our existing healthcare infrastructure is under tremendous pressure now. Employers are laying off employees and hospitals are strained beyond capacity. Obviously, the most important message we can send to the Connecticut health care system and the health care workers on the front lines reading this is a huge “Thank you!”

While everyone is rightly consumed with dealing with the coronavirus issues and implications, when we look to the future, it’s more clear than ever that we should keep government out of the business of health care risk management and instead focus policy and resources on value based strategies and programs that incentivize the use of high-value providers and facilities that create accountability for cost and quality. 

The recently released “Change Healthcare 2020” Industry Pulse Report on value-based health care interviewed payers, providers and health care stakeholders. The results show a historic opportunity to create a partnership between high-value providers and employer plans as providers take risk for the services, leading to predictable costs and quality outcomes (true value). 

The report demonstrates the gulf between payers and providers related to the adoption of value-based strategies and programs and reports on employer adoption.  

The report makes clear that providers are confused by the myriad of different and often conflicting outcomes that they’re supposed to adhere to and that systemic barriers continue to exist preventing them from moving to value based payment models. 

Employers are demanding that payers and providers move to value-based arrangements, and we’re finally starting to see employers demanding alternative payment models alongside advanced primary care and transparent pharmacy. Much work remains to be done, but progress is being made, which is truly a breath of fresh air in our current crisis.

Last year, there was a misguided attempt to have the state get into the business of providing health care insurance to many in the private marketplace. This year, another bill was introduced in the now temporarily closed session to once again inject state government into our health care system. Both of those efforts would have dramatically disrupted the existing small group marketplace in Connecticut and pushed the commercial cost shift onto our already burdened employers.  

But there is good news. There are several other initiatives that have shown tremendous potential and are being managed by some talented leadership at the state level. These are smart efforts to help move the existing provider marketplace to a value-based model of accountable risk arrangements.  

The state’s effort to operationalize the state’s All Payer’s Claims Database, to create a health care cost compact and to incentivize the use of advanced primary care models are all worthwhile and valuable initiatives that will lead to greater cost and quality transparency for all employers. This effort is the right way to go and will promote broad use of value-based healthcare and contracted risk arrangements that will promote employer and member interests.

The citizens of the state of Connecticut should not be backstopping risk. It’s never been a good idea for a government entity to become a merchandizer or bearer of risk for employers, especially now in these uncertain times. We should continue to move toward the adoption of transparent value-based care payment models that will truly reduce costs and increase quality for all Connecticut residents.

Jeffrey Hogan is the Northeast Regional Manager for the Rogers Benefit Group.