In Montana, a difficult negotiator showed that employers do not have to pay as much for medical care

In Montana, a difficult negotiator showed that employers do not have to pay as much for medical care https://i1.wp.com/www.eresviral.com/wp-content/uploads/2018/10/En-Montana-un-negociador-difícil-demostró-que-los-empleadores-no-tienen-que-pagar-tanto-por-la-atención-médica.jpg?fit=219%2C146&ssl=1

In Montana, a difficult negotiator showed that employers do not have to pay as much for medical care













					


			    









This story was co-published with NPR.







Marilyn Bartlett took a deep breath, prepared to measure her 5 feet and an inch, and told the few Montana officials that she had a radical strategy to rescue the state's sinking benefits plan for her 30,000 employees and their families.

The officers were listening. His health plan was breaking, with losses that could exceed $ 50 million in a few years. He needed a savior, but none of the applicants to be his new administrator had captivated them.

Now here was a boring boring self-styled 64-year-old who interviewed for work.

Bartlett came with some unique qualifications. She had just spent 13 years in the insurance industry, first as a controller of a Blue Cross Blue Shield plan, and then as the financial director of a company that administered the benefits. It was a potent combination of irreverent and nerdy, a certified public accountant whose Smart Car badge says "DR CR", the Latin abbreviations for "debit" and "credit." 

The most important thing is that Bartlett understood something that state officials did not know: parallel agreements, bribes and lucrative clauses that industry players secretly incorporate into medical costs. Everyone, he had observed, was benefiting, except for employers and workers who paid the bill.

Now, in the twilight of his career, Bartlett wanted to change equipment. In his opinion, employers should be rejecting the industry and demanding that it justify its costs. They must request detailed invoices to determine how prices are set. And they should read the fine print of their contracts to eliminate the secret deals that work against them.

In the way health care works in the United States, most employers give control of the costs of health care to their health insurers, hospitals that treat their employees, and companies that pay to administer health care. its benefits. The costs are a dense tangle that few employers feel prepared to go through. Therefore, they do not.



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This failure helps explain why Americans pay the highest health care costs in the world and why the eyelash continues to rise year after year. Employers finance these costs through employee compensation packages, so mathematics is generally bad news for workers: rising health costs mean less wage increases and fewer salaries to take home . Montana was not different.

And so Bartlett launched an audacious strategy. Step one: tell the state hospitals what the plan would pay. Take it or leave it. Step Two: Demand a complete accounting of the company that administers the costs of the medications. If you did not disclose any secondary agreements you had with the drug manufacturers, replace them.

Bartlett's strategy would expose a culture in which participants do not question the rising costs and the role that each part of the health care industry plays in them. ProPublica and NPR are investigating these unseen aspects of the health insurance industry and the way Americans pay for medical care. Previous stories have examined how health insurers take advantage of large medical bills and how is the industry partnering with data agents to assess how much patients cost depending on their lifestyles.

When Bartlett presented his plan that day in July 2014 in a conference room in Helena, Sheila Hogan, then director of the State Department of Administration, liked what she was hearing. They needed something radical. That she knew, nobody had tried something like this.

Bartlett would be facing some of the state's power players: hospitals and health insurers, and their politically connected lobbyists. If your plan did not work, the state and its employees were in trouble. If you did, you could create a plan for employers everywhere.

Bartlett knew that employers have a bargaining power that few use. The health care system depends on the income produced by the surgeries, mammograms, laboratory tests and other services it provides, and you can not afford to lose it. Bartlett got the job. She would call the industry bluff.

Medical costs in balloon

The health benefits sponsored by employers are almost as old as the United States itself. In 1798, John Adams, the second president of the USA. UU., Signed a law that required 20 cents per month of the checks of payment of the sailors of the EE. UU To finance your medical care. After the Civil War, timber, mining, and rail companies in the western United States withheld money from employee paychecks to pay doctors and hospitals.

After World War II, such plans became the mainstream. Today, approximately 150 million Americans obtain their health benefits through their employers. The industry is dominated by what some call the "BUCAH" plans: Blue Cross Blue Shield, UnitedHealth Group, Cigna, Aetna and Humana. Half of a dozen health insurers are currently near the top of the Fortune 500, with combined annual revenues of around half a billion dollars.





Despite the money at stake, many employers, knowingly or unknowingly, have differed in the industry. Decisions about health benefit plans are usually made by mid-level HR managers, who may not understand the forces in the medical industry that work against them. They are often advised by insurance brokers, who are traditionally financed by the industry. And they are trying to keep the peace for the employees, who demand convenient access to the care they need. It is a recipe for inertia.

The conventional wisdom is that insurance companies want to reduce health spending. In reality, insurers' business plans depend on keeping hospitals and other providers happy, and on their networks, often at the expense of employers and patients.

Employers often feel caught up in rising costs and worry that the changes they make will be bad for their employees, says Michael Thompson, president of the National Alliance of Health Care Buyers Coalitions, which represents employers' groups that provide benefits to more than 45 million Americans. And, he says, they rely on the advice of industry experts instead of delving into the details.

"We have to take control of this or we are going to reduce the economy, our personal funds and our salaries," he says. "It will cost jobs in the United States and reduce our public programs, this is not a small problem, it's a big problem."

But Bartlett soon discovered that it was easier to talk about rejecting than to do it.

A confrontation with the hospitals of Montana

Bartlett arrived in Helena, the state capital, in the fall of 2014 as a stranger navigating a minefield of established relationships. From the beginning, he knew he would have to face the amazing bills from the state hospitals, which constituted the bulk of the plan's expenses. It would not be popular because they also constituted a significant part of hospital profits.

Montana, like many big employers, self-financing its plan. That means you pay the bills and hire an insurance company or another firm to process the claims. More than half of American workers are covered by self-funded plans. As head of this agreement, Bartlett assumed that he would have access to detailed information about how much the plan paid, which was administered by Cigna, for procedures at each hospital. But when she asked Cigna about her price terms with the hospitals, Cigna refused to provide them.

Marilyn Bartlett in her office in Helena, Montana. Bartlett used his experience in the insurance industry to help Montana's health plan achieve better agreements with state hospitals.
(Mike Albans for NPR)


His contracts with the hospitals were secret, they told him representatives of Cigna. That did not sit well with Bartlett, remember. "The payer can not see the contract," she says, "but we agree to pay what the contract says we will pay."

A cumbersome consultation process established by Cigna allowed him to obtain individual claims and other limited information. But the company would only give you aggregate data, with the things grouped together, to show how much you paid to each hospital. It was like telling a family that they were trying to reduce their spending on groceries that they could only see what they spent in a year, not a breakdown of what bread, fruit and other items cost in each market.

When Bartlett continued to demand information, Cigna resisted; I needed to balance what I wanted to keep hospitals happy. "I do not see the need for a balance," he remembers he told them. "I'm representing the payer."

Cigna declined to answer questions about her relationship with the Montana plan, but said in a statement that she had prioritized the plan's preferences and needs.

Bartlett finally opted for a radical solution: the plan would set its own prices for hospitals.

In the illusory world of hospital billing, hospitals often charge a high price for a procedure and then offer discounts to insurers within the network. These charges and discounts may be different for each procedure in each hospital, depending on who has the most influence during the negotiations.

However, discounts do not make sense if the underlying charges are not limited. When Bartlett observed a common, uncomplicated knee replacement and a one-night hospital stay, he saw that a hospital had charged the plan $ 25,000, then applied a 7 percent discount. Then, the plan paid $ 23,250. 

A different hospital gave a better discount, 10 percent, but with a price of $ 115,000. Therefore, the plan was billed $ 103,500, more than four times the amount it paid to the other hospital for the same operation. Bartlett remembered wondering why anyone would think this was okay.

Under the new strategy proposed by Bartlett, the plan would use the prices established by Medicare as a point of reference. Medicare, the federal government's insurance for the disabled and patients over 65, is a good point of reference because it publishes its prices and adjusts them to hospitals based on geography and other factors. The Montana plan would pay hospitals a fixed percentage above the Medicare amount, a method known as "referral-based prices," which makes it impossible for hospitals to raise their prices arbitrarily.

Tired, Bartlett ended the relationship of the plan with Cigna. His battle to improve the status quo irritated some employees in his own office, who complained that it required too many changes. Some resigned. Bartlett did not give up.

That Christmas, Cigna's representative sent each employee from Bartlett's office a small gift, a snowball. Bartlett did not get one.



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But his ideas were exciting for Ron Dewsnup, the president of Allegiance Benefit Plan Management, a Montana-based subsidiary of, ironically, Cigna. Allegiance had been studying the variation in hospital prices for years and had sent reports twice to Montana hospitals that showed how their prices for the same procedures differed significantly. The company had also considered a pricing model based on references, but "had no employer to take their position seriously," says Dewsnup.

Allegiance obtained the state contract and began comparing what the plan paid to the 11 largest hospitals in the state with Medicare rates. The cheapest ones averaged about double the Medicare rates, the most expensive, about five times more than Medicare rates.

No one wanted to toughen hospitals, but this was ridiculous, Bartlett remembers thinking. She determined that the new rate for all hospitals would be slightly more than double the Medicare rate, which remains a lucrative agreement, but a good starting point to control prices. The contracts would also prohibit a practice called "balance billing," where hospitals bill patients for charges that a health plan refuses to pay.

It would mean a boost for some lower-cost hospitals. Now, she had to persuade the more expensive hospitals to take less.

"You are inside or you are outside"

Kirk Bodlovic, the financial director of the Providence St. Patrick Hospital in Missoula, remembers the day when a retinue of the state health plan, including Bartlett and Hogan, arrived at his hospital.

Bodlovic learned from Allegiance reports that San Patricio prices were high. But he was not prepared for the ultimatum: if St. Patrick wanted to treat the state's employees, the hospital would have to accept lower rates. If it did not, the state would pay its employees to travel to other hospitals.

"You're inside or outside, basically," says Bodlovic.

The state's lawsuit triggered a series of meetings within the Providence chain, which also operates in California, Alaska and the Northwest. I did not have much influence because Missoula is a city with two hospitals. His competitor, one of the lowest-priced facilities, had already accepted the agreement.

San Patricio considers rejecting the deal. Bodlovic says that thinking gives heartburn what to think now, imagining doctors' anger if some 3,000 members of the state plan had ended up in a rival hospital. And the hospital would have lost about $ 4 million in annual revenue. "That's a good part of the business," he says.

In his final analysis, he says, St. Patrick officials decided it was "a minor pain" to accept the new contract than to leave it out of the bargain.

While the state worked to get hospitals to sign new contracts, its CEOs and lobbyists planned final executions, scheduling meetings with the governor's office to propose alternative solutions. When they arrived at the meetings, they discovered that Bartlett had also been invited. She effectively blocked her ideas.

However, Bartlett had to take all the hospitals on board, or else. The new price was ready to operate on July 1, 2016 and, with one month remaining, six of the main hospitals were waiting. "I started to panic," recalls Bartlett. During the sleepless nights, Bartlett imagined that thousands of state employees would be forced to zigzag across the state to receive medical attention or accumulate massive bills in non-contracted hospitals. He prepared communication plans for members that described how they would need to travel to avoid certain hospitals.

Bartlett believes that employers should be rejecting the medical industry and demanding that it justify its costs.
(Mike Albans for NPR)


With his stomach in knots, he went on the offensive. He took a graph that shows the variation in hospital prices to state legislators. Then she threatened to go public. He could not name names due to contractual restrictions, but he could tell the media that the prices of some hospitals were three times higher than the others and let the journalists find out which ones were which.

Five of the holdouts surrendered and signed the contract. "Hospitals did not want that out there," she says. 

Only the Benefis Health System in Great Falls, one of the highest-priced hospitals, refused. The general director of the hospital told the local newspaper that "it was a business for them and for us."

The new plan went into effect on July 1, without Benefis as a contracted hospital. Bartlett increased the pressure once more by calling the Montana Public Employees Federation. The union has hundreds of members in the Great Falls area, including Keith Leathers, who works as an investigator in the state's child support enforcement division. Leathers has a young daughter with scoliosis, and she did not want to drive long distances to get the care she needs. He easily engaged in the fight.

"We have a regional medical center here that is supposed to handle almost any medical problem, period," he recalled thinking. "And do I have to leave the city to get attention because they want to charge more than anyone?"

The union leaders launched a campaign against the hospital. Leathers says he sent a postcard and made a phone call every day to the hospital's director general, to the board members, to anyone he could find in the leadership. He urged them to accept the new rates. Hundreds of other employees across the state did the same.

Within a month, Benefis agreed to join the health plan. The hospital declined to comment for this story.

Leathers says employers and workers should be protesting the costs of medical care "over and over again" throughout the country. "Are we going to wait until the health care system is blocked?" He says. 

When Bartlett took over the state health plan, he spent about $ 200 million a year. Bartlett's team estimated that the new hospital price program saved the plan more than $ 17 million in the second semester of 2016 and in all 2017, almost $ 1 million per month. By 2017, a plan that state officials had predicted would be broken turned around. And an additional $ 15 million is planned to be saved in 2018 without reducing benefits for employees or raising their rates.

Expose hidden drug offers

But Bartlett had one more goal in his sights: the costs of prescription drugs.

Health plans have contracts with separate companies, intermediate entities known as pharmacy benefits administrators, for members to obtain their medications. And they all assured Bartlett that the state's pharmaceutical benefit agreement was "cutting-edge." But as with Cigna, she insisted on examining it herself. That was not easy because the pharmacy benefits were executed through a cooperation agreement with other health plans, including those of universities, school trusts and counties. The state plan anchored the cooperative and the other partners were satisfied with the agreement.

Bartlett knew that pharmacy benefit managers are known to include agreements that increase their profits at the expense of employers. One of the common tricks is called "propagation." For example, a pharmacy benefits administrator will tell an employer that it costs $ 100 to fill a prescription that actually costs $ 60, which allows the pharmacy benefits administrator to save an additional $ 40. The small print in the contracts often allows it.

The spread is very widespread. A recent report from the Ohio State auditor noted that the spread of generic drugs had cost the state Medicaid plan $ 208 million in a single year, 31 percent of what it spent.




Indeed, when he obtained the contract, Bartlett discovered that the state plan had been a victim of propagation. 

Pharmacy benefit managers also collect dollars through reimbursements paid by pharmaceutical companies. Most health plans would mean that, since they are paying for the drugs, they should get any reimbursement. But pharmacy benefit managers often do not reveal the size of the reimbursement, which allows them to keep part or most of it for themselves. When Bartlett pressed, he discovered that the state was not receiving the full amount of his reimbursements. 

Montana was being taken, but it put Bartlett in a delicate political situation. The cooperative needed the state as a partner or it would not survive. Bartlett decided that his loyalty was at the bottom line of the plan. She withdrew from the deal.

"She was not afraid to ruin her career or anger people," says Scott McClave, an Alliant Insurance Services consultant who helped analyze the pharmacy benefit contract.

Bartlett says it helped that he was near the end of his career and that he did not need to please people. "I'm 67 years old, so I could give a shit," she says. "What are you going to do, fire me? I'm packing a Medicare card."

Bartlett found a pharmacy benefits manager, Navitus Health Solutions, that would not spread and would pass all reimbursements in full. The following year, the plan saved an average of almost $ 16 per prescription. He bought a similar mix and volume of drugs in 2016 and 2017. But he saved $ 2 million in the spread. And its revenue from reimbursements increased from $ 3.5 million to $ 7 million, Bartlett said. The savings continue until today.



In July of this year, her mission accomplished, Bartlett left her position as administrator of the health plan for state employees. He now works for the Office of the Insurance Commissioner of Montana, which is assuming pharmacy benefit managers more broadly. 

But Bartlett also has a parallel gig as a guru for other employers across the country looking to pay less for his health benefits. His advice is reduced to pushing back. "You have to go in there and do it," she says. 

So, how are the hospitals in Montana after the price cut? Very good, it seems.

Bob Olsen, vice president of the Hospital Association of Montana, says he has not heard hospital leaders say they are fighting for the new state contract. They have had "a reasonable financial return," he says.

But Bartlett's legacy can be even greater. With the state model in mind, Bodlovic of St. Patrick said Blue Cross Blue Shield of Montana, the state's largest insurer, recently came calling. Now he wants a similar price arrangement.



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