by John D. Bennett, M.D.
As I reflect on the whirlwind of the past 12 months and think about the challenges and opportunities ahead, I can honestly say – in my 30 years in health care – that I have never seen such tremendous change. As we head into the New Year, let’s look back at the Top 5 Health Stories of 2014 and focus on areas we can improve upon in 2015.
#1. Obamacare Becomes Reality
Undoubtedly, the single biggest heath care story of 2014 was the launch of the federal health exchange, the capstone of the Affordable Care Act. The launch was mired with technical difficulties that left hundreds of thousands of customers out in the cold and unable to enroll in coverage. After a number of apologies, deadline extensions, and bruises on the face of the Obama administration, the exchange finally launched in the spring of 2014, enrolling 7 million Americans in its first year.
The exchange story was different here in New York, where the launch of the state’s online marketplace, NYStateofHealth.gov, went much more smoothly. The state-based website saw its share of glitches, but thanks to the health department’s constant communication with health plans across New York, issues were quickly resolved.
As we head into the New Year, all eyes will be on Obamacare Part 2. We’ll begin to draw conclusions about the health status of our new members and how much they utilize our services, all of which will determine the long-term sustainability of this insurance model. We’ll also be watching a June decision by the Supreme Court in King vs. Burwell, which is expected to rule on the validity of subsidies (tax credits) for millions of Americans who purchased coverage in the new federal marketplace.
#2. Ebola Outbreak
The virus barely crossed American borders, but the 2014 Ebola epidemic was the largest in history. Centralized in West Africa, the outbreak claimed nearly 7,000 lives and left much of the world paralyzed in fear. Health experts scrambled to contain the virus in Guinea, Liberia, and Sierra Leone. Sadly, poverty and an inadequate health care system allowed Ebola to spread rapidly in the Third-World nations.
Here in the U.S., just four cases of Ebola were confirmed in 2014, resulting in one death. The news served as an important reminder about how fortunate Americans are to have access to the greatest health care system anywhere in the world. It should also serve as a wake-up call to the real-life health risks we’re facing in this country. Despite the sensationalism surrounding the Ebola outbreak, Americans are far more likely to die from the flu. According to the CDC, 1,532 people died from influenza last year. Still, only 40 percent of Americans get the flu vaccine.
#3. Battle over Hep C
2014 was a significant year for specialty drug giants. At the top of the list was drugmaker Gilead Sciences, which grabbed headlines for a pair of hepatitis C drugs that cost a whopping $1,000 a pill. Sovaldi and Harvoni are being called “revolutionary” in the fight against Hep C, but who can afford the $94,000 price tag ($1,000 pill X 12 weeks of treatment) associated with these drugs?
As a society, we’re thankful that science has progressed to a point where we can develop these cures, but we cannot allow a handful of drugs to bankrupt our health care system. As we head into 2015, it’s critical that policymakers consider common sense legislation to bring these costs down for all New Yorkers and Americans.
#4. Mergers, Acquisitions, Strategic Alliances…Oh My!
From hospitals to health parks, you don’t have to drive far in the Capital Region to find a multi-specialty megaplex that fits all your health care needs. 2014 was a big year for local hospitals and health systems that increased their customer base simply by becoming bigger. The news was good for consumers who want access to a cornucopia of on-demand health care services. But that added convenience comes with a cost. Since 2009, consolidations in the health care industry have increased more than 50%. And according to the Robert Wood Johnson Foundation, these mergers have led to price increases often exceeding 20%.
For those of us looking to reduce costs, a so-called “strategic alliance” became a popular way to share best practices with like-minded organizations, yet remain independent.CDPHP partnered with Buffalo-based Independent Health, a move we expect will increase efficiencies and reduce costs for both plans. In the hospital sector, St. Peter’s Health Partners and Ellis Medicine announced a similar alliance designed to help coordinate care, reduce costs, and compete for new business.
#5. The Almighty Dollar
What do all these stories have in common? In one way or another, they affect the cost of care – for all of us. As we close out 2014, U.S. health care spending is expected to tip the scales at nearly $4 trillion.
While the overall growth in health care spending is at its lowest rate in 50 years, the amount of money we’re paying hospitals and physicians is increasing at a rate greater than inflation. The Affordable Care Act is also juicing up the cost of care. The law imposed a new tax on health insurance, which increased costs by $8 billion this year alone. Then there’s the rampant rise in the use and cost of specialty pharmaceuticals. These drugs, which constitute less than one percent of all prescriptions in the U.S., accounted for more than a quarter of the country’s total pharmacy costs in 2013. Put all these together, and there’s really no question why your premiums are going up.
Still, state and federal lawmakers – who have a tight hold on the industry – are slashing reimbursements to Medicare Advantage and artificially suppressing premium rates.
As we head into 2015, I implore today’s health care leaders to take a good look at the Top 5 Health Stories of 2014 and not allow history to repeat itself.
-Dr. John D. Bennett is president and CEO of Capital District Physicians’ Health Plan. This piece originally appeared in the Albany Business Review.