Wardell Sanders
Nationwide, nearly half of contract disputes between health insurers and providers are now reaching their deadlines without being resolved, compared with 26 percent in the fourth quarter of last year, according to a recent report from FTI Consulting, Washington, D.C. Although the study was conducted nationwide, it must be admitted that unless providers in New Jersey aggressively work to contain costs, the same trends could be seen here.
No one should have to choose between their health and their finances. Yet the exorbitant costs of medical care mean New Jersey patients are faced with this no-win decision every day. In the past year alone, 25% of Americans have postponed necessary medical care due to cost concerns. In New Jersey, 77% of adults worry about medical costs. People struggling with medical debt are forced to cut back on necessities, dip into savings and take on extra work.
Meanwhile, the vast majority of health care dollars (see chart below showing “Medicaid spending” based on state data) are not spent on preventive or primary care for patients. Instead, most of the taxpayer money is siphoned off by hospitals and pharmaceutical companies.
It is already time for health care companies to make good on their promises and live up to their purpose. In New Jersey, government leaders have worked with the health care industry to establish proven guardrails to protect consumers in the Health Care, Affordability, Accountability, and Transparency (HART) program. To ignore this agreement now would be to discount their promises to a public that is understandably skeptical of the entire industry. The HART program is a powerful opportunity to make health care affordable, but only if New Jersey is willing to hold the industry accountable.
We also cannot ignore the role that private equity plays in the healthcare ecosystem. New Jersey has seen private equity firms buy up numerous healthcare providers and demand exorbitant price increases. The threat is real, with the U.S. Department of Justice's Antitrust Division, the Federal Trade Commission, and the Department of Health and Human Services all investigating how private equity firms' investments in hospitals, physician consolidations, and nursing homes affect patients and healthcare workers.
When hospitals and provider groups ask health insurers for price increases, it is employers, unions, governments and policyholders who pay the price in the form of higher premiums and taxes. More than 10% of New Jerseyans have past-due medical bills, and the numbers are even worse for communities of color, who are affected twice as often. Addressing rising health care costs is not easy, but the biggest problem is never easy. Insurers cannot lower costs as long as facilities and providers continue to demand double-digit increases in rate renewal negotiations.
In New Jersey, health insurers know their members cannot afford further price increases, and they are not going to sit idly by on their members' behalf.
