Rising health care expenses are a heavy burden on
companies and consumers alike. So when opportunities
arise to reverse that trend — potentially lowering the price of doing business in our state — we should aggressively
pursue them. In one landmark deal, we’ve done just that. But in
another case, we have allowed one company, Premera Blue Cross, to kill legislation that would have placed downward pressure on health care costs.
First, the good news: In June, Boeing announced a pioneering deal that will offer 25,000 of its employees in the Puget Sound region the option of being served by new health care networks established by UW Medicine and Renton-based Providence Health & Services. Boeing negotiated strict standards as to the cost and quality of care it expects the two networks to provide. The health care providers will share in the savings if they exceed those standards.
The networks are established as Accountable Care Organizations (ACOs), a new kind of structure introduced by Obamacare as a way to slow the growth of Medicare costs. Such organizations coordinate the care of an individual’s health needs rather than charging for each service. Since the providers must meet a targeted level of cost and care, they have a strong incentive to find cheaper, better ways to provide health care.
“We expect to bend the cost curve by rationalizing health care service,” says Alan May, vice president of human resources at Boeing. Companies have a particularly strong incentive to cut health care costs because of Obamacare’s “Cadillac tax,” which, as of 2018, will tax employers who spend too heavily on each employee’s health care. As more employers contract with these new networks — King County and the state of Washington are exploring the option — our state’s health providers will be pressured to find innovative ways to drive down costs while improving quality.
Now, for the bad news: In 16 states, legislatures have either passed or are about to implement something called an “all-payer claims database” that tracks what insurance companies pay hospitals and other health care providers (see page 42). Early experience indicates information from those databases intensifies competition and drives down costs. In Washington state, however, Premera has opposed similar legislation in order to protect its dominant share of the state’s health insurance market. The state Legislature has failed to pass the bill because of strong opposition from State Senator Randi Becker, R–Eatonville, and Premera.
Washington state has long been a leader in providing quality care at low cost, thanks to such pioneers as Group Health, which has offered health care similar to the ACO model, and UW Medicine, which is the nation’s leader in training primary care doctors. But the state needs an all-payer claims database if it is to continue as a leader in health care reform. The state senate should revisit the issue and pass it next year. Senator Becker and Premera need to back off and let the community do what’s best for both our residents and our businesses.