According to a recent report from FTI Consulting in Washington, D.C., across the country about half of contracting disputes between health insure providers and health care providers are now reaching their expiration dates with no resolution compared to 26% that did so during the fourth quarter of last year. While the study was conducted nationwide, we must acknowledge that if providers do not step up and do their part to control costs in New Jersey, we will see the same trend here.
No one should have to choose between their health and finances. But the exorbitant cost of medical care leaves New Jersey patients facing this no-win decision daily. In the past year alone, 25% of Americans have deferred needed health care over cost concerns. In the Garden State, 77% of adults worry about affording health care. Individuals struggling with medical debt are forced to cut back on necessities, drain their savings and take on extra work.
Meanwhile, most of every health care dollar (see the graphic below, which shows the “Medicaid dollar” based on state data) is not going toward preventive and primary care for patients. Instead, most of those taxpayer dollars are being swallowed up by hospitals and pharmaceutical companies.
It is past time that health care companies delivered on their promises — and their purpose. In New Jersey, government leaders have already worked with the health care industry to establish guardrails that are proven to protect consumers with the Healthcare, Affordability, Responsibility and Transparency (HART) program. Disregarding this agreement now would cheapen their word to a public already understandably cynical of the industry at large. 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 private equity is playing in our health care ecosystem. In New Jersey we have seen private equity firms buy numerous providers and demand exorbitant price increases. The threat is real, as the U.S. Department of Justice’s Antitrust Division, the Federal Trade Commission and the Department of Health and Human Services are now all investigating how private equity firms’ investments in hospitals, physician consolidation and nursing homes affect patients and health care workers.
When hospitals and provider groups demand higher prices from health insurers, it’s actually employers, unions, governments and their enrollees holding the insurance card that get stuck with the bill as higher premiums or higher taxes. More than 10% of New Jerseyans have medical debt in collections and the numbers are even more concerning in communities of color, which are twice as affected. Addressing the rising costs in health care is not easy, but the most important issues never are. Carriers cannot lower costs if facilities and providers continue to ask for double-digit increases in rate renewal negotiations.
In New Jersey, health insurer providers know our members cannot afford more price increases, and so on behalf of their members, they will not stand idly by.