Frustrations boiled over Thursday as some members of a state task force looking to curb public health benefit costs blasted representatives of Highmark Blue Cross Blue Shield Delaware, other insurers and care providers, calling for further regulation.
During a presentation, a Highmark representative suggested introducing new incentives and penalties for customers to help shape their healthcare choices and save money, incensing public union representatives.
“Why are you saying we need to be incentivizing or penalize member behavior and not provider behavior?” said Jeff Taschner, executive director of the Delaware State Education Association, the state’s largest teachers union, calling the comment offensive.
Right now, state officials are staring down a $130 million deficit in the health benefit plan for the coming fiscal year with mushrooming medical and prescription drug costs fertilizing the shortfall.
Earlier this year, public employees saw price hikes to their monthly premiums, as well as to how much they pay for certain medications and doctor visits. State lawmakers avoided steeper upsurges in costs by kicking in $21 million from the General Fund.
Past presentations from state officials revealed nearby states like Maryland, Pennsylvania and West Virginia pay up to 25 percent less for similar employee and retiree health care benefits.
Delaware’s small size and lack of providers is allowing providers to fleece more money out of the state says Geoff Klopp, president of the Correctional Officers Association of Delaware.
“We’re basically being geographically monopolized by Christiana Care, [Bayhealth Medical Center] and there’s not enough competition to force competitive pricing,” Klopp said.
Statewide Benefits Director Brenda Lakeman acknowledged the lack of provider diversity in the state, noting her department has asked insurers to be “more forceful” with hospitals charging high prices.
But Lakeman says there needs to be a decision as to how far they should push them, noting it could lead to a refusal to accept certain insurers, like the ongoing battle between United Healthcare and Nemours Alfred I. duPont Hospital for Children.
“We’re willing to do that, but we have to be willing to have some strong armor here,” she said.
“At the end of the day, [Christiana Care] is not going to pick their building up and leave and I’m quite sure they’ll be happy to take 20 to 25 percent less of the profit from us and still make a profit than to attempt to take their business and leave and go to another state,” Klopp said.
Bill Oberle, a former state representative and current lobbyist for the Delaware State Troopers Association, says he doesn’t see any other way around dealing with the situation than to legislate.
“Absent a regulatory scheme, we’re chasing our tails,” said Oberle, but he had no specific plan.
Hospitals aren’t thrilled with the idea.
Wayne Smith, former House Majority Leader and head of the Delaware Healthcare Association, the collective state hospital lobbying group, notes there are other solutions – like tweaking the state’s benefit plan in ways to control costs, though he offered no specifics.
But Smith says further regulation won’t have the desired effect state officials are looking for.
“Anytime you have an artificially regulated rate environment – that the objective of that is to control costs – those costs have to be provided for out of other available sources of revenue.”
Still there seems to be bipartisan support for some sort of legislative action tamping down healthcare prices, with state Sen. Dave Lawson (R-Marydel), one of the most conservative lawmakers in the General Assembly, saying he has no problem with it if it forces all players to come to the table.
Legislators set a precedent for wrangling hospitals into a fee control system for workers compensation insurance in 2014 after a compromise that corralled fees for smaller, private clinics as well.
But any grand bargain most likely won’t affect the problem in the upcoming fiscal year, as a comprehensive audit of potential fraud would likely not be completed until June, according to Lakeman.
Recommendations from the task force are due Dec. 1.
