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Hospital Prices: the Policy and the Practical

We have prepared a compendium of state and federal policy interventions to address hospital pricing.

This important reference tool outlines the opportunities and challenges for each solution—with three clear takeaways:

  1. There is no one perfect solution to solve the issue of high hospital prices and healthcare costs.
  2. It is possible to lower hospital prices while preserving affordability and access to high-quality providers, and it is happening all over the country.
  3. New York was notably absent from the states that are actively engaged in tackling the issue of high hospital prices.

 

The 32BJ Health Fund believes that we can find a path forward for equitable and sustainable solutions that tackle the problem of high hospital prices.

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Hospital Prices: Unsustainable and Unjustifiable

The Health Fund has published a report of our claims data analysis and other publicly available information that found we were charged $1.1 billion above Medicare prices from 2016 to 2019. 

The leading driver of these costs is the skyrocketing price of hospital care, especially in the New York City market. 

Unless dramatic action is taken to rein in hospital pricing, access to affordable care for our participants, as well as millions of others who depend on hospitals to provide critical care, is in jeopardy. 

In this report, we identify where hospital prices are highest and how they impact our participants. We also address some of the most common misconceptions about hospital prices and identify policy interventions that have proved effective in various locations around the country.

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Price Transparency Compliance Among NYC Hospitals

Healthcare represents an ever-larger share of employee compensation. Rising hospital prices are a key driver of these costs, yet these prices remain opaque. More than 158 million people get their insurance through their employers, yet employers and other commercial purchasers have no prospective insight into healthcare prices paid by similar purchasers in their local markets. 

Federal regulations require that hospitals publish a list of negotiated prices, yet our analysis of data from hospitals in the greater New York City area revealed that most of them have failed to fully comply. Further action is needed by federal, state, and city regulators to ensure compliance with hospital price transparency regulations so that purchasers can make informed decisions.

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Case Study Highlights

32BJ Health Fund Fights High Prices at New York Hospitals with 2019 Network Redesign

We know that high prices can be a barrier to treatment for our participants, and the key driver of rising healthcare costs is hospital prices. Therefore, in April 2019, the Health Fund implemented a new network design that distinguished between preferred and nonpreferred health systems and classified those that charged significantly more as nonpreferred, with correspondingly higher copays for planned care. While the majority of plan participants were already using preferred hospitals, we created a communications campaign to educate them about the benefit change. Several months later, an increasing number of participants had selected preferred hospitals for care, and most said that they viewed their health benefits, the quality of in-network providers, and the number of providers near them “very favorably.”

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Total Joint Replacement: Partnering to Reduce Costs and Boost Quality

We used our claims data to identify Mount Sinai Health System as a lower-cost but high-quality provider in an otherwise expensive market, and in 2016, the Health Fund contracted directly with Mount Sinai to reduce the cost and improve the quality of total joint replacement (TJR) surgeries. In January 2022, we expanded our partnership to include specialty hospitals in five additional states to establish the 32BJ Health Fund Centers of Excellence (COE) for Joint Replacement and Weight Loss (Bariatric) Surgery. Participants have a $0 copay for their surgery and specific follow-up care. Moreover, 100 percent of program participants say they are satisfied with the results of their care, and 97 percent would recommend the program to a friend.

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Union Health Center: The Premier 32BJ Health Fund 5 Star Center

The Union Health Center (UHC) traces its founding to 1914 by the International Ladies’ Garment Workers’ Union (ILGWU) to provide healthcare to its members. Today, UHC continues to prioritize caring for the health and well-being of working people—including 32BJ members and their families. In 2012, the 32BJ Health Fund partnered with UHC to establish our 5 Star Center model for primary and specialty care, where our participants pay a $0 copay for most services. As we’ve expanded our model across several states, UHC remains our flagship center. Most 5 Star Centers are recognized as Patient-Centered Medical Home Model (PCMH) Level III by the National Committee of Quality Assurance (NCQA). 

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Podcasts & Videos

Getting your data is the critical first step for employers and unions in understanding healthcare usage and costs and figuring out how to reduce spend without sacrificing access to high-quality care for employees and members.

In this encore release of the Relentless Health Value podcast (EP372), host Stacey Richter spoke with Cora Opsahl about how the 32BJ Health Fund has invested in using data to reduce costs, forecast healthcare trends, and improve financial solvency. In 2022, we made multiple benefit changes that saved the plan more than $35 million.

32BJ Health Fund Director Cora Opsahl spoke at the October 31, 2023, kickoff for Catalyst for Payment Reform’s webinar series, Pioneers of Progress.

We created this video to help employers and other healthcare purchasers determine how much they are paying for healthcare and to show them what they can do right now to reduce their hospital spend. 

What we’re reading & listening to

Like many of you, our team is inundated with information, so we often compare notes about what made it to the top of our lists. Here are some of our ongoing favorites as well as current material we’re paying attention to. We’re always open to suggestions on things that you think are worthwhile.