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32BJ Health Fund conference tackles uncontrolled hospital pricing

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32BJ Health Fund held its fall conference Thursday to address the challenges of higher hospital prices and uncover data-backed solutions endorsed by lawmakers and national policy experts.

The event, titled “Hospital Awards: The Policy and the Practical,” featured keynote speakers Kyle Bragg, president of the 32BJ SEIU Union, Cora Opsahl, director of the 32BJ Health Fund, and Dave Chase, founder and co-leader of Health Rosetta, in presence of nonprofit leaders, policy experts and legislators.

32BJ Health Fund is a multi-employer fund serving more than 200,000 union members and their families, jointly managed by both the union and its employers representing more than 5,000 employers who contribute to the fund. With members in more than 11 different states, the Health Fund represents the needs of essential workers, including property maintenance personnel, security officers, window cleaners, construction engineers, school and food service workers, and most recently airport workers included in the 32BJ SEIU union.

“We really see the fund as our responsibility to ensure our members have high quality benefits at an affordable price,” said Opsahl. “We have no premium sharing and no deductible for network care, so that 100% of the health care allowance is paid by the employers. We believe that it is the responsibility of the health insurance fund to guarantee the affordability of the benefit and not on the backs of our members.”

Emphasizing the troubling implications of increased hospital prices, Opsahl stated that hospital services have grown more than 80% since 2009 compared to drug prices which have risen just under 30%. “Since 2004, healthcare has increased from 17% of the total reimbursement to 37% of the total reimbursement. And in that same period, wages have increased by 54%, but health care costs have increased by a whopping 230%. To put that into a real figure — over the past 10 years, our members could have had $5,000 more in annual wages, if health care spending had increased at the same rate as inflation,” Opsahl said.

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To increase hospital accountability and combat uncontrolled pricing, Opsahl suggests using new data collection tools, such as RAND, NASHP, and Turquoise, to highlight wasteful hospital spending and help identify potential savings.

“The data is at the heart of what we do. We receive all our claim data and we use that data for our benefits and plans for design decisions. It includes how we spend our dollars on health care, the cost of the funds for our plan design changes, and the foundation for where we are going in the future,” she said.

Opsahl further emphasized the importance of state and municipal intervention to systematically address high hospital prices and hospital behaviour.

Chase, who delivered the keynote speech, highlighted successful examples in states such as Florida, Alaska and Montana with successful interventions in hospital pricing to highlight the restoration of “health sovereignty” among communities.

“It’s very clear, there’s a better way. We’ve seen it succeed in every part of the country, rural and urban, with employers small and large in the public and private sectors. It’s just a matter of will, but it’s absolutely doable,” said Chase. “The first part is mindset, the second step is optimizing planning and structure.”

Chase emphasized the importance of codifying accurate data and navigating federal regulatory frameworks such as ERISA to identify hidden costs and inefficiencies:

“We found that more than 95% of factory owners, employers and unions have never hired an ERISA lawyer, which is the regulatory framework. They don’t look at the agreements. That’s basically what codifies a trillion and a half dollars in wages. Therefore, the worst result we have is an absolute 20% savings in spending. We swept those contracts and the abuse that keeps these contractors out would be unacceptable in any other realm.

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As the COVID-19 pandemic brought a storm of demand for more hospitalization, with some communities doing worse than others due to a lack of available medical resources, Chase urged to change conventional perspectives on traditional hospitalization by opting for open source hospitalization.

“I challenge you to see every hospitalization as a failure. There is an administrative burden, and there is overtreatment and inappropriate care. There are some exceptions, but 60% of hospitalizations are preventable, if you go far enough, 90% upstream. And there has to be radical transparency and either billing options. Over there [is progress] when people outsource care, but current standards prevent much of this from happening,” Chase said.

Among the conference attendees at 32BJ’s Manhattan headquarters, State Sen. Jessica Ramos, whose district includes 32BJ union members, on the flaws in hospital prices.

“This room is filled with national policy experts and people who can really help us as lawmakers, doing our best to overhaul a system that isn’t working,” she said. “I hope we come up with some solution-oriented strategies that always help inform our work as lawmakers.”

State Sen. Gustavo Rivera, chairman of the Health Commission, also in attendance, suggested moving to a single-payer system to address rising hospital prices and general medical costs. “Striving for a single-payer system would help solve many, if not all, of the problems we’re talking about. Because another thing we didn’t mention was insurance. And that’s something we definitely need to talk about.”

Lawmakers at the conference seemed poised to crack down on predatory hospital prices. New York City Councilor Julie Menin and City Councilor Lynn Schulman said they had introduced a new legislative package that would lead to the creation of an Office of Hospital Accountability.

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“The [office of hospital accountability] would require the hospitals to disclose their prices, there would be no comparison charts, there would be figures on how transparent these hospitals are, there would be reporting mechanisms to the attorney general, who can then take enforcement action,” Menen said.

With New York City spending nearly $9.5 billion on health care costs, a figure that represents 10% of the city’s $1 billion budget, Menin insists that current spending practices are unsustainable:

“If you think about other industries, people don’t get pricing information, or send patients to hospitals at their most vulnerable point without any information about what they’re being charged for, it’s unscrupulous, and this legislative package would stop that practice. ”

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