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Are Employers Growing Wary of Their Health Insurance Partners?


The announcement by Amazon's Jeff Bezos, Berkshire Hathaway's Warren Buffett and JPMorgan Chase's Jamie Dimon, about a new health care company they were forming to address rising health care costs, enraged some health insurance companies. Some of these insurers were clients of JPMorgan Chase so Dimon assured them that only employees of the three companies would benefit. But Dimon recently admitted feeling annoyed by the response of the health care companies. He expected "a lot of these people we already do business with to call us up and say, ‘What can we do to help?" He expected a partnership.

So far the public response from big health insurance company CEOs has been diplomatic. Cigna CEO, David Cordani, stated in multiple interviews with the financial press that he sees the venture as "an opportunity." Aetna's CEO, Mark Bertolini, also to the financial press, said, “There is an unmet consumer need in health care." And UnitedHealthcare CEO, David Wichmann, said, "We invite innovation in health care." But Wichmann also said, "Our goal is to help people and make the health system work better for everyone. If Amazon can contribute to that, they should bring it." This refreshingly honest statement from Wichmann and his singling out of Amazon, implies that at least one big insurer considers the new company to be a competitor. But it is the sentiment expressed by outgoing CareFirst BCBS CEO, Chet Burrell, when he said, "What exactly are they going to do differently?" that is mostly likely what the big insurers are all thinking.

With Friends Like These

How long did health insurers think they could hand-deliver products that cut costs by shifting it to employers and their employees? Large employers were early adopters of skin-in-the game cost-cutting strategies like PPO and HDHP plans and know the limits of these schemes. Now, these employers want to see lower health care prices, which means health care insurers have to step up their game. To lower health care prices for their employer groups, insurance companies have to get greater price discounts from hospitals, doctors and pharmacy benefit managers, not just focus on employee behavior.
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Knowledge Isn't Power When Managing Health Care Costs


To shine a spotlight on America's outrageously expensive health care system, two media firms that are great at explaining health care policy, asked individuals to share their medical bills with them. Kaiser Health News (KHN) and National Public Radio's (NPR) "Bill of the Month" series does exactly what its name implies. It takes a medical bill submitted by an individual and dissects it to better understand how, for example, four tiny surgical screws or one extensive urine test can cost as much as a car. Vox Media, the other news organization requesting medical bills, performs a similar review, but for hospital emergency room bills only.

Both the KHN/NPR and Vox projects started in 2018, but stories about inexplicably high medical bills are not new. Major news organizations have been shocking readers with reports of shameless health care price gouging for years. Journalist,
Steven Brill's 2013 article, "America's Bitter Pill…" in Time Magazine, grabbed the nation's attention like no other health care price article has before or since. In fact, Brill's blockbuster article likely inspired NPR and Vox's current medical bill review projects, as well as several bestselling books on the subject.

Meanwhile, a similar information campaign about income/wealth inequality is also cause for outrage. But if the response to news about income/wealth inequality is any indication, what can we expect the stories about health care price gouging to accomplish? Remember
Occupy Wall Street and Fight For $15—how participants in these movements were mocked as naïve losers out to take from the makers? And how Republican lawmakers enacted tax cuts for corporations and wealthy individuals to punctuate the defeat of these groups? It's not hard to believe that this is the fate of the health care price outrage campaign. For every successful teachers' strike there is an annual health insurance premium increase to gobble up any negotiated benefits increase. Continue Reading...

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