Analysis | To Make Healthcare Affordable, Break Up OHS

Candidates are hearing a lot about affordability, in Connecticut and across the country. Rising healthcare costs are a big part of the problem, erasing any wage increases. Connecticut is among the most expensive states for health insurance premiums, and they're rising fast.

Our state Office of Health Strategy (OHS) is tasked with finding solutions that lower costs and improve quality. Setting a statewide healthcare strategy requires deep data analysis and focus. But OHS has grown too big and is juggling too many plates. The state should move some of its many responsibilities back to better homes and allow OHS to focus on the mission.

Over the years, a mountain of functions has been added to OHS's scope. In addition to monitoring and devising policy priorities to improve the value of healthcare, OHS is also tasked with:

* Approving Certificate of Need applications from health systems seeking to add or drop services;

* Running our state's Health Information Exchange, linking patients' medical records across providers;

* Running our state's All Payer Claims Database, collating extensive, granular data on healthcare spending across the state;

* Quality of care monitoring statewide and by provider;

* Prescription drug price transparency;

* Hospital financial reporting, including medical and administrative spending details;

* Hospital community benefit reporting;

* Collecting patient discharge data, including race, ethnicity, language and disability metrics;

* Tracking primary care spending in Connecticut;

* Coordinating 14 advisory councils and committees, and;

* OHS publishes dozens of reports, most required by law, annually. They aren't sure if some of the reports are making a difference.

This is a long list. Other states don't have all these roles under one agency, led by one Commissioner. It distracts from OHS's main job, to define strategies that improve Connecticut's health landscape.

This overloaded job list can also be a conflict of interest. One of OHS's most important goals is to work with overspending health systems, insurers, and drug companies to lower costs. One way large health systems cut costs and improve their bottom line is to shut down unprofitable services, such as birthing centers. The conflict arises with the Certificate of Need approval process, unfortunately also housed at OHS, that is meant to consider community health needs and preserve essential services in any service closure, not the hospital's bottom line. These checks and balances must be separate and independent to ensure affordability as well as access to critical care.

Health insurance is a private market. OHS doesn't have a lot of levers to lower costs. It's hard to effectively regulate providers while urging them to make changes that constrain their prices and revenues. OHS's most recent policy recommendations are underwhelming:

* Developing Performance Improvement Plans (PIPs) with overspending health systems, insurers, and drug companies, in private negotiations without community input or legislative review. This is a very bad idea. The causes of rising health spending are complex, and the law of unintended consequences is strong in healthcare. PIPs are one-offs, not long-term sustainable solutions that address the drivers of rising costs across the market.

* Moving more prescriptions to generics would have limited impact. Over 90% of US prescriptions are now for generic medications. The highest cost drugs tend to be new and are protected from competition under patents.

* Expanding use of Alternative Payment Models (APMs), placing more financial risk on providers, has failed miserably. Lowering healthcare costs is not as simple as tweaking contract incentives. Despite many years and billions of dollars invested, most experiments with APMs have disappointed, by increasing costs rather than lowering them, with no clear improvement in quality.

It is a good time to break up OHS. The current Commissioner is not permanent. The administration will be choosing new leadership that can focus on the core mission. The new leader will take on a solid staff of health policy experts, but the office needs to build more internal capacity and lessen reliance on consultants. Consultants are expensive and they take their expertise with them when they leave. OHS needs to partner and build trust with communities, advocates, providers, payers, and other stakeholders who share their goals, especially as we face the impact of federal cuts and disruption on healthcare.

There are promising policy options to lower costs responsibly. But to stay laser focused on lowering costs and improving healthcare quality, OHS needs to shed distractions and conflicts that are holding the office back. Those functions have better homes elsewhere inside or outside government, as in other states. New OHS leadership should encourage this transformation, partner with like-minded stakeholders, and follow the evidence to make healthcare affordable in Connecticut.