Hartford Business Journal

BOOK OF LISTS 2020 | 13 ECONOMIC FORECAST // HEALTH CARE CT faces pressure to lower state health-plan costs in 2020 Q&A talks to state Comptroller Kevin Lembo about efforts to lower healthcare costs at the state level as well as more broadly. He's got pressure to make headway — Gov. Ned Lamont's two-year budget requires Lembo and other members of the Health Care Cost Containment Committee to find ways to save $180 million over the biennium in efficiencies that don't reduce worker benefits. In 2019, your office announced a new pharmacy contract with CVS Caremark that involves over 200,000 government employees, retirees and dependents, calling it the "first of its kind" in the nation because it gives full line of sight into pharmaceutical costs. What is one of the most significant differences about the agreement and why does it matter? This contract is a game-changer in the market. Typical contracts give employers little to no information about what they're actually paying for, or what unknown financial arrangements exist between PBMs (pharmacy benefit managers), pharmaceutical corporations and pharmacies. This typical carte blanche to PBMs needs to stop. This contract is different. Connecticut is calling the shots on prescription-drug costs and quality. Under our new contract, the entirety of all drug manufacturer payments to the PBM will be passed on to the state, and we will fully know and only pay the amount that the PBM paid each pharmacy for the cost of filling prescriptions with no added so-called "spread pricing," the practice of PBMs charging plans more than what they paid. In September, you put health insurers "on notice," issuing a request for proposals that would give your office a seat at the negotiating table where insurers and providers decide reimbursement payments related to the state's healthcare plan. How might we see this play out in 2020? Employers across the country have long ceded control, responsibility and oversight of healthcare purchasing to health insurance corporations — but that old way of doing business has been broken for some time. We are preparing for a new market-altering dynamic where the state will ensure that corporate healthcare interests are better aligned with the interests of patients, healthcare providers and the state of Connecticut health plan. The state health plan, which serves approximately 210,000 lives of state and municipal employees, retirees and their dependents, is a self-insured plan, and contracts with Anthem and UnitedHealthcare to administer patient claims and negotiate reimbursement payments with healthcare providers. My office is in the process of completing an RFP process. The most significant change we are preparing for is that the state will have a direct seat at the negotiating table where health insurance reimbursement payments are established between health insurer(s), hospitals and other healthcare providers. Rather than deliver health care on terms negotiated between corporate interests alone, the state is demanding that the health care we pay for is driving quality up and costs down. In other words, we will not allow our contractors to pay for poor quality or duplicative unnecessary care. We will build a healthcare payment system that rewards quality and efficient care and the best possible patient outcomes. You've spoken in favor of Connecticut importing drugs from other countries, like Canada, to save money. What kind of savings might that achieve, and why is it so hard to get it done? Change of this scale is hard because it would disrupt one of the world's most powerful industries, but policymakers have a responsibility to lean in to this discomfort. Drug importation should be examined further. Our country is now funding pharmaceutical innovation while the rest of the world is enjoying the benefit of those investments at a fraction of the cost. The true savings and policy path to drug importation is something that will have to be investigated and analyzed further. St. Francis Hospital, other care providers eye expanded services, more M&A activity in 2020 Q&A talks with Dr. John F. Rodis, president of St. Francis Hospital and Medical Center about what's ahead for his hospital and the broader industry in 2020. Orthopedic surgery is a major service line that's become increasingly competitive. St. Francis has its Connecticut Joint Replacement Institute (CJRI) and just across town Hartford Hospital has its Bone & Joint Institute. St. Francis is also planning to open a $26.2-million Orthopedic and Spine Surgery Center on Woodland Street. What's driving these investments? The U.S. population is aging and these individuals want to continue to stay active and not live with chronic pain. The American Academy of Orthopedic Surgeons estimates that the volume of total-knee arthroplasty will increase 189 percent, to 1.3 million per year, by 2030. That volume is expected to rise by 3.8 percent per year until 2060. The healthcare value transformation will continue to incentivize patients to utilize centers of excellence where they can receive great outcomes, delivered safely, all at reasonable costs. Ambulatory surgery centers (where patients typically go home the same day as their surgery) are a more convenient option for patients and don't have the substantial fixed costs of a 24/7/365 large level one trauma center. Our Lighthouse Surgery Center, anticipated to open in early 2020, will provide state-of-the-art orthopedic services, pain management procedures and on-site physical therapists, all under one roof. Our orthopedic and spine surgeons and our Woodland Anesthesia group are all part of this joint venture. Are there any other major capital projects in the works at St. Francis? We have planned improvements in our cardiovascular and maternity units. We recently completed a new master facility plan and are in the midst of planning a new Smilow Cancer Hospital at St. Francis, which will be the result of either a major renovation to the existing building or a totally new building on the campus with repurposing of the old location. Additionally, we are planning an expansion to our cancer services at our Enfield campus and to our urgent care ambulatory footprint to bring care closer to patients' homes. What are the biggest hurdles ahead in 2020 for hospitals in Connecticut? The few remaining independent hospitals will face important decisions whether to stay independent or merge with one of the large systems in the region. These are hurdles for both the acquired hospital as well as the expanding systems. The continued pressure to reduce costs and improve quality and outcomes at the same time will be challenging for some. Trinity and St. Francis this past year continued to build on their clinical alliance with Yale New Haven Health, a partnership that began in 2015 when Yale opened a Smilow-branded cancer treatment facility at St. Francis. Recently, your crosstown competitor Hartford HealthCare announced it would pursue a proton beam thearpy cancer treatment facility in Wallingford with Yale. How is the competitive landscape for cancer care in Greater Hartford changing? We support bringing the highest quality of care and patient technologies to the citizens of Connecticut. Rather than any one system absorbing the high cost of proton beam therapies, we support health systems and private enterprises joining forces to share these higher costs. Our relationship with the Smilow Cancer Hospital continues to grow. More patients in Hartford have access to the latest clinical trials through our affiliation with Yale/Smilow. We've expanded our capabilities to Glastonbury, and we look forward to a long relationship providing patients with cancer the highest quality of care. Kevin Lembo Dr. John F. Rodis

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