Hartford Business Journal

26 HARTFORDBUSINESS.COM | JULY 10, 2023 Trinity Health Of New England, its hospitals, and providers have a legacy of being a transformative and healing presence within our communities. We promote the health and wellness of individuals and are committed to working with partner organizations to eradicate health disparities. At a time when health care costs for families, businesses, as well as state and federal governments challenge the outlook for a healthier future, hospital systems must continue to provide access to essential services vital to public wellbeing, while navigating the financial instability caused by inflationary cost pressures experienced during and continuing after the pandemic. We are actively working to deliver quality care, better patient outcomes, and improve the overall health of our community. However, fair, and adequate payment for services delivered are critical to continue this mission. Hospitals are dependent now more than ever on adequate payment rates to maintain access for essential health services such as trauma, strokes, and heart attacks. Hospitals receive payments from three primary sources: Medicare, Medicaid, and commercial insurance. Medicare is the federal insurance program that pays for health care costs for those 65 and older. Medicaid is the federal-state insurance program that pays the health care costs of low- income families, individuals with disabilities, and some seniors. Most hospital systems lose money on Medicare and Medicaid, with both Medicare and Medicaid paying significantly less than the cost to provide care. There is also needed care for patients with no health insurance that is uncovered. As hospitals work daily to deliver essential care in times of need for patients, financial sustainability is highly correlated with commercial insurance business and commercial rates. Commercial rates can vary within the same state or com- munity for same services provided. Hospital systems with more commercial business and better commercial rates are at a competitive advantage to those receiving lesser rates for similar services. Ironically, many hospitals receiving lower commercial payments provide an oversized safety-net function for the community, serving high percentages of Medicaid and other vulnerable populations. Commercial underpayment threatens the stability of safety-net hospitals, which in turn impacts the vulnerable populations they serve. A recent report from the RAND Corporation "Nationwide Evaluation of Health Care Prices Paid by Private Health Plans" shines a bright light on commercial insurance price disparity and validates that hospitals with less market power get paid less by insurers than hospitals with more market power. The variability is significant with some hospitals across the state being paid 30 percent, 40 percent, 50 percent or more for providing comparable services to patients in similar communities. A conclusion of the RAND study was, "very little variation in prices is explained by each hospital's share of patients covered by Medicare and Medicaid, ... a larger portion of price variation is explained by hospital market power." Market power should not create disparities in payments for hospital care in our communities. Lower commercial health insurance rates for smaller hospital systems with less market power impacts the ability to make needed investments in staff, infrastructure, clinical equipment, and physicians to serve the needs of the community. This disparity also creates an environment where hospitals with less market power are faced with difficult decisions such as program closure for services unable to be maintained or consolidation with a system that has more market power. Rising health care costs and medical debt for patients were front and center on Connecticut's legislative agenda. We thank Governor Ned Lamont and the Legislature for their leadership during this year's session in addressing the medical debt issue and for engaging with hospitals and other stakeholders to help restore some competitive balance in the health care market by prohibiting anti-competitive contracting practices. This legislation will help patients access higher quality, lower cost care and is progress towards a value-based payment system. Value-based payments incentivize providers to consider the whole person, including clinical needs, patient experience, health equity, and social influencers of health by linking reimbursement models to the quality and outcomes of services delivered, instead of solely on the volume of services delivered. In the near term, ensuring competitive commercial rates for smaller hospital systems lacking market power is crucial for needed market competitiveness. In the long term, the development and transition to better aligned payment and care models is the path to a sustainable high-quality health care future. While hospitals continue to face unprecedented challenges, from workforce shortages and high inflation to pandemic after-effects, communities will benefit from more competitive health care systems by ensuring commercial health insur- ance rate parity, and encouraging innovative and lower cost options that expand access and consumer choice. Hospitals who focus on providing the highest quality of care at the lowest possible cost, should receive adequate funding and reimbursement. TrinityHealthOfNE.org Montez Carter, PharmD, FACHE President and CEO Trinity Health Of New England

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