Why can't employers bargain for lower health care prices? A plan director explains
Cora Opsahl, director of the 32BJ Health Fund, told lawmakers that providers and plan administrators work together to keep prices high.
Health care providers and the health insurers that act as third-party administrators for self-funded health plans blame each other for high U.S. health care costs.
Cora Opsahl, the director of one of the plans, the 32BJ Health Fund, said the providers and the TPAs are working together to increase the costs.
Contract terms between carriers and providers “obstruct, hinder and limit the ability for us or any employers to take action on their data,” Opsahl testified Thursday at a Senate Aging Committee hearing on lack of health care price transparency.
The fund is a New York-based health plan that provides health coverage for about 200,000 union members who work for employers such as schools, airports and real estate companies.
The fund recently requested bids for a TPA contract.
One huge problem was provider contracts that would have hurt the fund’s ability to bargain for better prices and higher quality care.
Here are some of the anti-competitive provisions Opsahl saw:
- Requirements that one very expensive hospital be in the fund’s provider network, simply because the hospital’s contracts with carriers’ forced the carriers to include it in all of their provider networks.
- Rules against putting providers in different tiers.
- Limits on the fund’s access to claims data.
- Restrictions on the fund’s ability to conduct backward-looking reviews of claims for care already provided.
- Limits that would keep the plan from recouping excess payments.
“None of those contract provisions are beneficial for employer-sponsored plans or their membership,” Opsahl said. “This is just one example of how difficult it is for employers and self-funded plans, even of our size, to have a highly competitive bid process.”
Related: Will self-funded plans get caught up in carrier and TPA legal battles?
The result is that, over the past 10 years, the share of total compensation spent on health care has increased to 37%, from 17%.
“Our members could have had $5,000 more in annual wages had health care spend risen at the same rate as inflation,” Opsahl said.