Unhealthy Behavior, Repeat Hospital Stays Spur Rise in Health Costs, Forum Says

Andrew Kitchenman | January 21, 2015 | Health Care
Assembly Minority Leader Bramnick convenes group of healthcare experts to explore problems, discuss potential solutions

Assembly Minority Leader Jon Bramnick (R-Morris, Somerset and Union)
A wide range of unhealthy behavior and poor management of chronic illnesses are among the leading factors driving New Jersey’s high healthcare costs, according to healthcare experts who gathered at Kean University yesterday.

The group was gathered by Assembly Minority Leader Jon Bramnick (R-Morris, Somerset and Union) to discuss potential policy solutions to problems with the healthcare system.

The discussion centered on several factors that have gained national attention as potential reasons for high healthcare costs, including the increase in childhood obesity, the need to reduce repeated hospital admissions for the treatment of chronic diseases, and the use of “defensive medicine” to prevent malpractice lawsuits. While several proposals for legislation emerged from the forum, a number of participants said key stakeholders could reach important compromises if they spent more time talking with one another.

Bramnick, a potential 2017 gubernatorial candidate, said he’s interested in drawing on the experts’ knowledge in proposing legislative solutions. While the Democratic majority controls the legislative agenda, Bramnick said that the major healthcare issues are nonpartisan and he hopes to build broad support for changes.

Wardell Sanders, president of the New Jersey Association of Health Plans, said it was important to rein in the high costs of services charged by providers who are outside of insurance networks. He said that the state should ensure that the amounts charged by hospitals and doctors is “in some way commensurate with the services provided.”

This drew a response from Neil Eicher, vice president of government relations and policy for the New Jersey Hospital Association, who said that hospitals would close if they don’t have the ability to go outside of networks. In addition, Mishael Azam of the Medical Society of New Jersey said insurance companies have been intentionally reducing the size of their networks, putting pressure on doctors.

Dr. Raj Raab, a neurosurgeon, said that defensive medicine has become a major cause of rising costs because doctors and hospitals want to avoid lawsuits, so they order unnecessary tests and other services. While Raab cited estimates that as much as 10 percent to 15 percent of healthcare costs result from these decisions, he said he thinks the true cost is much higher as a defensive mindset has affected medical standards for decades.

“It’s been so entrenched in how people do medicine,” he said.

Raab also said that government regulations add to healthcare costs, indicating that when barebones insurance plans were available, healthcare providers would compete to offer lower costs to patients who were paying out of pocket. State regulations and the federal Affordable Care Act eliminated these “major medical” plans.

But David Knowlton, CEO of the New Jersey Health Care Quality Institute, noted that the state mandates that certain high-demand services — including emergency care — must be provided, but doesn’t regulate the cost for these services, contributing to escalating prices.

“What you have in the healthcare system is market forces without any market rules,” Knowlton said.

Increasing the availability of healthcare data could also help drive down prices by showing what services are most cost-effective, according to some participants.

Dr. Ted Kastner, who provides primary care to people with disabilities, expressed frustration that he’s been unable to get information from the state Medicaid program about the insurance claims for his patients. He’s hoping to use the data to learn whether his practice has been providing high-value service, but he said state officials have told him that the claims data is proprietary.

Kastner also expressed disappointment with insurance rules meant to keep costs down but end up being counterproductive. He cited one rule that requires patients to try less costly drugs before receiving a prescription that he would recommend. He recalled one patient who had to try five different antidepressants before being allowed by the insurer to use a medication that the patient had been using successfully before entering the Medicaid system.

Dr. Paul J. Carniol, Medical Society president, emphasized the importance of providers working with patients to treat chronic illnesses before they lead to repeated hospitalizations. Judith Schmidt, interim CEO of the New Jersey State Nurses Association, added that nurses play a key role in both coordinating care for these patients and assisting with home-based healthcare.

Douglas Johnston, government affairs manager for AARP New Jersey, said a recently enacted bill that involves caregivers in the process of releasing patients from the hospital also would help reduce readmissions by ensuring that caregivers are well informed about the patient’s treatment.

Dr. Mark Vitale, a dentist, said that dentists may have avoided some of the conflicts between insurers and other provider organizations by agreeing to sit down with insurers and reach compromises.

Sanders agreed that there are benefits to face-to-face negotiations.

“You’re going to argue about money, but there are things outside of the money that can be fixed,” Sanders said.

The discussion turned toward broader public-health measures that could lead to a healthier public.

Assemblywoman Nancy F. Munoz (R-Morris, Somerset and Union) offered support for mandating that fluoride be added to drinking water to improve dental hygiene and prevent future trips to the dentist. Vitale added that he would like to see state funding for oral-health examinations in schools, since early dental problems can lead to more serious health problems.

Assemblyman Erik Peterson (R-Hunterdon, Somerset and Warren) added that he supports mandating a 25-minute outdoor recess for students in kindergarten through grade 6.

“They need to be outside running around, acting like kids,” said Peterson, who generally opposes government mandates.