The challenges for Americans’ health care are rising. The one-two punch of higher insurance premiums and rising drug prices are squeezing American families. UnitedHealth Group was first to stop selling individual health insurance in most Obamacare exchanges, saying it expects to lose nearly $1 billion on Obamacare policies. Then Aetna said it will stop selling insurance in 11 of the 15 states where it had been active. It’s also abandoning expansion plans in five other states. That, followed by the 400% spike in the price of Mylan’s EpiPen recently, was another reminder of the squeeze on American families as a result of the cost of health care. In the short term, insurers will likely push for substantial premium increases. And drug prices are not going down. I caught up with the President and CEO of NewYork-Presbyterian hospital group, Dr. Steven J. Corwin, to understand the real impact to consumers. Our interview follows, edited for clarity and length.
Q: Why are we seeing so many insurance companies drop out of the exchanges?
A: The individual insurance market, the exchanges, have been a problem in terms of typical actuarial analysis that you go through as an insurance company. So you want to have sick people, as well as healthy people insured. And the healthy people pay more in premiums just like it would be for car insurance or any other type of insurance. What’s happened in the individual insurance marketplace and the exchanges is first, the patients have been sicker. That tends to drive premiums up. The ability to expand the amount of premium increase has been limited. The consequence of this is the insurance companies are losing money. And the only way that this can be rectified is to somehow get healthier people to join the exchanges through greater insurance subsidies, which would be in the form an expanded income credit or tax credit for the individual market. subsidies were initially promised. The amount of subsidization has been far less than what is required.
Q: It was really more of an insurance law than health care?
A: It’s healthy for the U.S. to have more people insured. It’s healthy to have both a public-pay and a private-pay system. The problem has been that the regulatory apparatus around the exchanges has created problems. That’s why some of the health cooperatives failed, and that’s why you’re seeing some pullback.
Q: What has been the impact on hospitals?
A: There have been Medicare cuts. The individual insurance exchanges, depending on the state you’re in, have benefited some hospitals by virtue of greater number of people insured and more people on Medicaid. But that is countered by the fact that some of the Medicare cuts have hurt hospitals. It’s still of benefit in this country to insure more people. But we’ve got to change some of these rules around the way the insurance exchanges work. As an example, we had the whole issue about making sure that somebody wasn’t denied insurance with a pre-existing condition. The problem is that you can get sick and then apply it to the exchange. And people can switch programs once they’re sick. And so that’s also distorted the marketplace. So if both parties put their heads together, we can come up with a more rational way of doing individual insurance. It would help the country to have more people with insurance, more emphasis on prevention of disease, more emphasis on careful care of chronic disease. This will lower the cost of health care over time in this country.
Q: What are you doing at New York Presbyterian to grow?
A: We are making sure doctors have terrific facilities to operate in and to see patients in. We make sure that we have the best doctors. And we try to convince consumers that the outcomes that we have and the quality that we have merits them coming to our institution. People should be free to choose. Our quality outcomes and our mortality outcomes have really been quite extraordinary. We take care of a disproportionate number of people who are underinsured or uninsured, including Medicaid patients. That’s a great equalizer. When we talk about inequality in the country, the great centers being able to care for people who don’t have means is really important. If you combine the research missions of these academic institutions with great clinical care, you get better clinical outcomes.
Q: There’s been much consolidation in the industry. Do you need to get bigger from here?
A: We’ve been very opposed to further consolidation in the insurance industry. Being left with three major insurers with the potential for Aetna, Humana and Cigna and Anthem to combine I think would be over-consolidation. I know that people are concerned about hospital consolidation as well. A couple of things that should be pointed out about that. First, many hospitals have taken over hospitals that otherwise would’ve failed. Second, I think for us to achieve the notion of population health, to get to more regionalized care you have to see some consolidation. From my standpoint, we’re big enough. And we have a fair amount of competition in the New York marketplace. There are some areas of the country where competition is less than desirable. And we need to be careful not to overly consolidate the hospital industry. But some consolidation is both necessary and desirable.
Q: Was it the right move that the DOJ blocked the Humana/Aetna merger?
A: Yes. It would’ve been an over-consolidation, and it would’ve left many markets with only one insurer to give a Medicare advantage. And I think the same thing applies with the Anthem/Cigna tie-up. Now, ultimately this will be ruled on by the Department of Justice. And in some of these circumstances transferring of assets or dispensing of assets is required in order to achieve a settlement. But, as constructed, it was ill-advised.
Q: Because when you have too few players there’s no competition on price?
A. That’s right. And the same thing applies on the hospital side. I think that if you overly consolidate sometimes it becomes problematic.
Q: U.S. News and World Report health rankings once again included your organization at the top. Congratulations.
A: Thank you. Our philosophy has been very simple. We are totally committed to reducing unnecessary utilization. We don’t want people to have to have extra MRIs or extra CT scans. We don’t want people to have unnecessary operations. We do an extensive second opinion program. We want to prevent disease. So we have a robust clinic system to try to prevent people from coming into our emergency rooms, to try to prevent people from needing hospitalization. So we want to reduce unnecessary utilization, and we want to be attractive to people. What we’d like to see from a macro standpoint is the number of in-patient admissions, the number of procedures being done in the United States, go down. And that we, New York Presbyterian, have an increasing share of what remains by virtue of the fact that we’ve got the highest quality and the most capable physicians.
Q: You were ranked No. 1 in New York, No. 6 national, No. 2 in rheumatology, No. 3 in cardiology and heart surgery, and No. 3 in neurology and neurosurgery. What today is the most pressing or biggest challenge on the health care side for people? The big challenges that we’re still trying to get our arms around in terms of cure?
A: Heart disease is still the major killer, and we’ve made huge progress in heart disease both from the standpoint of medications and devices. We have significant issues in neurologic diseases particularly the degenerative diseases like Alzheimer’s and Parkinson’s. We need to make progress there. And whether you call it a “moonshot” or not as Vice President Biden has, we need to make more progress in cancer. And I think that that’s critically important for us. So I would say heart disease, neurologic disease and cancer.
Q: How has technology changed things?
A: There’s been enormous, positive impact. Let’s start with the medical technology. You could be an 85-year-old dying of aortic stenosis and now we can put in a percutaneous valve. We can do it from the skin. Somebody can be out of the hospital in 36 to 48 hours. And have tremendous quality of life improvements and longevity after that. Devices like trans-catheter or aortic replacement, some of the devices like automatic defibrillators, devices like these on the cardiac side have really moved things forward. Robotic surgery has improved dramatically. And that has been a huge plus for us. So those types of devices that can help with highly technical operations make operations more minimally invasive.
On the information technology side, health care is still behind other industries. There needs to be a real push to create better electronic health records, more inter-operability amongst various types of electronic systems and cybersecurity is becoming a huge deal in in health care. Health care records are highly sought after by virtue of the fact that not only do you have somebody’s person financial information, you also have their person medical information. And that’s another reason why consolidation in the industry is inevitable because you need scale in order to have the amount of capital expenditure that is required to do some of these things. Not just bricks and mortar, but the investment in a substantial upgrades in information technology.
Q: Can we actually stop the bad guys, do you think?
A: It’s looking harder every day. it is going to be an ongoing threat. It’s getting worse, not better. What we’ve instituted at my institution is a weekly assessment of cyber threats coming directly to my office, almost akin to a national intelligence briefing as opposed to waiting for an event to happen.
Date: September 04, 2016