Curb insurance premium increases by analyzing the system
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The Obama Administration’s announcement that average premiums for silver health exchange plans are set to increase 22 percent illustrates the "perfect storm" that is brewing in healthcare today.

Broadly speaking, our established healthcare marketplace that led to unprecedented advances and made it possible for patients to live longer lives increasingly runs the risk of impeding patient access and future medical invention. Premiums are one challenge, but many exist. With a consequential election just days away, the system is as fragmented as it’s ever been.

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We’re achieving incredible medical milestones (think President Carter and immunotherapy for metastatic melanoma), but payment systems are largely designed to manage disease rather than cure it.

At a time when medical science is becoming far more complex and advanced, public and private payers are increasingly limiting access to new breakthroughs. This injects uncertainty into the market.

Too often, the system loses sight of the single most important reason that healthcare exists in the first place: addressing the individual patient’s needs.

One might think that re-engineering the marketplace is the answer. It isn’t. The answer lies in evolving the system so that every decision begins and ends with the patient.

To get started, we must embrace three pillars of a patient-first marketplace: realigning incentives, addressing chronic disease, and bending the cost curve.

First, how our nation keeps patients healthy is based on incentives from the 1940s and 1950s — quantity over quality. This approach made sense based on the science of the day. That’s changed. Aligning market-driven incentives with patient health outcomes — and today’s science — is the single most important step we can take in the short-term.

Consider efforts to define and measure “quality” — an area of healthcare policy that should garner widespread agreement. However, actual patient outcomes are often overlooked in measuring quality and value for reimbursement purposes, leading to confusion, misaligned market incentives and, often times, rewarding process over effective treatments or cures. This hurts patients and leads to higher premiums.

Second, for a marketplace to work, we need a system that holistically follows the path of disease, from prevention to treatment to cures. The existing commercial insurance model is essentially a one-year actuarial framework, designed to work for the health plan rather than the patient. This short term-focus is being eroded further by high-deductible health plans and payers who shift risk and costs to patients.

Disease, especially chronic disease, doesn’t occur neatly in a fiscal year. It evolves over a lifetime. Stronger reinsurance designs that enable insurers to spread costs of new treatments over a longer, more reasonable period of time are needed.

Furthermore, we criticize innovation rather than appropriately reward it. Third-party administrators often focus on restricting access to higher-cost medicines, rather than keeping their patients healthy and living productive lives. Once again, the patient is lost. These realities limit the ability of a functioning marketplace to promote risk-taking innovation that benefits patients. Instead, a serious conversation about insurance and quality standards would help lead to better health outcomes.

Third, we must bend the curve on systemic healthcare costs or we’ll begin to see permanent access barriers that limit patient care and stifle innovation. We’re long overdue to convene a collaborative summit for U.S. leaders across healthcare sectors to rise to the challenge, look at rising systemic costs, and advance solutions that work for patients.

Keep in mind: Healthcare was one percent of the U.S. GDP in 1961. Today, it’s approaching 20 percent (around $3 trillion annually). It’s also important to recognize how we’re spending this money and what we’re getting for it.

Finally, we must make a point to understand what it’s like to be a patient.

We have tools that we didn’t have just five years ago, but we also need to better listen to patient needs and then make decisions based on real feedback.

Recent advances in healthcare will be surpassed by new and life-saving breakthroughs — but this is only possible if we create a well-functioning market that begins and ends with the patient. Without it, we’ll only continue to see premiums and co-pays rise while we all fall short of a clear and non-partisan goal: a system united against disease.

Jim Robinson serves as president of Astellas Americas. He is responsible for the company's operations in North and South America.


The views expressed by contributors are their own and not the views of The Hill.