CAHC Offers Market-Driven Solutions for Lower Health Costs to Senate HELP Committee

Recommendations could save up to $100 billion annually in total health costs

WASHINGTON, DC (March 1, 2018) : The Council for Affordable Health Coverage (CAHC)  – a coalition of employers, insurers, life science companies, PBMs, brokers, agents, patient groups, and physician organizations – recently responded to a request for stakeholder input from Senate HELP Committee Chairman Lamar Alexander (R-TN) on solutions to lower health costs.

"With this letter, we are offering lawmakers a roadmap to lower health costs that emphasizes market competition, not government control,"  said CAHC President Joel White. "From removing impediments to value-based arrangements, to fully leveraging the power of tools like medication synchronization programs and real-time benefit check, to enacting commonsense reference pricing for surprise out-of-network medical bills, these proposals could save more than $100 billion annually in total health expenditures. That translates to real relief for consumers who need it most. We stand ready to work with lawmakers in both parties to put these solutions into action." 

Solutions offered in CAHC's letter fall into the following categories:

  • Enact a data framework that will enable better information to address high health costs and pressing needs. CAHC explains that "federal data policy currently inhibits data sharing and, by so doing, may be harming public health." It calls for reforms such as standardizing Medicaid data across states and making the aggregated data available publicly for research and cost containment purposes, as well as lower costs for users to access this information.

  • Transition to a payment system that rewards high-value care. CAHC calls for reforms to federal laws that, for too long, have inhibited the uptake of value-based purchasing arrangements in federal health programs, including the Medicaid "best price" rule and Stark and Anti-Kickback laws. CAHC previously found that such changes could produce $36 billion in annual savings to the healthcare system.

    The letter also endorsed action to incentivize appointment-based medication synchronization tools across federal health programs – a policy that the coalition's medication adherence campaign, Prescriptions for a Healthy America, has projected to save $42 billion annually in total health costs – while calling for greater use of real-time benefit tools and recommending referencing pricing to combat surprise out-of-network medical bills, initially set at 150% of Medicare reimbursement and gradually lowered to 125% over time. 

  • Address highly concentrated and uncompetitive health markets. CAHC calls for banning anti-competitive arrangements that limit competition and decrease consumer welfare, such as anti-tiering, anti-steering, most-favored-nation and other contract clauses in programs where taxpayers have a vested interest in lower costs. The coalition also recommends that states set upper payment limits in areas where competition is non-existent.

  • Promote health care transparency: CAHC's letter recommends providing consumers better tools powered by better data to help them shop for plans, providers, and drugs, asserting that better use of private tools should be a part of any reform effort. It additionally calls upon the administration to finalize rules to prohibit information blocking and to promote interoperability. 

  • End the public exchange monopoly and let the private sector compete: CAHC explains that "To promote choice and to lower costs, HHS should contract out most functions of and encourage states – via 1332 waivers and other mechanisms – to expand channels for enrollment, including through private exchanges and web sites," adding that "HHS should not compete with private entities who are better equipped and suited to compete in eCommerce enrollment."

  • Offer employers and consumers better choices for their coverage: CAHC recommends policies that encourage value-based insurance design and that improve and expand the use of consumer-driven health products. For example, CAHC recommends that excess funds from premium tax credits be allowed to be placed in an HSA. The coalition also encourages changes that would allow HSAs, FSAs, HRAs, and Archer Medical Savings Accounts to purchase or be reimbursed for the purchase of over-the-counter (OTC) medications without a prescription. 

Read CAHC's full letter to Chairman Alexander HERE.