1 00:00:04,840 --> 00:00:08,800 Speaker 1: Having a baby in America is expensive. By one measure, 2 00:00:08,880 --> 00:00:11,240 Speaker 1: the average cost for a normal delivery in the United 3 00:00:11,280 --> 00:00:15,320 Speaker 1: States is eleven thousand dollars. That's more than twice as 4 00:00:15,400 --> 00:00:18,759 Speaker 1: much as in Switzerland. It's even more expensive than the 5 00:00:18,800 --> 00:00:21,840 Speaker 1: deluxe suite in the private wing of a London hospital 6 00:00:22,200 --> 00:00:25,240 Speaker 1: where Kate Middleton and other British royals have given birth, 7 00:00:26,040 --> 00:00:29,480 Speaker 1: and in the US the price can vary wildly depending 8 00:00:29,520 --> 00:00:32,680 Speaker 1: on what hospital you go to, even within the same city. 9 00:00:34,000 --> 00:00:35,839 Speaker 1: You might think that the high price would mean the 10 00:00:35,880 --> 00:00:39,520 Speaker 1: care is superior, but that's not the case. The United 11 00:00:39,520 --> 00:00:42,760 Speaker 1: States healthcare system has alarming rates of poor outcomes for 12 00:00:42,880 --> 00:00:48,840 Speaker 1: mothers and their newborns. Welcome to Prognosis, Bloomberg's podcast about 13 00:00:48,840 --> 00:00:52,360 Speaker 1: the future of health care. I'm your host Michelle fay cortes. 14 00:00:53,400 --> 00:00:56,280 Speaker 1: Americans pay higher prices than people in other countries for 15 00:00:56,360 --> 00:01:00,560 Speaker 1: similar medical services, and the most expensive services is are 16 00:01:00,680 --> 00:01:04,840 Speaker 1: not necessarily the best. Bloomberg News health reporter John Tazzi 17 00:01:04,959 --> 00:01:07,400 Speaker 1: looked at one health plan that's trying to use the 18 00:01:07,560 --> 00:01:10,360 Speaker 1: millions of dollars it spends each year on births to 19 00:01:10,440 --> 00:01:21,040 Speaker 1: lower costs and improve outcomes from others. Sarah Rothstein pays 20 00:01:21,080 --> 00:01:24,520 Speaker 1: for a lot of babies. Well, she doesn't pay herself, 21 00:01:24,880 --> 00:01:27,560 Speaker 1: but the health plan she runs does. My name is 22 00:01:27,560 --> 00:01:30,600 Speaker 1: Sarah Rothstein, from the director of the thirty two Health Fund. 23 00:01:31,160 --> 00:01:33,560 Speaker 1: That's a big union health plan based in New York. 24 00:01:33,959 --> 00:01:37,800 Speaker 1: It's affiliated with the Service Employees International Union. So our 25 00:01:37,880 --> 00:01:42,080 Speaker 1: union members are office cleaners, their security guards. They're building 26 00:01:42,160 --> 00:01:46,720 Speaker 1: doormen and women building maintenance people. The union negotiates contracts 27 00:01:46,800 --> 00:01:49,840 Speaker 1: with employers on behalf of its members. As part of 28 00:01:49,880 --> 00:01:53,560 Speaker 1: those contracts, employers contribute money to the health fund to 29 00:01:53,640 --> 00:01:56,920 Speaker 1: pay for workers medical care. If you live in a 30 00:01:56,960 --> 00:02:00,760 Speaker 1: big Manhattan apartment building or your company rents office space 31 00:02:00,840 --> 00:02:03,800 Speaker 1: in the city, you're probably paying for some of the 32 00:02:03,880 --> 00:02:07,840 Speaker 1: union's medical expenses. The thirty two b J Health Fund 33 00:02:07,960 --> 00:02:11,480 Speaker 1: spends more than a billion dollars each year on medical care. 34 00:02:12,120 --> 00:02:15,920 Speaker 1: It covers about two hundred thousand people, both union members 35 00:02:15,960 --> 00:02:19,680 Speaker 1: and their families, and every year some of those people 36 00:02:19,800 --> 00:02:23,640 Speaker 1: have babies, And in our plan we pay for about 37 00:02:24,400 --> 00:02:27,480 Speaker 1: births a year, nearly a thousand of which are in 38 00:02:27,680 --> 00:02:30,799 Speaker 1: downstate New York and in New Jersey. Having a baby 39 00:02:31,000 --> 00:02:34,560 Speaker 1: is the top reason for planned hospital admissions among members 40 00:02:34,600 --> 00:02:37,120 Speaker 1: of the thirty two b J plan, and the fund 41 00:02:37,320 --> 00:02:40,239 Speaker 1: spends more than twenty million dollars a year on those births. 42 00:02:41,280 --> 00:02:44,560 Speaker 1: The fund hires an outside company that administers its plan, 43 00:02:44,919 --> 00:02:47,679 Speaker 1: but the fund pays the expense of medical care itself, 44 00:02:48,400 --> 00:02:51,120 Speaker 1: so Sarah wants to keep costs in check while getting 45 00:02:51,120 --> 00:02:55,000 Speaker 1: the best care for plan members in Sarah and her 46 00:02:55,040 --> 00:02:59,280 Speaker 1: team started analyzing the funds data on childbirth, and they 47 00:02:59,320 --> 00:03:03,520 Speaker 1: found two big surprises. Sarah told me about it recently 48 00:03:03,639 --> 00:03:07,640 Speaker 1: in her office on Eighteenth Street in Manhattan. The first 49 00:03:07,680 --> 00:03:11,640 Speaker 1: big surprise was that prices for childbirth were all over 50 00:03:11,680 --> 00:03:14,000 Speaker 1: the map. We could be paying ten thousand dollars or 51 00:03:14,000 --> 00:03:16,400 Speaker 1: we could be paying thirty thousand dollars, depending on the 52 00:03:16,400 --> 00:03:22,600 Speaker 1: hospital that someone had their baby at, same procedure, same procedure, 53 00:03:23,360 --> 00:03:27,799 Speaker 1: same region, same health plan. The difference in costs rang 54 00:03:28,080 --> 00:03:31,880 Speaker 1: from about ten thousand dollars to about thirty thousand dollars 55 00:03:31,919 --> 00:03:35,640 Speaker 1: just for a vaginal delivery. Sarah says Union members were 56 00:03:35,680 --> 00:03:38,320 Speaker 1: also surprised. They said, you know, we assume that some 57 00:03:38,400 --> 00:03:40,960 Speaker 1: hospitals would cost a little bit more. Maybe they're in 58 00:03:41,000 --> 00:03:45,080 Speaker 1: a nice location, maybe the facilities look a little bit nicer. 59 00:03:45,400 --> 00:03:48,160 Speaker 1: But when you have some hospitals charging so much more 60 00:03:48,200 --> 00:03:51,040 Speaker 1: than others. That makes us feel like we're being ripped off. 61 00:03:51,400 --> 00:03:54,560 Speaker 1: The second thing Sarah discovered was that the plan had 62 00:03:54,600 --> 00:03:57,840 Speaker 1: a really big problem with the quality of maternity care. 63 00:03:58,320 --> 00:04:04,000 Speaker 1: Women giving birth experience serious, unexpected problems such as blood transfusions, 64 00:04:04,240 --> 00:04:07,680 Speaker 1: kidney failure, or heart failure twice as often as the 65 00:04:07,760 --> 00:04:11,240 Speaker 1: national average. She also found that women on the plan 66 00:04:11,440 --> 00:04:15,600 Speaker 1: experienced a high rate of episiotomys. That's an incision to 67 00:04:15,680 --> 00:04:19,479 Speaker 1: widen the vaginal opening. Experts say it should happen in 68 00:04:19,560 --> 00:04:23,000 Speaker 1: only about five of births, but a quarter of the 69 00:04:23,040 --> 00:04:26,640 Speaker 1: births that thirty two b J paid for involved epsiotomys, 70 00:04:27,200 --> 00:04:31,480 Speaker 1: and of the deliveries were cesarean sections where the baby 71 00:04:31,560 --> 00:04:35,320 Speaker 1: is surgically removed through the mother's abdomen. C sections are 72 00:04:35,440 --> 00:04:40,720 Speaker 1: riskier and more expensive than vaginal births. Sarah was stunned 73 00:04:41,600 --> 00:04:45,040 Speaker 1: the hospitals where her members were giving birth build themselves 74 00:04:45,120 --> 00:04:49,880 Speaker 1: as world class medical institutions. We have several academic medical 75 00:04:49,960 --> 00:04:52,160 Speaker 1: centers in New York. We have a lot of high 76 00:04:52,240 --> 00:04:55,839 Speaker 1: quality care in New Jersey, and hospitals that advertise themselves 77 00:04:55,880 --> 00:04:59,520 Speaker 1: as providing only the highest quality care and only care 78 00:04:59,600 --> 00:05:02,800 Speaker 1: that's my really necessary, but the hospitals didn't seem to 79 00:05:02,839 --> 00:05:06,320 Speaker 1: measure up to those promises, and so it was really 80 00:05:06,360 --> 00:05:09,360 Speaker 1: shocking to us to see that the hospitals that are 81 00:05:09,400 --> 00:05:12,760 Speaker 1: members were using, which advertise themselves as some of the 82 00:05:12,760 --> 00:05:17,000 Speaker 1: best quality hospitals in the country, aren't necessarily the safest 83 00:05:17,000 --> 00:05:21,720 Speaker 1: for our members. Sarah found costs that varied widely among hospitals, 84 00:05:22,120 --> 00:05:25,880 Speaker 1: and he found big quality problems, and the most expensive 85 00:05:25,920 --> 00:05:33,280 Speaker 1: care wasn't necessarily better. What we've been finding after reviewing 86 00:05:33,320 --> 00:05:35,640 Speaker 1: a number of episodes is that there is not a 87 00:05:35,680 --> 00:05:39,160 Speaker 1: correlation between cost and quality. So higher cost doesn't mean 88 00:05:39,240 --> 00:05:43,400 Speaker 1: higher quality, lower cost doesn't mean lower quality. This isn't 89 00:05:43,440 --> 00:05:46,240 Speaker 1: just a problem when it comes to maternity care, and 90 00:05:46,320 --> 00:05:48,560 Speaker 1: it's not just a problem for the thirty two b 91 00:05:48,720 --> 00:05:52,000 Speaker 1: J Fund. Across the health care system, the price of 92 00:05:52,080 --> 00:05:58,040 Speaker 1: care doesn't reflect how good the care is. Let's step 93 00:05:58,080 --> 00:06:00,480 Speaker 1: back for a minute to consider how health care prices 94 00:06:00,520 --> 00:06:04,279 Speaker 1: are set in the United States. Some prices are set 95 00:06:04,320 --> 00:06:08,160 Speaker 1: by the government and programs like Medicare and Medicaid. These 96 00:06:08,160 --> 00:06:12,000 Speaker 1: public programs are giant purchasers of health care. They spend 97 00:06:12,200 --> 00:06:16,000 Speaker 1: hundreds of billions of dollars a year. They have a 98 00:06:16,040 --> 00:06:19,039 Speaker 1: lot of buying power, so the government can decide how 99 00:06:19,120 --> 00:06:23,000 Speaker 1: much to pay. On the other hand, if you're one 100 00:06:23,040 --> 00:06:26,240 Speaker 1: of the twenty eight million Americans with no health insurance, 101 00:06:26,600 --> 00:06:30,360 Speaker 1: you have zero buying power. The supplier of medical care, 102 00:06:30,640 --> 00:06:34,000 Speaker 1: a hospital or doctor, can set their prices as high 103 00:06:34,040 --> 00:06:38,000 Speaker 1: as they like. Unless you qualify for a charitable discount. 104 00:06:38,320 --> 00:06:44,400 Speaker 1: That's the price, and you're stuck with it. Private health plans, 105 00:06:44,480 --> 00:06:46,960 Speaker 1: like the thirty two b J Health Fund exists in 106 00:06:47,040 --> 00:06:51,680 Speaker 1: between these two extremes. Employers and unions higher health insurance 107 00:06:51,680 --> 00:06:56,160 Speaker 1: companies to negotiate with medical providers. The prices they pay 108 00:06:56,279 --> 00:06:59,480 Speaker 1: are higher than what the government pays because these groups 109 00:06:59,640 --> 00:07:03,480 Speaker 1: don't have as much buying power, but private health plans 110 00:07:03,600 --> 00:07:06,400 Speaker 1: usually pay less than what a hospital would charge someone 111 00:07:06,520 --> 00:07:10,560 Speaker 1: with no insurance at all. Each of these negotiations between 112 00:07:10,600 --> 00:07:15,400 Speaker 1: health plans and medical providers is separate and hidden. The 113 00:07:15,440 --> 00:07:19,040 Speaker 1: Trump administration is trying to force hospitals and insurers to 114 00:07:19,200 --> 00:07:24,520 Speaker 1: make their privately negotiated prices public. The industry is fighting 115 00:07:24,520 --> 00:07:28,840 Speaker 1: the plan. Hospitals and insurers want to keep these rates secret. 116 00:07:29,360 --> 00:07:32,880 Speaker 1: They argue that their contracts are private and revealing the 117 00:07:32,960 --> 00:07:37,760 Speaker 1: details could actually put costs up. Some experts say this 118 00:07:37,960 --> 00:07:41,280 Speaker 1: lack of transparency contributes to a lot of the crazy 119 00:07:41,320 --> 00:07:44,200 Speaker 1: price differences that we see in healthcare. But if you 120 00:07:44,320 --> 00:07:49,520 Speaker 1: look at how much c sections costs, both nationally and 121 00:07:49,640 --> 00:07:54,200 Speaker 1: in any given city, there's a huge range, from as 122 00:07:54,240 --> 00:07:58,280 Speaker 1: low as four or five thousand dollars in Knoxville, Tennessee, 123 00:07:58,640 --> 00:08:03,640 Speaker 1: to as high as forty dollars in San Francisco. This 124 00:08:03,800 --> 00:08:08,120 Speaker 1: is Nile Brennan. I'm the CEO of the Healthcare Cost Institute. 125 00:08:08,640 --> 00:08:12,160 Speaker 1: Nile's research group analyzes data from health in turns companies 126 00:08:12,240 --> 00:08:16,240 Speaker 1: to better understand costs. The data is anonymized, so you 127 00:08:16,280 --> 00:08:21,560 Speaker 1: can identify patients, inferers, or particular hospitals. But Nile can 128 00:08:21,560 --> 00:08:24,480 Speaker 1: look at the prices that inferrors pay hospitals in the 129 00:08:24,520 --> 00:08:28,560 Speaker 1: private market, the amount of money that actually changes hands. Then, 130 00:08:28,560 --> 00:08:32,240 Speaker 1: if you look at San Francisco, just the San Francisco area, 131 00:08:33,440 --> 00:08:36,520 Speaker 1: the price of a C section can range from fifteen 132 00:08:36,559 --> 00:08:41,720 Speaker 1: thousand dollars to again forty dollars. Just like Sarah found 133 00:08:41,760 --> 00:08:45,400 Speaker 1: in New York, prices are all over the place. In 134 00:08:45,440 --> 00:08:48,840 Speaker 1: a functioning market, Nile says, buyers would gravitate to the 135 00:08:48,880 --> 00:08:55,839 Speaker 1: lower priced services. So imagine a world where uh computer 136 00:08:56,160 --> 00:09:00,000 Speaker 1: or a Toyota camray you know, could range from fifty 137 00:09:00,200 --> 00:09:06,559 Speaker 1: thousand dollars. There would be absolute outrage, right and everybody 138 00:09:06,559 --> 00:09:12,319 Speaker 1: would you know, flock to the fifteen dollar problems. Even 139 00:09:12,360 --> 00:09:16,160 Speaker 1: simple commodity services like basically ab tests that are performed 140 00:09:16,240 --> 00:09:20,840 Speaker 1: all the time don't have standard prices. We found that 141 00:09:21,040 --> 00:09:26,520 Speaker 1: the prices of blood tests in our data varied from 142 00:09:26,600 --> 00:09:29,719 Speaker 1: you know, as low as twenty or thirty dollars to 143 00:09:30,600 --> 00:09:35,720 Speaker 1: as high as you know, nine dollars nine hud dollars plus. 144 00:09:41,800 --> 00:09:45,080 Speaker 1: Healthcare providers point out that they lose money on a 145 00:09:45,080 --> 00:09:49,280 Speaker 1: lot of the patients they see. Government programs like Medicare 146 00:09:49,320 --> 00:09:52,760 Speaker 1: and Medicaid set prices, and hospitals say they often don't 147 00:09:52,760 --> 00:09:57,200 Speaker 1: pay enough to cover expenses. Hospitals also point out that 148 00:09:57,280 --> 00:10:00,280 Speaker 1: they have to treat people in emergencies regard us of 149 00:10:00,320 --> 00:10:03,480 Speaker 1: the ability to pay. The industry has to comply with 150 00:10:03,679 --> 00:10:07,040 Speaker 1: complex regulations, and it often can't control the cost of 151 00:10:07,080 --> 00:10:11,920 Speaker 1: its inputs like labor or medication. Hospitals say the higher 152 00:10:11,960 --> 00:10:15,600 Speaker 1: prices they sometimes charge to commercial health plans are necessary 153 00:10:15,640 --> 00:10:19,880 Speaker 1: to keep the doors open. The American Hospital Association points 154 00:10:19,880 --> 00:10:23,360 Speaker 1: out that the price of similar services varies among hospitals 155 00:10:23,480 --> 00:10:27,240 Speaker 1: because of factors particular to each facility and episode of care. 156 00:10:28,280 --> 00:10:31,840 Speaker 1: Some hospitals may treat patients with more complex needs or 157 00:10:31,880 --> 00:10:38,160 Speaker 1: have additional expenses related to training medical residents. The average 158 00:10:38,160 --> 00:10:41,280 Speaker 1: person who walks into a hospital or doctor's office won't 159 00:10:41,360 --> 00:10:44,160 Speaker 1: know ahead of time what they'll be charged for a 160 00:10:44,160 --> 00:10:48,280 Speaker 1: given test or procedure. You typically pay the same copay 161 00:10:48,480 --> 00:10:51,600 Speaker 1: to your health plan. If you have a deductible, you 162 00:10:51,640 --> 00:10:55,640 Speaker 1: may have to pay the entire amount, but you might 163 00:10:55,679 --> 00:10:58,400 Speaker 1: not find out that you owe nine dollars rather than 164 00:10:58,440 --> 00:11:01,480 Speaker 1: twenty dollars for the same blood test until the bill 165 00:11:01,679 --> 00:11:08,800 Speaker 1: comes weeks later. Health insurance companies could exclude high cost providers, 166 00:11:08,920 --> 00:11:12,040 Speaker 1: and sometimes they do, but they can't do that in 167 00:11:12,120 --> 00:11:16,000 Speaker 1: markets where a big hospital system dominates, and even in 168 00:11:16,080 --> 00:11:20,160 Speaker 1: more competitive markets, they're often reluctant to cut powerful providers 169 00:11:20,280 --> 00:11:25,040 Speaker 1: out of their networks. Remember, Niles data knows the amounts 170 00:11:25,160 --> 00:11:29,480 Speaker 1: that insurance companies actually pay, and it shows wild price 171 00:11:29,559 --> 00:11:34,560 Speaker 1: spreads across all the services he's looked at. C sections, 172 00:11:35,440 --> 00:11:43,120 Speaker 1: lab tests, mammograms, m ris um all exhibit in incredible 173 00:11:43,840 --> 00:11:50,880 Speaker 1: and unwarranted variation that can really only be explained by 174 00:11:50,880 --> 00:11:54,000 Speaker 1: the fact that people have realized that they can get 175 00:11:54,040 --> 00:11:58,360 Speaker 1: away with it. Some prices are higher because people can 176 00:11:58,400 --> 00:12:01,360 Speaker 1: get away with it. At the thirty two b J 177 00:12:01,559 --> 00:12:06,120 Speaker 1: Health Fund, Sarah Rothstein examined what her health plan was spending, 178 00:12:06,559 --> 00:12:11,319 Speaker 1: and she came to a similar conclusion. Our theory, um 179 00:12:11,360 --> 00:12:13,120 Speaker 1: you know, which we can't prove because we don't have 180 00:12:13,200 --> 00:12:16,880 Speaker 1: access to the contracts between the hospitals and the insurers, 181 00:12:17,520 --> 00:12:19,760 Speaker 1: is that some of the health systems are able to 182 00:12:19,840 --> 00:12:24,400 Speaker 1: use their market power to demand higher prices. Giving birth 183 00:12:24,520 --> 00:12:28,120 Speaker 1: is a more complex procedure than allowed test, but Sarah said, 184 00:12:28,160 --> 00:12:32,000 Speaker 1: the Health Fund sees variation in prices across procedures big 185 00:12:32,040 --> 00:12:35,840 Speaker 1: and small, and the Fund doesn't know how it's insurance 186 00:12:35,880 --> 00:12:39,880 Speaker 1: carrier negotiates those rates with hospitals. Unless we were to 187 00:12:39,960 --> 00:12:43,600 Speaker 1: go to the hospitals directly and negotiate a price, we 188 00:12:43,640 --> 00:12:46,280 Speaker 1: don't know how the prices are set. So, for example, 189 00:12:46,400 --> 00:12:49,240 Speaker 1: if our member has a baby at the hospital, we 190 00:12:49,360 --> 00:12:53,040 Speaker 1: don't know if there is a different price for a 191 00:12:53,120 --> 00:12:56,199 Speaker 1: vaginal delivery or a C section. We don't know if 192 00:12:56,200 --> 00:12:58,480 Speaker 1: the doctors are getting paid more if they're performing in 193 00:12:58,480 --> 00:13:02,160 Speaker 1: a psiotomy than if they aren't. The Health Fund is 194 00:13:02,200 --> 00:13:05,160 Speaker 1: paying the bills, but it doesn't know how prices are 195 00:13:05,160 --> 00:13:08,920 Speaker 1: set or whether doctors have an incentive to provide certain 196 00:13:09,000 --> 00:13:14,199 Speaker 1: types of care that could be riskier for women. And 197 00:13:14,440 --> 00:13:17,520 Speaker 1: last year, the thirty two b J Health Fund decided 198 00:13:17,559 --> 00:13:23,760 Speaker 1: to try to change that. Sarah wants to use the 199 00:13:23,800 --> 00:13:27,360 Speaker 1: health Plans buying power, the billion plus dollars it spends 200 00:13:27,360 --> 00:13:30,880 Speaker 1: on medical care every year to reward hospitals that are 201 00:13:30,880 --> 00:13:35,479 Speaker 1: providing high quality care at lower prices, and in particular, 202 00:13:35,840 --> 00:13:38,120 Speaker 1: he wants to use the plans clout in the market 203 00:13:38,280 --> 00:13:43,000 Speaker 1: to improve maternity care. The first thing the Health Fund 204 00:13:43,000 --> 00:13:46,240 Speaker 1: did was give its members an incentive to avoid the 205 00:13:46,320 --> 00:13:50,280 Speaker 1: highest cost facilities in the New York area. That began 206 00:13:50,400 --> 00:13:55,400 Speaker 1: in April. We now have preferred hospitals and non preferred hospitals, 207 00:13:55,400 --> 00:13:57,199 Speaker 1: and having a baby at a preferred hospital as a 208 00:13:57,240 --> 00:14:00,080 Speaker 1: hundred dollars, having a baby at a non prefer at 209 00:14:00,160 --> 00:14:02,760 Speaker 1: hospital is a thousand dollars, So that's a big price difference. 210 00:14:03,240 --> 00:14:06,760 Speaker 1: That wasn't just for maternity care. The health Plan told 211 00:14:06,760 --> 00:14:09,959 Speaker 1: its members that they would face thousand dollars co pays 212 00:14:09,960 --> 00:14:14,360 Speaker 1: for planned in patient services at several big hospitals such 213 00:14:14,360 --> 00:14:17,600 Speaker 1: as New York Presbyterian because it found the prices at 214 00:14:17,600 --> 00:14:23,080 Speaker 1: those facilities to be significantly higher than other hospitals. At 215 00:14:23,120 --> 00:14:26,920 Speaker 1: other facilities, such as Mount Sinai, the normal hundred dollar 216 00:14:27,000 --> 00:14:32,800 Speaker 1: copay applies. The Plan was careful to explain to members 217 00:14:32,880 --> 00:14:36,120 Speaker 1: why co pays at certain hospitals went up by so much. 218 00:14:37,000 --> 00:14:41,280 Speaker 1: One mailing showed how the plans costs compared at different hospitals. 219 00:14:41,840 --> 00:14:44,080 Speaker 1: The average cost for having a baby at a non 220 00:14:44,120 --> 00:14:48,840 Speaker 1: preferred hospital was seven thousand dollars more than at preferred hospitals. 221 00:14:50,280 --> 00:14:53,360 Speaker 1: The Plan reminded union members that their employers pay up 222 00:14:53,400 --> 00:14:56,960 Speaker 1: to twenty thousand dollars a year for healthcare, and rising 223 00:14:57,000 --> 00:15:05,400 Speaker 1: costs left less money for wages. Then last summer, Sarah 224 00:15:05,400 --> 00:15:07,960 Speaker 1: announced that the thirty two b J Plan would launch 225 00:15:08,040 --> 00:15:11,240 Speaker 1: a program to encourage its members to give birth at 226 00:15:11,280 --> 00:15:14,920 Speaker 1: the best performing hospitals, the ones that would deliver high 227 00:15:15,000 --> 00:15:19,720 Speaker 1: quality at reasonable prices. The plan calls it the Better 228 00:15:19,760 --> 00:15:25,120 Speaker 1: Birth Maternity Program. Sarah invited hospitals to apply to join it, 229 00:15:25,520 --> 00:15:28,240 Speaker 1: and to get into the program, they have to reveal 230 00:15:28,480 --> 00:15:32,280 Speaker 1: detailed information about their practices. You really wanted to get 231 00:15:32,400 --> 00:15:35,520 Speaker 1: under the hood of the data and understand what was 232 00:15:35,640 --> 00:15:38,600 Speaker 1: behind the good numbers. At the hospitals that were performing 233 00:15:38,640 --> 00:15:42,600 Speaker 1: better and how they were holding their providers accountable. UM, 234 00:15:42,640 --> 00:15:45,440 Speaker 1: so really kicking the tires to make sure they were 235 00:15:45,480 --> 00:15:48,600 Speaker 1: doing all of the hard work that leads to better 236 00:15:48,720 --> 00:15:51,960 Speaker 1: data and better outcomes. Um to make sure that it 237 00:15:52,000 --> 00:15:55,160 Speaker 1: wasn't just by luck or by hoppenstance. Sarah shared a 238 00:15:55,200 --> 00:15:58,040 Speaker 1: copy of the request that she sent to hospitals. It's 239 00:15:58,120 --> 00:16:02,560 Speaker 1: nineteen pages and includes uSens of detailed questions. It asks 240 00:16:02,640 --> 00:16:06,840 Speaker 1: about whether the hospitals limit women's health services like sterilization 241 00:16:07,040 --> 00:16:11,520 Speaker 1: or contraception. It asks if factation consultants and duels are 242 00:16:11,560 --> 00:16:15,160 Speaker 1: on staff. It asks for detailed data on the kind 243 00:16:15,200 --> 00:16:18,160 Speaker 1: of serious harm to mothers that the plan is trying 244 00:16:18,200 --> 00:16:21,960 Speaker 1: to reduce. They had to meet certain quality criteria off 245 00:16:22,000 --> 00:16:25,320 Speaker 1: the bat, and then they also had to provide us 246 00:16:25,360 --> 00:16:29,640 Speaker 1: with an enormous amount of data as well as providing 247 00:16:29,680 --> 00:16:33,160 Speaker 1: attestation that they're adhering to the best practices as set 248 00:16:33,200 --> 00:16:36,720 Speaker 1: forth by national and state organizations who have done a 249 00:16:36,760 --> 00:16:39,000 Speaker 1: lot of work to figure out what leads to higher 250 00:16:39,080 --> 00:16:43,440 Speaker 1: quality maternity care. She even asked about some things that 251 00:16:43,520 --> 00:16:48,200 Speaker 1: the hospitals hadn't looked at themselves. The funded nudged hospitals 252 00:16:48,240 --> 00:16:51,360 Speaker 1: to provide data on maternal harm in terms of race 253 00:16:51,400 --> 00:16:56,360 Speaker 1: and ethnicity. Women of color experience higher rates of maternal harm, 254 00:16:56,400 --> 00:16:59,200 Speaker 1: a fact that's drawn increasing attention in the medical world. 255 00:16:59,680 --> 00:17:02,640 Speaker 1: One of the areas for concern for US was racial 256 00:17:02,680 --> 00:17:07,679 Speaker 1: and ethnic disparities amongst maternal outcomes. Their significant data that 257 00:17:07,720 --> 00:17:10,560 Speaker 1: shows that black women are particularly at risk and other 258 00:17:10,600 --> 00:17:12,840 Speaker 1: women of color are a much higher risk for adverse 259 00:17:12,880 --> 00:17:15,320 Speaker 1: outcomes when they're having a baby. But when the Fund 260 00:17:15,400 --> 00:17:19,280 Speaker 1: asked hospitals how often women of color suffered adverse events 261 00:17:19,359 --> 00:17:22,639 Speaker 1: related to childbirth, some of them couldn't answer, and a 262 00:17:22,720 --> 00:17:25,600 Speaker 1: number of hospitals said, we want to work to do this, 263 00:17:25,720 --> 00:17:28,399 Speaker 1: will commit to getting this data to you in the future, 264 00:17:28,720 --> 00:17:30,480 Speaker 1: but we don't have the data broken out that way 265 00:17:30,560 --> 00:17:34,040 Speaker 1: as of today. And that was interesting for us to hear, 266 00:17:34,200 --> 00:17:37,160 Speaker 1: because if you're not measuring something, you can't figure out 267 00:17:37,200 --> 00:17:38,800 Speaker 1: if you have a problem or if you have to 268 00:17:38,880 --> 00:17:41,960 Speaker 1: fix it. In the fall, Sarah met in person with 269 00:17:42,040 --> 00:17:46,040 Speaker 1: hospital leaders to explain why the third QBJ Health Fund 270 00:17:46,200 --> 00:17:49,480 Speaker 1: wanted all this information and to learn more about how 271 00:17:49,520 --> 00:17:53,120 Speaker 1: the facilities tried to ensure good outcomes in their maternity care. 272 00:17:53,359 --> 00:17:56,359 Speaker 1: And so they've been good conversations. UM, we've learned a 273 00:17:56,359 --> 00:18:01,040 Speaker 1: lot about how hospitals are holding prov witers accountable, how 274 00:18:01,080 --> 00:18:04,720 Speaker 1: they're changing clinical models in their hospital, and they've learned 275 00:18:04,760 --> 00:18:08,160 Speaker 1: a lot about a purchaser who is really concerned about 276 00:18:08,160 --> 00:18:10,879 Speaker 1: the well being of its plan participants. When I spoke 277 00:18:10,920 --> 00:18:14,000 Speaker 1: to Sarah in January, the plan hadn't yet announced which 278 00:18:14,040 --> 00:18:17,200 Speaker 1: providers would be included, but thirty T b J will 279 00:18:17,280 --> 00:18:21,320 Speaker 1: soon start telling its members which hospitals, doctors and midwives 280 00:18:21,359 --> 00:18:24,919 Speaker 1: have met the standards to join the Better Birth Program, 281 00:18:24,960 --> 00:18:27,280 Speaker 1: and it will offer some perks for mothers to go 282 00:18:27,440 --> 00:18:30,920 Speaker 1: to these providers. The plan will reba the hundred dollar 283 00:18:31,000 --> 00:18:34,040 Speaker 1: copay that members would otherwise have to pay. They'll also 284 00:18:34,080 --> 00:18:36,680 Speaker 1: be a basket of stuff for mom and baby, so 285 00:18:37,119 --> 00:18:41,919 Speaker 1: mom will get a nice gown, she'll get some birds, bees, products, um, 286 00:18:42,080 --> 00:18:44,159 Speaker 1: things that will maybe make her feel a little bit 287 00:18:44,160 --> 00:18:46,520 Speaker 1: better after delivery. And then there'll be a choice of 288 00:18:46,520 --> 00:18:50,080 Speaker 1: a big thing for baby, so could be a baby carrier, 289 00:18:50,200 --> 00:18:53,640 Speaker 1: a car seat. Thirty T b J will also promote 290 00:18:53,680 --> 00:18:56,960 Speaker 1: the program to women on its plan. The Health Fund 291 00:18:57,040 --> 00:18:59,520 Speaker 1: will send mailings and emails a few times a year 292 00:19:00,080 --> 00:19:03,360 Speaker 1: directing people to a website with information about the hospitals 293 00:19:03,400 --> 00:19:07,120 Speaker 1: in the program and why they've been selected. Sarah says 294 00:19:07,200 --> 00:19:10,400 Speaker 1: that some members in focus groups said they want help 295 00:19:10,480 --> 00:19:14,160 Speaker 1: accusing the best providers, and across the board they said 296 00:19:14,480 --> 00:19:17,840 Speaker 1: they really trust us to recommend programs to them. They 297 00:19:17,920 --> 00:19:21,720 Speaker 1: also really had a range of experience in maternity care. 298 00:19:22,040 --> 00:19:24,240 Speaker 1: Some people who had had a first or second childhood 299 00:19:24,240 --> 00:19:28,879 Speaker 1: good experiences, some people had really bad experiences, and a 300 00:19:28,960 --> 00:19:31,199 Speaker 1: number of people said, I really don't know how to 301 00:19:31,240 --> 00:19:34,760 Speaker 1: get the information that I need um and would welcome 302 00:19:34,800 --> 00:19:38,040 Speaker 1: the Health Fund providing me with this information and figuring 303 00:19:38,080 --> 00:19:40,280 Speaker 1: out what are some of the good choices for me 304 00:19:40,359 --> 00:19:43,440 Speaker 1: to make. Over the next few years, Sarah and her 305 00:19:43,480 --> 00:19:47,000 Speaker 1: staff will track how many women accused to use providers 306 00:19:47,000 --> 00:19:50,359 Speaker 1: in the new program, and they'll also measure rates of 307 00:19:50,440 --> 00:19:54,400 Speaker 1: c sections. Appease theotomies and incidents of harm to mothers. 308 00:19:55,359 --> 00:19:59,280 Speaker 1: By steering members to the best, lowest cost providers, Sarah 309 00:19:59,280 --> 00:20:03,040 Speaker 1: hopes to raise the bar across the entire market. There's 310 00:20:03,080 --> 00:20:06,760 Speaker 1: a role for purchasers to really push healthcare providers on 311 00:20:06,920 --> 00:20:10,440 Speaker 1: quality that they're not necessarily being pushed by other entities, 312 00:20:10,800 --> 00:20:13,640 Speaker 1: and this helps us serve our members better as well 313 00:20:13,680 --> 00:20:18,400 Speaker 1: as the rest of the public. What the thirty two 314 00:20:18,400 --> 00:20:21,720 Speaker 1: b J Fund is doing is unusual, but it's worth 315 00:20:21,800 --> 00:20:27,359 Speaker 1: asking why it's so extraordinary. Lots of big, sophisticated companies 316 00:20:27,480 --> 00:20:31,520 Speaker 1: spend plenty of money on healthcare, they have an incentive 317 00:20:31,600 --> 00:20:35,280 Speaker 1: to spend it wisely, and they all hire insurance companies 318 00:20:35,359 --> 00:20:39,360 Speaker 1: to administer their plans. Those insurers could apply the same 319 00:20:39,480 --> 00:20:42,080 Speaker 1: kind of pressure on hospitals that the thirty two b 320 00:20:42,200 --> 00:20:45,920 Speaker 1: J Fund is, but Sarah said that really hasn't happened 321 00:20:46,000 --> 00:20:48,919 Speaker 1: from Eternity Care, and even the hospitals that are interested 322 00:20:48,960 --> 00:20:50,959 Speaker 1: in participating have told us they've never been asked by 323 00:20:51,000 --> 00:20:54,560 Speaker 1: anyone for that level of quality data, which was shocking 324 00:20:54,600 --> 00:20:57,960 Speaker 1: to us. Um and a number of hospitals also said that, 325 00:20:58,600 --> 00:21:01,359 Speaker 1: you know, until recently, they themselves weren't looking at the 326 00:21:01,400 --> 00:21:03,960 Speaker 1: quality data from an Alternity Care, which was shocking to 327 00:21:04,040 --> 00:21:07,119 Speaker 1: us as well. For much of the last twenty years, 328 00:21:07,280 --> 00:21:09,800 Speaker 1: there's been a lot of talk about how Americans need 329 00:21:09,880 --> 00:21:14,680 Speaker 1: to be smarter consumers of health care. Employers raised health 330 00:21:14,720 --> 00:21:18,280 Speaker 1: insurance deductibles so people would have more skin in the 331 00:21:18,320 --> 00:21:23,240 Speaker 1: game and shop for care more carefully. They've effectively asked 332 00:21:23,280 --> 00:21:26,639 Speaker 1: individuals to use their buying power to make the market 333 00:21:26,680 --> 00:21:30,680 Speaker 1: work better, but people don't have good information on which 334 00:21:30,720 --> 00:21:33,919 Speaker 1: providers are the best or how much they cost. A 335 00:21:33,960 --> 00:21:37,840 Speaker 1: lot of the information that moms would need is hard 336 00:21:37,880 --> 00:21:41,280 Speaker 1: to get from hospitals. It's not publicly available, and even 337 00:21:41,280 --> 00:21:44,320 Speaker 1: a sophisticated consumer might have a hard time figuring out 338 00:21:44,359 --> 00:21:46,880 Speaker 1: how to wade through hundreds of data points to figure 339 00:21:46,920 --> 00:21:49,520 Speaker 1: out what the right facility is for them. And the 340 00:21:49,560 --> 00:21:52,960 Speaker 1: employers that pay for healthcare, for the most part, haven't 341 00:21:53,000 --> 00:21:56,719 Speaker 1: been doing what Sarah is doing using their own collective 342 00:21:56,720 --> 00:22:00,240 Speaker 1: buying power to try to improve the health care system. 343 00:22:00,240 --> 00:22:03,680 Speaker 1: It's ultimately our goal to have equally high quality care 344 00:22:03,800 --> 00:22:06,960 Speaker 1: and low prices everywhere so that members can go wherever 345 00:22:07,040 --> 00:22:10,720 Speaker 1: they want. But until that happens, we think it's to 346 00:22:10,800 --> 00:22:15,280 Speaker 1: our advantage and to our plan participants advantage to steer 347 00:22:15,359 --> 00:22:19,080 Speaker 1: plan participants to health care facilities that are lower cost 348 00:22:19,119 --> 00:22:25,640 Speaker 1: and high quality. Higher costs don't mean better care. There 349 00:22:25,680 --> 00:22:29,760 Speaker 1: are already some healthcare providers that deliver good care at 350 00:22:29,800 --> 00:22:33,800 Speaker 1: lower prices. Their proof that the system doesn't have to 351 00:22:33,840 --> 00:22:36,320 Speaker 1: be as expensive as it is and that it can 352 00:22:36,359 --> 00:22:43,880 Speaker 1: perform better than it often does. On this season of Prognosis, 353 00:22:44,240 --> 00:22:46,600 Speaker 1: We've looked at a lot of the ways the American 354 00:22:46,640 --> 00:22:50,280 Speaker 1: health care system is broken, how it costs too much, 355 00:22:50,600 --> 00:22:54,399 Speaker 1: and how it often fails people. It's a complicated problem 356 00:22:54,400 --> 00:22:58,000 Speaker 1: and there's no single solution, but one place to start 357 00:22:58,200 --> 00:23:01,200 Speaker 1: is with the entities were ultimately paying for a system 358 00:23:01,240 --> 00:23:05,399 Speaker 1: that doesn't work very well. A few big purchasers of 359 00:23:05,400 --> 00:23:09,440 Speaker 1: healthcare look carefully at where their dollars are going. If 360 00:23:09,480 --> 00:23:12,399 Speaker 1: more of them did, maybe we'd all feel better about 361 00:23:12,440 --> 00:23:31,359 Speaker 1: what we're paying for. And that's it for this season 362 00:23:31,359 --> 00:23:39,280 Speaker 1: of Prognosis. Thanks so much for listening. We'll be back 363 00:23:39,280 --> 00:23:41,840 Speaker 1: with the new season soon, but until then, you can 364 00:23:41,880 --> 00:23:44,000 Speaker 1: see what our health team is up to by going 365 00:23:44,040 --> 00:23:50,919 Speaker 1: to www dot Bloomberg dot com backslash Prognosis. Do you 366 00:23:50,920 --> 00:23:53,240 Speaker 1: have a story about healthcare in the US or around 367 00:23:53,240 --> 00:23:55,439 Speaker 1: the world, We want to hear from you. We're on 368 00:23:55,480 --> 00:23:59,040 Speaker 1: Twitter at bay Cortes or at Jaytaws. If you're a 369 00:23:59,040 --> 00:24:01,360 Speaker 1: fan of this episode, please take a moment to rate 370 00:24:01,400 --> 00:24:04,280 Speaker 1: and review us. It really helps new listeners find the show, 371 00:24:04,720 --> 00:24:08,240 Speaker 1: and don't forget to subscribe. This episode was produced by 372 00:24:08,320 --> 00:24:11,960 Speaker 1: Laura Carlson. Our story editor was Rick Shine. Special thanks 373 00:24:11,960 --> 00:24:15,480 Speaker 1: to Drew Armstrong Health care team leader and Francesca Levy, 374 00:24:15,560 --> 00:24:19,040 Speaker 1: whose head of podcasts at Bloomberg, thanks so much for listening.