“The answer is in common purpose”: Health secretaries share affordability insights at LOWN26
The recording below is from a panel at LOWN26: Confronting Healthcare Affordability. All panel recordings are available on Youtube.
Indiana and Massachusetts may not share much politically, but they share a lot when it comes to the fiscal challenges of healthcare. Gloria Sachdev spent years as an employer advocate demanding more from Indiana’s healthcare providers before stepping into state government; Kate Walsh ran one of the country’s premier safety-net hospitals before serving as Massachusetts’ top health official.
With gridlock at the federal level, are states prepared to use their regulatory authority to advance reforms? Watch the video recording and see some key quotes from the panelists:
- Vikas Saini, MD, President, Lown Institute (Moderator)
- Gloria Sachdev, PharmD, Indiana Secretary of Health and Family Services; Former CEO of Employers Forum of Indiana
- Kate Walsh, Former Secretary of Health and Human Services, Massachusetts; Former CEO of Boston Medical Center
Affordability challenges for states
Panelists Gloria Sachdev and Kate Walsh explained how Indiana and Massachusetts face similar challenges when it comes to affordability: High hospital prices, consolidation of health systems, lack of investment in primary care, inefficiencies and low-value care, and access issues in rural areas.
In Indiana, they’re seeing both horizontal integration (ie. health systems acquiring other hospitals) and vertical integration (ie. health systems buying physician groups, labs, and imaging centers). And it’s not just health systems. “We have insurance companies which have bought PBMs and pharmaceutical manufacturers. So now they own literally every aspect of it. And that that’s a a problem that we feel directly every day,” said Gloria Sachdev.
“We have relatively good health outcomes, but it’s at a cost we cannot afford and it’s driving up the cost of things that the rest of the state needs.”
Kate Walsh, Former Secretary of Health and Human Services, Massachusetts
In Massachusetts, health costs have been crowding out spending on other social services, which negatively impacts health in the long run. “We criminalize certain diseases like behavioral health and substance use disorder or we medicalize poverty,” said Kate Walsh. “This medicalization of [social issues] ends up on the health care system, which is part of what’s driving these costs.”
The political landscape can be an immense challenge, with powerful interests on both the health system and insurer sides. “How can you as the as the secretary make a policy move that you know is right, and then you spend all your time trying to figure out which stakeholders will be offended by said change?” said Kate Walsh. “It becomes so that you just can’t move in either direction. It’s like you’re in amber. It’s like you’re a fossil.”
They told me, ‘Nobody cares and the hospitals are too powerful. Nothing’s going to change.’ That’s the exact wrong thing to tell me.
Gloria Sachdev, Indiana Secretary of Health and Family Services
Gloria Sachdev recalled that she was told by one of the large health insurance leaders, “‘Gloria, nobody thinks you’re going to do anything about it. Nobody cares and the hospitals are too powerful. Nothing’s going to change.’ That’s the exact wrong thing to tell me.” She said the political fight got ugly, but that in the end it was worth it to get the change that their state needed.
Different paths to affordability
How are Indiana and Massachusetts taking action to make care more accessible for all? Gloria Sachdev discussed the many regulatory and legislative actions they have taken in Indiana including requirements for hospitals to offer direct-to-employer contracting, site-neutral payments for off-campus services, fiduciary responsibility for pharmacy benefit managers, and banning physician non-compete clauses.
Another recent law makes tax-exempt status for the largest nonprofit hospitals in the state contingent on reducing their average commercial prices. “We’re letting them [hospitals] voluntarily lower their prices, but if they continue to act like a for-profit, then they should pay taxes like a for-profit,” said Sachdev.
In Massachusetts, the governor’s healthcare affordability working group is looking at using the purchasing power of the Medicaid program to reduce costs as well as identifying inefficiencies with care delivery. “There’s a real opportunity in simplifying all of the friction and transaction costs that happen across our agency,” said Walsh.
“Data is not a problem in our state. We have so much of it and we use it to make no progress. The answer is not in more information but in common purpose.”
Kate Walsh, Former Secretary of Health and Human Services, Massachusetts
The panelists acknowledged that both states have similar constraints and challenges that drive their strategies. “The common themes from both of us in a very blue state and red state is that the budget realities force decisions,” said Kate Walsh. “When you look at the set of decisions in front of you, you end up with a very similar set of policy options.”