On a hot and muggy day in Orlando, Ceci Connolly, President and CEO at the Alliance of Community Health Plans, delivered an opening keynote that felt like a splash of refreshing cool water at the 2017 Society for Healthcare Strategy & Marketing Development Conference (SHSMD17).
It would have been easy for Connolly, a former Washington Post national health correspondent, to focus her keynote on the impact Capitol Hill has had on US Healthcare. Instead, Connolly used her 60 minute talk to provide the SHSMD17 audience with repeated doses of perspective. You could almost hear the gears turning in people’s heads as she dispelled common healthcare misconceptions and reframed daunting challenges.
Connolly started by highlighting the problem of the rising cost of healthcare. In 1960 US healthcare spending as a percentage of US Gross Domestic Product (GDP) was just above 5%. By 2010 it was almost 18%.
According to the Centers for Medicare & Medicaid Services (CMS), national health spending is projected to grow 1.2% FASTER than GDP per year until 2025. This means that by 2025, US healthcare spending as a percentage of GDP would reach a whopping 19.9%.
This in and of itself is not news, but what Connolly did was expertly re-frame these statistics:
The more that healthcare consumes our GDP, we will have less and less money for things like building national infrastructure, fueling economic growth and oh, helping people recover from devastating hurricanes. Those priorities will suffer because healthcare will dominate our GDP spending.
Connolly’s statement was especially poignant given SHSMD President Ruth Portacci’s early comments about the heroic efforts of healthcare workers in Florida, Texas, Louisiana, Puerto Rico and the Caribbean to help those areas recover from devastating hurricanes.
From there Connolly proceeded to cast a new light on the wave of healthcare provider consolidation, payer mega-mergers, patient consumerism, aging populations, millennial expectations and retail health. Particularly noteworthy was Connolly’s take on rising drug prices and high deductible health plans (HDHPs).
According to Connolly, drug prices go up when new drugs are introduced for specific conditions. These new drugs, often with fancy names, are brought to market at prices higher than existing alternatives. The companies that own those existing drugs then raise their prices to match the new entrant and justify the increase with a mountain of evidence that their drug is every bit as good as the new one.
Connolly also took aim at HDHPs. During the industrial boom, US employers offered to pay for employee healthcare as way to entice workers to join their ranks. In short order, employer-sponsored health became the standard. Fast forward to 2017 and employers can’t shed healthcare costs fast enough. Instead of offering more health coverage, employers are offering HDHPs and transferring the burden to employees. According to Connolly the era of employer-sponsored healthcare is ending and that will have enormous consequences for US Healthcare where almost 50% of Americans still receive their health coverage through their employer.
It certainly was not your typical rah-rah opening keynote, but in these challenging times, it was courageous and refreshing to have someone stand up in front of 1,500 healthcare insiders and get us to think differently.