Maternal mortality continues to worsen in the U.S.

U.S. maternal mortality continues to worsen, and there are large differences by race and state. JAMA recently reported that maternal mortality rates doubled between the 10-year period ending in 2009 to the 10-year period ending in 2019. This rise was across all racial groups and preceded the COVID-19 pandemic, which further increased maternal mortality. Maternal outcomes are worst for Native Americans and Black people and in the South.

Implications for employers:

• My recent article in Harvard Business Review on this topic suggests that employers can combat maternal mortality by:
• Improving benefit design
• Demanding more transparency and reporting from health plans to patients and employers
• Pushing health plans to pay providers for value
• Employers can provide better data to employees on their maternity benefits and offer resources to help identify and even cover doulas.
• Employers should be aware that this spring, the FDA approved a new blood test to predict the risk of preeclampsia, which leads to severe hypertension and seizures in pregnant women and can cause death. This test will likely be performed as part of hospitalizations, so its cost will be borne by facilities that are paid per diem or global fees and will show up as a new charge for facilities paid fee-for-service.

Members have problems navigating health plan coverage

Employers spend almost $1 billion annually on employer-sponsored health insurance, but employee experience with health plans remains disappointing. KFF (formerly Kaiser Family Foundation) surveyed almost 1,000 adults with employer-sponsored health plans and found a shocking number of members rated their health plans poorly and complained of not having access to the care that they needed or access to necessary services. KFF also surveyed members of exchange, Medicare, and Medicaid plans, but I’m focusing on those in employer-sponsored health plans.

Only a third (33%) rated their health plan as “excellent.” Fewer than a quarter (24%) of those who described themselves as in fair or poor health said their health plan was “excellent,” and over a third (35%) said their health plan was “poor.” That’s especially disconcerting since those who use health plans the most are the most dissatisfied.

Finally, it’s no surprise that those with the lowest income had the most difficulty paying medical bills. One in 11 respondents with income over 400% of the federal poverty level (about $120,000 for a family of four) also reported trouble paying medical bills.

Here are a few other important findings:

• 28% reported that they paid more than they expected.
• 10% of insured adults said that the mental health therapist or treatment they needed was not covered by their health plan.
• 43% of those who said their mental health was fair or poor said their plan had poor access to providers.
• 10% of all adults said they experienced a significant delay in health care due to insurance problems, and another 10% said they were unable to receive recommended care due to insurance problems.
• 9% of all adults said they experienced a decline in health status due to insurance problems.

Implications for employers:

• The current health care payment system is complicated. Even health policy experts often have trouble fully understanding it, so efforts to simplify health care for members would likely be welcome.
• At the very least, members could benefit from navigation assistance with health plans.
• Employers can better communicate with employees about their benefits.
• Employers should confirm if current health plans are meeting the needs of their members.
• Transparency initiatives could eventually help lift the cloak of secrecy over medical prices; employers should be aware that the data available to members now is inadequate.

Medical care costs likely to increase to over $7 trillion by 2031

The Office of the Actuary of CMS published its annual projection of the next decade of medical expenses in Health Affairs in June. The authors predict:

• Medical inflation will be a bit higher than overall inflation: about 5% in 2023 and 2024, and 5.6% from 2025 to 2031.
• Total costs for private insurance are projected to increase 7.7% (2023) and 7.6% (2024).
• The per enrollee cost of private insurance (including employer-sponsored health insurance and marketplace plans) is projected to increase from $5,728 (2019) to $9,898 (2031).
• Per enrollee spending will go up 6.8% in 2023 and 2024, and the number of enrollees is expected to increase modestly through the projection period.

The Office of the Actuary anticipates a lower rate of cost increase for prescription drugs than overall medical inflation but does not distinguish between the cost for Medicare and private insurance. Under the Inflation Reduction Act, CMS will negotiate some drug prices starting in 2026. Employer-sponsored insurance is already benefiting from rules that require a government rebate if prices increase by more than inflation. This likely led to the decreases in insulin prices announced earlier this year.

I think this projection is underestimating future pharmacy cost increases. The new anti-obesity drugs alone could dramatically increase cost, and I expect continued huge innovations in pharmacy stemming from genomics will add further cost. Artificial intelligence could speed development of new innovative drugs, which is also likely to raise total costs.

Implications for employers:

• Expect relatively high rates of medical cost inflation in 2023, which are projected to moderate somewhat thereafter.
• The imperative to better control unit price and utilization will continue for employer-sponsored health plans.
• Expect pharmacy cost increases to be higher than those projected.

For more information on future medical costs, our chief actuary and health analytics leader provide their perspectives.

Drug shortages hamper care for cancer and ADHD

We go from emergency to emergency in drug shortages. Last fall, we were short of antibiotics used frequently for upper respiratory tract infections, as well as over-the-counter acetaminophen (Tylenol) for children. Currently, we are plagued by shortages of cisplatin and carboplatin, key ingredients in potent chemotherapy cocktails. Without these drugs, patients with cancer face higher mortality. Those with attention-deficit/hyperactivity disorder (ADHD) have been hard-pressed to find the medications that help them modulate their attention and behavior. And Penicillin G, used for treatment of syphilis is also in short supply.

There are many causes of drug shortages, with low-cost generics being impacted the most. For example:

• Ongoing competition to lower costs has led to most generics being manufactured overseas where overhead costs are lower than in the U.S.
• The payment for these medications is low enough that new companies will not enter the market to manufacture them, leaving just a few sources.
• Existing manufacturers will often shut down production if they must make new capital investments in their plants.
• In some instances, shortages have begun when the FDA has banned imports from plants that have failed safety inspections.

I usually write about excessively high prices, but this is an instance where exceptionally low costs are leading to supply challenges. A reliable supply of reasonably priced generic medications would lead to better outcomes and less disruption of medical care than a fragile supply of drugs at rock-bottom prices. For instance, the FDA frequently discovers poor quality controls at manufacturing plants in India, but there are few alternative manufacturers. Efforts to produce high quality generics in the U.S. will only succeed if manufacturers are paid sustainable prices and the generics are widely used.

Implications for employers:

• Employers can instruct their pharmacy benefit managers to be flexible about formulary lists, out-of-pocket costs, and prior authorization in instances where a preferred drug is unavailable and delay in care could lead to adverse health outcomes.
• We should expect higher prices for some generics to ensure competition among manufacturers. The alternative is that many manufacturers will leave the market, causing both shortages and excessive inflation.

Author

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Jeff Levin-Scherz, MD

Population Health Leader, Health and Benefits, North America

Jeff is an internal medicine physician and has led WTW’s clinical response to COVID-19 and other health-related topics. He has served in leadership roles in provider organizations and a health plan and is an Assistant Professor at Harvard Chan School of Public Health.

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