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Connecticut businesses and nonprofits are struggling with health care costs

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Rising healthcare costs have made small businesses and nonprofits in Connecticut reconsider the insurance benefits they offer to employees.

WSHU’s Ebong Udoma spoke with CT Mirror’s Erica Phillips to discuss her first article in a series, “Rising health care costs weigh on CT small businesses and nonprofits,” as part of the collaborative podcast Long Story Short.

WSHU: So, health care costs are rising, and more so for small businesses. You give the example of a small church in Manchester. Could you tell us more about this church?

EP: Sure. So, this is the Unitarian Universalist Church in Manchester. They want to make a point to provide health insurance to their employees. They think that's part of their mission, part of what they want to do as an organization. But that's becoming more and more difficult as the premiums for health insurance grow. They only have a staff of six people, and only three of those people are actually on health insurance. Even so, it takes up about 10% of their budget.

WSHU: So why are health care premiums going up? And what role does hospital consolidation play in this?

EP: So yeah, hospital consolidation is part of it. But there are a lot of reasons that health insurance costs are going up. And a lot of that has to do with health care costs, the cost to provide health care is going up. There's also aspects involving, you know, government requirements, so additional things, according to the insurers that have cost more on the insurance side. But on the actual health care side, costs are going up, if that makes sense. So things like pharmaceutical costs, just labor, obviously, the pandemic has contributed to that. There's been, you know, the hospitals cited inflation as part of the reason costs are going up. But there's this big component of it, which is in Connecticut, and in a lot of markets. Hospitals are merging and hospitals are acquiring physician practices. And they're gaining more control of the markets in which they operate. And it's making what researchers call it's making the markets not work very well.

WSHU: They're not as competitive as they would be if there were more players in the market.

EP: There you go. Exactly. So that's the theory that a lot of researchers have been looking into and have been finding, yes, is the case. When hospitals merge, prices for the care that they offer tend to go up.

WSHU: Now, the government has been trying to do something about this. I know that Governor Lamont has talked about it, you know, and they've had different policies about prescription drugs, etc. What exactly is the governor doing? And is it possible that anything can be done to reduce the rise in premiums?

EP: So one of the things that all the parties involved here say is that there just needs to be more data — there needs to be more transparency. And there already is a heck of a lot of data if you go out and look. And that's a good thing. Hearst actually published a story a few days ago where you can compare the prices for various procedures across the state. So that was pretty cool.

That's made possible by the availability of this data, what the officials in the administration want to do is something called benchmarking. So they're going to say, year to year, healthcare costs cannot grow by more than this set percentage. And we're going to track all of the data in all the various healthcare providers across the state. And if anyone exceeds that cost growth benchmark, we're going to hold a public hearing, and we're going to ask them why.

So there's a lot going on. And a lot of it is in an attempt to keep the growth of costs down. But we're still at a point where, you know, we'll see how it works out.

WSHU: Now, Governor Lamont just last week, was pushing a bill that made it through the House and was pending in the Senate. What would that bill do?

EP: What that bill would do is actually codify this benchmark program. So it was originally an executive order. Now they're trying to put it into law and codify it.

WSHU: Now, what role do the attorney general and the Office of Health Strategy play? Because I know that Attorney General (William) Tong has been talking about looking into hospital consolidations and keeping an eye on that, what is it that that can be done as far as the state Attorney General's Office and the Office of Health Strategy?

EP: So there are two different tracks there. So the attorney general would, theoretically, if he determined that there needed to be legal action taken on a merger, which so far has not happened in Connecticut, but has happened in other states. So when any kind of merger acquisition takes place among businesses, legal officials can theoretically evaluate it and determine if something is not good for the market, if it would create an anti-competitive atmosphere in the market. So in theory, the attorney general has the ability to prosecute any hospital merger that might result in an anti competitive atmosphere, but in Connecticut has not done so yet.

Now, on the side of the Office of Health Strategy, what they're doing is, like I said, sort of gathering the data, keeping track of the activity among hospitals, when hospitals or healthcare providers merge or do any kind of deal, it has to be OK'd, basically, by the Office of Health Strategy through a process called the certificate of need. Those hearings are taking place and ongoing. You can look up, you know, the Connecticut Health certificate of need, and you can see what has gone on at those hearings, the testimony that's been raised, and so on. So there's a lot happening and a lot of people keeping an eye on it all.

WSHU: So how soon can the Unitarian Universalist Society East see a change in the marketplace and make it easier for them to take care of the healthcare needs of their staff?

EP: That's a very good question, honestly. So the benchmarking process is going on, you know, in theory, this stuff is getting looked at, but I don't know. The wheels of the legislative process move at their own pace. So I don't know that I haven't answered that question, unfortunately.

The second part of CT Mirror’s Erica Phillips’s series will look into how hospital consolidations are affecting rural Connecticut.