SUMMARY: A new survey from the Kaiser Family Foundation and the Purchaser Business Group on Health shows signs that corporate executives might be warming to the idea of government getting more involved to rein in the excesses of the healthcare system. It’s affecting their bottom lines, and they won’t stand for that. Big changes are coming.
Kaiser interviewed 300 decision-makers at large companies (more than 5,000 employees), and 87 percent said that they believed that in the next five to 10 years, the cost of providing health care would become unsustainable.
According to data from KFF’s annual survey of employers, between 2010 and 2020, insurance premiums for employer-sponsored family coverage rose by 55 percent; the employer’s contribution went up 61 percent. The average family policy now costs over $21,000, most of which is paid by the employer.
Larry Levitt, KFF’s executive vice president for health policy, about whether corporate America is changing its perspective. He noted that “it’s clearly in employers’ financial interest” for government to assume the burden of covering their employees.
Meanwhile For Health Insurers..
Health insurers’ stratospheric profits and executive compensation aren’t merely a function of fewer claims during the pandemic. They are a systemic result of high and hidden prices charged to policyholders. According to the Kaiser Family Foundation, average employer-sponsored family insurance premiums rose to $20,300last year, a 55% increase over the last decade. In addition, average families face annual deductibles of roughly $8,000. Cost-shifting from insurers to consumers has increased in recent years along with insurers profits, with the share of people holding high-deductible plans growing by nearly 50% over the last five years.
IBC, the Philadelphia region’s largest health insurer, on Tuesday reported 2020 net income of $622 million — almost double its $321 million income in 2019, before COVID-19 struck.
On a percentage basis, the figure for 2020 was Independence’s highest profit margin since 2011, records show. However, the 2020 results included a onetime $209 million Obamacare-related payment from the federal government. The company also did well in the stock market.
In other words the nation’s health insurers are doing extraordinary well.
If ANYONE believes that changes aren’t imminent in the healthcare market, they’re in denial. It’s going to affect every sector of healthcare, from prescription drugs to hospitals, and is going to squeeze profit margins.
How does pharma respond? Pfizer is working on a COVID pill that could bring in billions of dollars at a high price, and CART therapies are going for $350,000 or more. It’s gotten so bad that Pfizer’s own shareholders are demanding the drug maker detail the costs of new treatments as well as price increases on the current vaccine.
When corporate America says that healthcare costs are unsustainable you KNOW changes are coming. It’s long overdue.