Lowering Healthcare Costs By Targeting Governments and Businesses
Authors: Mark Pinsley & Dr. Jaan Altosaar
Skyrocketing healthcare costs are a major concern for governments, businesses, and citizens alike. But where should we focus our efforts to create meaningful change? Here's a strategic approach:
Start with local and state governments, counties, municipalities, and schoolboards
Citizens can push government agencies to negotiate better deals with healthcare providers by establishing fair pricing frameworks. When a county or municipality gets a good deal, it creates a benchmark that private companies can use in their own negotiations.
Leverage freedom of information and right-to-know requests
Citizens should request public records to uncover spending details. Submit a right-to-know or freedom of information request to your local government, municipality, or schoolboard. Ask for the total amount spent on healthcare, number of people covered, pharmacy and medical expenses, administrative costs, and more. Find out if they're self-insured or use a third party. Learn who their pharmacy benefit manager, broker, and consultants are. See if any drugs make up over 5% of pharmacy spend.
Here is an example of a right-to-know request:
- Total amount the township spends on healthcare
- Number of people covered
- Amount spent on pharmacy
- Amount spent on medical
- Amount spent on administrative costs or other costs that add up to the total spend
- Is the government or township self-insured?
- If not, who is the third party administrator (TPA) or healthcare insurance provider?
- Who is the pharmacy benefit manager?
- Who is the broker or other consultant helping you?
- If there are one or two drugs that made up more than 5% of your pharmacy spend in the last calendar year, please list them and the amount they individually cost per 30-day supply
- When was the last time you put out a request for porposals for your TPA, Broker, and Pharmacy Benefit Manager?
Once you have this data, look for quick wins. Have they put out a Request for Proposal recently? Do they use one of the top 3-5 Pharmacy Benefit Managers known for high prices? Is their Third Party Administrator opaque on pricing? Push for more transparency and competitive bidding.
After targeting local governments, turn to small and mid-sized businesses in the community. They likely struggle to get the best rates without the negotiating power of large corporations or government agencies. Equip them with questions to ask their healthcare providers and data from the government plans. Suggest they band together in groups to increase bargaining power.
Tackling outrageous healthcare costs requires a coordinated grassroots effort. By first arming citizens with information from government spending records, we can start to gain leverage over the powerful healthcare industry and make progress toward affordable care for all.
If you need help submitting a right-to-know request in your area, please email us at email@example.com.