As a nonprofit health plan, Blue Cross and Blue Shield of Minnesota is committed to improving health and helping Minnesotans live better, fuller lives. We’re also concerned. While we’re proud to be part of a community that offers some of the highest quality health care in the nation, our model of care delivery continues to become less and less affordable.
The Minnesota Department of Health’s recent report on the cost of health care found that the total cost of care in our state is on track to double by 2026. By then, annual health care costs could reach $94.2 billion – equating to more than 18 percent of the state’s spending.
Health care costs continue to rise at an unsustainable rate across the nation. A new report from Health Affairs found that hospital prices for inpatient care increased by 42 percent between 2007 and 2014. This, along with the rising cost of prescription drugs, is one of the main reasons why the average American family spent 35 percent of their income on health care in 2015. According to the Council for Affordable Health Coverage, it could be more than 50 percent of household incomes by 2030.
Right here at home, the total cost of health care in Minnesota has been increasing faster than in most other states at an average rate of 5.3 percent for more than 20 years (1991-2014), according to data from the Kaiser Family Foundation. That’s more than twice the average rate of inflation in the U.S. over that time.
The Minnesota Business Partnership Health Care Performance Scorecard found that Minnesota ranks first in the nation in coverage and access, but only 22nd when it comes to cost. What’s more, the cost of care in this state is not slowing down any time soon. In fact, it’s expected to increase by more than 7.4 percent each year over the next decade, which is a concerning and unsustainable trend.
Minnesota has historically set an example for the nation of what high-quality, accessible and affordable health care looks like. With our state’s skyrocketing costs, it will be difficult to maintain our leadership position. We must work harder to ensure Minnesota maintains its focus on being the nation’s leader in delivering better care at a lower cost.
This important work to maintain quality and reduce costs cannot be done in silos. We know that to truly make a difference, health plans, health care providers, employers, community leaders and patients must all work together to improve the long-term sustainability of health care. Working to assure that we deliver high-quality, consistent service and equitable access to affordable care requires new thinking and new approaches. For example, payment models that reward quality, outcomes, access and service over volume of services alone would have a major impact.
Likewise, assuring care is delivered in the right place, at the right time, and at the right price would be another step in the right direction. In this regard, the 2018 Minnesota Community Measurement report showed that on average, imaging services done in outpatient hospital settings were 45 percent more expensive than the same services provided at a specialty clinic. In response, we are seeing some examples of partnership in action. Several doctors in Minnesota have helped to manage costs by directing patients to lower-cost clinics instead of hospitals for certain outpatient services. At Blue Cross, we applaud these efforts and are working to improve our care management practices, in part, to make sure our members are being guided to lower cost options where the quality of care is as good or better.
These types of initiatives can make a difference on the overall cost of care. It’s important to understand that health care premiums reflect the costs and claims they cover, and more than 90 percent of every dollar we collect in premiums goes directly toward care for our members. While change is never easy, we must act now to make health care more sustainable for all Minnesotans. While we have much additional work to do, I’m confident that with the right focus on the right shared priorities, we will demonstrate to Minnesotans, and to the nation, that better care at a lower cost is an achievable goal.
In his role as president and chief executive officer of Blue Cross and Blue Shield of Minnesota and its parent company, Stella, Dr. Craig Samitt is responsible for overseeing the strategy and operations of the state’s first and largest health plan.
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