Senate President Stephen Sweeney, who led the drive for cost-saving patient-centered health care programs for public employees, today urged the Senate Commerce Committee to put the needs of New Jersey consumers first by championing effective tiered networks that provide better quality health care at a lower cost.

Senator Sweeney noted that the labor-management committees of the State Health Benefits Plan and the School Employees Health Benefits Plan saved $197 million for the state budget this year and an estimated $40 million more for teachers, police, firefighters, and state and local government employees through patient-centered health care and other common-sense, cost-saving programs.

“I’ve heard a lot of recent talk about health insurance,” Senator Sweeney (D-Gloucester) told the committee today. “The debate so far has been about tiers, about products, about hospitals, about insurance companies, about doctors, and about profit margins. What I haven’t heard a lot of talk about is ‘consumers’.”

“We are in a new world,” Senator Sweeney said “The rising cost of health care in New Jersey, which has the second highest premiums in the United States, is hurting consumers, unions and businesses. This is why every single one of those groups support a move to value based care.”

“We need to put the interests of the consumer first. We should not advance any measures that threaten consumer choice in the marketplace or drive up costs,” the Senate President said.

Below is Senator Sweeney’s testimony before the Senate Commerce Committee:

Good afternoon, Senators. I’ve heard a lot of recent talk about health insurance. The debate so far has been about tiers, about products, about hospitals, about insurance companies, about doctors, and about profit margins. What I haven’t heard a lot of talk about is consumers.

Consumers need to be our main focus. I won’t accept anything less. That is why I was proud to lead the way last year on patient-centered health plans that improve care while reducing costs for unions, businesses, families, and everyday consumers.
My idea is all about giving consumers a choice. A choice to focus care through your primary care doctor, who typically knows you the best and who knows how to manage your care the best. This increases the quality of care because doctors are rewarded based on outcomes – not on the number of services, tests, or bodies they bring in the door. Consumers benefit with more choice, better quality and lower cost. Value based care helps all consumers.

Just this week, the Robert Wood Johnson Foundation released a study with Harvard University finding that 3 out of 5 New Jersey residents say that health care costs are a “major” problem for their families.

I want to thank the health care systems in New Jersey that also are moving away from “volume” based care – to name just a few, Barnabas, Hackensack, Hunterdon and in my backyard Inspira health care systems.

And this should serve as a wake-up call to those that are not: we can no longer afford a health care system that rewards the number of patients who enter a hospital or doctors’ office — almost like a sports team is rewarded for bringing fans into the stadium. The idea is to keep patients out of the hospital, not to bring them in.

Consumers expect no less. So I applaud giving consumers the choice of products aimed at improving care and reducing costs.
So I stand with the trade unions, public employee unions and business groups that have told me – both publicly and privately – that tiered products, whether they are offered by Horizon, Aetna or others, are good alternatives to high-deductible plans for consumers.

At the same time, we need to make sure New Jersey law has protections in place for all consumers that are focused on transparency. Although I will oppose any bill that threatens a consumer’s choice to increase quality and drive down costs, I will support reform if it includes the following:

Consumer Transparency for Insurance Companies: I support requiring insurance companies to disclose the criteria they use in developing tiered products. I also support requiring insurance companies to fully educate consumers about their cost share obligations. I don’t believe this type of transparency will hurt the marketplace, increase cost, or threaten consumer choice.
Consumer Transparency for Physicians: If you go to get your car repaired, the mechanic has to tell you what you’re going to be charged. But when you go to a physician’s office, it’s nearly impossible for a consumer to find out what he or she has to pay, which is really important when you have a health plan with deductibles. There needs to be greater transparency in physician costs.
Consumer Transparency for Hospitals: I am issuing a letter today to each one of New Jersey’s hospitals asking immediately for information on hospital profitability. I expect a response in 2 weeks. I’m not talking about earnings – I’m talking about pure profit. The national average for hospital profit is approximately 2.5% — but here in New Jersey we have hospitals like Valley in Ridgewood and Virtua in Voorhees with double digit margins – not to mention for-profit hospital systems like Carepoint that are ripping off New Jersey consumers. Carepoint has a hospital that has the highest billing rates in the United States of America, according to the New York Times. This is outrageous.
As someone who recently and successfully called for greater transparency in executive pay for Horizon Blue Cross & Blue Shield of New Jersey, I believe we now need greater transparency in hospital executive salaries, especially those with the largest profit margins.

Senators, if we’re going to talk about the true cost of health care, let’s talk about all aspects of health care delivery. To be clear, I will only support legislation that includes all of these transparency reforms.

We are in a new world. The rising cost of health care in New Jersey, which has the second highest premiums in the United States, is killing consumers, unions and businesses. This is why every single one of those groups support a move to value based care. So we need to shift our focus away from an academic discussion of tiers, and metrics, and benchmarks. We need to stop all the lawsuits, press conferences and public relations campaigns going on – and return the focus now to where it should have been all along: the cost of health care to the New Jersey consumers. This means promoting transparency, choice, quality and a reduction in costs.

We need to put the interests of the consumer first. We should not advance any measures that ultimately threaten consumer choice in the marketplace and drive up costs. A number of hospitals, businesses, unions and insurance companies are working together to try to lower cost and increase care, and that’s a good thing. Too many times, there is a tendency in this building to respond to the groups that bang their pots & pans the loudest. We cannot lose sight of our true constituency: the New Jersey consumer.

I look forward to a healthy discussion in the upcoming months and want to work with the Committee for reform I can support before July 1st.

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