Health costs increasing twice as fast as goal

By Mark Pazniokas

The Connecticut Mirror Connecticut’s first health care benchmark report says health costs in the state rose by 6 percent to $34 billion in 2021, double the aggressive goal set by Gov. Ned Lamont to limit cost growth to 2.9 percent in each of the next three years.

Less than $2 billion went to primary care that the governor’s health adviser says is crucial to preventing or stabilizing chronic conditions like diabetes and high blood pressure, saving residents from costly complications and hospitalizations.

The numbers were presented late Monday afternoon to the governor and a steering committee that includes the leaders of the state’s two largest hospital systems, Hartford HealthCare and Yale New Haven Health.

Lamont is making health costs a priority of the second term that began in January, and the new report instantly became ammunition in the administration’s lobbying for two bills aimed at curbing costs, with a special focus on hospitals.

“The findings of this report reinforce the need for more sweeping action to ensure equitable access to affordable health care to all residents of Connecticut,” Lamont said in a statement issued by his office.

Dr. Deidre Gifford, the executive director of the Office of Health Strategy, said the benchmarking data out Monday and a full report to be released Friday, March 31 are important tools for policy makers. “It may not sound like it, but it’s big news that we have for the very first time in Connecticut a goal of how much we think it’s appropriate for health care spending to increase year over year, ” Gifford said.

To the steering committee, Lamont expressed frustration at the difficulty in controlling costs that are outpacing income and economic growth, often beyond the increases in other states with benchmarking projects.

“I don’t know why Connecticut is not best in class. We got the best damn hospitals in the country, incredibly innovative,” Lamont said, adding that the state also is a major insurance center. “I feel like we’ve got the pieces of the puzzle. We’re a relatively small state, and here I feel like I’m always playing catch up.”

Hospitals are lobbying against Lamont’s bills, which would limit out-of-network costs for hospital services to Medicare rates, giving insur- ers greater leverage in negotiating prices, and would prohibit the facility fees charged by hospitals for services at free-standing clinics and offices.

Chris O’Connor, the chief executive of Yale New Haven, told the governor that while the hospitals “ are crying foul,” they are willing to work with the administration.

O’Connor said hospital finances are fragile coming out of the worst of the COVID-19 pandemic, and the industry is “losing money for the first time in a long time.”

“But at the end of the day, you know, we have to be part of the solution,” O’Connor said. “And I just want to continue to reinforce the importance of working together at solutions.”

Connecticut is one of nine states trying to benchmark health costs and spending on primary care, with a target of 5 percent for primary care in 2021 that will rise to 6.9 percent in 2023, 8.5 per-

See Costs, A13

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