Anyone who has purchased healthcare services in Wisconsin knows that the cost of healthcare is high. Study after study verifies this fact. What individuals may not know, unless they spend some time shopping around the country for health care, is that the cost of healthcare in Wisconsin is routinely ranked as the highest or close to the highest in the nation.
The Health Care Cost Institute found that Wisconsin had the second highest health care prices of the 41 states it surveyed, with the 200 most common health services priced in Wisconsin 81 percent higher than average. According to the Healthy Marketplace Index, published by the Health Care Cost Institute, Milwaukee and Green Bay have the fourth and fifth highest healthcare prices of more than 100 metro areas it reviewed. Study after study comes back with very similar findings, to the surprise of no one. Healthcare costs are higher in Wisconsin than elsewhere.
Employers have looked at these studies, and at the bills they pay for health insurance for their workforce and their families, and have long wondered why Wisconsin costs seem so out of line nationally. What is special about Wisconsin? WMC member CEOs routinely put the cost of healthcare as a top issue they face as they try to remain competitive.
If you read the rhetoric from defenders of the healthcare industry, you would think that Wisconsin has a utopia of healthcare where the quality is far superior to anywhere else, justifying the high costs.
Employers have long scratched their heads at this notion, especially multi-state employers who purchase healthcare services in other states that is on par with the quality received in Wisconsin but at a fraction of the cost.
In December, the Business Health Care Group (BHCG) out of Milwaukee released a study they commissioned from GNS Healthcare in Cambridge, Massachusetts, that put the notion of high costs being justified by high quality to the test. The statewide study found emphatically that there is zero correlation between cost and quality.
A similar analysis was performed last year by the Workers Compensation Research Institute (WCRI), also out of Massachusetts, looking at the correlation between costs and quality for health care services purchased specifically for worker’s compensation injuries. WCRI also found that the correlation between higher costs and better quality simply wasn’t there. Yet in Wisconsin, that’s what we hear from providers for the reason why health care cost specific to worker’s compensation is the highest in the nation.
The Doctor who ran the analytics for the BHCG study, Earl Steinberg, was quoted in the Milwaukee Journal Sentinel story covering the study on Dec. 4, 2019 as saying, “There was no correlation between cost and quality — I mean virtually zero. We can show it. We produced a graph of every doc.”
In 2020, WMC will convene a group of employers to work on developing a set of proposals to turn back the high costs of healthcare.
The group will look at best practices, such as working with groups like BHCG to unleash consumerism by encouraging employers to seek out the high-quality doctors, lower-priced doctors, even if it means leaving the state for certain services. It will look at ways to make the state price-transparency requirements user friendly so that employers and workers are able to see the quality and cost comparison when making decisions.
The group will look at what is working, and what barriers exist, for employers who want to provide preventative care on site for workers and their families. Most importantly, the group will work together to determine what changes are needed, and then implement those changes — whether the changes are needed within employers’ purchasing models, in state law, or elsewhere.
It’s time for Wisconsin to stop spending more than everywhere else on healthcare — especially when studies are corroborating the long-held employer believe that the high costs do not equate better quality.
Chris Reader is senior director of workforce and employment policy with Wisconsin Manufacturers & Commerce, Madison. His commentaries are published regularly in the Wisconsin Business Voice, a WMC publication.