PRICE TRANSPARENCY

  • Patients have little access to cost information before agreeing to a procedure or treatment, allowing hospitals to set exorbitant prices that would be unsustainable in a more competitive, transparent market.

  • Only one major hospital network and one free-standing hospital in Maine are in compliance with a new federal law that requires hospitals to publish detailed prices of medical procedures.
"Informed consumers motivated by financial incentives are the best antidote to the substantial price variation between Maine hospitals."

SB 958: BAD FOR BUSINESS

What would this legislation do? 

  • A recent California Health Care Foundation study found the average monthly health insurance premium in California, including the employer contribution, was $653 for single coverage and $1,717 for family coverage.

  •  SB 958 could cost the state $846 million in excess drug spending in the first year alone and $10.5 billion over the next 10 years. On average, hospitals already set drug prices 108% higher than non-hospital pharmacies for the exact same drug according to data from 2018 - 2020.

  • SB 958 will increase premium costs for California employers and employees by making it even easier for hospitals to markup the price they charge patients for critical medications!

Why will SB 958 drive up healthcare costs? 

  • The proposed legislation would nearly eliminate “white bagging”, one of the remaining tools insurers can use to lower costs for their customers and as a result, drug spending in California will soar. (PCMA Study: Benefits of White Bagging, 2022)

  • Specialty pharmacies are different from traditional “brick and mortar” pharmacies because they focus on dispensing drugs that retail pharmacies are not equipped to dispense, and charge lower prices.

  • Specialty pharmacies are able to purchase drugs at a lower cost per unit by virtue of scale and are required to meet the same safety requirements to store those medications.

Examples of Rx markups in California:

  •  A recent American Health Insurance Plans (AHIP) study found that, on average, hospitals markup drug costs by an average of 108% but as much as 215%. These markups for drugs are passed onto consumers and employers in the form of higher premiums. 

  • Another recent study conducted by the JAMA Network found America's top cancer hospitals mark up prices for cancer drugs prices on cancer drugs prices 2-7 times cost to acquire the drugs

  • Health plan premiums directly reflect the cost of goods and services. When the price of medical products and services goes up, premiums increase. As the cost of medical care continues to increase in California, so do premiums for employers and their employees.

CA Healthcare Premium Increases Widespread:

  • According to the California Health Care Foundation, 18 million of 32.7 million insured Californians had  health care coverage through an employer sponsored health plan in 2019. The average premium for family  coverage has increased 22% over the last five years and 55% over the last 10 years. 

  • Since 2002, premiums  for the average family health plan in the employer market have increased 133%. The 2020 Kaiser Family  Foundation Employer Health Benefits Survey indicated that, for job-based coverage, the average annual  premium for single coverage rose 4%, to $7,470. 

  • The average annual premium for family coverage also  rose 4%, to $21,342, which is nearly one-third of the state’s median family income. California should not  increase costs of healthcare coverage for employers and employees.  

Impact on California's Business Community: 

  • SB 958 would remove an important tool used by health plans that reduces health care costs for employers who rely on these tools to maintain quality health care for their employees and employee families.

  • SB 958 would eliminate a safe and long-practiced process health insurers have implemented using specialty pharmacies to deliver clinically administered drugs directly to the clinic/patient when it is safe to do so. This practice is a necessary tool to address significant hospital mark-ups of these medications and keep them reasonably affordable.

  • California’s health plans work with specialty pharmacies to provide patients with affordable access to the same critical medications they would receive from the hospital, at a fraction of the cost.

  • SB 958 will increase health care costs for businesses across California by taking away this essential tool designed to keep these costs more affordable.

California employers are joining together in opposition to the increased healthcare costs which would result from SB 958,  legislation that'd make it even easier for hospitals to markup the prices they charge patients for critical medications.  

Being that this coalition was formed over shared concerns with the growing burden skyrocketing healthcare costs are placing on Californians, we oppose any legislation that would drive costs even higher.

SB 958: BAD FOR BUSINESS

JOIN THE FIGHT!

We invite you to join our efforts by signing onto our public letter to California legislators! Add your name using the form below & help amplify the business communities unified opposition to SB 958!

As organizations representing many of California’s leading job creators and contributors to our state’s economy, we must unfortunately OPPOSE SB 958, which would severely limit specialty pharmacies’ ability to deliver critical medications to patients at the hospital or to their homes, thus allowing hospitals to markedly increase the costs of those medications.

As you are well aware, California job small and ethnic businesses are facing a wall of massive new costs and problems impacting their bottom line, ability to hire and overall survivability during this pandemic. Rising fuel costs, inflation, the supply-chain disruption and a spike in retail theft are creating the perfect storm for the collapse of “Main Street” businesses as we know it.

Employers are committed to providing quality health care, but rising health care costs could jeopardize the affordability of employer-provided health care coverage for employees and their families. For the past thirty-five years, small business owners have ranked “soaring health care costs” as the number one problem plaguing their operation, according to the National Federation of Independent Business. And a recent California Health Care Foundation study found the average monthly health insurance premium in California, including the employer contribution, was $653 for ingle coverage and $1,717 for family coverage.

SB 958 would expose patients to higher costs charged by hospital pharmacies, and severely limit specialty pharmacies’ ability to deliver lower cost medications to patients, leading to increased medical costs and higher health plan premiums. leading to increased drug costs and higher health plan premiums. A recent American Health Insurance Plans (AHIP ) study found that, on average, hospitals mark up drug costs by an average of 108% but as much as 215%. These markups are passed on to consumers and employers in the form of higher premiums.

Finally, SB 958 would remove an important tool used by health plans that reduces health care costs for employers who rely on these tools to maintain quality health care for their employees and their families. The current longstanding process in place by which specialty pharmacies are able to deliver clinically-administered drugs to the clinic/patient when it is safe to do so allows patients with affordable access to the same medications they would receive from the hospital, at a fraction of the cost. SB 958 would increase health care costs for businesses across California by taking away this essential tool designed to keep these costs more affordable.

Our state policymakers have taken important steps to help our most vulnerable and struggling employers, small and ethnic businesses, to recover from this terrible pandemic and once again grow jobs, the local and state economy, and our communities. Unfortunately, SB 958 will take our state down the opposite road through higher costs, fewer choices and greater uncertainty for not only Main Street employers, but their workforce and all California taxpayers.

For these reasons, we respectfully urge you to OPPOSE SB 958 when it comes before you and Committee members. Thank you for your consideration.

SIGN HERE:

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PAID FOR BY EMPLOYERS AGAINST HEALTHCARE HIKES, A PROJECT OF BETTER SOLUTIONS FOR HEALTHCARE