State must do better job tracking health costs if it wants to save money, Schwimmer says

The state currently does a poor job of tracking health care costs, but needs to start doing so in order to have any hope of curbing them.

That is how Linda Schwimmer, CEO and president of the New Jersey Health Care Quality Institute, feels after studying the causes of high health care costs in New Jersey.

She said she will be releasing a study, in collaboration with the Washington, D.C.-based Health Care Cost Institute, that reveals key data about health care costs in New Jersey.

“Health care spending nationally, over the last five years, has gone up 15 percent, but utilization, in most categories, has gone down,” Schwimmer said.

She was a keynote speaker at the 10th annual State of the State in Healthcare Symposium, hosted by the New Jersey Association of Health Underwriters on Friday.

“Nationally, in all categories except for pharmaceuticals, which only went up by 1 or 2 percent, utilization has actually gone down,” Schwimmer said. “It’s probably because of the high deductible plans and all the cost shifting (to patients) … it’s also because of some of the patient-centered medical homes and great new models of care — I’m not sure, that’s still be looked at and tested. But, in either event, utilization is going down, market share is going down, revenue is going up. Where else in America can you lose market share and increase revenue but in the health care system?”

A similar study has been done to study New Jersey’s costs.

“It’s the same story,” she said. “Price increases (are) what’s driving the increase in spending. Our spending has gone up more than the national average. We’ve gone up by 18 percent in the past five years. But what’s interesting to me is our utilization in inpatient has gone down even more dramatically than the national average, but our pricing has also gone up more dramatically.”

In order to stop the trend of rising costs, the state has to do more, she said.

“As we start to think about how we can get premiums … even when we’re doing a great job on utilization and getting the right care and the necessary care, (if) we don’t get our arms around what is driving this 18 percent increase in spending, we’re never going to get to affordability,” Schwimmer said.

She added that there is an opportunity, at the state level, to start to gather better data at the state agencies and through other sources to curb the cost of health care.

“I share this not to pick on one particular sector or another,” Schwimmer said. “I share this to show you that it’s important to have this data to have a roadmap as to how to start coming together to figure this out.”

Read more from ROI-NJ on the symposium: