As is the case with all health care cost initiatives that promise more transparency and more affordable care, the judgment will come years down the road.
That being said, the executive order signed Tuesday by Gov. Phil Murphy that launched the New Jersey Health Care Cost Benchmark Program certainly had plenty of support. Leaders of nearly every major health care provider and insurer pledged their support for the program.
In addition to the Benchmark Program, Murphy also announced a stakeholder compact that unites New Jersey insurers, health care providers and health care advocates in support of the new program and the goal of working together to provide more affordable health care for all New Jerseyans.
Something clearly needs to be done.
From 2010 to 2016 in New Jersey, health care premiums and deductibles have grown roughly three times faster than residents’ incomes and, in 2016, premiums equaled almost a third of median household income. Further, a survey of more than 900 New Jersey adults, conducted from May 7 to May 12, 2020, found that more than three-quarters (77%) are worried about affording health care in the future.
Recognizing the unsustainability of these trends and the economic hardship on residents and businesses because of the COVID-19 pandemic, Murphy signed an executive order Jan. 28 directing the development of a Health Care Cost Growth Benchmark Program to mitigate the rate of health care cost growth in the state.
The executive order he signed Tuesday formally establishes the New Jersey Health Care Cost Growth Benchmark Program and takes a concrete step toward curbing health care cost growth. The benchmark program also offers an important opportunity for the implementation of market-based strategies rooted in broad stakeholder commitment and industrywide collaboration to support benchmark attainment.
The New Jersey Health Care Cost Growth Benchmark Program will provide everyone in the state with a shared understanding of how much health care costs are growing and factors contributing to high costs and cost growth. Over time, the benchmark program aims to decrease how much health care costs grow each year, and to contribute to making health care more affordable.
The Office of Health Care Affordability and Transparency and the Department of Banking and Insurance will lead the efforts of the benchmark program, along with committed partners at the Department of Health, Department of Human Services, Department of Treasury and the Division of Community Affairs.
The program is also bolstered by a stakeholder compact organized by the Murphy administration consisting of advocacy groups, hospitals and health care providers, leading insurers, a union, employers and other stakeholders across New Jersey, and is a collaborative agreement memorializing the collective commitment of stakeholders to work toward implementing the benchmark program. It sets forth the benchmark plan and establishes a commitment to take actions to make health care more affordable and to participate in the data collection, validation, analysis and reporting processes.
The following organizations, advocacy groups and businesses have signed onto the compact:
- AmeriHealth New Jersey;
- Atlantic Health System;
- Camden Coalition of Healthcare Providers;
- Cooper University Health Care;
- Hackensack Meridian Health;
- Horizon Blue Cross Blue Shield of New Jersey;
- New Jersey Association of Health Plans;
- New Jersey Citizen Action;
- New Jersey Health Care Quality Institute;
- New Jersey Hospital Association;
- NJM Insurance Group;
- Rutgers University AAUP-AFT;
- RWJ Barnabas Health;
- Sandkamp Woodworks;
- Joseph’s Health;
- Summit Health;
- Virtua Health.