Private sector urged to plan ahead due to increasing healthcare costs

The CNMI’s private sector should start planning ahead for its health insurance needs to mitigate the increases in healthcare costs in the near future, according to Frank Campillo, plan administrator for Calvo’s Select Care Health Plans in Hagatna, Guam.

Campillo is also urging the private sector to work with health insurance companies in the Commonwealth to find solutions to this increasing concern.

He outlined these recommendations in his speech during the Society for Human Resource Management NMI Chapter’s meeting yesterday on healthcare cost trends for 2015 and Affordable Care Act updates at the Hyatt Regency Saipan.

Frank Campillo

Campillo said that healthcare cost has been increasing at a drastic rate since 1999. During that year, an average annual premium for a family went for only $5,000 before ballooning to $18,000 in 2014, while the $2,000 average that covered a single person in 1999 is now a little over $6,000.

For the CNMI, the government is now paying a little over $400 a month on health plans and close to $5,000 annually. The CNMI is almost close to the same average annual premium that a single person receives as of 2014.

The healthcare trends that Campillo presented to SHRM were put together by various organizations and government agencies in the U.S.

According to his presentation, enrollment in high-deductible plans has tripled since 2009, as consumers took a greater stake in the health system, demanding more value.

So what is driving the increased cost in healthcare? Research demonstrates that when hospitals consolidate, either merging with other hospitals or buying up physician practices, health care costs go up. Provider consolidation gives hospitals greater negotiating strength and limits competition, resulting in higher prices for services, higher costs for patients, and no improvement in the quality of care delivered.

In the CNMI, “we have members in the CNMI, we incur claims at Commonwealth Healthcare Corp., incur at local clinics and also in the pharmacy side,” he said.

Drug cost increase

Dispensing of specialty drug medications represents less than 1 percent of all prescriptions, but these drugs now account for more than 25 percent of total prescription drug cost trends.

New specialty drugs coming to market and large price increases in generic drugs are the main driving forces of prescription drug plan cost trends, according to Campillo.

“For instance, the population for hepatitis C is concerning because there are millions of people that have hepatitis, but you now have two new drugs that are extremely expensive. The CNMI has been known to carry hepatitis A, B, and a small number of C,” he said.

“But even if we only get about 10 patients of hepatitis C, that’s a lot of money because these new drugs is what each one of them is costing to treat a patient. The cost is about $90,000,” he added.

Despite the introduction of new and, in many cases, more innovative medical treatments, prescription drugs that have been around for years are getting more expensive.

One example is doxycycline—an antibiotic used for a number of infections such as Lyme disease, chronic prostatitis, sinusitis, pelvic inflammatory disease, acne, and others—went from $20 per bottle back in 2013 to a whopping $1,849 per bottle in 2014. That is an astounding 9,145 percent increase in only six months.

“Today’s drugs are beginning to be a concern for health plans,” he said.