The head of healthcare for one of the biggest U.S. employers has a message for the rapidly consolidating healthcare industry: We're watching you.
General Motor's U.S. healthcare leader Sheila Savageau on Thursday took aim at the rampant merging industry, particularly as insurers and pharmacy benefits managers become one.
"The key takeaway for me here is, we've got to keep the pressure on" to make sure employers enjoy the benefits of consolidation, Savageau said.
The comments came as business leaders representing hospitals, physicians and insurers debated the merits of consolidation and whether the latest combinations can curb costs for patients and employers. The panel was part of the National Business Group on Health's conference.
GM, with hundreds of thousands of employees, is among big employers skipping insurers and contracting directly with providers in recent years.
She said employers have always entrusted healthcare industry partners to do the right thing, but she has noticed that over time health costs haven't decreased and outcomes haven't improved.
Fed up with business as usual, she and GM recently decided to contract directly with the Henry Ford Health System in Detroit. She noted that in Detroit she had six health systems to choose from, which is different than other, more heavily consolidated markets — where prices also tend to be higher.
"We're holding providers accountable for care," Savageau said.
Now, the auto giant is taking a similar approach with payers.
"I do think it's time that we start holding PBMs accountable," she said.
Savageau pressed Cigna Chief Clinical Officer Steve Miller on whether the payer's tie-up with Express Scripts, one of the nation's largest PBMs, will mean lower prices for business leaders and their employees.
"If I look at my contracts with Henry Ford, for example, I'm holding them accountable to a zero trend [in medical cost increases]. How are you going to do that within your consolidation?" she asked.
Miller said Cigna is up for the challenge. The company is promising to contain healthcare costs increases within the consumer price index by 2021, a bold promise others have yet to commit to, he said.
"Healthcare should not cost you any more than the increase in inflation," he said. "It's going to be really, really hard, but if our platform can't get there than no one can get there."
Earlier in the week, Miller was in another hot seat before the Senate Finance Committee along with other leaders of the nation's largest PBMs. They were called to testify as the committee seeks to pinpoint the reasons behind growing drug prices in America.
There was plenty of finger pointing to go around among health industry actors.
From the provider side, the American Hospital Association said members want to try new models of reimbursement, but they don't always have a willing insurance partner, Melinda Reid Hatton, general counsel for the group, said.
An American Medical Association official noted the models have not improved over the years and still need more of a focus on value over volume.
They have too many quality metrics, are too varied and have misaligned incentives between multiple payers, Carol Vargo, an executive with AMA said.
CMS innovation head Adam Boehler earlier this week called to AHA members to help his agency design payments models for post-acute care. He also said then that his agency will unveil a new payment model for primary care physicians in the coming weeks.