>> c-span, where history unfolds daily. in 1979 c-span was created as a public service by america's cable-television companies, and today we continue to bring you unfiltered coverage of congress, the white house, the supreme court, and public policy vents in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. >> congress is in recess for part of august with the use senate return early from its summer break. the senate is back in session on august 15 when senators will consider judicial nominations and federal spending bills. the house is in recess until september 4. my gavel to gavel coverage on a companion network c-span and the senate here on c-span2.

>> this week the national business group on health released its annual survey asking employers about health care costs and coverage for the coming year. the groups ceo discussed what to expect in terms of co-pays and deductibles and the overall price of health insurance. >> good morning, everyone. my name is brian marcotte, i'm ceo of the national business group on health. welcome to the breathing on her 2019 health care strategy and plan design survey results of large employers. this is, you have a pack of data, executive summary thatry will help you follow along with my remarks. i will comment on the survey results for about 20 minutes and then we can open it up for q&a. national business group winhelp is a membership-based-b

organization consisting of roughly 420 or so companies.. 74 of the fortune 100, and these are large multistate come in, many cases, global employers who typically self-insure theirare o health care costs in tsthe us .. and they contract with healthany plans and pharmacy benefit managers to manage networks anda to pay claims on their behalf, most of them are self-insured. business groups mission is really to keep our members on the leading edge of innovation,h thought and action when it comes to the delivery, the financing, the consumer experience and thee affordability of the health care system. we also look to really accelerate the adoption of health care innovation as well, aressy to improve and address the health and productivity off the globale prod workforce. so this year's survey is a bit different than what you've seend in the past.

we redesigned the survey toge provide insight into largeon employers perspectives on the rapid change we're seeing in thn health care environment. that's in addition to what we typically provide, which is whii health care cost information,man plan designn comparisons andon employ trained information,nfmai employer trained information in terms of initiatives that are driving. we asked employers questions regarding how is their role evolving with the management off health care? we asked about the role strategy plays within the organization. we asked about the thoughts and industry consolidation both at a local level with provider groups acquiring other provider groups but also at the national level with the proposed mergers of health plans and pharmacy benefit managers we asked their thoughts on newoe entrants from outside health care delivery system, out of th,

silicon valley or out of employee alliances or other areas and what role do they play in influencing health care. we also asked about the role of virtual care, in artificial intelligence and what role that full play in the delivery of health care in the future. we also asked their thoughts on the pharmaceutical supply chainp as youpl know has come under a t of scrutiny the last couple of years. we field the survey everyry may-june because that's when most companies make the decision for the upcoming year which is an important part of the timing of our survey because this is a survey about what companies will do in 2019, not what they'reth conda played for 2019. these results reflective perspective of 170 largecoie companies who collectively provide health insurance for f over 19 million employees andth their families. and to put that intoarticite perspective, the companies who th caripate in the survey divide as much cas -- to provide as muf

the code as the affordable care act provides for the public. rangondents reflect a wide range of industre y sectors from hospitality and retail to manufacturing and technology, to banking and energy and others. over three-quarters ofters of th respondents have over 10,000ov00 employees, and over 30 30, 30% f the respondents have over 50,000 employees. so let's begin with the evolving role of the employer. we asked employers what role the health care strategy plays iny their organization. is it primarily a means to carer manage their health care cost or organizati is it part of a broader organizational strategy? in what we learned is more companies view their investment inve well-being as an important element of theirof thl workforc overall workforce strategy.e in fact, 27% of companies say that their health care strategy is an essential role in their e

ability to deploy the mostto competitive, productive, engaged inrkforce possible and to boost businessesperf performance. only night was set -- 2019% of employers state the primary goal of health care strategy is to manage their health care cost od as companies are taking this broader view of health and well-being, we are seeing employers play an increasingly t activist role in changing health care within the delivery systemh and actually this was a higherr number that would really thought it would be. nearly half employees surveyed are pursuing alternate paymentrg models. they need greater access througu digital solutions. 35% of employed by implementing accountable care organizationsmg are high-performance networks either by directly contracteddes with health care providers are working directly through their r health plans. employer direct contact withovin

health systems and providers and local markets more than tripled% from 3% in 2018 to 11% in 2019. employers are also continuing to expand its centers of excellence model. seeingrow we are seeing growth across alls procedure based centers of excellence.er, with cancer, cardiovascular,ar fertility and orthopedics experiencing the greatest areaso of growth. employer direct contracting with centers of excellence from 9% it 2017, 18% in 2019. we asked employers questionsges regarding changes in the health care industry such as their a experience with providertheir en consolidation and the thoughts on industry mergers andnsol newi market entrants has been a significant amount of market specific provider consolidation over the years since the ac was enacted in 2010.

this activity of hospitals or health systems acquiring other hospitals or provider practicest or provider groups often flies. under the radar. because it happens at the localr level rather than a national scale. we asked employers whether cost, quality, and experience often referred to as the triple lane,y were any better, the same or worse prior to consolidation.fet employers fel fill in most cases provider consolidation has notnt resulted in lower health care costs. in fact, it often results in higher costs employers mostly struggled to weigh in on the effect of provider consolidation on consumer experience and quality, which reflects the lacd of data available on thesepeorma critical performance indicatorsw as we looked to industryale, consolidation on the national scale we asked employers theiryr on impact ofedgers

manageed mergers between health plans and pharmacy benefit managers will have on the triple lane. over the next three to five years, giving them an opportunity to gain some traction. 26% of employed are optimistic. these markets will have a positive impac positivet. impact. the theory being given the fragmented delivery system, the, vertical integration with health plans and pharmacy benefit managers has the potential to provide a more holistic approach on health care is managed,w th coordinated and delivered. however, given the track recorde of consolidation within thisare industry, most employers are skeptical that they will seeveme improvement from these mergers over the three to five year horizon, and some employers believe cost will increase. additionally, 70% of respondent believe new market and trends from outside the deliveryou system, or outside the healthh care industry in general, including innovations in silicoe valley fory emp employee allias are needed to disrupt health poa

care in a positive way. this reflects a level ofation frustration by employers with the pace of change on improving health care today. i will add that this questionng regarding new entrants into thed delivery system was not as result of the jpmorgan, berkshire hathaway and amazon, to. the survey was at when that was announced that the surgery was to open when that question was asked to believe that 70%, ther some responses factoring in or influencing that outcome. wthe the bottom line is a health system has not been designed with the consumer in mind. for example, after-hours care and seemed access to care is hard to come by or is at best inconsistent. telehealth, for example, was an innovation and a new market entrant back in 2012, 2011. it introduce consumers to what's possible virtually in the tha

convenience and the axis that comes with that. in 2012, 14% of large employers offered telehealth as alternativalternatepathway to ae on select services. largeccesngy all employers provide telehealth as todaption, and 20% of employers are experiencing utilization of 8% annually or higher. but since the introduction of telehealth wheezing virtual car in digital solutions into the of health care market at a rapid rate. we now have virtual care solutions for lifestyle coaching, chronic condition management such as diabetes,uala decision support andmotel monitoring, musculoskeletal and edicical andrapyon,al m surgical decision support, and emotional well-being and cognitive behavioral therapy, just to name a few of the areas that this has advanced into. today, virtual care is not part of health care strategy, your health care strategy is not

complete. alth in 2019, 78% of 8% of largee ems employer offer virtual mental and behavioral health services. 65% will offer virtual health and lifestyle coaching. and over 50% will offer diabetes management and medical decision support virtually.oach even virtual primary care services. what is provided typically throughagement and on telehealtd offered by% of employers in019. 2019. artificial intelligence is playing a greater role in virtual solutions and now the support consumers. the business group host that for hi him three times a year where we invite startups to come in present to a group of 35 novaressive employers, who come together really to accelerate the adoption of innovation in health care. over the last three years with assessed over 150 startups with over 60 making it through toh tt present to these employers, and

nearly all of the startups that star some element of virtual or virt digital solutions as part of their portfolio. we asked employers how significant a role virtual carev in ai will play and how health care is delivered in the futurem more than half of employersployl believe that s virtual care will play a significant role in the future delivery of health care, and others believe ai will have similar effect. additionally, half of employers2 stated it is a top priority for 2019. digital solutions for physicalml therapy,l, sleep, musculoskelet, diabetes management, prenatalhah care and coaching and emotional and behavioral health show the greatest potential for growth over the next several years.s ho the proliferation of virtual and digital solution, however, has added to the complexity of services and employer offers itc employees. engagement platform that emerged in the market back in aggregated

procure a potential integrate point solutions to create a more and personalized experience form consumers. employers believe engagement platforms show promised to deliver significant value but have a long way to go to fulfill that promise. so let's shift gears to pharmaceutical supply chain.e pc the pharmaceutical supply chain has come under increased scrutiny over the last couple of years. the growth of high deductible plans otas placed an needed spotlight on drug price where there had not been one before. we asked employees a trip employers their view of thebeene current supply chain and gave befo the options across the spectrum from it's working s well, to it needs to be overhauled. most employers believe theitds e pharmaceutical supply chain needs to change. 35% belief and needs it needs to be more transparent, and drug manufacturer rebates should be

reduced. but half of employers stated the pharmaceutical supply chain is inefficient, too complex, and es needs to be overhauled andrerans simplified. more specifically,ply chain three-quarters of employers dosi not believe drug manufacturerr rebates are anmore speci effectr drive down pharmaceutical costs. in over 90 90% of employers woud welcome an alternative to theg . rebate driven approach to managing drug costs. additionally, the contracting model within the pharmaceutical supply chain has not kept pacepn with today's planned designedloe reality.es do not over half of large employers are marserned that rebates do not benefit consumers at the point-of-sale. most pharmacy benefit managers today now have the capability to pull the valley of rebates benard to benefit consumers a t the point-of-sale, and employerd are moving in thatir direction. 27% large employers will have point-of-sale rebate programs in place in 2019, another 31% are

considering implementation by 2021. another challenge for employers is the proliferation of pharmaceutical manufacturer of ay aay assistance p programs. these programs are designed to minimize a patient's cost out-of-pocket cost for specific drug by providing coverage for the drug manufacturer to supplement the patient's health insurance. co-pay assistance programs have grown considerably over the past decade. in 2009 the rest of rese' the five drugs that had co-pay assistance programs. by 2015 that number grew to ove. 700.that num and today approximately% of brand drugs and 80% especially drugs now offer assistance toceo these programs. there are too concerned employers have with co-pay th optance programs. the first is, most co-pay assistance programs offer drugs that have a lower cost option available, such as generics. nearly two-thirds of employers

are concerned that these co-paye assistance programs steer consumers to higher cost drug'a when there's a low-cost drugssie available. only 12% of co-pay assistance programs are for similar source drugs are typically high-pricedg specialtyty medications. the second concern is co-payconn assistancsystem programs operate a patient's health insurance and, therefore, the coveragee provided by thehe here, the dr drug company bypasses the health insurers claim adjudication process. to the health insurer it lookse as if the consumer paid for the drug, and as a result ther consumers deductible and out-of-pocket or coinsurance ard falsely satisfied. to prevent the deductible in coinsurance from being falsely credited, to the drug company rather than patient was paid fod the drug pharmacy managers develop ther capability to tra some drugs that have received assistance which are the

patient's deductible is not credited if there was no cost to the patient. these were called co-payo co to accumulator programs and 30% of companies will have co-pay 30% o accumulator programs in 2019. the number will grow to 50% over the next few years. employers have less concerned about co-pay system programs when there is only a singleprogn source drug available. .. there's only a single source drug available. but still have concerns about the health plan deductible falsely been credited if there was no cost to the patient. so let's shift to health care costs and plan design. topline medical trend is projected to be 6% next year with an increase of 5% after employers contracting cost management initiatives. this is consistent with the last five years, but consistent doesn't mean good. topline medical trend is still running two times wage increases

and three times general inflation. which continues to threaten the affordability for all americans. today cost is expected to be $14,800 in 2019 of which employers with a -- on average 70% of the cost, leaving $4400 on average for employees to pick up through premium contributions and out-of-pocket expenses. key drivers of health care cost key drivers of healthcare cost trend are high-cost clues, specialty pharmacy which makes up 50% of most employers pharmacy spend even though it only affects 1% to 2% of the insured population. others are cancer and skeletal and price increases. the most unexpected data point in the survey this year is employers are dialing up the move. we have seen a steady increase in the number of companies

operating consumer health plans much as a full replacement for what they have. in 2019 the number of employers offering consumer directed health plans has the only option to drop by 9% from 39% to 30% reflecting a move by employers to add more choice into the mix. lastly employers are standing resources to help employees access mental and behavioral services, a big jump from 18% to 30%, it activating anti-stigma campaigns to break down barriers to access mineral health services. they are training managers and employees to recognize behavioral health issues and steer employees to appropriate services and we are seeing an increase in the number of companies offering on-site behavioral counsel beyond what

is typically offered. most employees are very concerned about inappropriate use and abuse of prescription opioids. in addition to the devastation on affected families, employers, higher absenteeism and 12% employee death related to opioid abuse. employees are working on a limited supply of opioids. the center of press -- the centers for disease control are prescribing them, providing coverage for alternative therapies including acupuncture and chiropractic care. let's close with what employees can expect for next year. it should be a quiet annual enrollment period. premium increases will be 5% which is consistent with prior

years to out-of-pocket costs that have not materially changed year over year. some employees will see additional voices and resources. it might be a quiet enrollment period but this is really an opportunity for employees to review their resources their employer makes availability to maximize their benefits on healthcare experience. 84% of employers feed money into health savings accounts and tie those contributions to program participation. a small percentage have matching contribution so it is important to obtain funding. and the employers are placing virtual care in 2019 on the growth of virtual care solutions, with convenient alternative pathways. 71% of employers are offering

employees medical decision support services to help understand treatment options and where to go for care. this is a valuable resource to help navigate a complex moving system. we encourage employees to use the interim opportunity to pause and understand what resources are available. i will take questions. >> you noted a slowdown to the high deductible plans. do you think of congress passes these hsa expansion plans allowing them to cover additions on a deductible basis, that would implement more attractive, change that trend? >> employers are interested in adding more flexibility into these plans. certain preventative services can be covered but everything has to apply to the deductible.

if you think that consumer directed health plans, they rebooted to pre-managed-care. before co-pays. there is a lot of rigidity around what you can do and can't do if you have a health savings account and most companies have a consumer directed health plan. building back flexibility employers would like to start covering more value-based services and providing higher-level coverage so whether it is chronic condition management or preventive services or the centers of excellence, there is a real opportunity to give back in design based on value. some of the proposals are moving in that direction. >> can you expand on that? can you provide more color why there has been a dialing back and what has been happening in

the network? >> why are we seeing a dialing back? the build up over the last decade in part has been driven by the affordable care act and catlike tax going into effect in 2018 so a lot of companies rushed to move to high deductible plans to minimize the impact of cadillac tax or delay it as far as they can delay it. as it is kicked down the road to 2020 and now 2022 there is a view that if they continue to be kicked down the road employers are relaxing their move from that perspective but there are other reasons, the ticking point in terms of cost shaving, employers contribute to health savings accounts, 500 for an individual, 1000 for a family. high deductible plans are a challenge. we have very low unemployment.

i think there are a number of factors playing into bringing choice back in, but i don't underestimate the impact of that catalog tax moving one of the factors. your second question. >> we kept seeing a shift in both of those. >> we are seeing more companies focus on high performance networks. in select markets, targeting their largest markets with the greatest opportunity and have leverage to go direct, a big jump in direct contracting or work through their health plan. this is a move to improve coordination of care in these markets and to do that rather than chip away at plan design,

there is a shift from focusing on plan designed to focusing on delivery system and effectiveness. >> most of your members seem to hate their pbms based on survey responses. why are they still doing business? >> hating the pbm and supply chain model. this is a pbm problem or manufacturing problem. >> they don't care for the rebates. >> the rebates would be around for decades and if you would go back to managed-care days of the 90s with people paying co-pays for drugs rebates were less of an issue because they lowered the overall cost of the plan.

fast forward to today where whether you have a high deductible plan or a ppo the deductible is still pretty high in the consumer is paying first dollar coverage, rebates don't work well in that environment. there are a lot of reasons employers don't like rebates. part of it is it is a convoluted approach to lower drug costs from their perspective. the difference between gross and net in terms of what somebody could pay versus what the net price could be. there has to be a more simplified approach to how you manage cost and the rebates structure, and into the market for the perverse nature of -- there is a lot of complexity in this model, it is not just about pbms, if price goes up in

pharmacy and stakeholders benefit. and we are getting at this model. >> there are market opportunities, why doesn't that exists? >> you have new pbm entrance that are more transparent models. look at pbms today, 70% to 80% more of the market. it is not the easiest market, it is not the easiest model to break into. not a model that is under construction. we may be getting to a tipping deka where you see change in the contracting model of the supply chain. >> there was a slide -- i didn't see if there was a slide focused

on cost control to the top initiatives. >> there is a slide, the key drivers focused on cost management, all off the top of my head. >> what actions are they looking to try to take to save money next year? related to that, the top initiatives and implement more virtual care solutions, i am curious if there is any data on what engagements they are getting from actual employees. >> i think that many of these are in the last couple years but we are seeing some examples of good engagement and some are

waiting to see what we have. one of the challenges employers have is a little bit of point solution fatigue, there are so many solutions in the market they don't necessarily have a bandwidth contract with them all. even if they contract, how to integrate them with everything else they have? these emerging engagement platforms, we say they have promised to better integrate these solutions, personalized messaging based on data, and put these solutions behind a wall so it can be better coordinated and be enabled. a lot of opportunity. employers are moving in that direction but we are seeing case-by-case examples of better engagement with certain point solutions. we have seen diabetes management in particular.

we have seen it on the emotional well-being solutions that are getting good, sustained engagement over time. the next question is what to do in terms of outcomes but a lot of these solutions are relatively new in the last several years but we are tracking that. one thing we do with health innovation forms is try to line startups with pilots, with employers, we see the results and pull those results forward. other questions? >> can you comment on what employers are thinking in terms of the jpmorgan disruption? >> let's start with the silicon valley disruption. they are coming out of the

market, not just about the valley but when you talk about different solutions around physical therapy or emotional health and well-being or lifestyle management or sleep, a lot of them are coming out of the valley. when you think about amazon, jpmorgan, berkshire hathaway coming together, i think if it is just going to be another purchasing coalition, i would expect incremental change. but if you begin to leverage amazon's footprints within the home, their relationship with the consumer, their customer obsession as we talked about, healthcare is not as custom focused as it needs to be. amazon's customer obsession, the customer loyalty they have, begin to leverage their ability. one of the challenges with

healthcare, employers don't touch the system with enough frequency for it to be routine to be sophisticated consumers. amazon and other online shopping is routine for many people and if you can incorporate healthcare into their routine and leverage their platform, you have an opportunity to reach them in a way no one has been able to reach them. for me when i look at this coming together, how do you leverage their platform. and to reach people in a more man's natural way, more frequent way than we reach them today. yes? >> the question about high performance networks, obviously related but different things too. are you seeing for instance real

savings? or is it a question at this point? >> it is a bit open right now. what they are doing is based on what they are finding in terms of competency and what they are able to do, partnering, 35% of companies pursuing high performance networks. it is not a broad-based strategy but a market targeted strategy. companies work directly in certain markets that are important to them. and find a credible partner to work with in that market. these are still building and the maturity path for some of these high performance networks can be multiple years. you need to get to a tipping deka of the providers practice and alternative payment in order to affect change.

and they talk about this, they get to a third of their practice. they affect change in the overall practice. and they are partnering with willing providers. and they are around network around data and data integration. that leads them to believe, and as we close, and they seek cost.

and measuring quality and consumer experience. are there other questions? >> i want to follow up on it. that might be another reason they are finding consumer directed health plans through their deductibles and it is not a high cost claim in terms of slowing spending. >> i would say regardless, it was a high deductible plan or ppo plan, you don't have the financial incentive once you get out of pocket max. high cost claims are a major

driver overall, and pharmacy in many respects are becoming high cost claims if you look at million-dollar drugs that are emerging whether it is a combination of the cost, the administration of the drug, the coming together of specialty pharmacy and high costs claimed of the common category. and how do you manage those high cost pharmacy drugs. cancer is another category that has again related to drugs, the growth and centers of excellence, cancer centers of excellence is seeing growth in 30% to 40%, steering people to

the best places to go for care. they get a high cost claims. all right. other questions? going once. going twice? thank you all very much. >> tonight at 8:00 pm eastern, former president barack obama delivers the annual lecture. >> do we have to abandon our unique national and religious identities. and stopping proud of this tribal heritage.

and instead of being a black man and south african. you can be proud of your heritage without denigrating those of a different heritage. >> thursday at 8:00 eastern, youth activist address the us conference of mayors. >> i can't expect the feelings you have during a school shooting. one thing i can relate it to, the feeling of anxiety of uselessness, not be able to do anything, and the united states congress. it might sound like a funny remark but it is no joke. i have spoken with legislators across the board. senators and representatives, mayors and not one single person

is confident that one thing can be done about 17 people who died in my school and many others have died since. >> watch on c-span, c-span.org, and listen to the c-span radio apps. >> tonight, booktv is in prime time on c-span28 with a look at recent biographies. starting at 8:00 pm, recalling the life of the late san francisco politician harvey mill, one of the first openly gay elected officials in america. her book is harvey mill, his lives, and death. sheila tate, former press secretary for first lady nancy reagan on her book lady in red, an intimate portrait of nancy reagan. booktv all this week in prime time on c-span20.

>> c-span, where history unfolds daily. in 1979 c-span was created as a public service by america's cable television company. today we continue to bring unfiltered coverage of congress, the white house, the supreme court and public policy events in washington dc and around the country. c-span is brought by your cable or satellite provider. >> congress is in recess with the u.s. senate returning early from its summer break. the senate is back in session on august 15th when senators consider judicial nominations and federal spending bills. the house is in recess until september 4th, cover the gavel coverage on companion network c-span and the senate on c-span 2. yesterday was the 20th anniversary of the bombings of

us embassies in kenya and tanzania, the effects killed 200 people. and al qaeda's first major offensive against the us. at the state department officials who were at the embassy that day and the deputy and assistant secretary of state for africa, to mark the anniversary. [inaudible conversations] >> good morning, ladies and gentlemen, distinguished guests. we are delighted with the turnout. thank you very much. good morning.