Mr. Chairman and members of the Committee, thank you for the opportunity to testify today. My name is Kelly McGivern and I am the President and CEO of the Ohio Association of Health Plans. OAHP is the statewide trade association that represents companies that provide health insurance benefits to over six million Ohioans.

I am here today as a member of the Ohio Chamber of Commerce Health Care Initiative. I, along with representatives of my member companies, have been participating in the discussions being organized by the Chamber focused on increasing access to health care benefits to Ohioans. Our role in this group is to provide feedback from the health insurance industry on the hurdles we face in trying to provide cost effective – high quality health care benefits to Ohio’s citizens as well as learn about the hurdles facing other parties involved in the health care system.

One of the biggest obstacles facing our members and everyone else in the health care system is rising costs. Hospitals, physicians, urgent care facilities, community clinics, state and local governments, insurers, employers and individuals are all experiencing increased costs for health care services. No one is immune. Therefore it is imperative that we all work together to find reasonable solutions that do not provide relief on one side and exacerbate the problem for another.

Our role in the health care systems is to work with employers to provide a health benefit product that meets the health care needs of individual employees, the financial constraints of those paying the bill and provides information on the quality of medical outcomes and patient safety. The end result has been broad access to health care benefits but without an understanding of the real cost of those benefits.

In today’s marketplace, employers are demanding more proof of the quality that managed care brings to the table, flexibility in designing new benefit packages and justification for increased premiums. At the same time, providers are demanding higher reimbursements to keep up with their growing health care costs and relief from administrative paperwork. Finally, government is increasing the amount of documentation needed to operate, implementing rigorous requirements to ensure protections for consumers and providers and because of its nature is unable to respond quickly to provide needed flexibility being demanded in the health care system. All of these demands add increased costs to an already expensive product.

Our industry is struggling to respond to all of these demands within a health care system that has strong, twisting roots that run deep and intersect numerous streams and valleys.

So where do we go from here?

1) We believe there needs to be more consumer accountability and responsibility for health care decisions. In fact, the marketplace is demanding it. Faced with double digit premium increases – 13% last year, employers are faced with tough decisions on scaling back benefits, passing more of the cost to their employees, or reducing other benefits and compensation. The convenience and low out of pocket costs that have been the norm in managed care benefits have resulted in a society which believes it costs $10 to see their doctor or get a prescription filled. Additionally lifestyle choices have increased health risks. Until consumers begin to make decisions based on cost and quality, they will never become a part of the solution to the crisis we face. New health insurance products place the consumer in the driver seat: from picking the physicians in the network to determining their co-pay levels – these consumer driven products will shift the decisions and responsibility back to consumers. In order to accomplish consumer activism in the health care system they need to have information readily available about cost and quality and be educated on how to use both.

2) Next, in order to respond to the growing demand to be innovative and flexible there needs to be a regulatory structure in place that accommodates the fast changing health care environment and the ability to provide necessary products in the marketplace. For example, HMOs in Ohio are having difficulty competing and responding to employer requests for flexibility in co-pays. Just like your car insurance – your co-pay or deductible has a direct impact on the premium you pay. In simple terms, if you increase co-pays – you can reduce the premium thus expanding access to health insurance benefits. Unfortunately, Ohio law and ODI policy artificially determine these limits for HMOs but not other health insurance products and as a result negatively impact the ability to market a product that employers and individuals are demanding and places HMO’s at a competitive disadvantage. This is just one example of the myriad of regulatory hurdles that create competitive differences among companies and stifle innovation in the market.

3) Finally, all of the parties involved in our group agree that there needs to be reforms to Ohio’s tort laws to rein in the cost of lawsuits against the health care system. The inability to predict the reserves needed to cover a medical lawsuit due to unlimited jury verdicts creates uncertainty and conservative pricing of these malpractice insurance products. Additionally, faced with the fear of frivolous lawsuits, physicians practice defensive medicine often ordering tests they might not otherwise have ordered. All of this adds to the overall cost of health care. Finally, if providers facing escalating costs of malpractice insurance elect to leave the practice of medicine – all Ohioans end up suffering.

These are just a few of the many topics the Ohio Chamber group has been discussing. Our members are committed in their participation with all these parties to jointly discuss and pursue changes that can be made to increase access to health care for Ohioans. I would like to thank the Ohio Chamber for their leadership in bringing all sides together and your willingness to take time to hear from interested parties on the challenges in the health care system.

( If we could all play musical chairs and spend a day in our peer’s shoes we could accomplish so much more) Rescue me society – refuse to stop smoking, drinking, or eating high fat foods and don’t exercise or take good care of their body. Do when something goes wrong – they are quick to want an instant fix immediately from their primary care provider or better yet the ER where more and more individuals are turning for primary care.