STEVE INSKEEP, HOST:
One woman found a way to attack high health insurance prices. And that's news because it's hard for any one person to do. If you go to the hospital, the hospital charges your insurer, which passes the cost on to you. And it's hard to negotiate a better price in that system. Marshall Allen of the nonprofit newsroom ProPublica has been investigating high health insurance costs. And he has the story of a woman who used her power to hold them down.
Hi there, Marshall.
MARSHALL ALLEN: Good morning, Steve.
INSKEEP: Who is this woman?
ALLEN: We're talking about a 68-year-old grandmother named Marilyn Bartlett. And Marilyn Bartlett took over the Montana employee benefit plan in 2014. And when she took over the plan, which covers about 30,000 state employees and their families, that plan was in deep trouble. It's self-funded, so the employer paid all the health care bills. And it was projected to lose about $50 million in the coming years and basically go broke.
INSKEEP: So the classic situation here that people in all sorts of insurance arrangements face where they're basically told health care is really expensive, gets more expensive every year. And we're short of money. We need more from you.
ALLEN: Exactly. And if people hadn't noticed, the cost of your health care benefits is rising. There's about 151 million of us who get our health care benefits through our employers. And part of the problem is our employers have been deferring to the medical industry when it comes to the cost of health care. And so the industry keeps raising the cost. And basically, those costs keep getting passed on to the workers.
INSKEEP: What did Marilyn Bartlett do differently?
ALLEN: She had spent 13 years working in the insurance industry, and so she knew a lot of the games. She was also kind of a math nerd who knew how to follow the money. And so working with her team, she compared what her plan paid each hospital in the state - the bigger hospitals - to what they were paid by Medicare. And Medicare publishes its prices. And so she could see that her health plan was paying hospitals in the state anywhere from two times what Medicare gets paid to five times what Medicare gets paid.
INSKEEP: Wow. And so she said that was too much.
ALLEN: It was too much. I mean, the plan was going broke. Her charge was to get things under control. And so she had to do some really hardball negotiating. And what she decided to do, which is kind of a revolutionary idea in the health care world, is she decided to set her own prices and set the plan's prices. Now in this case, she had some leverage. And actually, all employers have this leverage because the health care industry really does need our money. So she said, look; you hospitals that are at five times the Medicare rate, you're going to need to bring your prices down to about twice the Medicare rate.
INSKEEP: I wonder if hospitals simply had to accept that. I'm thinking that in Montana, there can't be all that many hospitals. There surely would be a hospital that would just say, listen; our price is our price.
ALLEN: It took some hardball negotiating. She threatened to go public with the price variation and expose the high-priced hospitals. She called in the union to campaign against a hospital that was holding out, and they had a whole campaign statewide. They sent hundreds of postcards and made phone calls to the hospital executives and leaders. And eventually, all the hospitals signed on. And the plan saved about a million dollars a month just from the reduced hospital prices.
INSKEEP: Is there a lesson here for employers of all sizes that if they put in the time, they can get the leverage to hold down what is paid for hospital and other medical costs?
ALLEN: Marilyn would say absolutely, yes. Her message really to employers is you need to push back. You need to read the fine print in your contracts. You need to demand to know where the money is going and why the costs are so high. Get an itemized explanation for all of the expenses. And when you do that, you know, you may need to - the smaller employers may need to join together with other small employers to increase their leverage. But they can bring down the prices.
INSKEEP: Marshall Allen of ProPublica, thanks very much.
ALLEN: Thanks so much, Steve.
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