Maternity Deserts an Alarming Trend in the U.S.

May 1st, 2023
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Maternity units across the country continue to close at increasing rates, leaving women at a heightened risk of maternal mortality. In fact, 47% of rural community hospitals report having no obstetric services in 2020. According to a report by the March of Dimes, more than 2.2 million women of childbearing age live in maternity care deserts, affecting nearly 150,000 babies.

Maternity care deserts are counties in which access to maternity health care services is limited or absent, either through lack of services or barriers to a woman’s ability to access that care. Living in a maternity care desert contributes significantly to a woman’s risk of maternal mortality. Studies show that this risk is even higher for women in rural areas, who have fewer options for prenatal care and fewer health care providers available to deliver their babies. This creates longer wait times and longer travel times to seek care.

The reasons behind these closures are complex, but many hospitals with obstetrics units are closing due to financial pressures, such as low reimbursement rates and high malpractice insurance costs. Additionally, the aging population of health care providers, particularly among obstetricians and midwives, creates additional challenges for rural communities. This results in fewer obstetricians and midwives available to provide prenatal care and deliver babies.

What’s the Solution?

Intervention from policymakers, including legislation, may be necessary to address the underlying causes of maternity deserts. Policy efforts should focus on ensuring all women have access to quality prenatal care and a safe environment for delivering their babies. Federal and state governments can invest in programs to recruit and retain physicians and midwives in rural areas, and the root causes of these closures can be addressed by offering financial incentives, such as loan forgiveness and tax incentives, to hospitals that offer obstetric services.

Several state Medicaid programs and major health systems in New Mexico, Missouri and Utah are leveraging telemedicine and remote monitoring and developing hub and spoke models of care in which obstetricians or maternal fetal medicine specialists in urban areas provide education and support to rural providers, who are more likely to be family medicine physicians and nurse practitioners than obstetricians.

Since obstetric unit closures in rural hospitals are often due to inadequate payments from private insurers, it’s time to rethink the way we pay for maternity care in these settings. The Center for Healthcare Quality and Payment Reform has proposed a new strategy which could create sweeping change – paying rural hospitals a monthly fee for each insured woman of childbearing age in the community, in addition to paying service-based fees directly related to pregnancy, delivery and postpartum.

Employers also have a critical role to play and know that improving maternal health outcomes in the U.S. and reducing disparities will require changes to the existing system of care to make it more patient-centered.

Here’s what employers can do to mitigate the trend of increased maternity deserts:


Read more about employer strategies to promote high-value maternity care.

A Vicious Circle: Food Insecurity Both a Cause and Effect of Higher Health Care Costs

February 23rd, 2023

More than 34 million people, including nine million children, lack reliable access to enough food to live active, healthy lives. Grinding inflation and rising health care costs are making life even more difficult for food-insecure Americans – undermining health and forcing risky tradeoffs between sustenance and medical care.

Factors contributing to food insecurity include poverty, a lack of affordable housing, racial discrimination, chronic health conditions and poor health care access.

Fueling Higher Costs

As a major social determinant of health, food insecurity contributes to chronic diseases like obesity, heart disease and diabetes. For children, food insecurity and chronic hunger create a higher risk of both developmental and behavioral health problems.

A 2019 study by Feeding America estimated that food insecurity costs the U.S. health care system an additional $53 billion annually by triggering or exacerbating chronic diseases and fueling emergency room visits, hospitalizations and readmissions.

It also results in higher family health care expenditures. A recent study found that food-insecure families paid about 20% – an average of $2,500 – more annually in health care costs than families with sufficient food.

Health care costs were higher regardless of the type of health care coverage the family had, from $1,855 more with public insurance and $2,107 more with private insurance to $3,531 more with no insurance or a mix of different coverages.

Choosing Between Food and Care

For many living near or below the poverty line, inflation’s steep rise over the past two years has led to increasingly difficult choices between food and health care. According to a recent survey conducted by the Harris Poll, nearly one-in-five Americans (18%) have skipped meals or did not buy groceries due to high inflation (including 28% of Gen Z and 23% of millennials).

At the same time, 14% have cancelled or postponed plans to see a medical specialist, 11% have skipped an annual physical, and 10% have not taken prescribed medication due to inflation. 

Minorities, Single Moms Disproportionately Affected

Food insecurity affects a little over 10% of U.S. households, according to the USDA. However, rates among single-mom households and Black and Hispanic households are substantially higher than the national average at 24%, 20% and 16%, respectively. Rates also differ significantly from state to state due to population characteristics, governmental policies and economic conditions. Between 2019 and 2021, food insecurity rates ranged from a low of 5.4% of households in New Hampshire to a high of 15.3% in Mississippi.

Food insecurity needs to be a bigger part of the conversation around health equity and efforts to decrease health disparities. As employers, purchasers and policymakers continue to navigate and combat ever-rising health care costs in this country, it’s important to remember that there are working Americans who must choose between putting food on the table and getting necessary medical care and prescription drugs.

4 Key Employer Health Trends for 2023

January 4th, 2023
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With the pandemic’s grip finally easing, employers are shifting their focus toward key objectives that can support sustained improvements in health care quality and meaningful reductions in cost. Here, the top four trends for large health care purchasers to watch as we head into 2023.

1. Improving health equity

COVID-19 exposed major disparities in the U.S. health care system and helped fuel an employer commitment to tackle the systemic inequities faced by underserved and minority communities. Employers understand that by focusing on health plan design, care access and social determinants of care, they can make important strides toward providing more equitable and cost-effective care.

In the coming year, more large companies will be looking to cover preventive medications and services, supporting pregnancies through doula services, developing data capabilities to identify and help address social determinants, improving remote chronic disease management, and making benefits and health care simpler to access and navigate for underserved populations.


2. Strengthening primary care

Employers realize that robust primary care provides the foundation for a healthy workforce and is an essential starting point of high-value health care system. Studies show that advanced primary care, or primary care systems that incentivize integrated and coordinated care, can lower overall health utilization, improve outcomes and reduce costs.

Key strategies employers are expected to target to bolster primary care include supporting consistent advanced primary care standards for payers, providers and health care purchasers to incentivize high-quality, lower-cost primary care. Other employer efforts are likely to focus on working with policymakers to advance the development and application of alternative payment models that support and enable advanced primary care. Equally important will be the continued evolution of tools and systems that enhance consistent access to behavioral mental health in the primary care setting.

To support purchasers in their efforts to identify and work with top-performing primary care practices, PBGH recently issued a first-of-its-kind collective request for information (RFI) on behalf of members to identify provider practices that meet established standards of advanced primary care and that are willing to partner — the results of which will be used in network design and/or in direct contracting arrangements.


3. Taking fiduciary responsibility for health care

The Consolidated Appropriations Act (CAA) of 2021 imposes fiduciary obligations for employers who self-insure under the Employee Retirement Income Security Act of 1974 (ERISA). That means self-insured employers will need to demonstrate that the health care services they purchase for employees are cost-effective and high-quality. As a result, employers will be working to harness newly available hospital price information to drive cost-effective, quality care. Critical to these efforts will be tools that can make newly transparent price data meaningful and actionable. In addition, collective employer efforts to identify specific examples of overpricing will likely emerge to support negotiating leverage with hospitals and providers. Ultimately, employers’ new fiduciary obligations may spawn a shared national database with companion analytics that purchasers can use for evaluating pricing variation to help determine fair prices.


4. Reforming pharmacy benefit managers (PBMs)

A key legislative objective for purchasers in 2023 will be passage of legislation similar to the last Congress’s Pharmacy Benefit Manager Transparency Act of 2022. Comprehensive federal legislation would empower the Federal Trade Commission to increase drug pricing transparency and hold PBMs accountable for numerous unfair and deceptive practices that increase consumer costs and limit access of prescription drugs. In addition to expected action from Congress, a Federal Trade Commission investigation into PBM business practices is underway. Employers, meanwhile, will increasingly be looking to new market entrants that promise more transparent PBM services and put employers in control of their data to gain greater control over rising drug costs and employee access to quality care. PBGH is working across multiple channels to raise awareness about the extent to which PBMs have distorted the prescription drug supply chain – actions which put lives at risk, constrain employee access to medications and add billions of unnecessary costs to employers’ health care expenses.

Better Data Collection Essential to Understanding and Addressing Health Inequities

December 14th, 2022
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The COVID-19 pandemic exposed and exacerbated the weaknesses of the U.S. health care system and highlighted long-standing inequities for minority communities. Highlighted during this period was the profound impact of economic stability, education, social and community life, one’s neighborhood and access to high-quality health care—social determinants of health—on the overall health and well-being of communities.

As a result, addressing health inequities has become a top priority for many employers, purchasers and health care providers. The ability to effectively collect a range of data points about patients and the care they receive is an essential component to creating meaningful change and ensuring populations achieve their full health potential.

Looking at health quality data by race, ethnicity, language and other patient characteristics, is crucial for understanding how long-standing systems of privilege and oppression impact the health of minority populations and communities. However, patient self-reported race, ethnicity and language (REaL) data across health insurance markets is widely variable and overall limited. While race and ethnicity data in California’s Medicaid program (called Medi-Cal) is broadly available likely because of legislation requiring health plans to collect this information starting in 2009, corresponding data for the majority of patients who receive health benefits through the commercial market – via employers or on the private market –is low or absent.

These limitations of known race and ethnicity data hinder the ability to see where disparities exist and for the health system to react with meaningful interventions. For health plans and large employers and purchasers, who provide health benefits for more than half the U.S., it is crucial to uncover variation in the access to care and the quality and experience of care being provided.

With better self-reported patient demographic information, employers, purchasers, payers and providers can tie this data to health care access, quality, patient experience and outcomes to illuminate exactly where disparities exist. These insights can enable tailored interventions and support for improvement.

How to Improve Data Collection

Legislation, Policy and Regulation

Legislation and regulations can incentivize or require health plans, providers and other health system organizations to increase the collection and quality of self-reported demographic data. Legislation and statute also have the potential to enforce standardization for data fields and definitions, which enables largescale purchasers of health care to align with their health plan and provider industry partners and enhance their ability to share, aggregate or disaggregate data to identify trends and implement plans for improvement.

It is crucial to ensure that national and state standards do not contradict each other.

Contracting and Business Relationships

Contracting requirements and incentives as part of large-scale public and private purchaser and payer programs can increase the collection, reporting and use of REaL data and thereby bolster efforts to mitigate disparities. Large purchasers could add incentive payouts if plans are able to stratify measures across self-reported REaL data. Health plans, provider organizations and other payers that contract within the health system can use incentive payouts for better data collection and stratification and other efforts to reduce disparities. Another approach is to build tiered networks that point patients to providers who have proven to be stronger at collecting, reporting and using REaL data.

It is important for purchasers and payers to avoid siloed initiatives that conflict with each other.

Organizational Leadership, Systems Structure and Culture

Organizations that pay for services at the point of care (e.g., health plans and independent physician associations, or IPAs) have the potential to increase REaL data collection, reporting and use by assessing and enhancing data collection opportunities, sharing data internally and creating a culture that values the collection of this information. This starts with organizational leadership. It is important to normalize data collection into regular workflows to improve the quality and ensure the most accurate information possible.

Purchasers, health plans and provider organizations can increase patient self-reporting by increasing awareness of how the data will be used and educating enrollment counselors and other staff with direct patient interaction on why it is important to collect this data.

Certification Requirements

The National Committee for Quality Assurance (NCQA) has required plans to report their percentage of self-reported REaL data for certain key measures, with a goal of 80% self-reported data. Additional accrediting organizations, purchasers and others could adopt similar certification requirements to support reporting and stratification for the same measures and self-reported data goals as NCQA. This would increase the consequences for not aligning and support the overall goal of greater availability of self-reported REaL data.


Read more in our latest issue brief.

Looking Toward the Horizon: Top 7 Health Care Trends for Employers in 2022

January 6th, 2022
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At the recent PBGH year-end roundtable, noted health care futurist Ian Morrison discussed key health care trends that both he and PBGH believe will be most relevant to purchasers in the year ahead. Morrison is the author of several books on health care and has worked with more than 100 Fortune 500 companies in health care, manufacturing, information technology and financial services. 

Here, the top 7 trends for large health care purchasers to watch as we head into 2022.


1. The workforce will remain in upheaval

Providers and other employers continue to grapple with the unfolding impact of the Great Resignation. Difficulty recruiting and retaining staff will remain an ongoing problem for many provider organizations. One consequence will be the continued ascendance of telehealth and other virtual care services. Separately, the loss of employer-based insurance for many workers who’ve left their jobs will likely increase self-pay, health exchange and Medicaid patients, resulting in a worsening payer mix and continued financial pressure on providers.  


2. Providers depend on employers for profits

According to a recent RAND study, hospitals charge employers, on average, about 250% of Medicare rates. The premium over Medicare can range for 130% in Iowa to 300% in California. The reality is that providers are dependent on self-insured and commercial payers for their entire margin; purchasers that can’t or won’t consider shifting provider networks to compel some level of competition will continue to be subjected to the highest charges.  


3. Choice has been conflated with quality

Employers are beginning to understand that in opting for broad, open provider networks over the years, they’ve undermined their own ability to direct employees and members to the highest-quality, most efficient provider organizations. This recognition is supported by surveys that show consumers themselves are willing to trade choice for quality.  

That’s why, increasingly, large employers/purchasers are measuring and contracting with teams and individuals that meet their standards for quality and service and respond to their concerns, stepping away from one-size-fits-all arrangements with large health systems. PBGH members, for example, report quantified success through direct purchasing relationships with systems that are eager to innovate and demonstrate quality. Passively accepting health plan reports is a thing of the past as employers gain the experience and data needed to scale new approaches. 


4. Consolidation will continue

Mergers and acquisitions across all levels of health care will continue as organizations negatively impacted by the pandemic are picked up by those interested in broadening their footprint or extending vertical integration. This trend will increase the market share of the most powerful health systems and reduce potentially more cost-effective alternatives for purchasers.  


5. Investment in digital point solutions will keep growing

Venture capital investment in digital health solutions has doubled over the past several years to approximately $14.7 billion this year, and the trend is expected to continue. Fundamental questions remain about whether these solutions are truly adding value or simply increasing fragmentation and cost across the system. Employers are overwhelmed by the sales pitches they receive from new companies vying for their business and are looking for trusted sources that use clinical rigor and data-based outcomes to help them assess their value and create needed standards in the market for new entrants.  


6. Addressing the health care inequities exposed by the pandemic will become a priority for providers and purchasers alike

The risks of hospitalization and death for marginalized people in the U.S. are two-to-three times higher than for white people. Organizations will continue looking for opportunities to close this gap by improving access and finding innovative ways to address social determinants of health. Such efforts can include innovative maternity care that reduces disparities and improves quality and outcomes and the broad adoption of patient-reported outcomes, which offer an ideal means for gaining insight into the care process and how its experienced by patients.  


7. Employers have an historic opportunity to impose greater control over the health care supply chain

Because the pandemic has caused significant upheaval across the health care system and created financial stress for many provider organizations, purchasers have an unprecedented opening to leverage their buying power in pursuit of higher-quality, lower-cost care. However, they can have an impact only if they’re willing to act in concert. Alignment on priorities and implementation is critical to advancing the change we need. Purchasers must become more aggressive in designing benefits that favor high-value delivery partners. 



Opportunities in COVID-19 Vaccine Access and Equity

May 4th, 2021
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While COVID-19 vaccine eligibility has expanded and supply has increased, data show that access to vaccines are not equitable throughout California’s communities.

Health care leaders are looking to work together differently as their vaccination efforts shift from trying to meet demand through mass vaccination sites to targeted interventions that address the needs and concerns of high-risk communities and vaccine-hesitant individuals.

In late April, PBGH’s California Quality Collaborative (CQC) hosted a closed roundtable discussion for health plans, provider groups and California state agency representatives to discuss challenges and success stories in their efforts to distribute COVID-19 vaccines and support equitable vaccine distribution for under-resourced populations. Five key actions stakeholders need to take emerged from the conversation:

1. Invest internally in policies supporting equity. During the past year, many organizations worked to improve internal processes that would better enable them to serve the diverse needs of their members and staff. L.A. Care Health Plan, the nation’s largest public health plan with nearly 2.2 million members, for example, developed a set of more robust internal policies to address diversity and inclusion, as well as programs designed to minimize barriers in working with minority or women-owned businesses, an approach described in the Clinical Improvement Network Connections spring 2021 publication.

2. Facilitate real-time data sharing. All groups agreed that, while there had been investments in data-sharing that facilitated collaboration to distribute and ensure access to vaccines, there were still gaps between health care delivery systems, public health and community-based organizations in terms of the accuracy of, and timeliness with which, essential clinical data was shared. As we begin to recover from the pandemic work should be done to ensure real-time data-sharing, especially between the California Immunization Registry and health information exchanges and organizations not traditionally part of health care information exchanges.

3. Provide clear, consistent and trusted communication. It was extremely important for all entities to streamline, test and regularly deliver communications campaigns to stakeholders, including community members, provider groups and member patients.

4. Leverage trusted relationships from primary care providers. Primary care providers were unable to play a significant role in the early days of vaccine distribution, often because mass vaccination sites were prioritized so individual practices received limited vaccine supply or were unprepared to accommodate the stringent storage requirements. With vaccine distribution having stabilized, there is an opportunity to tap into the primary care provider community, which is positioned to leverage long-standing patient relationships and play an important role in vaccination efforts. Increasing primary care’s role in COVID-19 vaccine administration may prove extremely effective in reaching vaccine-hesitant or skeptical patients.

5. Sustain new and strengthened partnerships. Overall, there was a recognition that the public health emergency and response has illuminated how effective cross-sector collaboration between health plans, public health departments, provider groups and community-based organizations can be at solving urgent problems when working together. Now, there is a question about how partnering groups can continue to collaborate while finding ways to become more efficient.


COVID-19 Vaccine Resources


Addressing Social Determinants of Health Essential to Reining in Health Care Costs

January 11th, 2021

Health care’s exorbitant costs can never be controlled without fundamentally shifting society’s focus toward the underlying social and economic conditions that disproportionately contribute to ill-health. That was the message former Centers for Medicare and Medicaid Services (CMS) Administrator Donald Berwick gave to large employer members of the Pacific Business Group on Health (PBGH) during a January 7 webinar.

“I’ve lost patience with marginal change. I don’t think it’s going to work,” said Berwick, a pediatrician who led CMS for a year-and-a-half during the Obama administration and who has been a leading voice for health care reform for over four decades. “We continue to confiscate resources in health care that we don’t deserve and aren’t using properly from other sectors that badly need those resources. It’s time for some big thinking.”

The Shadow of Racism and Poverty

In a presentation subtitled “The Moral Determinants of Health,” Berwick hammered home the need to tackle systemic issues like disparities in income, education, food access, housing security and community structure. He pointed to extensive and long-standing evidence showing the outsized impact these factors have on care access, outcomes, health status and ultimately, cost.

In one example, Berwick noted that individuals who’ve been subjected to at least four adverse childhood experiences (ACE) face dramatically higher risks for nine out the top 10 leading causes of death in the U.S. They’re also 10 times more likely to experience mental illness and 11 times more likely to suffer from Alzheimer’s disease, he said. ACEs can include experiencing violence, abuse or neglect, witnessing violence, or living in a household with substance misuse, mental health problems or parental separation due to incarceration.

The COVID-19 pandemic has both exposed and exacerbated the country’s long-standing health inequities, he noted, particularly as they relate to people of color, with black Americans dying of the virus at a rate three-to-four times higher than whites.

‘Fixing the Road’

According to Berwick, unless efforts are made to move upstream to address social and economic challenges and reallocate a portion of the dollars now flowing into health care toward housing, education, food, criminal justice reform and the like, rising costs and widening disparities will continue to be hallmarks of the U.S. health system.

Berwick went on to outline his personal vision for health care transformation in the U.S., components of which include making health care universally available. He also stressed other priorities, such as ending hunger and homelessness, restoring American leadership on climate change and restoring the credibility of democratic institutions.

He noted that PBGH has been an “extremely important force and presence” in efforts to reform health care for decades and applauded the organization’s willingness to engage seriously in pursuit of solutions. Nonetheless, he said, employers generally have largely remained “bystanders” in efforts to address the social determinants of health and challenged purchasers to consider how they can affect change.

“You’re concerned about your health care costs as an employer and the costs for your employees, so connect the dots,” he said. “With 18% of our GDP and $3.5 trillion a year, health care is running a repair shop. But nobody’s fixing the road.”

The webinar, which includes a panel of health care purchasers sharing their organizations’ approach to addressing social determinants of health can be viewed in full below.