Ned Lamont, CT hospitals reach deal to lower health care costs

After months of negotiations and at the eleventh hour of the 2023 General Assembly session, Gov. Ned Lamont and the Connecticut Hospital Association landed on a final deal Monday aimed at bringing down health care costs for Connecticut residents — one of the governor's top priorities this year.

The ambitious agenda, which sought to curb health care costs through stronger regulation of hospital and drug prices, appeared to have been pared back, according to an announcement released jointly by the governor's office and the hospital association Monday afternoon.

A proposed price cap on out-of-network care in one of the governor's bills was eliminated entirely. A proposed ban on some "facility fees" health systems charge appears to have been limited, with the deal prohibiting fees only on certain procedures.

The deal retained a proposal to ban certain terms in contracts between health care providers and insurers deemed "anti-competitive," as well as a proposal to join a multi-state program that offers lower prices through the bulk purchase of generic drugs.

Anti-competitive language includes clauses known as "all-or-nothing," where a health care provider requires an insurer to contract with all its affiliated providers across all markets. It also includes clauses known as "anti-tiering," where health systems have taken to requiring they be ranked in preferred tiers for patients regardless of their performance or prices.

"This is a complex issue that needs to be tackled from multiple angles and we need the involvement of all parties — insurers, hospitals, doctors, employers, and consumers — in this effort to provide real solutions to lower health care costs," the governor said in an emailed statement.

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The full details of the negotiated legislation will be reflected in an amendment to House Bill 6669. Legislative leaders said the amendment would be introduced late Monday and they expected to vote on the amended proposal in the House Tuesday.

"I do commend the governor for his initial sweep of proposals, which was really groundbreaking," said Ted Doolittle, the state's health care advocate. "I’m looking forward to finding out how many teeth remain."

Connecticut's large hospitals had lobbied against the governor's proposals, saying rising hospital prices — which increased by 6% to $34 billion in 2021 — reflected the sector's fragile financial situation coming out of the COVID-19 pandemic.

On Monday, Jennifer Jackson, chief executive of the Connecticut Hospital Association, said in a statement that the compromise reached with the governor's office "recognizes the value that Connecticut's hospitals and health systems provide every day, the financial challenges they are currently experiencing, and the sustained march toward lowering cost, improving community health and health equity, and eliminating administrative barriers that diminish care and add cost to our system."

The deal also includes several proposals that Lamont said would help curb the swelling cost of prescription drugs.

Comptroller Sean Scanlon, who will be tasked with establishing a drug discount card program for state residents under the bill, said, "While systemic reform of our health care and prescription drug system is desperately needed, I’m proud to be working with the governor to create a drug discount card that will mean real and immediate savings for all Connecticut residents at the pharmacy counter starting this year."

Rep. Cristin McCarthy Vahey, D-Fairfield, a co-chair of the legislature's Public Health Committee, said, "A lot of work has gone in on the part of the hospital association and the governor's office to get to a place where we can move forward some cost savings for the people of our state, hopefully in the short-term and the long-term."

"I do think [the bill] will end up being a more comprehensive look at these issues," McCarthy Vahey added.

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Erica covers economic development for CT Mirror. Before moving to Connecticut to join the staff she worked in Los Angeles for public radio's Marketplace and, before that, for the Wall Street Journal's L.A. bureau. She grew up in Minneapolis, MN, graduated from Haverford College and earned a master's in journalism from the University of Southern California.

Jenna is CT Mirror's Health Reporter, focusing on health access, affordability, quality, equity and disparities, social determinants of health, health system planning, infrastructure, processes, information systems, and other health policy. Before joining CT Mirror Jenna was a reporter at The Hartford Courant for 10 years, where she consistently won statewide and regional awards. Jenna has a Master of Science degree in Interactive Media from Quinnipiac University and a Bachelor or Arts degree in Journalism from Grand Valley State University.