Highmark CEO on healthcare costs, incentives

Healthcare spending is "unsustainable" and the health insurance industry must address cost drivers, including unhealthy lifestyles and "perverse incentives" to curb costs, said Highmark CEO William Winkenwerder Jr. (pictured).

Speaking to a group of business leaders at the West Virginia Chamber of Commerce's annual meeting, Winkenwerder said "we're not getting the bang for the buck that we should for our healthcare dollars," reported the Register-Herald.

And the reform law adds to the spending problem, the Charleston Gazette reported. Health reform "will improve access [to healthcare] but it adds considerable costs," he said. 

"There's no silver bullet in the solution to the cost problems," Winkenwerder said, according to the Herald-Dispatch. "There are several solutions. Some involve a company like ours, and some involve each of us as citizens to make healthcare costs more affordable."

For example, he said, consumers could improve their unhealthy lifestyles, referencing a Centers for Disease Control and Prevention report that found 75 percent of U.S. healthcare spending is associated with individuals' poor choices, including smoking, alcohol and drug consumption and overeating. "That gives you an idea of how much we can be saving," Winkenwerder said.

Another driver of rising costs is "perverse incentives in the medical payment system," he noted. "If something is subsidized, they tend to cost more because the real cost is shielded from the consumer. It's counter-intuitive that the more we subsidize, the more the costs go up."

He added that providers should avoid "defensive diagnostics" and instead practice careful observation, which could help prevent overtreatment and uncoordinated care that both contribute to unnecessary healthcare services and costs.

To learn more:
- read the Register-Herald article
- see the Charleston Gazette article
- check out the Herald-Dispatch article

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