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“Healthcare Innovation Should Be Rewarded, but Not Abused” | Paul Markovich at POLITICO Health Care Summit

Blue Shield of California President and CEO detailed public policy efforts needed to fix today’s dysfunctional healthcare system.

“If you can do something across California – a state with incredible diversity in people, geography, and socioeconomics – you can do it across the country,” said Blue Shield of California President and CEO Paul Markovich at the second annual POLITICO Health Care Summit.

Calley Baute and Paul Markovich at the POLITICO Health Care Summit, June 7, 2023

“As a health plan serving 4.8 million people, Blue Shield is trying to transform a dysfunctional healthcare system into one that’s worthy of our family and friends,” he said during his conversation on stage with Cally Baute, POLITICO executive vice president and general manager of Consumer Business.

One impetus behind this transformation is increases in healthcare costs regularly outpace inflation, leaving many Americans unable to afford their care. An estimated 112 million (44%) American adults are struggling to pay for health care, and 93% feel what they do pay is not worth the cost, according to the West Health-Gallup Healthcare Affordability Index and Healthcare Value Index.

Disrupt the pharmacy value chain

One of the biggest contributors to rising healthcare costs and inequities is today’s pharmacy value chain, with one in four Americans unable to afford their prescription drugs.

“As the posterchild of dysfunction, the current pharmacy value chain is a forest of opaqueness, built to maximize profits,” Markovich said. He pointed to new and novel partnerships as one way to reverse these trends and lower prescription drug costs. For instance, Blue Shield announced last year it was collaborating with a number of organizations to manufacture insulin at drastically lower prices.

By collaborating and establishing new ways to work with industry stakeholders, Blue Shield of California is helping to develop a blueprint for how to affect change at state and national levels. In what Markovich called the most comprehensive reform since the Affordable Care Act, the recently launched Office of Health Care Affordability will reduce the rate of cost growth across the entire health sector. With Blue Shield of California as a key supporter, this state agency’s goals are to lower the cost of care by setting spending targets for payers and providers – including hospitals – and to ensure that the money spent delivers better value and outcomes.

Increase pharmaceutical competition to lower drug costs

In addition to bringing transparency to pharmaceutical pricing, Markovich also called for updates to drug patent policies. Patent monopolies are set to expire on seven out of 10 of America’s top-selling drugs this decade, which means lower-priced generics will become available and drug makers stand to lose millions.

Without transparency for drug patents, pharmaceutical manufacturers will continue pulling the levers at their regulatory disposal to thwart competition and keep medication costs sky high.

“We need to create a healthcare system where innovation is rewarded, but not abused,” Markovich said.

Prioritize digital health records

Markovich stressed the importance of giving patients control and ownership of their own health data. Patients, not health systems nor other healthcare organizations, should be the owners of their health data as a matter of principle, believes Markovich. Digital health data is also a tool to improve care coordination, engagement, and outcomes.

Specifically, Markovich called for the creation of a national Digital Health Bill of Rights, which would establish that health information belongs to patients, first and foremost, with requirements around accessibility and usability.

“I'm talking about creating an internet for health care, creating a comprehensive, real-time, digital health record in a usable format for every American,” Markovich said, adding that the only way for the healthcare industry to accomplish this is if it’s required to do so. For its part, Blue Shield of California is aiming to provide 80% of its members with access to their digital medical records by the end of 2024.

Markovich believes accountability and urgency are essential to system-wide transformation: “What we need across the country, that we already have in California, is urgency. And that urgency will continue to drive Blue Shield of California’s mission in the months and years to come.”

Click here to watch a video of the conversation at the POLITICO Health Care Summit.