At the Quality Institute, I work to encourage change that makes health care safer, more accessible and more coordinated.  Often the changes in policy I explore do not affect the real-world practice of medicine until years later.

So I am always excited when I see real investments in health care policy and infrastructure play out in my own life.

I have been a patient at my area medical practice for more than two decades. Little has changed in that time. But in my most recent visit suddenly everything was different. First, the receptionist told me about the new patient portal and then the nurse explained the value to me, the patient, in signing up.  Finally, I thought, an easy way for me to access my own medical records.

The nurse said I also could use the portal to make appointments, request prescription refills, or ask non-emergency questions.

Then during my examination with my gynecologist we discussed evidenced-based practices and I was happy to see that she was taking the time to explain which tests and procedures I needed — and did not need — and why.  The physician, less than a decade out of medical school, had my records on her computer and easily navigated between talking with me and taking notes. For me, it was no different than a physician jotting notes on a paper chart.

Upon leaving, I was invited to provide feedback on my experience with the physician and with the office staff in an electronic patient survey. Was the office staff helpful? Did my physician clearly communicate the information I needed? The focus was on gathering information about my experience.

Yes, I know other parts of the nation, and other parts of New Jersey, have done all this for years.  Nonetheless, seeing changes happening in my sleepy community physician office shows me that medicine everywhere is slowly becoming more patient-centered and more tech-savvy.

Once home, I signed up for the portal and the technology worked perfectly. The information from my visit already was entered into the portal. Sadly, records from my other providers are not yet connected to this portal, but I see a valuable start to helping me keep better track of my health care.

The changes will position the office for the payment reforms ahead, when the patient’s overall health experience will factor into reimbursement from both government and private insurers.  As a result of these reforms, all practices must change the way they interact with their patients. Care is more evidence-based, more patient-centered. I saw firsthand that change may be slow, but it’s coming.

Amanda Melillo, Chief of Staff of the Quality Institute, leads the Quality Institute’s Leapfrog programming. She talked with Take Five about recent changes in the Leapfrog Hospital Safety Grades.

After the spring Leapfrog Hospital Safety Grades came out this year we saw a real shake-up in scoring. One-third of New Jersey hospitals dropped a grade or more. Meanwhile, our state’s overall score dropped to 22nd in the nation — from fifth place the year before. What changed?

Several changes in the grade’s scoring methodology could have affected a hospital’s performance this latest round. Five measures were removed from the methodology. These were Surgical Care Improvement Project (SCIP) measures that no longer had much variation. All hospitals performed well on these measures so it no longer made sense to include them in the safety scores. In addition, the numeric cut-off points that determine whether a hospital receives an A, B, C, D or F score were increased, making it more difficult for hospitals to receive an A or B grade. Leapfrog works to continually raise the bar on safety. That’s the reason new measures also were added.

What new measures were added?

For the first time, the Leapfrog Hospital Safety Grade includes results of patient surveys. Five measures that are part of the HCAHPS, or the Hospital Consumer Assessment of Healthcare Providers and Systems Survey, are now included. Leapfrog counts only the questions that are related to patient safety and quality, such as questions surrounding nurse and physician communication, staff responsiveness, communication around medicines and discharge information.  Leapfrog believes that these questions are closely linked to patient quality and safety and it makes sense to now include them in the grading process.

Were there any other changes?

Yes, the new scoring methodology also now includes two additional outcome measurements: rates of MRSA and C. difficile. These are health care associated infections that pose a serious risk to patients.

What are you expecting from the fall Hospital Safety Grade results, which will be made public on Monday.

I am not expecting significant changes in these grades compared to those released in the Spring. This round of grading uses the same scoring methodology as that used in the Spring. However, some of the data used in the 30 measures that make up the grade has been updated, so there might be some variation. As hospitals have more time to make changes in response to the new scoring methodology I expect we will begin to see more New Jersey hospitals getting A and B grades. Remember, New Jersey historically has done very well on Leapfrog Hospital Safety Grades and we traditionally have been among the nation’s top performing states.

We have heard criticism from hospitals nationally that incorporating patient-reported measurements into the Leapfrog Hospital Safety Grade is not fair to safety net hospitals, which have more lower income patients.

I can respond to the story in New Jersey, where we do not see the new measurements — specifically the five HCAHPS measures focused on provider communication, staff responsiveness, communication around medication and discharge information — disproportionately hurting safety net hospitals versus other New Jersey hospitals. Of the safety net hospitals scored in Spring 2016 and Fall 2015, about 31% saw a decrease in their grade under the new methodology. Non-safety net hospitals saw similar declines during that same time period. This is a rough calculation. We are sensitive to the concerns of our state’s safety net hospitals so we will continue to follow these grades closely going forward.

Hospital quality measures don’t have to be perfect to move forward with new payment standards.

 Published by Leah Binder on U.S. News

On Friday, Nov. 4, U.S. News is bringing together the nation’s leading hospital quality experts from government, academia and the health care industry for a U.S. News Colloquium on Quality Measures as part of the Healthcare of Tomorrow conference. This opinion piece is part of a series to help frame that discussion.

The economics of American health care is undergoing a profound shift. Employers, policymakers and other purchasers of health care are increasingly paying health care providers based on the benefit to the patient. For instance, the Centers for Medicare & Medicaid Services, or CMS, the agency that runs Medicare, adjusts payments to hospitals based on how well they perform on measures of patient experience, readmissions and patient safety. Private payers, too, are increasingly negotiating contracts tied to quality and safety performance.

Understandably, the changes to payment heighten sensitivity among hospitals and doctors about how their performance is measured. Even measures that have been exhaustively tested and validated face new levels of scrutiny when money is on the table. Many providers even call for delaying the changes in payment until measures can be perfected even more.

But employers and other purchasers of health care are determined to move forward with new payment standards without delay and will not await measurement perfection to do so. After decades of enormous investment in health care with little or no accountability for the quality of that care, purchasers place a high value on understanding quality and don’t intend to reverse course and continue paying for everything without regard to its value. Employers and purchasers do not intend to return to the days when consumers had no information to make an all-important decision about which hospital to use, and purchasers paid the bill regardless of the quality of the patient experience. Purchasers want numbers, figures and rates on safety, quality and cost, calculated with vigilance, responsibility and respect for science. After decades of hard work and research, this is finally available to them.

 Transparency has been the key to positive change. According to a multi-stakeholder roundtable convened by the Lucian Leape Institute of the National Patient Safety Foundation in 2015, “During the course of health care’s patient safety and quality movements, the impact of transparency – the free, uninhibited flow of information that is open to the scrutiny of others – has been far more positive than many had anticipated, and the harms of transparency have been far fewer than many had feared.” The effect is so dramatic, the report concluded, that “if transparency were a medication, it would be a blockbuster.”
The report cited my organization Leapfrog’s first-ever reporting of a measure of maternity care, early elective deliveries. These are deliveries scheduled early without a medical reason, and they pose risks to the mother and the baby, and frequently result in babies unnecessarily starting life in the neonatal intensive care unit. There had been many efforts in the past to curtail these unsafe deliveries, but it wasn’t until Leapfrog publicly reported rates by hospital that significant progress was made. In just five years, the national mean dropped from 17 percent to 2.8 percent.

Transparency has also accelerated reductions in errors and accidents that kill or harm patients in hospitals. The 2014 estimates from the federal Agency for Healthcare Research and Quality’s Medicare Patient Safety Monitoring System, which reports patient safety indicators, show progress in reducing hospital-acquired conditions, including a drop from 28,000 inpatient venous thromboembolisms in 2010 to 16,000 in 2014. This means 12,000 fewer patients in 2014 developing potentially fatal blood clots. It is very unlikely that we would have achieved a reduction of this magnitude without transparency.

 Measurement and transparency do not have to be perfect to achieve remarkable progress in quality improvement. We see this in more transparent industries outside of health care every day. For instance, researchers studied the recent initiative in Los Angeles to issue safety grades rating the hygiene of restaurants and found it associated with a near 20 percent decline in hospitalizations from foodborne illness in the program’s first year. The composite grade used in LA was fairly rudimentary by the standards of measurement scientists in the health care industry, but the grade was nonetheless effective in educating consumers and galvanizing improvement.

Providers and health care executives sometimes point to flaws in their medical record and billing systems as problems that should delay the use of certain measures. However, public reporting is often necessary to break logjams in data collection. For instance, New York state’s public release of surgical mortality data for coronary artery bypass grafting procedures jump-started the movement to define and more carefully collect the procedure outcome data. Providers will get better at data collection when the data is used.

Current health care performance measures may not be perfect, but good people are working hard to steadily improve their validity – and that work should be done in the sunlight of transparency. Employers will gladly work collaboratively toward that end, as long as the work continues without delay. We have all waited too long for transparency and sensible payment, and the cost in human lives and suffering is already too high.

Quality Institute’s Mayors Wellness Campaign, supported by United Health Foundation, working to list all services in one place online

Published by Campbell Health Media

A community’s resources — from food banks to job training to low-cost housing — have little value if people don’t know about them.

That’s why the New Jersey Health Care Quality Institute’s Mayors Wellness Campaign, supported by the United Health Foundation, is working to bring “Aunt Bertha” to three New Jersey communities.

Aunt Bertha is a social services search tool that allows health care providers, social workers and residents to more easily find the services available right in their own communities. The highly specific search tool allows people to search based on eligibility criteria such as age and income. The tool also lists up-to-date hours, contact information and other resources on a website that’s easy to navigate.

The Mayors Wellness Campaign has partnered with the United Health Foundation to bring Aunt Bertha to Jersey City, Cumberland County and Trenton. The Aunt Bertha search tool is complete in Jersey City and Cumberland County and continues to be refined for residents in Trenton.

“Often a doctor or a social worker may know that what a person really needs is a place to live, or better nutrition, or job training. But finding the right services to help them is not always easy,” said Linda Schwimmer, President and CEO of the Quality Institute. “Instead of making a dozen phone calls, now people in these communities can seek help from Aunt Bertha.”

Social workers and health care providers can also “prescribe” services to a client or patient by using Aunt Bertha to send a direct referral on behalf of a patient or client. The site will continually be updated.

Anyone who logs on to can enter a zip code. A Jersey City zip code, for instance, shows that more than 900 programs are available to serve residents. The user can click “food” and see programs such as those for nutritional education, free meals, food pantries and food delivery. Users can select other choices, such as transportation, legal help, education and work. The Quality Institute and community partners are working with Aunt Bertha to create these comprehensive listings for Trenton, Jersey City and Cumberland County.

“We know that promoting health is more than a visit to the doctor, but also includes housing, transportation, food, parks, education, culture, jobs, safe spaces and more,” said Susan Walsh, Vice President of Population Health and ACO Medical Director at Jersey City Medical Center.

“We are delighted that the Aunt Bertha data base will be available to the residents of Jersey City. This program will provide timely and updated resources available to our shared populations to help break down barriers to healthier lives,” she said.

Listings are available in more than 100 languages.

The Mayors Wellness Campaign partners with more than two-thirds of New Jersey municipalities to give mayors tools and strategies to promote health and active living and to improve the overall health of communities.

“The Aunt Bertha tool will bring immense value to the citizens of Cumberland County by ensuring that everyone is aware of the resources and assistance available,” said Megan Sheppard, Health Office for the Cumberland County Health Department. “Aunt Bertha will guarantee that clients get the help they need in a timely manner as well as allow workers from all agencies to effectively communicate with each other. We appreciate this tool we have been afforded by our partnership with the United Health Foundation and the New Jersey Health Care Quality Institute.”

The Mayors Wellness Campaign, through a $550,000 United Health Foundation grant, is working intensively with three of these communities: Trenton, Cumberland County and Jersey City. The Aunt Bertha initiative is part of the project to improve health outcomes in these communities. The partners in Jersey City are the Jersey City Department of Health and Jersey City Medical Center. In Cumberland County, the project partners are the Cumberland County Health Department and Inspira Health Network. The Trenton Health Team is the project partner in Trenton.

In Cumberland County, training already has begun to educate patient navigators and staff from Inspira on how to best use the site. Training for school professionals also is planned.

About New Jersey Health Care Quality Institute

The New Jersey Health Care Quality Institute is the only independent, nonpartisan, multi-stakeholder advocate for health care quality in New Jersey. The Quality Institute’s mission is to undertake projects and promote system changes that ensure that quality, safety, accountability and cost-containment are closely linked to the delivery of health care services in New Jersey. The Quality Institute partnered with the NJ League of Municipalities to create the Mayors Wellness Campaign, a program that empowers mayors across NJ with tools, strategies, and support to champion health and wellness in their communities.

Published by Susan K. Livio on

WEST ORANGE — New Jersey’s largest hospital chain intends to invest hundreds of millions of dollars to help catapult Rutgers University’s medical schools into the “big 10” of research and educational institutions in the nation, NJ Advance Media has learned.

The “unique partnership” between RWJ Barnabas Health, the Rutgers Robert Wood Johnson Medical School and the New Jersey Medical School is still in negotiations, said Barry Ostrowsky, the CEO of the $5.4 billion, 11-hospital network. An announcement detailing the arrangement is planned before the end of the year, and a launch by July 1, he said.

But the bottom line is the hospitals and the medical schools intend to use the money to lure high-profile researchers from other institutions and boost the amount of funding the university receives from the National Institutes of Health. They also expect to recruit more medical students to train in these hospitals, and put pioneering research into practice.

“New Jersey desperately needs a greater investment in research, which is almost unaffordable if it is exclusively going to be funded by a university like Rutgers,” Ostrowsky said. “We are agreeing to put up a significant amount of money over years to fund that commitment to research and educational expansion.”

The merger creates a nearly $5 billion hospital and health care system

New Jersey residents will have a lot to like about this partnership, said Brian Strom, chancellor for Rutgers Biomedical and Health Sciences, which includes the two medical schools.

“In addition to bringing to New Jersey a lot more clinical trials, they will get the experimental therapies here,” said Strom, a physician. “It’s good for patients and good for industry.”

New Jersey’s reputation as the nation’s “medicine chest” has diminished in recent years as some pharmaceutical companies have moved or expanded their footprint into other states.

Strom predicted the partnership with build upon New Jersey’s “intellectual environment” and keep companies in the Garden State.

“The potential here is unbelievable,” Strom added.

Since Strom arrived from the University of Pennsylvania three years ago, he said the amount of research funded by the National Institutes of Health has grown rapidly, by 25 percent from the first year to the second year, and eight percent in the first half of this year. Rutgers outpaces all the other universities in the state combined, with $271 million in 2015, he said.

The medical schools, under the auspices of Rutgers since the University of Medicine and Dentistry of New Jersey was dissolved in 2013, have succeeded in securing NIH funding in a very competitive environment, Strom said.

The issue is, Strom said, “We don’t have enough investigators” to lead the research.

“We have proven how well we can do, and with more investigators we will do even better,” he said. That means “stealing people from other schools, and that takes money and facilities. Many of the UMDNJ facilities we inherited are in pretty poor shape.”

Linda Schwimmer, president and CEO of the New Jersey Health Care Quality Institute, a consumer research and advocacy organization, said a significant amount of government-funded research comes into the state, but it is “fragmented” — split between various universities, hospitals and private enterprises.

“Think of all the data research jobs. This is an exciting next step in out state’s economy,” she said. “When you see where everybody is going and where the jobs are — in data and health technology — bringing more investments into New Jersey is what we need to do.”

Ostrowsky said he sees Northwestern University as a model for its funding goals.

The Feinberg School of Medicine at Northwestern University has acquired $443 million for medical research, two-thirds of which is from the National Institutes of Health, followed by other federal sources, not-for-profit agencies and the medical industry, according to Rex L. Chisholm, vice dean for Scientific Affairs and Graduate Studies.

“We are told that the Feinberg School has the fastest growing NIH portfolio of any medical school in the past 20 years,” Chisholm wrote in an email. Illinois hospitals contribute money to hire faculty but do not fund research, he added.

Drawing parallels with Rutgers’ entry into the Big 10 sports conference in 2012, Ostrowsky said he wants to boost New Jersey’s standing in medical education and research.

Historically, medical schools simply “affiliate” with teaching hospitals by agreeing to send their students for training, Ostrowsky said. “I’ve always thought that was not intimate enough. I think we should literally be partners — not just on the educational side, but we should be partners on the research side.”

Barnabas and Rutgers began its conversations about a partnership with the West Orange-based hospital system before the state signed off on the merger with Robert Wood Johnson University Health in New Brunswick this year, Ostrowsky said.

The merger “enhances” the pursuit of medical education and research he said. “If Rutgers said no, we would still have had the merger,” he said.

Barnabas Health’s holdings included Clara Maass Medical Center in Belleville, Community Medical Center in Toms River, Jersey City Medical Center, Monmouth Medical Centers in Long Branch and Toms River, Newark Beth Israel Medical Center in Newark, Saint Barnabas Medical Center in Livingston. Barnabas also has a management agreement with University Hospital in Newark.

Robert Wood Johnson brought to the marriage hospitals in Somerville, Hamilton, Rahway and New Brunswick, and its affiliations with the Robert Wood Johnson Medical School and The Cancer Institute of New Jersey at Rutgers University.

“We are trying to build a unique partnership between with the biggest delivery system in New Jersey and the owners of the two medical schools, and that  announcement I look forward to making,” Ostrowsky said.

Cory S. Capps, Phd., an economist at Bates White Economic Consulting and published expert on the implications of health care consolidation, will be the keynote speaker at the Quality Institute’s Winter Conference on November 2nd. He spoke to Symptoms & Cures in advance of his talk.

You have studied health care mergers for many years and have been called as an expert in federal court cases. Are we creating health care teams that promote integration? Or are we creating monopolies that eventually will cost consumers?

My first answer: that depends. My second answer: it can be both. The deeper question is: on what do the outcomes depend? We know there are examples of tightly integrated and large organizations that perform well on both quality and cost. We can point to Geisinger Health System and Kaiser Permanente. That’s one category.  Economists also have a pretty good understanding that mergers of closely competing providers — when there are few other competitors — can result in market power and high prices. That’s the other category.

One important role of competition is to sort out more and less effective business and care models. Right now, we have a diversity of organizations — provider-led systems, hospital-led systems, vertically integrated systems, systems with and without insurance offerings, and so on — that are trying to find ways to improve value through better technology, coordination and collaboration. Some feature common ownership, but many do not. There’s no consensus on which structure is more effective at increasing value, but competition is important to sorting out the more and less effective, which will further the Triple Aim.

The implications of consolidation in health care can be far-reaching, affecting quality, cost and access. Let’s start with the implications on pricing. Does it go up or down?

We, and by we I mean the collective body of health economists, have done research that has determined that specific types of mergers are likely to increase pricing power. We see that when there are mergers of close rivals in a relatively small geographic area, such as a city or county, and when there is also a shortage of other competitors. The second thing we know, based on more recent research, is that vertical integration — common ownership of different parts of the healthcare value chain — does not have widespread statistically significant economic benefits. There are examples of effective vertical integration but efficiency is not something we should presume.

What about the implications for quality?

The quality implications of vertical integration have not been as well studied as price implications. We do know that in horizontal mergers — specifically mergers of close rivals that lessen competition — quality implications are neutral to a reduction in quality, according to empirical studies. When there is less competition, the penalty for low quality declines. On the vertical front, such as hospitals buying physician practices, there is not good evidence showing better or worse patient outcomes. Perhaps that facilitates better coordination, or perhaps when a physician practice bases more of its referrals on its hospital alignment, as opposed to patient considerations, then you get a diminution of quality.

We’ve heard hospital executives say that the recent mergers are being driven by Medicare innovations and the push for value-based care. What do you think?

Yes, it is true that hospital executives are saying that. Whether that is actually what’s driving consolidation is pretty unclear to me. I am skeptical. I have been looking at this for 25 years and I have seen that consolidation comes in waves. Waves have been ascribed to the advent of prospective payments, HMO penetration, and other changes, like the Balanced Budget Act. A lot of people are attributing recent mergers to the ACA. There always is something to point toward. You can certainly have coordinated care as envisioned by the ACA without having a near-monopoly provider system. I do want to say that I have seen mergers that have saved lives, such as when a failing hospital providing low quality is purchased by a competitor. Consolidation can also save some costs on the back end, though it can also create costs.

What is your advice for policy makers and stakeholders in New Jersey?

States have important roles. First, states can cooperate with the federal government on anti-trust investigations. And there is a lot of low-hanging fruit in the purview of state legislators. They should be careful about putting restrictions on scope of practice for non-physicians. For instance, should non-dentists be allowed to provide teeth whitening? Advanced practice nurses are another example. Scope-of-practice restrictions are likely to decrease competition. Similarly, certificates of need can make it harder for rivals to add service lines that compete. Legislators should be cautious about legislation to tighten network adequacy rules — some evidence shows that narrow and tiered networks can save money without reducing quality.

One general point to keep in mind: there’s a mindset in certain quarters that competition does not work in the world of health care, but that outlook is just not supported by the data.

The cost of health insurance is rising. Again. High premiums, co-pays and cost sharing are hurting businesses and their employees. Insurers are pulling out of the ACA health insurance market in New Jersey and around the nation.

U.S. health care spending, meanwhile, has reached $3.0 trillion, taking money away from housing, education, social services and support of our bridges and roads. Health care spending now accounts for 17.5 percent of our Gross Domestic Product. Some experts say the cost will be $4.8 trillion in 2021, or one-fifth of our GDP.

You get the picture.

I don’t know of any serious person in the world of health care who does not believe we need to rein in costs.

But does that mean we have to deny patients with Hepatitis C valuable, but highly expense, new treatments? Do we stop paying for the high-priced cancer treatments that can save lives?

We do not want to cut care that has value to patients — and we don’t have to. What we need to cut are tests, procedures, drugs, surgeries and hospitalizations that do not help, and may even harm, patients.  Or, care that patients may not want.  Experts say that at least one third of U.S. health care spending is wasteful.

All of us, as patients or health care providers, must be good stewards of our health care dollars.  The best guide on that path, in my opinion, is Choosing Wisely, an initiative by the American Board of Internal Medicine Foundation. Choosing Wisely aims to promote conversations between clinicians and patients by helping patients choose care that is:

  • Supported by evidence
  • Not duplicative of other tests or procedures already received
  • Free from harm
  • Truly necessary

I do not know anyone who would not want to check all those boxes before enduring a test or procedure or taking a medication. Yet too often patients are given chemotherapy that will not prolong their lives or improve the quality of their lives. Prescriptions for antibiotics are given when there is no indication they will work. Late-stage Alzheimer’s patients are put on feeding tubes with no evidence they help and with many risks, such as bleeding, infection, nausea and vomiting.

Choosing Wisely examines intervention after intervention, such as lung Ct scans for smokers, continuous fetal heart monitoring during delivery, urine tests for nursing home patients, implantable cardioverter-defibrillators for people with heart disease, and whole body scans for cancer.

The lists are comprehensive and issued by the medical societies from each specialty area of practice. Each “Choosing Wisely” list clearly explains the interventions and why they may not be the best course for many people. Reading through the recommendations I was stunned at how much of our medicine actually harms people. The information created by the initiative, started in 2012, is easy to understand, objective and evidence-based.  You can access the list here.

As we try to keep insurers in our state and increase competition in the ACA market, or look to reduce the cost of our state-funded health benefit plans and Medicaid program, let’s choose wisely and think wisely about what we cover and how we spend our precious resources. Let’s cut waste before we have to tell patients who need costly but necessary interventions there’s no money left to save their lives.

Workers are paying for larger share of medical expenses, through higher contributions and deductibles, reduced benefits.

Published in NJ Spotlight by Lili H. Stainton

The vast majority of New Jersey businesses continue to provide health insurance for their workforce, but as the cost of care continues to rise by double digits, employees are paying a growing price for the privilege of medical coverage.

While companies now pay roughly $3 out of every $4 for insurance, their burden is shrinking as workers are faced with higher contributions and deductibles, reduced benefits, or fewer hours and wage restrictions.

Overall, nearly 80 percent of smaller businesses have taken these or other actions to control healthcare expenses as insurance costs jumped more than 10 percent since 2014, according to the findings of a survey released Monday by the New Jersey Business & Industry Association. Business leaders said that the cost of health benefits remains their top concern in 2016, as it has been for a quarter century, according to the NJBIA.

Healthcare experts generally agree that the federal Affordable Care Act, which took full effect in 2014, helped vastly expand healthcare coverage; in New Jersey, more than 700,000 people obtained free or low-cost insurance through the law. But healthcare costs have continued to escalate, driving up the price of benefits for business and government and costing patients more because of higher co-pays, cost sharing, and deductibles.

According to the NJBIA’s findings — the results of an online poll of more than 850 businesses conducted over the summer — Garden State businesses now pay an average of $7,000 for individual health coverage, $14,000 to insure two spouses, and some $17,600 for a family plan. The situation is particularly burdensome for small businesses — those with fewer than two-dozen employees — since they don’t have as many options for absorbing additional expenses; healthcare costs jumped more than 12 percent or this group.

Despite the expenses involved, the association’s survey found that 85 percent of these companies overall, and three-quarters of small businesses, offered health benefits. Most said the goal was to attract and keep a high-quality workforce. (A growing number are offering voluntary benefits, like optional dental and vision care, that don’t cost them but are attractive to employees.) Some businesses bore the healthcare cost increases themselves; one third reduced profits and 15 percent deferred investments to pay for employee healthcare plans.

“Employers in the New Jersey small-employer market tend to be professional businesses or family businesses with a long tradition of providing benefits,” said Linda Schwimmer, president and CEO of the New Jersey Health Care Quality Institute, which has helped build consensus around models that will reduce cost and benefit patients. “As the economy improves, offering benefits is one surefire way to attract and retain top employees.”

“But the 10 (percent to) 12 percent premium increases are unsustainable for any size business,s and the cost shifting to employees eventually cancels out the value of having insurance as employees can’t afford to buy it or use it,” Schwimmer added. One result is a growing interest in narrow or tiered networks, she said, in which patients trade some choice in providers for greater savings.

In fact, Assemblyman Reed Gusciora (D-Mercer) introduced a bill (A-4211) on Monday that would implement a public option, dubbed “JERSEYCare,” that he said would build on the state’s successful Medicaid expansion under the ACA, which added hundreds of thousands of residents to the public insurance rolls. Gusciora, who had promised to sponsor such a measure earlier this year, said the program would be open to all residents, with premium rates designed to make it as affordable as possible.

“The government has the benefit of representing a large population of people, and that gives them a lot of clout in cost and reimbursement negotiations. Even better, we’re people-motivated, not profit-motivated,” he said, noting that instead of rewarding executives, a public plan can cut costs for its customers. “That’s really the need and the goal, here — to cut costs. We can’t possibly afford to keep paying the astronomical amount we are for healthcare.”

According to the NJBIA survey, these rising costs are a growing concern to business owners as they weigh the pros and cons of offering employee coverage. A full 94 percent said price is the biggest reason they may discontinue insurance benefits in the future.

The poll also detailed exactly how businesses have made workers responsible for a growing portion of their health insurance costs, either through direct expenses or reductions in other benefits, like wages. Three in 10 businesses froze pay or capped increases; a similar ratio raised the employee’s share of the healthcare premium costs; and roughly four in 10 introduced a high-deductible plan, or increased the deductible level or other patient costs.

“You can see the trend in shifting costs from the employer over to the employee,” said Michele Siekerka, NJBIA’s president and CEO. For one, businesses are “starting to offer plans that aren’t as attractive in order to keep the costs at bay.”

A particular concern for Siekerka was the negative impact healthcare costs are starting to have on wages. Benefits must be viewed comprehensively, she said, and state policymakers need to be aware of the nexus when considering mandates for higher hourly wages or additional healthcare.

“Wages and benefits are all one,” Siekerka said. “The cost of business is getting more and more challenging. I think small business is really at a breaking point.”

Published on by Susan K. Livio

TRENTON — With insurance companies in New Jersey fleeing the health exchange created by the Affordable Care Act, a state lawmaker has introduced a bill to create a government-operated plan that he said will stabilize the volatile market.

The “New Jersey Public Option Health Care Act” would require the state Health and Banking and Insurance departments to develop the plans, according to the legislation Assemblyman Reed Gusciora (D-Mercer) introduced on Thursday and announced on Monday.

Any consumer could enroll in the plans, which would compete with those offered by private carriers, according to the bill (A4211). Carriers that already provide Medicaid and Medicare coverage would be eligible to join the public plans.

“Health care should be a right for every New Jersey resident,” said Gusciora (D–Mercer).  “I think the climate is finally right to make significant changes to our system that will enshrine that principle in our laws.”

Consumers will have only two health care providers to choose from on the health exchange when the open enrollment period begins Nov. 1. Oscar, Health Republic of New Jersey, and Oxford Health Plans, owned by UnitedHealthcare Co. are pulling out, citing severe losses.

Health Republic Insurance of New Jersey will serve its 35,000 policy holders through the end of 2016.

The insurance carriers that remain are the two most dominant, Horizon Blue Cross Blue Shield of New Jersey and AmeriHealth, which together insure more than 80 percent of individual enrollees.

This pattern has played out across the country, as premiums have continued to rise. Nationally, Democrats and Republicans both have talked about the need to amend the landmark healthcare law to address the lack of young and healthy participants, the rising costs and the dwindling insurance players in the market.

President Obama rejected the so-called “public option” when he was crafting the six-year-old law. This summer, however, Obama wrote an op-ed for the Journal of the American Medical Association calling on Congress to amend the law to include a publicly run option, pointing to “public programs like Medicare, (which) often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers.”

Guisciora’s bill faces significant barriers. If it passed both houses in the Legislature, Gov. Chris Christie, who would need to sign it in order for the bill to become law and he has shown no interest in getting involved with the health exchange.

Linda Schwimmer, president and CEO of the New Jersey Health Care Quality Institute, a research and consumer advocacy organization, said she appreciated Gusciora’s “good intentions,” but she saw problems with the bill.

“The bill in its current form raises so many legal and practical issues. From our state’s current fiscal status to just how insurance operates, there is a lot that would need to be fleshed out for this to be workable,” Schwimmer said.

“The government has the benefit of representing a large population of people, and that gives them a lot of clout in cost and reimbursement negotiations,” Gusciora said.

“That’s really the need and the goal, here — to cut costs,” Gusciora added. “With this plan, our insured and uninsured alike will have a reliable, affordable option for healthcare, where they can use their existing doctors and hospitals without having to deal with obtrusive and damaging network arrangements.”