Voices in Healthcare

Here is a copy of a blog I posted on WBUR's "Commonhealth" today. Happy reading!

In today's tough economic environment, addressing small business healthcare costs is a must. Governor Deval Patrick's new proposal to have the state regulate healthcare rates from insurers and providers aims to do just that, but is a dramatic and difficult step even if done on a temporary basis and some of what the Governor proposes isn't temporary. The Governor has said that his proposal is meant to start the conversation and he deserves credit for that.  Starting the conversation is good because there is a lot to talk about and a lot to do.

The governor's "Job Creation Bill for Small Business" calls for any contract for payment between an insurance company and a hospital, physician group practice, or imaging service to be submitted to the Division of Health Care Finance and Policy (DHCFP).  If DHCFP finds that the payments - adjusted for volume and patient acuity- increase by a rate greater than the previous year's rate of medical inflation, the increase would be presumed to be excessive and disapproved, pending a hearing to justify the increase. The bill also places some limits on insurers, but far less challenging.

There are important questions to be asked in this "conversation" including questions about the feasibility of implementing what is proposed, the administrative complexity and cost of implementing what is proposed, the impact of many providers who are struggling to survive today, whether there is a need to address demands for medical services if one is proposing to limit provider costs, which provisions are sunset and which provisions continue, will the proposal actually lower small business premiums and if so at what cost, what effect will increased regulation have upon our economy and jobs, what is the impact upon long-term reform of adding greater complexity to the payment system, does the proposal take into account costs that providers can't control - such as an aging population and the high level of coverage benefits in Massachusetts, how do providers account for the government not paying the costs for caring for MassHealth patients?

Because something is complicated doesn't mean that it can't work, but when it is this important, we better understand how it will really work or not work before buying it.

The disproportionately high premiums that small businesses pay are a legitimate concern.  The rapidly rising premiums result from business decisions being made by the state's insurers. Under current Division of Insurance regulations, insurers can charge small businesses as much as 76 percent more in premiums than they charge their 'big business' counterparts. But hospitals and other providers get paid exactly the same regardless of whether a patient works for a large or small employer. The Governor's bill authorizes the Commissioner of Insurance to limit these so-called rating decisions.

It is high time to ask tough questions about the cost of insurers' red-tape, cost in terms of dollars spent and in terms of providers and beneficiaries running in circles. Their administrative costs add significantly to providers' medical costs. Their billing and claims processes account for billions of dollars in our state's healthcare system.

There are steps we can take together. We should look carefully at new ideas such as allowing small business to join together to get lower insurance premiums while not excluding businesses from joining such networks.  And increased transparency if handled responsibly and applied to all stakeholders can contribute to a more effective and efficient healthcare system.

MHA is committed to basic reform of the healthcare payment system and to participating in the conversation that the Governor started.

Governor Deval Patrick's proposed 2011 budget assumes another challenging year for Massachusetts and calls for program cuts throughout state government, including MassHealth. The budget maintains eligibility for both MassHealth and Commonwealth Care and assumes both programs will grow in terms of covered lives. While the proposal demonstrates the administration's continued commitment to healthcare reform, hospital reimbursement will again suffer further reductions through the elimination of inpatient acute outlier payments, which cover complex adult patients requiring lengthy hospital stays.

MHA appreciates the governor's recommendations on the Health Safety Net (HSN) that: 1) re-establishes a general fund contribution of $30 million in FY2011 and 2) call for the FY2010 HSN account to receive prior year HSN surpluses to help alleviate an existing $70 million shortfall. However,  the strain on hospital finances remains significant and MHA projects that the FY2011 HSN could experience a shortfall of close to $100 million. Contributing factors to the shortfall include eligibility restrictions on the Commonwealth Care Bridge program for legal immigrants, which force patients to utilize the Health Safety Net, and the elimination of restorative dental care for most MassHealth and Commonwealth Care adults.

The inclusion of new revenues to mitigate the potential depth of possible cuts is important. These revenues include taxes on candy and sugared drinks which are supported by MHA, both for the revenue potential and the contribution to improving public health. In addition, the budget assumes an extension of enhanced Federal Medicaid Assistance Program (FMAP) which is an important priority for Massachusetts and every other state. Even with these important steps, MHA remains deeply concerned about continued and worsening government underfunding of care to patients.

Massachusetts hospitals are committed to working with the state's elected and appointed officials to implement meaningful and sustainable payment reform in the Commonwealth to mitigate increases in healthcare costs. But true reform will still require hospitals to be adequately paid for care provided to our most vulnerable residents. Short-changing providers through government reimbursements that are
substantially below costs only exacerbates these problems, rather than ease them, and potentially threatens the ability of hospitals to pursue their critical care-giving missions.

The Governor's support for sustaining health care reform is clear. While the economic downturn has stalled the Commonwealth's commitment to close the Medicaid payment gap, the state must pursue the full funding of care provided to our most vulnerable populations.  This would demonstrate the same "shared responsibility" that was shown by providers, employers, and insurers when the Commonwealth tackled coverage reform in 2006. MHA and its member hospitals pledge to continue to work with our fellow healthcare leaders throughout Commonwealth to achieve an appropriate balance of revenue and cost containment. 

Jon Hurst, President of the Retailers Association of Massachusetts, is understandably frustrated by the large increases in health insurance premiums that his organization and other small businesses are receiving from health plans.  It is important to note, however, that hospitals are reimbursed the same amount by the health plan regardless of whether the patient works for a small mom and pop business or a large employer.  Hospitals must accept ownership for the cost issues under their control, but the significant differential between small and large group premiums is due to the way the health plans calculate those premiums and is not caused by what the providers charge.

Unfortunately the Boston Globe chose to run an inaccurate and incomplete story today entitled "Executives snub hearing on rising health care costs" (January 8, 2010). The article incorrectly and unfairly characterizes Massachusetts hospitals' intentions and participation in the hearings called by the state's Division of Insurance.

Our hospitals are absolutely committed to being part of this process and participating in the hearings. Many hospitals were unable to attend in person due to the short notice, scheduling conflicts, and lack of time to prepare answers to questions that were not received until New Year's Eve when the first hearing date was January 7.  MHA had informed DOI that hospitals had virtually no time to prepare for the hearings given the short notice on the questions and the holiday schedule,  and had asked for the questions to be sent out earlier.

DOI was unable to accommodate other testimony times, and so many hospitals are submitting written testimony by the January 15 deadline, in order to participate in the process, answer the Patrick Administration's questions and to personally help find achievable and lasting solutions to the challenges of escalating healthcare costs. MHA is also testifying at the hearings, on behalf of all our member hospitals but especially for those who would otherwise be unable to give their input under DOI's deadline.

The Globe spoke with MHA staff about this, and knew the details of the short deadlines and scheduling difficulties. They also spoke with several of our members. Yet the paper chose to publish a non-story, affix an incendiary and inaccurate headline and run with it anyway.

In contrast, health insurance industry leaders attended similar DOI hearings but stonewalled on key questions. Who's doing the "snubbing" here? 

Hope everyone is enjoying MHA's new website and blog. I encourage you to post comments! The goal of Voices in Healthcare is to foster discussion, and believe me, there's plenty to talk about.

Federal and state reform, H1N1, cost and quality issues, the economic importance of healthcare to our state and national economies... You can't turn around these days without running into an important healthcare issue.

The hottest topic continues to be payment reform. Since the Massachusetts Special Commission on the Health Care Payment System issued its recommendations over the summer, there has been a lot of pressure from some sectors to act on the proposals, despite the fact that the Commission made its recommendations purposefully broad.

My ongoing discussions with providers clearly show that most Massachusetts hospitals favor changing the payment system away from the traditional (and broken) fee for service model, toward a more comprehensive and streamlined system that results in efficient, coordinated and collaborative care delivery across the board. But just like tackling a new program on my elliptical machine ultimately affects all of the muscles I use during a workout, so too any change to how providers are paid will have repercussions for the entire healthcare delivery system, up to and including patients. Even when we know that something is theoretically good for us and is the right thing to do, it's a normal reaction to consider the risks along with the benefits, and figure out the best way to make needed improvements while avoiding serious injury.

I'm encouraged that our hospitals are contemplating what they need to do to be successful in an environment that is not predominantly fee for service. Meanwhile, MHA is reaching out to other key stakeholders including legislative leaders and Administration officials to find common ground regarding workable efforts to move the reform effort forward. MHA's October white paper outlined hospitals' most serious concerns about implementing payment reform and helped to inform the dialogue. I sure hope you've already read it - and we'll soon be issuing several additional papers on these "foundational" issues and suggestions for how best to resolve them. So stay tuned, watch this space, and join the debate! Your perspective is really valuable.

Massachusetts hospitals share our state leaders' vision for an efficient, coordinated and collaborative healthcare delivery system that is supported by a fair and affordable payment system.

The Bay State's Special Commission on the Health Care Payment System issued recommendations setting out a conceptual model for such a new system based on a global payment model - It's a very ambitious set of recommendations that would fundamentally change the way that healthcare is organized and paid for in Massachusetts. But the report left many key questions unanswered.

Hospitals and other providers are actively working to overhaul the payment system away from fee for service in a thoughtful and responsible way. Making sure that this massive and complex issue is addressed comprehensively is the only way to ensure it will work. Successful healthcare payment reform will require the active involvement and support of all stakeholders - physicians, hospitals, insurers, policymakers, employers, and patients themselves. Everyone is going to need to contribute, and everyone is going to need to give something back in order to advance the overall effort.

Massachusetts hospitals are ready and willing to move toward fundamental reform of the payment system and to build a more integrated delivery system - including some forms of global payment. But they are not willing to do so haphazardly or by ignoring the very real, uncomfortable.5 issues that need to be hammered out. The Massachusetts Hospital Association has taken a leadership role in the payment reform effort by outlining some of the fundamental obstacles to reform's success and committing to work with all interested parties to address them. We know the legislature shares our commitment to this endeavor, and look forward to working with them to make payment reform a reality. But we must also make sure that payment reform succeeds for everyone, and for the long-term. We should build on our experiences and innovation while remembering that one size does not fit all.

Taking adequate time and care upfront to address the foundational issues collaboratively will ultimately save time and ensure lasting success.