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.