Voices in Healthcare

Hospitals Support Reducing Healthcare Costs, But Don’t Endanger Jobs and the Economy

Fri, 27 Apr 2012 17:00:15 -0400

A Blue Cross Blue Shield Foundation report on the benefit of slowing healthcare cost increases makes some great points about potential cost savings for Massachusetts businesses and employees if we successfully lower healthcare costs in Massachusetts; as some of the state's largest employers, our hospitals actively support efforts to lower costs. In fact, Massachusetts hospitals have already taken several billion dollars out of the cost trend in FY 2009 and FY 2010.

What the Blue Cross report does not address is how such reductions could affect the Massachusetts economy overall, given the importance of the healthcare sector in the state. As the report itself states (on page 6): "Importantly, this analysis does not attempt to quantify the effects that reducing health care cost growth would have on the health sector per se. … Any impact on the Massachusetts health care sector would be determined by the nature of the cost-containment policies and how those policies ultimately translate into any changes in the health care workforce or profitability."

Cutting costs too much or too quickly could end up substantially damaging our hospitals, especially the many that have inadequate margins already, and as a byproduct the entire Massachusetts economy.

Hospitals actively support reducing healthcare costs to more closely align with the overall cost of inflation in a reasonable amount of time. But with about 70 percent of every hospital dollar tied to labor, substantial, abrupt cutbacks would inevitably lead to layoffs and reductions of services that would have far-reaching negative consequences that would affect every Bay State community. What we need to do is give the market time to build upon the progress it has made already, with support from government and continued commitment from insurers, providers, employers and consumers to tackle the challenge of reining in healthcare costs.

Cutting Healthcare Costs Too Much and Too Fast Is a Prescription for Harming the Economy

Wed, 04 Apr 2012 18:26:06 -0400

First, the good news: Everyone in the Massachusetts healthcare debate hospitals, other providers, insurers, government leaders, employers and consumers agrees that we must lower the cost of healthcare, and we have all committed to addressing this difficult challenge head-on. But there is both a right way and a wrong way to reduce costs; the right way produces substantial savings and is sustainable, and the wrong way destabilizes our vital healthcare sector and harms the economy. The right kind of progress is already being made in the market:

Hospital cost management efforts here in Massachusetts have contributed to expense trend reductions worth billions of dollars in FY 2009 and FY 2010.
Insurance products are now beginning to align with new payment and care delivery models that reward better coordinated and more efficient patient care. The Boston Globe reports more than 1.2 million people are now covered by plans that limit payments to providers based on value over volume, and that number is growing.
There is increasingly widespread consensus in support of slowing the rate of healthcare cost increases to align healthcare spending with the state's economy in a reasonable amount of time.

Now, the bad news: Three weeks ago, with good intentions but bad judgment, the Associated Industries of Massachusetts (AIM) and Greater Boston Interfaith Organization GBIO made a reckless call for the Bay State's healthcare system to reduce the growth of total healthcare spending to two percentage points below the growth in the overall state economy within three years.

The "GSP minus two" target cuts too much, too fast. It ignores the serious and potentially devastating damage that such a 'slash and burn' approach would cause not only to Massachusetts' excellent healthcare delivery system, but to the overall state economy. And it completely ignores important lessons we should have learned from recent history here in Massachusetts:

Medical spending has tended to exceed state economic growth. Overall medical spend in the U.S. is about 1.5 to 2 percent above income as measured by Gross State Product or GSP. This is the state version of "GDP" you hear so much about.
Aggressive managed care in the 1990's suppressed that trend. At the height of managed care, from 1992 to 2000, the payment rate for healthcare costs in Massachusetts was -0.4 percent, less than half a percent below the state's economic growth. Many of you may remember the consumer backlash from those times. Quintuple that if you want a picture of what AIM's/GBIO's "GSP minus two" scenario would look like.

Projected medical spend from 2012 to 2015 comes in at 6 percent, which is 2 percent above the rate of growth for the state's economy. Lets be clear: That's too high.

But some unadjusted metrics are being cited that mistakenly suggest Massachusetts health insurance premiums are among the highest in the country. Here are some facts:

Massachusetts had the fourth highest median household income among the 50 states in 2010 (after Maryland, New Jersey, and Connecticut), and when premiums are considered as a percentage of median household income, the cost of Massachusetts premiums ranked 48^th out of 51 (including Washington D.C.)
Massachusetts average family premiums were highest in the nation in 2009, but dropped to 9^th highest in the nation in 2010.
Most people experience the cost of healthcare through the insurance premiums, co-pays, co-insurance, or deductibles that they pay. According to healthcare expert John McDonough, Massachusetts health insurance tends to include lower deductibles and co-insurance payments than most other states, which inflates MA premiums in comparison.

MHA and many other healthcare stakeholders agree with AIM and GBIO that a reduction in the rate of cost increases is needed. Furthermore, Massachusetts hospitals are fully supportive of delivering the right care, at the right time and in the right setting, even though this approach may ultimately result in lower patient volume and thus lower revenues for some hospitals. It's still the right thing to do.

But when talking about goals to reduce the total healthcare expenditure in Massachusetts, it's important to remember (or realize) that this isn't just about hospitals and physicians. Every aspect of healthcare spending needs to be constrained.

Hospital costs make up less than 40 percent of total healthcare spending in the state. That 40 percent covers the cost of employing doctors and nurses, developing electronic health information systems that are crucial to providing efficient and effective care, the cost of medications and medical devices, the cost of energy, and all the other costs tied to delivering care. If healthcare spending is forced down to two percent below the rate of economic growth, it's extremely unlikely that there would be a corresponding decrease in these expenses. Hospitals simply won't be able to absorb such costs without job losses, service cutbacks and delays in IT and other infrastructure investments.

Hospitals do acknowledge that there is significant waste in the overall healthcare system that needs to be teased out. Real and substantial progress is being made every day. However, due to the highly complex nature of healthcare delivery and payment, it is impossible to just "lift this waste in one neat movement. Separating unnecessary costs from worthwhile ones must be done carefully, and that cant happen overnight.

Former U.S. Medicare and Medicaid Administrator Donald Berwick, the same economist AIM quotes to support removing waste in the system, made this additional point on the subject: "Instantaneously reducing healthcare waste at the theoretically accessible scale—that is, 20% or more of total healthcare costs—is neither practical nor, from the viewpoint of economic stability, desirable."

Ah, yes, economic stability. AIM argues that since healthcare "only" directly supports 13 percent of the gross state product, employers and citizens who aren't employed in healthcare should not be forced to support that 13 percent by overpaying for insurance.

This argument overlooks two important facts: First, the healthcare sector's positive economic impact is actually much larger, because not only do goods and services that hospitals purchase from other businesses create additional economic value for the community, the good jobs hospitals provide for workers at all skill levels feeds the state's economy overall. The American Hospital Association (AHA) last year calculated that each hospital job in Massachusetts results in a total of 2.1 jobs in the economy as a whole. Hospital employees use their wages to purchase goods and services, which creates income and jobs for others. Unemployed healthcare workers cannot support their local businesses.

Second, in order to deal with private insurance "overpayment" by employers and their employees, Massachusetts needs to address the long-term, ongoing cost shift that continues to take place today as a result of government underpayment. Government, both federal and state, does not cover the actual cost of providing care. One of the state's major commitments when Massachusetts' healthcare reform first passed in 2006 was to narrow its underpayment gap for care provided to MassHealth/Medicaid patients. The rate now stands on average at about 70 cents for every dollar of care provided, which is worse than it was in 2006.

Hospital operating margins in Massachusetts are also dangerously anemic. Economic experts agree that operating margins of about three percent are considered 'healthy' Currently, the median operating margin for Massachusetts hospitals is 1.4 percent. In addition, 40 percent of Massachusetts hospitals have negative operating margins for the third quarter of 2011, the most recent data available.

AIM contends that it is only asking the healthcare industry to do what employers in other sectors "have been doing for decades." That's simply not the case. What other Massachusetts business has more than 50 percent of its revenues dictated by government, which then imposes additional financial burdens through substantial regulations and oversight? What other organization runs services at a loss because of its commitment to the community? What other sector is required to provide its services regardless of customers' ability to pay?

In FY2010, the Health Safety Net (HSN) fund paid for 800,000 hospital visits and discharges provided to low-income uninsured and underinsured patients. Hospitals not only have to provide the care, they pay for the majority of the HSN Fund itself.

Those are not the rules or the environment under which most Massachusetts business operate.

Hospitals proudly embrace their mission of providing services to those without adequate financial resources, and to contributing to the overall societal good, but there must be recognition of these contributions and fair payment by government.

There are still many things that hospitals and employers as well as other members of the healthcare community do agree on when it comes to reforming the payment and care delivery systems. Key among them is the belief in shared responsibility for reigning in costs. As hospitals and other providers strive to make thoughtful and innovative changes to increase efficient, coordinated and high-quality care, employers and their employees must purchase insurance products that are aligned with these goals and are easier to administer.

We must all work to make careful but steady and measurable progress toward bringing healthcare costs more in line with economic growth.

It's Time to Make Smoking History in Pharmacies, Too

Fri, 23 Mar 2012 14:43:36 -0400

MHA and its member hospitals strongly support the Public Health Council's recent push to ban the sale of tobacco products in pharmacies. In fact, we testified in support of proposed legislation that would prohibit tobacco sales wherever any health professionals work. Smoking is the leading cause of preventable death in the US, and it is extremely important that care providers 'walk the talk' on this vital public health issue. As we said to the Legislature, our hospitals have historically adhered to the policy outlined in this bill on a voluntary basis, but we believe all healthcare providers should be working in concert to limit access to deadly tobacco products at locations where care is given.

This week Massachusetts also hosted the US Surgeon General Regina Benjamin, who spoke at the State House about her recent report on some extremely disturbing trends in youth tobacco use. The report found that each day more than 3,800 young people under age 18 in the US smoke their first cigarette, and more than 1,000 young people become daily smokers. Nearly 9 out of 10 smokers start smoking by age 18, and 99% start by age 26. And of every three current young American smokers, Dr. Benjamin says, one will quit… and one will die from tobacco-related causes.

We also know tobacco use is a tremendous drain on our economy and is adding to increases in healthcare costs. According to the Massachusetts Department of Public Health, in addition to the price paid in lives lost, smoking costs Massachusetts an estimated $6 billion annually due to excess direct health care costs and lost productivity due to premature death.

I don't see how anyone can argue against banning tobacco sales at healthcare sites in the face of those terrible statistics.

Hospitals are already leading the way, and leading by example. All Massachusetts hospitals ban smoking in their facilities, and MHA has also led Healing Inside and Out: Mass. Tobacco-Free Hospitals, which assist hospitals in going totally tobacco free meaning tobacco use of any kind is not allowed anywhere on their campuses. Fifty-eight percent of the acute and post-acute care hospitals in the state are now tobacco free, and five more hospitals have committed to making this important advance in the coming months. Our goal is to have 100% of Massachusetts hospitals become tobacco free.

Both MHA's Tobacco-Free Hospitals initiative and HB0591/SB1094 ("An Act Restricting the Sale of Tobacco Products at Locations Where Health Professionals are Employed") are important steps forward. Now is the time for continued bold action. Legislators should approve the bill and Governor Deval Patrick should sign it into law as soon as possible.

Calls for Cutting Healthcare Costs to Below Economic Growth Are Penny-wise and Pound-Foolish

Wed, 14 Mar 2012 10:43:08 -0400

Today's calls by the Greater Boston Interfaith Organization (GBIO) and Association Industries of Massachusetts (AIM) to cut healthcare costs in Massachusetts to below the state's economic growth rate within three years are unrealistic and irresponsible. Aligning healthcare spending with the state's economy in a reasonable amount of time is a worthwhile goal, and one that MHA and our member hospitals support. But imposing restrictions at a level below inflation, regardless of the time period involved, would harm our healthcare system, itself a driver of the economy, and force numerous layoffs, closures of services and impose barriers to access for everyone.

The impact of such draconian measures on hospitals and the patients we care for would likely be significant. When talking about goals to reduce the total healthcare expenditure in Massachusetts, it's important to remember (or realize) that this isn't just about hospitals and physicians but every aspect of healthcare spending. Since nearly two-thirds of hospitals' expenses are related to labor, drastically reduced spending would result in widespread cuts to the healthcare labor force, as well as cutbacks in goods and services such as medical technologies, pharmaceuticals and updates to aging buildings and equipment - And that's before we even get to the question of making investments in healthcare IT and electronic health records.

Claims that patients in Massachusetts pay "among the highest insurance premiums in the country" are incorrect. As the market has moved to change the commonwealth's entire healthcare payment and delivery systems, premiums have moderated. When adjusted for the higher cost of living here, as a percentage of median household income healthcare premiums in Massachusetts rank 48 out of 51.

AIM is right that the market is showing demonstrated progress in reducing healthcare costs, and we need to give it time and flexibility to create meaningful and comprehensive changes that will create lasting reductions in costs. But reducing total healthcare spending below the state's overall economic spending would debilitate one of Massachusetts' key economic drivers. That would be penny-wise and pound foolish.

No Crying Wolf: Hospital Cuts Are Big, Bad, and Real

Fri, 02 Mar 2012 17:35:03 -0400

MHA was quoted and served as an extensive source in a Boston Globe article on the deep potential harm hospitals face as a result of further cuts to Medicare reimbursement to fund the so-called "doc fix" legislation passed by Congress. The article also included some comments from two noted economists stating, in essence, that hospitals' concerns need not be taken seriously; we could not let the remarks stand unchallenged.

Our letter to the editor in response to those comments was printed in the Boston Globe. Hospitals continue to work hard to improve efficiency and make care even safer and better coordinated than it is currently, but we cannot make progress if we are subject to 'death by a thousand cuts.'

Tobacco-Free Employees: A Positive Public Health Trend for Hospitals

Mon, 09 Jan 2012 13:45:50 -0400

This weekend's story in USA Today on the growing trend of hospitals across the country refusing to hire smokers is welcome news to start 2012. The Massachusetts Hospital Association became one of the first small businesses to stop hiring smokers more than a year ago, and it's extremely gratifying to see this important practice catching on with larger employers, particularly in healthcare.

As the new model Medicare ACOs demonstrate, now more than ever hospitals are being held accountable to improve the health of the populations they serve. It's commendable that they start by being role models and "walking the talk" on this huge driver of mortality and cost.

Employers - especially hospitals - are to be commended for making sure their employees share their commitment to health.

Stemming the Rising Tide of Preventable Illness in Massachusetts – Carpe Diem

Fri, 16 Dec 2011 17:34:05 -0400

Massachusetts has a very real - and achievable - opportunity to improve the overall health of our residents and lower healthcare costs at the same time, and we should move forward with this effort as soon as possible. With today's intense focus on the costs of healthcare, and the pressures being exerted on providers to bring those costs down, MHA and our member hospitals are working hard on the downstream side of the equation and making real progress. But the issue needs to be addressed on the prevention side as well, and we should start with one really obvious tactic - ending the state sales tax exemption on sweetened beverages and candy.

Numerous scientific studies have shown that consumption of soft drinks is associated with poor diet, increasing rates of obesity and risk for diabetes. One study found that for children, each extra can or glass of sugar-sweetened beverage consumed per day increases their chance of becoming obese by 60 percent.

Massachusetts state law exempts certain food products from the sales tax. This includes essential items like fruits, vegetables and milk, but it also currently includes soft drinks, sugar and sugar products, and candies. In the last decade, the percentage of calories consumed by 2- to-8-year-olds from sweetened beverages has increased, while the percentage from milk has decreased.

What's wrong with this picture?

Over 40 states now have sales tax on soft drinks and Massachusetts remains one of only a handful of states that does not tax these items at all. HB1697 eliminates the sales tax exemption for candy, confectionary and soft drinks. The Massachusetts Department of Revenue estimates that lifting the sales tax exemption for soft drinks and candy could generate $52 million in annual revenue that could be used for proven public health prevention efforts. A recent poll showed 69 percent of Massachusetts residents would support ending the sales tax exemption on sweetened beverages and candy if the revenues generated went to local schools to help combat childhood obesity.

Opponents of HB1697argue that it amounts to a penalty tax on sugary drinks and candy, but this argument misses the mark. The current exemption is actually a taxpayer subsidy of items that have little nutritional value and have been linked to the growing epidemic of overweight and obesity.

This week MHA joined our fellow members of the Healthy People/Healthy Economy Coalition at the State House to call for an end to the state sales tax exemption for soft drinks and candy. To further educate the public on the dangers of consuming large quantities of sweetened beverages, pediatricians will be handing out "prescriptions" to patients and their parents that describe the negative health effects of consuming too many sugary drinks. MHA will be supporting this education campaign as well.

If we want to lower healthcare costs, we need to support prevention efforts along with payment and care delivery reform. There are a number of ways to support improvements to our residents' public health - Ending what amounts to our Commonwealths taxpayer subsidy on sugary beverages and candy would be a concrete step in the right direction.

A Big Step Forward: The Massachusetts Healthcare Market's Efforts to Slow Costs Are Working

Thu, 17 Nov 2011 11:55:52 -0400

Today's story in the Boston Globe that Massachusetts insurance costs have dropped from number 1 in the US to number 9 is very good news. Hospitals throughout the Commonwealth, however, are not particularly surprised. Hospitals only account for approximately 39% of our per capita healthcare expenditures, but they are already bending the cost curve, reducing expense increases in 2009 and 2010. In other words, hospitals are helping to move the market in the right direction.

But healthcare costs aren't solely the problem of providers we all have a responsibility to help reduce costs and premiums. Our state government must also hold itself accountable for improving price variation by paying adequately for care provided through Medicaid and other public sources, and by ending government cost shift to providers and private insurance premiums. We must be careful not to "over-correct" and end up with a situation that is actually detrimental to the healthcare community and the patients we serve.

Government definitely has a role in prompting change in the healthcare market, but that role shouldn't be to determine what rates are given to those who provide care. Recent Massachusetts laws, including M.G.L. Chapters 58, 288 and 305 are examples of constructive government involvement.

We know that price variations in healthcare exist. They exist not only in Massachusetts, but also in highly regulated environments such as Medicare and the state of Maryland, which has mandated government control over provider prices for years. The reasons for variation are complex, and more study is required to understand why particular variations exist and to determine what - if anything - needs to be done about those differences. To act before we understand the significance of variations and what to do about them is placing the cart before the horse.

I sat on the Governor's Special Commission on Provider Price Reform, which recommended that an expert panel be convened to research the many factors for variation and then determine how to reduce any unacceptable variation in provider prices. On behalf of the states hospitals, I voted to support this effort. In fact, MHA supported five of the six Special Commission recommendations. But I voted against the recommendation to regulate provider prices from the get-go, for the reasons Ive mentioned here, as well as in my detailed statement to the Special Commission.

Today's report from The Commonwealth Fund found Massachusetts healthcare premiums are no longer the most expensive in the nation, and that is a great start It's also evidence that the market's efforts to slow the cost of healthcare increases are working, and that government intervention in price regulation would be premature. But the report also highlights that there is still plenty left to do to slow and reduce healthcare cost increases. Massachusetts hospitals are contributing to the cost-control effort, and will do even more moving forward. Collaborating with all healthcare stakeholders including government, insurers, businesses and their employees, I am confident we can succeed.

Flu Vaccination for Hospital Workers Should Be Mandatory

Wed, 14 Sep 2011 18:35:14 -0400

The Massachusetts Hospital Association strongly supports mandatory flu vaccination for all hospital employees and applauds Beth Israel Deaconess Medical Center and Children's Hospital Boston for their bold decision to require flu vaccination as a condition of employment.

Today's release of vaccination rates at Massachusetts hospitals shows continued improvement, with 70.8 percent of acute care hospital workers statewide receiving the flu vaccine last year, compared to 68 percent the year before. But 20 percent of those hospitals' employees refused to be vaccinated, which is completely unacceptable and a huge disservice to patients. There are rare instances where an exception needs to be made, but outside of those limited circumstances, the goal should be 100 percent.

Currently Massachusetts hospitals are required as part of their licensure to ensure that every employee is offered influenza vaccination unless such employee declines to be vaccinated. Hospital employees who decline vaccination are required to sign a form that includes providing the reason the individual refuses to be vaccinated against influenza.

Hospital employees are the front-line stewards of public health and we are proud of their service. For the relatively few employees without extenuating circumstances who may still hesitate to participate in the vaccination program, we believe that their commitment to patient care should carry the day. Patient safety shouldnt be optional and that means that vaccination compliance shouldnt be optional either.

Keeping Our Priorities Straight: Tackle Healthcare Costs Right – And Together

Fri, 19 Aug 2011 15:50:19 -0400

Yesterday's excellent op-ed by Senator Richard T. Moore (D-Uxbridge) takes thoughtful issue with several points expressed in an editorial earlier this week by the GateHouse News Service (publisher of the MetroWest Daily News, Milford Daily News, and Taunton Gazette, among others) regarding Massachusetts healthcare reform and the intertwined issues of access and costs. Senator Moore's comments are right on the mark, and could even be expanded upon from the perspective of the hospital and provider community.

The GateHouse editorial's contention that Massachusetts' 2006 healthcare reform law "included no provisions that would keep costs down" is indeed incorrect as Senator Moore points out. In addition to the points raised by the Senator, the initial editorial omitted mention of another key provision of that statute: The 2006 reform law also included a commitment from the Commonwealth to close the gap between what it paid providers under Medicaid and the actual costs of providing that care. Reducing this underpayment gap would lessen the need for cost-shifting to private insurance, which in turn would mean fewer costs passed on to employers and their workers in the form of higher premiums. Unfortunately the underpayment gap is now larger than it was when the reform bill was enacted. It will be essential for the Commonwealth to re-commit to this priority if any "payment reform" initiative is to be successful.

Big changes are already happening in the healthcare marketplace and our hospitals are doing their part. Massachusetts hospitals have already cut some $3.1 billion in projected costs over the course of FY2008 to FY2010, and early results indicate that hospitals continue to reduce costs in FY2011.

Like our legislators, Massachusetts hospitals support reforming the Commonwealth's healthcare delivery and payment systems and moving away from the dominant "fee for service" payment models. The Massachusetts healthcare market is already moving ahead with voluntary payment reform efforts, and we're seeing some strong and positive results. We look forward to continued collaboration with policy makers to achieve meaningful and sustainable healthcare reform, while at the same time we recognize that progress is already being made.

The challenge of maintaining what works well in our system while reforming what doesn't work well can only be achieved if we all work together. Why? The reason is simple even if the answer isn't: there isn't a single culprit. We all contribute to the problem, we all suffer from failure, and we can all gain from success. Employers, providers, government, insurers, and consumers working together is the answer.

Wise Words on State Over-Regulation of Healthcare

Mon, 25 Jul 2011 16:50:29 -0400

As we grapple with the prospect of national default over the question of expanding the US debt ceiling, Massachusetts Taxpayers Foundation President Michael Widmer's op-ed in this weekend's Boston Globe offers a clear message about additional dangers closer to home. Specifically he calls on state lawmakers not to rush into additional regulations and cutbacks for the healthcare community as part of the ongoing effort to curb costs.

As Mike very eloquently points out, "leaders must be careful to recognize that a combination of market pressures and their own recent legislative accomplishments have begun to bear fruit." He is absolutely right. Massachusetts hospitals have reduced their anticipated healthcare cost increases by $3.1 billion during 2009 and 2010 in response to both market forces and existing state laws. Yet despite these efforts, our hospitals continue to be challenged by ongoing government underpayment for care provided through Medicare and Medicaid, and by increased administrative burdens the state Medicaid program now places on healthcare providers.

Continued progress in healthcare payment and delivery reform is highly dependent on hospitals' ability to invest in resources like workforce and health information technology. With one in six Massachusetts residents employed in healthcare, and a combination of current cost-saving measures and continued government underpayment already resulting in layoffs at hospitals across the Commonwealth, now is not the time to be piling on additional restrictions.

Cautioning the state shouldn't be confused with defending the status quo. The status quo is fading fast. That is good news and paves the way for new opportunities. Change is happening fast. And government has helped stimulate that change, but it shouldn't now overreach. While government has a legitimate interest in both the delivery and cost of care, there are limits to what government can do without stifling the ability of the private market to innovate and adapt to change quickly and efficiently. It's both gratifying and reassuring that someone from outside the healthcare community is so perceptive about the potentially devastating impact of heavy-handed rate regulation and funding cuts on our hospitals and healthcare systems. The Patrick administration, legislators and other healthcare stakeholders should heed Mike Widmer's wise counsel and refrain from harming the healthcare sector, which adds so much to the quality of life in Massachusetts by providing great healthcare and rewarding jobs today while collaborating to grow a vibrant economy tomorrow.

DHCFP Payment and Insurance Trend Reports Miss the Mark

Fri, 27 May 2011 17:15:53 -0400

The Division of Health Care Finance and Policy (DHCFP) has contributed to the public dialogue on reforming the healthcare system by aggregating and reporting a great deal of data in its two most recent reports, which deal with health insurance premium trends and price variation among healthcare providers. The Division clearly exerted a great deal of time and effort to produce these reports and I look forward to a fully examining them along with the MHA staff.

But there are significant issues with some of the conclusions being drawn from these reports. No one, particularly hospitals, is arguing against the urgent need to do something about escalating healthcare premiums. But I am deeply concerned that a well-intentioned effort to "do something" about this problem could lead to over-simplification of this extremely complicated situation and result in innovation-killing restrictions on hospitals and other healthcare providers.

The Governor often cautions against the notion that the complexity of the healthcare system should stop leaders from taking action. He makes a fair point. But it's equally true that it would be a grave mistake to ignore or underestimate what is in reality an amazingly complex system. Concern with complexity leads to inaction, while underestimating it leads to wrong action. The correct path runs between the two poles and the dramatic changes and improvements that hospitals and others are undertaking across the healthcare system proves the point.

Although the DHCFP reports use the most recently available data, it's important to note that this information may not reflect hospitals' current reality. The report about provider payments is also based on just 32% of private insurance inpatient payments to hospitals. This use of potentially outdated information and reliance on such a small subset of payments places limitations on what conclusions can be drawn. Simply put, some of the most controversial issues raised in the reports will actually require additional data and analysis to validate or disprove them.

The report on healthcare price variation also aims to shed light on the consequences of the states chronic underpayment to hospitals for the cost of caring for patients in public programs such as MassHealth, but it unfortunately misses the mark. Neither providers nor insurers have stated that government underpayment is the sole driver of escalating premiums, only that it is a significant contributor.

The Division's report also inaccurately states that there is no evidence that higher private payer prices are needed to compensate for losses incurred by servicing Medicaid patients. The Division comes to this false conclusion through its finding that hospitals with the largest share of public payer revenue do not have the highest private sector payments. Each hospital in the commonwealth is different, and unfortunately many of our hospitals that provide care to large numbers of patients covered under public programs do not have the ability to shift the government's underpayment burdens to the private sector due to their market circumstances, such as having a very small proportion of private sector patients. Many hospitals are forced to make do with these losses and this affects hospital employment, facility investment, and services. Many other hospitals have greater opportunities to shift a portion of the burden to private insurance payers, which results in a significant impact upon private premiums.

Furthermore, the report's Medicaid analysis is based on fiscal year 2009 payment rates. While those rates reflect the first year of Medicaid rate cuts implemented by the Patrick administration, more followed in fiscal years 2010 and 2011. And still more cuts are planned for fiscal year 2012. Hospitals also incur additional financial losses related to care for low-income patients due to significant funding shortfalls in the commonwealth's Health Safety Net program. Hospitals alone are responsible for paying for the shortfall, which totaled $70 million in fiscal year 2010 and which we estimate will approach $120 million in fiscal year 2011.

The Division's report on insurance premium trends does point out that medical claim increases are declining, which should have a positive impact on the price of premiums. This trend was substantiated by a report that MHA produced last year that demonstrated hospitals' projected expense trend for FY'09 and FY'10 was "bent" by approximately $3.1 billion. [Our report also noted that at the same time that hospitals were pulling costs out of the system, payments to hospitals for services in those two years were more than $2.4 billion lower than they would have been had earlier cost trends continued.]

MHA and its members encourage informing the public about the about the cost of providing high quality care to Massachusetts patients. But just as there is no single "silver bullet" to conquer costs, neither is there one member of the healthcare community that is single-handedly responsible for causing costs to increase. All stakeholders - hospitals, other healthcare providers, insurers, the business sector, consumers and government -play an important role in mitigating the costs of healthcare. MHA will continue to work with the Patrick Administration, state legislators and other healthcare leaders to take on these difficult issues.

Sugary Drinks Bans Expand in MA (So Residents' Waistlines Don't)

Thu, 12 May 2011 15:01:26 -0400

One day before Boston Mayor Tom Menino announced his executive order prohibiting the sale, advertisement and promotion of sugary drinks on city-owned property, Carney Hospital President, Bill Walczak, implemented a ban on sugar-sweetened drinks being sold or otherwise provided on the hospital's grounds. Bill then joined the Mayor and other leading health and nutrition experts at a press conference over the weekend announcing the expanded municipal ban (sugary drinks and unhealthy snacks were removed from Boston Public School vending machines in 2009). Carney is believed to be the first hospital in the city to prohibit sugary drinks, and it is certainly one of Boston's first big employers to take such a strong stand in the battle against obesity. Once again, Massachusetts hospitals are leading the way as stewards of the public health (pun intended). Bravo!

Recent research has shown that beverages now make up a significant portion of people's overall calorie intake, and that soda, energy drinks and sports drinks are major sources of added sugar in American diets. The added calorie intake can result in weight gain, which in turn can cause health problems like high blood pressure, diabetes and heart disease.

Mayor Menino's executive order sets science-based standards for what constitutes "healthy" drinks, and gives Boston city departments six months to clean up their nutritional act using a stoplight-based system. The city will encourage consumption of so-called "green" beverages such as bottled water, unsweetened tea and low-fat milk; and "yellow" drinks such as diet sodas and other diet beverages, 100 percent juices and flavored or sweetened milk may continue to be sold. "Red" beverages - including non-diet soda, pre-sweetened iced tea, dessert-like cold coffee beverages, sports and energy drinks, and juice drinks with added sugar - are being phased out entirely.

At MHA, we also take health and nutrition very seriously. We supported Governor Patrick's proposal last year to lift the sales tax exemption on candy and soda and funnel the extra revenue into health programs. While that particular effort has not been successful (yet!), as the leading voice for hospitals throughout the commonwealth, MHA employees know it's important for us to "walk the talk" on this important issue.

That's why MHA developed an initiative called HEALING, which promotes healthy eating, active living and a greener work environment. Our HEALING program sponsors health-related lectures, screenings and cooking demonstrations, and supports a wide variety of healthy options - including a healthy snacks honor bar and a relaxation room. Just recently MHA was acknowledged for our efforts when we were named one of the state's healthiest employers in the small business category by the Boston Business Journal.

So you can see that MHA is passionate about this issue - As I am personally. I have to admit Im forever toting a Dunkin' Donuts unsweetened iced tea with lots of lemon and no artificial sweeteners. So I walk and "drink" the talk! I look forward to the day when sugary drinks are banned from all state and local government locations, not just our public schools. Meanwhile, three cheers for the City of Boston and for the health-conscious hospitals of Massachusetts for doing their part - and then some - to promote our communities' public health.

It's All About Innovation and Patient Outcomes

Mon, 11 Apr 2011 16:43:09 -0400

HOSPITALS are working continuously to innovate, slow the growth of healthcare costs, and improve patient care. In addition, they're implementing new care delivery strategies to make sure the care they provide is better coordinated and more efficient.

But hospitals are also encountering obstacles as they work to do their part to change the healthcare delivery system for the better. As some of the state's largest employers in this fragile economy, hospitals face the double pressures of escalating wage and benefit requirements on one extreme and continued government underpayment for the care they provide on the other. Hospitals are trying to balance the many demands on their limited resources - both human and economic - in ways that are both creative and allow for the effective continuation of their life-saving missions.

In light of these challenges, it is disappointing and disturbing to learn that the Massachusetts Nurses Association was reportedly planning a multi-hospital strike for Good Friday, April 22.

Such an action would be disruptive to providing optimal care to patients. While the nurses association now denies making a concerted effort to conduct same-day strikes at four Massachusetts hospitals and a facility in Maine, documents left by one of its members in a meeting room at St. Vincent Hospital in Worcester have been turned over to the state Department of Public Health and Executive Office of Labor and Workforce Development. Whether this reported strike action was an attempt to influence contract negotiations, mandatory nurse staffing legislation, or both isn't clear. But it's clearly the wrong thing to do for patients, other hospital workers, and the local communities involved.

We all need to work together to maintain universal access to quality healthcare in Massachusetts, and to make that care more affordable. For their part, hospitals are becoming more efficient while simultaneously continuing to improve patient outcomes. Measuring outcomes is the primary method to examine hospital performance - and the efforts of RNs are at the core of this process; yet it would be a serious mistake to undervalue or dismiss the contributions of other key members of the care team such as nursing assistants, technicians, patient sitters (who monitor patients at risk of falls and help them enter and exit beds, among other duties), pharmacists, respiratory therapists, physical therapists, and others who round out the care process. It still takes a team to care for patients. And the team's performance as a whole should be taken into account.

The union wants fixed and inflexible staffing ratios for nurses. But clearly there is no "one size fits all" method for achieving high quality, safe patient care, nor should there be. Especially during this time of dramatic, fundamental change in healthcare, it's time to think - and act - outside of the box, while keeping patient safety at the forefront.

Shackling hospitals with cookie-cutter methods for delivering care stifles innovation. It ignores the needs of individual patients. And it doesn't acknowledge our nurses' individual levels of expertise and experience. Nurses need to be treated fairly; likewise, nurse managers need the flexibility to use all of the resources at their disposal - including assistive personnel, RNs with different education and skill levels, even advanced technology - to ensure and improve the care hospitals provide. Hospitals also need to remain fiscally viable to fulfill their care-giving missions. None of these aims can be accomplished through acrimony, threats, or efforts to impose a restrictive mandate across hospitals with very different settings and diverse patient needs.

By pursuing innovative approaches to care delivery and quality improvement, hospitals can not only do right by their patients, they can also maintain a supportive work environment while providing good jobs with good pay and benefits, whether it is for a physician, a nurse, an administrative assistant, or a groundskeeper. Those jobs, in turn, will allow hospitals and their workforces to contribute to the economy in many ways. That helps everyone.

Massachusetts Hospitals: Where Every Week is Patient Safety Week

Wed, 09 Mar 2011 11:28:00 -0400

We are in the midst of National Patient Safety Awareness Week, and MHAs provider members are marking the occasion by highlighting some of their ongoing work to reduce readmissions, mortality and central line-associated bloodstream infections (CLABSI) at hospitals across the Bay State.

Patient safety and high-quality care - measuring it, assessing it, and improving it - is the fundamental mission of hospitals. Massachusetts hospitals are national leaders in voluntary reporting of patient quality and safety information; and our hospitals are committed to doing even more to improve healthcare quality and patient safety.

The MHA Board of Trustees has unanimously endorsed an association-wide initiative to move beyond public reporting and transparency to make measurable, concrete improvements in hospitals performance. This Strategic Performance Improvement Agenda (SPIA) focuses on three priorities. The goal is for Massachusetts hospitals to collectively:

"    Improve Quality by reducing preventable mortality
"    Improve Efficiency by reducing preventable readmission
"   Improve Safety by reducing in central line-associated bloodstream infections (CLABSI).

To date, the boards of trustees for 48 hospitals have made specific commitments to SPIA, and the list is growing. MHA, in turn, is providing numerous tools to help hospitals in their fight to reduce readmissions, mortality and CLABSI.

A multi-state project dubbed the STate Action on Avoidable Re-hospitalizations (STAAR) Initiative was launched by the Institute of Healthcare Improvement (IHI) in May 2009 with grant funding from The Commonwealth Fund. Participating hospitals including 49 from Massachusetts have formed cross-continuum teams and are now focusing on how to improve patient transitions from hospital to post-acute setting.

On the mortality front, MHA is undertaking a new initiative to combat sepsis, which is the leading cause of death in non-coronary intensive care units. A new portfolio of offerings from MHA called Mortality: Learning-in-Network (M-LiNk) will be publicly available shortly. M-LiNk offers strategies to help hospitals improve the effectiveness of their mortality review programs, as well as concrete tools with evidence-based strategies to reduce mortality for those at greatest risk.

For central line-associated blood stream infections, MHA has been overseeing the Comprehensive Unit-based Safety Program (CUSP). Hospitals that have joined the CUSP-CLABSI program have project teams from their intensive care units participating in national content calls and state coaching calls. They also submit data on CLABSI, unit patient safety culture and team progress. These teams adopt best practices and work to ensure that the culture of their ICUs promotes teamwork and trust so that all staff can point out errors and shortcomings.

Evidence indicates that CLABSI efforts nationwide are working. Last week the Centers for Disease Control and Prevention (CDC) released its latest CLABSI data, and bloodstream infections in intensive care unit patients with central lines decreased by 58 percent in 2009 compared to 2001. The decrease over those nine years represented up to 27,000 lives saved across the U.S. and $1.8 billion in excess health care costs avoided, according to the CDC.

Specific examples of care improvement success stories in Massachusetts hospitals are available on PatientCareLink, the healthcare quality, transparency and patient safety website sponsored jointly by MHA and the Massachusetts Organization of Nurse Executives (MONE). A selection of the success stories will also be featured on MHAs main website during Patient Safety Awareness Week.

Every week is Patient Safety Week at Massachusetts hospitals. MHA is proud to support the work our hospitals do continually to ensure outstanding patient safety and quality care.