There has been a lot of discussion recently about whether health care reform needs to include the option of a “public plan”. Our experience in Massachusetts has convinced me that health reform with virtually universal coverage is very achievable without the total disruption to the marketplace and our employer based system that would occur with the creation of a public plan.

The proponents for a public plan have argued that such a plan is necessary to promote competition and to keep the private plans “honest”. They seem to ignore the fact that we already have 1500 private plans being offered in the country – I fail to see how one additional plan will change the competitive landscape. Furthermore, such a plan could threaten the viability of employer sponsored coverage which is currently enjoyed by over 170 million Americans.

In Massachusetts, we chose correctly to build upon our employer sponsored system by simply filling in the gaps, most importantly by providing subsidies to low-income residents to purchase private plans offered through the Connector. This has worked extremely well. We also addressed coverage needs for another large segment of the uninsured, i.e. young adults, by offering them more affordable plans through the Connector or allowing them to stay on their parents’ plans for an additional two years after losing their dependent status.

A public plan could destabilize the insurance market as the government will be both the payer and the regulator. We all know about the massive cost shifting that currently occurs with our largest government payers, Medicare and Medicaid. These two programs which account for 50% of health care spending, simply do not reimburse providers for their full costs, resulting in much higher costs to all of the private payers. Another public payer will simply exacerbate that situation. Health care premiums for both employers and individuals would be more affordable if the government payers would simply pay their fair share.

Government health care programs have demonstrated no ability to be innovative in addressing either quality or cost issues so it is hard to imagine why we think a new public plan would be any different. I am hopeful that the discussion in Washington will shift away from this needless distraction and focus on how our nation can meaningfully address the access issues for millions of our citizens as well as creative ways to make health care more affordable.

Richard C. Lord
President & CEO, Associated Industries of Massachusetts

My good friend Jim Roosevelt — who also happens to be the CEO of Tufts Health Plan, one of the GIC’s larger plans — in his blog last Friday described a White House Press event on health reform that he had attended and pointed out that the much admired Massachusetts HealthCare reform program does not include a public option. He suggested that perhaps the country doesn’t need one either. Well, maybe. I’m not particularly interested in getting into a debate with Jim or any of his colleagues from the other five health plans we offer and I most definitely do not want to detract from the success of the Mass HealthCare Reform Act, but we don’t necessarily need to clone all of its features at the federal level. I understand that the private health insurance companies’ Trade Associations, the Massachusetts Association of Health Plans and at the national level, America’s Health Insurance Plans are officially opposed to the prospect of competing with a public plan. They say it will be an unfair competition, and they all assert that they can do the job better, especially if the government provides money to subsidize low income citizens who are currently priced out of their market — 47 million of them. I could concede the point that the playing field might not be level if AHIP acknowledged that even with the best of intentions, they have been unable to control the costs of health care. This is not to say that the challenge is an easy one — it isn’t. Read more…

If you need any convincing about the urgent need for reform of provider payment, check out the latest report on hospital financial performance from the Massachusetts Division of Health Care Finance and Policy.

The report gives a very stark picture of the growing gulf between the “haves and have-nots” among hospitals in the Commonwealth.

I think the operating results are the most troubling and relevant, since they show financial performance without the effect of non-operating factors like investment gains or losses.

Among the findings in the report:

• 40% of Massachusetts hospitals had a loss from operations in Fiscal Year 2008.
• The top quarter of hospitals made a healthy 2.9% operating margin; the lowest quartile lost money, with an average negative margin of 1.1%.
• The gap between the financial performance of teaching and community hospitals is getting wider and wider: the median operating margin among teaching hospitals was 4.1%–by far the highest level in the seven-year-period shown in the report– while community hospitals barely broke even from operations, with an anemic 0.4% operating margin.

Not all community hospitals did poorly on operations. Read more…

Governor Deval Patrick will restore partial funding to cover uninsured legal immigrants in the state budget he signs tomorrow. The Governor’s budget adjustments will include $70 million for immigrants who are in a final stage of citizenship and who qualify for Commonwealth Care. The House and Senate cut the full cost of coverage for these 28,000 residents, which is about $130 million. Toby Guevin, state policy director at the Massachusetts Immigrant and Refugee Advocacy Coalition, applauds the Governor’s move, but will continue to press for full funding.

“From this point, there is still significant work that needs to take place to make sure this population has comprehensive health coverage, and we will continue to work for that, but this is a good first step.”

The Patrick administration will ask the federal government to pick up the other half of the cost of this coverage. If that doesn’t work, the Connector will design a cheaper plan for these residents. House and Senate leaders were not ready to say yesterday if they would try to reverse this budget change. The Governor will go along with the House and Senate on maintaining dental coverage for adults who earn $16,000 a year or less. He has not said what he’ll cut to free up the $70m.

Martha Bebinger

On Beacon Hill, the House has agreed to reinstate a $64-million payment to Boston Medical Center. The state promised the hospital this money last year…but House leaders had removed it from a supplemental budget…saying the state just couldn’t afford it right now. A spokeswoman says BMC is grateful to the legislative leadership for understanding the hospital’s difficult financial situation. Governor Patrick is expected to sign the bill. Legislators expect to dip into reserves, again, to make the $64m payment.

Martha Bebinger

The Boston Archdiocese and it’s hospital network, Caritas Christi, have decided that participating in a joint health insurance venture would violate the church’s mission. Caritas Christi, in partnership with a for-profit health insurer, was set to begin providing state subsidized coverage on Wednesday. But tonight, the Archdiocese announced Caritas is pulling out. Cardinal Sean O’Malley, in consultation with the National Catholic Bioethics Center, decided that having an ownership stake in a venture that provides abortions and other reproductive procedures is inconsistent with Catholic moral teaching.

The insurance plan, CeltiCare, will go ahead and enroll new members. Those members will be able to use Caritas hospitals…but Caritas may not see the same increase in patients or revenues it expected through the joint venture. This is the second setback for Celticare this week. On Tuesday, the state decided to stop automatically assigning low income residents who don’t chose a plan to the lowest price option…which was Celticare.

Martha Bebinger

Here’s the full statement from the Archdiocese…

Braintree, MA – Based on the decision of the Caritas Christi Executive Committee of the Board of Governor’s to relinquish its membership and equity interest in the previously established joint venture, CeltiCare Health Plan Holdings, LLC (formerly known as Commonwealth Family Health Plan Holdings, LLC) but maintain its important role as a provider of health care to many enrolled in the state’s Connector Program, the Archdiocese of Boston today expressed support for the new arrangement. Read more…

On Wednesday night, I had the good fortune to be among 164 invited participants in ABC News’ health care forum, Questions for the President: Prescription for America. The event itself was a hybrid of a news conference (with the public instead of reporters) and a White House social event.

After clearing security, attendees gathered on the White House lawn, and for a brief period listened to a Marine Corps trio, though we quickly retreated inside as the heat, humidity and insects made it too uncomfortable to congregate. I saw some people I knew and enjoyed meeting others—and all of us were excited to be there. It was a diverse group of health care providers, insurers, policy experts, medical/nursing students, human resources representatives, business people, and others from all walks of life and political points of view, all invited because we each have a vested interest in the final shape and success of a national health plan.

ABC asked us to submit a question in advance for the president. My question was, “We have real life experience in Massachusetts with success of covering nearly 98 percent of our population in less than three years without raising health care costs and without the expense and unintended consequences of a government-run plan. Why can’t the nation follow our example?” Read more…

Health and Human Services Secretary Kathleen Sebelius is rolling out individual reports for each state today that the White House says “highlight the urgent need for health reform across the nation.” Here’s how the White House make the case for Massachusetts:

THE HEALTH CARE STATUS QUO: Why Massachusetts Needs Health Reform

Congress and the President are working to enact health care reform legislation that protects what works about health care and fixes what is broken. Massachusetts took groundbreaking initial steps toward these goals in 2006 with the passage of the Massachusetts Health Care Reform Act. Reform measures have been successful, with more than half of the previously uninsured population now covered and high program satisfaction. Yet sky-rocketing health care costs continue to hurt families and businesses and strain state budgets. Families and businesses in Massachusetts deserve better.

INSURANCE COVERAGE HAS INCREASED IN MASSACHUSETTS AS A RESULT OF REFORM

2.6 percent of people in Massachusetts are uninsured, a decrease from 5.7 percent in 2007. (1)
Almost 450,000 individuals have enrolled in private or subsidized health insurance plans since reform implementation. (2)
Employer-based coverage in Massachusetts is increasing, with 85,000 new enrollees between 2007 and 2008. (3)
Employers offering coverage in Massachusetts held steady around 72 percent between 2001 and 2007, while the percent of employers offering coverage nationally declined from 68 to 60 percent. (4)
Despite improvement due to the Connector, insurance choices remain limited. Blue Cross Blue Shield MA alone constitutes 50 percent of the health insurance market share in the state. (5) Read more…

Editor’s Note: There are a number of white papers on health care making the rounds in Washington, D.C. This one focuses on reorganizing the health care system around primary care. The executive summary is below. You can read the full paper here.

The failure of the US Health Care system to deliver population health to all, and do so affordability, is not likely to be impacted significantly by health insurance reform. Efficient, effective, and affordable health care is the product of an organized delivery system that provides needed services to all citizens. Most health care systems start with primary care, provided universally to the entire population.

Primary Care for All is a proposal to bring together three existing systems – existing private primary care practices, Community Health Centers, and Accountable Health Care Organizations (large, vertically integrated health systems) that currently provide primary care, and out of them creates an infrastructure that provides primary care to all Americans. Every American would have a primary care medical home – and a personal physician –nearby. The nation would be blanketed with robust multidisciplinary primary care practices – one practice of five to eight physicians, working as a team with other health professionals –for every 10,000 to 15,000 people. The majority of citizens would have a primary care practice just down the street that is open until eight or nine every night; open on weekends; and offers most of the medical services patients need on a regular basis.

This health care infrastructure would be supported by a national, statewide, and local organizations that would provide funding, support, oversight, and advocacy, so that primary care centers could remain patient centered, community focused, accessible to all, and effective at improving the health of the population.

Primary Care for All presents two mechanisms for funding the nation’s primary care infrastructure, both of which remove primary care funding from existing ineffective and wasteful fee-for-service reimbursement.

Financing health care system reform can succeed best if it is accompanied by focused improvement in primary care delivery and organization. The development of Primary Care for All presents an essential and affordable first step toward an effective and efficient health care delivery system, and sustainable health care reform.

Shannon Brownlee, MS, is a journalist and a visiting fellow in the Department of Bioethics at NIH.
Michael Fine MD is a family physician, community organizer and Clinical Assistant Professor of Family Medicine at Brown University.

The economy is hitting the state’s free and subsidized health insurance program, Commonwealth Care, from 2 angles. First, more state residents affected by the shrinking job market are signing up. Second, the state has less money to spend on this…and hundreds of other programs. As a result, the Health Insurance Connector Authority presented a package yesterday that would save $114 million. The biggest change affects about 17,000 residents who qualify for free health insurance…but who have not combed through their insurance options to pick a plan. They’ve waited for the state place them in one. Now the state will stop doing that. Leslie Kirwan chairs the Health Connector board.

LESLIE KIRWAN: Eligible Commonwealth Care enrollees, need only pick a plan and they will have health insurance. In the scheme of things, and many of the other choices we have to make in the budget, that seems like a reasonable shared sacrifice.

Letting coverage lapse for this group is expected to save about $63-million next year. These residents would still be eligible for Commonwealth Care and could enroll or re-enroll when they go to a clinic or hospital. Kirwan, who is also Secretary for Administration and Finance, argues that this change is less disruptive because it does not affect eligibility and can easily be reversed as revenues improve.

KIRWAN: As opposed to taking large segments of the population out of the program, which we hoped to avoid and which we’re now struggling to cope with.

That struggle is over 28,000 legal immigrants the House and Senate proposed cutting from Commonwealth Care to save money. Read more…