THERE IS NO RELIEF IN SITE FOR WHAT MANY BUSINESSES AND CONSUMERS CALL THEIR TOP CONCERN…THE RISING COST OF HEALTH INSURANCE. THE STATE’S LARGEST HEALTH INSURERS SAY PREMIUMS WILL RISE
The state’s dominant insurer, Blue Cross Blue Shield is telling employers to expect a 9-13% increase. They say high health care costs are fueled by a variety of factors including more aging patients who seek more care that is more sophisticated and more expensive. But repeated premium increases mean that many employers have seen the cost of providing health insurance almost double in the last 7 or 8 years. Senior Vice President for Sales and Client Relationships, Tim O’Brien says Blue Cross is trying to help employers with options for less expensive insurance.
“Employers view affordability of health care as their no. one priority and we view it as our no. one priority to work on a multi-phased approach to offset the rate of increased health care costs, but it’s formidable.”
Tufts Health Plan claims it will have the smallest, on average, increases at 8%. Brian Pagliaro, senior VP for Sales and Client Services, says Tufts has the best record for helping members manage care.
“Tufts Health plan has the lowest medical and prescription drug trend in the market and therefore we’re able to provide a lower premium to our members. “
Fallon Community Health Plan declined comment on it’s expected premium increases…saying talks with employers about their rates are on-going. Harvard Pilgrim projects a 6-12% rise in the price of health insurance. Senior VP of Sales and marketing, Vincent Capozzi says the key factor is what Harvard spends to contract with large, merged hospital and physician groups.
In the year since enacting Massachusetts’ comprehensive plan for expansion of health insurance coverage to all citizens of the Commonwealth (what many mistakenly promote as health reform) two seminal reports have been issued this summer providing recommendations to address the persistent racial and ethnic disparities in the health and health care of its citizens of color. One, issued in July, the Pay-for-Performance to Reduce Racial and Ethnic Disparities in Health Care in the Massachusetts Medicaid Program, contains recommendations from the Massachusetts Medicaid Disparities Policy Roundtable, convened and supported by the Massachusetts Medicaid Policy Institute and the Metrowest Community Health Care Foundation seeks to establish Medicaid rates based on performance on certain measures of quality, including reducing racial and ethnic disparities in health care. The second, issued earlier this month, is the long awaited final report of the legislative Commission to End Racial and Ethnic Health Disparities, chaired by Senator Dianne Wilkerson and Representative Peter Koutoujian with its own set of recommendations emanating from a three year process that began before discussions of health reform in the state.
Chapter 58, the Massachusetts health reform legislation introduced the notion of “pay-for-performance” (P4P) by tying increases in hospital reimbursement rates to measures of quality performance. Unlike other pay for performance programs implemented in other states, Massachusetts for its Medicaid program, given the populations covered in the state, is including measures for the reduction of racial and ethnic health care disparities, hoping that such efforts will contribute to reducing disparities in the health of those covered by MassHealth. They are not only testing the pay for performance model but also testing the relationship between health care disparities and health disparities; looking at the process of health care delivery as a determinant of health outcomes. The Chronic Disease Collaboratives of the Health Resources and Services Administration working with community health centers to better manage chronic disease care among their patient populations may be a model with some important lessons learned.
The concern with P4P in MassHealth is that it has the potential of possibly making disparities in health worse for this population. Read more…
So far — and rightly so — measuring the state’s health reform success has been largely focused on reaching and enrolling Massachusetts’ estimated 400,000 uninsured residents. However, there is another group that will have an impact on many of the goals set forth by the landmark legislation: the newly insured.
As we approach the October 1 deadline that will end the free care pool as we know it, it becomes increasingly important that the newly insured understand the “ins and outs” of using health insurance – in particular the concept and use of a health care home, the importance of maintaining their insurance coverage and, in some cases, the financial consequences of using an emergency room for non-emergent care.
Community health centers are playing a major role in signing residents up for the state’s new Commonwealth Care plans. As a result, we have taken some time this summer to assess the intake and enrollment experiences of health centers during this important phase of implementation. Initial findings seem to indicate that some of the newly insured have questions about how health insurance works, are not familiar with the importance and goals of primary care and are confused about when to go to the emergency room and when to see their doctor.
This groundbreaking experiment in health care reform is a huge transition for individuals who historically have been excluded from the insurance market. Read more…
As regular readers know, the topics of cost control and affordability of health insurance are starting to dominate the CommonHealth blog. This focus on costs makes sense: as many contributors have noted, the coverage expansions in Chapter 58 will not be sustainable if we don’t find ways to control rising medical spending. If we’re going to get serious about moderating costs, we’re going to need to ask—and answer—some very hard and contentious questions. Here are a few of my top candidates:
#1: What about regulation and supply side planning? Health care costs are higher in the US than any other country for many reasons: administrative complexity, fragmented financing, lots of uninsured people, and the prevalence of profit-making organizations in many sectors. But at the top of the list are higher prices—for drugs, devices, physician services, hospital days–you name the service—along with the lack of effective mechanisms for controlling supply. Our “romance with competition” over the past 20 years has made this problem even more acute, by fostering growing market power within much consolidated provider and insurance systems. While our newest infatuation with quality improvement has much to commend it—who could seriously oppose eliminating overuse and misuse, for example–there’s no evidence that improving quality will do much to stem health care inflation—at least not unless it’s coupled with some limits on prices and supply. Virtually every country that’s been more successful than the US at controlling health care costs—and that would be most other countries—has price regulation and central planning as central features of its health care system.
#2: How can we bring back budgets? And while we’re learning from other countries, we need to take a hard look at health care budgets—another cost control technique that’s used in just about every other health care system. It was no coincidence that the last time we made any progress on moderating medical costs was during the era of capitation—one form of health care budgeting. Read more…
The issuance of proposed regulations governing the Health Safety Net Trust Fund represents another critical step in implementation of the state’s landmark health reform law. As with the affordability schedule and minimum creditable coverage standards, the Health Safety Net regulations represent a balance among competing needs and interests.
In our view, the Division of Health Care Finance and Policy has struck just the right balance – providing a legitimate safety net for low-income individuals who do not have access to affordable coverage on the one hand, while not creating a disincentive for individuals to purchase health insurance on the other.
Reforming the Uncompensated Care Pool, the precursor to the Safety Net Trust Fund, was a driving force behind health reform – moving the uninsured from “free care” into health insurance with its broader range of services and better medical care. The regulations help achieve this goal by promoting enrollment in affordable health insurance coverage in a way that is consistent with MassHealth and Commonwealth Care.
The funding of health reform critically depends on reducing the cost of free care so those dollars can be used to subsidize coverage for lower-income individuals.
The transfer of funds from uncompensated care to an insurance-based system is also an absolute precondition to negotiating a new federal waiver and securing all-important federal dollars that are essential to the success of health reform.
Michael J. Widmer
President
Massachusetts Taxpayers Foundation
Cape Cod business owners are still struggling to learn their responsibilities under the new health care law that went into effect on July 1, 2007, while Cape businesses were preparing for their busy summer months when thousands of tourists would be visiting their restaurants, motels, inns, shops, recreation spots, art galleries and museums. These business owners were hiring and training workers, ordering supplies, finishing maintenance and renovation projects and trying to understand the new health insurance law. They wanted to do the right thing by their employees and by the law, but they were confused because of new terminology, new regulations, and the delays on the State’s part in finalizing information and making it available to the public. Questions that business owners were, and still are, asking range from, “Am I subject to the law?” to “How do I determine full-time equivalent employees with my six full-time staffers, many seasonal workers, out-of-state workers, college students, high school students and retirees who work part-time year round, and some J-1 and H2B immigrant workers.?” Other questions are:
. If I close my business for 5 months, am I responsible for insurance payments during the months that I am closed?
. If I offer a group health insurance plan to my employees, can an employee go to the Commonwealth Connector looking for a less expensive plan? Read more…
There has been much focus in the health care reform debate on who pays for care – essentially, what is the optimal balance between government, employers, and individuals. But so far, we have paid little attention to how we pay for care.
Recent actions by state and federal government may shift the conversation. Medicare just announced that it will no longer pay for treatment of certain preventable hospital errors, injuries and infections. On October 1, MassHealth will launch a $74 million pay for performance program targeting health disparities and encouraging improvement in several specific areas of care. The state’s Group Insurance Commission is already using payment to reward cost-effective care.
These moves are part of a quiet revolution in health care, a movement toward using the payment system to influence the quality, safety, and effectiveness of care. As Lisa McGiffert, Consumers Union policy analyst, told the New York Times: “Medicare is using its clout to improve care and keep its patients safe.”
At Blue Cross, we are already seeing how changing the payment structure can support quality and safety improvements. Read more…
About every six months, our local media carry some version of this story about Massachusetts healthcare costs, and explain that the problem is we have too many doctors, and that no one is doing enough to control costs. Just this last month, the Commonhealth blog reiterated this claim via a guest contributor as did reports on healthcare from the New England Healthcare Institute and the Boston Foundation.
The label is both facile and inaccurate. Two of the “costs” that are included in the numbers that appear so inflated are the costs of doing research and the costs of caring for out-of-state patients, both activities that bring with them substantial revenue. By any rational criteria these are not a burden but among the benefits of having some of the best hospitals in the country. To label ours as the world’s costliest health care you must calculate that the extraordinary level of funding that Massachusetts receives from the National Institutes of Health is a health care cost and that together with the care we provide to out-of-state and international patients – who often pay the highest rates for that care – these funds are a drain on the Commonwealth’s economy. They plainly aren’t. Life sciences research and out-of-state and international patient care are key elements of the health care economic engine that sustains this Commonwealth in rough economic times and employs 14 percent of our workforce.
Insurance premiums are a better measure of healthcare costs than hospital expenditures. Read more…
Former Governor Mitt Romney’s top adviser on domestic policy makes the case for Romney’s health care record here. Former Missouri Senator Jim Talent says Romney is the “innovative” candidate and the only one who has “done something” on health care reform. The post and comments spell out the dilemna Romney faces with conservatives who are wary of the individual mandate. As a political issue…is Romney’s health care record helping or hurting the candidate?
(OK readers – here’s a view of the law no one else has packaged for you. Are there surprises? What stands out? Martha)
If You Build It, Will They Come?
• Which health plan has the most Commonwealth Care members?
Answer: Boston Medical Center HealthNet Plan
• What percent of the people who have enrolled in Commonwealth Care so far are required to pay a premium?
Answer: 17%
• What percent of the estimated number of uninsured people with incomes less the poverty level have enrolled in Commonwealth Care?
Answer: Based on most recent public data I can find, enrolled = 64,000; eligible = ~57,000: 112%
• How much funding for health reform outreach and enrollment is included in the FY08 budget?
Answer: $3.5 million explicitly in the budget (and much more if you count what will be spent for MassHealth outreach and by the Connector).
• How many other states have passed comprehensive health coverage reform laws since Chapter 58 was enacted in April 2006?
Answer: One–Vermont
Shared Responsibility
• How much in total Medicaid rate increases are providers scheduled to receive in fiscal years 2007-2009 under the provisions of Chapter 58?
Answer: $540 million (plus community health centers received increases in the annual budgets for FY07 and FY08)
• How much money does that state estimate it will collect in FY 2007 from employers that did not make a “fair and reasonable” contribution to health insurance?
Answer: $0
• If every adult who was uninsured in Massachusetts when Chapter 58 was enacted were to become insured year-round, at a monthly premium of $175 per month, approximately how much additional revenue would health insurers receive annually?
Answer: Somewhere between $688 million and $1.1 billion
Low: Using the 2006 state survey: 328,000 adults $175 times 12 = $688.8 million
High: Using 2006 CDC estimate: 524,000 times $175 times 12 = $1.1 billion Read more…