The Massachusetts health reform was a distinct departure from previous reform strategies. The two most significant pieces of the approach were a set of insurance market reforms and a set of public financing reforms.

The insurance reforms were designed to make coverage easier to obtain and portable from job to job. The public program reforms redirected subsidies paid to safety net hospitals for treating the uninsured into subsidies to help the low-income uninsured buy health insurance.

The results of the first two years of implementation of both these key elements have been broadly positive.

Approximately 350,000 Massachusetts residents, or roughly half the state’s estimated uninsured, have obtained coverage, and there has been a significant decline in taxpayer subsidized “free care”.

While, to date, both of these key elements have shown progress, challenges remain as their implementation continues.

It is significant that of the 350,000 newly coverage individuals, approximately 110,000 have obtained coverage on their own without any public subsidy. However, only 18,000 have obtained coverage through the newly created Connector. Read more…

When Massachusetts passed its new health care law, the plan was hailed as a potential model for the nation. But as we see it in action, it becomes increasingly clear that the plan does not live up to the hype.

* Slightly less than half of Massachusetts’ uninsured population actually complied with the mandate. True, the number of people without health insurance was reduced from 13% of the state’s population to 7%, but when the bill was passed, advocates promised that “all Massachusetts citizens will have health insurance.” Of course health care reform should not be judged solely by whether it achieves universal coverage, but it is fair to judge a plan by its advocates’ criteria.

* Most of those who are signing up are low-income individuals, whose coverage is fully or partially subsidized, proving once again that if you give something away for free people will take it. It certainly appears that it is the expensive and generous Massachusetts subsidies, not the unprecedented individual mandate that is responsible for much of the increased coverage.

* Adverse selection remains a big problem, with the young and healthy failing to comply with the mandate. The state refused to change its community rating laws which drive up the cost of insurance for young, healthy individuals. Not surprisingly, they don’t find this a good deal.

* The program is far exceeding its projected costs, with at least a $128 million budget overrun in its first year. Read more…

As a former state cabinet officer in a big state and as a transplanted Californian who still calls Massachusetts home, I have nothing but admiration for what the Bay State has done in putting together its health reform plan. Some are quick to point out that Massachusetts had a more modest uninsured problem than other states and Federal Medicaid money to play with that many other states don’t have. True enough. The potential loss of $385 million in federal funds can bring remarkable focus. But viewed from a national perspective, Massachusetts has shown that it is possible to break through the ideological and policy logjam between Left and Right that has prevented action on health reform nationally for so many years. Massachusetts did this by assembling a broad-based coalition and putting together a plan that gave all sides at least something they could like about our fragmented health system; it built on public programs, the employer-based system, and insurance purchased in the non-group market by individuals, and it improved payment levels for providers.

In many ways, Massachusetts’ weaknesses come from its strengths. The plan does not satisfy purists on the Left or the Right, precisely because it represents an amalgam approach; it is not single payer nor is it a pure market approach. The plan does not cover everyone because pragmatic decisions were made to overcome implementation obstacles rather than let the plan blow up. Two percent of the state’s total population and approximately 20 percent of the uninsured population has been exempted from the mandate to have insurance because these people could not afford it.

A few key health policy lessons have also emerged from Massachusetts. Read more…

The state’s health coverage law says companies must make a fair and reasonable contribution to employee health coverage or pay a yearly $295 fine for each worker. The current definition of fair and reasonable is:

1) enrolling at least 25% of full time workers in a company health plan
or
2) offering to pay at least 33% of the premium for full time workers

The Patrick administration is proposing to change the “or” to “and.” Health and Human Services Secretary JudyAnn Bigby says the change will bring in closer to the $45 million the employer fine was expected to raise when the law passed.

“We’ve only collected between 6 and 7 million dollars and we think the way the rule was implemented didn’t take into account that this was not a reasonable test.”

Associated Industries of Massachusetts President Rick Lord counters with three arguments.

“There really was no analysis to support that ($45 million) number. This was never supposed to be a significant component of financing for health reform; and employers in Massachusetts are already paying their fair share.”

Retailers Association of Massachusetts President Jon Hurst says the change would backfire. Read more…

Editorial note: This week we will hear from national health policy experts who are tracking the Massachusetts health coverage law.

As the country prepares for a new administration that will have a unique opportunity to improve access to health care for all Americans, it’s important for the nation to look closely at the effects of the historic Massachusetts health reform law. It’s clear that the law has already had a major impact, halving the uninsured rate among working-age adults in the state in its first year. A Commonwealth Fund-supported evaluation published in Health Affairs also found that low-income adults reported better access to care, such as more preventive care visits, and lower out-of-pocket spending on health care. Additionally, the new public coverage did not lead to “crowd out,” where employers drop coverage or employees opt for public coverage over employer coverage.

A national approach to universal coverage should incorporate the core elements of the Massachusetts plan. Like the Massachusetts law, the Building Blocks framework my Fund colleagues and I described in another recent Health Affairs article calls for expanding public coverage while maintaining the current role of employer-sponsored insurance. It also includes a new national insurance connector—similar to the subsidized Commonwealth Care and unsubsidized Commonwealth Choice —that would provide a selection of insurance plans for the uninsured, small businesses and the self-employed. We also recommend implementing an insurance mandate, as Massachusetts has done.

As highlighted in a recent issue of the Commonwealth Fund newsletter States in Action, moving forward, Massachusetts will need to consider how to best to enforce its mandate and ensure coverage is affordable. To that end, it will be critical to ensure the plan has sustainable financing.

Karen Davis, President, The Commonwealth Fund

Over the objections of major business groups, Governor Patrick signed a health care cost control bill today that includes public reporting of gifts or payments of $50 or more. The business community supports the rest of the new law, but says that the reporting requirement and gift rules the state will establish, will put the medical community in Massachusetts at a competitive disadvantage. Governor Patrick says in a press release that the concerns of the pharma and medical device manufacturers will be addressed when the state sets rules about how the law will work.

“I am confident the Department of Public Health, pursuant to its regulatory authority, will safeguard the confidentiality of companies’ trade secrets and proprietary information and protect against roadblocks to medical research or the education of health care providers.”

Health Care for All and other consumer groups are celebrating the Governor’s decision. More tomorrow….

It could be at least two more weeks before the state and federal government reach a new agreement on a multi-billion dollar Medicaid Waiver. The current three year deal, which expired July first, was extended until Monday. The state has asked for another two weeks to hash out the complicated cost-sharing plan.

In King Richard III, the Duke of Gloucester says “it is the winter of our discontent”, but for some of us, we could say that this has been the summer of our discontent — everyone has been treading water, waiting to see how the national election turns out, watching oil prices bounce up and down, with the stock market following right along, the housing and banking sectors in distress, and the almost daily question — “are we in recession — yet?” And the answer generally being — “not quite, but close” — not exactly reassuring words.

All of this, of course, makes life more difficult for our sector, health care, particularly in Massachusetts where health care is a cost driver and simultaneously an economic generator and a job creator. Growth, in economic discourse, is usually viewed as a good thing, but it is also a matter of concern to payers, purchasers, and budget-watchers, since we all know that if you build it, people will come, and there goes the budget.

So what does all this have to do with health reform? As Jon Kingsdale noted in his recent monthly report, the Connector’s need for additional revenue this year has come as a consequence of its success in enrolling more uninsureds than planned for. My agency has had its budget problems too, as utilization climbs. So volume counts, and so does price — and supply does drive demand. We know all this, but what we don’t know or don’t have agreement on, is what to do about it. All of us who work in state government are on notice that our FY09 budgets are subject to change, — down, not up, so health care costs are of concern to all of us — public and private sectors alike. Read more…

Editor’s note: For opposing views, read this letter to Governor Patrick from House lawmakers or this letter from Wyeth Pharmaceuticals.

The Massachusetts Legislature recently adopted a comprehensive proposal to improve the quality of health care and to contain the rapidly increasing cost of care. Both goals are essential to sustaining the Commonwealth’s landmark health care reform law and keeping high quality health care affordable to all our residents.

Some of the most exciting and meaningful reforms in the bill – promoting reform and efficiency in the health care system, improving access to health care services, enhancing transparency of health care costs and quality, and encouraging the adoption of health information technology – will dramatically improve the care provided in Massachusetts as we expand access to care for all of our residents. However, one provision of the bill – regulating drug marketing practices – has generated heated, but not well-informed, discussions with representatives of the bio-pharma industry.

Those of us who helped to draft the Massachusetts Health Care Quality Improvement and Cost Containment legislation firmly believe that marketing practices of pharmaceutical and medical device manufacturers are an important factor in driving up health care costs without, necessarily improving the quality of care that’s delivered to patients here, and across the country. There are numerous books, articles, and academic research papers that clearly demonstrate the pervasive, even corrupting, influence of such marketing practices as gifts, travel, honoraria, and other valuable incentives offered by industry to those with the state licensed power to prescribe medication. Legislators are not alone in our sincere concern. Read more…

A Commonwealth Fund survey of 1,004 Americans finds that most want to overhaul or reconstruct the nation’s health care system. Here’s a summary:

Eight of 10 respondents agreed that the health system needs either fundamental change or complete rebuilding. Adults’ health care experiences underscore the need to organize care systems to ensure timely access, better coordination, and better flow of information among doctors and patients. There is also a need to simplify health insurance administration. There was broad agreement among survey respondents that wider use of health information systems and greater care coordination could improve patient care. The majority of adults say it is very important for the 2008 presidential candidates to seek reforms to address health care quality, access, and costs.

The Fund has an accompanying report on reorganizing the way health care is delivered.