Altman To Chair Board Of New Cost-Control Health Policy Commission

Stuart Altman of Brandeis University

The Patrick administration just announced that Prof. Stuart Altman, a Brandeis economist who advised President Nixon on health policy, will chair the Health Policy Commission, the new board overseeing the sweeping cost-control law.

The board will monitor progress toward keeping health care spending in line with state economic growth overall. Altman says he’s hopeful the state can meet this goal.

WBUR’s Martha Bebinger asked Altman a few questions about the post.

Bebinger: How do you see this new role?

Altman: Massachusetts has put together the best kind of balanced program that I could think of in the country, where it is relying at one level on the many changes that are going on in the private sector, both at the delivery system and at the payment system. But it also has put together an overarching public assessment of what’s going on to make sure that it works, and it actually brings cost down without hurting quality.

If the changes that are currently in place don’t do that, this commission is responsible for giving an early warning sign that the system is not working and makes recommendations on how to make the system work. So we don’t have direct regulatory power to force the system to change, but we do have a monitoring role to make sure that it is working and if it’s not, first to direct the delivery system and the payers to change, and if that doesn’t work, we could also recommend back to the Legislature that the state needs more authority.

What is your sense going in about whether things will proceed without too much intervention, or whether you will need to be directive?

One level I’m pretty optimistic. The level of changes that are occurring in the state are really very substantial. And I would say that both at the delivery system and including our very big delivery systems they really are seriously trying to restructure their care delivery and really trying to live within a tighter budget than they had in the past. And the payers too, Blue Cross, and Tufts, and Harvard also, are tightening up the reins and not giving big increases.

So I go into this feeling reasonably optimistic, but I’ve been around a long time and I’ve seen other years and other decades when after a while the cost containment mechanisms in place began to fall apart, and did fall apart. So while I’m going into this quite optimistic, I also have a degree of skepticism so I’m going to be watching it pretty closely.

You have seen interest in reining in costs wax and wane. How do you rank this period?

If we look back in history we had very strong government regulation environment in the early and middle 1970s, actually put forward by a Republican administration. It looked like the government was going to be a very strong regulator of growing health care spending.  We had wage and price controls from ’71 to ’74.  We created health planning agencies all over the country. We had tough certificate of need laws. And then as we move through the 70s we gradually dismantled it all and by the end of the 70s it was all gone.

Then we had a very brief period when the providers had what we called a “voluntary effort” to control their spending. All that fell apart and we had the biggest growth in our history in the 1980s. Then we introduced managed care, which was extremely effective in slowing the growth in spending, but it was perceived by the patients — and the beneficiaries and the press — as a system that was holding back access and quality and we had this strong backlash and we essentially destroyed managed care by the end of the ‘90s. So I’ve seen both the private sector fall apart and the government sector fall apart.

Now, I think what’s being done is smarter, and not quite as aggressive as the ‘90s, which I think is a good thing. If you’re too aggressive you’re going to get a lot of backlash too quickly. So I give it a higher probability of success than either the ‘90s or the ‘70s, and I am hopeful.

What’s your main worry?

The main worry is two:

1) Is that ultimately the constraints begin to hurt certain segments of the provider community, [and they] begin to put out statements to the patients that they’re being denied needed care and we begin to develop a new backlash. So I think patients need to be part of this equation and we need to be balancing their needs with the people that pay the bills, so that’s one side.

2) Massachusetts can only be so far ahead of the rest of the country and if inflation really begins to rear its head again in the rest of the country, the likelihood that Massachusetts would be able to really have a significantly lower level of spending growth is hard to hold on to. I’m going to be very conscious of trying to minimize any backlash and I’ll also be watching what’s going on in the rest of the country.

For patients, are things moving along now in terms of communicating clearly with patients as you think they should?

No. I don’t think patients really understand these limited networks and tiered networks and ACOs and the like. I think there needs to be an expanded consumer education program. Also I think we need to do it smarter and I think tiered networks that are a better model than limited networks, in the sense that you don’t force a patient into any one delivery system, you just make it more expensive if they jump out of one to the other, which continues to gives them the choice. What happened in the ‘90s is that often they had no choice, they had to be at a particular network and they couldn’t jump out.

So I think we’ve learned something in the last 20 years. If we’re going to ask organizations to have responsibility for total spending of a particular patient population, [the patients] need to know they’re in a particular group, but they also need to have the flexibility if for some reason they want to get out. I think we need to better educate our consumers and patients, but I think we’ve also learned from the ‘90s, so I’m hopeful.

(Martha thanks Terri Ogan for transcribing.)

(Altman spoke earlier this year to CommonHealth about cost-containment efforts in Massachusetts.)

And here’s the news release from the Patrick administration:

Continuing to make progress implementing the Commonwealth’s first-in-the-nation health care cost containment law, Governor Deval Patrick today appointed Dr. Stuart Altman to chair the Board of the Health Policy Commission (HPC). The new agency is charged with monitoring the reform of Massachusetts health care delivery and payment systems in order to reduce costs and improve quality.

“Dr. Altman’s experience in matters of health policy in both the public and private sectors is deep and unparalleled and will be an asset to the Commonwealth in our work to drive health care costs down,” said Governor Patrick. “I thank him for his willingness to serve.”

Dr. Altman, a Professor of National Health Policy at Brandeis University, is an economist with nearly five decades of experience working on health policy issues across the public and private sectors.

“I fully appreciate the importance of this appointment and the confidence the governor has in my ability to help guide this important effort,” said Dr. Altman. “Addressing unsustainable health care cost growth is a critically important challenge for Massachusetts. I look forward to working with the full board of the Health Policy Commission, as well as all interested stakeholders, to achieve this goal while maintaining access to high quality health care for all residents of the Commonwealth.”
Dr. Altman has served on numerous government advisory boards at both the federal and state level. He is a member of The Institute of Medicine, a member of the Board of Tufts-New England Medical Center in Boston and Chair of the Health Industry Forum at Brandeis University. Dr. Altman is a recognized leader in the health care field; in 2006 Health Affairs and Modern Healthcare named him among the 30 most influential people in health policy over the previous 30 years. Dr. Altman holds M.A. and Ph.D. degrees in economics from the University of California, Los Angeles.

The Health Policy Commission (HPC) is established by the historic health care cost containment legislation that the Governor signed on August 6 as the successor agency to the Health Care Quality and Cost Council.  The HPC is governed by an 11-person board, as appointed by the Governor, the Attorney General and the State Auditor, with input from an advisory council.

The HPC sets the broad policy direction for the Commonwealth as supported by data and information collected by the Center for Health Information and Analysis.  The HPC is charged with establishing a statewide goal for reducing the growth in health care costs and monitoring progress through annual cost trends hearings.  The HPC also works with the health care industry to foster innovative health care delivery and payment models to help achieve this goal. The first full board meeting of the Health Policy Commission will take place on November 16, 2012.

Last month, the Administration launched a website dedicated to the cost containment law, with detailed information about the law and notices of upcoming events related to the law’s implementation. The site serves as a clearinghouse for information on efforts to control health care costs, creating a transparent home for updates on progress, and other information important to consumers throughout the Commonwealth.

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