Dolores L. Mitchell, Executive Director, Group Insurance Commission of the Commonwealth of Massachusetts, says health care costs continue to rise while the tough decisions on payment reform have yet to be made:

Some two months ago, the Special Commission on Payment Reform concluded its deliberations with a unanimous vote recommending a shift from a payment system based primarily on fee-for-service to one based primarily on global payments.

What was remarkable about the recommendation was that it was unanimous and that the decision to abandon fee-for-service was reached with virtually no dissenting voices.

Some skeptics have pointed out that many of the tough decisions have yet to be made, and this is certainly true. But the important point to remember and emphasize is that a group of people including physicians, hospital leaders, legislators, the administration, health plans (otherwise known as insurance companies) and economists made a public declaration that the current system in which doctors and hospitals are paid for each unit of service they provide has outlived its usefulness. This system has also become a barrier to the growing need for coordination of care, as well as acting as an accelerant to the growth of costs that are crowding out funding for other social needs. Read more…

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…

While many of us in the health care “space”, as some like to call it, are waiting for Congress and its five committees that are involved in health care legislation to come up with something we can respond to, we, in the Commonwealth are plowing along, trying to come to grips with our own great piece of unfinished health care reform business, namely cost control and its first cousin, payment reform. Proceedings of the Cost Containment committee have been concentrating on the many options that have been espoused over the years to contain costs, and the committee is now poised to begin making some choices among them. At the same time, the Payment Reform Commission, moving with admirable speed, has already selected one path, from among four or five possibilities, and is beginning to tackle the issues of how to get from here to there. The road taken is global payments as the preferred substitute for fee for service. So now begins the hard part — definitions of what level of aggregation is intended for those global payments, who will get them, who will distribute them, and how will they be allocated. We also have to figure out how to include self insured purchasers in the new system, and how long a transition can be tolerated, given the economic circumstances of 2009, 2010, and who knows how much longer. Read more…

A few blogs ago, I stuck my neck out, and predicted that we could and would pass a national health care reform bill by the end of the year. Well, what a difference a stimulus package makes! The progress of the bill through the Congress has resuscitated a host of old scare tactics that I thought had been discredited and discarded during this first decade of the 21st Century. But here they are again. Comparative effectiveness research? How can a rational person be against trying to find out what works, without harming patients, and what works as well as, if not better than what’s already on the market? Have these alarm sounders missed all the highly publicized examples of drugs that turned out to have serious negative effects once they were distributed country-wide? And what about the dozens of drugs that are “new” heavily advertised, and expensive, but are really just “me – too” drugs that delay the roll out of generic substitutions. Read more…

Writing about what’s next in health care and health insurance during the next five or six months is going to be pretty much of a crap-shoot (If that’s a swear — sorry — I think of it as a gambling term) and most of us would be wise, not to do it. Who knows how bad the economy will get, or what help we will get from the next Congress and the next administration — or what that help will accomplish. And who knows what will come of the various health reform packages — Senator Baucus’s, Senator Kennedy’s or Secretary Daschle’s. And of course, in the great parlor game of musical chairs, we’re all waiting to see who gets on the short lists for CMS, for AHRQ, for CDC, for FDA, for Surgeon General — who from Massachusetts will get the nod — which incumbents get to stay — and who goes — what will it all mean for us in the Commonwealth as we watch the state’s revenues sink, along with those of our sister states. Misery doesn’t particularly enjoy this kind of company.

Although we can see the future only dimly, the one thing we know is that things will be different in Washington — and in Boston. So, with absolutely no inside knowledge to guide me — my predictions are the following:

- There will be a stimulus package, and it will pass quickly.
- There will be a health reform bill and it will pass during the first year of the new Congress. Read more…

The budget ax fell, last week, on the Quality and Cost Council — the other half of Ch. 58’s Health Care Reform Law. Charged with creating a web-site to provide consumers with comparative price and quality information, and led by a board consisting of an admixture of state health care agency heads, A and F, the Inspector General, representatives of the Attorney General and the Auditor, prominent providers, payers health policy experts, and buyers, and the Council has taken significant steps toward addressing its mandate. This, despite a bare bones budget and a minimalist staff, augmented by staff from DHCFP and others. The complex claims data operation authorized by Ch. 58 did take place, a web site developer did put together the web site structure, consultants have vetted the statistical booby traps involved in presenting data, and a contractor has been selected to map out how the Council and the Commonwealth might use all these data to begin to deal with ever-rising costs. And then came the budget crunch. Making cuts in program is never easy and critics can say that cost cutting strategies should have been the last thing cut, not the first. And for the staff who are losing their jobs, it is probably cold comfort that they go, with the respect and gratitude of the council members who know how hard they have worked and how far they have come. But the need to do something about rising costs does not go away with their departure, Read more…

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…

The other day I was asked, why I was taking a somewhat conservative approach to suggestions that eligibility for CommCare be expanded now. The excellent analysis presented to the Connector Authority (I am pleased to add that it was written by Bob Carey, a former GIC policy director) raised a number of questions about the fiscal implications of expansion, and the decision was made that the issue demanded further investigation and analysis — a sensible decision, in my view.

I’ve been giving this matter a lot of thought and it seems to me to present even larger policy issues. The distribution of state tax dollars across state sponsored programs, as we know, has changed over the years of health care inflation coupled with health insurance coverage expansion, be it Medicaid, state employees, or the creation of CommCare itself. And, while it is a matter of justifiable pride that we have covered so many of our fellow citizens with insurance that they didn’t have before, we need to keep our eyes on the other state needs that are competing for those dollars. The Governor’s new and exciting education program is just one example. As the administrator of one of the Commonwealth’s health care agencies — the GIC — and as a board member of another — the Connector Authority — I know I can support and feel very good about the health services that we can provide with every additional dollar we are given. But as a citizen of this Commonwealth, standing back and looking at all of the needs of our Commonwealth and its people, it is the obligation of every one of us to look long and hard at every expansion proposal that comes before us to make sure that it is well thought out, carefully costed out, and every alternative to saving dollars seriously considered. Read more…

Transparency — the new moral imperative — has much to recommend it, but it is not a panacea. Giving people information about health care providers, or health plans, may or may not make them better “consumers” — whether the information is about price or quality. Indeed, a lot has been written in recent months about the unanticipated effects of price transparency — not all of it giving aid and comfort to those purchasers who are hoping that providing information will turn their enrollees into frugal, money saving consumers. “It ain’t necessarily so” — and not just because the information is complex and not easily transmitted. We have the price-placebo effect, — I personally like to call it, “The Neiman Marcus effect” — if the price tag is big enough, it has to be better — or, more academically put by behavioral economists, people tend to value stability more than change, and fear loss more than appreciate the potential benefits of change.

The point of these cautionary notes is not to criticize or denigrate transparency. Read more…

For those of you who believe in that old French maxim, “the more things change, the more they remain the same”, some of the recent medical news stories may have shaken your cynicism. Whether it was Paul Levy at the Beth Israel Deaconess, publicly committing his institution to specific goals and promising to achieve safety measures putting that institution in the highest 2% ranking in the country, or Blue Cross announcing its willingness to stop paying fee-for-service claims to any providers who are willing to take a capitated fee (along with the chance of earning a hefty performance bonus), it sounds as though someone out there may be ready to do more than talk about the need for action to change our current dysfunctional medical system. I’m not surprised that Paul Levy is out front on tackling a tough issue, and I have confidence that he’ll get the BID to do everything in its power to make it happen. He has already solicited and received the public support of his board — a good first step — and announced his goals in public, a good second step. The next question is — which other hospitals will take up the challenge and join him? As for Blue Cross, although I’ve had my differences with them from time to time, they are state’s largest health plan, and they are in a unique position to start what Don Berwick refers to as the necessary “decoupling” of volume from value, and I wish them well on this offer. Again, the question is — which providers will take up the challenge and sign on? To use two old American maxims, “I’m not betting the family farm” on this, but I do “have my fingers crossed.”

Dolores L. Mitchell, Executive Director of the Group Insurance Commission of the Commonwealth of Massachusetts, the agency that provides life, health, disability and dental and vision services to over 285,000 State employees, retirees and their dependents.