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.

Now that the “what” and “why” questions have been answered, the details that need addressing are the “where,” “how,” and “who” questions.

How can the various individual practicing physicians, labs, health plans, and hospitals get themselves organized into what are to be called “accountable care organizations” and who will take the lead in organizing them? How will it be determined who gets how much of the global payments, and who will determine what the global payment is? Who should sit on the board that will determine the goals and monitor the progress toward implementation, and who should select them?

When can all this get started, and how will it happen — through a legislative mandate or through administrative action? Who will do the necessary analytic work? And who will decide what services are inside the global payment tent, and which are outside? And a tough one: if patients can go outside the ACO at will, how can the group be held accountable? And cutting across all the questions is the particularly tough one in these fiscal times: where will the money come from to fund the implementation management?

These are not easy questions and the answers will not be easy, or quickly resolved. But every day of delay means that costs go up and reversing the curve of the growth in cost, or at least bending its angle, becomes harder and harder. Fortunately, the legislative Committee on Health Care Financing has already scheduled a hearing to get things rolling.

It is imperative to keep the momentum going and not to let the defenders of the status quo gain momentum in the interest of keeping things as they are. We’ve all been watching that happening in Washington with a fair amount of trepidation. The difference here is that while the Commission’s recommendation is not yet embedded in law and contract, it carries with it a rational solution to two enormous problems — improving health care quality, and lowering costs so that the access issue we so bravely addressed three years ago in Ch. 58, can survive and continue to be a source of pride and satisfaction to the Commonwealth

(The Group Insurance Commission of the Commonwealth of Massachusetts is the agency that provides life, health, disability, dental and vision services to 300,000 state employees, retirees and their dependents.)

The current system has had 15 years or more since the early 90’s, when rates actually went down, to prove that a less managed system could provide quality care to all Americans at affordable costs. Perhaps it is time to try a different approach.

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 300,000 State employees, retirees and their dependents.

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 300,000 State employees, retirees and their dependents.

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 300,000 State employees, retirees and their dependents.

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.
- There will be a tax increase for some, and tax relief for others, as promised by then Candidate Obama.
- The pressure on Massachusetts health care providers to lower their costs will gain momentum, but it will be an uphill struggle. Redistribution of income is always the highest hurdle of all, but it will have to come.
- The excruciatingly slow adoption of Information Technology in medicine will accelerate as it becomes an expected standard of care.
- We won’t equal the Japanese, but the gap between the CEO pay and hourly workers pay will begin to narrow — ever so slightly — and it’s about time.
- Health plans and purchasers will continue to push providers to do better by measuring their performance and reporting the outcomes, as the most effective way to improve the quality of medical care.

Does this sound Pollyannaish? Well, maybe, but despite the grim economic news there is a breath of fresh air as we change administrations in Washington. With change, there is hope. With hope anything is possible. Tune in a year from now and see how many of my predictions come true.

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 300,000 State employees, retirees and their dependents.

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.

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.

A lot of good people are working very hard on a number of fronts to deal with aspects of reform — encouraging transparency, funding disease management and wellness initiatives, looking for ways to simplify administrative procedures — every one of them useful contributions to reform. But the basic values, structures, and delivery systems of health care in this country are basically pretty much as they have been for decades. We used to be able to afford its inefficiencies, but those days are over.

Basic reform in this country has almost always occurred as a result of cataclysmic events — depression or war — or when the middle class itself is threatened. We are perhaps closer to the latter scenario than we would like. The Massachusetts Health Reform Acts of 2006 and 2008 called for shared responsibility. It may be that 2009 will call upon all sectors — hospitals, doctors, medical schools, businesses, and patients to dig deeper and accept the necessity of systemic change. We may not have time for gradualism.

So summertime is almost over and “the livin hasn’t been easy”. Maybe the cool, crisp days of fall will bring more clarity and the energy we need to deal with “insolvable” problems. In the meantime, my recommendation to all is to prepare yourselves for some rough weather in the months ahead.

P.S. I promise never to use a weather metaphor again!

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.

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.

State government is supposed to serve all the people and balancing their needs is a very tough job. I have worked on a governor’s staff, and I know how tough that balancing act is. Those of us who serve in one sector and those whose advocacy efforts are about one sector must not forget that they are also part of the whole. It’s hard to do, but it must be done, especially in times of economic uncertainty. Ever-increasing dollars spent on health care will not be available for other program needs. We need to keep those other needs in mind as we move into a new fiscal year.

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.

The point of these cautionary notes is not to criticize or denigrate transparency. Both are long overdue in a sector of our economy that has gone for far too long without sufficient scrutiny. As health care is now consuming 16% of our national GDP, scrutiny becomes not just appropriate, but an absolute necessity. But the most likely users of information about the cost and quality of health care may not be its ultimate consumers, but rather, its providers — the doctors and hospitals whose work is being analyzed and reported on, often to the discomfort of those being evaluated. The real benefit of transparency will come from the pressure it puts on providers to do better — to more rigorous self-examination, knowing that external examination is out there, and to even the most prestigious institutions, to remember that the world is watching, and no longer taking it for granted that their quality is as good as it gets, or its prices justified. Transparency may cause some angst, but its ultimate benefits outweigh its psychological costs. So, turn on those lights, and let’s take a closer look at what we’re getting from our health care system.

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.

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.