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.

How does the Quality and Cost Council go about providing consumers with information that they can use to make intelligent decisions about their health care choices? The answer is, With Great Difficulty.

It is unbelievably hard to turn data into information, and getting the data in the first place isn’t all that simple.

Let’s say you want to tell consumers which hospitals are the least expensive. First, you need to find out what hospitals charge — and for what services. Then, it turns out that different purchasers pay different prices. Sticker prices aren’t real because hospitals have different arrangements with different payers, and these arrangements can include not just discounts and daily charges, but also extra payments for special services or meeting certain contractual goals. So even if you collect all the claims with all the charges for all the payers, no mean task just by itself — what numbers do you choose to display? The average charge? The average amount actually paid? The average amount paid by the patient? The insured patient? The uninsured patient? Medicare? The Group Insurance Commission? With bonuses, without?

And which of those numbers does the consumer really want to know? Read more…

The argument that it’s acceptable to exclude prescription drugs because some people will buy a plan without drugs is like allowing plans to exclude coverage for mental health services — if you don’t need it today and think you probably won’t need it tomorrow, why make you pay for it. You could do just that, and some people would buy a plan without mental health coverage — but we don’t allow it because it puts vulnerable people at risk and because it is contrary to the whole concept of insurance. Everybody pays a little more so that everyone is protected when and if they need help. We can try to keep costs down by requiring the use of generics; by excluding some “me-too” expensive drugs; by adjusting co-pays to encourage desirable utilization patterns, but we should not be encouraging people to be underinsured or, more importantly, to put themselves or their families in harm’s way by not taking the drugs necessary for prevention of serious health outcomes, for delaying treatment of current ailments, or by buying at full retail cost, the undiscounted drugs they absolutely must take. Remember what serious consequences can follow even an untreated strep throat in a child. That’s when being penny-wise can lead to life-long medical harm — that’s pound foolishness.

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’m writing this blog the day of the third game in the Red Sox-Yankee three game series, and while hope springs eternal, we already know the bad news about games one and two. All of which makes me feel a little skeptical about other recent news coming from New York. It appears possible that even health care reform isn’t faring as well in the Empire State as it is in Massachusetts. New York’s Attorney General has taken on the issue of physician tiering and seems to be suggesting that the goal of transparency should not extend to ranking doctors, despite the evidence that there is significant variance among doctors treating the same conditions in terms of both quality and cost has been known for years. We can hope that as the NY AG digs deeper into the facts he can be convinced that consumers are better served by more, not less information. We at the GIC don’t have a horse in this particular race – we don’t contract with any of the three health plans under scrutiny in New York. A spokesman for A.G. Cuomo’s office has said that they are not opposed to physician profiling in principle, but…and it’s the “but” that makes me nervous. We hope that their efforts will result in recommendations that will make the three companies’ products better and more useful to consumers and providers. One way or another, it’s time to look more critically at what we are getting for our health care dollars and identifying which providers serve us better with both skill and efficiency. In the last analysis, giving patients information is the best consumer protection – and the best road to lasting health care reform.

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.

Readers of the New York Times picked up their Tuesday paper to read that at least three governors are struggling with the clash between their desire to cover their uninsured citizens and the ever rising cost of health care. Pennsylvania’s Ed Rendell is learning, as the article says – “that to contain costs is eventually to pluck dollars from someone’s pocket. His plan has incited protest from hospitals, doctors, insurers and small businesses, each of them finding something to detest”. Governor Schwarzenegger, the author notes, says that making insurance mandatory will have to include “stringent reductions in health care spending”. But before we in Massachusetts can assert that we have solved the problems that our fellow states have failed to solve, a word of caution is perhaps in order. We are an expensive medical community to begin with, and we are far from immune from the cost pressures that affect every community. Our groundbreaking health reform rests on responsibility shared by taxpayers, individual citizens, and business owners large and small. But the shared responsibility has to include providers as well, if health care is to be affordable over time. The Quality and Cost Council is just beginning to address these issues, first by getting cost information to the public. My own agency, the GIC, is measuring cost effectiveness of specialists. There are other efforts by the federal government and others to focus on cost as well as quality and access. But if Massachusetts is to keep on leading the pack, we’re going to have to keep our eye on the cost issue and be willing to do what it takes to put on the brakes. Slowing down may be the only way to get to where we’re going.

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.

A couple of blogs ago I said I wanted to talk about rising healthcare costs and the danger they pose to the ultimate success of Ch. 58, and promised to come back to the subject soon. So, here I am, with a few words about the dangers of ignoring the cost monster. Read more…

Federal tax laws may be among the most boring topics in the world – except to tax lawyers, tax delinquents, tax dodgers, and CFOs – but this is one case where the smart consumer and the savvy employer have interests in common and both will be well served if they take advantage of one provision of the new Health Care Reform Act. The law provides that employers must allow employees to buy their health coverage with pre-tax payroll deductions. These are sometimes called cafeteria plans, or “Section 125″ plans, because they are governed by Section 125 of the Federal Tax Code.

The whole point is that the federal government actually helps both you and your employer. Your employer saves FICA, State, and Federal Income Taxes and, for all but very small companies, escapes a penalty called a “free rider” surcharge. You save money on your personal income taxes, because this provision allows you to lower the amount of your taxable income by using pre-tax dollars to pay your health care premiums.

One example: on a typical $70,000 income, you could save $1,140 in taxes by funneling your health care premium through your employer’s Section 125 Plan. So what should you do to make sure you get this tax benefit? Read more…

Last Thursday was a very good day for health care reform. The Connector Authority Board met and in an unusually (for Massachusetts) amicable session, resolved three tough issues that have threatened to derail the train moving toward implementation of Ch. 58. The Board voted to loosen the purse strings a bit to help out the people at the lower end of the income scale. They agreed on an affordability schedule that will exempt from the individual mandate, people whose premiums would probably be too high for them to handle, and they agreed to be flexible in granting individual cases of hardship. The advocates congratulated the board members for listening and responding. The board members praised the staff for their prodigious and successful work. The Chair thanked the board members for their perseverance and patience in achieving a compromise that everyone could accept. It was a rare Massachusetts moment and 99% of the uninsured should be able to get insurance as a result. Read more…

This morning we all heard–and read–the very good news that a real breakthrough has occurred in the drive for affordable health care for all, achieved by the collective efforts of the governor, the Connector staff and Massachusetts” health plans themselves. Read more…