Eric H. Schultz, president and CEO of Fallon Community Health Plan, says Massachusetts must consider a “minimum” health insurance plan with fewer state-mandated benefits or risk an exodus of employers:

As our nation gets closer to its health care reform finish line, it’s critical to examine the potential impact on Massachusetts residents, and on our own health care reform, which we all worked hard to implement. National health care reform should allow us to preserve what’s working well, while at the same time provide opportunities for improvement.

And there is a lot that works well in Massachusetts:

– We’ve achieved nearly universal health insurance coverage.

– Residents have access to a wide variety of health plan options through the Health Connector.

– We have in place many of the health insurance consumer protections being debated nationally, such as guaranteeing access to coverage regardless of health status and ensuring that consumers can renew their coverage regardless of medical history.

– Our health plans are consistently ranked among the top in the country, in terms of clinical quality and member satisfaction.

–On average, 90 cents of every premium dollar goes directly to pay for the cost of medical care our members receive, as compared to a much lower average number for the rest of the country.

Yet this last point also alludes to what’s not working well in Massachusetts: the cost of care. We now have the highest health care costs in the country, and our medical cost trends only fortify this unenviable position.

National reform financing strategies include taxes on high-cost “Cadillac” health insurance plans, as well as other taxes on health insurance premiums. The negative impact on Massachusetts becomes clear given our health insurance premiums are higher because our health care costs are higher.

One area to consider is the Massachusetts definition of minimum creditable coverage (MCC), as compared to definitions contained within the various national reform bills. Those bills define MCC in broad terms to give each state flexibility in designing their specific benefits. Equally important, the bills set MCC actuarial requirements at a much lower level than we currently use in Massachusetts. Read more…

Eric H. Schultz, president and CEO of Fallon Community Health Plan, says restructuring the delivery system will improve quality and lower costs in Medicare:

A new analysis shows that Medicare Advantage is doing exactly what its critics claim it’s not – controlling costs and ensuring quality of care through lower rates of avoidable hospitalizations.

The analysis, authored by Gerard Anderson, PhD, Professor and Director, Center for Hospital Finance and Management, Johns Hopkins University, and commissioned by the Alliance of Community Health Plans (ACHP) offers important, objective evidence in the current debate over funding for the Medicare Advantage program. The analysis compares traditional fee-for-service Medicare to Medicare Advantage in key categories, specifically hospital readmissions, preventable hospital admissions and emergency department visits.

Based on data reported by most of the health plans that are members of ACHP, including Fallon Community Health Plan, Medicare Advantage outperformed traditional Medicare in all categories:

–On average, the hospital readmission rate for the ACHP Medicare Advantage plans was 27 percent lower than the national average for traditional Medicare (FCHP’s rate was 18 percent lower). Hospital readmissions cost Medicare $17.4 billion in 2004. Read more…

Last month, I got a call from a Fallon Community Health Plan member who wanted to speak with the CEO to express his dissatisfaction with the health insurance plan he purchased. Our conversation really brought home the importance of educating consumers in our increasingly complex health care system.

The caller was upset over having to pay a $1,800 MRI bill. He thought FCHP should have covered and paid for the test. In fact, the MRI was covered, but according to the plan he purchased — a $2,000 high-deductible plan — the service was subject to the deductible, which had not yet been met. So, the $1,800 was going to have to come out of his pocket. He was shocked, frustrated and angry.

Our conversation revealed that his decision to purchase a high-deductible plan was based, of course, on his desire to save money on the monthly premium. Many of us do this with our car insurance. We opt for a higher deductible because it decreases the premium. We gamble on not being involved in a car accident (and therefore not having to pay the deductible) so we can have a little more money in our pocket each month. But a gamble it is.

I posed a question to him: When he first decided to purchase a high-deductible plan, what was his contingency plan for covering the $2,000 deductible? Read more…

A colleague recently attended a conference for clinical and non-clinical health care managers on the topic of “high performing” medical groups. Because of our history with and belief in high performing provider networks, I was intrigued. When I heard more, I was stunned.

To us, the definition of a high performing medical group is one that delivers high quality, coordinated care in a cost efficient manner. When done right, a limited network comprised of high performing provider groups and hospitals provides significant value to patients and meets our policy goal in Massachusetts of holding down medical cost trends. It’s a model that makes sense — in any economy.

Interestingly, this conference had a very different definition of high performance. Some highlights:

- Speakers defined high performance as “maximizing revenue” and placed significant emphasis on the value of billing ancillary services, especially lab and radiology. Read more…

There’s serious discussion in Washington around national health care reform. That’s a good thing because our current system produces inadequate clinical outcomes at an unsustainable cost. And, while the devil is most definitely in the details when it comes to health care reform, there’s growing consensus and a commitment among key stakeholders to take meaningful steps toward a solution.

There also is serious discussion around reducing funding to Medicare health plans (known collectively as the Medicare Advantage program) as a strategy for funding some of the national health care reform measures. For Massachusetts Medicare beneficiaries, that’s a bad thing.

As in so many things, Massachusetts was a pioneer in the Medicare program when it was among the first states to offer a health plan option to seniors. Today, Medicare Advantage is popular in the Commonwealth. Approximately 190,000 seniors (about 20% of all residents on Medicare) are enrolled in the program. There are good reasons for this popularity. These plans are high quality and low cost. And, the Massachusetts Medicare Advantage plans are ranked among the top health plans in the country by the National Committee for Quality Assurance for clinical quality and customer satisfaction.

According to statistics from the Henry J. Kaiser Family Foundation, most Medicare Advantage enrollees are lower income seniors (with incomes reported between $10,000 and $30,000). Read more…

Capitalist. Socialist. Impatient. Curious. Dissatisfied. Forward-thinking. Compassionate. Innovative. Competitive. Extremist. Centrist. Risk tolerant. Risk adverse. Does one or some of these terms describe an aspect of your central core? For many of us in the Massachusetts health care system — whether it be care delivery, financing or policy — these personal and professional attributes may serve as the fuel driving change; and in many cases change for the better.

The Massachusetts health care system, which has undergone and continues to experience change, is admired by the country and the world. Of course, here at home, it’s easy to find blogs, essays, conferences, editorials, and other sources that focus on what’s broken instead of what’s working. And, yes, I’ve been a contributor to that debate. Part of it may be that we’re cranky New Englanders. But I also think we have an intolerance of mediocrity and a passion for pushing the policy envelope — attributes that have propelled our health care system forward.

For many of us, this is the time of year to look back at our achievements over the prior 12 months and assess our performance relative to the plans we made when the year was young. It’s an important exercise for many reasons, the most important of which may be that we get to take time out from fixing, creating and improving to celebrate our successes. It’s something that we don’t do often enough in this competitive culture. Read more…

Increases in health insurance premiums have become an annual story and despite our awareness of what drives them (rising medical costs largely beyond the control of health plans), the intensity of the debate surrounding their cause continues to increase.

But is there a way to reduce some of the sting of rising premiums? Through a combination of very simple strategies with larger lessons for health care, Fallon Community Health Plan has been able to hold down and, in some cases, reduce 2009 premiums for our Medicare members — despite rising health care costs.

We offer coverage to Medicare beneficiaries through 12 different Medicare Advantage plans, each with slightly modified benefits to best fit individual health status and financial risk tolerances. For 2009, we reduced premiums for four of those plans, from 10 to 42 percent. The others are remaining level.

The real story here is how we were able to do it. Regular readers of Commonhealth know that I’m perhaps the state’s biggest advocate for limited, high-performing networks. And they are the primary reason we’ve been able to reduce or hold premiums flat for our Medicare Advantage members. Read more…

The state’s health care regulators deserve credit for tackling the problem of the explosive expansion of teaching hospitals into local communities.

Unbridled expansion hurts community hospitals and raises health care costs, not just by creating duplicative services but also by replacing services once delivered by local providers. When that happens, those services often increase in cost by 20 to 30 percent – without a corresponding improvement in the quality of care. When a teaching hospital moves to the suburbs, its rates do too.

As part of health care reform, the Legislature created a sensible framework for establishing new health insurance mandates, which are health care services the state requires health plans to provide. Before any new mandate can be put in place, state regulators must perform an analysis to calculate and assess its effect on health care costs.

A similar test should be applied to proposed hospital expansions. Before approving any expansion, regulators should ask:

How is quality of care improved?
How is access improved?
How will the cost of care change? Read more…

Like many consumer-driven organizations, we do market research periodically to be sure we’re listening to consumers in a way that produces reliable and actionable information. But a recent consumer survey done by Fallon Community Health Plan provides some data that might help inform ongoing policy deliberations about the implementation of health care reform.

The bottom line: Consumers believe in choice.

They want the ability to choose in making health insurance decisions. They want lifestyle choices to be factored into health insurance costs. And they want more information so they can make informed choices.

The scientific survey, done by RKM Research and Communications, polled 605 consumers between the ages of 18 and 64 across FCHP’s Massachusetts service area from April 24 to May 7. It has a margin of error of plus or minus 4 percent.

Here are some highlights: Read more…

In a recent post, Dr. David Himmelstein provides a critique of cost-control ideas being discussed in Massachusetts and elsewhere, and closes with his argument in favor of a single public financing program. Read more…