Governor Patrick’s small business legislation is a well-intentioned attempt to encourage business growth in the Commonwealth and provide relief for small businesses from rising health care costs. But one of his prescriptions for relief, cost control, is not a wise course of action.

We recognize how the recession has battered small business. Rising health insurance premiums are a significant part of this. But we believe that simply regulating rates would trigger a wide range of unintended consequences and would not solve the underlying problem.

A better approach for cost containment comes from the Massachusetts Health Care Quality and Cost Council. Its final recommendations would allow the state to meet its goal of containing cost growth in health care because it employs a comprehensive approach to a very complex problem.

The Council’s recommendations include comprehensive payment reform, support of system-wide redesign efforts, widespread adoption and use of health information technology, implementation of evidenced-based health insurance coverage informed by comparative effectiveness research, development of health resource planning capabilities, enactment of malpractice reforms and peer review statutes, implementation of administrative simplification measures, consumer engagement efforts, emphasis on the prevention of illness and the promotion of good health, and increased transparency.

We’re much less than enthusiastic about its support for limited provider networks, because the current science of determining provider value and efficiency is rife with error and results in more harm than good.

The Council studied rate regulation as well and decided it should be considered only as a last resort. Its own subcommittee studied the effect of rate freezes on insurers and providers – the most extreme version of rate control – and concluded it would be disastrous. The Legislature, which created the Council in 2006, should pay serious attention to this conclusion.

A final word about the utilization of health care services, which is high on everyone’s list.

We’re convinced that the practice of defensive medicine is an important factor in rising utilization and costs. National studies have estimated that defensive medicine costs the country billions of dollars. In Massachusetts alone, our own study of defensive medicine conservatively estimated its cost at nearly $1.4 billion. That’s equal to about 5 percent of total health expenditures in our state. We believe the actual cost could easily be double that.

To begin curbing this phenomenon, we support state legislation that would encourage the early disclosure of medical errors and appropriate apology and provide the fair and prompt non-judicial resolution of claims for damages resulting from those errors.

Everyone agrees controlling costs in health care is critical and that the status quo is not sustainable. But blunt-knife approaches to this problem have failed before and will likely fail again, until its complex causes are addressed with an equally sophisticated solution.

Beginning in 1912, when the Progressive Party of Theodore Roosevelt endorses health reform, through 1935 when the first compulsory health insurance bill failed to pass Congress, to 1971 when Richard Nixon backs a plan to require employers to pay for health insurance (Ted Kennedy counters with a single-payer proposal; both plans fail), to the present state of limbo, the graphic offers snapshots of important milestones and NEJM articles that span the years.

For another thoughtful perspective, read Rick Hertzberg in The New Yorker this week on President Obama’s health care summit and why the current bill under consideration, for better or worse, is already bipartisan.

The U.S. House of Representatives took a giant step toward health care reform on November 7 with its passage of H.R. 3962, the Affordable Health Care for America Act. But achieving meaningful health care reform still has a long way to go, and a critical part of that journey includes passing the complimentary bill H.R. 3961, The Medicare Physician Payment Reform Act of 2009. A vote on H.R. 3961 is scheduled this week.

H.R. 3962 contains many provisions that will improve patient access to quality health care. It will cover 96 percent of Americans, invest in public health and quality improvement programs, reduce administrative waste, expand Medicare coverage of prescriptions drugs, create pilot programs for malpractice reform, and underwrite improvements in the primary care workforce. These are goals at the core of health care reform, and physicians vigorously support them.

However, if H.R. 3961 falls by the wayside, or some other payment reform for Medicare doesn’t come about, much of what H.R. 3962 seeks to accomplish will be greatly diminished.

H.R. 3961 will repeal a seriously flawed formula used to set Medicare physician reimbursement rates. The culprit is something called the “sustainable growth rate” formula, introduced in a budget bill passed by Congress in 1997. While it’s a complex formula, the basic idea is that the amount Medicare pays to provide care for an average Medicare patient can’t grow faster than the economy as a whole. When the economy is good, there’s no problem.

But since 2002, the formula has called for cuts in reimbursements to physicians, and for seven years in a row, Congress has stepped in at the last minute to reverse the cuts. But instead of paying for it, it simply moved the cuts to future years. Without some action by lawmakers on Medicare payment rates before the end of the year, physicians in Massachusetts will see a 21 percent reduction in reimbursements beginning January 1, 2010, according to the 2009 Medicare Trustees report. But it gets worse with time: under the SGR, more cuts are scheduled to take effect, reaching 40 percent by 2014.

H.R. 3961 erases the cut, forgives the budget debt, and sets the stage for comprehensive payment reform. Critics are painting this bill as spawning irresponsible new spending, but in fact, it asks Congress to fulfill its 45-year commitment to funding senior health care. There is nothing new about this commitment.

Medicare must be adequately funded to maintain seniors’ access to health care. The percentage of physicians accepting Medicare has been slipping slowly but steadily over the last decade, and it will become dramatically worse if the Medicare physician payment quagmire is not fixed. And with our population aging rapidly, it becomes even more imperative to do so.

The latest proposal to improve our state’s health care reform effort offers no improvement at all. In fact, it’s detrimental to physicians and hospitals – and thus to patients.

This week I testified at a hastily scheduled hearing for Senate Bill 2170, filed on behalf of the Massachusetts Association of Health Plans, which would create a new kind of a health insurance plan, ostensibly to make health insurance more affordable for small business owners.

But it’s actually a cynical attempt by the health insurance industry to focus cost-cutting efforts on the state’s health care providers and away from insurance premiums. Providers who have participated willingly and enthusiastically in all of the state’s health care reform efforts to date deserve better.

Insurers now want to force physicians to participate in a health insurance product totally of their own design and whose reimbursement levels could bankrupt many physician practices.

If we don’t want to participate in these private plans but still want to serve our patients with other insurance, we should be able to do so. This bill would prohibit that. Likewise, it is completely unacceptable to force physicians into accepting a level of reimbursement and prohibit them from balance billing the difference as a condition of professional licensure. Not even Medicare and Medicaid have such a requirement.

Worse, the bill does not hold the insurance industry accountable in any meaningful way for passing along any savings to their customers. In essence, insurers control their costs and have no limits on their premiums and profits. Health plans have been increasing their rates to their customers for the last couple of years. What part of these double-digit annual increases went to cover increased provider costs? In some cases, nothing. You can read more of our objections to this ill-conceived bill here.

We’re not the problem. We’re part of the solution. Physicians overwhelmingly support state health reform by a 10 to 1 margin, and are doing everything in their practices every day to make it work. Even if you froze physician reimbursement rates for many years, the cost problem would not go away. There are many factors at play. The Health Care Quality and Cost Council recognizes that fact with its Roadmap to Cost Containment, as does Governor Patrick, who recently proposed a multi-step plan to address small business health care costs.

I absolutely recognize that small businesses are under a lot of pressure, especially during these difficult times. As a small business owner myself, I feel the same pressures.

But the bill heard by the Legislature this week, Senate 2170, is not the answer. Its simplistic, cynical approach will actually worsen our primary care shortage, reduce patients’ access to care, and alienate the very providers who have to make our health reform effort succeed.

Massachusetts continues to attract attention as a model for the nation in health care reform, and the analysis and commentary, both good and bad, on our experience keeps flowing from a variety of sources.

In a September 30 commentary in The Christian Science Monitor, entitled “Health care in Massachusetts: A warning for America,” Denver physician Paul Hsieh provides a litany of negatives about health reform in the Commonwealth and seeks to dissuade the nation from copying our model in any way, shape or form. Some excerpts:

“Rather that creating a utopia of high-quality affordable healthcare, the result has been the exact opposite – skyrocketing costs, worsened access, and lower quality care…..The Massachusetts plan thus violates the individual’s right to spend his own money according to his best judgment for his own benefit….The Massachusetts plan is also breaking the state budget.”

A study in Health Affairs published October 1, “Employer Coverage from Employees’ Perspective,” provides some good news. It found that “employer-sponsored health insurance coverage has remained strong under health reform in Massachusetts.” The survey found more workers reporting an insurance offer from their employer and more workers taking up that offer in the fall of 2008 that before health reform. “Overall,” the study concluded, “these findings provide evidence of Massachusetts employers’ commitment to providing access to high-quality employer coverage under health reform, despite the beginning of the economic downturn.”

Readers can judge for themselves about the intent and accuracy of those analyses and others on the Massachusetts experience. The fact is we’ve made progress with our health care reform: more residents than ever before are now insured, and many of those are now able to see physicians and get care they’ve been without for far too long. And that is very good news.

Huge issues remain, of course, with cost and quality among those at the top of the list, and we have been forced to deal with those in an unusually tough economic environment. While we’re hard at work addressing those, let’s not forget one of the major lessons learned from our health reform experience: universal coverage doesn’t equate to universal access.

The crisis in access to care, particularly primary care, was once again highlighted by the Massachusetts Medical Society’s 2009 Physician Workforce Study. This eighth annual and latest study showed an ever-more deteriorating condition of primary care. Shortages in primary care physicians appeared for the fourth year in a row (commentators please note that the shortages began before universal health reform was established), and the percentage of primary care practices closed to new patients is the highest it’s ever been as recorded by the Society. Additionally, shortages of obstetricians/gynecologists have appeared for the first time, adding to primary care difficulties, as many women use this specialty for primary care.

While the study did have some good news – five physician specialties were taken off the “short list” –the primary care situation is cause for alarm, for it is primary care that provides patients a gateway to the healthcare system and is the mainstay of preventive care and wellness.

The legislature has recognized the critical nature of the physician workforce and has seen fit to establish several initiatives to bolster the workforce as part of health care reform legislation. Chapter 305 of the Acts of 2008 provides for those initiatives, but budget cuts have delayed implementation and reduced resources available for them. While legislators, industry leaders, policymakers and providers struggle with the immediate challenges of revenue shortfalls, more budget cuts, and resolutions to cost and quality issues, let’s keep in mind the critical aspect of access to care. Ways to improve access to care must be part and parcel of health reform. Our patients are depending on it.

This new payment model would mean a dramatic change in how practices and hospitals organize themselves around patient care. Any business leader who has attempted a change of a similar scope will tell you that the process is slower, more difficult and more costly than initially expected. When you consider that we would be attempting payment reform at the same time that people are still becoming sick or injured, this task becomes even more daunting. It’s like trying to fix an airplane while it’s flying. You have to do this carefully – very carefully.

If physicians sound cautious about proceeding with this transition, it’s with good reason. Like everyone else, we have long memories. We remember past failed experiments, like capitation in the 1990s, which was rushed into implementation without proper safeguards, checks and balances. Under capitation, patients accused doctors of withholding necessary care, while physicians felt they were being saddled with untenable financial risk.

I’m pleased that the commission took these and other concerns quite seriously. This was largely due to the terrific work of the physician and hospital members who sat on the commission, including Dr. Alice Coombs, an officer of my own medical society. I also want to acknowledge the wise comments of the dozens of physicians who attended the commission’s outreach meetings this past winter and spring.

It’s been noted that 20 percent of Massachusetts physicians are already compensated under a kind of global payment system. This is often taken as evidence that the global payment goal is achievable. By the same token, 80 percent of physicians are paid under the current fee-for-service model, and their readiness to move to a new model varies greatly from practice to practice. Their needs cannot be taken lightly.

If payment reform is to succeed, physicians will need lots of time and support to get there. Without such support, we risk failure, and inflicting even more harm to our health care system. Some have called this need for support a complementary strategy, but I believe it is essential to success.

The commission outlined a transition period of about five years. From my standpoint, this is possible, but optimistic. There must be flexibility to make adjustments if reality doesn’t meet expectations. What kind of support to doctors need? Some examples:

Financial: Very few practices have access to the capital required to build the technical and logistical structures required by a global payment model. The federal government is promising substantial subsidies for implementing electronic health records, but that’s at least three years away, and only after the systems are installed and meet “meaningful use” criteria that are still undefined. So, even assuming the federal money is still available in five years, practices need help getting to that point.

Technical: As anyone in an IT department will tell you, any big project will take longer and be costlier and more difficult than expected. This is doubly true when installing an electronic health record system, a young, evolving technology that is the underpinning of a global payment system.

Legal: Our laws and regulations need lots of changes before a global payment model can achieve its promise. Anti-trust laws must be revised. Administrative processes need to be reinvented; most paperwork today is costly and adds little or no value. Malpractice laws must be reformed, in order to discourage the costly, maximalist care that the malpractice system implicitly requires.

Finally, this cannot be accomplished without a similar careful transition for patients. If they fear their care will be compromised by this new system, it will fail in the blink of an eye. Doctors do not want to be gatekeepers again. This was one of the most distasteful outcomes of the capitation era, and we don’t want to return to that scenario. How we get to the point where patients trust this model is a very big challenge.

Time and again, during the commission’s final meeting, its members acknowledged there is a lot of work remaining. They’re right. It’s up to everyone – government, insurers, businesses, providers and patients – to do their part to make this vision become a reality.

Mario Motta, M.D. is President of the Massachusetts Medical Society, the statewide association of physicians with some 22,000 members.

Conducted in collaboration with the Home Care Alliance of Massachusetts, the survey represents one of the few efforts to learn more about the under-examined area of physician use of home health services such as skilled nursing care, physical and occupational therapy, speech-language therapy, and medical social services provided in the home.

The survey report revealed some startling numbers. More than 89 percent of responding physicians said they believe home health services can reduce inpatient hospital admissions, 67 percent said remote monitoring services can reduce costs, 63 percent said they can reduce emergency room visits, and 41 percent stated they can produce overall costs savings. And a stunning 97 percent said the services help them better manage their patients’ care at home.

These findings can be significant in developing future health policy, as our population ages and as our physician workforce – especially primary care and geriatrics – becomes increasingly strained year after year. The number of adults 65 and older will double in the next 20 years, and life expectancies are increasing. Those factors, along with current and projected shortages of primary care and geriatric physicians, are adding intense pressure on health care access and delivery for seniors – as well as future health care costs.

An additional benefit of home health services may be to provide some relief to primary care physicians – a specialty whose use of such services is very high. The survey found that 64 percent of primary care physicians use the services for chronic disease management, and 82 percent use them for hospice and palliative care.

Pat Kelleher, executive director of the Home Care Alliance of Massachusetts, which has some 150 member agencies across the state, sees the potential. “As the state looks at system redesign and cost efficiency,” she says, “the survey indicates that strengthening relationships between physician and home health care would be more promising than reinventing new models of care coordination.”

Currently, the Alliance estimates that more than 150,000 people in the state are served by home care services through Medicare, Medicaid, and private insurance, with 100,000 of those being senior citizens on Medicare. Those figures do not include patients assisted by private funding. The numbers are apt to increase along with ages of our citizens.

Another key benefit to such services is reducing caregiver stress: 73% of responding physicians cited this benefit, an important consideration as more and more family members are pressed into caring for their elders for longer periods of time. According to the National Alliance for Caregiving, an estimated 44 million Americans age 18 and older – about 21% of the population – provide unpaid care to another family member. And recent research and published reports have indicated the economic recession has put further strain on caregivers: as services are cut, caregivers are carrying much more of the financial load for care and in many cases are dividing time between working and caregiving.

The survey did note some negatives. Physicians cited administrative burdens (paperwork), reimbursement issues, and availability of workers as barriers to using the services. But none of these appears to be overwhelming. The barrier of reimburse-ments, for example, can likely be removed by education: of the 71% of physicians who reported that they did not submit charges to Medicare for the services, 64% said they were unaware of the reimbursement. And reducing administrative hassles has been a long-desired goal for any number of activities all throughout the health care system.

As health care costs continue to rise relentlessly, we should take every opportunity to look for reasonable ways to reduce costs and improve care. From the physician’s perspective, home health care services could be one way to ease costs, reduce the pressure on primary care, and maintain quality of care. It’s certainly worth a closer look.

Mario Motta, M.D., a cardiologist in Salem, is President of the
Massachusetts Medical Society.

This presents physicians with a challenge – and opportunity. Physicians are the one key link between patients and a system that currently is in chaos. I believe that physicians can work to ensure a workable health care delivery system for our future.

Physicians have two key imperatives in my view. The first and most obvious is clinical. This is our prime directive, and we must never deviate from the pursuit of the safest and highest quality clinical care.

The second is less obvious, but now especially, no less important. It is, to participate in the efforts — without ever sacrificing our primary clinical role or the pursuit of excellence in quality — to ensure that we have a health care system that is affordable, sustainable and accessible by all.

We’ve seen in Massachusetts that providing universal coverage, while an admirable goal, does not ensure patient access or an adequate work force. It is also commonly understood that universal care is not sustainable if we can’t get our arms around the current explosive growth in health care costs.

While actual payments to physicians are a relatively small percentage of overall health care spending, what physicians recommend for care, treatment, and therapies, influence a significant piece of the health care expenditure pie.

Physicians must understand the components of the cost of the health care, be accountable for utilizing effective treatments and therapies that add value for our patients, and take more responsibility for the total cost to society.

Where can physicians have a positive impact?

It has long been known that tremendous variation exists in care between and among physicians. End-of-life care has been shown to have as much as a four-fold difference among different parts of the country, with no potential to change the outcome, death being the ultimate risk adjuster.

Utilization rates of procedures and high-cost imaging modalities also vary widely across the country, with no obvious difference in outcome or population health. (In fact, with some, the areas with higher utilization have worse outcomes.) We must learn what works and drive care to the most effective, least costly models.

Evidence, where it exists, must inform our care and we must insist that more efforts focus on evaluating the effectiveness of the care we provide for our patients.

Physicians can educate patients about prevention and management of the chronic diseases that many of them will develop. This includes informing them about the financial consequences of performing procedures and tests they “want,” when we do not truly believe those tests or procedures will add value or improve the outcome.

We must collaborate and partner with the other participants of the health care delivery system — our hospitals, allied health professionals, the pharmaceutical and technology industry, nursing homes and others — to provide all the care, but only the care, that our patients require to ensure their health, well-being and optimal productivity throughout the years and stages of their lives.

And we must lobby for a compensation system that adequately funds and supports the time we will be investing in educating, pursuing evidence-based research, and coordinating our patients’ care.

In this way, physicians stand the best chance of ensuring a sustainable health care delivery system that has the physician-patient relationship at its core and will be there for all citizens throughout their lives.

Bruce Auerbach, M.D., Vice President of Sturdy Memorial Hospital in Attleboro, is the immediate past president of the Massachusetts Medical Society.

While unanimous consent about payment reform – even among physicians — is unlikely, I think we can agree on certain key principles.

First, all stakeholders should practice “principled negotiation.” Dr. Elliott Fisher, Director of The Center for Health Policy Research and Professor of Medicine and Community and Family Medicine at Dartmouth Medical School, defines that as a willingness to collaborate and to frame issues in a way that everyone will interpret as valid rather than self-seeking.

I think all participants in the dialogue would also agree that a redesigned payment system could promote better coordination of care, preventive care, and chronic disease management. Shortcomings in these crucial areas adversely affect patient health and drive up costs.

However, those reforms could take several years to show a return on investment. If we compensate providers for better management of patients with diabetes, for example, fewer complications will arise down the road, but we won’t take a huge bite out of the disease burden or health care costs this year or next.

Circulating around payment reform are related issues that could yield shorter-term benefits. Eliminating non-value-added administrative tasks is one area. Another is weeding out counterproductive variability of care. However, medicine is an evolving science, so physicians must have the latitude to develop and refine evidence-based clinical standards in areas where agreement on best practices is lacking. And, where there is broad agreement, physicians should expect to be held accountable for following practices that have a solid evidence base.

Passing meaningful malpractice reform could also have a more immediate impact. Our recent study on defensive medicine – a practice driven by fear of lawsuits – identified cost savings of at least $1.4 billion a year if the liability climate changed. A bill filed by the Medical Society that would make provider statements of regret or apology inadmissible as evidence in legal proceedings would help to change the malpractice climate.

Physicians encourage the commission to move with all deliberate speed – quickly but carefully, but we also caution against a one-size-fits-all solution. The law of unintended consequences will raise its harmful head if hasty, inflexible changes to the payment system are made. For vetting purposes, the Medical Society favors a series of high-intensity pilot projects with different models, such as the advanced medical home programs under development throughout New England.

Physicians and the Medical Society remain committed to helping the commission and the Commonwealth arrive at solutions that will improve patient care, preserve the physician-patient relationship, and halt the spiraling costs of health care.

Bruce Auerbach, M.D. is President of the Massachusetts Medical Society

The American College of Emergency Physicians (ACEP) last week issued its National Report Card on the State of Emergency Medicine, and listed Massachusetts as ‘first in the nation for its support of emergency patients.”

The report, a comprehensive analysis of the support that states provide for patients needing emergency care, which also includes recommendations to overcome weaknesses, was the second issued by ACEP. Massachusetts ranked second in the organization’s first analysis in 2006.

The move from second place to first is significant, because the 2008 report contained more than twice the measures of the previous report, analyzing 116 measures in five categories. Besides the overall number one ranking with a grade of B, the state also ranked first in the individual category of Public Health and Injury Prevention, with a grade of A.

Here’s a rundown of the five categories and our state’s 2008 overall rankings and grades in each: Access to Emergency Care (3rd in the nation, grade B); Quality & Patient Safety Environment (6th, A); Medical Liability Environment (33rd, D); Public Health & Injury Prevention (1st, A); Disaster Preparedness (19th, B).

ACEP cited many areas of strength in Massachusetts: the low rate of uninsured thanks to health care reform and efforts to end ambulance diversion; quality control and improvement systems in place or under development, such as a statewide trauma registry; a system of care for stroke; measures addressing childhood immunization, fatal unintentional injuries, and traffic fatalities; and low rates of obesity, infant mortality, and smoking among adults.

In Disaster Preparedness, a category analyzed for the first time in the 2008 Report Card, Massachusetts gained positive scores for planning, coordination and tracking systems, burn treatment capacity, and surveillance, as well as for its enrollment of providers in the Emergency System for Advanced Registration of Volunteer Health Professionals program.

It is gratifying to be cited for excellence in so many areas, and the state can and should be rightly proud of its achievement. As an emergency physician, I take some sense of pride in this as well.

But Massachusetts has its shortcomings, to be sure, and the ACEP report pinpointed “significant opportunities for improvement,” the most critical of which is medical liability, an area that has an enormous and pervasive influence on our health care system.

The effect of medical liability on the practice of medicine was recently highlighted in the findings of a Massachusetts Medical Society physician survey on defensive medicine. That survey of physicians across the state found that the practice of defensive medicine – ordering tests and procedures out of the fear of being sued – is widespread and adds a minimum of $1.4 billion to the cost of health care in the state.

But the specter of medical liability has other consequences, as ACEP noted. It affects the availability of on-call specialists to take what are generally high-risk cases in emergency departments. Emergency physicians have reported difficulties in getting on-call services from specialists, in part, because they’re reluctant to provide services that entail greater risks of liability. Such a situation can have serious consequences for patient care: If a patient is in an automobile accident or has a stroke, for example, and the emergency department has difficulty in finding a surgeon or neurologist on call, care may be delayed by precious minutes or hours.

Liability also affects the state’s ability to prepare for disasters. Should a pandemic or major natural disaster occur, the medical community would need to supplement the number of internists, pulmonologists, emergency physicians and others with physicians from other specialties. Asking them to work outside their specialty and under altered standards of care with inadequate staff and supplies – conditions that would exist in a major medical emergency — exposes them to liability.

Currently the state has no liability protection for physicians and health care providers who may be called to work under such conditions. A proposed bill, which would protect physicians and other health care professionals from civil suits when they volunteer or are called upon to assist during a health emergency, has yet to pass the legislature.

ACEP’s recognition of our many strengths in emergency care is rewarding. But they have also identified the challenges we face, most notably the need for medical liability reform.

Enacting such reform will improve our emergency care and disaster preparedness, yes, but it will also have benefits throughout our health care system — for cost control, quality of care, and access to care.

We must heed the warning: “Failure to take action in this area,” said ACEP, “may result in decreased quality and access to care for those presenting in the emergency department.” And elsewhere, I would add. And that, certainly, is not characteristic of a state leading the nation in health care.

Bruce Auerbach, M.D., is president of the Massachusetts Medical Society