CommonHealth | health reform 2012

Is This Chelmsford Doctor A Model For The Nation?

Carey Goldberg — Mon, 17 Dec 2012 11:28:29 +0000

Do you think Dr. Damian Folch, a primary care doctor in Chelmsford, is a model for the nation? You can vote on that here at The Los Angeles Times.

Oh, wait, you want to know how he might be a model? Well, he definitely has my vote when it comes to practicing “Lifestyle Medicine,” tackling his patients’ unhealthy lifestyles and getting them to exercise more. (Check out that story from earlier this year here.) But now The Los Angeles Times features Dr. Folch in “A shift in how care is paid for.” It’s an excellent explanatory piece about the shift away from “fee for service” medicine — paying doctors for each bit of care — and toward “global payments” that pay doctors for a patient’s overall care — and rewards them for keeping the patient healthier and costs lower. That shift is happening more systematically here in Massachusetts than anywhere else, the piece says.

It begins:

CHELMSFORD, Mass. — It’s hard work being one of Dr. Damian Folch’s diabetic patients.

If a lab test shows high cholesterol, Folch is quick to call or email. No patient can leave the office without scheduling an annual eye exam, a key preventive test. A missed exam or an appointment leads to another call.

“We are a real pain in their necks,” joked Folch, a primary care physician in suburban Boston. “We track them down.”

That kind of attention has always been good medicine. For Folch, 59, it’s now good business. He is among thousands of physicians in Massachusetts whose pay depends on how their patients fare, not just on how many times they see them. If patients stay healthy and avoid costly medical care, he gets more money.

This simple shift in how healthcare is paid for — long seen as key to taming costs — has been occurring in pockets of the country. But nowhere is it happening more systematically than in Massachusetts, the state that blazed a trail in 2006 by guaranteeing its residents health insurance. Now Massachusetts, a model for President Obama’s 2010 national healthcare law, may offer another template for national leaders looking to control health spending.

“There have been few greater periods of change in American medical history … and this is the epicenter,” said Dr. Kevin Tabb, a former chief medical officer at Stanford Hospital and Clinics in Northern California who now heads Beth Israel Deaconess Medical Center, one of Boston’s leading hospitals. “It is striking how different Massachusetts is from the rest of the nation.”

Read the full story, then let us know how you voted….

Are We Lowering Health Costs Or Just Shifting Them To Consumers?

Martha Bebinger — Mon, 04 Jun 2012 11:48:43 +0000

“You guys on Beacon Hill back off, the market is working.” That’s the message, more or less, from most hospitals and some business leaders to the House and Senate — particularly to the House, which takes up its health care cost bill tomorrow.

The evidence of market success? Hospitals are agreeing to contracts with lower rates of increase and insurance premiums are rising at their lowest rate in five years. A few employers are actually reporting a cut in premiums.

Why are premiums down and why are hospitals able to take a lower increase than in recent years? I haven’t seen much firm evidence that answers this question. But the latest report from the state’s Division of Health Care Finance and Policy has some important analysis on the premiums question.

Take a look at the far right column on this chart and note the premium increase in 2010 when “adjusted for benefits.” If you put back all the costs that have shifted to members (higher co-pays, deductibles, co-insurance, etc.), premiums in 2010 would be rising at almost the same rate they have for the last decade or so. In healthcare-speak, this is called “benefit buydown.” The market is producing lower premiums, but it is because patients are paying more health care costs on their own.

When I contacted the Division to see if I was reading the chart correctly, they sent a statement with a more nuanced view:

The data that the Division has collected indicates that benefit buydown is a likely contributor to the recent decrease in premiums. Other contributors include a decreasing trend in medical claims expenditures, reflecting lower utilization (likely related to the recent recession).

I called a few people to get their reaction.

“Changes in the marketplace in Massachusetts are far more fundamental and far-reaching than the report suggests,” says Michael Widmer, president of the Massachusetts Taxpayers Foundation.

“As costs continue to go up, employers are looking for ways to moderate the premium,” says Eric Linzer, senior vice president at the Massachusetts Association of Health Plans. “One of the few levers they have is to look at products that increase cost sharing. This will encourage members to think about the cost of care. If you want real meaningful long term relief you have to do something about underlying health care costs.”

The DHCFP report is meant to help frame the health care costs hearings that begin this morning at Bunker Hill Community College. I expect we’ll hear a lot more about whether the market is actually working to control health care spending, or whether we are just pushing more payments to consumers.

Revised House Health Costs Bill Is Out

Martha Bebinger — Wed, 30 May 2012 15:42:12 +0000

This is an updated version of the story. For more on the latest House bill and comparisons with the Senate version, click on the audio bar on the right.

On Beacon Hill, the House has made few changes to a health care cost control bill despite intense pressure from hospitals and some business leaders.

When the House released a draft of the bill earlier this month, critics said it would put the state’s golden goose — its health care system — at risk. They objected to the health care spending target and to a penalty that expensive hospitals would have to pay if they can’t prove they have higher quality. Rep. Steve Walsh said the spending target and that penalty are still in the bill.

“It’s a disingenuous comment to suggest that asking people to show their quality will kill the golden goose,” said Walsh, the House point-person on the health costs bill. “We have the best systems in the world, I think they’ll continue to be the best but as President Reagan said, ‘Trust but verify.’”

The House makes one significant revision in the bill. The new entity that would set guidelines and monitor compliance with required changes would be within the Executive Office of Health and Human Services. But it would still be independent, as is the Group Insurance Commission.

Walsh won praise for his efforts to craft reasonable solutions from the Greater Boston Interfaith Organization and the state’s largest physician group, Atrius Health.

“We appreciate that the House leaders have demonstrated their continued willingness to listen to providers and other stakeholders in crafting this bill,” said Gene Lindsey, president and CEO at Atrius. “We think that the revised bill will move Massachusetts healthcare in the right direction. Progress occurs when people are willing to listen to one another and try to respond to concerns. I think that’s been the earmark of this process so far.”

But the Massachusetts Hospital Association released a statement that highlights ongoing concerns about the House bill.

“MHA appreciates the willingness of Chairman Walsh and House leadership to listen to the concerns of the hospital community. This version of the legislation retains some important provisions supported by the hospital community and incorporates some important revisions, but we continue to hold major concerns about the House bill.
These concerns include:
• The creation of an enlarged state agency funded by providers and the separate imposition of millions of dollars in new taxes on providers – both seemingly in contradiction to the goal of reducing costs on the healthcare system;
• The lack of broad stakeholder representation on the new state oversight agency when those same stakeholders are responsible for carrying out healthcare reform efforts in the state;
• Extensive new and complex regulation of the healthcare system; and
• The establishment of a target for healthcare spending that is too steep and too fast to be reached without risking harm to the healthcare system and the economy.
To be successful, we believe that any reform proposal that’s enacted must continue to advance the substantial progress toward reform that is already being achieved, must embody a balanced partnership between government and healthcare stakeholders, must address the systemic challenges created by significant underpayment from government programs, and must strengthen both the healthcare system and our economy. With those principles in mind, we look forward to continuing our policy discussions with the House.”

Amendments to the bill are due by the end of the day on Friday. Debate is likely next Wednesday.

You can read the revised bill, released from House Ways and Means this morning, in its entirety, below:

Breaking: Mass. Senate Passes Historic Health Care Cost-Cutting Bill

Rachel Zimmerman — Fri, 18 May 2012 00:47:06 +0000

5/18 Update: WBUR’s Martha Bebinger has a feature report on the bill’s passage.

Original post: Here’s the full, unedited press release:

Senate Approves First-In-Nation Payment Reform Bill

BOSTON – Crunching through 265 amendments during two full days of public debate, the Senate on Thursday capped a framework of nation-leading health care reforms with landmark cost-control legislation that will save the Commonwealth $150 billion in the next 15 years while improving the quality of care and increasing the transparency and accountability of the state’s entire health care system. The bill passed 35-2.

Health spending is projected to double from 2009 to 2020, outpacing both inflation and growth in the overall economy. Massachusetts residents, businesses, and state and local government continue to struggle with increasing premiums and other health care cost sharing.

“The most important goal of this legislation is to reduce the cost of health care while providing access and quality outcomes,” Senate President Therese Murray (D-Plymouth) said. “Massachusetts spends 15 percent more per person on health care than the rest of the nation and 40 percent of our state budget is spent on health care. This bill will reel in health care costs, without harming our number one industry or patient care, and remove a major roadblock to long-term job growth and essential investments in education and transportation.”

“The Senate today took bold action to address one of the most serious threats to our economic recovery and strength, and did so in a thoughtful and deliberate manner,” said Sen. Richard T. Moore (D-Uxbridge), lead sponsor of the bill. “This proposal will result in billions of dollars in savings for consumers and small businesses across the Commonwealth, and it will ensure that patients receive the highest quality of care which they expect and deserve. The Senate recognizes the importance of our innovation economy, and sought to pursue reforms in a collaborative manner with those stakeholders responsible for implementation. This legislation completely alters the landscape of our deliver system, and does so with a desire to seek the greatest value at the most reasonable cost for the residents of the Commonwealth.”

The approved bill, for the first time in the nation, establishes a statewide health care cost growth goal for the health care industry equal to the projected growth of the state’s gross state product (GSP) plus .5 percent from 2012 to 2015 and equal to the state’s GSP beginning in 2016.

This change will result in an estimated $150 billion in savings over the next 15 years which will be passed on to businesses, municipalities and residents of the Commonwealth who are struggling with increasing premiums and other health care costs.

In an effort to carefully balance the need to transform the health care industry without harming the number one employment sector in Massachusetts, the bill supports health care professionals in developing innovative payment and care delivery models and establishes tools to help providers meet the targets in the bill through market-based solutions.

The bill also requires the state’s Medicaid program, the state’s employee health care program and all other state-funded health care programs to transition to new health care payment methodologies by 2014. These payment models incentivize the delivery of high-quality, coordinated, efficient and effective health care.

To support the development of “best practices” for care delivery and payment reform models, the legislation establishes a certification process for health care provider systems dedicated to cost growth reduction, quality improvement and patient protection. These “Beacon ACOs” will receive a contracting preference in state-funded health care programs.

Additionally, the bill also establishes independent oversight of the health care industry by reorganizing the existing Division of Health Care Finance and Policy to become an independent state agency and serve as the designated health care data collection, dissemination and analysis agency of the Commonwealth.

To aid consumers in making health care purchasing decisions based on comparative cost, the bill requires health care payers to disclose up-front, through a toll-free number or a website, the total cost sharing a member will be liable for in receiving a specific service from a specific provider.

Current trends indicate the cost from preventable forms of chronic disease will reach $62 billion by the year 2023 which must be addressed in order to meet the long-term health care cost growth goals. The bill includes several wellness initiatives including $100 million over the next five years in community-based prevention, public health and wellness efforts, expanding an existing wellness incentive program for small businesses to provide a subsidy of up to 15 percent of premium costs and requiring the Department of Public Health to develop a “model” guide for wellness programs for businesses.

The Health Care Quality and Cost Containment bill of 2008 established Massachusetts as a national leader in the statewide adoption of electronic medical records. The bill passed today builds upon that legislation by dedicating $100 million in the next five years to accelerate and facilitate the ongoing statewide adoption of the interoperable electronic health records by the year 2015. It also establishes a Health Care Workforce Transformation Fund to invest in the training, education and skill development programs necessary to help workers succeed and flourish in the health care system of the future.

In addition, to reduce unnecessary litigation and malpractice claims costs, the bill creates a 180-day cooling off period while both sides try to negotiate a settlement, and it allows for providers to offer an apology to the patient.

The bill also does the following:

Expands the role of physician assistants and nurse practitioners to act as primary care providers in order to expand access to cost-effective care;

Expands an existing workforce loan forgiveness program to include behavior and mental health providers;
Requires the development of standard prior authorization forms, which would be available electronically, so that providers would use only one form for all payers;

Streamlines data reporting requirement by designating a single agency as the secure data repository for all health care information reported to and collected by the state;

Charges the Attorney General to monitor trends in the health care market including consolidation in the provider market in order to protect patient access and quality; and,

Develops a process to track price variation among different health care providers over time and establishes a Special Commission to determine and quantify the acceptable and unacceptable factors contributing to price variation among providers.

The bill will now go to the House of Representatives for further action.

Since passing the omnibus Health Care Reform Act of 2006, used as the model for national health care reform, the Senate has led reforms in 2008 enhancing primary care access and e-health initiatives and in 2010 helping individuals and small businesses reduce the costs of health insurance plans.

Patrick: Use Anti-Trust Laws To Fix High Hospital Prices

Martha Bebinger — Thu, 17 May 2012 14:07:05 +0000

WBUR’s Martha Bebinger reports:

I’ve been waiting to hear from Governor Patrick on one of the most controversial health care cost control issues on Beacon Hill: what to do about hospitals that charge three, four or five times more for an MRI (and hundreds of other services) with little or no difference in quality.

Two reports from Attorney General Martha Coakley and at least two from the Governor’s administration (the latest here) say that inflated prices based on the market clout of major teaching hospitals are a major factor driving health care costs in Massachusetts.

Now we have some insight into the Governor’s position on this dicey problem. During a Greater Boston Chamber of Commerce breakfast Tuesday, the Governor was asked whether he wants a provision in the final health care costs bills from the House and Senate that would deal with what’s often called “price disparities” among hospitals? The Governor framed the problem as one of “market clout” and said dealing with the market clout of top Boston hospitals is in the hands of AG Coakley.

The AG, said Patrick, “has tools today to address these imbalances and we have to look to her office to use those tools.”

I called Patrick’s office to clarify. What “tools?” An aide says the Governor was referring, loosely, to the AG’s ability to file anti-trust charges against hospitals.

Does the AG agree that she could use anti-trust law to fight market clout in Massachusetts and close the price gap that she says is driving up health care costs?

Here’s the statement I received from Coakley’s spokesman, Brad Puffer:

“The Governor, the Legislature, and our office all agree that there are important market dynamics that should be addressed through greater transparency and appropriate oversight. While it is true that our office has law enforcement tools at our disposal, law enforcement is just one of many mechanisms that must be used to ensure a competitive marketplace. There are many actions that may not rise to the level of an anti-trust violation, for instance, but that still may not be in the best interest of a healthy market. We believe a better mechanism should be in place – one that better tracks data about market consolidation to identify problems early and then is able to act on that data short of involvement by law enforcement.”

Coakley has said in the past that the state needs something more precise than anti-trust laws to close the gap between what hospitals with a lot of market clout and those with little or no clout charge in Massachusetts. She offered the legislature a remedy during a speech last November to the Massachusetts Association of Health Plans.

Starting in 2015, if the market has not corrected unwarranted price variation, the administration should be able to reject health plan contracts with excessive or inadequate provider price variations.

Health plans should be prohibited from paying provider rates that differ beyond a certain band. One example would be 20% above or 20% below the plan’s average price for the previous year.

The Senate rejected this idea altogether. The House has a 10% surcharge on hospitals whose prices are 20% above the median price for services. I haven’t seen a firm list of hospitals that would have to pay this surcharge, but I’m told that Massachusetts General, Brigham and Women’s, Dana-Farber and Children’s Hospital are among those that would have to pay the tax unless they could prove that their quality or the unique value of the service justified their higher price.

There’s a lot of concern on Beacon Hill about government taking a heavy handed approach to controlling health care costs. But many health care leaders say that if one of the main drivers is the prices that brand name hospitals can and do demand, the state has to do something to limit what these hospitals can charge if it hopes to contain health care costs.

The Ancient Rome Angle On Mass. Health Reform, Circa 2012

Carey Goldberg — Wed, 16 May 2012 13:13:49 +0000

Boston Globe columnist Jeff Jacoby is often too caveman-ish for my taste, but he certainly gets erudition points today for comparing Gov. Deval Patrick to the third-century Roman emperor Diocletian.

In a column headlined “On health care, state doesn’t know best,” he describes Diocletian’s “famous” (I guess to everyone but me) “Edict on Prices.” It “established price ceilings for a wide range of goods and services,” and it totally backfired, leading to hoarding, black-marketeering, speculation and a general economic worsening. Now to the proposals afoot to contain rising health costs in Massachusetts:

These bills aren’t written in Latin and they don’t impose the death penalty, but their core principle is not much different from Diocletian’s: The state knows best. What fraction of the local economy should health care consume? How fast should medical spending rise? On what business model should provider networks be organized? How should hospital and doctors fees be calculated? Where should consumers get information on quality and cost of care? When are a provider’s high rates justified? What penalty should it bear when they aren’t? In the world these plans envision, decision after decision comes not through the voluntary interplay of doctors, patients, hospitals, and insurers, but from government agents who impose them from above.

And his conclusion: “Price controls invariably make economic problems worse. It was true in Diocletian’s Rome. It’s no less true in Deval Patrick’s Massachusetts.”

There are already some thoughtful comments, both agreeing and disagreeing, below the column on the Globe’s site here. Including:

There is nothing ‘voluntary’ about health care. Patients are not “consumers.” Getting a CT scan when you are in serious pain not the same as buying cat litter. The statement that the a free market consists of “voluntary interplay of doctors, patients, hospitals, and insurers” is absurd. If anything, your argument supports single payer–a well-known and proven solution to the conundrum.

Berwick On Mass. Health Reform: More Pain, More Gain

Carey Goldberg — Mon, 14 May 2012 16:21:37 +0000

I don’t know about you, but when my dentist says that I’m about to experience some “temporary discomfort,” I know what that really means is, “Hang in there, this is going to hurt like heck.”

In the Boston Globe, Dr. Donald Berwick, the widely admired former chief of Medicare and one of the nation’s leading health policy mavens, has just weighed in on the competing proposals for cost-cutting reform in Massachusetts. He argues in favor of aiming for more ambitious cost-cutting targets: The House’s tougher goal rather than the Senate’s less ambitious one, or even the still-tougher target put forth by business and religious groups.

I must say that what struck me most in his essay were the repeated references to pain for a good cause. Massachusetts needs “large-scale changes in delivery that will be temporarily uncomfortable for most providers.” Government must step in because “The changes are just too hard for most to face.” And “Undoubtedly, this transition will be wrenching.” I’m left wondering: Is there a political equivalent to Novocaine?

The whole piece is an important read but here’s an excerpt:

Bills now before the Massachusetts House and Senate can provide that will in the form of a cost target, and by creating consequences for missing it. The House would limit the growth of health care costs to the growth rate of the Massachusetts economy starting now, and then to 0.5 percentage points lower than the overall economic growth rate starting in 2016. The Senate is less ambitious; it would set a limit of 0.5 percent above economic growth until 2016, and then equal to it thereafter. Neither matches the bolder goal proposed last month by both the Associated Industries of Massachusetts and the Greater Boston Interfaith Organization: 2 percentage points lower than the overall growth rate.

Alarms are sounding. Massachusetts hospitals and other providers are warning that too stringent a target will harm care — and harm the state’s economy when unemployment is already high.

Undoubtedly, this transition will be wrenching. But no healthy industry can maintain jobs that depend on continuing services that add no value.

Health Reform 2012: Hello, How Much Will My Care Cost?

Carey Goldberg — Mon, 14 May 2012 14:57:46 +0000

“Hello, is this the state medical care price line? My doctor says I need to get a mammogram, and suggested I go to XYZ imaging center. I have ABC insurance. Could you please tell me how much that will cost me? $200? Okay, thanks very much.”

Not exactly how things work now, is it? But as the Massachusetts legislature works toward the next, cost-cutting phase of health reform, both the House and the Senate proposals envision a toll-free number and online information for patients who want a sense in advance of how much their care is about to cost.

I asked Dr. Neel Shah, founder and executive director of the Boston nonprofit Costs of Care, what he thought of the legislative proposals. He was just coming off a night shift for his day job, as a senior resident and soon-to-be chief resident in Obstetrics and Gynecology at Brigham and Women’s Hospital, but he kindly shared some thoughts, reacting in part to chunks of the draft bills that talk about price disclosure (see the bottom of this post.) Our conversation, edited:

Judging by the draft bills released in the last few days by the House and Senate, you’re about to get your wish: Medical costs in Massachusetts are likely to become much more transparent to patients. Is that true?

A; Well, I’m cautiously optimistic. I think it’s important to keep our eye on the overall goal of the legislation, which is to improve the value of the care we’re delivering and help us get more bang for the buck.

There are a lot of different parts of the bills. None of them is a silver bullet solution but they’re all important steps. The cost transparency part of the bill gets us part of the way there.

What do you mean?

First, a disclaimer: I’m not pessimistic about this. But to speak more broadly for a minute: Every year, in our essay contest we get dozens of anecdotes from all over the country that illustrate how difficult it is for patients to find out what their care will cost. It’s really hard on patients, and for physicians it’s not any easier.

I had a patient within the last year who I was worried had an ectopic pregnancy, which is potentially life-threatening, and she wouldn’t come in until we would tell her how much an ultrasound cost. She wasn’t being unreasonable; she had been hit before by a medical bill that was unexpectedly high. It took most of the day to find out an answer. And it was stressful because an ectopic pregnancy isn’t a situation where you want to sit on your hands. It took that long to figure it out because the part of the hospital where people deliver the care is different from the part that does the billing. We’re physically separate.

That’s a hard thing to change. In terms of this legislation, it says that within 48 hours, if a patient requests it, you have to give them an estimate of what it will cost them. And in a case where it’s not completely clear what you’ll need, which is actually a more common case, then the bill says the provider has to give an estimate. So there may be a delay, and the information may not always be accurate.

So that doesn’t really address the concerns of patients who need to know the price tag?

I think there will be a margin of patients whom it’ll help get a better understanding of what they’ll pay beforehand, if they’re having something elective done, or if it’s not urgent, so you have time.

But then there’s another margin of patients: Say you have chest pain. There’s a lot of things that have to happen between you coming in with chest pain and us figuring out what’s causing it and making you better. In those situations, it’ll be less helpful. In those situations, you need some ability to give people information about the prices but at the moment of care, not 48 hours later.

There are a lot of things that neither the doctor nor the patient are going to know until you start delivering the care. The information is only useful at the right time in the right place. For a lot of the care that gets delivered, it still won’t be available at the right time at the right place.

So that could use more work. What else?

The other piece of it is that price by itself is important to know, but the overall goal is to improve the value of the care. Sometimes things can be expensive but they’re worth it if they make you better enough. One important role of the doctor is to help you figure out what the value of the care is. It’s how much it costs but also how important is this for my health.

The bill doesn’t directly address that but I think it’s a step in the right direction in terms of facilitating a cultural shift — one already taking place in medicine and that my organization advocates for — which is that we don’t have the training to integrate value in medical decision-making. We’re not trained to do that. If you start moving toward putting costs in patients’ hands, you’ll probably move to a situation where patients ask doctors about costs, and that’s where we want to go.

So just doing this by itself doesn’t bring us all the way, but it gets us part of the way. The next step is to train caregivers to help patients better understand value and help them make decisions based on it.

If what’s outlined in the bills passes and we can all call an 800 number on check a Website to see what care costs, will that make Massachusetts unique?

Actually, Massachusetts already has a Website that pulls some data from the all-payer claims database. You can look up first-trimester obstetric ultrasounds at three Boston hospitals and compare cost and quality already. Currently more than 30 states have or are pursuing this kind of transparency. We have a lot of investment by government and there’s a booming cottage industry in the private sector to enable these kinds of tools. I think we’re really at an inflection point in history in terms of this kind of thing.

The fine print: I’ve pulled some sections about prices that look relevant from the House and Senate draft bills released in the past few days. Needless to say, none of this is set in stone, but here are some chunks from the initial iteration:

In the Senate bill:

Section 226. (a) Prior to an admission, procedure or service and upon request by a patient or prospective patient, a health care provider shall, within 2 working days, disclose the allowed amount or charge of the admission, procedure or service, including the amount for any facility fees required; provided, however, that if a health care provider is unable to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the health care provider shall disclose the estimated maximum allowed amount or charge for a proposed admission, procedure or service, including the amount for any facility fees required.
2015 (b) If a patient or prospective patient is covered by a health plan, a health care provider who participates as a network provider shall, upon request of a patient or prospective patient, provide notice of , based on the information available to the provider at the time of the request, sufficient information regarding the proposed admission, procedure or service for the patient or prospective patient to use and the applicable toll-free telephone number and website of the health plan established to disclose co-insurance, copayment and deductibles, under clause (3) of
2021 subsection (a) of section 6 of chapter 1760. A health care provider may assist a patient or prospective patient in using the health plan’s toll-free number and website.
2023 (c) The commissioner shall, in consultation with the board of registration in medicine, promulgate regulations to enforce this section. The commissioner may impose a fine of up to $1000 for each violation of this section. A health care provider aggrieved by the issuance of a fine under this section may, within 21 days of receiving notification of the commissioner’s decision to impose such fine, request an adjudicatory hearing under chapter 30A.

In the House bill:

SECTION 6. Chapter 32A of the General Laws, as so appearing, is hereby amended by inserting after section 26 the following 3 sections:-

Section 27. Pursuant to section 50 of chapter 118G, the commission shall provide a toll-free number and website that enables consumers to request and obtain from the commission in real time the maximum estimated amount the insured will be responsible to pay for a proposed admission, procedure or service that is a medically necessary covered benefit, based on the information available to the carrier at the time the request is made, including any copayment, deductible, coinsurance or other out of pocket amount and the actual or maximum estimated allowed amount, for any health care benefits.

As used in this section, “allowed amount” shall mean the contractually agreed upon amount paid by a carrier to a health care provider for health care services provided to an insured.

SECTION 7. Chapter 32B of the General Laws, as so appearing, is hereby amended by inserting after section 20 the following 3 sections:-

Section 21. Pursuant to section 50 of 118G, every appropriate public authority which has accepted this chapter shall provide a toll-free number and website that enables consumers to request and obtain from the public authority in real time the maximum estimated amount the insured will be responsible to pay for a proposed admission, procedure or service that is a medically necessary covered benefit, based on the information available to the carrier at the time the request is made, including any copayment, deductible, coinsurance or other out of pocket amount for any health care benefits.

SECTION 19. Section 217 of said chapter 111, as so appearing, is hereby repealed

SECTION 20. Said chapter 111, as so appearing, is hereby amended by inserting after section 224 the following 2 sections:—

Section 225. (a) Upon request by a patient or prospective patient, a health care provider shall disclose the charges, and if available, the allowed amount, or where it is not possible to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the estimated charges or estimated allowed amount for a proposed admission, procedure or service.

(b) A health care provider referring a patient to another provider that is part of or represented by the same provider organization as defined in section 53H shall disclose (i) that the providers are part of or represented by the same provider organization, and upon the request by the patient, (ii) the charges, and if available, the allowed amount, or where it is not possible to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the estimated charges or estimated allowed amount for a proposed admission, procedure or service.

As used in this section, “allowed amount”, shall mean the contractually agreed upon amount paid by a carrier to a health care provider for health care services provided to an insured.

Section 50. (a) To facilitate the sharing of health care data between payers, providers, employers, and consumers, the division shall:—

(i) Establish procedures for payers to report to members their out-of-pocket costs, including, but not limited to, requiring payers to provide a toll-free number and website that enables consumers to request and obtain from a payer in real time the maximum estimated amount the insured will be responsible to pay for a proposed admission, procedure or service that is a medically necessary covered benefit, based on the information available to the carrier at the time the request is made, including any copayment, deductible, coinsurance or other out of pocket amount, for any health care benefits;

(ii) Establish procedures for the authority to disclose to providers, on a timely basis, the contracted prices of individual health care services so as to aid in patient referrals and the management of alternative payment methodologies. Contracted prices shall be listed by provider and payer;

(iii) Establish procedures for payers to disclose patient-level data including, but not limited to, health care service utilization, medical expenses, demographics, and where services are being provided, to all providers in their network, provided that data shall be limited to patients treated by that provider, so as to aid providers in managing the care of their own patient panel;

(iv) Establish procedures for third-party administrators to disclose to self-insured group clients the prices and quality of services of in-network providers; and

(v) Establish procedures for health care providers, upon the request of a patient or prospective patient, to disclose the charges, and if available, the allowed amount, or where it is not possible to quote a specific amount in advance due to the health care provider’s inability to predict the specific treatment or diagnostic code, the estimated charges or estimated allowed amount for a proposed admission, procedure or service.

(b) The division shall ensure that all data collection, analysis, and other submission requirements established under this section are implemented in a manner that promotes administrative simplification and avoids duplication.

House Vs. Senate Health Reform Plans: Let The Comparison Shopping Begin

Carey Goldberg — Wed, 09 May 2012 14:14:40 +0000

The Massachusetts House released its plan for cutting health costs on Friday. The Senate is releasing its own plan today. And now begins the public “compare and contrast” period, the ingathering of input that could influence the final bill that the legislature is expected to pass this summer.

Let us commence. This just came in from the Greater Boston Interfaith Organization, which has been campaigning for lower health costs:

GBIO is grateful to the Senate for their inclusion of the public health prevention trust with much needed funding. We all know that prevention saves lives and dollars.

With respect to the the TME spending target, GBIO supports the House version of the legislation. We estimate that the House target saves employees and employers an additional $11-12 billion over ten years, compared to the Senate version. We will be urging the legislature to adopt the House’s version of a TME spending target.

Translation: The House plan proposes a somewhat tighter cap on overall health spending, saying it should grow at a slightly slower rate than the state economy. The Senate version allows health spending to grow at a rate equal to or slightly above the state economy’s.

In contrast, Liz Kowalczyk’s extremely excellent Boston Globe story on the Senate plan includes this reaction:

Michael Widmer, president of the Massachusetts Taxpayers Foundation, said the House bill goes too far. The Senate’s spending benchmark “strikes a better balance than the House between the need to squeeze cost out of the health care system without damaging the state’s world renowned health care sector,’’ he said.

He criticized the House’s luxury tax on expensive providers and the “vast powers’’ of an independent new agency “that is going to be inserting itself into the health care system in a major way.’’

On his Not Running A Hospital blog, Paul Levy leans in favor of the House version’s proposal to levy a surcharge on unjustifiably high hospital prices, writing:

As an uninvolved observer, I see evidence of more behind-the-scenes influence by the Attorney General in the House version. Her office has been relentless in pointing out that a major driver of costs in the state’s health care environment is the lack of an effective marketplace, where the presence of size-based and geography-based monopolies has resulted in huge disparities in payment rates from insurers. She has offered rigorous and data-driven reports that document this pattern. The House bill explicitly attacks this, knowing that the sector participants cannot and will not solve it.

Rick Lord of the state’s largest employers’ group, Associated Industries of Massachusetts, writes on AIM’s blog that the legislature should put tighter limits on health cost growth. He said by phone:

“Though we’re pleased the House and Senate are focusing on health care costs, we don’t think the target in either bill is aggressive enough. In March, we came out in support of Gross State Product minus 2 in three years.” That would lower the rate of growth of health costs to about 2% a year, because GSP tends to grow at about 4% a year. “Most economists…have said 30% of health care is either wasteful or inefficient. We’re just challenging the industry to do what every other industry has had to do in the last 20 years: To become more efficient and do more with less.”

I asked about the concern lawmakers have been voicing about not wanting to come down too hard on an industry that employs one in every six or seven workers in the state. Yes, he said, health care is an important industry, but “85% of the workforce is not in the health care industry. They’re paying the price of having an inefficient system.”

The Massachusetts Hospital Association was still reviewing the bill, but a statement from its president, Lynn Nicholas, on the Senate plan read in part:

As with the House proposal, we’ll judge the Senate bill on the merits – whether it improves the healthcare system on a sustainable basis, and sets goals to lower costs in ways that promote good care and also allow the economy to stay on the right track.

Massachusetts hospitals also strongly support bringing healthcare costs more in line with economic growth. But reform has to be about more than just cost, it has to promote improvement and continued access to care. As some of the state’s largest employers helping to strengthen the economy at a difficult time, we appreciate the need to address healthcare costs in a way that strengthens our economy. The right reform will both produce substantial savings that are sustainable and support the wellbeing of the healthcare system. We have to build on the undeniable progress that the current reform course has achieved.

The statement from Health Care For All’s Amy Whitcomb Slemmer focused in part on mental health services, including:

This legislation makes great strides towards improving the coordination of care and access to preventive and primary care services. We are particularly encouraged by the bill’s approach to incorporating behavioral health services with those that are traditionally provided for physical health. We know that the two are inextricably linked, and believe that this era of health reform provides the much needed opportunity to remove barriers to behavioral health treatment and care.
…
We support the integration of behavioral health into the overall health system through the establishment of behavioral health medical homes and the vigorous implementation of the federal Mental Health Parity and Addiction Equity Act. Together these laws will make a significant difference to people who need these services.

At The Pioneer Institute Blog, Josh Archambault warns that these comparisons, and early media coverage of the coming debate in general, are premature until the full text of the Senate bill is out and all the facts are in.

He writes:

It is easy to say the two bills look the same from the press release, but are they?

The debate over somewhat arbitrary cost growth goals is pointless, unless there is a debate about the mechanisms to get there. Did we forget that DHCFP data tells us 53% of employers are self-insured in our state and therefore not regulated at the state level?

I am worried, after talking with a number of health care industry folks over the last 4 or 5 days, that each is looking at their slice of the pie and failing to see the big picture… or even questioning how these proposals will play out in implementation.

On the flip side, I worry that folks on Beacon Hill see this debate more as an academic exercise or a political battle, and not establishing comprehensive and sensible reforms that engage consumers.

Please watch this space for more comparisons and caveats today, and we welcome your own thoughts if you have the fortitude to forge through both plans.

Mass. Senate Health Cost Bill: Mostly ‘Darn Similar’ To House Plan

Rachel Zimmerman — Wed, 09 May 2012 05:00:10 +0000

By Rachel Zimmerman and Carey Goldberg

The Massachusetts Senate today released its version of a sweeping plan to control health care costs. And guess what? It’s pretty close to the sweeping plan the House released last week. Both emphasize preventive care and wellness. Both place a specific cap on the growth of health spending linked to the growth of the state economy. And both envision shifting more care into systems that put doctors on a budget instead of paying per procedure.

In the details, the Senate plan may be slightly more business-friendly: There’s no “luxury tax” on pricey hospitals that fail to justify their high costs, and there are more references to “market-based” solutions as opposed to government interventions.

The Senate’s cap on health spending is also slightly less restrictive. (Until 2015 it’s set to be equal to the projected growth of the gross state product plus 0.5%. From 2016 to 2026 it’s equal to the projected growth in the state’s GSP and from 2027 and beyond, it’s the GSP plus 1.0%. The house plan proposes GSP minus 0.5% beginning in three years.)

Other new elements: The Senate bill‘s prevention and wellness provision is backed by $100 million in funding over five years. And it establishes a new certification process for “Beacon ACOs,” the most effective accountable care organizations. These “beacons” would get preference in state health-care contracting.

The Boston Globe’s Liz Kowalczyk sums up the House-Senate difference in flavor: “The Senate bill appears to allow doctors and hospitals more leeway to find their own solutions, while the House appears to want more oversight.”

Still, the degree of common ground is notable. Electronic health records become inescapable in a few years. The price of specific medical tests and treatments should soon be transparent to any consumer who checks a Website or makes a phone call. If your doctor makes an error, you may well receive a direct and prompt apology under new medical malpractice provisions in both bills. State agencies overseeing health care are reorganized.

We asked a few local experts for their first impressions.

Jonathan Gruber, the MIT economist who served as an advisor on the state’s 2006 health insurance reform law as well as the national Affordable Care Act, emailed that the two bills “look pretty darn similar to me.”

David Cutler, a professor of economics at Harvard’s Kennedy School of Government agreed that based on the summaries, the bills seem fairly similar. But he noted a few key differences including the higher cost growth target in the Senate bill and that the House bill “goes further on transition to alternative payment systems.”

Senate Chairman of the Health Care Financing Committee Richard Moore told WBUR that the Senate bill intentionally does not punish providers: “Throughout the bill we attempt to reach lower cost growth by encouragement and working with the market rather than regulating it overly…and working with providers to get within range of meeting the goals in the next 3 years,” he said. Senate leaders say the plan will save $150 billion over 15 years.

The full bill is now online here. Of course, over the next weeks lawmakers will try to work out the differences and ultimately come up with one unified proposal. But in the interest of getting as much information out there as soon as possible here, slightly edited, is a summary of the bill put out by Senate leaders. We welcome any and all analysis from you.

SENATE HEALTH CARE COST BILL

Summary of Key Provisions:

Health Care Quality and Finance Authority

The bill establishes a new, quasi-public authority. The Authority will be governed by an 11-person board consisting of state officials, health policy experts, business, consumer, and labor representatives. The Governor, the Auditor, and the Attorney General are all appointing officials and must jointly agree on the appointment of the chair of the board. The powers of the Authority are limited to 2 specific duties:

1) Establish the Health Care Cost Growth Benchmark and Monitor Compliance

The Authority will establish the annual health care cost growth benchmark. For calendar years 2012 to 2015 the benchmark shall be equal to the projected growth of the state’s gross state product plus 0.5%. For calendar years 2016 to 2026 the benchmark shall be equal to the projected growth in the state’s gross state product. For calendar years 2027 and thereafter, the benchmark shall be equal to the projected growth in the state’s gross state product plus 1.0%. The Authority will hold annual hearings on the state’s progress in meeting the health care cost growth benchmark and issue an annual report with any recommended future strategies for the state and the private market to increase efficiency.

Any recommendations requiring statutory changes would need to be approved by the Legislature and the Governor. Beginning in 2016, if the health care cost benchmark is exceeded, the Authority will work to assist health care entities to reduce cost growth through a market-based solution approach. The Authority will require health care providers, provider organizations and payers identified as contributing to excessive cost growth to file a confidential “performance improvement plan” with the Authority. The authority may approve a waiver or delay this requirement based on the unique circumstances of the health care entity. Every element of the plan must be proposed by the health care entity and the Authority may not insist on any specific action steps. The Authority will approve all plans that are reasonably likely to address the underlying causes of the cost growth and will ensure that the health care participant implements the plan in good faith. Penalties will only be imposed if the health care participant does not file a performance improvement plan or does not implement the performance improvement plan in good faith.

2) Support Market Innovation and Assist in the Development of “Best Practices” for Care Delivery and Payment Reform Models

The Authority shall support the development, experimentation, and evaluation of market-based “best practices” for care delivery and payment reform models, by: Developing a certification process for “Beacon ACOs” The Authority will develop a process by which eligible provider organization may apply to be certified as a “Beacon ACO.” This is a voluntary certification. No provider organization is required to apply.

The standards for “Beacon ACO” certification will be based on the best practices in the market and shall reflect a high commitment by the provider organization to reduce cost growth, improve quality, and coordinate care. Provider organizations so certified will be given a preference in the contracting of any state-funded health care programs. Developing standards and best practices for new payment models to be used by the Office of MassHealth, the Group Insurance Commission, and other state-funded programs, to be fully implemented by 2014. Such models may include bundled payments, shared-savings programs, episodic payments, and global budgets. Administering a “Health Care Payment Reform Fund” to support the market in continuing to innovate and experiment. The Authority may distribute funding through incentives, grants, competitive applications, and targeted assistance to advance and promote market development of cost-reduction and quality improvement pilot programs. The “Health Care Payment Reform Fund” was established in the gaming bill last year and is expected to receive $20 million for each license granted under that law.

Institute of Health Care Finance and Policy

The bill reorganizes the existing Division of Health Care Finance and Policy, currently under the control of the Executive Office of Health and Human Services, to become an independent state agency. The Institute is not a quasi-public authority. The Institute will have an executive director that will be appointed by a majority vote of the Governor, Auditor, and Attorney General to a 5- year term.

The purpose of the reorganization is to establish the Institute as the designated health care data collection, dissemination, and analysis agency of the Commonwealth. The Institute shall support all other state agencies and the Health Care Quality and Finance Authority, but will also provide critical, independent analysis of the how the state’s policies are affecting cost trends and marketplace composition. The Institute will annually prepare a health care cost trends report that will establish whether the state’s health spending is exceeding the health care cost benchmark, for
use by the Authority. The Institute shall also identify those market entities that are found to contributing to excess cost growth to the Authority.

The Institute retains many of the functions and duties of the Division of Health Care Finance and Policy. Three new duties include:

–Administers a new “registration” process for provider organizations to allow the state to collect enhanced information about these types of organizations. This is critical to monitoring the on-going trends in the market and what impact these changes have on health care costs.
–Collecting annual information for health payers regarding the relative variation in prices paid to health care providers and to track this information over time. Administering a consumer health information website to provide consumers with easy to understand comparative health care cost and quality information by provider.

Enhancing Consumer Transparency

To aid consumers in making health care purchasing decisions based on comparative cost, the bill requires health care payers to disclose up-front, through a toll-free number or a website, the total cost-sharing a member will be liable for in receiving a specific service from a specific provider.

Requires providers to disclose their own charges for services, upon request of patient, and to direct the patient to the health plan’s phone number/website to determine any possible cost- sharing costs.
Promoting Prevention and Wellness Program

Establishes a “Prevention and Wellness Trust Fund” to be administered by the Department of Public Health, in consultation with an advisory board. The Fund collects $20 million a year for 5 years from a “health system benefit” surcharge on health plans. After 5 years the assessment sunsets.

The purpose of the Fund is to support community-based prevention and wellness programs aimed at reducing the most costly and most prevalent avoidable health conditions. Funds are provided to organizations through a competitive grant process. Up to 10% of the funds collected in any year may be used by the Department to promote workplace wellness programs.
Requires the Department of Public Health to develop a “model guide” for wellness programs for businesses and may provide stipends to help businesses establish programs that improve health, reduce recidivism, and help control the growth in business health care premium costs. Expands an existing wellness incentive program for small businesses offered by the Commonwealth Connector. The bill allows more small businesses to be eligible for this program and increases the subsidy from 5% to 15% of the employer’s premium costs.

Improving Access to Essential Primary Care and Behavioral Health Services

Expands the role of physician assistants and nurse practitioners to act as primary care providers. Expands an existing workforce loan forgiveness program to include behavioral providers. Requires that all health plans in Massachusetts must certify to the division of insurance and the attorney general compliance with Federal Mental Health parity.
Establishes a Behavioral Health Task Force to develop standards for the extent to which and how payment for behavioral health services should be included under alternative payment methods Requires the Department of Public Health to create a 4-year state health resource plan that inventories our current capacity and assesses the needs for the future, specifically in primary care and behavioral health services.

Building a 21st Century Health Care IT System

Dedicates $20 million a year for 5 years from a “health system benefit” surcharge on health plans to the e-Health Institute Fund, as administered by the e-Health Institute. After 5 years the assessment sunsets. The purpose of the Fund is to accelerate and facilitate the on-going statewide adoption of interoperable electronic health records by the year 2015.
Funds are provided to organizations through a grant process. The e-Health Institute will prioritize providers that were ineligible for financing from the federal government to implement interoperable electronic health records. All assistance is needs-based and all grantees are expected to meet federal “meaningful use” standards. To the extent a provider fails to meet the obligations of the grant, the e-Health Institute may “claw-back” the funding.

Updates an existing requirement that all physicians must demonstrate competency in health information technology as a condition of licensure by 2015 to define competency as having achieved “meaningful use” as defined by the federal government.

Transitioning to “Alternative Payment Methodologies”

Requires that by July 1, 2014, the Office of MassHealth, the Group Insurance Commission, and other state-funded programs, must, to the extent feasible, implement “alternative payment methodologies”. The standards for these methodologies are developing in consultation with the Health Care Quality and Finance Authority. Such models may include bundled payments, shared-savings programs, episodic payments, and global budgets.
The bill does not mandate that private health plans implement “alternative payment methodologies.”

Promoting Administrative Simplification

Requires the development of standard prior authorization forms, which would be available electronically, so that providers would use only one form for all payers. Streamlines data reporting requirement by designating a single agency as the secure data repository for all health care information reported to and collected by the state.

Supporting Health Care Workforce Development

Establishes a Health Care Workforce Transformation Fund to invest in the training, education, and skill development programs necessary to help workers succeed and flourish in the health care system of the future. Requires that a portion of any revenues transferred to this Fund must be used to support the loan forgiveness program for primary care providers and behavioral health professionals.

Transparency of the Health Care Marketplace

Charges the Attorney General to monitor trends in the health care market including consolidation in the provider market in order to protect patient access and quality. Requires the Institute of Health Care Finance and Policy to, as part of its provider organization registration requirement, to collect extensive information about the financial condition, organizational structure, market power, and business practices of all provider organizations in the Commonwealth.
Establishes a procedure by which if a provider organization is seeking a significant change in its organization a market impact review may be triggered, a public hearing held, and a final advisory report issued on the impact of the proposed change on health care costs and the competitive marketplace. Develops a process to track relative price variation among different health care providers over time and establishes a Special Commission to determine and quantify the acceptable and unacceptable factors contributing to price variation among providers.

Reforming Medical Malpractice Laws

Mandates a 180-day cooling off period after an injured patient signals an intention to file litigation. Certain physician-patient communications required during that time period. Would clearly allow providers to express apology, regret, sympathy, and other similar statements to a patient.

Improving Standards of Care

Promotes the use “check-lists” in hospitals. These simple tools have been demonstrated to reduce complications and errors. Establishes an expert task force to seek solutions to the prevalence of misdiagnosis. At least 15% of Americans are misdiagnosed, according to The American Journal of Medicine, with misdiagnosis rates for some forms of cancer reaching as high as 44%.

Extending Important Health Insurance Reforms from the Small Business Health Insurance Reform Act of 2010

Extends the current requirement that DOI must review proposed premium rates and may disapprove rates based on the inclusion of excessive administrative costs or surplus margins. Adds an additional requirement that plans with surpluses above certain level may not continue to include any margin for additional surplus into the premium filing.
Extends the current ability of the Division of Insurance to limit the impact of the application of any rating factors on rate increases. This has proven effective at mitigating and stabilizing large “spikes” in premium increases from year to year.

Examining Adequacy of Government Reimbursement for Health Care Services

Establishes a special commission to review public payer reimbursement rates and payment systems for health care services and the impact of such rates and payment systems on health care providers and on health insurance premiums in the commonwealth.