CommonHealth | mahealthcosts

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.

Reactions To House Health Reform Plan: Confusion, Cheers, Concerns

Carey Goldberg — Mon, 07 May 2012 14:26:51 +0000

Times like this separate the true health reform wonks from the wannabes. Did you spend your weekend poring through H.4070, An Act relative to Health Care Quality Improvement and Cost Reduction Act of 2012, which was finally unveiled Friday afternoon? For the hard core, this was a health cost weekend: No time for lilacs or Little League, what the heck does this thing say and what does it mean? (Here’s our initial summary.)

Though many of the bill’s proposals were long expected, reaction tended to be muted on Friday because everyone needed a chance to digest. Now, the considered analyses are beginning to roll in, and we aim to make CommonHealth their home, much as it was during the debate around the state’s 2006 health reform. The Senate is expected to weigh in with its own bill on Wednesday, and then comes the great sorting-out. Here’s a very early sampling of today’s opinion harvest, and we plan to update this post today as others come in.

Forbes:
Massachusetts moves toward health care price controls; Is America next?

Goodness, ‘The Apothecary‘ blogger Avik Roy — a member of Mitt Romney’s health care advisory council, according to his Forbes profile — re-posts a bit more of CommonHealth’s bill summary than is usual blogging practice. But he does make some interesting points, including a prediction that the proposal to impose a surcharge on high-cost hospitals will backfire badly. He writes:

The beauty of government-controlled relative pricing is that it creates an incentive for everyone to raise prices. There are two ways for a high-cost provider (say, Partners HealthCare) to get their prices within the 20-percent band: (1) lower their prices; (2) get everyone else to raise their prices.

Thanks to the transparency provisions of the bill (and transparent prices are, in general, a good thing), low-cost providers will know what their peers are charging. They will therefore have the ability to raise their prices considerably.

For example, let’s say Mass General charges $32,000 for a coronary angioplasty, whereas the state median is $21,000, driven in part by low-cost Tufts, which is charging $16,000. Now that Tufts knows that MGH is charging $32,000, Tufts knows that it can charge, say, $25,000 per procedure, and still gain favorable status from insurers, without incurring the new “luxury tax.”

Once Tufts raises its price to $25,000, the “median” price for angioplasties in the state goes up, allowing MGH to raise its price further, and the cycle repeats itself.

MetroWest Daily News editorial:

Progress and confusion on health costs:

The ways of Beacon Hill can be mystifying, especially to those watching from afar. On health care costs, we appear to be moving in the right direction, but which way Beacon Hill is moving is anyone’s guess…

What is the argument about? Which elected officials and which interest groups are on which side? It’s hard to say, especially because all the players spout similar generalities about protecting consumers, restraining costs, promoting competition and moving away from the fee-for-service model. The good news, especially with the unveiling of a House bill, is that details are starting to become public.

The better news is that health cost inflation is slowing, either because of political actions or despite their lack of action. In 2009 and 2010, national health care spending grew less than 4 percent per year, federal officials report, which is the slowest annual growth in more than 50 years…

As Beacon Hill prepares to grapple with this complicated issue, one challenge is to understand what seems to be working and why. While legislation is certainly needed — some of the cost restraint shown by insurers and providers has come in response to political pressure, not structural reforms, and could disappear if politicians turned their attention elsewhere — legislators must focus on expanding things that are working. They must be especially careful not to disrupt the progress being made by insurers and providers.

Leaders must also move their debates into the public forum. Health care policy may not excite the public, but it has an impact on every Massachusetts family.

Today’s Daily Rounds already link to John McDonough’s Health Stew in the Boston Globe, headlined “Two cheers for House health financing reform bill.” John praises the plan as “far reaching and game-changing.” He also expresses this reservation:

The bill pays only lip service to prevention, wellness, and public health. We know what is the real driver of health care costs in Massachusetts and the nation — the growing burden of chronic disease, and the health behaviors that trigger it. Improving the quality and efficiency of medical care delivery can produce meaningful dividends. Nothing can produce the savings we need more than serious efforts to change health behaviors in ways that prevent and reverse chronic diseases such as heart disease and diabetes.

Section 2 of the Walsh bill throws a sop at prevention by creating a public health trust, though with no financing — the ACA, by contrast, committed $15 billion to its Prevention and Public Heath Trust, the largest such commitment in the nation’s history. The employer wellness tax credits in the House bill won’t move any needles. Even the modest proposal from the Boston Foundation to end the state’s food tax exemption for sugar-sweetened beverages and candy — which has broad public support — got ignored.

Maybe House leaders decided they would let members add prevention and public health in floor amendments. I sure hope so. It would make a solid and promising bill much stronger and better able to address all the compelling causes of our health spending challenge.

The Pioneer Institute’s Josh Archambault was quick off the mark Friday with his “Many unanswered questions on payment reform.” Today, in a post titled “I pledge my faith in bureaucracy,” he listed an array of concerns about the House bill’s proposed Division of Health Care Cost and Quality, an uber-agency that would oversee many aspects of the reform. He writes:

Policymakers should take a serious look at the wide-ranging authority given to the Division. On multiple occasions, the Division is instructed to “take actions necessary to ensure….” or “promulgate regulations or guidelines to implement the findings of this section.” We must ask if we are comfortable with bureaucrats holding the reins to 18% of our state’s economy, that may not have the expertise, resources, or shared values that we do to balance the trade offs associated with government centered cost controls. They decide where billions of dollars will be directed or granted from trust funds. Do we trust their judgment and are we confident that industry influence will not sway these few government officials?

Readers, if you spot any other good commentary, please click on the “Get in touch” button below and send it in…

Atrius Chief Calls For Speed On Health Reform

Carey Goldberg — Wed, 02 May 2012 15:20:42 +0000

You know how when microwave popcorn begins to reach kernel-blowing heat, first you hear a few isolated pops and then they turn into rapid-fire, machine-gun-speed explosions? That’s the dynamic we can expect for the debate about the next, cost-cutting phase of Massachusetts health reform — and right now we’re in the isolated-pop stage. With the legislature expected to unveil its blueprints for cost-cutting very soon, we’re just starting to hear those first few pops of views, opinions, reactions.

Dr. Gene Lindsey, the chief of Atrius health, the state’s largest physician group, is just out in The Boston Globe (well, okay, yesterday but I somehow missed it at first) with an op-ed piece titled “Payment reform is working in Massachusetts.” It ends:

Governor Patrick wants us to move even faster. He delivered his draft legislation on payment reform in February 2011. Now, the Legislature is about release its proposed bill. What we really need from the Legislature now is the support to move forward with speed to implement changes so that patients and employers can begin to see a difference both in the care that is delivered and in the invoice that follows.

The work that was set in motion in Massachusetts in 2006 and that laid the groundwork for critical parts of the Affordable Care Act will continue, regardless of what the Supreme Court decides. We know that we are the ones who will have to live with the consequences if we don’t make these changes, and we don’t like the picture of a future of rapidly increasing healthcare costs strangling the way of life that we value.

State and federal legislation can play a critical part in defining the future, but regardless, the wheels have been set in motion. Massachusetts created the picture of what universal coverage could look like. Soon we will show the nation what it looks like to deliver the highest quality of care at an affordable price.

Readers? Is it just me or is that final sentence one of the most optimistic ever written about Massachusetts health reform?

Glossary In Progress: Health Reform Terms For Coming 2012 Debate

Carey Goldberg — Mon, 30 Apr 2012 16:55:26 +0000

Very soon, the topic of health reform is going to get white-hot again in Massachusetts. Legislative leaders will reveal their plans for the next stage, the part left out of the landmark 2006 law: How to cut costs. Gov. Deval Patrick laid out his own blueprint last February, and now, at long last, this next political shoe will drop.

To prepare you and ourselves, we at WBUR are gathering a glossary of terms that it will help to know in the coming debate. We entreat you to improve on our definitions and write in suggestions for more. And most of all, we need a catchy title for what’s coming. Health reform, part two or 2.0? Health reform 2012? There’s Romneycare and Obamacare, but Devalcare or Patrickcare just don’t sound right, especially for the coming legislative initiatives.

One thing we do already know: We’re going to use the Twitter hashtag #mahealthcosts for relevant tweets, and invite you to do the same.

ACO — Accountable Care Organization – An accountable care organization is a collection of hospitals, doctors, and other care providers that coordinate among themselves to provide high-quality, efficient care to a patient within the bounds of a single payment. Consumers, at some point you will likely be asked to sign up for one of these. This is a really important decision because it means you’re making a commitment to get most or all of your care from within this group. Here’s a fuller explanation in cartoon form: “What The Heck Is An ACO?”

AQC — Alternative Quality Contract — The global payment model created by Blue Cross Blue Shield of Massachusetts. Other major insurers now offer their own global payment contracts.

Bundled and episode-based payments — “Providers are reimbursed for clinically defined episodes of care – that is, a lump sum payment is made to providers in different settings for caring for one patient who has undergone, say, a major procedure.”(From the Massachusetts Hospital Association’s new guide to health reform, “Completing the Journey.”)

Capitation — Very unpopular in the 1990s. From Wikipedia: “Capitation is a method of paying health care service providers (e.g., physicians or nurse practitioners) a set amount for each enrolled person assigned to that physician or group of physicians, whether or not that person seeks care, per period of time. Generally these providers are contracted with a type of health maintenance organization (HMO) known as an independent practice association (IPA). The HMO contracts with the providers to have the latter take care of patients enrolled in the HMO. Most often, payment for such a service is under the capitation system.”

EMRs and EHRs — Electronic Medical Records, also known as Electronic Health Records — Computerized patient medical records, replacing ancient paper files. Can allow all a patient’s doctors to share information better, and also be used to assess and improve care. Caution: Some patients worry about privacy.

Fee for service — Right now we pay doctors and hospitals a separate fee for each service they provide. The trouble is that this system creates incentives to do as much as possible, for as much money as possible.

Global payments — Capitation redux. Health care on a budget. In this version, doctors and hospitals, in theory, get paid more when they can prove their patients are healthier. Health insurers pay them a set annual fee per patient depending on the patient’s condition. If the doctors don’t meet that budget, they’re on the hook for some of that loss. If they stay under the budget, they get to keep some of the surplus. They can also get bonuses for high quality.

GSP+ — Gross State Product plus — As lawmakers debate how much to allow health costs to rise, they use terms like GSP plus one or GSP minus one. What they mean is, for example, if the state’s economy (or GSP) grew by 4% in a given year, health costs could be allowed to grow at GSP plus 1, or 5%; or by GSP minus one, or 3%. The idea is to tie the growth of health care costs to the growth of the state’s overall economy.

Limited Networks — Health insurance plans that limit where patients can go for treatment. They are cheaper because insurers negotiate volume discounts with certain medical providers.

Medical Home — Also known as Patient-Centered Medical Home — The general definition is the place where you get your primary care; and the idea is that your home person or clinic will understand everything about what you need and help you find it. The definition is in flux because some patients’ main provider might be, say, their psychiatrist if they have mental illness or their endocrinologist if they have diabetes.

P4P — Pay for Performance — When doctors and hospitals get paid for meeting quality measures.

PMPM — Per member per month — When insurers decide how much to pay providers under a global budget, then they have to figure out how much it’s going to cost to take care of each patient. They adjust the budget if you’re older and sicker, and come up with a cost per member per month. For example, a health middle-aged person might be assessed at perhaps $400 per month. PMPM can vary significantly depending on where a patient gets care.

PCP — Primary Care Provider — Your primary doctor or other care provider, including nurse practitioners and others. Some have proposed requiring all Massachusetts residents to have one, because it’s such a critical entry point to the health care system, both in terms of getting care and tracking costs.

Price Disparities — Catchphrase for the fact that some hospitals and doctors get paid four to eight times as much as others for the same tests and procedures.

Tiered coverage — Think drug prescription co-pays, but apply that same kind of generic-vs.-brand price gap to all medical care. A tiered health insurance plan allows you to go to a more expensive hospital, but you pay more out of pocket — sometimes a lot more.

Readers, what are missing? Please post in the comments below…

What Do You Want To Know About Health Reform 2012?

Carey Goldberg — Sun, 15 Apr 2012 19:38:06 +0000

Dear readers,
What are you wondering? What are you worried about? Where might we be heading? Please submit your questions about the next, cost-cutting phase of Massachusetts health reform in the Comments section below, and we’ll do our best to answer them ourselves or find someone who can.