Last night, the state senate struggled through a dry debate on a complex package of health care cost-control measures. The challenge is to see through the legalese to the underlying choices.
Some years ago, with a beer in one hand and a cigarette in the other, a friend’s uncle casually mentioned he was getting ready for his second heart transplant at state expense. The life style choices that we all make do contribute to the inexorable pressure of rising health care costs.
The recommendations that doctors make also contribute to rising health care costs. In my 30s, I developed frequent heart burn. A doctor told me I faced a choice – either risky surgery involving a week of hospitalization under his care or a lifetime of taking heart burn drugs that raise the risk of stomach cancer. He didn’t identify the third possibility, the one I chose – maybe I just shouldn’t eat and drink so much right before going to bed.
Of course, much of health care is both necessary and unavoidably expensive. Most of expensive health care occurs at the end of life. The trick is that it’s hard to know when the end of life is going to be.
In April 2001, I was feeling tired when I shouldn’t, falling asleep in morning meetings. Long story short, I suddenly found myself in the hospital facing surgery for a brain tumor. They told me I was close to death, but the tumor looked like it might be benign. This was not to be my final health care episode. Seven days, a lot of doctors and over $50,000 later, I was out of Mass General and on my way to a full recovery.
The bill for that episode included charges from many different professionals and the hospital itself. The allocation of income among all those providers is a hugely complex struggle, much of which occurs out of public view at corporate negotiating tables.
In 2012, the legislature passed a comprehensive health care cost-control bill which created the Center for Health Information Analysis. CHIA’s charter is to analyze health care claims data to create more transparency around all of these decisions. CHIA supports the work of a second entity created in the same legislation, the Health Policy Commission, that has the charter to bend the curve of health care cost growth.
The legislation that we passed last night builds on (1) the 2012 legislation, (2) the work of CHIA and HPC (3) the work of a Special Commission on Provider Price Variation which recently produced a report on wide difference in prices between the downtown teaching hospitals and the small community hospitals and (4) the work of a group of senators who have spent the last year studying what more we can do to reduce the growth of health care costs, a question of huge significance to most public and private institutions and especially for the state which bears the burden of funding MassHealth.
The major ideas in the legislation include:
- Expansion of so-called “alternative payment models” — designed to give providers incentives to improve population health in a cost-effective way — in private health insurance market, as in the Masshealth context. The bill includes special incentives to reduce costly hospital re-admissions. What turned out to be the most controversial element of the bill was a provision moving seniors who dual eligible for MassHealth and Medicare into “senior care option” programs (SCO’s) that are charged to provide all the services necessary to keep people healthy. For example, a SCO might conclude that it is cheaper and better for the patient to provide an air conditioner than to hospitalize the patient for heat related ailments. Movement of dual-eligible seniors to SCOs would change the flow of funds to home care providers — not necessarily reducing their income, but subjecting them to the uncertainty of change — and they organized in opposition to the change. Ultimately, a compromise was reached that included many safeguards for the transition. See Amendment 9 to the bill for details.
- New hospital pricing regulations that are designed to support community hospitals that are perceived to be underpaid by insurers as a result of the high market power of the downtown teaching hospitals. This was one provision of the bill that I had trouble with and voiced opposition to — it seemed to unfairly place financial responsibility for weak hospitals on the stronger hospitals (the hospitals used by and staffed by many constituents in my district). In some instances, the weaker hospitals deserve support because their weakness may reflect the poverty of their clientele. In other instances, the weaker hospitals may be mismanaged or intrinsically inefficient. Ultimately, I concluded that the issue was not one that should lead me to oppose the whole bill since there is not much money at stake — the underpaid hospitals have very low volume, so increasing their rates does not cost the system much. I do hope that this provision gets more scrutiny and refinement as the process moves forward.
- Expansion of insurance products that reward consumers for choosing less-expensive providers.
- Permission for less-expensive professionals to provide care. In every instance of this, the conversation is the same: lobbyists for the more highly trained group of professionals, for example the dentist, argue that the quality of care will suffer if the less trained professionals, for example the dental hygienist, is allowed to provide care without close supervision. The lobbyists for the less trained group argue the opposite. This is always a judgment call, but I generally come down in favor of expanding the practice scope of less-trained professionals — I trust that exposure to liability gives organizations employing the less trained group an adequate incentive to assure that they are properly supervised — the state should not over-regulate their scope.
- Pushing care to the the most cost-effective settings, encouraging tele-medicine, mobile health providers and the use of urgent care facilities over emergency rooms.
- Controlling prescription drug prices — the bill includes a number of new measures to reduce prescription drug costs. This was the subject of floor activity as well with new disclosure requirements added.
- Simplifying the blizzard of forms involved in payment processing. Huge private sector investment is going toward the simplification of payment interfaces, but the legislation also includes measures to encourage progress.
- Controlling the surprise “out-of-network” charges that creep in when consumers visit hospitals and multiple professionals get involved with their care.
In addition to these ongoing challenges, the legislation includes a number of measures to discourage shifting from employer-sponsored insurance to Mass Health and also allows employers to buy into an optional expanded MassHealth plan. The legislation does not alter eligibility for MassHealth.
Collectively, the new rules and mechanisms in the bill add up to a significant effort to control costs and improve quality by influencing the choices of consumers, providers and insurers. The bill does also include a new task force to increase efficiency through regulatory simplification.
A single payer approach might reduce some of the complexities of our system. Yet, if we tried it at the state level, it would create a huge funding challenge and it would not eliminate the fundamental dilemmas of health care outlined above. On the floor, we added a study to compare to examine how single payer health care might perform compared to the mechanisms we created.
The legislation now moves to the House. The House will not take it up until some time next year.
Official Senate Press Release Appears Below:
Senate Passes Sweeping Healthcare Reform and Cost Containment Bill
Result of yearlong effort to address rising costs and consumer protections
BOSTON-Today the Massachusetts Senate passed sweeping healthcare reform legislation S.2022, An Act Furthering Health Empowerment and Affordability by Leveraging Transformative Health Care. The HEALTH act, passed by a vote of 33-6, focuses on both short and long terms goals on how to fix our healthcare system to lower costs, improve outcomes, and maintain access. The legislation is the result of effort by a group of Senators, The Special Senate Committee on Health Care Cost Containment and Reform, addressing the healthcare system by analyzing the best practices in other states and engaging stakeholders in a series of meetings over the last year.
“Massachusetts continues to lead on healthcare, and having a robust economy depends upon lowering costs for everyone without compromising quality or access. This bill will help working families, businesses, and our state budget,” said Senate President Stan Rosenberg (D-Amherst). “I’m very proud of the work the Senate did to craft a comprehensive report and draft legislation that touches so many aspects of our healthcare system and meets the needs of all engaged stakeholders.”
“Passing The HEALTH Act is a phenomenal step forward for health care in the Commonwealth,” said Senator James T. Welch (D- West Springfield). “Once again, we are setting an example for the nation by creating a health care system that will, among many things, maximize the impact community hospitals can have on our citizens, while keeping costs in check.”
Healthcare costs are continuing to strain the budgets of working families, businesses, municipal and state governments. The Senate has continued to push for reforms to the current system through diligent research, stakeholder engagement, and legislation. The working group of Senators, with the logistical support of the Milbank Memorial Fund spent the last year meeting with officials from seven states, healthcare experts, and stakeholders to examine best practices while lowering costs and improving outcomes.
“The Massachusetts Senate has worked long and hard to craft this plan to contain ever inflating prices and improve the quality of care,” said Senate Majority Leader Harriette Chandler (D-Worcester). “Each member was given the opportunity to contribute to the deliberations and debates when structuring this bill – making this a truly representative effort for the entire Commonwealth. Nevertheless, inflating costs are more than a Massachusetts concern, and I hope this legislation serves as a model for the rest of the nation.”
The bill implements more effective care delivery such as telemedicine and mobile integrated health, to reducing emergency room visits, to expanding provider versatility while also addressing price variation between larger hospitals and their smaller community hospital counterparts.
A recent study by the University of California Davis Health system estimates that “by using telemedicine for clinical appointments and consultations, its patients avoided travel distances that totaled more than 5 million miles. Those patients also saved nearly nine years of travel time and about $3 million in travel costs.”
“Everyone deserves access to high quality health care at a fair price,” said Senator Karen E. Spilka (D-Ashland), Chair of the Senate Committee on Ways and Means. “Massachusetts has always been a leader when it comes to healthcare, and this legislation is the next step in our efforts to protect and empower consumers, encourage innovative healthcare and ensure access and affordability. Our goal is long-term cost savings for the state, without sacrificing our unwavering commitment to high quality coverage for all.”
The bill aims to reduce hospital re-admissions and emergency department use through mobile integrated health and telemedicine as well as expanding access to behavioral health. The Massachusetts Health Policy Commission has estimated that 42 percent of all emergency department visits are avoidable.
The bill aims to tackle provider price variation, the variation between providers for similar procedures, by implementing a floor for providers while also setting a benchmark for hospital spending. If hospitals exceed the benchmark the state will implement fines or penalties on those institutions.
“This important legislation takes meaningful steps to both improve healthcare quality and outcomes, as well as contain costs,” said Senator Jason Lewis (D-Winchester). “More deeply, this legislation furthers efforts to address the social determinants of health that are responsible for many health inequities in our system; and, innovative steps are taken to make prevention a more central component of our healthcare system, which will improve our quality-of-life and save money.”
Post-acute care in an institutional setting and long term care and supports (LTSS) cost the state an estimated $4.7 billion in 2015, a major cost driver for MassHealth. The bill increases transition planning for patients into community settings and strengthening coordination between providers.
“Too often emergency rooms are the only options for individuals struggling with behavioral health and addiction. This comes at a high cost to the system and to families, and this over-reliance on emergency rooms is not the way to address behavioral health and the opioid crisis, said Senator John Keenan (D-Quincy). “So we are presenting effective alternatives – new urgent care centers, Mobile Integrated Health, innovative programing by community health centers, and other ways to get people into the right care setting.”
Pharmaceutical costs have been a driver of increased healthcare costs for a number of years. The Center for Health Information and Analysis (CHIA) reported a 6.4 percent growth in pharmaceutical spending in 2016. Drug costs are making families choose between filling prescriptions and paying for other essentials like housing and food. The bill implements greater oversight and transparency in drug costs and encourages Massachusetts to enter into bulk purchasing arrangements, including a multistate drug purchasing consortium like other states, to lower costs and protect consumers.
“We spent years working towards a strong transparency package and we finally have it with this bill,” said Senator Mark Montigny (D-New Bedford)
The legislation encompasses the whole system from Medicaid to the commercials market, addresses price variation, increases price transparency for consumers, leverages better federal funding opportunities, and expands scope of practice for many practitioners including dental therapists, optometrists, podiatrists, and nurse anesthetists.
Thank you for these clear and helpful explanations of complicated topics. I’m grateful that you and the Senate are working on these issues too!
Senator Brownsberger, thank you for all the good work you do.
I’m glad your brain tumor turned out to be benign. My sister was not so lucky. She died of brain cancer in Washington three years ago six months after having been diagnosed with an inoperable tumor.
Who will make the decision on who gets health care. I hope not the government in order to reduce costs. Like a senior in their 80’s would be not be allowed lifesaving procedures because they are too old????????
No change in consumer decision making on medical care.
Thanks for your thoughtful analysis of the Senate-passed bill that should have a favorable impact on both the cost and quality of health care. My only regret is that the legislation did not significantly focus on the fact that so much of our costly health care needs can be avoided by investing in prevention and wellness — dealing with such issues as tobacco use, poor nutrition and inadequate exercise — and addressing the social determinants of health. (The example you cite of giving a poor elderly person an air conditioner rather than constantly admitting them to the hospital is a good example of a cost-effective intervention.)
I am very appreciative of your hard work on this and so many other issues.
Thanks, Steve. Hopefully, the movement into Senior Care Options will help lead to considerably more preventive care for that population.
WBUR’s reporting stated opponents of single payer claim it is “impractical and would hurt the state’s health care industry”. As if those are good reasons not to save patients and insurance subscribers money! I’m still amazed that so many in this “liberal” state are opposed to single payer, while every other major country has seemed to have figured it out. There is something exceptional, opponents claim, about the United States, that makes universal publicly funded health insurance impossible. I don’t buy it. And if spending less on health care hurts area employers, I don’t view that as a bad thing, because paying to treat sick people is not what amounts to economic development or increased wealth. Less costly prevention and administrative efficiency will allow money to be invested in other industries that are more productive. It’s not good for a third of our economy to be health care. Finally, the fears about the government pulling the plug or denying care are baseless. Private insurers already do this! They make more money by denying coverage to patients! And there is nothing saying that we can’t have a private supplemental insurance market as the French do, and as we currently have for Medicare recipients.
While I support single payer in concept, I do agree there are issues to going it alone as a small state, and it would be better if we had regional cooperation in an Interstate Compact or other reciprocity mechanism. Legislation with a trigger clause might be a way to go.
I think the interstate compact would be desirable and may be the only way to do it short of a national approach, but it would be, as they say, an “elephant dance” to put it together.
Thank you for your [tireless] work on this. I so appreciate the common sense approach I see in this proposed legislation.
It is doubtful that costs of medical care can be controlled much on the state level. Consider the fees that doctors charge for their services. Surgeons and doctors who perform procedures, like radiologists, earn huge incomes compared with primary care physicians, psychiatrists, and obstetricians. The Department of Health and Human Services devolves the setting of these fees to a relatively unknown committee of the AMA. This committee is controlled by the specialists; the pcp’s and other doctors who are involved with diagnosis and palliative care have little power.
Massachusetts could offset this to some extent by encouraging more the training and acceptance of more physician assistants and dental hygienists.
Another problem is that specialists are adopting an industrial model of practice. There is an eye doctor in Boston who has twenty assistants and crams hundreds of patients into his huge office. Patients often have to wait three hours to see him after they arrive at his office. He then spends about 10 minutes with them. He removes clouded corneas from patients in an assembly line, spending about five minutes on each patient and then assigning an assistant to finish the job and follow up. This is industrial medicine. What can Massachusetts do about that, unless you think that is a good thing?
Hi Michael, this legislation does a whole lot on the expansion of practice of various forms of assistants — I agree that this is an important cost control strategy.
As to industrial medicine, sometimes it’s the best kind. I really want to be taken care of by someone who has done roughly the same thing thousands of times — they really know what they are doing.
Thanks, Will, but it is far from enough. The huge disparity in incomes between specialists and primary care physicians is causing a serious shortage. Some of this shortage is being made up by young foreign physicians, but after several years of working in a general practice, they leave to take residencies in gastroenterology or some other well-paying particularly bad in Massachusetts.
As for industrial or “factory” medicine, no patient wants to be treated in an assembly line, and a surgeon doesn’t need to perform thousands of operations to remove a simple cataract, unless it gets infected or results in complications, which are rare.
Anything we can do to control health care costs means there will be more money for other priorities, such as education and infrastructure. Eighteen months ago, I did a tremendous amount of reading about how we die. The answer is “not well”. (I especially recommend Atul Gawane, Being Mortal.) The interventionist healthcare we offer at the end of life not only doesn’t extend life (it actually SHORTENS it), but it causes significant physical and emotional suffering, with absolutely no benefit. All the options you list above are helpful. However, there is one additional option we need to consider, which is unnecessary care driven by fear of lawsuits. (I had to argue with my doctor not to perform some unnecessary and intrusive tests. I’m an attorney, so I could articulate why the tests were not indicated and why I should not take them. However, it was clear she was afraid I would come back and sue her at some later point for not ordering the tests.) We need to shift to a model of medical comp, akin to workers comp. People need redress against negligent medical care, but a medical comp system would ensure that experts (not juries and tort attorneys) assess the standard of care and grant awards that are both medically justified and more evenly distributed. (Many people who should be compensated don’t sue at all, whereas others receive far more in jury awards than they should.)
I do agree that Being Mortal is a great book that speaks well to these issues.
Much of the excessive cost of health care could be decreased if we simply eliminated the confirmation of issues by doctors and dentists. I find that nurse practitioners can generally solve my problems and answer my questions without consulting with a MD. Similarly , my dentist often simply confirms what the hygienist has found. Your constant investigation and communication is greatly appreciated.
Thank you for this clear summary of what sounds like a complex issue. I like the idea of encouraging common sense solutions over medical ones while not cutting into people’s coverage if they need it.
Thanks for this summary. Ironically, this came in as I was reading that the MBTA is revisiting alcohol ads as a way to raise revenue when the 5 year life expires. IF we are serious about controlling health care casts, this should never be allowed. If you and others oppose this, you will have the support of American Society of Clinical Oncology that just made a recent state about reducing alcohol use through several public policy levers, including less advertising.
This is another misguided move by the MBTA– time to step up and manage rather than pretend there are no public consequences they are shifting to others
Yes. I will be publicly opposing alcohol ads by submitting a letter to the T board.
Who is going to choose and hire the handyman/carpenter to install the air conditioner and take it out of the window in the fall every year? It isn’t as simple as buying one in the store. It has to be lifted and carried and installed and someone has to do all that and they have to be paid. Fortunately we can. So far.
Thank you for your efforts and integrity on this important issue. And thank you for keeping us informed.
I’m so riveted on your brain tumor history. It’s impossible to plan all aspects of life although you and so many of us try with all our might. I am humbled and grateful that you had excellent care.
Data now directs us to self-preservation through health care behaviors. We in the first world know about conception and fetal development. We know about football and CTE, substance abuse, mental derangement from living in wars, guns and their inevitable use when available. Every health care provider should ask his or her patients to complete a detailed questionnaire which would measure the individual’s risks, both external uncontrollable factors and life choices made by the individual. Health care can only be more efficient and effective if we all recognize the efforts we are making or not making in our own lives.
Thank you, Lorraine.
Indeed, we all need to take as much responsibility as we can for our health care!
I would be an interesting exercise to see how much it would cost to go to single payer and how high an income tax surcharge would be to fund it. I doubt it would be practical until more states combine resources to do the deal
We can ball park this. MassHealth covers roughly a quarter of the population at a cost of $16 billion-ish. If you were going to cover everyone, you’d probably need at least another $30 billion (give or take $10 billion).
Income tax revenues are about $15 billion, so that we would need to double or triple income taxes . . . not likely to happen.
Thank you for your work on this issue. I was glad in particular to see your last bullet on out of network fees. Just last week, my family received a $700 bill for what was a 5 minute office exam at a dermatologist referral for our daughter, from one of the major downtown hospitals. We were referred there by our pediatrician, and it didn’t occur to us to ask “how much will this visit cost us”, and I’m not sure we would have received an answer. I realize there would be tremendous underlying complexity, but if providers had to provide some basic price transparency that is expected of every other industry, I believe this would help control prices as much as all the regulatory frameworks that are being attempted.
Regarding dental therapists, you said, “Permission for less-expensive professionals to provide care. In every instance of this, the conversation is the same: lobbyists for the more highly trained group of professionals, for example the dentist, argue that the quality of care will suffer if the less trained professionals, for example the dental hygienist, is allowed to provide care without close supervision…”
I don’t think quality of care will suffer. I do question a goal of “greater access to lower cost providers” when the fact is that it is not at all the same as a goal for “lower cost care”. Lower cost providers include pharmacy techs, physician assistants, and nurse practitioners. Have the fees for prescriptions and medical care been lowered? No, instead we’ve seen decades of pharmacy chain and hospital system expansions. Lower cost providers help stretch dollars in public health and non-profit settings. In the private sector, they help the bottom line of their employers.
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