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.