hill country observerThe independent newspaper of eastern New York, southwestern Vermont and the Berkshires




Next step for health care

With coverage nearly universal, Mass. looks to cut costs, push prevention



Contributing writer


From his second-floor office on the campus of North Adams Regional Hospital, Chip Joffe-Halpern has a unique vantage point from which to watch the course of health care reform in Massachusetts.

As executive director of Ecu-Health Care, a nonprofit that helps Berkshire County residents to find health insurance, Joffe-Halpern was tapped to serve on the board that oversaw implementation of the state’s seminal 2006 health care overhaul.

The 2006 reform, signed into law by then-Gov. Mitt Romney, required all Massachusetts residents to obtain health insurance – and greatly expanded state subsidies for those who couldn’t afford to buy coverage at market prices.

Six years later, Joffe-Halpern said, the legislation has changed everything. Before 2006, about 40 percent of those who contacted Ecu-Health Care looking for insurance coverage weren’t able to find coverage they could afford. But now, thanks to generous subsidized coverage, the proportion of callers unable to find affordable insurance has shrunk to 4 percent.

Joffe-Halpern says he knows of at least two cases of young men who came to his office solely because of the state’s individual mandate for health insurance, only to discover they had early stages of treatable cancer. The new law has saved lives, he said.

“From a local perspective, it’s just been terrific,” Joffe-Halpern said.

The trend toward sharply higher rates of health coverage has been reflected statewide. This year, 98.2 percent of Massachusetts residents – including 99.8 percent of children -- had health insurance coverage.

“No other state in America can touch that,” Gov. Deval Patrick said in a recent speech to the Greater Boston Chamber of Commerce. “You should be proud of that.”

Despite its success in boosting the number of people with health insurance coverage, however, the Massachusetts system has done little so far to curb the rising costs of health care – for doctor visits, medical procedures, prescription drugs and so on.

That may be about to change. This month, legislators on Beacon Hill are expected to pass a bill aimed at shaving billions of dollars in health care costs over the next decade, mainly by moving away from fee-for-service medicine toward a system that emphasizes preventive care and patient outcomes.

Setting limits on costs

In the past few years, the Massachusetts health insurance system has been used as a yardstick for all other state health care reform efforts, including Vermont’s, and it effectively served as a blueprint for the national health care overhaul that President Obama and his allies pushed through Congress in 2010. It also has become a hot campaign issue in this year’s Republican presidential primaries, with candidate Romney carefully distancing himself from the program he once championed.

Critics of the federal health care overhaul have warned that, even if it provides health insurance coverage to a lot more people, it won’t do much to control the spiraling costs of medical care. As more people get subsidized coverage, more of those costs will be passed along to taxpayers, the critics contend.

But in Massachusetts, Joffe-Halpern says, the state deliberately put off the issue of cost control in the overhaul it approved six years ago. Doing that and expanding coverage at the same time would have been too much of a political lift – and likely would have fallen apart the way President Clinton’s health reform efforts collapsed in the 1990s, he said.

“No piece of health care legislation in the history of this country has ever contained costs and expanded coverage all in one bill,” Joffe-Halpern said.

What passed in Massachusetts was “politically what we could do,” he explained.

The cost-containment effort now being crafted in Boston will be fashioned from three competing bills pending in the Legislature. Lawmakers have said they want to limit the increase in health care costs to the rate of growth in the state’s overall economy.

To achieve this, the pending bills would increase the state’s control over health insurance rates while shifting payments for health care from a per-service model to an incentive plan based on patient outcomes. The final bill is also expected to include an expansion of preventive care and other programs aimed at keeping the state’s citizens healthy.

Health care and business advocates are divided, however, in their assessment of how effective these steps will be.

Changing the model
Amy Whitcomb Slemmer, executive director of the nonprofit group Health Care for All, says the switch from a fee-for-service model to a more holistic billing system that rewards positive patient outcomes would be a major breakthrough and a model for the rest of the nation.

“This is the most exciting opportunity we have had in generations to realign health care,” Whitcomb Slemmer said.

The change, in fact, is already being carried out by many insurance companies, partly as the result of a previous showdown with the Patrick administration.

Two years ago, the state Division of Insurance rejected 235 out of 274 rate increases health insurers had proposed for small businesses and individuals. Insurance companies initially went to court to challenge that, but eventually they saw the writing on the wall, said Sharon Torgerson, a spokeswoman for Blue Cross Blue Shield of Massachusetts, the largest insurance provider in the state.

“People in Blue Cross saw we had to find fundamentally different ways to pay for services,” Torgerson said.

Under the traditional fee-for-service model, health care providers get paid more for every additional test or procedure they provide. But industry experts say this method can lead to inefficiencies and bad outcomes for patients. The Patrick administration has estimated that wasteful practices within the health care system cost Massachusetts between $13 billion and $20 billion every year.

Under the new model of “global payments” or “alternative quality contracts,” health care providers receive a set fee from insurance companies for a number of patients -- with a bonus if they can keep within the set budget.

Advocates of the new system say it provides an incentive for doctors to focus on preventing serious health problems rather than treating them after they occur. This results in aggressive maintenance care for patients – by calling them to schedule blood pressure tests or mammograms, for example.

Recipe for better care?

Torgerson said the global-payment system has proven popular and now covers about 75 percent of Blue Cross patients in Massachusetts and has been adopted by other major insurers.

In a recent study of the 2-year-old global-payment system, Harvard Medical School researchers concluded that the scheme has increased the quality of patient care.

The Senate version of the pending cost-control bill would create a certification process for insurers and a fund to help insurance companies and health care providers make the transition to the new payment system. This type of state assistance may be important for physicians trying to adapt to a changed environment.

Richard Aghababian, president of the Massachusetts Medical Society, said the 2006 health care overhaul added some 400,000 new patients to the rosters of primary care physicians, and the state’s medical infrastructure is just beginning to catch up. The added workload means many physicians have had to streamline operations and become more efficient, but even so it has been tough for some medical practices to adapt, he said.

“It can be very anxiety-provoking,” Aghababian said.

The change has also been stressful for patients, who face longer waits for appointments with primary-care doctors. Perhaps in part because of this, the number of patients seeking care at hospital emergency rooms has not declined significantly since the 2006 law took effect.

Whitcomb Slemmer said any new payment structure must be designed in a way that avoids putting doctors in the ethically compromising position of saving money by favoring healthy patients over the sickest. The state must ensure that insurance companies provide enough room in global-payment budgets for doctors to treat those with chronic illnesses, she said.

“We want to make sure there are no disincentives to treat the very sick frequent-flyers,” Whitcomb Slemmer said.

Not everyone is convinced that a global-payment scheme will work.

At Mass-Care, a nonprofit group that favors a single-payer health care system for Massachusetts, Executive Director Ben Day said the proposed system sounds remarkably similar to the managed-care payment schemes that were vilified during the heyday of health maintenance organizations in the 1990s. Day suggested that a global-payment system is just managed care in sheep’s clothing; adopting such a system, he said, will just waste time while health care costs continue to rise.

“We can’t wait forever to tinker with things that don’t work,” Day said. “Eventually, we do have to do something that works.”

Even so, Day said there is a lot to like about the pending legislation, including the emphasis on preventive care.

Early intervention
Whitcomb Slemmer said the focus on prevention is what sets the new reform effort apart from managed care. The legislation, she said, emphasizes the need to empower patients on their own health care by requiring discussions with physicians about treatment options and how much each of these payments costs.

And studies have shown that patients often choose less costly and less invasive treatments when given a choice -- and that these treatments can lead to better outcomes, Whitcomb Slemmer said.

“I want us now to be talking about the patient experience,” she said.

The proposed legislation also would provide more funding for community wellness programs that can prevent serious, chronic illnesses before they happen, Whitcomb Slemmer said.

Massachusetts communities already have been trying small-scale pilot programs in recent years and have seen considerable success. Smoking cessation programs, for example, have paid real dividends by lowering health care costs, Whitcomb Slemmer said. Funding such programs is like going back in time with a liver transplant patient and helping that patient make lifestyle changes to prevent the need for the transplant, she said.

Locally, the Northern Berkshire Community Coalition has won a $300,000, five-year grant under the Mass in Motion program to find ways to keep residents in communities like Adams and North Adams healthy.

Amanda Chilson, a local yoga instructor, is overseeing the grant program for the coalition. Since January, Chilson has been working to strengthen farm-to-school programs that provide fresh produce for school lunches, encouraging low-income individuals to use their food-stamp and WIC benefits at farmers’ markets and planning the rehabilitation of a walking trail, among other things.

“The big piece is to make the healthier choice the easier choice,” Chilson said.

Differing details

The state Senate already has passed its version of the reform package by a large majority, and the House is expected to take up its package in the next few weeks. The governor has made the legislation a top priority.

Although the various versions of the cost-containment legislation have similar goals, the differences involve the amount of required government oversight.

Observers say the House legislation, as currently written, is perhaps the most aggressive. For example, it creates a new tax on hospitals that charge prices more than 20 percent above the state median price for a given medical service. The money raised by this tax would be used to help poorer hospitals cover their costs.

The Senate legislation is considered more business-friendly, although it would create a new quasi-public agency to oversee cost-cutting measures. It allows health care costs to grow at a higher rate, just slightly over the state’s annual economic growth rate, before the Legislature would be required to revisit the cost-containment issue.

Senate President Therese Murray has called the House tax on wealthier hospitals a nonstarter.

And Patrick, while praising the Legislature’s efforts, has raised concerns about some provisions in each bill. In particular, the governor has said he’s skeptical about the idea of creating a new government agency to oversee cost-containment efforts.

“Creating new quasi-independent agencies with less accountability to the public is a bad Massachusetts habit,” Patrick said in his speech to the Boston chamber.

But the governor has not said he would oppose either bill. With the governor’s office and both legislative chambers firmly in Democratic control, political observers agree that fundamental health-care reform is in the works, with the details to be worked out in a joint conference committee of the House and Senate.

“The conference is really going to be an exciting place,” Whitcomb Slemmer said.

Adding to the drama is the fact that Massachusetts’ efforts are unfolding on a national stage, against the backdrop of the presidential campaign and a pending U.S. Supreme Court decision on the constitutionality of requiring individuals to buy health insurance – as both the Obama reforms and the 2006 Massachusetts law do.

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