June 2011

June 30, 2011

Time Out For Health Care Cost Increases

Today, HCFA and GBIO are issuing a challenge to insurers to freeze health premiums for one year or until a meaningful long-term cost containment solution is reached, and urged all stakeholders - doctors and hospitals, government, insurers, business and consumers -to do their part to reduce health costs in the Commonwealth.

Join us to rally to call for a time out on premium increases today at noon, in front of the State House
. Sign our Petition. And join our challenge.

Globe story. WBUR report.

As we passed health reform, health care cost control demands shared responsibility. HCFA and GBIO are issuing the following challenges:

  • insurers - Deliver relief to policy holders and keep health insurance premiums level for 2012, without reducing benefit packages or increasing patient out of pocket costs.
  • hospitals and doctors- Reduce costs by promoting integrated care, prevention and wellness, and end wasteful and inefficient treatments. If necessary, re-open existing contracts with insurers to end unjustified price increases.
  • government-Enact comprehensive reform of the health care payment and delivery system, and lead by example to move state employees, as well as MassHealth and Commonwealth Care members into alternative payment arrangements with providers by 2013.
  • employers- Join individual consumers in saying enough is enough and work with us to support a premium freeze for one year or until there is an agreed upon solution for and comprehensive delivery and payment reforms. Large self-insured employers should also work aggressively to negotiate appropriate provider payment rates in order to freeze annual premium increases for workers.
  • consumers- Be more educated and engaged in community prevention efforts that can improve health status and at the same time reduce community health care costs.

More info at: www.hcfama.org/TimeOutOnHealthCareCosts.Join us today and let's fight together for quality, affordable health care for all.

June 30, 2011

Day 3 of health wonk boot camp. The crowd is getting a bit thinner, but there's still lots of good discussion and learning. These hearings are accomplishing both of their goals. First, its providing a forum for getting in-depth data and analysis out into the public sphere. Just as important, it's building a shared set of understandings among key health industry people and government about the policy changes we must enact soon to right our health care system. These understandings will enable the "stakeholders" to work together when it's time to pass, and more critically, implement, the policy changes that are coming.

Today’s hearing focused on alternate payment methodologies and thinking creatively about the health care system in the 21st century. DHCFP posted all the reports, testimonies, or presentations from today's experts, and the witness' testimony. Our full report is after the jump:

June 30, 2011

Day 3 of health wonk boot camp. The crowd is getting a bit thinner, but there's still lots of good discussion and learning. These hearings are accomplishing both of their goals. First, its providing a forum for getting in-depth data and analysis out into the public sphere. Just as importantly, it's building a shared set of understandings among health

Today’s hearing focused on alternate payment methodologies and thinking creatively about the health care system in the 21st century. To see the reports, testimonies, or presentations from today, click here.

The morning began with a review of the research findings using global payment and bundled payment methodologies. Susan Brown, Assistant Attorney General, reiterated what she announced on Monday regarding the Attorney General’s report. The main findings were that global payments to providers did not produce any significant costs savings, and that a major impediment to payment reform cost savings is variation in prices paid to providers, whereby higher global budgets were more related to higher incomes of members than to riskier health status of the members.

Stacey Eccleston, Assistant Commissioner of the Division of Health Care Finance and Policy, presented findings from a demonstration of what is called the “Prometheus Model” of bundled payments. Basically, a bundled payment reimburses a provider for the provision of multiple services during a defined episode of care, either acute or chronic. The services are based on best practice guidelines for particular conditions. The bundled payment for a specific episode, called an Evidence Informed Case Rate, or ECR, is calculated by the sum of 4 factors: Base cost associated with typical care + Severity adjustment based on the condition of the patient + margin to cover provider overhead costs + Potentially Avoidable Consequence (PAC) allowance. PACs, as the name implies, are treatments outside best practice guidelines and add to the cost of care. An example of this would be a hospital acquired infection resulting from an operation. In a typical fee-for-service system, a patient’s insurance would pay for both the operation and the infection (perverse incentives, right?). Under bundled payments like these, some providers could see a surplus if they do not incur PACs beyond the allowance, and some may see losses, if they did not take necessary precautions to avoid PACs. This will reward efficient, quality providers for preventing PACs and delivering quality care to a patient. The results of studies so far are very promising, showing significant cost savings for the conditions that were tested.

Harold D. Miller, Executive Director of the Center for Healthcare Quality and Payment Reform, served as the first expert witness of the day. He talked about how better payment systems can help improve quality and control costs. First off, he wanted to dismiss any consumer worries of ‘rationing’ care to save money. He believes that if we reform the health care payment system and align patient and provider incentives, no rationing of care will be needed, and patients will receive quality, efficient care. He also endorsed paying for health care based on episodes of care, like the Prometheus Model of bundled payments, and compared it to getting a warranty on a TV or a computer. It wouldn’t make sense to have to pay for something that was the manufacturer’s fault, so it doesn’t make sense to pay more for a hospital acquired infection or other unintended consequence of care. He cautioned that warranties on health care services will, and should, cost more than unwarrantied services. Though it may cost more initially to purchase this, the system will realize savings as providers who issue warranties will reduce the frequency of adverse events and payers will actually save money by investing in care with warranty.

Miller cited health systems in the US that currently use bundled payments, such as Geisinger Health Systems in PA (which the afternoon expert witness also cited), and that by using bundled payments, Geisinger has realized major cost savings and reductions in complications and readmissions. The end result: cost savings to the system, and better care delivered to patients. Miller mentioned other health plans across the country that have used payment methods like these and have realized cost savings and reinventing their delivery models to give patients better, cost-efficient care. Some providers may worry that bundled payments or global payments are just capitation with a new name, but Miller encourages providers to think about global payments differently and not a repeat of capitation, which paid providers rates that were too low and not health status adjusted. Comprehensive care payment, he likes to call global payments, should pay providers more to care for sicker patients in order to limit the amount of risk providers must assume. One model that has done a good job in these areas is the Blue Cross Blue Shield MA alternative quality contract, which is a longer-term agreement between payer and provider to care for a patient and assume dual-risk for their health.

In order for payment reform to work, Miller mentioned six things that need to happen first: transitional payment reforms (medical home models, episode payments), supporting prevention and long term returns on investment, making providers accountable for what they can control (and not holding them accountable for things out of provider control), access to multi-payer data on costs and quality, develop better methods of controlling prices and being able to access data across multi payer data on cost and quality, and increasing patient support. The combination of payment reform and these six factors will lead to significant cost containment and enhanced quality in our health care system, Miller believes.

June 29, 2011

The fiscal year ends on June 30th - there are just two days left to help Health Care For All this year!

Health Care For All (HCFA) needs your support to fully fund our HelpLine. Will you make a donation today? HCFA's fiscal year ends June 30, 2011 and we need your help to continue to reach and assist residents of Massachusetts.

Here's how your gift helps:

$100.00 allows a HelpLine counselor to intake and enroll one person in health coverage.

$500.00 collects data and identifies areas and populations in the state that need health coverage improvements.

$1,000.00 sends a HelpLine counselor to a community event to enroll consumers and provide bilingual consumer education on health reform issues.

HCFA's HelpLine is an underfunded and vital direct service program that assists Massachusetts health care consumers navigate the health care system and enrolls residents directly into coverage.

Please watch this video to learn more about the work of our HelpLine.


Thank you for considering a donation today to Health Care For All!

To make a tax deductible donation, click here or call 617-275-2926.

Thank you for your support!

The Staff and Board of HCFA

June 29, 2011

HCFA ED Amy Whitcomb Slemmer testifies at DHCFP cost trend hearings 6-28-11
Yesterday's takeaway was political leaders agreeing on the urgent need for decisive action to reform our health payment and delivery system. Liz Kowalczyk's Globe lede was "State legislative leaders made their strongest statements yet in support of placing significant cost controls on health care, predicting yesterday that they will agree on a bill as early as the fall."

Today's process takeaway was that many stakeholders agree too. The substance takeaway was, like always, that it's complicated.

The determination for reform that was so present on day one was again evident on day two of the Division of Health Care Finance and Policy hearings at Bunker Hill Community College, but some of the earlier optimism was tempered by varying concerns about aspects of the proposed changes.

Those concerns may have been particularly evident in part because of the difference in who testified at the hearings. Day one featured the State House’s heavy hitters and their research teams; day two featured representatives of the hospital, insurance, and business communities, as well as consumer-advocacy groups including Health Care For All.

There was a surprising amount of support, however, for the Attorney General’s suggestion of some government intervention to limit the range of variation among providers’ prices to control what she has characterized as a “dysfunctional” market. WBUR's CommonHealth blog has lots of video highlights, and the Globe's White Coat Notes blog has a report on the morning and afternoon sessions. Powerpoints and written statements are here. Our detailed report is a click away:

June 28, 2011

[caption id="attachment_7033" align="alignleft" width="480" caption="Gov. Patrick speaking at cost trends hearing. Photo from Gov. Patrick Flickr set"]Gov. Patrick speaking at cost trends hearing 6-27-11[/caption]Today, the Division of Health Care Finance and Policy (DHCFP) kicked off health wonk boot camp - its four-day annual public hearing on health care cost trends at Bunker Hill Community College. Today’s hearing featured statements from multiple government officials, including Governor Patrick, Attorney General Coakley, Inspector General Sullivan, and legislative chairs Moore, Walsh and Sanchez. The wonkside included analytic findings from DHCFP, the Division of Insurance (DOI), and the Attorney General’s Office. The presence of all these political leaders brought lots of press attention, with interesting reports by WBUR's Martha Bebinger, and their CommonHealth Blog (posts and videos of Governor Patrick and AG Coakley), along with the Globe's White Coat Notes (testimony excerpts and Gov. Patrick) by Liz Kowalczyk. All the meeting materials and testimony is posted by DHCFP, and Senator Richard Moore posted his statement, too. For us, one of the headlines of the day was the strong commitment from the legislative leaders to move "bold and aggressively," in Rep. Walsh's words, to pass comprehensive payment and delivery reform legislation. There was also shared support for promoting patient-centered primary care, and public oversight over rates. While many more details remain to be worked out, it appears today marked the beginning of the when, not if, phase. The other highlight was the fact that no one even cracked a smile when a researcher noted that the data was "fully loaded." That's how wonkified it can get. It was a long hearing, and so we got a long report. Details below the fold:

June 27, 2011

We heard a very curious argument at a State House hearing last week. The bill was H. 2351, sponsored by Representative Randy Hunt (R-Sandwich). This bill would increase the threshold for the number of employees subject to the Employer Fair Share requirement to 50 workers. Under the compromise the led to the passage of chapter 58, firms with 11 or more workers are subject to the fair share requirements, although the test is stricter for employers with over 50 workers (the conjunction junction regulation).

We opposed this bill, and presented our arguments in a written statement (pdf). We reminded the legislators that Chapter 58's foundation is shared responsibility, and that medium-sized firms have stepped up and added coverage. We noted that "the majority of business owners in Massachusetts support health reform and covering their employees with coverage – interestingly, even if they are not currently offering coverage. According to a 2008 Blue Cross Blue Shield of Massachusetts Foundation report, 64% of firms that do not offer coverage either strongly believe or somewhat believe that 'all employers bear some
responsibility for providing health benefits to their workers.'"

But here's the strange part. Because national health reform imposes its much different employer free rider surcharge only on firms with 50 or more workers, Rep. Hunt argued that his proposal was a jobs bill, not a health bill. According to State House News, Rep. Hunt said border communities will see an exodus of small businesses within the next three years if Massachusetts fails to relax the requirement that companies with 11 or more employees offer health plans for their workers.


If this were true, however, Massachusetts businesses would have already flocked to other states when the state fair share requirement was implemented in 2007. We haven’t seen this happen.

There's no doubt that rising health care costs are hurting small businesses as much as any sector. However, shared responsibility between businesses, individuals, and government is necessary to realize universal coverage and successful cost containment reform. Comprehensive payment and delivery system reform legislation will work to lower health care costs, lessening the burden on businesses and consumers. We all need to contribute our fair share in order to continue the success of Chapter 58.
- Amelia Russo and Brian Rosman

June 24, 2011
Campaign For Better Care activists at Pittsfield hearing

Campaign For Better Care activists at Pittsfield hearing

The Health Care Financing Committee is holding its western Massachusetts regional hearing on Governor Patrick's payment reform legislation in Pittsfield today. We have full coverage on our twitter feed - here's a few of the tweets:

  • [Connector ED Glen] Shor talking about need to move evidence-drive, coordinated care. Move to payment reform needs to be done quick, at appropriate scale.
  • [MassHealth Director] Says it's mistake 2 think things can never change. Dedicated folks r working towards better care, but they need roadmap. This bill that map
  • Heart Association members testify at Pittsfield payment reform hearing

    Heart Association members testify at Pittsfield payment reform hearing

  • Our friends from the @HeartMASS, Allyson, Amy & Ali testify as part of the Campaign for Better Care.
  • Ali,age12, has a heart condition and often drives hours for the specialized care she needs. Access to care is key!
  • Chair Walsh says that quality and access has to come 1st. @sendickmoore thanks them for Ali personal story--says it makes all the difference
  • Cynthia, of North Adams testifies with Campaign for #BetterCare. Talking about how her premium doubled and how HCFA's helpline helped.
  • Local Health Center talking about how CHCs must be part of equation.
  • Chairman Walsh just gave @HCFA a shoutout for helping push the committee to move the ball forward. Thank you!

Reminder -we'll be in Charlestown all next week for the health care payment policy boot camp, in the spacious Room A-300 at Bunker Hill Community College. Follow our tweets and look for blog updates throughout the hearings. Monday is opening day, featuring the staff aces, Senate President Murray, Governor Patrick, Attorney General Coakley and more.

June 24, 2011

[[{"type":"media","view_mode":"media_large","fid":"270","attributes":{"class":"media-image","typeof":"foaf:Image","height":"344","width":"425","style":""}}]] Remember our challenge issued in April (see video above)? The time has come.  On June 30th, from 12-1pm in front of the Statehouse, consumers from Health Care for All and the Greater Boston Interfaith Organization (GBIO) are teaming up to tell insurers and providers that we are not willing to pay for the rising costs of health care any longer! For too long, consumers have been told how much they will pay in their skyrocketing premiums.  Now, we are taking a stand. We will announce our challenge next week at a rally in front of the Statehouse. This is a call to action to bring everyone to the table-insurers, providers, city and state governments, and consumers-to find meaningful ways to improve the health care system to preserve access and improve quality care, while also reducing costs. But in order to be heard loud and clear, we need your help!  This is a bold move. We are telling the industry that we will not accept outrageous premium hikes this year. So when we issue this challenge, we need to demonstrate support. Please let Celia Segel or Ari Fertig know if you're able to join us - and who you can bring along! • Who: You and anybody you can bring along who wouldn't mind wearing a HCFA t-shirt • What: Rally to Give Health Care Cost Increases a Time Out! • Where: In front of the Statehouse • When: NEXT THURSDAY, June 30th - 12-1pm • Why: Because it's our money and we can't wait. Please RSVP to Csegel@hcfama.org or Afertig@hcfama.org This is our time to show that as consumers, we care about quality, affordable health care. Join us next week and make your voice heard! -Celia and Ari Health Campaign Organizers

June 23, 2011

ACA Implementation subsidized coverage options
Yesterday afternoon, EOHHS held its quarterly stakeholder meeting regarding implementation of the federal Affordable Care Act (ACA) in Massachusetts (see presentations from the meeting).

Secretary Bigby opened the meeting with an overview of accomplishments in the first year since the ACA was passed. Already, the state has received $160 million in funding through ACA grants and demonstration awards. The largest grant is $110 million over the next 5 years through the Money Follows the Person Rebalancing Grant Demonstration, which will be used to orient Massachusetts’ long-term care systems towards more community-based care.

Also, Massachusetts, in collaboration with the other New England states, was awarded $35.6 million through the Early Innovators Grant. The funds are being used to develop a technological platform to improve eligibility and enrollment, customer service, interactions with health plans and other administrative services.

The subsidized insurance workgroup has been formed to plan for changes in MassHealth, Commonwealth Care and other state programs that take effect in 2014. Robin Callahan of MassHealth, and Kaitlyn Kenney of the Health Connector, presented an update from the subsidized insurance workgroup. They have created guiding principles and outlined a timeline for assessment, design and implementation of subsidized insurance plans. The group has developed preliminary potential options (see above). Next steps include costing out the various options and feedback from stakeholders.

The ACT!! Coalition is vitally interested in the work of the group. We want to make sure that implementation advances the progress made in Massachusetts health reform. The state needs to bring in stakeholders into the decision-making process, rather than at the conclusory stages. It’s clear that legislation amending chapter 58 will be required to implement the ACA, and so stakeholder participation is vital at the policy formation stage.

As a guide to ACA implementation in Massachusetts, the Blue Cross Foundation has published their ACA Tracking tool (pdf). This resource lists many of the key ACA-relate coverage policy decisions facing the Commonwealth (full disclosure: HCFA helped prepare the tool, along with the Center for Health Law and Economics, at UMass Medical School). The Foundation plans to regularly update the document with the latest information as things develop.
-Emily Sobiecki and Brian Rosman

June 20, 2011

Vermont Governor Peter Shumlin recently signed Act 48 which will put Vermont on the path towards a single payer health system, hoping to save Vermont $500 million per year in health costs. Blue Cross Blue Shield MA Foundation and The Massachusetts Health Policy Forum cosponsored an event this morning titled “Stepping Toward Single Payer: An Inside Look at Vermont” that focused on Vermont’s progressive legislation and how it will work to contain costs. Panel members included Anya Rader Wallack, Special Assistant to Gov. Peter Shumlin for Health Reform and President of Arrowhead Health Analytics, William Hsiao, Professor of Economics at Harvard School of Public Health, Representative Michael Fisher from Vermont, and Don George, President and CEO of Blue Cross Blue Shield of Vermont. Sarah Iselin, President of BCBS of MA Foundation, moderated the forum.

Vermont is a much smaller state than MA, with 625,000 residents, 14 general hospitals, and only 8 critical access hospitals. But like Massachusetts, Vermont health spending has soared through the roof in recent years. Between 1992 and 2009, health care spending more than tripled. There has been talk about single payer in the Green Mountain state for some time, and this talk was put into action last month. A Democratic governor and 2/3 majority in both House and Senate provided a political window for legislation, yet panel members stressed that the main catalyst for Act 48 was an economically sound argument for cost reductions from a single payer system.

Act 48 outlines three important components, according to Wallack.

1.Sets up Green Mountain Care Board (2011), the locus for cost containment that will set an overall budget and recommend minimum benefits to the plan.

2.Sets up Vermont Health Benefit Exchange (2014) which will follow along federal exchange guidelines and transition into the single payer, “Green Mountain Care” once a waiver is obtained.

3.Plans Green Mountain Care, the single payer organization. This will be an independently-run non-profit payer, and will need a waiver (2014) to replace the exchange.

The financing for coverage and the available federal funds will be worked out by the Secretary of Administration in 2013 and voted on by the legislature.

Hsaio, who researched Vermont’s situation and developed recommendations for a single payer system, believes that single payer is the best way to control costs while maintaining quality by reducing administrative waste, using electronic medical records, rewarding providers for value not volume, and improving the care delivery system. He believes the final legislation was successful in creating an independent board, decoupling health insurance from employment, and creating guidelines for a benefit package, but the proof of the pudding will come from how VT will finance the care, and how doctors and hospitals will be paid (i.e. moving away from fee for service), which we will not know until 2013.

Representative Fisher compared the passage of a single payer law to his other job as a licensed social worker. Realizing rising health costs are unsustainable, it’s easy to throw in the towel and ignore the issue, as it is with a seemingly hopeless client. However, in both cases, a step-by-step approach is needed to address the causes and fix the problem. In response to Hsaio, the legislators were not adequately prepared to outline the financing, and this step will be addressed later in the process.

You may assume the CEO of a private insurance company would oppose transition to single-payer. However, Don George, President and CEO of BCBSVT and a Vermont native, fundamentally agrees with the a single payer health care system, and claims after 25 years of working to control costs in health care, he has gained no ground. Committed to Vermont’s residents, he acknowledges that a single payer (he hopes BCBSVT) will be necessary to deliver quality affordable care to his home state.

Some attendees asked about the response of physicians and hospitals. Panelists unanimously reported that there has been a broad array of responses, but generally a more positive response from the primary care community, and a more anxious response from specialists. Hospitals are also nervous about what this will mean, as they have already been having trouble meeting the bottom line in recent years.

Other members of the audience asked about rationing care as a means to saving money. Don George replied that the goal of single payer is to restrain costs, not care. He believes a single payer system can align incentives between patients and providers, and areas such as chronic disease management will be large cost savers.

Michael Doonan, Executive Director of the Massachusetts Health Policy Forum, ended by stressing that progressive policy begins in the states, as we have seen in Massachusetts with our own health care law. Vermont’s new legislation is certainly progressive, and time will tell how the policy will influence its health care system.

-Amelia Russo

June 20, 2011

The latest health care cost trends report from DHCFP “Trends in Health Expenditures” looks at total health care spending for the private health plans (fully insured and self-insured), Medicare and MassHealth (which includes Commonwealth Care spending). The private health plan analysis is for 2007-2009 and the public analysis is for 2007-2008.

The report notes several disturbing trends including: continued growth in use of tertiary and specialty hospitals with minimal gains in certain areas by community hospitals, continued increases in price paid per unit of service for private plans, increased use of diagnostic imaging across all markets, and increased dominance of fee-for-service payments (95%-97% increase). The report finds that “health care spending continues to outpace inflation, wage growth, and other measures of economic growth in

While the rest of the nation experienced a decrease in the health care growth rate, “health care spending growth was largely uninterrupted” in the Commonwealth. This is not surprising news to us- we have all seen the pressures on government, employers and health care consumers who struggle to pay for their health care services where health care costs take up an increasing percentage of annual budgets. What is new to us is the in-depth analysis of why costs are increasing. The analysis will enable us to target the right solutions to the different parts of the system.

Here are the top line numbers: The report estimates that Bay Staters spent $36.9 billion in total health care costs in 2008. Spending grew 10.3% in 2009 in private insurance, 4.8% in 2008 for Medicare, 2.8% in 2008 for MassHealth. Meanwhile, the GDP actually shrunk in 2009 at -1.6%.


Percent of Change in Total Private Insurance Hospital Inpatient Spending Due to These Factors


Total Change in Overall Spending

Changes in Price for Same Service

Location of care among hospitals

Number of Admissions

Mix of Services













Two things drive health care spending: the cost of each service and how much we use those services. For private insurance, increases in the price of services is the overwhelming cause of increased spending (accounting for virtually all growth in inpatient spending and outpatient spending and 88% of professional services in 2009). See the chart above on inpatient care, (adapted from table 9 on p. 29). For public insurance, the cause of growth is mixed, with increases in the cost of each service as well as use of the services. We recommend checking out the tables in each section that show the drivers of change in spending for each part of the market and within each growth area.

There are a few other themes that jump out:

  • First, use of imaging continues to grow everywhere. There is a little slowing in the use of the highest cost imaging technologies (CT and MRI), but not enough to slow the overall growth in this expensive area.
  • Second, behavioral health. 2009 was a pivotal year with the passage of federal mental health parity (extending coverage to the self-insured market) and the extension of the state’s mental health parity law. These two laws resulted in significant increases in volume of services provided in the private market. We will have to carefully monitor this over the next few years to determine the full impact of the changes to both people’s health and the cost of coverage.
  • Third, there is still significant and growing use of tertiary and specialty hospitals to the detriment of community hospitals. Hospitals in the Boston metro area are increasing their market share compared to the rest of the state.
  • Fourth, the report noted strong growth in the use of non-physician professionals – up 10.5% from 2007-2009 in private insurance, and up 14.1% in MassHealth. This group includes nurses, midwives, dentists, chiropractors among others.

So. Where do we go from here? For us, the ‘uninterrupted’ cost growth will only be stopped through payment and delivery system
reform. We need person-centered health care that coordinates our fragmented system so patients get the care they need and waste is removed from the system. The evidence is in. We must make a change.
-The Campaign for Better Care Team