Board Meets to Review Report on Performance of Massachusetts Health Care System
On September 9th the Health Policy Commission (HPC) Board met primarily to discuss the release in early September of the Center for Health Information and Analysis (CHIA) Annual Report on the Performance of the Massachusetts Health Care System and the upcoming annual Health Care Cost Trends Hearing. The full slide deck can be accessed here.
Executive Director’s Report
First, Executive Director David Seltz delivered a report to summarize recent activities at the HPC. He began with an update on Material Change Notices, noting that of the types of transactions documented from April 2013 to the present, the most frequent were physician group merger, acquisition, or network affiliation transactions at 26% (Slide 7).
Notices received since the last HPC meeting include an acquisition of Saint Francis Care, a hospital system in Hartford, CT, by Trinity Health Corporation, which owns Mercy Medical Center in Springfield, MA.. Additionally, the HPC received notice of a new clinical affiliation between Tufts Medical Center Parent (Tufts) and Cape Cod Hospital (CCH) under which Tufts physicians will provide substantially all pediatric services at CCH (Slide 8).
The HPC elected not to proceed with Cost and Market Impact Reviews (CMIR) for the following:
- Acquisition of Braintree Rehabilitation Hospital and New England Rehabilitation Hospital by HealthSouth Acquisition Holdings. Their analysis indicated there is limited scope for a CMIR due to the fact that the hospitals in question primarily serve Medicare patients.
- Acquisition of Saint Francis Care by Trinity Health Corporation. The proposed transaction would have a limited impact on operations, prices, and contracting practices at Mercy Medical Center. While the transaction may result in a small increase in referrals between MA and CT providers, their analysis did not find that such changes would likely have a negative effect on spending or on the competitive market.
- Affiliation between Tufts Medical Center Parent and Cape Cod Hospital. The analysis indicated that rates and referral patterns are unlikely to change as a result and, in fact, may improve quality, access, and the ability of CCH to provide consistent pediatric coverage (Slide 9).
Seltz then gave an update on the HPC’s Registration of Provider Organizations Program, a project meant to create a database to capture ongoing changes in the provider market Thus far 59 provider organizations have completed the first part of initial registration and are expected to complete the second part this Fall. The registrants represent behavioral health, hospital systems, physician groups, and an “other” group solely including Quest Diagnostics (Slide 11). The provider organizations must submit their part 2 materials to the HPC by October 30, 2015. Provider organizations can now access the online submission platform and the HPC encourages providers to schedule one-on-one meetings with them.
Next Seltz turned to the HPC’s Community Hospital Acceleration, Revitalization, & Transformation (CHART) Investment Program, which is progressing with both Signature Healthcare and Berkshire Health Systems moving into the contracting and launch phases respectively. At Northern Berkshire Neighborhood of Health, part of Berkshire Health Systems, the $4M project has now launched and is serving patients from Northern Berkshire County. The project primarily aims to reduce 30-day readmissions by 20% and, secondly, reduce 30-day returns to the emergency department from any bed by 10%. They hope to achieve these goals by utilizing a number of strategies like individual care plans, addressing underlying social issues, and investing in technology to support care coordination. The project also hopes to integrate many services into the community (Slides 17-18).
Lastly, Seltz reported on an important amendment passed in the FY2016 budget that strengthens consumer protections for patients who face medical bills and who exercise their rights to pursue internal or external appeals of certain health insurance coverage decisions. The amendment prohibits health care providers and their agents from providing information about unpaid charges for health care services to a consumer reporting agency while an internal or external review is pending or for 30 days (increased from 15 days) following the resolution of the internal or external review. The amendment further prohibits health care providers and their agents, including any collection agency or debt collector from initiating debt collection activities relative to unpaid charges for health care services while an internal or external review is pending or for 30 days following the resolution of the internal or external review (Slide 20).
CHIA Annual Report
Executive Director of CHIA, Áron Boros, began by delivering the major finding of CHIA’s Annual Performance Report that total health care expenditures (THCE) per capita rose 4.8% from 2014, which amounts to $8,010 spending per person. The greatest source of the percentage change is reported to be MassHealth/Commonwealth Care spending. However, there was much debate among the Board members as to what this fact actually meant when examined more closely and its impact on the total spending change number.
According to the CHIA report’s cumulative state program enrollment numbers for MassHealth, CommCare, and MassHealth Transitional, enrollment increased significantly from December 2013 to December 2014. Board member and Secretary of EOHHS Marylou Sudders explained that the reasons for this expansion were the implementation of the ACA, problems with the Connector website and the subsequent creation of MassHealth transitional, and the inability of the Connector to conduct MassHealth redeterminations over that time period. However, Sudders noted that only 5% of the people who were recently redetermined for MassHealth were eligible for another program. Some other questions raised included whether dual eligibles were affecting the enrollment numbers (Boros reported that they were not counted twice) and what the current demographic make-up is of the MassHealth population. Boros explained that CHIA was unsure whether the demographic make-up of MassHealth had changed or, in response to a question by Board member Rick Lord, where the new members were coming from given that population growth had increased little over the past year. After a lengthy discussion, the Board members came to the conclusion that the spending growth per capita figures may not have adequately taken into account enrollment growth and therefore the THCE figure may not tell the whole story about how the Commonwealth is progressing in its ability to curb costs through payment and delivery system reform efforts.
Prescription drug trends were also a significant part of the THCE trends. Prescription drug costs accounted for 13% of THCE and represent 33% of the growth in THCE between 2013-2014 (slide 29). These percentages, noted Board Chair Stuart Altman, include non-insurance related out-of-pocket coverage or “self pay”. Boros is unsure whether there were certain prescriptions drugs that account for this increase but he did state that some new specialty drugs and the use of some generics may be accounting for the increased spending growth.
Also within the Report was a table measuring provider quality of adult primary care experience by race and ethnicity. The table notes that there are racial disparities in quality across all measures (slide 31).
The adoption of alternative payment methodologies is growing slowly in the commercial market, Boros explained. The growth of global payments in the commercial market rose a modest amount from 34% to 38%. The most significant increase in non-fee-for-service payment methodology uptake was among MassHealth Primary Care Clinician (PCC) plans, from 14% to 22% (slide 32).
The Report also showed that premiums increased modestly but cost sharing increased faster from 2013-2014. The cost of coverage (e.g. premiums) increased 2.6%, cost sharing increased 4.9%, and high deductible plans are now a greater part of the market (slide 33). The Board members were concerned that out-of-pocket costs were growing and wanted to know more about whether high deductible plans, with their higher cost sharing, were reducing utilization and subsequently overall spending .
Lastly, Boros noted that tiered network products, the self-insured market segment, and the number of preferred provider organization (PPO) plans had increased (slide 34). All were gradual but consistent increases.
Following Boros’s presentation, HPC General Counsel Lois Johnson gave an overview of the panels for the upcoming Health Care Cost Trends Hearing on October 5th and 6th at Suffolk University Law School (slides 41-42). The next HPC Board meeting is on October 21, 2015.
---- Michelle Savuto