September 25, 2006

The Special Commission to study the merger of the Non Group and Small Group Insurance Markets will meet on Thursday September 28th from 10 to 11:30 at the offices of the Division of Insurance (One South Station, Boston). We understand the Commission is weighing the three proposals from firms wishing to do the merger study, and that they will vote on their choice at this meeting.

The market merger is an important piece of health reform to keep an eye on. Changes in the private insurance market impact not only those who are currently uninsured who will need to purchase insurance, but everyone currently in the individual and small employer markets. The merger will also play a role in the structure and success of the non-subsidized Insurance Connector plans for folks with incomes over 300 percent of the poverty level.

Come to let the Commission know that you care about the private insurance pieces of health reform!

September 20, 2006

So, let's ponder larger questions related to Kerry Healey's new health agenda (5 out of 50 "tough smart solutions"...)

First, if this is all she has to offer on health care, we should all pull a Dickens on her: "please ma'am, we want some more..." Cuz these five underwhelm in contrast with the scope of health system problems facing the Commonwealth. Let's hope the LG has more up her sleeve than these meager pickins.

Second, hmmmm, nothing to say about Massachusetts health reform (Chapter 58). Nothing? Gov. Romney's premiere legislative accomplishment. A major challenge for the next Governor, whether Kerry, Deval, Christy or Grace. Nothing tough or smart to say? Oh, well.

Third, attacking health care costs? Not with this list. Lucky for the LG, she can say, "I've put out detailed proposals to bring health care costs under control" and 99,999 out of 100,000 won't ask what those proposals actually do.

Fourth, how about the fastest growing insurance phenomenon in Massachusetts, the rising tide of "underinsured," folks whose family budgets are straining under the weight of deductibles, co-pays and co-insurance. Any tough or smart solutions for them? Boy, could they use them.

Electronic health records, administrative costs, quality improvement, racial and ethnic health disparities, pay for performance, hospital acquired infections, obesity epidemic, substance abuse prevention -- so many opportunities for genuine tough and smart solutions.

Is this all there is?

September 20, 2006

Today, MA LG and Republican Gubernatorial Candidate Kerry Healey released 50 “Tough Smart Solutions to Change Massachusetts.” Click here to view. As her first set of detailed policy proposals, we were curious which ones related to health care. Five deal with health care and five deal with beating up on illegal immigrants.

Here are the five health items:
#13:Keep doctors in Massachusetts and reduce health care costs by adopting medical malpractice reform.
#21:Lower health insurance costs for cities and towns by allowing them to purchase coverage through the state.
#29:Reduce health care costs by helping consumers comparison shop for treatments and facilities.
#30:Require state government employees pay 25 percent of their health care premiums; a rate that is in line with the private sector.
#40:Provide tax incentives for individuals who care for their elderly relatives at home.

Quick reacs on each one:

#13:Keep doctors in Massachusetts and reduce health care costs by adopting medical malpractice reform. Details include: 1. Reform current $500,000 cap on non-economic damages…2. Tighten the state’s current medical tribunal system…3. Allow medical providers to disclose and, if appropriate, apologize…4. Reduce lawyers’ fees…

Comments: Pretty timid and vague overall. Impact on reducing health costs – minimal to non existent. By the way, limiting non-economic damages hurts low and middle income victims of medical negligence. Rich people by definition have more economic damages when they are injured in medical care and can sue for lots of money. Lower and middle income victims, housewives, children, disabled folks have much lower economic damages. Pretty anti-consumer, especially when there’s nothing in the platform to address the epidemic of medical errors. Item 3 – apologies – good idea. We're thinking of backing this one.

#21:Lower health insurance costs for cities and towns by allowing them to purchase coverage through the state.

Comments: As Healy notes, a promising process is already underway inside the State House on this topic, involving municipal officials, unions and the Group Insurance Commission. If they reach agreement, this will happen legislatively regardless of who is governor. By the way, cities and towns have been able to do this since 1991, and no city or town has taken up the option. The question is whether cities and towns are able to join the existing pool of state workers or whether they have to create a separate risk pool, which saves them nothing. Existing unions in the Pool have resisted allowing the munies into the larger pool and that's where movement may occur.

#29:Reduce health care costs by helping consumers comparison shop for treatments and facilities.

Comment: Gee, maybe no one told the LG, but the Romney Administration has been taking credit for doing this for about a year now. Click here to see the site. If LG Healey wants to propose something radical, ask the Romney Administration to ask consumers why none of them are using this site.

#30:Require state government employees pay 25 percent of their health care premiums; a rate that is in line with the private sector.

Comment: Proposed every year by the Romney Administration (and his three Republican predecessors), and rejected every year overwhelmingly by the Legislature. Something new here?

#40:Provide tax incentives for individuals who care for their elderly relatives at home.

Comment: In July, Legislature passed and Gov. Romney signed major senior choice law allowing Medicaid dollars to follow the senior, whether they choose home or nursing home. No mention here of the new law or the cost of this proposal. Also no mention how big the tax incentives. Some smart person should ask Healy for a cost estimate of this one. Could be quite large.

Next blog – let’s explore what’s not on Healy’s radar screen.

September 19, 2006

In the new MA health reform law, the House and Senate agreed to restore coverage for dental services to 650,000 MassHealth adults. Gov. Romney vetoed the restoration and the House and Senate overrode the veto. Coverage was restored in early July. Keep that in mind when you read excerpts from this article in today's Wall Street Journal on how health plans across the nation are saving money by investing in good oral health.

Amid mounting evidence linking poor oral hygiene to a range of expensive medical problems, health plans are starting to cover more dental treatments and preventive services. The idea, insurers say, is that paying for certain services now, such as additional cleanings, gum treatments and prescription mouth washes, can reduce the incidence of other health problems down the road. A number of studies suggest that early prevention and treatment of gum disease may result in significantly improved outcomes for pregnancy, heart disease and diabetes, often leading to substantial medical-cost savings.

Many of the insurers' enhanced benefits are focused on people with these health risks. Cigna Corp.'s Oral Health Integration Program, implemented earlier this year, covers additional deep cleanings known as scaling and root planing during pregnancy at no extra cost, or an additional regular cleaning (over the usual two a year) for pregnant women who don't require scaling and root planing. A similar benefit is available for patients in Cigna's diabetes and cardiac-care disease-management programs.

In March, Washington Dental Service, a member of the Delta Dental Plans Association, introduced enhanced benefits, including coverage of antimicrobial mouthwashes for pregnant women, to its members in 2,000 companies in the state. Aetna Inc., with 8.8 million members who have both dental and medical coverage, has conducted pilot programs designed to get pregnant women and people with chronic disease to visit a dentist. The company expects to offer a third regular cleaning each year, or additional deep cleanings as needed, to all such at-risk patients next year.

"We can save medical costs by getting people to have dental care at the right time in their lives," says Glenn Melenyk, dental consultant at Blue Cross Blue Shield of Michigan in Detroit. The insurer, with 1.1 million dental members, started pilot programs in 2005 that cover an additional regular cleaning per year for diabetics and heart patients. In July, it expanded the pilots to include pregnant women who obtain a coupon from their obstetrician.

The enhanced benefits come at a time when many employers are under pressure to cut medical costs. But some big employers are signing on. Ford Motor Co. and Kellogg Co. are among those offering benefits in Michigan via Blue Cross Blue Shield, and Pacific Research Laboratories and KCTS Public Television are participating in Washington Dental's enhanced benefits. Some health plans, including Michigan Blue Cross, Washington Dental and MetLife Inc., are offering the extra coverage at no additional cost to employers or employees. Washington Dental says it achieved this by cutting back coverage of other services for which there is less evidence of benefits, such as routine X-rays. (Currently, insurers say, dental care makes up only about 4% of employers' overall health-care budget.)

Costco Wholesale Corp. of Issaquah, Wash., earlier this year participated in a pilot with Aetna Medical & Dental, in which nurses called employees with diabetes or heart disease or who were pregnant, to encourage them to visit a dentist. Donna Sexton, Costco's director of employee benefits, says nurses reached about 2,200 of Costco's more than 153,000 Aetna members. About 36% of them have indicated they would go see a dentist as a result. That is "pretty good compared to other types of outreach," Ms. Sexton says. "The bottom line is, if it helps the health of the baby, or the health of an employee or dependent improves, there will be an overall reduction in costs."

Insurers who offer both dental and medical-care coverage say they expect that spending more on preventive dental care will yield big savings on the medical treatment of costly chronic illnesses. Insurers that offer only dental coverage expect to save money on periodontal surgery. Stand-alone plans also say they want to be more attractive to workers, who increasingly have to pay all or part of their dental-insurance costs themselves as more employers make group dental a voluntary rather than an employer-paid benefit.

The emphasis on preventive care is the result of an increasing number of studies linking oral health to general health and well being, dental specialists and insurers say. The reasons for the connection aren't fully understood. In the case of preterm births, bacteria around the tooth root may cause the body to produce a substance that induces labor. The evidence suggests that the same bacteria in the mouth can provoke the body into producing factors that clog arteries, worsening heart disease and stroke risk. With diabetes, any inflammation in the body makes controlling blood sugar more difficult, according to Kenneth Krebs, president of the American Academy of Periodontology.

A two-year study of 144,000 insured patients by Aetna and the Columbia University College of Dental Medicine released in March found that earlier periodontal treatment reduced overall medical-care costs by 9% for diabetes, 16% for coronary artery disease, and 11% for cerebrovascular disease, or stroke. Another recent study of pregnant women with a serious gum disease published in the Journal of Periodontology found that early treatment with scaling and root planing (which removes plaque and tartar from around the tooth root) reduced preterm births by 84%. Additional research is under way to try to explain the association between these illnesses and periodontal disease.

September 16, 2006

HCFA's non-profit health law firm, Health Law Advocates, will host their annual breakfast on Wednesday, November 8 from 7:30 to 9:30am at the Sheraton Boston Grand Ballroom. Keynote speaker is writer, journalist Calvin Trillin, author of A Heckuva Job: More of the Bush Administration in Rhyme.

In case you didn't notice, the event will take place the morning after election day so, win or lose (depending on your choice) this will be THE place to celebrate or commiserate.

HLA raises more than half it's annual budget at this event, so it goes to a great cause, and everyone has a great time. So don't miss it. Tickets are $150.

September 14, 2006

The national policy journal, Health Affairs, released a package of six articles on MA health reform, lead article by us at Health Care For All. Click here for the package. We wrote it last April, and edited in June, so it covers the new law and the legislative enactment process, not the implementation process between then and now. Blue Cross Blue Shield Foundation President Nancy Turnbull also has a commentary in the package.

Here's the HA release on the package:

Bethesda, MD -- Massachusetts’ plan to move toward universal coverage represents an impressive political achievement, and the plan’s policy innovations offer important lessons to other states. However, the true significance of the Massachusetts experiment will become clear only after the state addresses daunting implementation challenges over the next several years.

That’s the verdict delivered by the two lead papers of a six-paper package on the Massachusetts experience published today on the Health Affairs Web site. John McDonough, executive director of the Boston-based Health Care For All, teams with three colleagues from that organization to provide a comprehensive look at the important events and key players involved in the plan’s package. John Holahan and Linda Blumberg (Urban Institute) survey the issues Massachusetts will have to address as it seeks to turn its path-breaking plan into reality. Four additional papers offer perspectives on these lead studies.

Massachusetts’ plan, passed in April 2006 as Chapter 58 of the Acts of 2006, “is a complex mix of Medicaid changes, subsidized insurance offerings, insurance market reforms, safety-net alterations, individual and employer responsibility provisions, and more,” according to McDonough and coauthors. They explain that the Massachusetts plan includes the following:

-- The Commonwealth Care Health Insurance Program. Commonwealth Care will provide subsidized health insurance coverage for uninsured adults with incomes below 300 percent of poverty ($29,400 for an individual and $60,000 for a family of four). Those below 100 percent of poverty will pay no premiums, and those at relatively higher incomes will receive income-based subsidies on a sliding scale.

-- The Insurance Connector. The Connector is an independent state authority that will serve as a marketplace for insurance offered to individuals without employer-sponsored coverage, enabling them to purchase coverage with pretax dollars. Companies with fifty or fewer employees may also purchase coverage for their employers through the Connector. In addition, the Connector will manage Commonwealth Care.

-- Individual Mandate. The law requires all adults to purchase insurance, subject to the availability of “affordable” insurance. In 2007 the penalty for violating the individual mandate will be the loss of the Massachusetts state personal income tax exemption -- about $218 for an individual and $418 for a family. In 2008 and thereafter, the penalty increases to up to half the cost of the least expensive available insurance policy. The Connector board will set the definition of “affordable” and determine what types of coverage satisfy the individual mandate.

-- Medicaid Expansion. The plan expands MassHealth, the state’s Medicaid program, to children in families with incomes up to 300 percent of poverty.

-- Employer Mandate. At a minimum, employers are required to set up a Section 125 plan for their employees. Under these plans, workers can buy insurance with pretax dollars through the Connector, even if their employer contributes nothing to the coverage. If employers with more than ten employees do not make a “fair and reasonable” contribution to their workers’ insurance coverage -- with the definition of “fair and reasonable” to be defined administratively -- they will be subject to a per worker per year assessment not to exceed $295, prorated for part-time and seasonal workers.

Holahan and Blumberg say that the Massachusetts plan “is potentially of enormous consequence.” The two authors say that the plan could bring Massachusetts economic gains from improved health with a present value of $1.5 billion dollars, but they also caution that the state faces major challenges in implementing its reform plan, including the following:

-- Affordability. “Ideally, the subsidy schedule [offered to low-income state residents] would be directly linked to the affordability standard,” so that “each family would be subsidized to an extent that would allow them to purchase coverage within the standard of affordability,” the authors say. However, “nothing in the Massachusetts legislation requires such a linkage, and revenue constraints could make doing so difficult.”

-- The Connector. “The most likely approach for insurers to offer lower-cost plans” through the Connector is by requiring “much higher out-of-pocket spending than is typical today,” say Holahan and Blumberg. They warn, however, that policies with high out-of-pocket spending could segment the Connector’s risk pool, attracting healthier enrollees and leaving only those with high medical costs in more-comprehensive policies, thus driving up premiums in these policies. On the other hand, “if such high-cost-sharing policies do not prove attractive, it is difficult to see how plans in the Connector would be able to hold down premiums,” since “the Connector as envisioned does not seem equipped to use other mechanisms to control increases in health care spending.”

-- Employer Response. Under the Massachusetts plan, large firms are not likely to drop coverage, but “allowing workers to purchase coverage on a pretax basis using Section 125 plans reduces the incentive for small employers to offer coverage to their workers independently,” the authors say.

September 13, 2006

Prescription Advantage, the Commonwealth's pharmacy assistance program for eligible seniors and disabled individuals, begins its open enrollment period on September 15th and runs until November 15th. Applications and application assistance are available from Prescription Advantage by calling 1-800-AGE-INFO.

Click here for the official PA website.

Thanks to the legislators -- Senate and House -- who have worked hard to keep this program alive and thriving.

September 12, 2006

Somebody once told me: if you want to know what is really going on in state government, look at the bond documents. They can say whatever they want to the public, but they can go to jail for fibbing to Wall Street. So click here to see what the Executive Office of Adminstration and Finance told Wall Street about MA health reform just one month ago.

Some significant details and at least one error.

A-1: "The (CMS) approval contained one condition requiring amendment of legislative language regarding certain hospital payments. The Legislature has not acted on technical corrections legislation the would have effected this change. In the absence of such legislation, disbursement of funds for these payments would not be permitted, but receipt of the $385 million in annual federal funds would not be impaired." Translation -- until the Legislature passes the pending technical corrections bill, $385 million in payments to the state is being held up.

A-1: "The legislation also required parents to provide insurance for their children." Not true. The Administration proposed this in the technical corrections bill now pending before the Legislature, and both House and Senate have rejected this idea.

A-3: The money piece. "The table below shows the incremental cost from fiscal 2006 to fiscal 2007 only in the components of the Massachusetts health care financing system changed by the healthcare reform legislation..."

Spending 2006 2007 Change
MassHealth Expansion -- 175.8 175.8
Acute Care Hospitals and CHCs 822.8 989.0 166.3
Managed Care Organizations 770.0 270.0 (500.0)
HCR Start Up and Premium Assistance -- 207.1 207.1
Total Spending related to HCR Components 1,592.8 1,641.9 49.1
MassHealth Expansion Incremental Revenue -- 122.9 122.9
Pool Revenue 536.3 595.0 58.7
1115 Waiver Revenue 1,062.4 653.5 (408.9)
Total Revenue related to HCR Components 1,598.7 1,371.4 (227.3)
Net Cost of HCR Components (6.0) 270.4 $276.4

Source: Executive Office of Administration and Finance

Pretty darn different than what we saw in the financial projects of the Legislative health reform conference committee released last April, see below:

Sources FY07 FY08 FY09
Federal Safey Net Revenue 605.0 610.5 610.5
Federal Medicaid Match 184.6 242.1 299.6
Hospital Assessment 160.0 160.0 160.0
Payor Assessment 160.0 160.0 160.0
Free Rider Surcharge 50.0 40.0 25.0
Fair Share Assessment 45.0 36.0 22.5
General Fund 125.0 125.0 125.0
Existing Obligations
MCO Supplemental Funding 287.0 180.0 160.0
Free Care Pool/Safety New Fund 610.0 500.0 320.0
SubTotal 897.0 680.0 480.0
New Spending
Children to 300% 18.2 27.4 37.4
Restored MassHealth Benefits 48.0 53.0 58.0
Medicaid Rate Increase 90.0 180.0 270.0
Commonwealth Care Subsidies 160.0 400.0 725.0
Subtotal 336.2 660.0 1090.4
Total Spending 1,233.2 1,340.0 1,570.4
Three Year Balance +116.4 +33.2 -167.9

If you find doing a crosswalk hard to do, join the club. Differences, even sharp ones, are par for the course in these kinds of projections. Yet, there's one bottom line in here worth noting -- the Conference Committee projects a FY2007 health reform surplus of $116.4 million, and the A&F estimate shows a $270.4 million deficit. Seems like a pretty wide swing.

September 11, 2006

Today's Blue Mass Group, the premiere Massachusetts political blog, posts an interview with HCFA Executive Director John McDonough getting down and dirty on the details of health reform implementation.

Worth a read if you're seeking a quick overview of health reform since April 2006 and catch up.

September 10, 2006

Jeff Krasner in today's Globe does his typically excellent work detailing how health insurance premiums will be rising at double digit rates in 2007 for the 7th consecutive year.

A little history:

In the mid-1970s, in response to unacceptably high rates of health insurance premium inflation, Massachusetts and other states adopted a host of hard hitting regulatory interventions to reduce the rate of growth in premium costs. Most failed to do the job. Hospital rate regulation worked for about a decade, then the state lost the political will to maintain it, ultimately deregulating in 1991 in response to hefty medical inflation between 1988 and 1992.

Deregulation was premised on an idea -- that a functioning health market could be created that would control costs better than government regulation. 15 years later -- are we ready to declare this experiment a dismal failure? The only idea on the table right now is more cost shifting and cost shafting to workers:

Some employers are expected to react by switching to health plans with higher deductibles or by increasing copayments and making other changes that will result in additional out-of-pocket expenses for employees.

Time for a new approach. Not going back to failed regulatory experiments. Not stay the course. New ideas that compel us to act on what we already know, new approaches that challenge the status quo. We think this will be a major issue priority for the 2007-08 session of the Legislature. Time to start advancing constructive ideas is now. We'll be coming forward with ours soon.


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