Three years ago, the Commonwealth of Massachusetts enacted a far-reaching health reform law that politicians and the media hailed as a model for other states and the federal government. That law has become the major blueprint for health system change on a national scale, and its advocates, with Sen. Edward Kennedy at the top of the list, are aggressively marketing some variation of the Massachusetts plan as the reform of choice. Until recently, there has been little analysis of how the law has worked. This is the third in an occasional series of posts that will explore the Massachusetts law, with an eye toward helping the press and the public understand the flashpoints as legislation based on the Bay State’s experiment winds its way through Congress. The entire series is archived here.
At the tail end of last year, The Boston Globe published the best story on health policy I’ve seen since I began posting for Campaign Desk. The Globe’s Spotlight Team examined the reasons why health care costs so much in Massachusetts. In doing so, the team took on the state’s largest health insurer, Blue Cross Blue Shield, and the state’s medical powerhouse, Partners HealthCare, which runs two of the country’s premier teaching hospitals, Massachusetts General and Brigham and Women’s Hospital.
The Globe story, part of an ongoing series entitled “Unhealthy System,” disclosed how Blue Cross and Partners, the state’s largest private employer and its biggest health care provider, sealed a deal in 2000 that raised health insurance costs across the state. The agreement, which the Globe said was called a “market covenant” by Blue Cross, precipitated the financial troubles the state now faces in maintaining its ambitious health reform law that subsidizes insurance for families with incomes below $66,150. And it reveals the difficulties in containing medical costs when dominant players and their market power seem to set the market’s rules.
One could argue that Partners and Blue Cross gained their clout during the managed care heyday in the early 1990s, when HMOs squeezed doctors and hospitals to reduce costs. In retaliation, providers organized into large systems like Partners. The Globe found that Blue Cross raised “the rate it pays Partners by 75 percent since 2000,” and that Partners also pressured the state’s other big insurers to extend similarly large rate increases. The insurers passed the costs on to policyholders, hiking individual premiums by almost nine percent per year since the agreement was made—more than twice the annual rise in the late 1990s.
Massachusetts has the most expensive care in the country, partly because of expensive styles of medical practice that call for the use of costly high tech interventions. Boston University health policy expert Alan Sager told me health care spending was one-third higher than the national average in 2004, two years before the state enacted its law. “If we cover more people with no offsetting cost controls, we can expect Massachusetts health care to be even costlier than in 2004,” he said.
As more people gained insurance coverage and used it to obtain medical services (which was the point of the law), the care they received piled more costs onto the state’s already expensive system. It’s a simple mathematical proposition: more services lead to higher total expenditures. Jon Kingsdale, who heads the state’s Health Insurance Connector Authority, is blunt: “The cost of health care needs to be under control to sustain the individual mandate or the whole thing unravels. If costs continue to soar, the enforceability of the mandate is in jeopardy.”
Media outlets have delivered that message, but most stories stop short of careful analysis that would be useful as Congress crafts legislation that mirrors Massachusetts reform. (Yesterday, Sen. Edward Kennedy released his bill, containing elements of the Massachusetts plan.) The May issue of the AARP Bulletin told its millions of readers: “At stake ultimately is whether the Massachusetts reforms can survive if health care costs continue to rise unchecked.” But it didn’t offer any discussion of solutions. A shallow story on Marketplace attributed the “pricey” Massachusetts system partly to people who use emergency rooms when they can’t afford a doctor.
- 1
- 2
Connecting various and sundry dots and ending with a Rodney Dangerfield lament:
In the past two weeks, Atul Gawande, a surgical oncology attending at Brigham and Women's - one of the Partners anchor institutions, published a more is not better health costs article in The NewYorker, looking at usage and costs in McAllen and El Paso, Tx. He should have saved travel costs and simply strolled around the Longwood Medical Area in Boston and then driven an hour or so north up to Dartmouth. He might as well as just looked in the mirror and acknowledging that he has the same business first blinders on as his esteemed colleagues in McAllen.
The Boston Globe also reported that a low cost mobile primary health van travels to low income neighborhoods with disproportionately high percentages of residents who are uninsured or who have accessibility problems, and that this service has saved over 2 million dollars in preventing avoidable hospital admissions over a one year period.
The Harvard brand has an outsized influence in national health policy. Yet it's just as guilty of pushing up costs and protecting its own corporate interests at the direct expense of patients.
What Harvard, Dartmouth, Princeton, Cornell and Brown don't have are professional nursing programs which provide baccalaureate through doctoral education,field robust nursing research agendas and include professional nursing issues in driving university curriculum, research and health policy.
They need to get educated, and they need to engage nurses and professional nursing in critical health policy arguments and formulation. Morbidity and mortality rates are significantly decreased when patients are cared for by nurses with a minimum of a baccalaureate nursing education (IOM, Aiken). And overall nursing costs are so minimal that they don't merit a carve out or mention in overall US healthcare cost breakouts.
In what other national policy discussion would a service with a very high ROI be totally ignored?
#1 Posted by annie, CJR on Wed 10 Jun 2009 at 02:12 PM
The cost of a product and how it is paid for are two separate issues. Insurance is how we pay for health care and it works by applying the concept of risk pooling. What is lacking most in our current system is a fair and equitable way for people to access insurance.
MA has taken very big and bold steps in trying to address this issue, but there appears to be two major missing elements. First, there must be some form of community rating where insurance rate are established based on basic demographic information like age and sex and not health condition. Not only must pre-existing conditions be covered, but rating with any information on health status should be illegal.
Second, there can be no exemptions from participation. None. A $1,000 tax penalty doesn't cut it when the average health insurance premium far exceeds this amount.
Establishing a fair and equitable system that universally provides for access to health insurance to pay for health care should be priority number one. There are plenty of quick fixes available to do this right now.
Addressing the cost of care issues is priority number two and unfortunately there are no quick fixes available. If we do not fix the payment problem, it really doesn't matter what it costs.
#2 Posted by Frank Erwin, CJR on Fri 12 Jun 2009 at 10:24 AM