Since April 2006, when the Massachusetts Health Care Reform Bill was signed into law at a ceremony in Boston’s historic Faneuil Hall, the state has been on a fast pace to meet its ambitious goal of providing every uninsured adult resident—by some estimates, more than 500,000—with affordable coverage.
The reform law is generating national attention for a few of its innovative provisions, such as the “individual mandate” requiring all adults to sign up for coverage by July 1, 2007, or face financial penalties and the “employer assessment,” which requires employers with more than 10 workers to pay money into a fund each year if they fail to provide coverage to their employees.
“It’s an important national model,” says U.S. Health and Human Services Secretary Mike Leavitt of the Massachusetts reform initiative, and already some of its components are being adapted in other states, including California.
But while the reform effort speeds along in the Bay State, questions remain: Will it work? And what will reform mean for the larger issue of cost management?
It is well documented that the growing ranks of the uninsured throughout the United States are placing financial pressures on the healthcare system. Those who get health insurance where they work probably don’t think much about—that is, until they lose it. But for people who don’t have a plan, there is risk and anxiety. They don’t get regular checkups. Most go to the hospital for emergencies only. A person who is uninsured and faces a devastating and expensive illness finds herself in poor financial health as well.
When people who don’t have access to preventive care get really sick, they generally end up in emergency departments. In Massachusetts, when patients can’t cover the cost of their care, that cost is passed along through an “uncompensated care pool” system that is paid for by taxpayers, insurers, and the hospitals themselves.
Any shortfalls in pool funding—a common occurrence in recent years—are borne entirely by hospitals; that is, they are forced to eat the cost, which, in turn, increases healthcare costs throughout the system.
Compassion requires us to improve access to primary care for all. Economics requires us to end the cost shifting that puts upward pressure on the price we all pay for healthcare.
A central tenet of the reform debate has been shared responsibility in our healthcare system. It has been argued by many, including hospitals, that the immense moral and financial challenge of ensuring that the citizenry has health insurance coverage should be shared by all; health insurance should not necessarily be the responsibility of the employer, nor should it be borne entirely by government or low-income individuals.
The health reform bill divides the pie more equitably than ever before. In addition to the individual mandate and employer assessment mentioned above, new requirements are placed on hospitals to ensure that they offer care in a more open and cost-effective way than in the past. And, until enrollment efforts are proven successful, the Commonwealth of Massachusetts is also committed to providing fairer payments to providers through Medicaid and through adequate funding of the uncompensated care pool.
Specifically, Massachusetts’ healthcare reform seeks to enroll 90,000 additional individuals into MassHealth (Medicaid). It created Commonwealth Care, a health insurance program that offers those earning less than 100% of the Federal Poverty Level ($9,805/year) a full range of healthcare services, including inpatient services in hospitals; preventive and primary care; medical care from a specialist in a doctor’s office, community health center, or hospital; emergency care; vision care; prescription drugs; inpatient and outpatient mental health and substance abuse services; and some dental coverage. These families pay no monthly premiums and limited co-pays.
Those earning between 100% and 300% of the poverty level—$9,805 to $29,412—pay monthly subsidies ranging from $18 to $106 per month for the same services. The state expects 200,000 uninsured families to qualify for Commonwealth Care plans.
An income of more than $29,412 qualifies a family to purchase a Commonwealth Choice plan, which contains no subsidies from the state. Another 200,000 fall under this category. The Choice plans were the subject of great deliberation in Massachusetts; patient advocates, providers, state officials, and the insurance companies creating the plans debated the scope of coverage (should prescription drugs be included?) and the monthly premium. (The state’s Commonwealth Health Insurance Connector Authority—the agency overseeing the reform law implementation—was expected to give its seal of approval to the Commonwealth Choice plans in March.)
The Cost Issue
Linked to the themes of affordability and access that are cited so often when this law is discussed is the challenge of effectively managing costs. Massachusetts’ hospitals have an opportunity to lead the way as the call to better manage healthcare costs grows louder.
Reform has addressed some of the pressures that are driving premium increases in Massachusetts. For example, cost shifting to the private market has been tackled: The state has had to amend its habit of paying less than cost for the services it covers under Medicaid. The reform law also established a Quality and Cost Council to work on other cost pressures.
After years of experience with razor-thin or non-existent margins, Massachusetts hospitals have learned how to run lean operations. Some of this streamlined activity is attributable to the increasing presence of hospitalists. The Massachusetts Hospital Association’s “Patients First” initiative, which (among other things) posts the staffing plans for each unit in every hospital in the state, shows more and more hospitals are using hospitalists. (You can view the staffing plans at www.patientsfirstma.org).
But there are some things hospitals do not completely control, like the cost of labor and new technology—the biggest and fastest-growing parts of hospital budgets. As part of the new reform-inspired focus on hospital costs, Massachusetts providers are turning their attention to administrative expenses—that is, cutting paperwork and frustration by standardizing claims forms and processes across payers. To improve this process further, insurers could do more to explain the benefits and obligations of their myriad products, instead of off-loading that work to harried hospital counselors.
Will Reform Work?
Early results are positive, but the hardest part of reform implementation is just beginning. Since health reform went into effect, approximately 60,000 new enrollees have qualified for the state’s newly expanded Medicaid program. The new Commonwealth Care plans for people and families at up to 300% of the federal poverty line have, to date, 45,000 enrollees. Think of it: More than 100,000 men, women, and children who did not have health coverage 10 months ago now carry an insurance card. They get preventive care. They have the security and comfort that comes with health coverage.
Hospitals, community and business groups, health agencies, health insurers, and community health centers across the state are working to inform the public about opportunities for health coverage. The Massachusetts Hospital Association has joined forces with other advocacy groups to produce hundreds of thousands of posters and brochures in 13 languages to help enrollment efforts. Hospitals are hosting information fairs and meetings and are reaching out to employer and civic organizations; business groups are doing the same. Making reform work is a shared responsibility at this point.
Health insurance is now everyone’s responsibility—individuals, government, employers, and healthcare providers. The state will help people who need it. But the rest of the population—both individuals and employers—must secure insurance plans to protect their own well-being and to make certain that their own health needs don’t burden the system and add costs—costs that could eventually make healthcare less accessible.
The concern now is whether affordable plans with adequate coverage will be available to people who don’t qualify for state help. The balance between good benefits and affordable pricing won’t be easy to achieve. It’s not impossible, however, and the current thinking throughout the state is that this bold health reform experiment cannot be allowed to fail. TH
Timothy Gens, Esq., is senior vice president of the Massachusetts Hospital Association.