Massachusetts Health Reform: On The Right Path

As the country awaits the Supreme Court’s decision regarding the Affordable Care Act, we in Massachusetts can reflect on how much our state healthcare reform efforts have achieved.

We have the highest level of healthcare coverage in the country — more than 98 percent. Hospitals have taken billions of dollars out of their expense trend over the last three years. Public opinion surveys demonstrate that our reform efforts have broad public support. Employers continue to offer insurance even as we have expanded coverage for public programs. And when one compares the cost of health insurance premiums based on median household income, Massachusetts ranks as the 48th lowest state.

The challenge is to build on our success and make it sustainable over the long haul. We have to find ways to maintain our great access to care while improving both quality and efficiency. We also have to be concerned about the impact of reform on our economy as we struggle to climb out of the “great recession.” Healthcare is the economic engine of our state thanks to our hospitals, universities, and biomedical and life sciences industries. Fortunately in Massachusetts we have a history of key stakeholders finding ways to collaborate to reach the right balance, and have three suggestions for how to achieve these goals.

The first involves transforming the health care delivery system from a disjointed system reacting to illness into one that provides well-coordinated care and that is focused on keeping people healthy.

The Massachusetts market is already shifting from a fee-for-service framework to one in which caregivers are organized to provide comprehensive patient care, and are rewarded for providing access, quality and efficiency. In such a system providers not only accept increased responsibility for care, they also accept financial risk that was once the responsibility of insurers. Recently the Boston Globe reported that more than 1.2 million people in the Bay State are now covered by such plans. And five of the 32 “Pioneer ACOs” the federal government awarded are now operating in Massachusetts. We are heading in the right direction, but it’s important that insurers continue to develop products that promote this transition, and for employers and consumers to support this trend as they decide which insurance products to purchase.

The next suggestion is that we keep our eyes on lowering the total health care spending trend over several years.

The health care spending trend is not the result of the actions (or inactions) of any single player. It’s affected by those who provide care, who design insurance coverage, who buy insurance and seek health care services, who control state and federal government health care programs, who produce medical technologies, and others. You can’t target just one participant in the system and hope to achieve sustainable success. Government should lead the way and set a goal to lower total health care spending by a reasonable amount in a reasonable time frame. That will motivate everyone to get involved, find solutions and achieve success.

Finally, the strategies we pursue also must harness the ability of the private market to innovate and adapt quickly. At the same time, the government should work to improve its own programs by ensuring transparency, measuring success and helping to shape decisions among stakeholders about what to do if success isn’t realized.

The Massachusetts legislature has found numerous ways to promote health care progress, from requiring small business purchasing pools to the creation of a critically important All Payer Claims Data Base, which will be a unique claims-based data source that will ultimately provide timely, valid and reliable data to help shape reform, improve quality and reduce cost. But government shouldn’t move to regulate provider rates — that would go too far.

State and federal governments already dictate more than half of the reimbursements that hospitals receive — and government substantially underpays for those hospital services. This is particularly problematic for hospitals that serve the financially needy and have little private insurance business. It is also a glaring weakness in the mental health care system.

Moreover, when government — whether state or federal — underpays, some of its costs are shifted to private payers and that leads to higher insurance premiums. Empowering government to rule over private market rates will make matters worse. The market is making substantial progress and it should be given a fair chance to work.

We are on the path to sustainable success. Maintaining a collaborative and balanced approach will keep us on that course.

Lynn Nicholas is the president & CEO of the Massachusetts Hospital Association.