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CLT UPDATE
Friday, August 17, 2012
Mass. Health Care: "The Devil is in the details"
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Lawmakers have all but abandoned Beacon Hill
until January. Yes, as we do every two years we remind taxpayers
that our “full-time” Legislature does not meet in formal session
after July 31 in election years. The rule is supposed to avoid
election season mischief-making but it also happens to be a
convenient time for summer vacations to stretch into campaign
season....
But frankly most rank-and-file lawmakers needn’t
be at the State House much these days anyway. There were 35 formal
sessions of the Senate this year and 30 in the House; about a third
were consumed with the state budget or wrapping up business in the
final week of the two-year session.
And let’s face it, none of the important business
takes place inside the ornate chambers of either branch. Power is
increasingly concentrated in the hands of a tiny number of
legislative leaders, and it shows.
Take the health care reform bill enacted last
week.
Before they recessed lawmakers championed the
bill as one of the most important, well, ever.
But the contents of the final bill — an
astonishing 349 pages long — were, before the final day of the
session, unseen by all but the six legislators on the House-Senate
conference committee, the Senate president, House speaker and a few
others.
It emerged from the committee at 8 p.m. last
Monday, and by late afternoon Tuesday it was on its way to the
governor’s desk — after a combined total of eight people spoke about
it (in very general terms) on the floor.
In an attempt to counter complaints about the
process Rep. Steven Walsh (D-Lynn), who spearheaded House reform
efforts, cited the dozens of public hearings that were held — before
the bill was even drafted.
Walsh insists the bill means Massachusetts will
“lead the way in transparency and disclosure.” On medical costs,
maybe, but clearly not when it comes to “landmark” legislation like
this.
A Boston Herald editorial
Monday, August 6, 2012
End insiders’ game
A critic called a health care reform law state
Rep. Steven Walsh helped forge and Gov. Deval Patrick signed on
Monday “simplistic,” but a supporter said the law is overdue.
“We need to do this. If we don’t, we’re going to
see more hospitals closing. You’ve got to start somewhere,” said
Lynn Health Care Task Force Chair Leslie Greenberg.
Walsh said it took two years’ worth of work and
leadership from Patrick, House Speaker Robert DeLeo and state Senate
President Therese Murray to craft the reform law.
“It moves the leverage back to patients,” Walsh
said, adding the law will translate into savings for Massachusetts
families....
Citizens for Limited Taxation’s Barbara
Anderson on Monday called the growth calculation “really
simplistic.”
“As long as the economy is growing as fast as we
are getting sick, no problem,” she said....
Anderson said government involvement in providing
health care in Massachusetts complicates cost control efforts.
She said the industry operates with “all kinds of
expectations that they can charge more than they could if they knew
the only person they could charge is the sick person.” ...
Anderson warned that duplication of services in
the health care industry won’t end simply because a law has been
signed. She is worried the law’s cost controls could hurt, not help
Massachusetts’ health care industry.
“The big fear I have is people won’t find it
worthwhile anymore to become doctors,” she said.
The Lynn Daily Item
Tuesday, August 7, 2012
Patrick signs health care cost reform law
ObamaCare's illusions are starting to fall like
autumn leaves, even among some liberals, and what they're
discovering are things that have happened over and over again in
Massachusetts. Beacon Hill "reformed" health care four years before
Capitol Hill, and ever since it has reliably predicted the national
trend—on surging costs, price controls, physician shortages and so
much else.
So Boston's latest adventure deserves particular
scrutiny, since odds are its methods are coming soon to a hospital
near you. After more than a year and a half of debate, last week the
legislature passed a far-reaching "cost containment" bill that
Democratic Governor Deval Patrick is about to sign. It is the
inevitable postscript to the model that Mitt Romney introduced in
2006....
Despite these Medicare failures, Washington has
never gone as far as Boston is now going, installing itself as the
arbiter of care in order to redesign care, though under ObamaCare
it's only a matter of time. Everyone agrees that the health system
needs to deliver medicine more efficiently and be more accountable,
but accountable to whom? The answer for the political rulers of
medicine, if not patients, is always: government.
The Wall Street Journal
August 5, 2012
REVIEW & OUTLOOK
RomneyCare 2.0
With costs rising fast, Massachusetts moves to dictate medical care
Gov. Deval Patrick signed a sweeping health care
reform law on Monday that seeks to build on the state’s near
universal access to insurance by reining in costs and improving the
quality and transparency of care....
While the law’s critics say it represents a
thicket of government regulation and mandates, its supporters say
its focus on the health of patients, new care delivery and payment
models, and cost control will yield major financial savings....
The audience, mostly industry stakeholders and
government aides, gave the governor and legislative leaders a
standing ovation as they walked down the stairs from Patrick’s
office, hollering and whistling as advocates and staff lined the
staircases and balcony overlooking the ceremony.
Among those attending the sign ceremony were
Massachusetts Taxpayers Foundation President Michael Widmer,
Massachusetts Association of Health Plans President Lora Pellegrini,
Greater Boston Chamber of Commerce President Paul Guzzi, Retailers
Association of Massachusetts President Jon Hurst and Massachusetts
Biotechnology Council President Robert Coughlin....
The bill, however, makes Massachusetts the first
state in the nation to try to curb rising health care costs by
setting a limit for growth, proposing to hold growth to the rate of
the economy through 2017 – set at 3.6 percent in 2013 – and dipping
to half a percentage point below the growth of the economy for the
next five years.
A bureaucracy that includes two new state
agencies – the Health Policy Commission and the Center for Health
Information Analysis – will replace existing entities to oversee the
transition and enforce cost benchmarks....
The bill would assess a one-time $225 million fee
on hospitals and insurers, with $165 million coming from health
plans, and the remaining $60 million assessed through a formula to
Partners HealthCare, Beth Israel Deaconess Medical Center, and
Boston Children's Hospital....
The Senate unanimously passed the bill, while the
House voted 132-20 in favor, with only one Democrat – Rep. James
Miceli – opposed.
Rep. Bradford Hill, an Ipswich Republican, said he was uncomfortable
voting for a 349-page bill he did not have time to read, without
completely understanding all the details and ramifications....
Rep. Dan Winslow (R-Norfolk) said he felt it was
“irresponsible” to vote on the bill, unveiled Monday night and voted
upon on Tuesday, without studying it first. “Remember when Nancy
Pelosi said you have to vote on it to see what’s in it?” he said.
“Legislators were being told to vote on something on faith that was
so important.”
Josh Archambault, the director of health care
policy at the Pioneer Institute, described the bill on Monday as
“little understood and brimming with unintended consequences.”
He noted in a graphic distributed Monday that in
2006 it took the Legislature 362 days from the time the universal
access law was introduced to the 86-page bill’s signing by Gov.
Romney. Though Patrick first proposed a similar concept in January
2011, from the first look at the Senate’s cost containment bill in
April until last Tuesday, it took 88 days to enact a 349-page bill.
“The law being signed today re-imagines and
repackages so many failed top-down approaches from the past. The
acronyms may have changed, but this bill looks a lot like past
approaches that trusted government, not patients, to drive big,
systematic changes in how we purchase healthcare,” Archambault
wrote.
State House News Service
Monday, August 6, 2012
Six years after Health Care Access Law,
Patrick inks bill tackling rising costs
The health care cost control law signed by Gov.
Deval Patrick Monday will hurt the bottom lines of Massachusetts
hospitals and limit their flexibility to grow, a major credit rating
agency warned Monday.
“The Legislation is credit negative for
Massachusetts hospitals because it will limit their revenue growth
and reduce their operating flexibility,” Moody’s Investment Services
wrote in a credit analysis of the new law.
The report also suggested the money derived from
a $225 million one-time assessment on health plans and major health
care providers to help support community hospitals would
artificially work to keep smaller hospitals in business, while
limiting the expansion opportunities for larger hospital groups and
hurting their credit standings.
State House News Service
Monday, August 6, 2012
Moody's: New health care cost law "credit negative" for Mass.
hospitals
Steward Health Care System, which includes
struggling Carney Hospital, will not qualify for millions of
dollars in special payments under the new Massachusetts health
care law, because legislators said they did not want to
subsidize a for-profit company. The provision is one of several
buried in the 350-page bill that penalize or benefit certain
hospitals.
The cost-control law also targets three
Harvard-affiliated hospital systems — Partners HealthCare,
Boston Children’s Hospital, and Beth Israel Deaconess Medical
Center — to pay a one-time $60 million tax to fund health
programs....
Partners Spokesman Rich Copp criticized the
approach.
“Imposing a tax on a very small number of
hospitals is not a fair way to approach this issue, particularly
when the money is being used to solve a problem the state
created by underfunding the Medicaid program,’’ he said.
“Burdening hospitals with more costs in a bill to reduce costs
is a paradox, as well as bad public policy.’’
The Boston Globe
Wednesday, August 15, 2012
Health law benefits some Mass. hospitals, penalizes others
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Chip Ford's CLT
Commentary
With The Best Legislature Money Can Buy
now recessed — our "full-time"
legislators, now dedicated until November 6th to getting themselves
re-elected on our dime, then a bit of post-campaign rest before they
return in January — we're still
exploring just what they did to us in the closing days of this
session, dissecting the Bacon Hill sausage.
In the final hours the Legislature passed and the
Governor signed far-reaching legislation that revamps health care
— public and private
— as we knew it. The House-Senate
conference committee released the final version of its ongoing
evolution and expansion of health care in Massachusetts at 8:00 pm
on Wednesday, August 1. The vote on its 349-page bill was taken the
following afternoon with little debate or discussion
— and the deal was done. Health care as we
knew it is gone.
To deal with rising costs
for health care, The Great and General Court decided on some
arbitrary number then applied it to the growth of the state economy
for the next five years. As Barbara wryly observed: “As long
as the economy is growing as fast as we are getting sick, no
problem.”
The new law imposes a one-time $225 million money
grab on some hospitals and insurers, with a $165 million raid on
health plans (those of us who pay for our own health insurance).
Some in the Legislature voted against the bill,
citing the unconscionable rush of such an important piece of
legislation. Rep. Dan Winslow (R-Norfolk) reminded everyone of
then-House Speaker Nancy Pelosi's infamous remark on the vote for
ObamaCare, "you have to vote on it to see what’s in it," but the
majority decided to take her easy way out. Now we're finding out
what's in it.
Why this is still referred to as RomneyCare
eludes me. This bureaucratic monstrosity has been evolving and
morphing ever since adoption in 2006.
Back then, The Boston Herald reported (Apr. 13,
2006, "Critics
slam insurance plan as intrusive and unwieldy"):
Barbara Anderson of Citizens for Limited
Taxation applauded Romney’s core goal of encouraging personal
responsibility for medical costs, but she said the law is going
to "end up accomplishing a lot less than they’re saying and it’s
going to cost a lot more."
In her column of Mar. 29, 2007 ("Healthcare
reform: So many expensive options, so few real benefits")
Barbara wrote:
"The concept of the new law
— making everyone take some
responsibility for having some health insurance
— was fine. But we now know exactly
what is meant by the phrase 'the devil is in the details."
In her recent column (Aug. 2, 2012, "Looking
back at the legislative session, looking forward to the Olympics")
she observed:
"A compromise health care bill solves the
problem of rising health costs by simply telling the private
Massachusetts medical system what it can charge. Health spending
will be allowed to grow no faster than the overall state
economy. Who knew it was that easy? Let’s hope we don’t get sick
at a higher rate than the state economy grows."
So here we are . . .
Remember in November!
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Chip Ford |
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The Boston Herald
Monday, August 6, 2012
A Boston Herald editorial
End insiders’ game
Lawmakers have all but abandoned Beacon Hill until January. Yes, as
we do every two years we remind taxpayers that our “full-time”
Legislature does not meet in formal session after July 31 in
election years. The rule is supposed to avoid election season
mischief-making but it also happens to be a convenient time for
summer vacations to stretch into campaign season.
But frankly most rank-and-file lawmakers needn’t be at the State
House much these days anyway. There were 35 formal sessions of the
Senate this year and 30 in the House; about a third were consumed
with the state budget or wrapping up business in the final week of
the two-year session.
And let’s face it, none of the important business takes place inside
the ornate chambers of either branch. Power is increasingly
concentrated in the hands of a tiny number of legislative leaders,
and it shows.
Take the health care reform bill enacted last week.
Before they recessed lawmakers championed the bill as one of the
most important, well, ever.
But the contents of the final bill — an astonishing 349 pages long —
were, before the final day of the session, unseen by all but the six
legislators on the House-Senate conference committee, the Senate
president, House speaker and a few others.
It emerged from the committee at 8 p.m. last Monday, and by late
afternoon Tuesday it was on its way to the governor’s desk — after a
combined total of eight people spoke about it (in very general
terms) on the floor.
In an attempt to counter complaints about the process Rep. Steven
Walsh (D-Lynn), who spearheaded House reform efforts, cited the
dozens of public hearings that were held — before the bill was even
drafted.
Walsh insists the bill means Massachusetts will “lead the way in
transparency and disclosure.” On medical costs, maybe, but clearly
not when it comes to “landmark” legislation like this.
But forget health care and its absurd promise of delivering $200
billion in savings; in our view the most significant accomplishments
of this session were the casino gambling bill and enactment of a new
sentencing law — and those bills got the same closed-door treatment.
There is something rotten in this system.
Too many members of one party are in charge. And too many members of
the other party are content with the status quo.
Voters should chew on that during this legislative “recess.”
The Lynn Daily Item
Tuesday, August 7, 2012
Patrick signs health care cost reform law
By Thor Jourgensen
A critic called a health care reform law state Rep. Steven Walsh
helped forge and Gov. Deval Patrick signed on Monday “simplistic,”
but a supporter said the law is overdue.
“We need to do this. If we don’t, we’re going to see more hospitals
closing. You’ve got to start somewhere,” said Lynn Health Care Task
Force Chair Leslie Greenberg.
Walsh said it took two years’ worth of work and leadership from
Patrick, House Speaker Robert DeLeo and state Senate President
Therese Murray to craft the reform law.
“It moves the leverage back to patients,” Walsh said, adding the law
will translate into savings for Massachusetts families.
Patrick’s office, in a press release Monday, heralded the law as “…
the next phase of health care reform ...” and stated that it will
create “… nearly $200 billion in health care cost savings over the
next 15 years …”
The statement noted the law creates a $60 million Wellness Fund to
help keep Massachusetts residents healthy. Greenberg, a Lynn
resident, said Walsh played a key role in drafting the law.
“He actually listened to our concerns about people who could not get
care, especially ones with chronic illnesses,” she said.
According to Patrick’s statement and a health reform summary
prepared by Walsh’s office, the law creates an 11-member commission
to monitor health care pricing by providers and, if necessary, refer
a provider to the state Attorney General’s office for investigation.
Lynn Community Health Center Director Lori Abrams Berry said she is
in the process of reviewing the law, but said she is “intrigued” by
its shift away from a fee-for-service reimbursement system to
accountable-care organizations.
“There are some visits patients make to the Center, that if there
was a different form of reimbursement, the patient may not need to
come to the Center; they could go through a telephone consultation.
In the best of all worlds, we will be improving care and it wouldn’t
cost as much,” Berry said.
The law requires health insurers to give customers more access to
medical information through websites and telephone information.
Greenberg credited Partners HealthCare, owner of North Shore Medical
Center including Union Hospital, with taking a lead in information
access.
“One of my complaints was separate billing. My husband sees three
different doctors and it used to drive him crazy. Now you can check
everything online,” she said.
Under the law, the health industry’s costs could grow at a pace
matching Massachusetts’ economic growth over the next four years.
The industry would be required to keep costs below the state growth
rate between 2018 to 2022 and then the rate would adjust upward
again to match state growth.
Citizens for Limited Taxation’s Barbara Anderson on Monday
called the growth calculation “really simplistic.”
“As long as the economy is growing as fast as we are getting sick,
no problem,” she said.
But Walsh said the law “will begin to squeeze some of the waste and
inefficiency out of the system.”
“The skeptics can say what they want but when health care costs have
been growing at 6.7 percent to 8 percent and economic growth has
been 2.4 percent, that’s a real problem,” he said.
Partner’s spokeswoman Jean Graham, in an email statement Monday,
called the law’s cost control method a “first-in-the-nation
approach.”
“It will be a tremendous challenge for hospitals and doctors to tie
medical spending to a little-known economic indicator. It has never
been done before,” Graham wrote.
Anderson said government involvement in providing health care in
Massachusetts complicates cost control efforts.
She said the industry operates with “all kinds of expectations that
they can charge more than they could if they knew the only person
they could charge is the sick person.”
The law addresses medical malpractice suits, according to Patrick’s
statement, by requiring parties in a suit to spend 182 days trying
to negotiate a settlement. Greenberg said the health wellness fund
in the law should be coupled with efforts aimed at ensuring people
have physicians. She said people often end up in emergency rooms
because they are not familiar with basic information involved in
getting consistent medical care.
“We need to find out where people are getting lost. Too many people
aren’t getting help until they are sick,” Greenberg said.
Anderson warned that duplication of services in the health care
industry won’t end simply because a law has been signed. She is
worried the law’s cost controls could hurt, not help Massachusetts’
health care industry.
“The big fear I have is people won’t find it worthwhile anymore to
become doctors,” she said.
After working with the Task Force for 25 years and helping her
husband survive serious ailments, Greenberg regards the new health
law as landmark reform. She expressed her feelings to Walsh
recently.
“I walked over to him, hugged him and said, ‘Thank you,’” she said.
The Wall Street Journal
August 5, 2012
REVIEW & OUTLOOK
RomneyCare 2.0
With costs rising fast, Massachusetts moves to dictate medical care
ObamaCare's illusions are starting to fall like autumn leaves, even
among some liberals, and what they're discovering are things that
have happened over and over again in Massachusetts. Beacon Hill
"reformed" health care four years before Capitol Hill, and ever
since it has reliably predicted the national trend—on surging costs,
price controls, physician shortages and so much else.
So Boston's latest adventure deserves particular scrutiny, since
odds are its methods are coming soon to a hospital near you. After
more than a year and a half of debate, last week the legislature
passed a far-reaching "cost containment" bill that Democratic
Governor Deval Patrick is about to sign. It is the inevitable
postscript to the model that Mitt Romney introduced in 2006.
***
The claim then, as with the Affordable Care Act, was that health
care would be less expensive if everyone had insurance. Soon
Massachusetts Democrats leaked that their political strategy all
along was to expand coverage only, because had RomneyCare seriously
squeezed providers it never would have overcome industry opposition.
"Bending the curve" on costs could be saved for another day, once a
vast new government liability was locked in.
Sure enough, 79% of the newly insured are on public programs. Health
costs—Medicaid, RomneyCare's subsidies, public-employee
compensation—will consume some 54% of the state budget in 2012, up
from about 24% in 2001. Over the same period state health spending
in real terms has jumped by 59%, while education has fallen 15%,
police and firemen by 11% and roads and bridges by 23%.
Meanwhile, Massachusetts spends more per capita on health care than
any other state and therefore more than anywhere else in the
industrialized world. Costs are 27% higher than the U.S. average,
15% higher when adjusted for the state's higher wages and its
concentration of academic medical centers and specialists.
The health-care postman always rings twice, and now medicine itself
is the target, instead of unsympathetic insurance companies. Under
the plan, all Massachusetts doctors, hospitals and other providers
must register with a new state bureaucracy as a condition of
licensure—that is, permission to practice. They'll be required to
track and report their financial performance, price and cost trends,
state-sanctioned quality measures, market share and other metrics.
The best that can be said is that in principle such transparency
could increase useful information about cost and quality. Today's
lack of comparative tools makes it hard for consumers to search for
value in health care, even when they have the incentive to do so.
But Massachusetts takes 360-degree surveillance and converts it into
a panopticon prison. An 11-member board known as the Health Policy
Commission will use the data to set and enforce rules to ensure that
total Massachusetts health spending, public and private, grows no
more than projected gross state product through 2017, and 0.5
percentage points lower thereafter. (And Paul Ryan's Medicare
projections are unrealistic?)
No registered provider is allowed to make "any material change to
its operations or governance structure," the bill says, without the
commission's approval. The commission can also rewrite the terms of
provider contracts with insurers and payment levels and methods if
they are "deemed to be excessive."
As the commission polices the market, it can decide to supervise the
behavior of any provider that exceeds some to-be-specified
individual benchmark—that is, doctors and hospitals that are
spending too much on patient care. These delinquents must submit a
"performance improvement plan" that the commission must endorse.
In other words, the commission is empowered to control the practice
and organization of medicine. The Massachusetts left complains that
this government control is too weak because the delinquents can only
be fined $500,000 for disobeying the commission's dictates. But more
teeth can always come in round three when this plan fails, as it
will.
The main reason is that the enlightened planners never allow for the
complexity of medicine in the real world. For example, Medicare has
for years been trying to lower hospital readmissions using the
strategies across the health policy universe—generate performance
and quality measures, then pay "good" hospitals more and the "bad"
less.
But it turns out that many of the supposedly bad hospitals also have
much lower mortality rates than the ones Medicare is rewarding in
its readmission programs monitoring heart attack, heart failure and
pneumonia. The reason is that patients who die can never be
discharged and then readmitted if something later goes wrong. The
alleged underachievers that Medicare punishes are often much better
at treating sick people and saving lives, less good at crunching the
numbers.
***
Despite these Medicare failures, Washington has
never gone as far as Boston is now going, installing itself as the
arbiter of care in order to redesign care, though under ObamaCare
it's only a matter of time. Everyone agrees that the health system
needs to deliver medicine more efficiently and be more accountable,
but accountable to whom? The answer for the political rulers of
medicine, if not patients, is always: government.
State House News Service
Monday, August 6, 2012
Six years after Health Care Access Law, Patrick inks bill tackling
rising costs
By Matt Murphy, Michael Norton, and Colleen Quinn
Gov. Deval Patrick signed a sweeping health care reform law on
Monday that seeks to build on the state’s near universal access to
insurance by reining in costs and improving the quality and
transparency of care.
As it did for former Gov. Mitt Romney, the bill holds the potential,
for better or worse, to become a defining accomplishment for both
Patrick and the House and Senate leaders who crafted the
legislation. However, like the 2006 universal access law, it could
be years before its changes are fully implemented and its impacts
known.
While the law’s critics say it represents a thicket of government
regulation and mandates, its supporters say its focus on the health
of patients, new care delivery and payment models, and cost control
will yield major financial savings.
“Today we become the first to crack the code on cost,” Patrick told
a jubilant crowd who gathered in Nurses Hall to see the governor
sign the bill on a lit podium in Nurses Hall.
Patrick was joined by House Speaker Robert DeLeo, Attorney General
Martha Coakley, Health Care Financing Committee Chairman Rep. Steven
Walsh and Rep. Ronald Mariano, Secretary of Health and Human
Services Secretary JudyAnn Bigby and Administration and Finance
Secretary Jay Gonzalez. The bill overwhelmingly cleared the
Legislature last week with bipartisan Senate support, but many House
Republicans voting against it.
The audience, mostly industry stakeholders and government aides,
gave the governor and legislative leaders a standing ovation as they
walked down the stairs from Patrick’s office, hollering and
whistling as advocates and staff lined the staircases and balcony
overlooking the ceremony.
Among those attending the sign ceremony were
Massachusetts Taxpayers Foundation President Michael Widmer,
Massachusetts Association of Health Plans President Lora Pellegrini,
Greater Boston Chamber of Commerce President Paul Guzzi, Retailers
Association of Massachusetts President Jon Hurst and Massachusetts
Biotechnology Council President Robert Coughlin.
No senators joined the governor at the bill-signing ceremony. Sen.
Richard Moore, who led the Senate negotiating team that worked with
Walsh to develop the final bill, was unable to attend because he is
attending the National Conference of State Legislatures summit this
week in Chicago. An aide to Senate President Therese Murray said she
didn't want to attend the ceremony without Moore, and also planned
to leave later Monday for the conference.
“The bill I’m about to sign makes the link many have long recognized
between better health and lower cost. We need a real health system
in place of the sick care system that we have today,” Patrick said.
More than six years after Romney signed the health care access law
at Faneuil Hall, the cost-control legislation signed by Patrick has
been billed as the long-awaited follow-up that supporters say will
save $200 billion over 15 years by bringing cost escalation in
health care more in line with economic growth.
The bill also prioritizes transparency of pricing and quality of
services for patients, and encourages state health agencies and the
private marketplace to move toward new care delivery and payment
systems that financially reward illness prevention and coordinated
care.
“We are ushering in the end of the fee-for-service care system in
Massachusetts in favor of better care at lower cost,” Patrick said.
DeLeo credited Patrick’s leadership for pushing the Legislature to
tackle health care costs, noting that the governor made it a
priority in his annual state address in January 2011 and “never let
us lose sight of this important priority.”
DeLeo also praised Walsh for having the “energy” and “intellectual
curiosity” to tackle the issue, and Mariano for being the “Michael
Phelps” of health care, helping to negotiate the 2006, 2010 and 2012
reform laws.
Joking at how the House and Senate pushed negotiations to the limit
of formal sessions which ended last Tuesday, Patrick said he had
done “a little nail biting” at the end, but also credited DeLeo,
Murray and stakeholders throughout the health care system for never
backing away from the negotiating table. The late-arriving accord
landed in a receptive Legislature, where lawmakers okayed the
expansive bill only hours after it was filed.
Coakley said she thought the bill included important review
mechanisms to identify pricing disparities between providers for
similar services, which her office has frequently pointed to as a
driver of high health care costs.
“I think this bill strikes the right balance of giving the market
room to grow and function. The market knows where it needs to grow,
and we, I think, have enough oversight to make sure it’s going where
it should,” Coakley said.
WHAT IT DOES
Though Monday’s ceremony was largely about paying tribute to those
who worked on the bill and shaped its final outcome, the 349-page
bill contains the blueprint for a dramatic overhaul of the state’s
health care industry, which continues to be a both a dominant drain
on wallets and source of employment in the Massachusetts.
“I won’t get into any of the specifics because we’ve talked about
that for a long time and it really doesn’t much matter five minutes
from now because it’s going to be signed into law, and then you go
figure it out for yourself,” joked Walsh, prompting laughter from
the audience.
The bill, however, makes Massachusetts the first state in the nation
to try to curb rising health care costs by setting a limit for
growth, proposing to hold growth to the rate of the economy through
2017 – set at 3.6 percent in 2013 – and dipping to half a percentage
point below the growth of the economy for the next five years.
A bureaucracy that includes two new state agencies – the Health
Policy Commission and the Center for Health Information Analysis –
will replace existing entities to oversee the transition and enforce
cost benchmarks.
According to the Patrick administration, this effort is expected to
help trim $200 billion in health care costs from the system over the
next 15 years, and result in the average worker taking home an
additional $10,000 over that span in their paychecks. The average
family will see $40,000 in savings over 15 years, according to
officials.
State agencies like MassHealth, the Group Insurance Commission and
the Health Connector will be required to use global and other
alternative payments systems to achieve savings, while the private
sector would be encouraged to form coordinated care organizations
focused on illness prevention and primary care.
State agencies will also be directed to partner for the bulk
purchase of prescription drugs, and a planning council will be
tasked with reviewing ways to increase the use of health savings
accounts.
The bill would assess a one-time $225 million fee on hospitals and
insurers, with $165 million coming from health plans, and the
remaining $60 million assessed through a formula to Partners
HealthCare, Beth Israel Deaconess Medical Center, and Boston
Children's Hospital.
The bulk of the money, or $135 million, would go toward a fund to
help distressed community hospitals, while $60 million would be
deposited in a wellness and prevention trust fund for program grants
at the community level, and the remaining $30 million would go
toward the eHealth Institute to aid the transition to electronic
medical records.
In addition to the measures intended to limit the impact on pricing
of market power and medical malpractice, Walsh said patients will be
empowered with better choices about their care through the use of
required toll-free hotlines and websites that will disclose price
information.
“There are some of the strongest consumer education and patient
protection pieces in this bill that have ever been written into
law,” Walsh said. “Patients will now be able to know the cost,
quality and risk of anything that’s being done to them in one of our
great hospitals, one of our great clinics, one of our great health
centers, or one of our great doctor’s offices.”
The bill builds on a 2010 law establishing limited and tiered
networks as a way of controlling cost growth and addressing market
power and price disparities among providers by increasing the
minimum premium savings from 12 percent to 14 percent cheaper than
those with a full network. It also introduces “smart tiering" that
will allow health plans to tier based on service rather than
facility.
Finally, the bill bans mandatory overtime for nurses in hospitals
unless patient safety or an emergency requires it, and updates the
2006 access law that penalized businesses with 11 or more employees
for not offering health care.
“Forcing nurses to work when they are exhausted endangers patients
and leads to costly, preventable medical errors and complications.
The practice of mandatory overtime is indefensible by any patient
safety standard, and yet hospitals continue to increase their use of
this practice. This legislation will put an end to that,” said Donna
Kelly-Williams, president of the Massachusetts Nurses Association.
Under the new bill, the threshold for so-called “fair share
assessments” would be increased to 21 full-time equivalent
employees, and employees who have qualifying health insurance
coverage from a spouse, parent, veteran’s plan, Medicare, or a
disability or retirement plan will not be counted against an
employer’s total.
NOT EVERYONE HAPPY
While the state's new health care law easily won approval in the
House and Senate last week with overwhelming and bipartisan support,
it did encounter some opposition from lawmakers who told the News
Service they have problems with the substance of the bill and the
speed with which it was approved.
The Senate unanimously passed the bill, while the House voted 132-20
in favor, with only one Democrat – Rep. James Miceli – opposed.
Rep. Bradford Hill, an Ipswich Republican, said he was uncomfortable
voting for a 349-page bill he did not have time to read, without
completely understanding all the details and ramifications.
“With everything going on that very last day, with what we were
dealing with, you know obviously, I didn’t think it was right just
to vote for a bill for the sake of voting for a bill,” Hill said,
referring to the spasm of legislative activity last Tuesday, the
last day of formal sessions this year.
Rep. Dan Winslow (R-Norfolk) said he felt it was “irresponsible” to
vote on the bill, unveiled Monday night and voted upon on Tuesday,
without studying it first. “Remember when Nancy Pelosi said you have
to vote on it to see what’s in it?” he said. “Legislators were being
told to vote on something on faith that was so important.”
Josh Archambault, the director of health care policy at the Pioneer
Institute, described the bill on Monday as “little understood and
brimming with unintended consequences.”
He noted in a graphic distributed Monday that in 2006 it took the
Legislature 362 days from the time the universal access law was
introduced to the 86-page bill’s signing by Gov. Romney. Though
Patrick first proposed a similar concept in January 2011, from the
first look at the Senate’s cost containment bill in April until last
Tuesday, it took 88 days to enact a 349-page bill.
“The law being signed today re-imagines and repackages so many
failed top-down approaches from the past. The acronyms may have
changed, but this bill looks a lot like past approaches that trusted
government, not patients, to drive big, systematic changes in how we
purchase healthcare,” Archambault wrote.
Another critic of the bill, Rep. Steven Levy, tweeted after the
House vote: “Only thing concrete in it is more bureaucracy & fees.”
Levy told the News Service Thursday he voted against the bill
because he does not believe it will actually control costs by
dictating to providers and insurers to cap their growth rate at
gross state product.
While health care costs have been growing on average in recent years
at 6.8 percent, gross state product has averaged closer to 3.6
percent. The cost of health care for Massachusetts residents is
roughly 15 percent higher per person then elsewhere in the country,
accounting for more than 40 percent of annual state spending.
Levy called it “random” to use the gross state product as the target
number. “We are mandating this lower cost and we are going to call
that savings, without giving any specifics on how to achieve that.
It is wishful thinking,” Levy said.
Archambault also warned of the impact the $225 million assessment on
plans and providers would have on patients. “Make no mistake about
it, these costs will be passed onto consumers,” he said.
Winslow voted in favor of the House version of the health care bill
but against the final bill. He said he objects to creating a
“massive” state bureaucracy to oversee a major sector of the state’s
private sector economy.
One-sixth of the state’s economy is tied to the health care
industry, he said. “We are going to create a massive state
bureaucracy to oversee a private industry. If you like the post
office, you are going to love this new health care bureaucracy,”
Winslow said.
Winslow said he also opposed the bill because it did not include a
provision he pushed for to license telemedicine, which allows
doctors to appear by video conferencing. Not including telemedicine
in the final bill was a “big negative for me,” he said.
Other House members who voted against the bill did not return phone
calls seeking comment. The bill attracted the votes of House and
Senate Minority Leaders Brad Jones and Bruce Tarr, who served as one
of six conferees.
State House News Service
Monday, August 6, 2012
Moody's: New health care cost law "credit negative" for Mass.
hospitals
By Matt Murphy
The health care cost control law signed by Gov. Deval Patrick Monday
will hurt the bottom lines of Massachusetts hospitals and limit
their flexibility to grow, a major credit rating agency warned
Monday.
“The Legislation is credit negative for Massachusetts hospitals
because it will limit their revenue growth and reduce their
operating flexibility,” Moody’s Investment Services wrote in a
credit analysis of the new law.
The report also suggested the money derived from a $225 million
one-time assessment on health plans and major health care providers
to help support community hospitals would artificially work to keep
smaller hospitals in business, while limiting the expansion
opportunities for larger hospital groups and hurting their credit
standings.
“Another negative credit effect of the bill is that the state will
use an excise tax on insurers to support smaller and less profitable
hospitals, potentially allowing them to remain in business longer
than would otherwise be possible and limiting the ability of larger
systems to consolidate and grow through acquisitions,” Moody’s
wrote.
Joined by legislative leaders, Patrick signed the new law Monday.
Supporters say it will build off the successes of the 2006 law that
has led to more than 98 percent of residents having health
insurance.
The Massachusetts Hospital Association called the law “immensely
complex.”
After the News Service inquired about the Moody’s analysis, the
association said in a statement: “The hospital community supports
the law’s objectives and praises many of its provisions, even as we
have expressed concerns regarding select provisions. And we pay
attention to Moody’s perspective. But we believe that the best way
to handle the issues that Moody’s raises, and our other concerns, is
to work thoughtfully and collaboratively with policymakers and
stakeholders to address them and avoid the hazards ahead, allowing
the full potential in this law to be realized.”
The hospital group said it will be a “challenge” to successfully
implement the law, but said “overcoming challenges in Massachusetts
healthcare is what we all do best. Thoughtful collaboration got us
this far and it will get us the rest of the way.”
Though the final bill did not include what Moody’s described as an
“onerous” tax on high-cost providers favored by the House, the
rating agency said the bill would “publicly expose” hospitals and
care groups that fail to meet benchmarks laid out in the bill for
cost growth.
The bill will limit year-to-year growth in health care costs to the
overall growth rate of the state’s economy for the first five years,
dipping half a percentage point lower between 2018 and 2023. The
goal would essentially cut health care cost growth in half, to about
3.6 percent or lower.
Though Moody’s said the new commission overseeing the cost growth
targets could not tax or punish hospitals that don’t meet the
benchmarks, the bill actually allows the Health Policy Commission to
fine a provider up to $500,000 for failing to file or faithfully
implement its improvement plan. The penalty, according to the bill,
should be a “last resort.”
Further, Moody’s said the requirement that hospitals file a
performance improvement plan would “publicly expose organizations
that do not meet cost targets.”
The bill also requires state agencies administering health plans for
Medicaid patients to adopt alternative payment models for at least
50 percent of Medicaid beneficiaries by July 1, 2014.
“Although the state has yet to provide specifics of those
alternative models, we expect them to include bundled payments and
shared savings models that are substantially different from the
current fee-for-service model. We expect the new reimbursement
models will reduce hospital revenues,” Moody’s wrote.
Gov. Patrick on Monday at the bill-signing ceremony said the shift
would improve the quality of care, instead of rewarding quantity.
“We are ushering in the end of the fee-for-service care system in
Massachusetts in favor of better care at lower cost,” Patrick said.
Moody’s said hospitals that fail to adapt quickly will likely lose
revenue, though the rating agency said it could not estimate how
much given that the payment models have not yet been defined.
Last week, Patrick said he was not concerned that the cost growth
limits would negatively impact employment, or force hospital
closures.
“No, no. I think, you know, there are going to be changes, but if
those changes mean lower cost and higher quality care because care
is being delivered in different settings, in homes for example, in
neighborhoods in communities rather than in hospitals, then I think
that’s something we all ought to strive for,” Patrick said.
Atrius Health CEO Gene Lindsey predicted that the bill could lead
jobs to “migrate” from hospitals to other institutions but it could
actually be an economic boon for the industry. “I think there is
plenty of work available,” Lindsey told the News Service.
In an interview on Friday, Housing and Economic Development
Secretary Greg Bialecki said the new Massachusetts health care
system may include more jobs outside of hospitals than the current
system, which means workers will need to be trained in providing
care at home and other non-hospital settings.
“The folks who work in the hospitals, their training is very
specialized and it’s for work in the hospitals so to ask those folks
to say, ‘Oh well, you’re in health care so you can also take care of
somebody in a home situation,’ it doesn’t work that way,” Bialecki
said.
But the roughly $60 billion health care industry is well resourced
enough to handle those changes as well as other demands called for
in the legislation, he said. Bialecki said the health care industry
could weather the one-time $225 million assessment on hospitals and
insurers.
“It’s such a big industry and we spend so much money on health care
in the country right now that an assessment that seems like a big
number to you and me is in fact a tiny, tiny fraction of a percent
of the total revenues of the industry,” Bialecki said.
Bialecki said the industry was already moving in the direction
outlined in the new law.
“I think that’s something that’s happening in the marketplace
already. We’re seeing health care evolve. We’re seeing businesses,
insurers, government all asking that health care be delivered more
affordably,” Bialecki said.
Part of that change may mean a shift in where people are employed,
he said. “So those kinds of changes will cause changes of
employment. It’s not clear actually that it’s going to cause a
reduction in employment,” Bialecki said.
Andy Metzger contributed reporting
The Boston Globe
Wednesday, August 15, 2012
Health law benefits some Mass. hospitals, penalizes others
By Liz Kowalczyk
Steward Health Care System, which includes struggling Carney
Hospital, will not qualify for millions of dollars in special
payments under the new Massachusetts health care law, because
legislators said they did not want to subsidize a for-profit
company. The provision is one of several buried in the 350-page bill
that penalize or benefit certain hospitals.
The cost-control law also targets three Harvard-affiliated hospital
systems — Partners HealthCare, Boston Children’s Hospital, and Beth
Israel Deaconess Medical Center — to pay a one-time $60 million tax
to fund health programs.
Legislators rewarded three small hospitals considered too isolated
or too specialized to fail: Athol Memorial, Fairview in Great
Barrington, and Franciscan Hospital for Children in Boston will
get boosts in Medicaid payments.
In order to receive a share of $155 million set aside mostly to help
community hospitals invest in technology, control costs, and better
coordinate patient care, providers will have to make their case to a
commission being set up to oversee the law’s implementation.
“It’s a jump ball,’’ said Donald Thieme, executivedirector of the
Massachusetts Council of Community Hospitals. “They’ve created a
very broad definition of things to look at. It gives [the
commission] wide authority to select one versus another.’’
Hospitals doggedly lobbied key legislators to treat them well under
the new law, which Governor Deval Patrick signed earlier this month.
The law seeks to keep health spending from growing faster than the
state’s economy through 2017 and to further slow spending for five
years after that.
The governor and legislative leaders say it could save $200 billion
in health costs over the next 15 years by encouraging providers to
use fewer expensive procedures, to better coordinate patients’ care
to keep them healthier, and to steer patients to lower-cost
hospitals and doctors.
A major point of debate among lawmakers who crafted the law was
whether to dock powerful caregivers who demand high prices for
their services, one of the most-cited reasons for rising medical
spending, with House leaders pushing for financial penalties.
Discussions also focused on whether to help shaky community
hospitals, a pet issue of state Representative Ronald Mariano, a
Quincy Democrat and a member of the team negotiating a compromise
between House and Senate proposals.
As a result, the law sets up a Distressed Hospital Trust Fund that
will distribute $135 million over four years, with about 35
community hospitals competing for money, Thieme said.
Teaching hospitals and hospitals with very high prices do not
qualify. And the law for the first time prohibits a specific pool of
money, the distressed hospital fund, from going to for-profit
hospitals.
The state has 13 for-profit, acute-care hospitals, including three
owned by Vanguard Health Systems. Cerberus Capital Management, a New
York private equity firm, owns the 10 Steward hospitals, including
Carney, which has been financially unstable but has taken care of
some of the city’s poorest residents for years.
Even though Carney lost $20 million in 2011, Mariano said, the
Dorchester hospital’s for-profit status makes it “difficult to make
the argument that they should get a large chunk’’ of the money.
Steward bought nearby Quincy Medical Center last year, adding to his
concern.
“We don’t know what is going to happen with these places,’’ he said.
“We don’t know how long they are going to exist.”
Spokesman Christopher Murphy said that Steward is committed to
Carney and that the distressed hospital fund is “a Band-aid’’
anyway, not a permanent solution.
“We’re looking at building Carney for the long-term, so the
availability of these Band-aid funds isn’t material for the future’’
of the hospital, he said.
Carney has been a major recipient of similar special funds for
years, including about $5 million this year from state and federal
programs for hospitals that serve large numbers of poor patients. It
will continue to receive that money.
The distressed hospital fund, along with money for public health
programs and information technology systems in the new law, will
come from an assessment on hospitals and insurers.
But the law is written to apply only to Partners, Children’s, and
Beth Israel Deaconess, legislative leaders said.
Massachusetts General and Brigham and Women’s hospitals, which are
part of the Partners network, and Children’s have been targeted as
three of the highest-paid hospitals in the state, in reports from
the Patrick administration and Attorney General Martha Coakley.
Representative Steven Walsh, a Democrat from Lynn who led the House
effort, said legislators “created a formula we felt would only hit
those hospitals that are healthy enough to withstand’’ it.
Walsh said Partners’ share is about $42 million. Beth Israel
Deaconess and Children’s will roughly split the remaining $18
million, although they can apply for a hardship waiver for most of
their share under the law.
Partners Spokesman Rich Copp criticized the approach.
“Imposing a tax on a very small number of hospitals is not a fair
way to approach this issue, particularly when the money is being
used to solve a problem the state created by underfunding the
Medicaid program,’’ he said. “Burdening hospitals with more costs in
a bill to reduce costs is a paradox, as well as bad public policy.’’
Meanwhile, Athol Memorial and Fairview — tiny, isolated hospitals —
will get increases to their Medicaid payments to bring them up to
slightly more than Medicare pays.
Medicare, the health insurance program for the elderly, has
traditionally paid better than the state and federal Medicare
program for the poor.
Medicaid rates for Franciscan Hospital — a pediatric rehabilitation
hospital for children with disabilities and long-term significant
medical needs — will increase by 50 percent.
The hospital received $6.5 million from Medicaid last year. Senator
Richard Moore, Democrat of Uxbridge, said children there would have
few alternatives if the hospital failed.
The state’s hospitals also will be able to compete for up to $20
million in additional Medicaid payments.
Mariano said community hospitals will be at a disadvantage because
hospitals must show they have made strides in switching to
budget-minded payment systems that help providers coordinate care
and hold down costs, which requires information technology.
“They don’t have the infrastructure,’’ he said.
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