Counterpoints

Dear Gov. Romney:

First of all, thank you. Your willingness to confront the dual crises of health access and affordability has enhanced prospects for reform. We may now be on the cusp of a “third wave” of Massachusetts health reform, building on gains achieved in 1988 and 1996, progress that has driven our rate of uninsurance to one of the nation’s lowest.

The Massachusetts health care community wants to work with you and the Legislature to achieve reform. Many of us – consumers, hospitals, physicians, nurses, health centers, business and labor leaders – already have united behind the Health Access and Affordability Act filed by Sen. Richard Moore and Rep. Deborah Blumer. Our approach is different from the one you outline here. We believe our disagreements can be bridged by good faith collaboration.

Our concerns about your statements are based on actual experience in the policy trenches. Like you, we regard discussion of policy differences as helpful in reaching the understanding necessary to develop meaningful, lasting changes. We hope health reform becomes the signal accomplishment of your administration. In that spirit, I offer these comments, beginning with areas of agreement:

First, we fully concur with prioritizing the enrollment of low-income individuals who are eligible and unenrolled in public programs such as MassHealth. An enrollment campaign could be the first stage of an exciting reform process. The health care community identified and enrolled more than 300,000 individuals between 1997 and 2001 until state outreach funding was eliminated. While the new one-stop enrollment portal you mention is welcome, it will not by itself result in enrollment of all 106,000 people you identify as eligible. Full enrollment requires aggressive collaboration between government and the health community. We are eager to participate; you need only ask. To inspire confidence in your commitment, you could report the numbers of new enrollees monthly.

Second, we agree that the cost of health insurance is too high and must be made more affordable. We welcome your commitment to addressing this. One way you could help now is by ending the state’s chronic underpayment of MassHealth providers who shift their losses from public payers to private payers, causing higher private health insurance premiums. Last February, you publicly acknowledged this problem. When will state government face its responsibility to provide fair reimbursement to providers for the cost of care?

Third, we endorse your call for transparency. Consumers need accurate, useful, and timely information about costs and quality, and your leadership can help make this happen. We think transparency should also apply to state government. Your administration spent 18 months developing a comprehensive health reform plan – work now laid aside. Health Care for All has filed a Freedom of Information request for documents related to this process. Don’t you think, in calling for transparency, your administration should practice what it preaches?

We also have areas of concern:

First, evidence shows that prospects for pared-down insurance products are poor. For example, Blue Cross Blue Shield of Massachusetts already offers a high deductible ($5,000) individual insurance product, and state law since 1991 allows insurers to offer “bare bones” products. The reason they are not prevalent is because insurers and consumers don’t want them – and they’re not so affordable either. The major, expensive insurance mandates are for maternity, mental health, and substance abuse. Do you really want to see widespread use of products that leave consumers without coverage for these services?

You mention that New York offers a low-cost basic policy. But New York State has heavily subsidized that product with state tax dollars. Premiums in the New York program are low because the state “reinsures” high cost cases with public dollars. The Moore/Blumer Health Access and Affordability Act proposes this same approach.

Second, please don’t vilify MassHealth clients. Your comments about “abuse” and “fraud” in Medicaid are worrisome. If you think there are problems in MassHealth along these lines, fix them. If there are MassHealth clients who don’t qualify for coverage, don’t provide it. You don’t need a statute, regulation, or appropriation. You certainly don’t need insinuations. Unlike welfare, MassHealth clients receive no cash; they receive medically necessary services authorized by licensed health professionals. Throwing around, without substantiation, charges of fraud simply spreads stigma, which works against your stated desire to sign up people who are eligible but not now enrolled.

‘Bare bones’ products aren’t that affordable.
Instead, focus on real abuse. Since 2003, 500,000 adults on MassHealth can only get dental services when their teeth are so rotten they need to be pulled. After they’re pulled, the state no longer pays for dentures. And kids? Yes, they’re eligible but your dental program is run so poorly that only one in 10 dentists will see a MassHealth kid and only one-third of those 400,000 kids had their teeth cleaned last year. Your Department of Public Health did an oral health survey of Massachusetts third graders – 41 percent of MassHealth kids had untreated cavities and 19 percent had urgent dental needs. That’s a scandal.

Third, don’t be so hasty to dismiss the need for mandates and new revenues. Your secretary of health and human services (whom you publicly called “the best in the nation” last February) was right when he told you no significant reform could happen without them. Since the state health reform era began in the 1980s, many states have made dramatic gains in affordable coverage. None did it for free. Hawaii has the nation’s highest rate of employer-sponsored health coverage for a reason – it’s mandatory. Massachusetts has one of the lowest rates of uninsurance because we help many who could never afford employer-based coverage.

One final thought: You have suggested that 2005 will be a good time to get things done because 2006 is an election year. Remember that the two watershed access reform laws were passed in 1988 and 1996, both election years. The public wants health access and affordability problems fixed, and they will reward public officials who get it done right, not in a hurry. There’s a lot of goodwill out here to help you get it right, if you’re willing to tap into it.

John McDonough is executive director of Health Care for All.

 

Health costs are now everyone’s problems

By Jane Walsh and Alan Macdonald
Winter 2005

Gov. Mitt Romney, legislative leaders, and health care advocates are to be commended for bringing the issue of universal health coverage to the top of this year’s public agenda. Business leaders welcome this discussion, as we attempt to simultaneously reduce the increases in health care costs and share in the responsibility to meet the health care needs of our employees.

Business is acutely aware of the importance of this issue for a variety of reasons:

  1. Employers provide medical insurance for nearly two-thirds of insured people, and the cost of these benefits is increasing at rates far greater than inflation;
  2. health care is one of the largest sectors of the Massachusetts economy;
  3. health care cost factors affect the competitiveness of our state’s businesses; and
  4. access to quality health care is an essential component of quality of life for all our citizens.

Business, however, does not have a monolithic opinion on how to address the issue. In fact, different business leaders could have very different views depending on the size of their business, the wage scale of their industry, and/or the demographics of their employees. Even with potential differences among employers, though, there are common concerns, such as trying to answer the simple question, “Can we afford to pay for out-of-control health care costs that are many times the rate of inflation?”

The answer, of course, is that no enterprise can afford to pay for increases that are persistently above the rate of inflation, whether for health care or any other cost item. Business leaders understand that this is not sustainable, and that some form of government intervention may be necessary to bring health care costs under control, due to the mix of public and private payers for health care services, and due to the extensive 65-year history of government regulation of the health care field. These facts help to explain business leaders’ historic and current interest in the state’s health policy debate.

For the past 22 years, the Massachusetts Business Roundtable has had a Health Care Task Force, which has done research and made recommendations on health care policy. The MBR task force includes executives from the state’s health care insurers, teaching and community hospitals, and large and small companies that are purchasers of health care services. During the 22-year history, four key points have emerged consistently from the deliberations of the task force:

  • Universal access to basic medical care is a public responsibility for a society such as ours;
  • A basic health care package must be consistent with the government’s ability to fund such care for those without adequate means, and also consistent with the goal of controlling inflation in the cost of medical care;
  • Built into the basic health care package must be strong measures that emphasize individual responsibility for health care, including provisions for co-payments, deductibles, and premium incentives to encourage wellness and reward appropriate use of the health care system; and
  • The best way to achieve universal access to basic medical care at a reasonable cost is through a system where consumers exercise choice in selecting insurers and providers in a competitive market.

In 2002, MBR’s Health Care Task Force released a white paper entitled “Solutions for Massachusetts Health Care,” which includes many of the recommendations discussed on these pages. We agree, for example, that individuals should select the lowest cost, most appropriate treatment settings. We agree that technology resources need to be leveraged, not only to assist providers in delivering more efficient, high-quality care, but so that consumers can make informed decisions about their health care. We agree it is essential that, wherever possible, information on both cost and quality is available to support a consumer’s selection of health care provider and treatment options. We agree that the Medicaid reimbursement shortfall is significant and that the formula needs review and adjustment. This shared ground gives us optimism that the goals outlined recently by Senate President Travaglini, Gov. Romney, and other public leaders can and will be achieved.

The recommendations in our report are based upon two principles, which we believe will be helpful in guiding the public health care debate in the coming months:

  1. All parties – employers, consumers, providers, payers, government, and advocacy groups – have a shared responsibility to address this issue, and their various interests must be bridged so that no one constituency is at a competitive disadvantage by disproportionately bearing the expense of providing health care in Massachusetts; and
  2. all concerned parties must understand the costs and impact of individual health care decisions.

Consumers currently utilize health care resources without access to data or any objective provider performance comparisons to understand the cost or quality impact of their decisions. It is incumbent upon all responsible parties to commit to developing consistent measures, based upon understandable quantitative data, to increase awareness among consumers and providers and to assist them in decision making.

Employers, insurers, and providers must join together to educate and inform consumers in order to assure them that providing appropriate care in an appropriate setting is not just about cost shifting but about the wiser use of limited resources and greater personal responsibility and well-being. Wherever possible, information on both cost and quality must be made available to support consumers’ selection of health care providers and treatment options. By introducing the empowered consumer into the process, employers hope to activate a new element of cost control while meeting their responsibility to contribute to health coverage for their employees.

The goals that have been set by our state leaders can be achieved if all the affected parties work together to achieve them. Such a shared effort and understanding can begin to control escalating health care costs, while meeting the fundamental obligation to provide universal access to affordable health care in Massachusetts.

Jane Walsh is president of Northmark Bank and chairman of the Massachusetts Business Roundtable’s Health Care Task Force; Alan Macdonald is executive director of the Massachusetts Business Roundtable.

 

Expanding insurance is a matter of value(s)

By Jon Kingsdale
Winter 2005

Apparently, one of the New Year’s resolutions on Beacon Hill is: “health insurance for (almost) all.” Gov. Romney and Senate President Travaglini have committed publicly to increasing the number of citizens with health insurance; Sen. Moore, Senate chairman of the Health Care Committee, and a coalition of advocates, led by John McDonough’s organization, recently filed legislation that proposes to go further. Health plans based here in Massachusetts support universal access to insurance and look forward to the opportunity to work with the governor and legislative leaders to fulfill this promise.

Gov. Romney is right to stress cost control as key to reducing the number of uninsured. In doing so, he underscores the core question of value: How do we wring more value out of health coverage, so that more individuals, employers, and taxpayers are able to – and will choose to – buy it?

The tie between controlling cost and expanding insurance coverage is inextricable. Very simply, if we cannot afford to do it, we won’t. Let’s not forget that Massachusetts already enacted universal coverage once, in 1988, only to repeal it as unaffordable, in 1995.

How can we increase the value of health coverage? Here are some of the ways:

  • Increase choice in insurance products by reducing mandated benefits;
  • Develop comparable information on the cost and quality of competing providers;
  • Encourage consumer selection of the most cost-effective providers;
  • Develop standards of evidence-based medical practice;
  • Reform malpractice liability to encourage reporting of medical errors and stimulate the practice of evidence-based medicine; and
  • Reduce reliance on the Uncompensated Care Pool by strictly enforcing eligibility requirements and treating patients in the most appropriate settings.

Gov. Romney endorses many of these reforms. No doubt they will be resisted, but the less we do to reduce the cost of health care, the harder it will be to induce more people to buy it and convince taxpayers to fund it.

If significantly increasing access to affordable health insurance requires controlling medical costs, it also raises a question of values: Do we in the Commonwealth care enough to commit additional resources to assuring equal access to mainstream medicine? Doing so requires spending more dollars here, and fewer elsewhere.

It means expanding access to Medicaid, as both the governor and the advocates propose. It also means subsidizing low-wage workers and their employers to purchase private health insurance. The governor refers with enthusiasm to the “Healthy NY” insurance program, which subsidizes access to private insurance and eliminates some mandated benefits for eligible segments of the small-group and non-group (individual) market. The advocates also borrow from Healthy NY, including its most innovative – and expensive – element, state subsidy of catastrophic claims.

Where the governor and the advocates appear to disagree most fundamentally is over the so-called “play or pay” mandate. This requires most employers to finance group insurance for their employees (to “play”), or to pay the state to cover those workers. Given the high cost of coverage now and the threat of higher costs to come, this is a major disagreement.

While there are substantial benefits to bringing thousands of Massachusetts residents into the mainstream of health care, there is a cost as well. Notwithstanding the recent Urban Institute report of a relatively modest net cost for covering the uninsured in Massachusetts – $834 per adult per year, after deducting current costs of the uninsured to “the system” – the financial burden on those not now paying cannot be trivialized. Small-group health insurance premiums in Massachusetts are approaching $5,000 per person per year for comprehensive benefits.

If values are translated into financial terms, we can seek out middle, if not common, ground.

Compelling employers to pay such amounts is partly a matter of values. The advocates argue that we must, as a matter of principle, bear this burden; the governor pledges no new taxes or mandates on private spending. Thus, a primary principle powering expansion – that we assure equal access for all to essential medical care – meets the opposing principle of championing individual over centralized control of personal decisions and private resources.

Value politics are generally the least susceptible to compromise (think abortion, death penalty). Fortunately, in this case, differences in values can be translated into dollars, which are far more amenable to compromise. For example, the employer’s cost to “play” could be less than $5,000 per person if we reduced mandated benefits. As Senate President Travaglini has said, “We can cover everyone, but we can’t cover everything.” And the employer’s penalty for not “playing” could be reduced to less than the average price of health insurance.

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If our political leaders translate their differences over values into financial terms, they can seek out middle, if not common, ground. Conversely, if each camp holds true to its own principle – one side refusing to consider any new mandate on employers while the other refuses to consider coverage that costs less than $5,000 per person – then the perfect will be the death of the good.

The test of our resolve to press forward through this thicket of policy challenges may be the willingness of each camp to compromise its most cherished principle.

Jon Kingsdale is senior vice president for planning and development at Tufts Health Plan.