7 healthcare questions for Rick Lord

Rick Lord has a unique perspective on health care in Massachusetts. He serves on the state’s Health Policy Commission. He stepped down in May after more than 28 years as head of the business group Associated Industries of Massachusetts. And previously he served as the budget director of the House Ways and Means Committee on Beacon Hill.

 Lord talked health care on this week’s Health and Consequences segment of the CommonWealth Codcast with John McDonough of Harvard’s TH Chan School of Public Health and Paul Hattis of Tufts University Medical School. To give you a taste of the discussion, here are seven questions posed to Lord.

What kind of grade would you give the Health Policy Commission?

“I would give it an A -,” Lord said, noting that the annual process of setting a health cost growth benchmark has focused attention on the rising cost of health care. Lord said the commission’s advisory role in analyzing the impact of mergers and acquisitions has also been helpful. The proposed acquisition of South Shore Hospital and Hallmark Health System was blocked in part because a Health Policy Commission analysis concluded it would increase costs. “Fifteen years ago it would have [been approved] because nobody was looking at those kinds of transactions in the marketplace,” Lord said.

Are rising health care costs less of a problem today?

“The bigger employers seem to not see health care inflation as the kind of real challenge it might have been 10 years ago. For smaller employers, however, particularly in the small group market, which is 50 and under, they don’t have those tools, the resources. They’re in that market that’s group rated, and those premium increases continue to be over the benchmark, which is currently 3.1 percent and was 3.6 percent. They don’t feel as comfortable about our success here, so we have more work to do.

Lord said there are many other cost challenges facing Massachusetts, including wasteful spending on emergency room visits, high readmission rates, and overuse of teaching and academic center hospitals.

Does it make sense for employers to provide insurance to their workers?

“We’re in the situation we are kind of due to an accident of history. It was during World War II. There were wage and price controls and employers couldn’t give salary increases so they started offering benefits like health insurance. And that became the way that, as you said, most employees, people in the workforce, now get their health insurance through their employer. If we had to start all over again, I don’t think the three of us would design the system that we have. On the other hand, I don’t see us moving off of it. I know there are a lot of discussions, certainly at the national level and in the presidential debate, about Medicare for All. I don’t see us going off in that direction, at least in the near future. Most people are comfortable with the current system. We’ve made it work as best we can.”

Why do businesses oppose changing the way health care is paid for?

“The benefit packages that employers offer are part of the way they attract the types of employees that they’re looking for. It’s part of their compensation strategy, so that’s one reason they wouldn’t want to see it go. Secondly, I think they feel they have more control, particularly, again, the larger ones because they can self-insure, they can design the benefit plans, provide some more flexibility. They would be concerned about losing all of that and having it taken over nationally. Third, I think there’s a lot of evidence that commercial insurance rates to providers help subsidize the public payers like Medicare and Medicaid. It’s not like employers aren’t going to be paying into a national system, and who knows what they’ll be paying in order to finance it if we did go, for example, to Medicare for All. It’s not like they’re going to be off the hook. They’re going to be paying into that system in some way. At least right now they feel more comfortable with the system we currently have.”

Do you think the Beth Israel-Lahey merger will create a true competitor to Partners?

“That was the rationale basically for approving that merger. …After these transactions occur, I think we need to do a better job of looking back to see if we achieved what was promised during those conversations. It’s obviously way too early to know what the outcome will be.”

What about the proposed merger of insurers Harvard Pilgrim Health Care and Tufts Health Plan?

“I’ll refrain from commenting on that. I think individual mergers and acquisitions have to be looked at on their own.”

What’s the secret to getting health care legislation passed on Beacon Hill?

In 1988, when Lord was working on Beacon Hill, a universal health care law was passed along with an employer mandate of $1,680 per person. “The employer community in general was not at all supportive of that law,” Lord said. “I’m not sure how actively they participated in the conversation. Anyway, we passed a law that the employer community opposed.” Republican governor William Weld came into office vowing to repeal the law, and most of it was discarded. In 2004 and 2005, when universal health care resurfaced under Mitt Romney, business groups were all key participants. “It showed me that, if you can get the stakeholders at the table and everybody’s willing to give, you can accomplish some great things.”



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