Cost cut supporters see many ways to meet
health care law's goals
Moore, a principal author of new legislation, helps lead discussion
By Andy Metzger
October 1, 2012 ... The hard work of bringing down health care cost growth will be left to care providers, health insurers and consumers, not state regulators, state officials who drafted and passed this summer's omnibus health care cost control law said Monday.
"We purposefully in the Legislature did not want to get into over-regulating the business. There are a lot of regulations as it is in health care," Senate chairman of the Joint Committee on Health Care Financing Richard Moore said during Blue Cross Blue Shield Foundation breakfast panel discussion.
Moore and others said providing more information about health care will empower consumers and lead hospitals toward offering lower-cost treatments to provide what consumers want.
"We need to have more and more education and more open, free and honest discussion about the choices," said James Roosevelt Jr., president of Tufts Health Plan.
While critics of the new law applaud its transparency measures, they say the statute, which begins to take effect next month, relies too heavily on government directives to achieve its promised costs savings.
State officials had some ideas Monday about where the industry could find savings under a law designed to bring health care cost growth down to overall economic growth levels.
Speaking about the most expensive patients, Health and Human Services Secretary JudyAnn Bigby said, “Right now they’re circling around the health care system, consuming a lot of cost, and people think that about 30 percent of that is unnecessary or duplicative.”
Bigby said creating better hospice care would address the twin goals of lowering costs and allowing people to spend their last days outside of an intensive care unit.
“We have one of the lowest proportions of hospice providers in the country in Massachusetts. When we look at where people get their end of life care, it’s in ICUs and hospitals. Most people say though that when it’s that time they want to die at home,” Bigby said.
Bigby said it is important to “make sure that we are providing health care services based on what people want and what they need as opposed to what generates revenue.”
Critics have also expressed concern over the methods of bringing down costs in earlier versions of the bill, though one such critic – Massachusetts Taxpayers Foundation President Michael Widmer – said the final version was a big improvement.
“The most onerous provisions in the House bill were not included in the final bill, which is clearly a positive step,” Widmer told the News Service. “So I think the final bill broadly strikes the right balance between setting an ambitious target for cost growth on the one hand, but giving the marketplace the flexibility to achieve that target.”
The final version of the cost control bill was filed the evening of Monday, July 30, a day before it was gaveled through both chambers in the last day of formal sessions.
Group Insurance Commission Executive Director Dolores Mitchell said lowering health care costs would free up funding for physical education, public transit and nutrition.
“Health is not just a function of medical care, and we are starving the rest of the components of health,” said Mitchell. She said, “If we spend every single dollar on medical care, there’s nothing left for all these other programs.”
Besides providing consumers more information about health providers, the law also encourages affordable care organizations, entities intended to help supplant the fee-for-service model by taking responsibility for a group of people for a set fee.
Steward Health Care CEO Ralph de la Torre said an ACO is a cross between a provider group and an insurer and said that his ACO, designed specifically for small businesses, has worked at reducing costs. However, he warned that risks are involved.
“We’re not going to be the only solution . . . There are going to be a handful, and I mean a small number of providers who can vertically integrate and carry risk,” de la Torre said. He said, “If you allow providers to enter into carrying risk and managing care, then without appropriate reserves and without appropriate infrastructure, you’re going to bankrupt providers. There is a group of them that are going to go under. And then we’re all going to be faced with deciding about whether or not we’re going to bail them out.”
De la Torre also talked about the risk of overambitious rate-cutting. He said that giving a 10 percent rate cut to the top 30 percent most expensive hospitals would put those hospitals into bankruptcy and only reduce overall insurance rates by 1.2 percent.
“You just took out the largest employers in Massachusetts – because you’d really bankrupt them if you hit them with 10 percent – for a 1.2 percent reduction,” he said. “That doesn’t seem very smart to me.”
Some of the industry leaders and government officials singled out preventative and wellness medicine as a means of reducing health care costs and increasing health.
“If you don’t get sick or injured, health care’s pretty cheap, so we want to encourage prevention and wellness,” said Moore. At another point, he described a means of cost-cutting that he does not support.
“You can cut cost by reducing access or the quality of care,” Moore said. “We don’t want to see that type of cost-cutting.”
This story appears courtesy of the State House News Service (subscription required).