Massachusetts health-care reform tests impact of employer 'tax' on jobs

The US Supreme Court calls it a tax. The Obama administration says it’s a penalty. In Massachusetts, where health-care mandates have been in effect for six years, they call the money a person pays for not having health insurance a “tax penalty." As far as small-business owners like Diane Giblin are concerned, it doesn’t make a difference one way or another.

“To me it’s the same no matter what you want to call it. It’s just another way to get into my pocket,” says Ms. Giblin, co-owner of a nine-employee metal fabrication company located just south of Boston. “Whether it’s a tax or a penalty, it’s the cost that you have to pay, it’s the money you to have to pay out."

But with the Supreme Court's historic ruling last week upholding the federal health-care reform law, the Massachusetts program faces increased scrutiny for how its plan, especially the mandate for small businesses, has played out in practice.

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The upside of the Bay State's pioneering reform is clear: The state now has the country’s highest rate of people with health insurance, due in no small part to the requirement that businesses over a certain size help provide it. The downside is less clear: the longer-term impact on business hiring and employment.

Under the 2006 law, Massachusetts businesses with more than 11 employees or their equivalent must offer a “fair and reasonable contribution” toward coverage or pay the state a “Fair Share Assessment” of $295 per full-time employee. The law also requires businesses to help employees pay for premiums using pretax dollars.

Under the federal law, by contrast, businesses with more than 50 employees will face penalties (called a “shared responsibility payment”) equal to $2,000 per full-time employee, with some exclusions. Tax credits are intended to help smaller businesses get coverage for workers.

Almost 79 percent of nonelderly insured Massachusetts residents now receive health insurance through their employers. In 2010, under the most recent data, Massachusetts had about 188,000 employers, 22,324 of which had 11 or more full-time equivalent employees and were potentially subject to the tax penalty, according to the state Division of Health Care Finance and Policy. Of that figure, 1,017 employers faced penalties, with restaurants making up the vast majority. Between 2006 and 2010, the penalties brought in an average of $15.7 million per year to the state, which helped offset costs for the entire law.

Businesses that rely on part-time or seasonal workers have reported the most problems in trying to comply. In the Cape Cod town of Wellfleet, where the local economy is tied to summer tourism, John Vincent Jr. says he’s struggled to keep his drive-in movie theater, mini-golf, and snack bar business in compliance.

Of the 50 people on payroll, the majority are college- or high-school-aged students doing summer work, he says. He also has four year-round employees, whose health benefits are paid 100 percent. That is down from 10 year-round employees a decade ago, a drop he blames on rising health-care costs, including double-digit premium increases, he says.

“If I had to all of sudden put 50 employees on the payroll, boy, we wouldn’t be in business, plain and simple,” Mr. Vincent says. “We’d have to charge $15 a ticket to meet all the cost expectations. We’d have to price ourselves out of the market.”

Ms. Giblin, who owns Draper Metal Fabrication in Holbrook, Mass., along with her husband, says they’ve provided health care for their employees since before then-Gov. MItt Romney signed the state's health-care reform into law. Employees pay 40 percent of their coverage, while the company picks up the rest. Health-care costs have increased by double digits for years now, she says, dating back to before the state law went into effect. Two years ago, the company dropped down a tier in coverage, forcing employees to pay more out of pocket and higher deductibles.

With sales steady at about $1.5 million to $2 million annually, the company kept pace with orders at its current payroll, Giblin says. The company has yet to consider dropping coverage, but for other small businesses, she says the 11-employee threshold is an obstacle to hiring.

“It’s definitely not an incentive, and with all the horrible economic factors out there, you don’t need a nonincentive,” she says.

So far, evidence that the Massachusetts law has depressed hiring is largely anecdotal. A Boston-based think tank, the Beacon Hill Institute, estimates that the law has depressed hiring by at least 18,000 jobs, though some experts dispute that conclusion. Unemployment in Massachusetts has consistently been lower than the national average; as of May, the rate stood at 6.0 percent, the lowest since October 2008.

“Employers here don’t like a lot of government intervention, but I think they have adapted,” says Sandy Reynolds, executive vice president with Associated Industries of Massachusetts, which represents 6,000 employers across the state.

State legislators are trying to hammer out changes to try to slow the growth of health-care costs, says Bill Vernon, state director for the National Federation of Independent Businesses. They are also trying to make it easier for employers to meet the threshold for “fair and reasonable” coverage by allowing them to include employees who get insurance, for example, through a spouse or a government program.

“When we passed the law, we never addressed the cost of health insurance," Mr. Vernon says of the Massachusetts statute. "We addressed access, we accessed coverage, and here we are six years later, trying to control the costs."

Despite grumblings, polls show that the Massachusetts law remains popular with residents. Jonathan Gruber, an MIT economist who was instrumental in crafting the state law, says that for President Obama to win reelection, he’ll have to convince Americans of the federal law’s benefits.

“If the American public understands this law, they’ll feel about it like we do in Massachusetts, where there’s, what, two-thirds support for it,” Mr. Gruber says. “It’s not that we’re all crazy lefties here, OK? It’s that it’s a good law and people understand it here.”

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Massachusetts Lawmakers Unveil Ambitious Plan To Cut Health Care Costs

When Massachusetts passed sweeping health insurance reform in 2006, a crucial piece was missing from the landmark legislation: how to control rising medical costs. 

On Friday, state lawmakers announced a new proposal to do just that, including new ways to pay doctors and hospitals, a specific cap on health-care spending tethered to economic growth and a tax on the state’s most expensive hospitals if they can’t justify their prices. MIT economics professor Jonathan Gruber, an architect of the state’s 2006 health law and an adviser to President Barack Obama on the national Affordable Care Act calls the new House proposal “aggressive, broad and visionary.” 

“This is an incredibly hard problem,” said Gruber, speaking on WBUR’s Radio Boston. “What I like about this…is that it’s really taking the spaghetti approach to cost control; let’s throw a bunch of things against the wall and see what sticks. They’re doing a bunch of different things all of which might work.” 

So, what does it mean for patients? 

Mass. state Rep. Steve Walsh, the House chair of the joint Committee on Health Care Financing, said the plan would save $160 billion over 15 years. As far as savings for patients, Walsh said: “The first thing I’d tell [a patient] is five years from now, her family plan is going to be $2,000 cheaper than it is today.” Walsh said businesses would also find their health costs cut significantly. 

House Speaker Robert DeLeo added: “With this bill, I think everyone’s gotten a little something they want and everyone’s gotten a little something they don’t want. So that’s what this legislation is all about, but at the end of the day, most importantly what it’s going to provide is some real health care cost containment. That’s what the bill is all about.” 

One of the greatest challenges, he said, was to contain costs while not undermining a key industry in the state, with 1 in 7 jobs here linked to health care. Clearly some folks will be disappointed that the plan didn’t go far enough. Gov. Deval Patrick introduced legislation in February 2011 that would have allowed greater government oversight of contracts between insurers and health care providers and moved more medical groups into global payment systems that put doctors and medical groups on a budget. 

But DeLeo also made the point that once again, the state is in the forefront of health reform. “I look at this as Massachusetts being a leader once again in terms of what’s going on in the health care field in the country.” 

Here are some details of the House bill, officially the Health Care Quality Improvement and Cost Reduction Act of 2012, presented today by lawmakers. The state Senate is expected to introduce its own version of the plan next week. 

1. A new, quasi-governmental agency called the Division of Health Care Cost and Quality would oversee the transition to the new payment and delivery system with a board including consumer, government and industry representatives. 

2. The plan establishes a specific cap for health-care spending that would be linked to the Gross State Product minus .5 percent. 

3. The state could impose a 10 percent tax on hospitals if they charged more than 20 percent of the state median price for a given service and couldn’t justify that higher price. (Two earlier reports by Attorney General Martha Coakley found that certain hospitals exploited their market clout to charge higher-than-justified prices). Hospitals would pay this penalty into a distressed hospital fund for institutions that serve a high proportion of poor and vulnerable patients.

4. Accountable care organizations would take on greater prominence, though the bill stresses that joining an ACO would be voluntary for patients and providers. The bill defines the size of an ACO as bigger than 15,000 people and no larger than 400,000. Patients would have the right to appeal decisions made by their ACO doctors, and have the right to a second opinion. 

5. The state’s medical establishment would continue its shift toward global payments and away from fee-for-service systems. The measure would “transition the industry to adopt alternative payment methodologies such as global payments and bundled payments for acute and chronic conditions.” 

6. Electronic health records would be required for all providers by 2017. 

7. Greater transparency would be attained through detailed pricing available to consumers on the Web, as well as greater disclosure of out-of-pocket costs to patients up front. 

8. The measure stresses greater coordination of care through primary care, and the establishment of “patient-centered medical homes” so that patients could have a single point of coordination for all types of care. 

9. New rules on medical malpractice would create a 180-day cooling off period while both side try to negotiate a settlement. Also, the measure would allow providers to freely offer an apology to a patient. 

10. Under a provision called “smart tiering” patients might pay more for more expensive services. 

11. The bill would make several changes to Medicaid, including increasing MassHealth rates paid to providers. 

12. Funding for workforce training and development are included in the measure, and a provision would forgive loans to primary care doctors who practice in rural or underserved areas.

This story was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.

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Tufts Health Plan Sponsors Worksite Wellness Council of Massachusetts

WATERTOWN, MA--(Marketwire -03/23/12)- Tufts Health Plan and the Worksite Wellness Council of Massachusetts (WWCMA) today announced Tufts Health Plan's sponsorship of the Wellness Council, the first non-profit organization in Massachusetts that represents health promotion professionals and business leaders dedicated to promoting worksite wellness programs across the Commonwealth.

"The WWCMA is a great resource for Massachusetts employers," said Anne Marie Ludovici-Connolly, director of health, wellness and productivity. "We are proud to support an organization whose goals are in alignment with our mission of improving the health and wellness of the diverse communities that we serve."

The Tufts Health Plan sponsorship will help WWCMA carry out its mission to:

promote worksite wellness within the business community;create a community and peer group of worksite health promotion professionals;represent health promotion professionals as a common voice on professional matters;implement quality professional development activities and networking;facilitate communication about wellness and health promotion amongst worksite health promotion professionals, business leaders and other stakeholders.

"We are very excited to have Tufts Health Plan sponsoring the Council. Their sponsorship demonstrates their commitment and the role businesses can plan in health promotion in the workplace," said Mari Ryan, Board Chair of WWCMA.

About Tufts Health Plan
Tufts Health Plan is the #1 ranked PPO in the nation and is ranked 4th overall in NCQA's Private Health Insurance Plan Rankings, 2011-2012*. Overall, Tufts Health Plans' HMO/POS ranked second. Their HMO/POS products have had the highest NCQA accreditation status available since 1996 and the highest available NCQA accreditation for our Medicare product since 1997. To learn more about Tufts Health Plan, visit their website at: http://www.tuftshealthplan.com.

About the Worksite Wellness Council of Massachusetts
The Worksite Wellness Council of Massachusetts is a 501C(3) organization of Massachusetts health promotion professionals and business leaders dedicated to promoting healthier lifestyles for all employees of Massachusetts through health promotion activities at the worksite. Organized in 2010, the Council brings together Massachusetts employers and health promotion professionals interested in combating the ever-increasing cost of health care benefits by helping their employees, theirfamilies and their communities achieve and maintain a state of good health. To learn more about the Worksite Wellness Council of Massachusetts, visit their website at www.wwcma.org.

* NCQA's Health Insurance Plan Rankings 2011-12--Private
NCQA is a private, non-profit organization dedicated to improving health care quality. NCQA accredits and certifies a wide range of health care organizations. It also recognizes clinicians and practices in key areas of performance. NCQA's Healthcare Effectiveness Data and Information Set (HEDIS®) is the most widely used performance measurement tool in health care.

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Health Care In Massachusetts Turns To Cost Control

Voters are hearing a lot about health care this year. Republicans want to make the 2012 elections a referendum on the health care law that President Obama signed two years ago.

That law was largely based on one that then-Gov. Mitt Romney signed into law nearly six years ago in Massachusetts.

Romney is now a GOP presidential contender, and that has made the Massachusetts universal health care law a political football. Romney's rival Rick Santorum recently called it "an abject failure."

But "Romneycare," as Santorum and others call it, isn't controversial in its home state. And a lot of people there don't call it Romneycare because it took the support of a lot of other people — Democratic legislators, business leaders, insurers, hospitals and doctors, consumer groups — to get it passed.

But it's true that Romney got the ball rolling. When I interviewed him in 2006, Romney said he got the idea from talking to Massachusetts business leaders.

 

"The key insight was this: People who don't have insurance nonetheless receive health care — and it's expensive," Romney said.

Romney saw a state fund set up to provide free care — paid for by a growing surcharge on private insurance premiums — was spending a billion dollars a year.

"My question was, could we take that billion dollars and help the poor purchase health insurance — let them pay what they could afford? We'd subsidize what they can't," Romney said.

The percentage of uninsured people has gone down. Nearly everybody in Massachusetts has health coverage, while the rate of uninsured nationally has gone up to one in six.

The proportion of employers offering health plans has gone up in Massachusetts, despite fears that availability of government-subsidized insurance would "crowd out" employer-sponsored coverage. Nationally the rate is believed to be static.

*This figure may be a statistical anomaly. The rates in 2009 and 2011 were close to 60 percent, the same as in 2005.

Access to health care has improved in Massachusetts, while emergency room visits have gone down — possibly a sign that people with insurance are more likely to have a regular source of care. Self-rated health is improving.

And he proposed a requirement that people buy private health insurance if they're able. That's the "individual mandate" that has become a curse word in Republican politics these days.

"We're going to say, 'Folks, if you can afford health care, then, gosh, you'd better go get it,' " Romney said back in 2006. " 'Otherwise you're just passing on your expenses to someone else.' That's not Republican, that's not Democratic, that's not Libertarian — that's just wrong."

Flash forward to 2012. Romney's successor, Democrat Deval Patrick, says the health plan Romney launched is no abject failure — it's working.

"I think it's just been a terrific success," Patrick said in an interview. "And [it's] a statement of value — about our values here, about how people aren't all on their own, that we are in this together."

Patrick says no state can match Massachusetts' record of getting more than 98 percent of its citizens insured for health care — and virtually every last child. And, he boasts, "It has cost the state about 1 percent in additional new state spending."

The Massachusetts law has had strong and steady support — and little opposition. Last year, an attempt to repeal the "individual mandate" — the part that requires most people to have insurance — couldn't get enough signatures. Last week, only 39 people had "liked" its Facebook page.

To get an idea of how it's working at the ground level, I stopped by the office of Dieufort Fleurissaint, a self-employed Haitian-American businessman. He has a tax prep and insurance business. He's also an evangelical minister who worked with the group Greater Boston Interfaith Organization, which helped get the health law passed.

"Close to 500,000 people didn't have health insurance," Fleurissaint says. "Now, because of the passing of the law, they have health insurance."

And one of them, it turns out, is Fleurissaint. He used to be a mortgage broker, but his business crashed in 2008. He couldn't pay his health insurance premiums.

But under the new law, Fleurissaint qualified for state-subsidized insurance.

"My premium ... dropped from $1,200 on a monthly basis [to] $770 for the same coverage for the same family of four," he says. And when his income dropped again during the recession, so did his health insurance costs.

"The law has been extremely good for me," he says, but he admits that not all his business colleagues like the law.

"They complained that they were forced, basically obligated to purchase health insurance," Fluerissaint says. "So I explained to them that it's much better to have health insurance than not having it."

In fact, despite some initial grumbling, more Massachusetts businesses of all sizes have begun offering insurance.

When I called the Massachusetts Restaurant Association, it said it didn't know of any members that don't offer coverage. That was surprising, since restaurant owners have been among the most opposed to health laws like this one.

Similarly, Bill Vernon, who heads the Massachusetts office of the National Federation of Independent Businesses, says the law "works for Massachusetts." The NFIB is a plaintiff in one of the lawsuits challenging the constitutionality of the Obama health plan that will be argued later this month before the U.S. Supreme Court.

But in Massachusetts, Vernon says, "my guess is that we would probably be pretty much split on the issue of whether to repeal the law or not. That suggests repeal is not something we would favor. And I don't think it's politically realistic, either."

Likewise, the individual mandate has not met with nearly the resistance that many predicted.

"The sky did not fall," says Andrew Dreyfus, president of Blue Cross Blue Shield of Massachusetts, the state's largest insurer. "And by the way, we have much stronger penalties around the individual mandate than the national law has, and despite that, the sky did not fall."

The penalty for not buying insurance can be on the order of $1,200 a year for a 37-year-old single person in Boston. But only about 1 percent of taxpayers end up paying any penalty.

Meanwhile, a new study in the journal Health Affairs shows that more Massachusetts citizens are seeing a doctor regularly, fewer are going to emergency rooms for care, and the percentage who rate their own health as "good" or "excellent" is going up.

But that doesn't mean everything about Massachusetts health care is wonderful.

The 2006 law didn't do anything about controlling the state's health costs, which were already among the nation's highest.

So now the conversation in Massachusetts has turned to cost control. And some very interesting things are beginning to happen.

They didn't happen overnight. When Patrick took over the governor's office in 2007, he called together top insurers, hospital executives and doctors to talk about controlling costs. He says it was an exercise in frustration.

"I finally lost my patience," Patrick says. "Because they'd sit around the table and everyone would start their response the same way — 'Well, governor,' they'd say, 'it's complicated.' "

Patrick says the insurers would point to the hospitals, the hospitals would point to the doctors, the doctors would say it's malpractice suits or red tape or the imaging center down the street.

Patrick says he got fed up. "I understand it is complicated," he says. "But the point is, we have to stop being defeated by that complexity."

So, two years ago, the governor directed his insurance commissioner to exercise a little-used power to turn down a requested rate increase because it was excessive. Not every state has this power.

Insurance companies were outraged. But Dreyfus of Blue Cross Blue Shield now says it was a pivotal point.

"It sent a message to the entire health care community and the business community that we had to change," Dreyfus says.

And change seems to be happening. Insurers have torn up their contracts with hospitals calling for annual reimbursement increases of 8 percent and 10 percent, and negotiated agreements providing for 3 percent, 2 percent and even zero percent increases.

Blue Cross Blue Shield has persuaded some of the state's biggest hospitals, and thousands of doctors, to accept a new kind of payment. Instead of getting paid every time they do something — a venerable system called fee-for-service that encourages them to provide more and more services — they're paid a fixed amount each month for each patient.

That was tried in the 1990s, and it failed, largely because of backlash over its incentive to stint on care. The new wrinkle is that this time hospitals and doctors have to meet 60-some different quality measures to show they're not cutting back on care.

Dreyfus says a third of his company's 2.8 million subscribers are now on these so-called "global payment" plans, and he's hopeful that most of the state will be on this kind of reimbursement within the next two to three years.

The various steps seem to be working to moderate Massachusetts' historically high health care inflation rates. "We've got some more work to do here," the governor says, "but average premium increases were almost 17 percent two years ago. They are less than 2 percent right now."

But he doesn't trust that it will automatically go on that way. Patrick and many others, inside and out of government, say Massachusetts now needs some legislation to lock in these changes and go further — cut down on administrative costs, reform the malpractice system and other innovations.

The big idea you often hear these days is to hold total Massachusetts health spending to a target tied to the state's overall economic growth.

"I want to assure ... that it's sustainable," Patrick says, "that we don't continue to have increases above the rate of growth in the economy." Otherwise, he says, health care will "eat up everything else."

Legislators, who are wary of tampering with a health sector that accounts for 20 percent of the state's economy, are expected to come up with their own proposals this spring.

But significantly, no one is talking about repealing the 2006 law. Not even businessmen like Fred Difinis, who runs a small business selling parts for playground equipment. He's unhappy with the Massachusetts health plan because it requires him to buy coverage for prescription drugs, which he says he doesn't need.

"I'm not sure I necessarily want to see the law repealed," he says. "What I want to see is some balance on the cost side of the equation."

If Massachusetts can do that, it might become a national model — again.

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Health Care In Massachusetts: 'Abject Failure' Or Work In Progress?

Voters are hearing a lot about health care this year. Republicans want to make the 2012 elections a referendum on the health care law that President Obama signed two years ago.

That law was largely based on one that then-Gov. Mitt Romney signed into law nearly six years ago in Massachusetts.

Romney is now a GOP presidential contender, and that has made the Massachusetts universal health care law a political football. Romney's rival Rick Santorum recently called it "an abject failure."

But "Romneycare," as Santorum and others call it, isn't controversial in its home state. And a lot of people there don't call it Romneycare because it took the support of a lot of other people — Democratic legislators, business leaders, insurers, hospitals and doctors, consumer groups — to get it passed.

But it's true that Romney got the ball rolling. When I interviewed him in 2006, Romney said he got the idea from talking to Massachusetts business leaders.

 

"The key insight was this: People who don't have insurance nonetheless receive health care — and it's expensive," Romney said.

Romney saw a state fund set up to provide free care — paid for by a growing surcharge on private insurance premiums — was spending a billion dollars a year.

"My question was, could we take that billion dollars and help the poor purchase health insurance — let them pay what they could afford? We'd subsidize what they can't," Romney said.

The percentage of uninsured people has gone down. Nearly everybody in Massachusetts has health coverage, while the rate of uninsured nationally has gone up to one in six.

The proportion of employers offering health plans has gone up in Massachusetts, despite fears that availability of government-subsidized insurance would "crowd out" employer-sponsored coverage. Nationally the rate is believed to be static.

*This figure may be a statistical anomaly. The rates in 2009 and 2011 were close to 60 percent, the same as in 2005.

Access to health care has improved in Massachusetts, while emergency room visits have gone down — possibly a sign that people with insurance are more likely to have a regular source of care. Self-rated health is improving.

And he proposed a requirement that people buy private health insurance if they're able. That's the "individual mandate" that has become a curse word in Republican politics these days.

"We're going to say, 'Folks, if you can afford health care, then, gosh, you'd better go get it,' " Romney said back in 2006. " 'Otherwise you're just passing on your expenses to someone else.' That's not Republican, that's not Democratic, that's not Libertarian — that's just wrong."

Flash forward to 2012. Romney's successor, Democrat Deval Patrick, says the health plan Romney launched is no abject failure — it's working.

"I think it's just been a terrific success," Patrick said in an interview. "And [it's] a statement of value — about our values here, about how people aren't all on their own, that we are in this together."

Patrick says no state can match Massachusetts' record of getting more than 98 percent of its citizens insured for health care — and virtually every last child. And, he boasts, "It has cost the state about 1 percent in additional new state spending."

The Massachusetts law has had strong and steady support — and little opposition. Last year, an attempt to repeal the "individual mandate" — the part that requires most people to have insurance — couldn't get enough signatures. Last week, only 39 people had "liked" its Facebook page.

To get an idea of how it's working at the ground level, I stopped by the office of Dieufort Fleurissaint, a self-employed Haitian-American businessman. He has a tax prep and insurance business. He's also an evangelical minister who worked with the group Greater Boston Interfaith Organization, which helped get the health law passed.

"Close to 500,000 people didn't have health insurance," Fleurissaint says. "Now, because of the passing of the law, they have health insurance."

And one of them, it turns out, is Fleurissaint. He used to be a mortgage broker, but his business crashed in 2008. He couldn't pay his health insurance premiums.

But under the new law, Fleurissaint qualified for state-subsidized insurance.

"My premium ... dropped from $1,200 on a monthly basis [to] $770 for the same coverage for the same family of four," he says. And when his income dropped again during the recession, so did his health insurance costs.

"The law has been extremely good for me," he says, but he admits that not all his business colleagues like the law.

"They complained that they were forced, basically obligated to purchase health insurance," Fluerissaint says. "So I explained to them that it's much better to have health insurance than not having it."

In fact, despite some initial grumbling, more Massachusetts businesses of all sizes have begun offering insurance.

When I called the Massachusetts Restaurant Association, it said it didn't know of any members that don't offer coverage. That was surprising, since restaurant owners have been among the most opposed to health laws like this one.

Similarly, Bill Vernon, who heads the Massachusetts office of the National Federation of Independent Businesses, says the law "works for Massachusetts." The NFIB is a plaintiff in one of the lawsuits challenging the constitutionality of the Obama health plan that will be argued later this month before the U.S. Supreme Court.

But in Massachusetts, Vernon says, "my guess is that we would probably be pretty much split on the issue of whether to repeal the law or not. That suggests repeal is not something we would favor. And I don't think it's politically realistic, either."

Likewise, the individual mandate has not met with nearly the resistance that many predicted.

"The sky did not fall," says Andrew Dreyfus, president of Blue Cross Blue Shield of Massachusetts, the state's largest insurer. "And by the way, we have much stronger penalties around the individual mandate than the national law has, and despite that, the sky did not fall."

The penalty for not buying insurance can be on the order of $1,200 a year for a 37-year-old single person in Boston. But only about 1 percent of taxpayers end up paying any penalty.

Meanwhile, a new study in the journal Health Affairs shows that more Massachusetts citizens are seeing a doctor regularly, fewer are going to emergency rooms for care, and the percentage who rate their own health as "good" or "excellent" is going up.

But that doesn't mean everything about Massachusetts health care is wonderful.

The 2006 law didn't do anything about controlling the state's health costs, which were already among the nation's highest.

So now the conversation in Massachusetts has turned to cost control. And some very interesting things are beginning to happen.

They didn't happen overnight. When Patrick took over the governor's office in 2007, he called together top insurers, hospital executives and doctors to talk about controlling costs. He says it was an exercise in frustration.

"I finally lost my patience," Patrick says. "Because they'd sit around the table and everyone would start their response the same way — 'Well, governor,' they'd say, 'it's complicated.' "

Patrick says the insurers would point to the hospitals, the hospitals would point to the doctors, the doctors would say it's malpractice suits or red tape or the imaging center down the street.

Patrick says he got fed up. "I understand it is complicated," he says. "But the point is, we have to stop being defeated by that complexity."

So, two years ago, the governor directed his insurance commissioner to exercise a little-used power to turn down a requested rate increase because it was excessive. Not every state has this power.

Insurance companies were outraged. But Dreyfus of Blue Cross Blue Shield now says it was a pivotal point.

"It sent a message to the entire health care community and the business community that we had to change," Dreyfus says.

And change seems to be happening. Insurers have torn up their contracts with hospitals calling for annual reimbursement increases of 8 percent and 10 percent, and negotiated agreements providing for 3 percent, 2 percent and even zero percent increases.

Blue Cross Blue Shield has persuaded some of the state's biggest hospitals, and thousands of doctors, to accept a new kind of payment. Instead of getting paid every time they do something — a venerable system called fee-for-service that encourages them to provide more and more services — they're paid a fixed amount each month for each patient.

That was tried in the 1990s, and it failed, largely because of backlash over its incentive to stint on care. The new wrinkle is that this time hospitals and doctors have to meet 60-some different quality measures to show they're not cutting back on care.

Dreyfus says a third of his company's 2.8 million subscribers are now on these so-called "global payment" plans, and he's hopeful that most of the state will be on this kind of reimbursement within the next two to three years.

The various steps seem to be working to moderate Massachusetts' historically high health care inflation rates. "We've got some more work to do here," the governor says, "but average premium increases were almost 17 percent two years ago. They are less than 2 percent right now."

But he doesn't trust that it will automatically go on that way. Patrick and many others, inside and out of government, say Massachusetts now needs some legislation to lock in these changes and go further — cut down on administrative costs, reform the malpractice system and other innovations.

The big idea you often hear these days is to hold total Massachusetts health spending to a target tied to the state's overall economic growth.

"I want to assure ... that it's sustainable," Patrick says, "that we don't continue to have increases above the rate of growth in the economy." Otherwise, he says, health care will "eat up everything else."

Legislators, who are wary of tampering with a health sector that accounts for 20 percent of the state's economy, are expected to come up with their own proposals this spring.

But significantly, no one is talking about repealing the 2006 law. Not even businessmen like Fred Difinis, who runs a small business selling parts for playground equipment. He's unhappy with the Massachusetts health plan because it requires him to buy coverage for prescription drugs, which he says he doesn't need.

"I'm not sure I necessarily want to see the law repealed," he says. "What I want to see is some balance on the cost side of the equation."

If Massachusetts can do that, it might become a national model — again.

View the original article here

Massachusetts Health Experience: What the Nation Can Expect?

Mitt Romney may not like to hear it, but if you want to know what health reform will look like for the United States, look to what’s happening in Massachusetts, a team of experts said on Wednesday.

An analysis in the journal Health Affairs shows the 2006 Massachusetts health reform initiative has, not unexpectedly, gotten health insurance coverage to most of the state’s residents. It has cut emergency-room visits and people say they feel they are healthier than before the law passed.

But costs are rising, and the national debate about the 2010 health reform law has hardened positions. Massachusetts residents who were once neutral about the law now say they oppose it, the study found.

“Just as Massachusetts’ 2006 health reform legislation provided the template for the Affordable Care Act, so the state’s experience under that legislation provides an example of the potential gains under federal health reform. It is likely that the path to near-universal coverage nationally will be slower and bumpier than it was for Massachusetts in 2006,” Sharon Long of the University of Minnesota and two graduate student colleagues wrote. “Yet the findings for Massachusetts are a reminder that major gains in coverage and associated benefits are possible.”

In 2005, an estimated 11.4 percent of Massachusetts adults under the age of 65 went without health insurance – below the national estimate of 15 percent. But the health reform law then-governor Mitt Romney signed in 2006 helped more people get covered. “Health insurance coverage among nonelderly adults in Massachusetts was at 94.2 percent in 2010,” Long’s team reported.

Long’s team used the Massachusetts Health Reform Survey, which collects information from 3,000 new adults ages 19 to 64.5 every year. They found the Massachusetts legislation met its two main goals of increasing access to health insurance and creating a new standard that health plans must meet to count as coverage under the individual mandate.

“The ‘minimum creditable coverage’ standard includes coverage for a comprehensive set of services (including prescription drugs); doctor visits for preventive care, without a deductible; limits on out-of-pocket spending; and no caps on total benefits for a particular illness or a single year. Both paths were expected to lower the costs of health care to individuals and, thereby, increase access to and use of care,” they wrote.

And this did happen. “For example, in 2010 compared to 2006, nonelderly adults were more likely to have a usual place to go when they were sick or needed advice about their health (up 4.7 percentage points), and were more likely to have had a preventive care visit (up 5.9 percentage points), a specialist visit (up 3.7 percentage points), multiple doctor visits (up 5 percentage points; and a dental care visit (up 5  percentage points),” they wrote.

There was a small drop in emergency room visits as well. But all was not rosy.

“Despite the 2010 gains in access relative to 2006, 22.8 percent of nonelderly adults in Massachusetts reported that they did not get needed care in 2010,” Long’s team wrote. “It is likely that the economic downturn and the continuing increase in health care costs, in particular, dampened any gains in coverage and affordability that might otherwise have been achieved under health reform in the state.”

Opposition to reform hardened, likely as a result of the national debate. Republicans have kept up a constant drumbeat of criticism of the national health reform law, with even Romney promising to work to repeal it if elected.

“And although nearly two-thirds of adults continue to support reform, among nonsupporters there has been a marked shift from a neutral position toward opposition (17  percent opposed to reform in 2006 compared with 26.9 percent in 2010),” Long’s team wrote.

View the original article here

Massachusetts Health Experience: What the Nation Can Expect?

Mitt Romney may not like to hear it, but if you want to know what health reform will look like for the United States, look to what’s happening in Massachusetts, a team of experts said on Wednesday.

An analysis in the journal Health Affairs shows the 2006 Massachusetts health reform initiative has, not unexpectedly, gotten health insurance coverage to most of the state’s residents. It has cut emergency-room visits and people say they feel they are healthier than before the law passed.

But costs are rising, and the national debate about the 2010 health reform law has hardened positions. Massachusetts residents who were once neutral about the law now say they oppose it, the study found.

“Just as Massachusetts’ 2006 health reform legislation provided the template for the Affordable Care Act, so the state’s experience under that legislation provides an example of the potential gains under federal health reform. It is likely that the path to near-universal coverage nationally will be slower and bumpier than it was for Massachusetts in 2006,” Sharon Long of the University of Minnesota and two graduate student colleagues wrote. “Yet the findings for Massachusetts are a reminder that major gains in coverage and associated benefits are possible.”

In 2005, an estimated 11.4 percent of Massachusetts adults under the age of 65 went without health insurance – below the national estimate of 15 percent. But the health reform law then-governor Mitt Romney signed in 2006 helped more people get covered. “Health insurance coverage among nonelderly adults in Massachusetts was at 94.2 percent in 2010,” Long’s team reported.

Long’s team used the Massachusetts Health Reform Survey, which collects information from 3,000 new adults ages 19 to 64.5 every year. They found the Massachusetts legislation met its two main goals of increasing access to health insurance and creating a new standard that health plans must meet to count as coverage under the individual mandate.

“The ‘minimum creditable coverage’ standard includes coverage for a comprehensive set of services (including prescription drugs); doctor visits for preventive care, without a deductible; limits on out-of-pocket spending; and no caps on total benefits for a particular illness or a single year. Both paths were expected to lower the costs of health care to individuals and, thereby, increase access to and use of care,” they wrote.

And this did happen. “For example, in 2010 compared to 2006, nonelderly adults were more likely to have a usual place to go when they were sick or needed advice about their health (up 4.7 percentage points), and were more likely to have had a preventive care visit (up 5.9 percentage points), a specialist visit (up 3.7 percentage points), multiple doctor visits (up 5 percentage points; and a dental care visit (up 5  percentage points),” they wrote.

There was a small drop in emergency room visits as well. But all was not rosy.

“Despite the 2010 gains in access relative to 2006, 22.8 percent of nonelderly adults in Massachusetts reported that they did not get needed care in 2010,” Long’s team wrote. “It is likely that the economic downturn and the continuing increase in health care costs, in particular, dampened any gains in coverage and affordability that might otherwise have been achieved under health reform in the state.”

Opposition to reform hardened, likely as a result of the national debate. Republicans have kept up a constant drumbeat of criticism of the national health reform law, with even Romney promising to work to repeal it if elected.

“And although nearly two-thirds of adults continue to support reform, among nonsupporters there has been a marked shift from a neutral position toward opposition (17  percent opposed to reform in 2006 compared with 26.9 percent in 2010),” Long’s team wrote.

View the original article here

The state of Massachusetts health reform, in 3 charts

???initialComments:true! pubdate:01/25/2012 16:15 EST! commentPeriod:14! commentEndDate:2/8/12 4:15 EST! currentDate:1/25/12 6:0 EST! allowComments:true! displayComments:true!Posted by Sarah Kliff at 04:15 PM ET, 01/25/2012

(Health Affairs) Health Affairs is out this afternoon with a four-year look back at Massachusetts health reform. It has some good news (coverage has gone up!) and not-so-good news (health care isn’t getting any cheaper). With the Massachusetts reforms serving as the model for the federal law, it’s worth taking a look at what has and hasn’t worked in the Bay State reforms.

The clearest effect is an increase in health insurance coverage, going from 86.6 percent of adults with health insurance in 2006 to 94.2 percent in 2010. As the above chart shows, most of the coverage gains came in the first two years of the health reform efforts, and have remained relatively stable ever since.

An increase in coverage has correlated with another encouraging trend: a decrease in more costly forms of health coverage, such as emergency room visits. That turns out to be a more recent development, with rates of emergency room visits dropping 3.5 percent between 2009 and 2010.

(Health Affairs) “This pattern, combined with increases in the use of specialists and preventive care over time, may imply a shift in use toward other providers for some needs,” study authors Sharon Long, Karen Stockley and Heather Dahlen write.

What Massachusetts health reform has not done, however, is bring down the cost of health care. The percent of adults who have delayed care because of cost in the past year has steadily crept upwards, while those who have had trouble paying medical bills increased for a few years, before dropping off in 2009:
(Health Affairs) Part of this trend is likely tied up in the recession, which has made paying medical bills tougher for Americans across the country. So even as the amount of expensive, emergency room care goes down, health care remains costly. And that underscores the big health reform challenge that Massachusetts now faces: making universal coverage affordable. “Nearly one in four of these adults reported unmet need for care, often because of health care costs,” the study authors write. “Consistent with that finding, Massachusetts continues to struggle with escalating health care costs, reflecting the decision to defer addressing costs in the 2006 legislation so as not to hold up the expansion in coverage.”

In the coming year, you can expect more action on this front. Lead by Gov. Deval Patrick (D), there’s increasing attention paid toward global payments that compensate doctors for each patient they cover or condition they treat, rather than a traditional fee for every service they provide. That next round of reform will be a crucial test for Massachusetts’ efforts to move past its coverage solution, and onto its cost challenge.

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Massachusetts Health Experience: What the Nation Can Expect?

Mitt Romney may not like to hear it, but if you want to know what health reform will look like for the United States, look to what’s happening in Massachusetts, a team of experts said on Tuesday.

An analysis in the journal Health Affairs shows the 2006 Massachusetts health reform initiative has, not unexpectedly, gotten health insurance coverage to most of the state’s residents. It has cut emergency-room visits and people say they feel they are healthier than before the law passed.

But costs are rising, and the national debate about the 2010 health reform law has hardened positions. Massachusetts residents who were once neutral about the law now say they oppose it, the study found.

“Just as Massachusetts’ 2006 health reform legislation provided the template for the Affordable Care Act, so the state’s experience under that legislation provides an example of the potential gains under federal health reform. It is likely that the path to near-universal coverage nationally will be slower and bumpier than it was for Massachusetts in 2006,” Sharon Long of the University of Minnesota and two graduate student colleagues wrote. “Yet the findings for Massachusetts are a reminder that major gains in coverage and associated benefits are possible.”

In 2005, an estimated 11.4 percent of Massachusetts adults under the age of 65 went without health insurance – below the national estimate of 15 percent. But the health reform law then-governor Mitt Romney signed in 2006 helped more people get covered. “Health insurance coverage among nonelderly adults in Massachusetts was at 94.2 percent in 2010,” Long’s team reported.

Long’s team used the Massachusetts Health Reform Survey, which collects information from 3,000 new adults ages 19 to 64.5 every year. They found the Massachusetts legislation met its two main goals of increasing access to health insurance and creating a new standard that health plans must meet to count as coverage under the individual mandate.

“The ‘minimum creditable coverage’ standard includes coverage for a comprehensive set of services (including prescription drugs); doctor visits for preventive care, without a deductible; limits on out-of-pocket spending; and no caps on total benefits for a particular illness or a single year. Both paths were expected to lower the costs of health care to individuals and, thereby, increase access to and use of care,” they wrote.

And this did happen. “For example, in 2010 compared to 2006, nonelderly adults were more likely to have a usual place to go when they were sick or needed advice about their health (up 4.7 percentage points), and were more likely to have had a preventive care visit (up 5.9 percentage points), a specialist visit (up 3.7 percentage points), multiple doctor visits (up 5 percentage points; and a dental care visit (up 5  percentage points),” they wrote.

There was a small drop in emergency room visits as well. But all was not rosy.

“Despite the 2010 gains in access relative to 2006, 22.8 percent of nonelderly adults in Massachusetts reported that they did not get needed care in 2010,” Long’s team wrote. “It is likely that the economic downturn and the continuing increase in health care costs, in particular, dampened any gains in coverage and affordability that might otherwise have been achieved under health reform in the state.”

Opposition to reform hardened, likely as a result of the national debate. Republicans have kept up a constant drumbeat of criticism of the national health reform law, with even Romney promising to work to repeal it if elected.

“And although nearly two-thirds of adults continue to support reform, among nonsupporters there has been a marked shift from a neutral position toward opposition (17  percent opposed to reform in 2006 compared with 26.9 percent in 2010),” Long’s team wrote.

View the original article here