Massachusetts’ Physicians Experience with “Romneycare”

Joseph W Gravel, Jr. MD,FAAFPPresident, MassAFP

Ten State ConferenceNew York, New YorkFebruary 23, 2013

Massachusetts health care insurance reform law- 2006

Patient Protection and Affordable Care Act -2010

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My Pretzel-Point Slide

Evolutionary, Not Revolutionary• 1985-the state established a “free care pool” paid for by profitable

facilities to support the safety net hospitals• 1991- Hospital rate deregulation resulted in a cost crisis, leading both

conservative and liberal politicians in Massachusetts to cooperate on legislation

• 1997- state granted a federal “research & demonstration” waiver to develop health insurance programs for low-income adults & children, 50% from federal matching funds, MassHealth created (Medicaid and CHIP)

• 2005- MassHealth waiver renewed – based on premise that state & federal funding uncompensated care should be redirected to provide subsidized health insurance coverage for low income uninsured residents

• 2006- a Republican Governor, a Democratic Speaker of the House, and a Democratic President of the State Senate collaborated to develop Massachusetts health insurance reform

2006- Romney insisted on a proposal of Stuart Butler, PhD, of the conservative Heritage Foundation

• included an individual mandate to purchase health insurance

• Butler: “If a young man wrecks his Porsche and has not had the foresight to obtain insurance, we may commiserate, but society feels no obligation to repair his car. But health care is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance.”

Key Provisions of the Law• Created a quasi-public agency Commonwealth Health Insurance

Connector Authority- oversee program & act as an “exchange” through which individuals and small businesses may purchase unsubsidized, priate health insurance plans that meet state standards for adequacy of coverage and overall value.

• Individual mandate- requires all residents over age 18 obtain health insurance if affordable coverage available to them or be subject to a state income tax penalty

• Employers with 11 or more employees required to pay a “fair share assessment” to state if don’t make a “fair and reasonable contribution” to their employees’ coverage.

• Amount of assessment ($295 per employee) based on estimated cost of uncompensated care for employees who work for employers that don’t meet fair and reasonable standard.

Key Provisions of the Law (cont.)

• Created new public health insurance program called Commonwealth Care for low income adults without access to employer- sponsored health insurance or Medicaid.

• Transformed Uncompensated Care pool into Health Safety Net Trust Fund with new rules

Massachusetts has high healthcare costs but…

• Was already high before healthcare insurance coverage reform

• When adjusted for cost of living, Massachusetts ranks 48th out of 50 states in percentage of household income devoted to health care insurance premiums

Dr. Katherine J. Atkinson of Amherst, Mass., has a waiting list for her family practice; she has added 50 patients since November.

In Massachusetts, Universal Coverage Strains Care

April 5, 2008

Not Just a Massachusetts NeedSource: Merritt-Hawkins

2011 AHRQ Projection of PCP Use

What Has Massachusetts Health Reform Accomplished?

• Massachusetts has highest rate of insured residents (98.1%) Children (99.8%) in US; (US average 83.7%)

• Additional 439,000 residents newly insured since reform passed

• Improved access to needed care especially to middle and low- income residents, racial and ethnic minorities, and people with chronic diseases.

• 77% of Mass. employers with 3 or more employees offered health insurance (70% in 2005) National average = 69%

• 70% patients support (same as when passed in 2006)

Favorable Reviews from Public & Physicians

• 2/3 of public support reform• 88% of Mass. Physicians believe reform improved, or

did not affect, care or quality of care• 75% of physicians believe Mass health reform should

continue • 79% believe reform helped those previously uninsured• Most physicians are now paid for patient care that was

previously uncompensated and 70% of physicians polled in 2009 were satisfied with the new law.

• No difference between primary care physicians and specialists in satisfaction ratings.

Effect of the Massachusetts Health Care Reform Law on the 2135 Respondents' Practices and Their Patients.

SteelFisher GK et al. N Engl J Med 2009;361:e39.

Costs Since “Romneycare”

• Over the 5 full fiscal years since the law was implemented, the incremental additional cost per year has averaged $91 million, well within initial projections; this cost is not a “budget buster.”

• The cost of the plan added only 1.4% to the annual state budget.

• Health insurance rates for the small business community initially increased by 10% per year as an adjustment to the new requirements but now only increase 1% to 2% per year—far less than in most other markets.

2012- Healthcare Cost Reform“Next Big Step Forward”

The Future- Cost Control• In July 2012, a new law was passed that capped

“total health care expenditures” at 3.6% per year for 2013.

• In 2014, health care costs can increase only as fast as the gross state product (an estimate similar in notion to gross domestic product but never actually measured before).

• A host of new commissions, councils, data repositories, and other entities have been established to track the increase in health care costs. The legislation gave teeth to the attorney general, who will examine as yet unidentified cost outliers.

Risk-Based Contracting

• High costs have driven businesses and insurers to pursue market-based changes in health insurance contracts. A new “risk-based” reimbursement model has gained traction.

• Three commercial carriers that account for about 70% of the state’s nongovernmental insured have instituted risk-based contracts. They have a variety of names, such as the Alternative Quality Contract, which is a global payment strategy.

• Five of 32 Medicare Pioneer Accountable Care Organizations are in Massachusetts. These models reimburse organizations so that physicians and hospitals within them must collaborate to control costs.

More Patient “Skin in the Game”

• These newer contracts also facilitate patient responsibility in cost control by placing some risk on them. There are an increasing number of high-deductible and “tiered” plans offered by employers. In these plans, patients pay significantly more out-of-pocket expenses should they choose to receive care at a hospital or from clinicians or health care centers that are known to be more costly than others in the region.

Credits

• “Caring for the Uninsured and Underinsured, Health Policy” The JAMA Forum 10/31/12 JAMA Zinner MJ and Livingston EH

• “Physicians' Views of the Massachusetts Health Care Reform Law — A Poll” Gillian K. SteelFisher, Ph.D., Robert J. Blendon, Sc.D., et al. N Engl J Med 2009; 361:e39

• “Massachusetts Health Reform and Spending 2006-2011; An Update on the Budget Buster Myth” Mass. Taxpayers Foundation, 4/12.