Healthcare Turkey Talk

Posted on November 21, 2011 by Michael D. Miller MD

Thanksgiving is a great occasion for learning what people think about the future of the US healthcare system.* This year, I’m going to find out what people are thinking about some of the coming health delivery system changes – particularly Accountable Care Organizations (ACOs) and Patient-Centered Medical Homes (PCMH).

I’ve conducted this two-question informal survey with handfuls of people and found their level of knowledge and positive reactions equivalent to Congress’s approval rating, i.e. 9%. This is worrisome, since if transforming the US healthcare system to increase value and quality will be partially based on ACOs’ and PCMHs’ superior care coordinating abilities, it will be hard to improve cost, quality, and access at the local level if the average person/patient doesn’t know what these organization are, there is inherent aversion to their names, or there is resistant to unexplained “changes.” (For example, several people I’ve talked to have thought Accountable Care Organizations seem like HMOs, and Patient-Centered Medical Homes are home care, nursing homes or hospice.)

So fair readers of this blog, let me know what you hear at your Turkey dinners and associated holiday events – and I’ll post back next week what I heard from my disparate and decidedly unrestrained friends and relatives.

*Unlike most meals and gathering of family and friends, Thanksgiving dinner goes on for a long time, there are no ceremonial interludes, and it is generally a sit-down affair so you can’t move on to someone else – or out the door. This means “Aunt Sally” can pull your ear or kick your leg (either figuratively or literally) for upwards of 2 hours about what’s wrong with the US healthcare system and what how to fix it. My advice is to ask questions to find out root concerns and to gauge people’s understanding of the coming ACA changes in both healthcare delivery and insurance coverage. Also, if you find yourself referring to a recent study from Commonwealth or Kaiser Family Foundation, (or a similar organization or government group), STOP, put food in your mouth and nod encouragement for them to keep talking, because quoting the best studies to someone impassioned about their healthcare will be about as successful as convincing your 7-year-old cousin that 3.14159 is a great dessert.

Implementing Health Reform – The Long, Hard and Twisting Maze

Posted on April 13, 2010 by Michael D. Miller MD

Health reform is now the “law of the land,” and “written in law.” However, as people are quickly realizing, after a year of campaigning and more than a year of legislative action, implementing the new law will require navigating a long, difficult, and twisting path – even before any amendments are considered in this or subsequent Congresses.

Navigating the fast and slippery route to successfully implementing all the provisions of the PPACA will be daunting. Three relatively recent laws are examples of the time and steps required for such implementation – and each of these was much simpler than the PPACA:

The Medicare Part D law was signed in December 2003 and the new benefit started in January 2006. This gave the Federal government about 2 years to develop the rules, sign up providing plans and facilitate enrollment by creating an exchange-like website and other resources, while the plans conducted the actual enrollment.
The Massachusetts health reform/insurance expansion law was enacted in April 2006. This was followed by a long series of staggered implementation steps. For example, insurance reforms, (on top of the state’s pre-existing significant insurance regulations), became effective in January 2007, and the new individual mandate started in July 2007.
The Federal stimulus law was signed in February 2009, and the HITECH Act part of the law included significant provisions and funding to boost the development and adoption of information technology by healthcare providers. At the end of December 2009 a key draft rule on “meaningful use” was released, and it is expected to be finalized soon. In the meantime, the Department of Health and Human Services has distributed funding to start the adoption of specific types of health IT. (The April 2010 Issue of Health Affairs has a series of articles focusing on the implementation of the HITECH provisions of the stimulus bill.)

Written in Law – Not Written in Stone
The implementation of these laws illustrates how it takes months and years after a law is signed to create the implementing rules and regulations, and to contract with organizations to actually carry out significant parts of the new law – and this is before any modifications are made by subsequent laws.

In the coming weeks and months, many entities will continue combing through the final law – which because of the circuitous path it took to Congressional passage is much more difficult to read and understand than most other new laws. Some of the most challenging aspects of implementation will be in the states, where government agencies will have many new responsibilities and/or will need to be created. Federal and state governments, and many private organizations, will also probably need to hire people to carry out this implementation – and hiring government employees can be a lengthy process.

In addition healthcare companies – particularly health plans and insurers – will be working to determine how their business operations will be affected by new state and Federal regulations, despite the fact that those regulations haven’t been written yet. And all but the smallest businesses will be seeking to understand how they will comply with – and possibly benefit from – the new insurance rules and financial incentives.

Overall, it is clear that the implementation will be the hardest part in taking health reform from a concept and a campaign position, to reality for individuals and society. I know that many people in Washington DC – particularly Congressional, HHS and related health reform staff – worked very hard for many, many months in an exhausting process to get the law passed. For Congressional staff at least, the implementation will be the responsibility of others, while Congress’ work will be to ensure that this implementation is consistent with their intent, and to work with HHS to adjust provisions according to the real-world bumps and detours in the road from here to there.

Conclusion
The cartoon below summarizes the expanding and complicated challenge of implementing health reform through the inevitably twisting and complicated path better than any combination of words could… I’ll have more about specific provisions and implementation in the coming days, weeks, and months….

Regulating Insurance: States v. Federal Roles

Posted on March 18, 2010 by Michael D. Miller MD

One of the fascinating issues within the health reform debate is how to improve the insurance market by changing government regulations. While large employers who self-insure are except from state regulations, (and must only conform to limited Federal rules under ERISA), individuals, small groups, and others who actually purchase insurance have their policies regulated by individual states.

Both Democrats and Republicans agree that the current system of insurance regulation creates job lock and other socially undesirable effects, and that insurance companies should be able to sell policies across states lines. However, their solutions are quite different.

Democrats favor national regulation to create a single playing field, and Republicans prefer permitting insurance companies to sell in multiple or all states if they are licensed and regulated in any state. The insurance industry’s trade association (AHIP), doesn’t seem to take a firm position on this issue – at least from looking at their website.

However, I was surprised to see a full page ad from an individual company on the back cover of a recent issue of National Journal advocating for national rules to replace state insurance regulation. This interesting ad included the following phrases:

“Something’s wrong when…. innovation surpasses…. insurance regulation.”

“Here’s something to bristle at: the regulatory system that shapes our…. insurance policies hasn’t changed much in the last century. Yet everything …. has changed dramatically…… Chrome and steel have given way to thermoplastic and fiberglass.”

And the company’s recommendations for solutions focus on increasing national regulations:

“Today there are 50 different sets of insurance regulations in 50 states. This makes it difficult to introduce innovative new products. But with a modern system of national regulation, consumers would get to choose from the best products available nationwide.”

“National regulation would help spread risk more fairly across similar geographic areas.”

“Modern regulation is the kind of protection Americans deserve.”

However, the caveat here is that this ad is talking about regulation of car insurance and not health insurance. In fact, the specific company doesn’t even sell comprehensive health insurance – so they don’t have a dog, cat or Cadillac plan in that fight.

What is also interesting is the parallel developments and history in the State of Massachusetts with health and auto insurance. Everyone following the debate about health reform has certainly heard what Massachusetts has done with health insurance reform and mandates to achieve near universal coverage. However, in roughly the same time-frame the state also reformed its auto insurance regulations to enable national insurers to enter the market. This increased competition resulted in dramatic decreases in premiums – but the insurance plans are still regulated by the state.

How changing the regulation of selling health insurance would change costs and affect consumer protections is open to debate. Unfortunately as an “issue” it has been overshadowed in the health reform discussions by other aspects such as the so-called public option, abortion coverage, coverage of immigrants, costs to individuals, effects on the Federal deficit, and mandates for having insurance. Thus Federal v. State insurance regulation – which is really a core part of health reform – hasn’t been a big part of the national political debate, even though changing insurance company practices has been a large part of the Democrats’ messaging. Despite that, there are several interesting points to consider:

Insurance companies operate on a business model very similar to financial institutions, such as banks, in that they seek to manage risk and they make most of their money on the “float” – or interest earned – based upon having large amounts of money for a period of time between collecting premiums and having to pay for covered benefits… and deductibles also adds a delay to these payments, which creates a cushion to the float. Therefore, because their revenues are tied to their interest earnings, the lower the prevailing interest rates the lower their earnings – and thus the more they need to raise premiums… and vice versa. (I did an analysis several years ago showing that premium increases were directly correlated with interest rate fluctuations, but delayed a year or two.) This parallelism with banks raises the question about why it is OK to Federally regulate banks, but not health insurance companies? How much more important is it to protect people’s money than their health insurance coverage?
National insurance regulation would help address both job lock for individuals within companies that purchased insurance directly, and location lock for small businesses and entrepreneurs – particularly those operating service businesses where location may not be as crucial as manufacturing or retail operations.
Permitting the selling of insurance across state lines based upon licensing in one state would probably result in reduced consumer protections since some states have less oversight and requirements than others about marketing, coverage guarantees, etc.
And neither national rules from the Federal government or allowing selling across state lines would significantly affect the growth in health case costs or insurance premiums, i.e. they wouldn’t really bend the cost curve. Although allowing selling across states lines could reduce premiums in certain higher cost states, but that would be due to people being able to by insurance policies with less coverage or intrinsic protections. In some ways this would follow the old saying, “you get what you pay for.”
And since the consensus is that bending the cost curve will require changing how health care is actually delivered to patients, (which makes sense since ~80+% of health care spending goes to pay for health care goods and services), this discussion makes me wonder how differential state regulation of doctors and healthcare providers fit into this equation? While laws and legal procedures may vary among states, presumably the practice of medicine shouldn’t vary dramatically…. Although many studies have shown that it does so in ways that can’t be explained by demographic differences or regional variations in disease states such as Lyme disease. I’m not certain how changing the way clinicians are licensed would improve healthcare delivery or costs, but it is another aspect of State v. Federal regulation that is becoming an increasingly contentious issue – as was pointed out in an article in today’s New York Times.

Healthcare as Part of the Social Safety Net – Policy Implications for Health Reform

Posted on January 6, 2010 by Michael D. Miller MD

Researchers at the Urban Institute have recently released a book about the forces and values that shape the social safety net in the United States. (Repairing the U.S. Social Safety Net.)

Yesterday, they held a briefing to discuss their book and solicit comments from other experts. Demetra Smith Nightingale, one of the authors, described how different parts of the social safety net interact, and how societal values and assumptions shape the creation and evolution of individual safety net programs. One of their fundamental conclusions is that society’s trust in government is reflected in how safety net programs are structured. When there is more trust in government the programs can be national in scope and administered by the Federal Government, such as with Medicare or Social Security. But when there is less trust in government, then programs are created which may be funded or supported with government dollars, but the programs are administered by state or local governments or even by private entities.

It is clear that today’s society is in a trust the government less mode, and this is reflected in the movement of the health reform legislation towards state and private entity implementation. Why this is important is that the Urban Institute researchers also looked at how well various types of social safety net programs work, and they noted that those with more local implementation also have much greater variability of effectiveness and penetration.

Two other conclusions from the discussion may be important for the implementation of a new health reform law. First, food stamps are really the most fundamental part of the social safety net in the US since they are the most easily obtained and food is the most basic of human needs. And second, the social safety “net” is probably more like a series of lines that may or may not productively insect. This situation might be like two fishing boats: One using a net can very efficiently and productively catch lots of fish, while another using a number of individual lines may be able to use a variety of baits, but will surely miss catching many fish.

Below are two of the charts from the book which were distributed at the briefing. These are very informative because they summarize how the different parts of the social safety net interact and the policy framework which connects societal values, goals, program structure and implementation.

Playing Poker with Health Reform

Posted on December 16, 2009 by Michael D. Miller MD

The National Journal’s December 5th issue has a very interesting article comparing President Obama’s approach to key issues to his poker playing style. (The issue cover states, “Obama as Poker Player.”)

Having played poker for over 45 years, I find the article’s discussion of his cautious approach and preference for standard games very enlightening. For many people today, poker is about Texas Hold’em, a game that is great for TV but rather simplistic in some ways because each player only has 2 cards and shares 5 others. The National Journal discusses the intellectual, strategic, and personality difference between this game, and more sophisticated games such as five-card draw and seven card stud – as well as more “wild” games such as baseball, although it doesn’t mention my crazed favorite, midnight baseball.

What the National Journal doesn’t discuss is the difference between playing poker on-line versus in-person, and the difference between playing with a bunch of strangers and playing with people you know and might interact with professionally. These differences are very significant, since playing on-line is all about the odds, and “reading” people can only be done via their betting behaviors. However, playing in-person enables a player to physically read the opponents, (i.e. see their “tells”), and playing good poker is primarily about playing the other people, and secondarily about playing the cards in your hand and on the table. And reading the other people becomes even more important – as well as possible – when playing with people you know and have interacted with in other settings, such as negotiating legislation.

So for the President, applying lessons and strategies from poker to health reform, Iran, and other key issues may work well, but I also hope that he remembers that great players don’t win every tournament, and the key to long-term success is knowing when to fold, when and how to bet, and perhaps most importantly how to see around the table to what is likely coming up in future deals so one can be in the game and optimally positioned for future hands.

Healthcare Reform’s House of Cards
For the current health reform efforts, it seems that the cards are being reshuffled and new hands dealt at a time when the legislative house of cards should be getting its final touches and glued together. Instead, the house of cards seems to keep collapsing – although Senator Reid, (and the President), are doing their best quick-handed action to keep rebuilding it for another try before minor or major political quakes send the cards scattering again. From a fundamental process level, the pulling in and pushing out of new ideas – such as a allowing some younger people to join or buy-into Medicare – is what might have been expected in April, May or June, but not December, and this is not a good sign for enactment of a law anytime soon.

The Substance of Health (Insurance) Reform Without a Public Optio
At this point, it seems that a public option is out of the equation, and some House Members are signaling that they could pass such a bill, but some on the left are arguing that no bill is better than a new law without a public option. Despite these loud protests, not having a public option isn’t the end of the world, (sorry HD), and I’ll soon write why insurance reforms and coverage expansion are much more important, (sorry MoveOn.org), based upon my past experience with health reform legislation, my time in Massachusetts, and my very recent and ongoing ground-level experience in getting new health insurance in the District of Columbia as I prepare to move there from Cambridge, MA. (Preview – Community rating and guarantee issue by non-profit insurers v. medical underwriting by for-profit minded insurers.)

End of the Beginning for Health Reform

Posted on November 29, 2009 by Michael D. Miller MD

This week’s Economist has an article titled “The beginning of the end” about the coming Senate debate. But I think they have it exactly wrong. The passage of legislation through the Senate – and then ultimately through a Conference Committee and by both houses so it can be signed by the President – would be the end of the beginning for health reform.

In contrast to the many, many hours of work by Members of Congress, many more by their staff, and probably even more by interest groups and activists across the country, the implementation of a new set of laws will be the real beginning. Implementing a new law reforming the insurance industry – and myriad other parts of the healthcare delivery and financing systems – will require drafting of many rules and regulation, reviewing and commenting on the drafts, digesting those comments, issuing final rules and regulations, drafting RFPs for contracts to run various new entities, (such as insurance exchanges), awarding those contracts, and possibly hiring employees for new functions such as a Medicare Advisory Board. Whew.

It now seems that the likelihood of a new health reform law being enacted during this Congress (probably sometime in February or March) has tipped into the greater than 50% category – but just barely. (National Journal has 2 great articles about the current precarious situation – one about the process and politics in the Senate, and the other about eight key stakeholder groups and their issues and concerns.) However, even if the political and substantive issues can be tweaked into good-enough alignment that would enable enactment today, many different events and scenarios that are too complex and numerous to list here could still derail the process.

If the legislation fails to pass at this 715th minute, then there will still be followed by a vast outpouring of activity. But instead of being focused on a specific law, it will be about how to address access and cost at the state level, in the private sector, and via more pilots, demonstrations and other variations within the existing authority of Medicare and other government programs. However, without a new law these activities will be much less focus and contained – and much of the effort will be discussion and analysis about what should be done and where limited resources should go, rather than focused on implementing new initiatives.

These two options remind me of a question someone asked me at Thanksgiving dinner, “Don’t they [Congress] have to do something since we can’t continue the way things are?” The presumption that if no legislation passes, then nothing will change is a false assumption. With no major health reform laws for the last 20-30 years, the healthcare system has changed dramatically – both through private sector and government actions. Clearly those actions have been imperfect and temporizing rather than addressing fundamental problems, but they have resulted in change.

Which scenario will be “better” depends upon who you are and how the current situation is benefiting or hurting you and your family. Certainly, for the majority of Americans, having a new law would be better because it would improve their security for having insurance that they can depend on and know is stable – a theme that has persisted since the early 1990s and was reemphasized this summer by David Kendall and his colleagues at Third Way.

Morphing Medical Homes into Advanced Primary Care Model

Posted on October 18, 2009 by Michael D. Miller MD

The concept of patient centered medical homes (PCMH) has been evolving since it was first presented by 4 primary care medical societies, (AAFP, AAP, ACP & AOA), in March 2007. Since then, the PCMH concept has been endorsed by many other medical societies and interest in PCMHs has grown. Some of the significant steps forward have included:

The National Committee for Quality Assurance (NCQA) created specific requirements and a certification procedure for PCMHs
Several states are moving forward with PCMH pilot projects
Congress passed a law for Medicare Demonstration projects and the Department of Health and Human Services created draft guidelines for these projects – however, these guidelines haven’t been finalized although the demonstrations were scheduled to start in 2010

Steps Sideways
Along with all the interest and activity related to medical homes, there has been a blurring of the definition about what constitutes a medical home. For example, the definitions of a medical home in the Medicare Demonstration’s draft materials are somewhat different than the NCQA’s criteria. And in various venues others have presented their modifications on what a patient center medical home needs to – or should – look like. And most recently, HHS announced an initiative “that will allow Medicare to join Medicaid, and private insurers in state-based efforts” using the “Advanced Primary Care model (APC), also known as the patient-centered medical home.”

This new initiative is interesting for at least two reasons: It may be giving PCMHs a new name, and it will not replace the previously unstarted Medicare Demonstration which, according to a healthreform.gov fact sheet about the initiative, will move forward on its own. [FYI - CMS's website for that demonstration hasn't been updated since April and doesn't reflect the APC initiative.] Whatever the connection between the two demonstration projects, I hope that the powers that be at CMS avail themselves of the groundwork already laid in the draft materials for the original Medicare only PCHM demonstration, since the HHS press release states that, for the new APC concept demonstration, “The Centers for Medicare & Medicaid Services will develop application materials later this fall with the expectation that the demonstration programs begin next year.”

With Greater Interest (and Funding) Comes Pressures to Bend
This entire time-line – from the 4 Medical Societies agreeing to the “Joint Principles of the Patient-Centered Medical Home,” to the current initiative which seems to rename PCMHs as Advanced Primary Care – reflects the morphing of medical homes because of economic and political interests from outside groups that hope to benefit from new medical home based funding. The blurring of the definition of medical homes may enable some groups to be eligible for those funds with a minimum amount of effort. The policy counter argument will be that by having many different types of medical homes in demonstration projects will provide the best evaluation of what works best.

The shapes and sources of those pressures for “diversity” of definitions, and how they have led to changes and delays in different programs, are often hard to tell, but their effects will likely be seen in the demonstration programs’ final forms…. if they ever get started. And looking forward, the next point of attack for these pressures will likely be the demonstration programs’ data collection and evaluation processes, since similar vested interested will want to show how various features of APC practices (or PCMHs) are important for improving quality and reducing costs – or not.

Real Health Reform in Massachusetts

Posted on July 29, 2009 by Michael D. Miller MD

The Massachusetts Special Commission on Payment Reform recently issued its recommendations for shifting the state’s health care system from Fee-For-Service (FFS) to Global Payments over a 5 year period. The Special Commission’s report lays out a good case for making this change, describing why it needs to be adopted by all payers, (although each payer would still pay different rates, they would all use the same fundamental global payment structure), and some of the challenges for successfully navigating a 5 year transition period from the current mostly FFS system to one dominated by global payments.

The report summarizes its recommendations into 9 areas:

The development of Accountable Care Organizations (ACOs). (Health delivery entities that can work as a team to manage the provision and coordination of care so that they are accepting responsibility for all – or most – of the care for their enrollees.)
Patient choice. Patients will be able to choose their primary care physician, and will not be restricted to only clinicians in their ACO – but may have to pay more for services outside of their ACO.
Patient-centered care and a strong focus on primary care. Each patient’s selection of a primary care provider will direct their insurer’s payments to their ACO, which will receive technical support to help develop/create medical homes.
Widespread adoption of the medical home model. (The Special Commission concluded that “medical homes overlaid on the current FFS system cannot achieve its vision for a high-value health care system.”)
Pay-for-performance (P4P) incentives to ensure appropriate access to care, and encourage quality improvement, evidence-based care, and coordination of care.
Sharing of financial risk between ACOs and insurers. ACOs will be held responsible for performance risk—including cost performance and meeting access and quality standards. Insurance companies, (and self-insured companies), will retain the insurance risk for the insurance contracts written to groups and individuals.
Strong and consistent risk adjustment. Global payments will be adjusted to reflect providers’ clinical and socioeconomic case mix, and, as appropriate, geography, so that ACOs will not be financially harmed by accepting high-risk patients with complex or chronic health care needs.
Cost and quality transparency. ACOs will report performance against common metrics measuring health care quality and access to appropriate care.
Participation by both private and public payers to ensure consistent alignment of care delivery incentives and to minimize administrative complexity and costs.

These changes would have tremendous implications for improving quality and controlling costs, and be much more significant than the coverage expansion the state started in 2006 – which could be viewed as the first part of health reform in Massachusetts, with the movement to global payments as the second part. Specifically, the Special Commission’s recommendations could largely accomplish the somewhat wonkishly termed goal of “bending the curve” in health costs that is being bantered about in DC these days. These changes would achieve that aim by shifting the financial incentives for clinicians and provider organizations from providing more care, to providing higher quality and more cost effective care – which should include more preventive services and interventions.

Incentives Need to Be Translated to Small Groups
However, those goals will only be achieved if the incentives created at the ACO level by global payments and P4P are translated to much smaller groups of clinicians and others within each ACO. If clinicians are still compensated based upon a modified FFS system within the ACOs, then their incentives will still be mostly for volume over quality. Similarly, if they are told that their compensation will be based upon the overall performance of the ACO, then they won’t feel that their actions will be significant enough to effect the ACO’s or their own financial success or failure. (This is the reason why Medicare’s Sustainable Growth Rate formula hasn’t constrained the growth in Medicare’s spending for physician services, i.e. why would physicians feel that their individual actions matter when they are pooled in with hundreds of thousands of other physicians across the country?) In contrast, if the incentives and data monitoring are done at the level of the individual clinician, (or small clinical entity), then each individual can understand how that their actions will influence their own success or failure.

Just as creating granular incentives depends upon monitoring the clinical decisions and activities at the same level, there is also a need to monitor the overall operations and quality performance of the ACOs to be able to adjust global payment amounts and methodologies. This is why analyzing data to support individual and ACO decisions, and monitoring the success of movement toward global payments, are two of the major functions (see #3 & #5 below) for the entity the Special Commission recommends be empowered to oversee the transition to global payments across the state.

Special Commission’s Recommended Functions for Transition Oversight Entity:

Establish the methodology for global payments
Establish the parameters defining an ACO
Analyze health system data to support providers, patients, and employers in making coverage and care choices
Recommend the necessary infrastructure support for providers
Establish transition milestones and monitor progress towards those goals
Identify and implement mid-course adjustments as needed

Implications for National Actions and Health Reform Advocates
Up here in my area of neon-blue Massachusetts, the focus has been on how it is essential to have a “strong public plan option” because that will lead to a single payer system. Many community activists have held onto this position despite Massachusetts making significant improvements in coverage without a public plan option, (or single payer), but if the state of Massachusetts can implement the Special Commission’s recommendations for an all-payer global payment system in ways that transform healthcare delivery, it will be the most significant health reform initiative in the United States since the creation of Medicare and Medicaid in 1965.

Yes, that’s my opinion, but I can defend it for several reasons. First, implementing an all-payer global payment system really can’t be watered down too much. Certainly, for example, the large teaching hospitals – which the report indicates are doing financially better than community hospitals – may continue to do better under a global payment system, but fundamentally global payments, (with associated incentives for quality), will transform FFS incentives for volume of care into incentives for efficiency and quality.

And second, shifting the healthcare delivery system’s fuel source from FFS to global payments should cause clinicians and health providing institutions and organizations to reorganize themselves into forms, (i.e. ACOs and their subsiadary building blocks), that can accept global payments and effectively manage care. (If they don’t then they will likely find that their global payments aren’t covering their costs, or their quality of care falls behind those who do effectively reorganize their care delivery structures and incentives.)

The Commission uses the term Accountable Care Organizations (ACOs) to describe these types of conglomerations, but each ACO will certainly have its own unique structure derived from the components that were woven together to form it. (I like to call these Multiform Accountable Care Organizations or MACOs.)

While health reform is often talked about as if it would create the same structures and options across the country, this variety will be good a thing since it will reflect local cultures, as well as the unique characteristics of the local providers, clinicians, payers, and community leaders, and their relationships.

While Massachusetts has been pointed to as a model for national health reform – and the state should be proud of achieving near universal coverage – shifting the health system’s fuel source from volume to quality will be a much more profound achievement with longer lasting implications. After taking significant steps to increase insurance coverage to >97%, payment reform and delivery system transformation are the next logical tandem steps. Nothing else being discussed at the Federal level or in other states would have as sweeping an impact as going to an all-payer global payment system. (Yes, there are Federal and state demonstrations and pilot programs for medical homes and other more focused types of bundled payments, but they are toe-dipping rather than diving-in initiatives.)

Next Steps
The state legislature is expected to start hearings on the Special Commission’s recommendations in September. At this point the major stakeholders – including insurers, doctors, and hospitals – are supporting the recommendations. Health reform advocates should start paying attention and figuring out how to mobilize support for the legislature to implement these recommendations so that no matter what happens with Federal reform, Massachusetts will be ahead of the curve in taking real steps to bend the spending growth curve. And if there is no Federal legislation this year, Massachusetts will be even farther ahead of the curve and positioned to lead the rest of the nation as well as create a more economically attractive environment for starting businesses and creating jobs – while improving the quality of healthcare.

Health Reform Hiatus – or Not

Posted on June 28, 2009 by Michael D. Miller MD

I’ve been reading so much about health reform that the inside of my eyelids are burning with headlines about draft committee bills, CBO scoring, Republican responses, editorials for and against various amorphous proposals, and multiple organizations advocating about a public plan option, a public plan option, a public plan option…….

I was hoping that for the July 4th Congressional recess week the public’s and pundits’ attention would go elsewhere, but then I saw this week’s Economist cover picture of President Obama:

(If you look closely you can see that the syringe is graduated in Trillions of dollars from $0.25trn to $1.5trn – indicating that paying for health reform is likely to be the main cause for political pain.)

International Perspectives
International perspectives may be useful in assessing healthcare systems and reform options. Usually people, (and pundits), in the US look to other countries for lessons about how to fix the US’s problems – despite Atul Gawande’s January 2009 New Yorker article that described how other countries’ health care systems have historical roots rather than being based on social contracts or grand political decisions.

Rather than looking outward from the US, the Economist provides the opportunity to see how other countries view the US health care system and out current reform efforts. [Note: the British have no to observe the July 4th holiday hiatus - after all, for them the date doesn't mark a holiday of independence, but rather the beginning of the unraveling of their global colonial empire.]

The June 26th issue has 2 one page columns about the politics of health reform, and a 3 page article that looks at the problems and possible solutions. The article, “Heading for the emergency room,” is particularly interesting since it uses the terminology I adopted several years ago to describe the issues of high cost and limited insurance coverage as symptoms rather than as fundamental problems in the US healthcare system, and to highlight the fundamental problems as actually being the incentives created by the US’s Fee-for-Service (FFS) reimbursement system. As the article two sentence introductory summary clearly states: “America’s health care is the costliest in the world, yet quality is patchy and millions are uninsured. Incentives for both patients and suppliers need urgent treatment.” Although I’m sure that US physicians, (and other clinicians), and hospitals, (and other healthcare institutions), wouldn’t want to be called “suppliers,” the analysis is spot on.

The article also addresses issues of prevention, health IT, and increasing competition information, transparency and accountability, but eventually returns to the conclusion that incentives need to be realigned – “More competition and transparency would help, but the main goal of any reform plan must be to address the perverse incentives that encourage overconsumption [and overdelivery] and drive up costs.”

This is the same conclusion that’s been reached in Massachusetts. The state’s Special Commission on the Health Care Payment System is expected to release their recommendations in July about how to take health care reimbursements in the state from being based upon a FFS system to one that pays physicians, hospitals, accountable care organizations, etc. using global payments – a term that has multiple possible meanings which will get more precisely defined during the legislative/regulatory process in the coming months.

Conclusions
Stat tuned. Following the July 4th hiatus, Congress will be in session for 4 weeks and there will certainly be lots of action.

Congress’ ability to move health legislation towards consensus and closure in July will be very important since when they return in September there will only be 25 legislative days until the October 15th trigger date for using the Reconciliation rules in the Senate. Of course, there is no requirement that Reconciliation be used after October 15th to achieve the President’s goal of health reform this year, but if bipartisan agreement cannot be reached before then, the temptation to go the Reconciliation route requiring only 50 votes to pass legislation will be very hard to resist – despite the fact that it may limit the substance of what can be included in health reform.

At the state level, Massachusetts has been touted as a model for national health reform – having achieved >97% insurance coverage without the use of a public plan. Its actions in the coming months to realign incentives towards quality, value and team-based, patient-centered care rather than volume of services and clinician autonomy, may be even more significant for truly transforming healthcare in the United States – assuming that healthcare in the States are to become united rather than continuing to be segregated across state lines.

Culture of Health Reform

Posted on April 13, 2009 by Michael D. Miller MD

One of the challenges for health reform legislation is the culture of the policy and political community.

Massachusetts’ insurance and coverage initiatives have been cited as lessons for health reform at the Federal level and other states. However, while observing a meeting of the state’s Special Commission on the Health Care Payment System last Friday, I was struck by how the culture of this group was very different than what I have often seen in Federal processes or within other states.

The Commission had agreed at their previous meeting that global payments should replace fee-for-service as the main payment route for medical services and products. At Friday’s meeting their discussion about what that system of global payments should eventually look like – and how to get there – was not confrontational, even though the Commission’s representation includes a wide range of stakeholders, including doctors, hospitals, two insurers, the state employees’ insurance plan and two elected representatives.

The collegiality and non-confrontational atmosphere of this Commission compared to national discussions of similarly broad groups – such as the Health Reform Dialogue – may provide important insights for other health reform efforts. The reasons why health reform in Massachusetts has this type of culture is probably a long list, but some of them might be:

The stakeholders realize that payment reform is part of longer-term cost containment efforts that will be necessary for the overall success of the state’s insurance expansion program
Despite the overall economic downturn, the state and its healthcare system are generally better off than other states and healthcare operations
The state has a generally progressive bent, and is somewhat culturally aligned, e.g. almost everyone is a Member of Red Sox Nation

Whatever the reasons for the agreeablity within the Commission and the state, progress thus far has been a significant achievement, and could lead the way for significant reforms at the Federal level or within other states – particularly if they can replicate a similar culture of cooperation and agreement.

Next Challenging Steps
Of course, the Special Commission won’t be making all the detailed decisions necessary for actually reforming payments, such as:

How quickly the new system will be initiated
How much the global payments will be
Who will get the global payments, e.g. hospitals, integrated delivery systems, physician groups, or some combination of providers
What types of quality information those receiving the payments will have to provide
What levels of cost containment will the new global payment system be expected to meet – and what measurements will be used to determine if costs are being constrained appropriately

Those types of decisions will be made by the state legislature and a government agency – or para-governmental entity created for these purposes. These upcoming decisions and their implementations will be where the even harder challenges await. However, given the Special Commission’s progress so far – and the state’s ability to implement and sustain the insurance expansion program – the likelihood that these harder steps will at least be partially successful seems good. So while critics have been predicting the downfall of the Massachusetts insurance coverage expansion experiment because of rising costs, that’s not the future I see.

The political and policy leadership in Massachusetts seem to have a sustainable group-think and desire to keep on the path they’ve started on rather than veering off into another direction to achieve immediate cost savings or politically expedient gains. The ability of the state to do this will be aided by some of the factors postulated above, as well as the political clout the state has in Congress, and the Governor’s relationship with the President. But those factors may change with time, so the ultimate ability of the state to sustain ongoing reforms and improvements to the healthcare system within the state may very well depend upon its momentum of success. They’ve had great success in reducing the number of people without health insurance. Now cost containment via payment system reform is the next success that must be achieved.

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Category Archives: State-Level Healthcare Reform