Give ’Em Health Insurance Reform Successfully Covers More State Residents, but Cost Remains an Issue

Peter Straley never bought into the idea that health insurance reform would, by itself, lower the costs of health care.

“There were people who claimed that, simply by insuring more people, the total cost of health care would come down. That’s a kind of voodoo economics,” said Straley, president and CEO of Springfield-based insurer Health New England. “It’s never worked that way, I’ve never believed it would work that way, and it has proven not to work that way. At least in the short term, it’s going to cost more. It doesn’t change the fundamental cost of a hospital stay or MRI or prescription drugs.

“So these costs have all continued to rise,” he continued. “There is a consumption of more health services each year, more prescriptions filled by our members, more people seeing doctors for various medical issues each year, more MRIs and CTs being done. The cost of health care has not been reduced by passing health care reform in 2006, or the recent effort on the federal level. This will change only through fundamental restructuring of the delivery system.”

But Straley remains supportive of Massachusetts’ ongoing effort to insure more residents, understanding that all the issues associated with that undertaking would not be solved immediately.

“My sense is that Massachusetts did a good thing in taking on health care reform,” he said. “Now we need to stay focused on the fact that health care costs will only change through long-term changes to the delivery system, and people choosing to live healthier lifestyles — things I believe will happen and should happen. They won’t be fixed overnight, but this legislation can help prod us in the right direction.”

Broad Support

Proponents of insurance reform in Massachusetts estimated that about 6{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the population was uninsured before the law was implemented. Today, that number is between 3{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} and 4{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} by most estimates — still better than in any other state, but not quite meeting former Gov. Mitt Romney’s goal of covering virtually all residents.

Just to get to this point, though, a striking number of players worked together to create momentum for a new law. In late 2004, Romney announced his plan to support a universal-coverage bill, and Senate President Robert Travaglini and House Speaker Salvatore DiMasi both got on board. In fall 2005, the House and Senate each passed health care insurance reform bills, and in April 2006, Romney signed a consensus bill. The law requires most individuals to show evidence of coverage on their income-tax return or face a tax penalty.

It also created the Health Connector and subsidized the Commonwealth Care Health Insurance Program to help low-income or unemployed residents to access insurance. Specifically, the program allows eligible residents without health insurance who make below 300{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the federal poverty level to access certain subsidized private insurance health plans, without deductibles. For individuals below 150{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the federal poverty level, no premiums are charged; for those above 150{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, premiums are determined on a sliding scale based on income.

There have been labor pains, as Straley mentioned, particularly the law’s inability to change the cost equation, and rising costs for small businesses, some of whom are reporting rate hikes of 40{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} or more.

That’s because, even though the state and major insurers agreed this summer to cap rate increases for individuals and small businesses at 12.9{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} at most, the base price of a premium is often pushed higher by other factors, including the size, average age, and health of a company’s workforce, as well as the type of work performed. These factors can especially hurt smaller businesses because just one or two employees with major health issues can significantly boost insurance expenses for everyone.

But, again, Straley said, these types of hurdles were not unexpected.

“When health care reform was being debated in Massachusetts, there was an explicit discussion about whether to try to take on all the issues, or to take them on serially, one at a time,” he told the Healthcare News. “The decision was made back then — and I don’t think it was a bad decision — that we would start by getting people insured, addressing the access issue. And I agree with that. Based on that initial goal, Massachusetts health care reform has been quite successful by any measure.”

But the cost issue has turned out to be a significant one, perhaps moreso than reform proponents had assumed.

“Our estimates for the number of uninsured were low,” he said, and most of these can now access coverage through the Connector. “By our best estimates, today roughly 3{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of Massachusetts residents still don’t have high-quality, comprehensive insurance, which is much lower than any other state. So I would give it a very good grade for additional coverage.

“But the subhead on that is where all the newly insured came from — primarily people who could not afford insurance on their own or through their employer, so it’s subsidized in some way,” Straley continued, noting that many who access the Connector are either unemployed or underemployed, with no access to insurance at work. “We thought that a large number of middle- to upper-income people were choosing not to buy health care, but this has not proven to be the case.”

Questions of Access

Then there’s the question of whether the newly insured can access care — which isn’t as cut and dry as some might imagine.

“Once you have your insurance card, you think you can now see the doctor to get health care,” Straley said. “But if we haven’t changed the supply of providers, many people will find it difficult to get access. There’s a lot of work being done separate from the insurance discussion to create more extensive primary care and a better continuum of people who get into primary care.”

That’s not an easy task — not when the numbers of medical students choosing primary care were falling even before the reform law was passed. And the growing primary-care shortage isn’t just a Bay State problem; surveys show that the percentage of medical students choosing the discipline has fallen by 50{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} in the past decade alone, and a 2008 University of Missouri study suggested that the U.S. could face a shortage of 44,000 general-practice doctors by 2025.

Last year, Dr. Rob Jandl, an internist and president of Williamstown Medical Associates, conducted a survey of doctors in Berkshire County about how satisfied they are with their job, and 47{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the respondents were somewhat or very dissatisfied with primary care; 63{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} would probably or definitely not enter the profession were they able to make the choice again; and 91{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} would have reservations about recommending a career in primary care to someone else — or outright discourage it.

Dr. Michael Picchioni, associate director of the Internal Medicine Residency Program at Baystate Medical Center, recently told the Healthcare News that multiple factors are contributing to that trend, among them a feeling that primary care is at least as challenging a job as other specialties, with less-predictable hours, more bureaucracy and paperwork, and lower pay.

“Ten years ago, a lot of our graduates used to go into primary care — more than half,” he said. “Now, it’s a small minority. It’s the same teaching program, with the same leaders and the same emphasis on primary care; the people at the center of the program are primary care-trained practitioners. Yet, this shift has happened in spite of us, you might say.”

What makes the situation even more irksome, Picchioni said, is that primary care has so much to offer in terms of personal satisfaction, but the way the system is set up now — with doctors under pressure to see as many patients as possible — undercuts that.

“The single most valuable thing about primary care is that central relationship the doctor has with his or her patient,” he said. “Often, in their eyes, we do have the greatest status. We share in their highs and lows in health care as they happen; we’re much more than peripherally involved. Still, everyone I’ve known in this field has made a comment like, ‘I wish I had more time to spend with my patients.’ That’s absolutely true.”

Staying Accountable

As far as changing the health care delivery system in Massachusetts, revolutionary ideas are now being considered. Last year, the state-appointed Special Commission on the Health Care Payment System proposed a sweeping health-payment reform for Massachusetts that centers on the concept of accountable care organizations (ACOs), each of which would include doctors, other community-based providers, and hospitals working together to collectively provide a full range of services for each patient.

The ACO would take responsibility for caring for a patient for the year and, in exchange, accept some form of payment from the insurer. The system is geared toward controlling costs because it provides a one-time payment regardless of how many tests, procedures, and hospital admissions a patient requires, theoretically leading to greater efficiency and consolidation of services.

Mark Fulco, vice president of Strategy and Marketing at Mercy Medical Center, said such discussions are important because, until recently, there hasn’t been enough public recognition of the actual cost of health care, and how much it’s rising under the current system. “There hasn’t been price sensitivity,” he said. “But as the consumer is bearing more and more of the cost of health insurance and health care, we’re seeing a dramatic shift in price sensitivity.”

Straley goes even farther and suggests that any restructuring of health care must be accompanied by a greater sense of responsibility on the part of the insured to stay healthy.

“Anywhere from 30{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} to 70{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of health care costs are, broadly speaking, lifestyle- or choice-related,” he said, citing smoking and obesity as two obvious examples of behaviors that lead directly to health complications that, collectively, burden the entire system.

“We need to profoundly engage every person about leading the healthiest life they can given their economic situation and genetic makeup,” he continued. “I’m not saying everyone has to be an athlete, but the choices we make about exercise, lifestyle, safety — do you wear a seatbelt in the car? — these profoundly affect the total cost of health care. I’m committed to helping people make the next decision, just one decision to do something tomorrow better than they’re doing it today, and sustain that behavior. Once you make the first one, the next one’s easier to make. Your life will be better for it, and society benefits as well.”