Health Care at the Crossroad Seminar Gives Snapshot of Health-insurance Reform in Flux

Five years ago, Susan O’Connor said, Massachusetts kicked a very imposing can down the road.

She was speaking specifically of the Commonwealth’s landmark health insurance reform law, the first in the nation to require residents to be insured. Today, 98{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of all Bay Staters — including 99.8{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of all children — are covered.

“Massachusetts leads the nation in providing access to health care, so that workers and families no longer have to worry about catastrophic illness forcing them into bankruptcy,” said O’Connor, assistant general counsel for Health New England. “From an access perspective, health care reform is doing exactly what it was designed to do — expand access to quality health care for all residents.”

Containing costs, however, is another matter altogether.

“That was intentionally left for the future,” she said — but, due to ever-soaring medical costs, the matter can’t be put off any longer. “Massachusetts and the country need to crack the code on the cost of health care. When the cost of care goes up, so do premiums. The goal is achieving quality, affordable care for all residents. But the stakeholders in Massachusetts realized this was a process, and not something that was going to happen overnight.”

O’Connor shared these thoughts at a recent seminar — “Prescription for Progress? Understanding Health Care Reform” — presented at the recent Western Mass Business Expo at the MassMutual Center in Springfield.

“We’re moving from volume to value,” said Mark Fulco, senior vice president of Strategy and Marketing at Mercy Medical Center, which has been a leader in exploring an innovative model for controlling medical costs (more on that later). “We have knocked down the access issue; now we’re working our way through the finance side.”

He cited statistics suggesting that the U.S. spends more per capita on health care than other developed nations, yet ranks low in health care quality, efficiency, and access.

“The problem is ours; we own it on the provider side,” he said. “And we’re very much working to do something about that. We’re working to use technology better, reducing rehospitalizations, reducing errors, and reducing excess costs like duplicate tests, which are rampant. This move away from ‘fee for service’ into better and more integrated care — what’s called ‘clinical integration’ — is really taking hold.

“If you improve quality of care,” he continued, “you can actually reduce costs and spending, and that’s where things are moving. We’re moving toward quality outcomes, rather than the more work you do, the more you get paid.”

O’Connor compared fee for service to a shopper going into a supermarket and filling up the cart with everything he wants, and not worrying about the cost until the cashier rings up the total. The goal, she said, should resemble making a list of only necessary grocery items that can fit within a certain budget, and then sticking closely to that list.

The interconnectedness of health services, and the ways in which eliminating redundancies and creating efficiencies could actually lead to higher-quality care at a cheaper cost, has long been a goal for Baystate Health, and is even more pressing today, said Steve Bradley, vice president of Government and Community Relations for that health system.

“When you’re in the business of providing health care, you’re really in the business of helping people remain well,” he explained. “Maybe the health care system got away from that format over time and got into providing widgets for health care — high-quality, expensive widgets. Now, again, the focus is on keeping people healthy.

“We embrace that change,” he said, “and we’re excited about it.”

Challenges to Reform

O’Connor called the federal Patient Protection and Affordable Care Act of 2010 “the most comprehensive legislation for employee benefits since ERISA more than 30 years ago, and the most significant change in the American health care system since Medicare and Medicaid.” But, as anyone following the news over the past year and a half knows, it has not gone unchallenged.

“A major provision of federal reform — which is modeled on Massachusetts’ reform — is the individual mandate,” O’Connor said. “And why is the individual mandate so hotly debated at the federal level? Why is it so critical to the success of health care reform? Because, without the mandate, people might wait until they’re sick to purchase insurance. And to keep coverage affordable, people need to pay for coverage before they’re sick.”

Opponents of the national reform law, which they label ‘Obamacare,’ know this, she explained, and they are targeting many legal challenges at this one aspect of the law.

“The individual mandate takes up six pages” of the legislation, she noted. “But if that mandate fails, so go the other 900 pages.”

So far, courts have been split over challenges to the mandate under the Commerce Clause, the essential issue being whether the U.S. Congress has the power to mandate that all Americans purchase a product, in this case health insurance.

In Thomas More Law Center v. Obama, the 6th Circuit Court of Appeals ruled the mandate constitutional. In Florida, et al v. the U.S. Department of Health and Human Services, the 11th Circuit Court of Appeals determined the opposite. Next into the fray will be the Supreme Court, which could take up a challenge to the mandate this year and render a decision next summer — just a few months before a national election. “These are interesting times for health care,” O’Connor said.

Stakeholders in health insurance reform on all levels realize that controlling the actual costs of care is a critical factor. Mercy, for its part, has been in front of the curve in studying accountable-care organizations (ACOs), which are a model of payment being promoted in Massachusetts to suppress costs while maintaining high quality standards.

ACOs are groups of providers — doctors, nurses, specialists, therapists, etc. — who work together in assuming risk for treating a defined population of patients. “There are incentives to save money while improving care delivery and get better outcomes,” Fulco explained. “And if you do a better job delivering quality care and save money, in the end you get to keep some of those savings. Some goes back to the government, but the physicians and providers get their portions of that.”

It is not a system, however, that sacrifices quality care for expediency.

“Quality goals are key. Some people say this is old wine in new bottles,” Fulco said, referring to the well-known system of capitation, by which insurance companies pay providers per patient under their care, often regardless of outcomes. “But this is different. If you don’t hit your quality metrics, you don’t get paid.”

The move “from volume and intensity to efficiency” must make a priority of reducing hospital readmissions, Fulco added — in other words, not overtreating patients, but making sure they get the services they need to recover and stay healthy. “We think this is the right seed in the right soil. Now we’ll see how things grow.”

Bradley also sees value in an ACO-centric system. “When you manage care well, you get to reinvest the money left over — not in stockholders, but in hospitals, doctors, new equipment. It goes from the operating budget to the capital budget,” he explained.

The shift toward a more holistic form of care has providers excited, he added, because it enhances the human side of health care.

“The future is very bright because we’re getting back to wellness-focused services; we’re getting back to patient-centered care. Even though it’s money that seems to be driving the change, the way it has re-energized health care providers in their jobs has been remarkable. It encourages patients to be more thoughtful, and as a consumer, it makes me very optimistic about the future.”

Bradley called it “exciting to get back to a system that reinforces primary-care physicians, nurses, clinical technicians, who can talk to their patients and make sure they have all the health care information they need and understand how to integrate it into their lives.

“It’s nice,” he added, “for those of us who have our hearts in health care to see financial reimbursement strategies now better correlating with wellness.’

Mother Knows Best

That concept is actually a pet cause for Peter Straley, CEO of Health New England, who promotes what he calls “my mother’s health plan,” a wellness regimen that includes physical activity (“go out and play”), good nutrition (“eat your vegetables”), and prevention measures (“brush your teeth”).

Bits of parental advice like those, he writes, form the basis for a lifestyle of wellness that doesn’t tax the already-stressed health care system like people with bad habits — obesity, smoking, and the like — do. “Unhealthy personal habits and individual choices have a profound impact on the cost of coverage for everyone and are directly responsible for a significant rise in annual health care premiums.”

Statistics from the Centers for Disease Control and Prevention (CDC) suggest he’s right. A moderate exercise regimen, for instance, has been shown to reduce one’s chances of developing type 2 diabetes, and someone with that disease racks up about $11,744 in health care costs annually, as opposed to $5,095 for the typical consumer without diabetes.

With approximately 24 million Americans diagnosed with type 2 diabetes, if society were able to reduce that number by only 25{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5}, the annual cost savings would be almost $40 million.

Similar costs are associated with obesity, underlining the importance of eating well. Other neglectful lifestyle choices, from not wearing a seatbelt to getting inadequate sleep to, yes, failing to brush those teeth, ring up similar costs that add strain to the entire health care infrastructure.

“Taking responsibility for our personal health and well-being is a holistic approach to managing those things that are within our control,” Straley writes. “It also means that, if we do get a chronic illness, we manage our condition effectively to minimize negative outcomes.

“The value of this,” he continues, “is leading a rich and productive life, reducing the economic burden on the U.S. health care system and economy, as well as positioning the next generation to achieve optimal health and longevity.”

The state Legislature has gotten into the act, allocating $15 million to a pilot program promoting wellness initiatives in the workplace, said state Rep. Michael Finn, D-West Springfield. Companies that adopt the program save 5{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} on their insurance costs through the state’s Health Connector, and are eligible for a federal wellness program that reduces their costs even further.

“At the end of the day, this program was really intended as an opportunity for employers to save money — and employees, too, in out-of-pocket expenses — while also containing costs in the Commonwealth,” Finn said.

“It is definitely a priority for the governor, the Senate president, and the speaker of the House to save money through certain efficiencies,” he said, and part of that is better involving patients in their own care and health maintenance.

Another key to the cost conundrum is reforming the malpractice system to reduce the often-onerous premium costs providers face. Massachusetts is looking at a model used in Michigan by which providers are allowed to apologize to patients for mistakes without having those words used against them in court. The model also institutes a cooling-off period before any legal action is taken. Proponents believe such a system will breed better communication and trust between doctor and patient.

“We don’t want people to run out of the hospital, run right to court, and sue,” Bradley said. “That’s causing health costs to skyrocket because of premium costs.”

At the end of the day, however, perhaps Straley’s mother had the best idea, as preventable illness accounts for up to 90{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of health care costs, according to the CDC.

“We have a lot to gain individually and as a nation by following the rules our mothers set for us when we were just youngsters,” he writes. “Let’s revisit the lesson and begin making healthy choices today.”

Of course, millions of Americans will likely continue down an unhealthy path, while an ever-graying population requires more (and more expensive) care than ever before. Clearly, plenty of tough decisions remain — for both Massachusetts and the entire nation — as the debate continues over how to control costs while making health care accessible.

And the answers that emerge — like those vitamin-rich veggies on a picky child’s dinner plate — won’t necessarily be easy to swallow.

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