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December 7, 2009

Mass. Docs Fret Over Health Care Reform

Photo/Courtesy Jack Dutzar, president and CEO of Fallon Clinic.

As politicians and pundits debate the pros and cons of national health care reform, Massachusetts residents can be forgiven if they have a bit of a “been there, done that” attitude. After all, many of the ideas that run through the national proposals were enacted in Massachusetts back in 2006.

But according to some who are following the national discussion closely, the outcome could have some very significant effects for doctors and other health care providers in the commonwealth.

Public-Private Partnership

One way national reform could affect local providers is by reducing the funding of the Medicare Advantage program. Medicare Advantage allows seniors to enroll in private insurance plans that cost significantly more than standard Medicare on the government’s dime. The extra spending has come under fire from some politicians, and a final health care bill would likely include cuts to the program as a way to finance extra expenditures elsewhere.

Jack Dutzar, president and CEO of Worcester-based Fallon Clinic, said Medicare Advantage cuts could be a “disaster” for the clinic and its patients. He said about 25,000 of Fallon’s 200,000 patients are part of Medicare Advantage, and, since those patients are seniors and typically have significant health issues, they account for a disproportionate share of the clinic’s income.

Dutzar acknowledged that Fallon makes good money from the program, but he said it also provides good care to enrollees. He said the version of Medicare Advantage that has come under the most fire for having excessive expense and little added value is essentially private fee-for-service type care. In contrast, he said, Fallon and most other Massachusetts providers use a managed care model that offers intensive, comprehensive preventative care for seniors with chronic illnesses.

The goal, he said, is to keep seniors healthy and out of the hospital.

“When we do that, we do better and, obviously, they do better,” Dutzar said.

Robert Seifert, a principal associate at the University of Massachusetts Medical School’s Center for Health Law and Economics in Charlestown, said another possible revenue source for national health care reform is cuts to “disproportionate share hospital” payments, which offer extra funding to hospitals with high numbers of low-income and uninsured patients. The theory, Seifert said, is that there will be less need for the extra funding as the number of uninsured goes down, but it’s unclear whether that will really pan out.

“That’s a potential financial hit to certain hospitals,” he said.

Dutzar said another big question for Fallon in the national debate is whether any final bill will include a public option, and, if so, what it will look like. He said he’d be worried about a government-run health plan that sets low reimbursement rates for providers. Some proposals that have been floated would set the rates at 110 percent of what Medicare now pays.

“That doesn’t get us up to covering the cost of the services,” Dutzar said.

Limited Scope

But Seifert said providers probably have little need to worry about a public option. He noted that the reform bills that have moved forward in the House and Senate don’t include set reimbursement rates, and instead would require the public plan to negotiate its own rates separately from Medicare. In addition, the number of people who can participate in a public plan would probably be fairly limited, Seifert said.

“I understand hospitals and physicians’ apprehension about it,” he said. “But right now the public option, I think, is not really the central focus of what these bills are going to do.”

Seifert said the aspect of national reform that worries him is that it might not offer as much support for the currently uninsured as the Massachusetts plan – and might actually drag Massachusetts back down.

“The sort of irony of it is a lot of the standards that the national bills are setting don’t come up to the standards that Massachusetts has set,” he said.

Subsidies to help pay for insurance for small businesses and the self-employed could be less than Massachusetts currently offers, Seifert said. And he said national reform could eventually mean the state loses a waiver that allows it to put federal Medicaid funds toward certain subsidies.

“The finance of a lot of the coverage expansion that we’ve seen is based on this Massachusetts health waiver,” he said.

The waiver comes up for renewal at the end of June 2011, he said, and it’s not clear whether it would be renewed if a national reform package passes.

Even as providers and other observers worry about the possible effects of national reform, many say something needs to be done.

“The only single universal issue is that, at least in my experience, everybody feels the need for significant change,” Dutzar said. “Even people who are reacting to the idea of any kind of national reform as an intrusion… It’s hard to find somebody who thinks that things are just fine.”

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