Payment Reform Key Hurdle For Health Care In Massachusetts
When it comes to health-care reform, 2011 may prove to be the year Massachusetts learns the biggest advantage to being first is avoiding the sign-up scramble.
It’s one thing the state needn’t fear: As it prepares to mark the fifth anniversary of its landmark health care overhaul experiment, regulators, businesses and patients are in some ways better off than their peers in the rest of the country who face the difficult, now federally mandated, obstacle of trying to insure the entirety of their populations. That milestone has already been reached in the commonwealth. With more than 97 percent of Bay State residents insured, Massachusetts far outranks its peers in terms of meeting federal reform initiatives.
And as of September several other key components of federal health care reform kicked in for Massachusetts — and other states — such as the elimination of copayments for preventive health services and the ability of young adults to remain on their parents’ health insurance plans.
Looking Ahead
The coming year in Massachusetts will see a new phase of the health care debate dominate headlines. In 2010, insurance — that is the question of “who pays?” — took center stage in the debate. But in 2011, as the state begins to grapple with payment and cost containment reforms, several state laws go into effect that will shift the focus from the source and availability of money to the value patients and payers receive for the health-care dollars they spend.
It has already reined in contracting practices with hospitals that include automatic annual increases. And over the next year, the Legislature is expected to begin looking at recommendations from a statewide task force that is calling for fundamental changes to the way doctors and hospitals are paid. In essence, the group, which was created by the 2006 state health care law, wants to transition away from a model where providers are paid for individual services to one in which groups of providers — also known as accountable care organizations — are paid a lump sum for a particular course of treatment.
“Everybody is wondering how this is going to work out,” said Alan MacDonald, executive director of the Massachusetts Business Roundtable, a trade group for large employers in the state. “They all understand that cost management is now essential. Both branches of the Legislature want to look at this and it’s probably going to see the most attention in 2011.”
Glen Shor, executive director of the Massachusetts Health Insurance Connector, agreed, saying that the shift toward “payment for performance rather than fee-for-service… will see the most attention in 2011 — more so than health insurance coverage.” The Connector was created by Massachusetts’ health-care reform legislation to help residents find affordable health insurance.
Of course, away from Beacon Hill, coverage still remains a major issue for businesses that are purchasing health-care coverage.
The expansion of required federal benefits, the elimination of the contracting procedures between hospitals and insurers and typical medical inflation will all combine to put upward pressure on insurance premiums — which will likely be about 10 percent higher on average in 2011, said Matthew Hollister, president of Hollister Insurance Brokerage in Clinton.
Another big change in 2011 will be the state-mandated availability of health-care plans known as tiered, limited or narrow-network plans, in which consumers agree to use only certain health-care providers or groups — and pay sizable co-payments and deductibles if they go outside that network.
Most of the state’s major insurers such as Harvard-Pilgrim, Blue Cross and Tufts are all expected to have those plans in place by 2011. “
That’s significant because only one carrier — Fallon Community Health Plan — had been offering a narrow network plan already,” Hollister said.
The impact of those early cost containment efforts — such as the smaller, cheaper plans — will be closely watched throughout the nation, said Peter Gruenberg, chief placement officer of the human capital practice at Willis North America, a major national insurance brokerage.
“A lot of eyes are looking at Mass-achusetts…The state is seen as a leader in this area and hopefully what goes on can help bring down costs in the state,” he said.
Gruenberg also said there remains a lot of confusion for small businesses over whether they can use a 35 percent tax credit to offset the costs of insuring their employees. A recent survey by Willis found that more 80 percent of businesses said they were either not eligible or had no idea whether they were.
Overall, 2011 will also be something of a “wait-and-see year,” said Sonja Brehm, director of business and product development for Worcester-based Fallon Community Health Plan. Regulators, insurers and providers are going to spend much of the year merging what has happened with federal health care reform with other state regulations as “those rules of the road still need to be determined,” Brehm said.
“I envision more of a year for planning rather than seeing new results,” Brehm said. “As a result, some of the changes you see are going to be nominal compared to the rest of the country.”
Kenneth St. Onge is a freelance writer based in Connecticut. He can be reached at ken@kenstonge.com.
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