Tag: The States

Privatize Medicaid? Have We Learned Nothing??

Mar 17, 2011• 44

By MONA MANGAT, MD

As we move thru 2011, many states are eagerly progressing with implementation of the Affordable Care Act (ACA). We have many Early Innovators that are leaders in setting up the state based exchanges. These states are Kansas, Maryland, New York, Oklahoma, Oregon, Wisconsin and a multi-state entity led by the University of Massachusetts Medical School that consists of Connecticut, Maine, Massachusetts, Rhode Island, and Vermont. Furthermore, Vermont is poised to pass the country’s first state-wide single payer system.

You can imagine when I look in my own back yard I get a bit depressed. Despite our 80 degree sunny weather, our state is leading the charge to overturn the ACA. Our newly elected governor, Rick Scott (the past CEO of Columbia/HCA when the company pleaded guilty to MCR fraud and paid $1.7 bil fine) is singularly focused on not implementing the ACA in Florida. As the months go by and other states move forward, we continue to move backwards.

As expected, it is the poor and sick that continue to suffer the most. The current assault occurring in Florida is on Medicaid. Medicaid currently covers close to 3 million Floridians (nearly 15% of the population) at a cost of nearly $19 billion dollars. The cost of each state Medicaid program is a burden shared jointly by the states and the federal government.

For every $1 spent by the state, the federal government matches $1.84. Florida Medicaid already has some of the most restrictive eligibility criteria in the country, such that the only people who can qualify for Florida Medicaid are: 1) low-income infants, toddlers, preschool-age children, and pregnant women; 2) extremely low-income school-age children, seniors, people with disabilities; and 3) parents of children in deep poverty. 60% of FL Medicaid recipients are children.Continue reading…

The Inspector General Observes

Mar 17, 2011• 5

By PAUL LEVY

A recent report by the Massachusetts Inspector General raises a thoughtful concern about the implementation of global payments in the state.

In the effort to contain health care costs, much discourse has centered on moving from a predominantly fee-for-service system to one based mainly on global payments to providers organized as Accountable Care Organizations (“ACO”). There is little doubt that fee-for-service reimbursements create incentives for providers to increase utilization of health care services, with obvious inflationary consequences. But moving to an ACO global payment system, if not done properly, also has the potential to inflate health care costs dramatically.

There is nothing inherent in the current marketplace that would cause an ACO-based global payment system to contain health care costs. The evidence, in fact, suggests the opposite conclusion. For the past two years, the primary experiment with global payments in the private insurance market in Massachusetts has been the Alternative Quality Contract (“AQC”) popularized by Blue Cross Blue Shield of Massachusetts (“Blue Cross”). The payments to providers under this contract are made on a global capitated basis. The capitated amounts are determined by starting with the previous year’s experience of the population of lives covered by the specific AQC. That entire amount becomes the base year from which all future payments are derived. Therefore, the AQC embraces and adopts any excessive or wasteful payments in that base year, including all overutilization resulting from over a decade’s worth of fee-for-service provider contracts. Implicitly, the premium increases of that decade, which overall were well in excess of 100%, are made a permanent part of our health care system’s cost structure.Continue reading…

AQC to ACO: As Goes Massachusetts, So Goes the Nation?

Feb 14, 2011

By DAVID HARLOW

About four years ago here in Beantown, survivors of the last big ill-conceived or poorly-executed (depends who you ask) wave of health care management and finance innovation were kicking around for a new approach to aligning payor and provider incentives, focusing on quality and cost containment. To hear Andrew Dreyfus, CEO of Blue Cross Blue Shield of Massachusetts, tell the story, the Blues wanted to address both quality and cost, and therefore (after looking in vain for a model elsewhere that could be transplanted to Massachusetts) developed the Alternative Quality Contract, or AQC, which features a global payment model hybridized with substantial performance incentives, plus design features intended to lower the cost of care over time.

Many of the features put in place under the AQC will allow participating provider networks in Massachsuetts to make the leap to ACO (once the beast is defined by the federales), despite the difference in payment methodology (global cap for AQC vs. FFS for ACO).

I was invited to hear Andrew present the AQC story this week together with Gene Lindsey, CEO of Atrius Health, a Massachusetts multispecialty physician network of some 700 physicians that participates in the AQC. (Atrius’ largest group is Harvard Vanguard Medical Associates, whose docs used to be employed by Harvard Community Health Plan, the pioneering staff model HMO ’round these parts.)Continue reading…

The Laboratories of Democracy

Jan 23, 2011• 4

By MERRILL GOOZNER

If “Obamacare” was a federal takeover of health care, states failed to get the memo.

The House Republicans and three Democrats who voted to “repeal and replace” it with something that provides “lower health care premiums through increased competition and choice” might want to take a look at Utah. Its new internet-based insurance exchange was designed by free-market advocates.

It provides small businesses, individuals and even some large employers with access to competitive insurance plans. The state’s Republican leadership, aided by Michael Leavitt, the state’s former governor and secretary of Health and Human Services in the Bush administration, believes their exchange “could be a national model for market-based health care reform.”

Closer to where they go to work every day, the “repeal and replacers” in Washington might also want to follow onrushing events in Virginia, whose state attorney general sued to void the individual mandate in the national law. Last month, using a $1 million planning grant from the federal government, the state’s Republican secretary of health Bill Hazel, an orthopedic surgeon, issued a “Virginia Health Reform Initiative” that outlined the state’s vision of reform under the federal Affordable Care Act.

It’s centerpiece? The proposal, which was introduced in both houses of the state legislature this month with bipartisan support, calls for setting up a health care insurance exchange that will “try to promote effective competition” within the state, said Len Nichols, a professor of health policy at George Mason University, who consulted with Hazel in coming up with the proposal. Virginia desperately needs some competition since one carrier – Anthem Blue Cross Blue Shield – currently controls over 60 percent of the market, Nichols said.

“Don’t Litigate, Innovate.”

Nov 29, 2010

By ROBERT LASZEWSKI

What if a Republican governor and a Republican legislature had the ability to implement their version of health insurance reform and the federal government would have to pay for it? It’s a great idea. And I’m thrilled to say that a bi-partisan bill has already been introduced in the Senate by Ron Wyden, D-Ore., and Scott Brown, R-Mass., that would help facilitate exactly this end.

First, let’s review section 1332 of The Patient Protection and Affordable Care Act to realize how states are already — at least eventually — given the ability to innovate in this manner. Here is a simplified summary:

A state may apply to the Health and Human Services secretary for a waiver of all or any requirements with respect to the insurance exchanges, mandates, and subsidies with respect to health insurance coverage within that state for plan years beginning on or after January 1, 2017.
The secretary has to provide for an alternative means by which the aggregate amount of the tax credits and subsidies, which would have been paid on behalf of participants in the exchanges, would instead be paid to the state for purposes of implementing their own version of the law.
The secretary may grant a request for a waiver only if the secretary determines that the state plan will provide coverage that is at least as comprehensive as the coverage defined under the new law and offered through similar exchanges established by the states.

Massachusetts has the best health care in America?

Nov 15, 2010• 9

By PAUL LEVY

A well regarded local hospital administrator last week said, “There is lots of evidence that Massachusetts health care is the best in the country.”

The context was a discussion in which it was pointed out that health care costs in Massachusetts are above the national average, even adjusted for wage differences. The statement was made to suggest that it is worth paying a bit more if what we actually get is better.

I was taken aback. I have never seen any evidence to support this conclusion. Would anyone care to offer quantitative support for the proposition — or against it?

Paul Levy is the President and CEO of Beth Israel Deconess Medical Center in Boston. Paul recently became the focus of much media attention when he decided to publish infection rates at his hospital, despite the fact that under Massachusetts law he is not yet required to do so. For the past three years he has blogged about his experiences in an online journal, Running a Hospital, one of the few blogs we know of maintained by a senior hospital executive.

The Massachusetts Connector: Success or Just a PR Coup?

Oct 11, 2010• 13

By ROGER COLLIER

With the passage of insurance exchange legislation in California, and the release of a template for state exchange statutes by the National Association of Insurance Commissioners, many state eyes are turning towards the only existing exchange comparable to that required by PPACA: Massachusetts’ Connector.

The Connector, which offers Commonwealth Care subsidized coverage for those with incomes below 300 percent of FPL but not eligible for Medicaid, and Commonwealth Choice private plans for other families and individuals and small employer groups, has been touted as a major success by current and former Commonwealth officials and many national reform advocates.

But, after four years of operation, just how successful has the Connector really been? Has it simplified health plan choice and enrollment, increased the number of insured, reduced marketing costs, created competition, or driven down premiums? It turns out that the answers are far less positive than the Connector’s boosters have admitted.

HAS THE CONNECTOR SIMPLIFIED PLAN SELECTION AND ENROLLMENT?

For some, at least.

For the 33,000-enrollee unsubsidized CommChoice program the answer is yes. Health plan selection and enrollment for the seven plans (with six levels of benefits each) is directly available via the Connector website, with simple well-designed screens and navigation, and easy comparison of alternatives. Even so, only half of thepost-reform non-subsidized insured have chosen coverage via CommChoice.

Massachusetts Update

Aug 10, 2010• 29

By PAUL LEVY
Here is one of my occasional updates on theMassachusetts scene, for people looking for hints as to the kind of issues that might arise nationally as health care reform is implemented.

I have written several times about the ongoing saga between the state administration and the health care insurers in the state concerning premiums for small businesses and individuals. Over the last several weeks, several insurers have reached settlements with the Division of Insurance. At least one has not and has prevailed at the appeals board because the rates forced upon it by the state were not actuarially sound. Where settlements have been was reached, they were not based on actuarial principles: They was based on a desire to get past this impasse and provide some stability to customers.Continue reading…

Contradictions in Massachusetts

Jun 28, 2010

By PAUL LEVY

I have written before
about the strange things going on in the Massachusetts health care
insurance market. For those from out of state, here are some quotes
that will give you a sense of the contradictions in the public policy
arena.

They are, respectively, from two stories that appeared on
the same day in the Boston Globe:
"Rate
cap for insurer overturned" and "Officials
give up cutting health perks."

(1) An insurance appeals board yesterday overturned the state’s
cap on health premium increases for small business and individual
customers covered by Harvard Pilgrim Health Care . . . [finding] that
rate increases Harvard Pilgrim initially sought in April are
reasonable given what it must pay to hospitals and doctors. That ruling
trumped the Insurance Division’s earlier finding that the requested
increases were excessive.

(2)
The state’s public employee unions won a major victory this week when
the Legislature abandoned efforts to allow cities and towns to trim
generous health care benefits enjoyed by thousands of municipal
employees, retirees, and elected officials.

You can read
the rest and related stories, but what is most disturbing is that the
spirit of cooperation and compromise that existed when Massachusetts
approved its health
care reform law in 2006 has broken down. Part of the reason is
that commitments made at that time have not been delivered upon. For
example, the state had promised to lift Medicaid payment rates to
something closer to the cost of delivering that service. Once the
economy sank and state budgets were stressed, that was not possible.
This left providers needing to collect more of their income from private
insurers.

Dislodging the anchor

May 21, 2010• 3

By PAUL LEVY

A well-established technique in negotiation is to “set an anchor.” The
idea is to be the first person to put out an offer in a negotiation in
which price is the main issue. Many people think, incorrectly, that you
are better off if you let the other party make the first offer. But,
no. An anchor, once set, has a powerful impact on the negotiation,
causing the final price to settle in its vicinity — even if the anchor
has no substantive basis.

I fear that we are seeing this phenomenon happening in Massachusetts. Many of you have followed our
current controversy regarding insurance rates for individuals and small
businesses. Lots of people with these kind of insurance policies found
themselves with large premium increases this year.