Christy on the Issues: Health Care

Health Care Plan

This past year, Massachusetts enacted Health Care for All legislation, an innovative, first-of-a-kind law requiring all Massachusetts residents to have health insurance.

The next Governor will be responsible to make sure that this law provides affordable coverage for uninsured residents, while avoiding a potentially huge revenue shortfall.

Leadership can be defined as the courage to identify a problem and to offer a solution.

Two problems face the next Governor, each of which will threaten our efforts to provide affordable health care for all:

1. If the costs of health care in Massachusetts continue to escalate at over 10% per year, the low cost insurance will not be affordable for very long, and the insurance will become a staggering cost to the State budget.
2. Simultaneously, the funded reimbursements by the federal government for the Medicare and Medicaid programs are expected to be reduced. This will significantly increase non reimbursed costs of the program and directly impact the cost of health care insurance and the State budget in Massachusetts.

The next Governor has two choices. Wait until the two events occur and the system becomes a major financial burden… or take action now to reduce the costs of health care in Massachusetts.

Massachusetts has the highest cost of health care in the United States, equivalent to over $9,500 per year for each resident of the state. Having insurance for everybody is very important, but it does not confront the annual cost increases in health care.

The primary causes for escalation of health costs are the following:

1. Costly, cumbersome administrative procedures… While casual observers argue that we could reduce the cost of administration by computerizing the system, they are technically correct but naïve… The real cost of administration is driven by the complex requirements imposed by health insurance providers, including Medicaid, Medicare, and the archaic maintenance of proper medical records.

1. Unnecessary testing and medical procedures… The primary reasons for this are doctors’ fear of malpractice suits, the hospitals’ financial incentives for additional testing, and doctors who own medical equipment.
2. Fraud… Countless health care claims are paid to people who bill for services never rendered and products never delivered. Erroneous payments are estimated at over 10% of health care cost. [many many bills have mistakes as well, which is not fraud but still adds significantly to the costs]
3. Lack of preventative care… 80% of our health care costs are associated with chronic diseases. The availability of preventative care could result in major reduction to these costs.

The insurance companies and the hospitals helped to formulate the affordable insurance for all program; but we should not expect them to provide the leadership to reduce costs, as it is not in their interest to cut into their own profits. The government, executive and legislative branches, must take the lead in Massachusetts because the  current system is structured to provide for a free and competitive market for health care services and products. A free and competitive market has multiple service providers, multiple insurers, and market prices which track actual costs and reveal unnecessary and excessive costs.  A systematic change is required to transform the existing culture that has had no accountability to the customers it serves and has contributed to health care costs becoming unaffordable to individuals, families and the state.

1. Our administration will do the following:
2. Immediately initiate tracking two markers to determine whether Health Care for All is becoming unaffordable. These markers are the cost of health insurance to major subscribers and the Sate expenditures to support this program. We will report these results to the public and legislative leaders.
3. Appoint a separate commission to prepare recommendations for reducing the administrative burdens on hospitals and doctors. This commission will be made up of administrative efficiency, computer, software experts and hospital administrators who can identify how to change the system to make it user friendly, automated and cost effective.
4. Appoint a separate commission made up of doctors to recommend standard testing protocols for treatment and protocols for decisions on surgery or other invasive procedures. Provide and identify potential changes in the legal system to allow doctors to follow appropriate protocols without fear of malpractice.
5. Appoint a separate commission on fraud. This commission will review U.S. government reports on fraud and assess risk areas. It will identify key areas of fraud in the Massachusetts health care system and recommend control and enforcement strategies. There has been significant research work done in this area, but no one is addressing the problem.
6. Direct the Department of Health to make as a top priority the prevention and control of chronic diseases, including diabetes, heart disease and cancer, which make up about 80% of health care costs. This initiative will include a detailed review of the Care Coordination Initiative in Vermont. This Vermont initiative considers offering support services to assist patients and doctors providing better treatment of chronic diseases at lower cost.
7. Prepare a plan to competitively bid the Medicaid services.
8. Prepare a detailed financial statement for the “Free Care Pool”, identifying all revenue sources, estimated at $1 billion per year. Identify which hospitals are the recipients of this fund. Identify options for this program that would result in lower costs, and determine whether these funds are being utilized to build facilities and hospital capacity that is redundant.
9.  Aggressively pursue the Mihos/Sullivan plan to lower health insurance costs for employees of cities and towns. The proposal allows local municipalities at their option to join the State’s health insurance plan. Any city or town with concurrence of a municipal union can join the program and realize the savings from bulk purchasing. The proposal would not require coalition bargaining and the cost sharing between the city or town and the union would be negotiated at the local level.

Massachusetts has accepted the challenge to be the national leader in providing health care insurance coverage for all. Let us now be the national leader in reducing the cost of health care.