In the four years since I assumed the role of Health and Human Services Secretary of Massachusetts, residents of the Commonwealth have witnessed significant changes in the health care landscape. We have successfully implemented health care reform to achieve 98% coverage of all state residents; the Affordable Care Act was signed into law by President Obama on March 23, 2010; and the state has accomplished near universal coverage of all children – an estimated 99.8%, including 20,000 more children enrolled in MassHealth during the past year alone.
Yet significant challenges persist that are fundamental to the health care delivery system in Massachusetts, namely, it operates in a high-cost, fee-for-service environment, rather than as a model that encourages coordinated, patient-centered and cost-effective care. A leading priority of the Patrick-Murray Administration during its second term is to address systemic health care costs in Massachusetts. To achieve meaningful change in this arena, the enduring elements of health care costs must be tackled in a comprehensive way. Integral to achieving this goal is putting the right tools in place so that the state can ensure success of this key agenda item.
Last August, the state’s Legislature enacted — and the Governor signed — what is commonly referred to as the small business health care cost bill, or Chapter 288, which further empowers the state’s Division of Insurance to regulate insurance rates. This law does even more than regulate rates, however, and will facilitate the state’s ability to contain health care costs for small businesses, which in turn will lower costs for individuals and families in the years to come. While regulating rates is essential to achieving lower costs, the long-term solution is to shift the health care payment and delivery system from one that rewards the volume of care to a system that rewards the value of the care provided.
The Patrick-Murray Administration supports the formation of accountable care organizations (ACOs) that will gradually accept more and more responsibility for the overall care of their patients. By forming ACOs, providers are held accountable for a patient’s care — primary care physicians and specialists alike work in an integrated and coordinated environment, rather than in isolation and by charging a fee for each individual visit. This is important because today we know much more about preventing diseases like diabetes and heart attack. We know how to prevent complications after surgeries such as joint replacements. Providers achieve the best outcomes for their patients when they communicate with each other, share important information, and engage the patient. This is the type of care we want to support.
Bundled payments, paying a group of doctors within an integrated practice for services and costs related to the treatment of a particular condition, rather than paying each provider piecemeal, show promise in holding down costs while improving coordination. With a bundled payment, physicians can also assume the responsibility of treating a chronic condition such as asthma or diabetes, and therefore provide whatever care is most appropriate for the patient. This model encourages more coordinated care in the interest of treating a condition that requires patient education, adherence to medicines, and regular monitoring of clinical tests.
A more integrated system — in Massachusetts or any state — can only be accomplished if there is close coordination with the federal government, which provides payment for about 50% of the population. The newly-formed Center for Medicare and Medicaid Innovation (CMMI) is designed to authorize the participation of Medicare and Medicaid in a more coordinated model and to support states’ implementation of new payment methods and information technology that supports coordinated care.
While it is apparent that many providers are beginning to organize themselves into integrated care organizations and payers are rapidly beginning to move toward alternatives to fee-for-service payments, it is important that the state play an active role in helping to ensure that this evolution develops in a way that truly lowers costs while improving the quality of care. To do this we must empower physicians and patients to be the stewards of the health care system. The Patrick-Murray Administration will propose legislation in the coming weeks that will serve to carefully guide the development of payment reform but will leave providers and payers free to use their own creativity to create new models of integration and payment reforms that best serve their patients and customers.
The federal health care reform law, the Affordable Care Act (ACA), contains many provisions that will help all states reform the payment and delivery system.
Massachusetts has a distinct advantage in achieving health care payment reform – the Commonwealth is already well poised to apply the state’s existing medical home model to support primary care as a strong base for accountable care organizations. Current medical practices that are organized as ‘medical homes’ – where the patient is at the center of coordinated care — will gradually phase in the use of bundled payments for certain conditions. Physicians have shown their willingness to participate in reforms and we are currently developing plans to solicit the health care community’s vision for the shape and structure of ACOs. Similarly, with the implementation of global payment pilot programs, providers and payers have demonstrated that they are ready to accept the challenges to improve care while curbing the growth of health care costs and will be able to pioneer the efforts needed to reform the health care delivery system.