Massachusetts Faces the Bill for Covering the Uninsured

Yesterday, the New York Times featured front page coverage of Massachusetts’ health care reform.  The effort was lauded as “boldest state health care experiment in American history” for reducing our uninsured rate to 1/6 of the national average.  The article also noted that there is currently a commission reviewing options for payment reform, and that the state can only afford near-universal coverage if health care spending increases are moderated.    


Yesterday’s Boston Globe had an op-ed piece by Jim Mongan, the CEO of Partners, who said four efforts would help us control health care spending.

1)    Transition payment away from “fee for service.”   Of course, this won’t be easy to do – since much of our delivery system is fragmented and providers will have a difficult time accepting (and dividing up) bundled payments.  The Massachusetts payment reform commission is taking this seriously, and the local Blue Cross Blue Shield plan has an alternative contract that has a “standard global budget,” otherwise known as capitation.  I’m enthusiastic that this is a real key to reining in health care inflation, but there are a lot of devilish details to work out. I’ll talk in a future blog about some critical issues in the conversion from “fee for service” to some type of bundled payment.

2)    Better use of healthcare information technology.  There is a real debate about the impact of HIT on costs, and an op-ed in the Washington Post  points out the lack of empiric evidence that electronic medical record really lower cost or improve quality.  I can’t imagine practicing in an environment without an EMR, but I wouldn’t want to count on the associated cost savings.

3)    Disease management for high risk patients.  Medicare’s randomized control trials yielded encouraging results in terms of quality, but disappointing results in terms of net savings.  We need to get better at identifying patients for disease management programs, and make these programs much less expensive.

4)    Comparative effectiveness research.  I’ve covered this issue in an earlier blog. We should clearly invest in research in comparative effectiveness, but the cost-savings will depend upon how we use the results.

I’d like to add a fifth suggestion to help control medical costs, which is outside of the medical care realm.  We should invest in improving the overall health of our population.    Let’s be honest, we smoke too much (17% of adults in Massachusetts – fewer than the national average but still far too many), we don’t exercise enough, and we weigh too much.  We need to rethink tax and farm subsidy policies to discourage tobacco use and extra calories on a national level.  On a state level, we need infrastructure investments in “built environment” and zoning changes to make it easier to exercise.  As spring is arriving, I’d like to see some shovel-ready bike paths. And of course hospital executives would like to see lower spending on double-wide beds.


Payment reform really will be key, though – and there are two good times to do payment reform. The first is when there is a surfeit of “new money,” so no one has to lose. The second is when most providers believe that the current system is unsustainable, and are fearful that if they don’t come to the table they might lose even more.   That’s where we are now – so it’s a good time for some real payment reform.