Transcript The Massachusetts Model of Health Reform in Practice - Mass-Care

The Massachusetts Model of
Health Reform in Practice
And the Future of National Health Reform
http://masscare.org/massachusetts-health-reform-in-practice/
Massachusetts Health Reform (“Chapter 58”)
April 12, 2006
Patient Protection and Affordable Care Act
March 23, 2010
Presidential Elections
November, 2012
Origins of Mass. Health Reform
• 2006 expiration of Massachusetts Medicaid
Waiver (Section 1115).
• Bush Administration opposition to state’s ‘Free
Care Pool’ payments: culture of insurance.
• Two binding ballot initiatives for ’06 election.
The ‘Free Care Pool’
• Hospital & health center reimbursement for care of
uninsured, 0 to 200% of poverty line.
• 452,000 users in FY2006 (659K uninsured).
• $710 million in FY2006 (Medicaid: $10 bill).
• Covers all services available at hospitals, health
centers, no cost-sharing, not considered insurance.
Structure of Mass. Health Reform
• Commonwealth Care: free subsidized insurance from 0
to 150% of poverty; sliding subsidies from 150% to
300% of poverty.
• Commonwealth Choice: ‘exchange’ for individual and
eventually small business market (40K users currently).
• Individual Mandate: adults above 150% of poverty
must demonstrate insurance coverage or pay a fine
($200 to $1,200) on tax forms.
• Employer Play-or-Pay: with 11+ employees, must
cover 1/4th of employees and offer to cover 1/3rd of
premium costs, or pay $295/per worker per year fine.
• No New Revenue: financed from existing free care
pool funds, federal matching funds, private payments,
and limited cash from state’s General Fund.
• No Cost Control: limited to access for political reasons.
Impact on the Uninsured
12%
11.3%
10.3%
10.4%
Health
Reform
10%
9.3%
9.2%
8.5%
Census/ACS
8%
7.4%
Census/CPS
6.2%
6%
5.5%
6.4%
5.7%
5.4%
4.4%
5.6%
5.3%
4.4%
State/CSR
4.4%
State/Urban Inst
4%
4.1%
4.2%
4.3%
CDC/BRFSS**
2.6%
2%
2.7%
1.9%
0%
2004
2005
2006
2007
2008
2009
2010
Notes on the Uninsured
• Most commonly cited estimates are
impossibly low: state survey finds less than
144,000 uninsured in fall 2008, but 150,000
report they are uninsured for whole year on
tax returns.
• Most reliable surveys show uninsured
population cut in half, around 4-5% of pop.
• State reports that 4/5ths of the newly insured
received public subsidies – majority of these
were eligible for free care prior to reform.
Impact on the EmployerSponsored Coverage
80%
76%
75%
70%
77%
72%
70%
69%
68%
65%67%
63%
60%
63%
60%
55%
57%
54%
50%
2001
2002
2003
2004
2005
2006
2007
2008
% of Employers Offering Workplace Coverage
% of Employees Buying Workplace Coverage
2009
2010
Impact on Employer Coverage of
Low-Income Residents
70.0%
59.4%
60.0%
50.0%
54.2%
55.6%
46.1%
42.4%
40.0%
30.0%
26.2%
25.3%
21.8%
20.9%
17.2%
20.0%
10.0%
0.0%
2005
2006
2007
Employer-Sponsored Insurance
2008
Public Insurance
2009
Access to Regular Source
of Care Improved
Massachusetts Residents, Ages 18-64, Reporting a Regular Source of
Care, Three Sources of Data
94.0%
92.1%
91.0%
92.0%
89.0%
90.0%
89.9%
88.0%
88.0%
87.0%
86.0%
90.0%
88.3%
87.8%
87.7%
2007
2008
86.3%
85.4%
84.0%
82.0%
2005
BRFSS
2006
Blue Cross/Urban Inst
2009
State/Urban Inst
2010
Cost Barriers to Care Declined
Massachusetts Residents, Ages 18-64, Didn’t Receive Needed Care
Due to Costs, Three Sources of Data
35.0%
29.0%
30.0%
26.0%
27.0%
25.0%
20.0%
16.3%
15.0%
11.6%
11.7%
10.0%
9.9%
8.6%
5.0%
7.8%
6.9%
7.9%
7.6%
2009
2010
0.0%
2005
2006
BRFSS
2007
Blue Cross/Urban Inst
2008
State/Urban Inst
From Safety Net Care to PubliclySubsidized Private Insurance
Co-Payments by
Safety Net Plan
Income Eligibility
Annual Premium
(for lowest cost plans)
Free Care Pool
0-200%
poverty
Commonwealth Care (2011)
0-100%
poverty
100-200%
poverty
200-300%
poverty
$0
$0
$0 - $468
$924 $1,392
Primary Care Visit
$0
$0
$10
$15
Specialist Visit
$0
$0
$18
$22
Inpatient Care
$0
$0
$50
$250
Outpatient Surgery
$0
$0
$50
$125
Emergency Room Visit
$0
$0
$50
$100
$1-3
$1-3
$10
$12.50
Preferred Brand Drugs
$3
$3
$20
$25
Non-Preferred Brand Drugs
$3
$3
$40
$50
$200
$200
$500
$800
$0
$0
$750
$1,500
Generic Drugs
Maximum Prescription Co-Pays
Maximum Other Co-Pays
Patient Story on
Mixed Access Impact
“Under Free Care I saw doctors at Mass General and
Brigham and Women’s hospital. I had no copayments for medications, appointments, lab tests or
hospitalization; the care I received gave me a light at
the end of the health care nightmare tunnel...Under
my Commonwealth Care plan my routine monthly
medical costs included the $110 premium, $200 for
medications, a $10 appointment with my primary
care doctor, and $20 for a specialist appointment.
That’s $340 per month, provided I stayed well.”
Kathryn, Boston MA (2008)
Primary Care Wait Times Rise
With Increased Demand
Average Wait Time for New Patient Appointment
53
55
52
50
50
47
48
Days
45
44
40
35
33
30
25
2005
2006
2007
2008
Internal Medicine
2009
Trendline
2010
2011
Decline in Primary Care Practices
Accepting New Patients
Percentage of Practices Accepting New Patients
70%
66%
64%
65%
58%
60%
55%
51%
49%
50%
51%
45%
44%
40%
2005
2006
2007
2008
Internal Medicine
2009
Trendline
2010
2011
Underinsurance Rises:
Primarily at Small Employers
Private Insurance Plans with
High-Deductibles ($1,000+)
12.0%
11.3%
Share of Medical Costs Covered by Small
Business Employees’ Insurance, 2007-2009
100%
8%
90%
80%
10.0%
15%
34%
70%
28%
60%
8.0%
50%
6.1%
40%
6.0%
46%
30%
4.0%
50%
20%
3.4%
2.0%
10%
16%
0%
5%
0.0%
2006
2007
2008
≤ 70%
70.1% - 80%
80.1% - 90%
90.1% - 100%
Out-of-Pocket Barriers Decline
Change in % of Families with High Out-of-Pocket Spending
25%
21.8%
20%
18.4%
18.0%
15%
10%
9.4%
5%
7.3%
6.7%
0%
2006
2007
Out-of-pocket costs 5% of income or more
2008
2009
Out-of-pocket costs 10% of income or more
Impact on Total Household
Spending on Health Care
Change in Percentage of Families with High Total Health Spending
25%
20.2%
20%
15%
14.2%
10%
5.2%
5%
3.6%
0%
Spent 10%+ of income on health care
2000
Spent 25%+ of income on health care
2009
Impact on Medical Debt and
Medical Bankruptcies
70%
59.3%
60%
52.9%
50%
40%
30%
20%
19.1%
19.1%
19.5%
20.3%
10%
0%
Problems paying medical bills
Paying medical bills over time
2006/07
2009
Bankruptcies related to
illness/medical bills*
Emergency
Department Use
Trends in Emergency Department Use (Indexed to 2004)
115
113
113
111
111
109
107
109
107
105
107
102
103
104
100
101
99
101
97
95
2004
2005
2006
Preventable/Avoidable ED visits
2007
Total ED visits
2008
Financial Crisis for Safety Net
• Contrary to expectations, patient volume at safety net
providers has gone up since health reform:
– 31% growth in patients receiving care at community health
centers
– Ambulatory visits to safety net hospital clinics grew at 2X the
rate of visits to non-safety net hospital clinics
• Reimbursement rates at safety net hospitals are down.
Promised Medicaid rate increases reversed through budget
cuts and health safety net funds falling short, creating a
serious financial crisis.
– Unsuccessful lawsuit by Boston Medical Center and six
community hospitals for Medicaid underpayments in 2009.
– “Soft landing” funds for two largest safety net hospitals run out
in 2010.
– Cambridge Health Alliance forced to close six clinics and shut
down all inpatient services at one of its hospitals, seeking a
buyer or a merger.
Rise in Premiums Has Accelerated,
Growth in Provider Administration
• Employer premium growth accelerated in Massachusetts
after health reform compared to other states:
– For single coverage: premium growth was 5.9% higher in three
years after reform for all employers, 6.8% higher for small
employers
– For family coverage: average annual premium growth was
premium growth was 1.5% higher in three years after reform for
all employers, 14.4% higher for small employers
• Small employer premiums due in part to merger of
individual and small group markets in Mass.
• Job growth in Mass. health care industry almost double
that of nation after reform, slower than nation prior to
reform. Almost all of difference accounted for by growth in
administrative occupations in Massachusetts, which grew
by 18.4% over three years (compared to 8.0% nationally).
Concept of “Shared
Responsibility”
“Massachusetts mandated shared
responsibility… The costs of expanding
coverage to all are considerable… the only
way to ensure the sustainability of that
expense over the long term is through
universal responsibility, spreading the cost
broadly among all sectors of society:
individuals, government, and employers.”
Bruce Bodaken
President and CEO, Blue Shield of California
Measuring Shared Responsibility
Change in Health Care Spending by Payer, Before and After Reform, 2005-2007
30%
25%
20%
15%
10%
5%
0%
21%
22%
Employers and Union
Plans
Individuals
25%
State Government
28%
Federal Government
Measuring Shared Responsibility
Change in Health Care Spending by Payer, Before and After Reform, 2005-2007
30%
25%
20%
15%
10%
5%
0%
21%
22%
Employers and Union
Plans
Individuals
28%
25%
State Government
Federal Government
Incearse in Health Spending
as Percentage of Household
Income
Increase in Health Care Spending After Reform as a Percentage of Family
Income, by Income Quintiles, 2005-2007
4.6%
5%
4%
3%
1.7%
2%
1.4%
0.4%
1%
0%
-1%
-2%
-1.5%
Bottom 20%
($0 - $20k)
Second 20%
($20k - $41k)
Middle 20%
($41k - $66k)
Fourth 20%
($66k - $111k)
Income Quintiles: Bottom to Top 20% of Income Earners
Top 20%
($111k+)
Mass. Health Reform Has Had
Positive Impacts, But Is
Unsustainable
“If we have double-digit increases (annually in
costs), health reform is not sustainable.”
Jon Kingsdale
Executive Director, Commonwealth Connector
“If we do not constrain healthcare costs, the
system we worked so hard to create and
implement will collapse..”
Therese Murray
Senate President, Massachusetts Legislature
40%
200000
180000
160000
140000
120000
5%
100000
80000
60000
40000 3,654
20000
0
8%
0%
31%
31%
177,136
Commonwealth Care Enrollment
Q1 '09
Q2 '09
Q3 '09
Q4 '09
178,686
% Unemployed
9%
152,571
5%
Q2 '11
Commonwealth Care Enrollment and Mass. Unemployment Rate
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Massachusetts
Unemployment
42%
Q1 '11
42%
Q4 '10
32%
42%
Q3 '10
33%
43%
Q2 '10
29%
Q4 '08
60%
Q1 '10
28%
Q3 '08
20%
23%
Q2 '08
25%
Q1 '08
Q4 '07
0%
Q3 '07
Q2 '07
20%
Nov '06
Dec '06
Jan '07
Feb '07
Mar '07
Apr '07
May '07
Jun '07
Jul '07
Aug '07
Sep '07
Oct '07
Nov '07
Dec '07
Jan '08
Feb '08
Mar '08
Apr '08
May '08
Jun '08
Jul '08
Aug '08
Sep '08
Oct '08
Nov '08
Dec '08
Jan '09
Feb '09
Mar '09
Apr '09
May '09
Jun '09
Jul '09
Aug '09
Sep '09
Oct '09
Nov '09
Dec '09
Jan '10
Feb '10
Mar '10
CommCare Enrollment
State Has Been Gradually Rolling
Back Coverage to Control Costs
Share of Commonwealth Care Enrollees Paying Premiums
50%
49%
Individual Mandate Also
Unsustainable, Mass. Has Raised
Affordability Thresholds
Percent of Income Deemed Affordable for Health Premiums
(Families of Three, 2007-2011)
12.0%
11.0%
10.0%
9.5%
8.0%
7.5%
5.9% 6.0%
6.0%
4.0%
8.0%
7.0%
5.6%
4.9% 5.0%
2007
2011
3.3%
3.4%
2.0%
0.0%
151% of
Poverty
201% of
Poverty
251% of
Poverty
301% of
Poverty
401% of
Poverty
500% of
Poverty
Takeaway Points for National
Health Reform (PPACA)
1.
2.
3.
4.
5.
Mass. reform affected the insurance status of about 4-5% of the
population (half the previously uninsured), and improved access for
about half of those. The impact in other states will vary depending on
their existing safety net programs, but focus on access outcomes – not
insurance coverage!
National reform is unlikely to have a significant impact on outcomes that
predominantly afflict the insured population, including emergency
department visits, medical debt, and health-related bankruptcy.
While safety net providers handle most of the increased demand for care
that results from reform, Massachusetts and national reform rely on cuts
to public health care programs that can threaten the viability of those
providers. This increased demand will also increase strain on primary
care provider networks.
Most of the population will be relatively unaffected by health reform,
but will continue to experience the health care crisis of unaffordable
premiums and high barriers to care. (They also vote!)
This model of reform defers serious action on cost control. Without
addressing the systemic causes of our high costs – which has thus far
proven politically impossible – access gains will face retrenchment, or
will force us to sacrifice spending on other basic social goods.