Tackling Health Care Costs

Dave Denison has an excellent article in the Summer issue of CommonWealth magazine on the lack of attention paid to controlling costs in last year's landmark health care reform law. It's becoming apparent as the state works to implement that law that it does little to address the rising costs of health care and there's little political will to change the status quo, even as cities and towns, not to mention private sector employers, struggle to keep up with those costs.

The cost argument at the time, if I recall correctly, was that if we were able to achieve universal health coverage, costs would magically lower themselves as hospitals would no longer have to cover the costs of care for the uninsured and people who would under other circumstances end up in the emergency room would now be able to afford to go to a primary care provider before a health situation worsened (and therefore became more expensive).

Of course, if that were the case, Massachusetts should have already had low health costs. Even before the new reform law took effect we were already insuring 90% of the population, which was enough to put us in the top ten, tied for fourth with five other states. If a low percentage of uninsured individuals was enough to keep costs down, we should be among the lowest cost states, not the highest.

Denison notes that the group nominally in charge of reducing costs is the state's Quality and Cost Council, but according to the article, they are focusing on creating a public database of local health provider costs and, presumably, outcomes. That, however, is still in the brainstorming stages and won't see the light of day for another two years according to council member Charlie Baker. I for one remain unconvinced that individuals would use such a tool to comparison shop for doctors or hospitals. Baker points out that the real benefit would be in third parties, such as insurance companies, legislators or journalists who would use such a database to ask tough questions of care providers that were out-of-step with the rest of the market. It seems to me, though, that we're relying on those very people right now to ask these questions, and they don't seem to have the stomach to come up with answers. A database would be nice -- more sunshine on these matters would be a good thing -- but don't our legislators have the power to compel providers to give them this information now without linking it to a public database? Don't insurance companies have the incentives and the leverage to get this information from hospitals? Why do we have to wait for the state to put together a big web-enabled database that we can search ourselves if the savings are going to come from experts using that data anyway? Could we not get those same results just by commissioning a study of current costs and investigating the differences between providers?

Guest Post: Health Care Panel Report

Guest post by Mrs. sco

Last week, The Boston Foundation held a panel to discuss the release of its health care report, The Boston Paradox: Lots of Health Care, Not Enough Health. TBF President Paul Grogan began by sounding a warning bell: he forecast a long-term decline in health due to skyrocketing costs, an aging workforce, and a rise in chronic illness.

Wendy Everett, President of New England Healthcare Institute, presented the report. She started out by describing Boston as a healthcare paradise – lots of jobs in the industry, lots of doctors and world-class institutions, average life expectancy of just under eighty years. But she pointed to signs of trouble in paradise, including increases in healthcare costs outpacing income, a decrease in fitness, and an obesity rate of over 20%. (The obesity statistics were the most alarming part of her presentation – go look at the CDC's PowerPoint presentation, which shows the fattening of America from 1985 to 2005. There is currently no state in the Union where less than 15% of the population is obese. 46 states have an obesity rate of 20% or more.)

The rest of the discussion was devoted to ideas for improving the bleak outlook. All of the panelists emphasized public health. Public health spending has dropped by 12.5% over the past six years, while healthcare spending has risen by 25%. Meanwhile, within healthcare spending, we spend 88% of our budget on access to care when only 10% of our health is influenced by access to care. We spend 7% of our budget on behavior and environment, which accounts for 50% of our level of health.

The common theme was that public health isn't just about improving access; it's about improving environment and behavior. And not just in ways that you might think, encouraging people to get preventative medical care and to be physically active.

In fact, Dr. Judy Ann Bigby, the Secretary of Health and Human Services for the Commonwealth, discussed gun violence, the lack of grocery stores in low-income communities, and the impact of race on health outcomes. (Dr. Bigby's alarming statistic: a college-educated black woman with regular prenatal care is likely to have a worse outcome than a high-school educated white woman with minimal prenatal care.) Judith Kurland, Mayor Menino’s Chief on Staff, picked up on some of these points. She talked about programs like urban gardens, bringing farmer's markets to low-income neighborhoods, encouraging use of food stamps – which wouldn't cost Massachusetts a dime because it's federally funded – and making school lunches palatable for kids. She also discussed Mayor Menino's initiative to plant 100,000 trees (actually, she corrected herself and said he would "cause them to be planted") in Boston. That appears to be an environmental issue, but dig just a tiny bit deeper and it's a public health issue too – the rate of asthma has risen dramatically in the past decade or two. Similarly, Dr. Barry Zuckerman, Chief of Pediatrics at Boston Medical Center, talked about a medical-legal partnership that, among other things, helped people resolve disputes with their landlords. Again, it doesn't seem to be related, but if you're living in a dangerous environment because your landlord won't fix the broken window or the rusty water pipes, your health will suffer.

The takeaway message for me was: racial and socioeconomic disparities, environmental problems, issues with public housing, education, and even bureaucracy are obstacles to health. Containing costs is important, but investing now to address all the interrelated issues may pay off more in the future.

State Health Insurance Should be Optional

There's one small problem with the healthcare compromise that Scot Lehigh proposes in his column today. Here's how the Lehigh proposal would work:

Cities and towns would be allowed to raise meal and lodging taxes, subject to two conditions. First: Before they did so, the locality would have to enroll in the state [health] insurance program.
[...]
Second: Local voters would have the final say on the proposed tax increases, voting on them just the way they currently do on proposed Proposition 2 1/2 overrides.

So, in order to raise any meal or lodging taxes, communities would be forced into the GIC. The only problem with this, is that some communities may already be in insurance programs that are slightly lower-cost than the state's. In order for them to be able to raise revenue through the meals tax, they'd end up with a more expensive health plan for their employees. That does not seem like a good deal. Communities should not be forced to join the GIC if they're already doing better for themselves. It may be true that the GIC's rates will grow more slowly, so that eventually it will be lower cost than any program a municipality might have, but there's no reason to force adoption of the state plan now if it's not going to be cheaper until some point in the future.

New Wrinkle in GIC Propsoal

Casey Ross over at the Boston Herald's Daily Briefing noted tonight that House Speaker Sal DiMasi is interested in allowing municipalities to join up with the state's GIC Health Plan without first negotiating with unions. The bill currently before the legislature, endorsed by Governor Deval Patrick, would require cities and towns to collectively bargain with their employees before changing their health plans, as a compromise to win over skeptical unions. DiMasi's proposal would obviously make it much easier for localities to take advantage of the state's group health insurance as they would not have to do it on a union by union basis.

Now, I had thought last week that the votes wouldn't be there if the collective bargaining language wasn't included. With DiMasi on board, however, that becomes a real possibility. There's no reason to think that DiMasi couldn't get his version of the bill through the House -- otherwise he likely wouldn't have floated the idea. The next question is whether new Senate President Therese Murray supports removing the collective bargaining language. If she does and can get it through the Senate, all that remains is whether the change is acceptable to Governor Patrick.

I would have to imagine that he would sign a bill that did not include the collective bargaining language. First, Governor Patrick has hitched his wagon to his package of municipal reforms and he needs a policy victory. Stymying a stronger version of one of his proposals would be a serious blunder, even if it means upsetting public employee unions. They're already upset with him over his proposal to force underperforming pension funds to be taken over by the state. In any case, this could also be a good opportunity to compromise with DiMasi. Would the speaker soften his stance on local option taxes or closing the telecom loopholes in exchange for Patrick taking the heat from the unions? If so, the cities and towns of Massachusetts would benefit.

Lehigh: Perfect is Enemy of the Good

The Boston Globe's Scot Lehigh attacks today the measure that would allow municipal employees to enter into the state healthcare system because the bill before the legislature gives public employee unions too much power to negotiate the terms of the deal in each community. His problem is that the language of the bill would let unions "either veto a locality's attempt to join or exact other concessions as the price of their okay." Let's leave aside the idea that wanting some other compensation from an employer who is going to reduce your benefits is some sort of criminal impulse because Lehigh does not focus on the merits of allowing union input, but rather uses his column as a chance to chide lawmakers for putting the collective bargaining language in. In particular, he mocks Rep. Rachel Kaprielian (D-Watertown) for using the word "consternation" as a euphemism for "we can't pass it without coalition bargaining included." Lehigh might be forgiven for skipping that detail if he were writing only about the policy implications of the bill, but most of his column is about the politics of the measure. As such, it seems to me that the biggest question is whether this bill could pass over the objections of the union-friendly members of the Legislature. If the answer is no, then it's a good thing that language is in there so that we have some action taken rather than another legislative stalemate.

For the life of me, I can't figure out why some members of the media would rather see a big fight that accomplishes nothing than a step in the right direction. Could it be because compromise doesn't sell newspapers?

Update: Charley on the MTA has more at BMG. In hindsight, I think I'm being a little hard on Lehigh. It is not his job, after all, to count votes. Still, I think that he might better use his position as a columnist to whip up support for his position rather than use it as another excuse to bash the legislature. He ends his column wondering if this is what one-party-rule has wrought, but I can't see any way that a Republican governor removes this language if the Democratic legislature wants it in.