In September of 2015, AG Maura Healey’s office put out a report noting that Massachusetts has not met their costs in health care cost containment. The report was based on our independent watchdog group CHIA which was part of Massachusetts health care law. CHIA was set up to be clear of any political control to remain an independent auditor of cost containment. CHIA had reported that MA has missed their goals over the past few years and identified health care organizations which seem to be over charging for services.
Massachusetts will miss a self-imposed health care spending target again this year. This warning from Attorney General Maura Healey comes just a few weeks after a state agency announced that Massachusetts failed to keep spending below 3.6 percent last year, as recommended in a 2012 law.
The cost disparity created by overcharging was choking smaller regional hospitals due to lower reimbursement, some hospitals received as low as 40% of reimbursement made to other hospitals for the same procedure. It all came to a head when 1199SEIU became involved as the cash flow crunch started impacting staff at these regional hospitals. The union started to organize a ballot question to place cost controls on hospital reimbursement.
The exact amount private insurers pay per procedure is confidential, but union officials estimate, based on public Medicare reimbursement data, that Mercy Medical Center gets $12,200 to care for a critical patient with asthma and bronchitis, while Massachusetts General Hospital gets $40,000.
…
Advocates for the bill estimate that it would reduce payments to higher cost hospitals, almost entirely those run by Partners Healthcare, by $500 million, of which around half would be distributed among the state’s other hospitals and the rest would go back to consumers through lower premiums. Baystate Health would get an additional $9.6 million a year, according to the union’s numbers. Sisters of Providence would get $11.2 million, and the UMass hospital system would get $8.4 million.
“These reforms would bring much needed relief to community hospitals,” said Jeff Hall, a spokesman for 1199SEIU. “By creating a more balanced payment system in the Massachusetts hospital industry, there’s an opportunity to protect both jobs and services at community hospitals across the state.”
State Sen. Ben Downing, D-Pittsfield, who proposed bill S. 574 to add cost controls noted:
You can’t look into that area without stumbling across the pretty significant disparities that exist from system to system for what both public and private payers pay for services that roughly get the same quality of outcome in dramatically different settings
Enter Charlie Baker, Mr. Health Care.
In his FY 2016 Budget, Baker wanted to stop all those pesky cost control reports, not by taking measures to control costs but rather take CHIA and moved it under his control, removing it’s independence and placing it under the control of the Executive branch. Baker didn’t get his way, Deleo was fine with it but the Senate scuttled the move. Instead a seven member board was created where Baker could push his influence by being able to select three members.
But that wasn’t enough for Baker, this week there was news of a compromise between Baker, Deleo and Rosenberg along with 1199SEIU on the cost disparity. That compromised was quickly passed by both chambers and signed by Baker with little fanfare, and probably for a reason.
The compromise:
Hospitals will still be able to continue to charge exorbitant rates for services, no change there, but a pool of money will be created to provide additional funding to smaller regional hospitals. Where will that money come from? CHIA’s budget, shaving off a third of it’s budget over the next 5 years.
The compromise bill to avert the ballot question would create a new fund with $45 million over five years. The money would be distributed to hospitals in a way that hospitals charging lower prices to insurers would get more money.
The money in the fund — $5 million the first year and $10 million for the next four years — would come from CHIA.
Don’t worry folks as part of the deal Baker is going to create his own commission to review costs at some point to do something or whatever. I think we need an AG intervention because the Governor, House and Senate failed us.
The SEIU gave in too, do they deserve a peice of the blame? What is their rational on this issue? I’d like to hear.
and I did note their involvement here, but from the beginning they were clear that they were trying to protect workers. I was disappointed that a better result with reducing costs didn’t come about with the removal of the ballot question. My personal feeling is that our elected officials are the ones who should be driving policy. if we have to count on unions to make our elected officials accountable then we have a problem.
We have a problem.
They seem to feel mixed about it. The headline says they “praise” the deal but the statement itself talks about this as only a “start” and “first step”.
http://www.1199seiu.org/campaign_for_fair_care_praises_health_care_deal_averting_ballot_question#sthash.4wE3rO1O.dpbs
It seems to me that the union, all things considered, got a pretty good deal for dropping a ballot initiative that would have cost millions of dollars and was still most likely a losing proposition.
This complex issue seems not very well suited for resolution by ballot initiative. Time for our Legislature to act here.
CHIA was only independent since 2012
There was no board overseeing it.
Their spending was increasing.
There were complaints about their fees.
There were rational arguments for bring it back under state control.
Several powerful groups were ambivalent or not happy with them.
So sidelining CHIA, is hardly a conspiracy. If it is, (as you state- Governor, House and Senate are on board) it’s a big one.
If the SEIU gets something out of the ballot question negotiation, how is what they do a problem? Aren’t they supposed to maximize benefits to their membership?
no one has complained that what they produce is flawed, even in your “analysis”.
Who was unhappy with them? The hospitals who refused to provided required data and go fined? Yup, those guys over-charing, they hate the group. Who else? Not even Pioneer has complained about the results of their review. The fact of the matter is there was an independent review which Baker could not control and he’s doing everything he can to weaken the group. if we can’t trust Baker then we need the AG involved.
Is that really something that needs an independent review?
There are so many factors driving up health care costs in MA, it’s hard to know where to start.
Break up Partners (per charley) ? They’re probably the most powerful organization in the state. There’s nothing the AG can do to them. They are party neutral- they own everyone, and threw support behind Baker at a key juncture in 2014. Remember the to-do about the BC/BS board? A who’s who of powerful people in the state.
PS BMG posters can’t paint Pioneer as biased one day and then cite them the next when you agree with them. Pioneer not complaining means they agreed with the methodology and therefore it’s no good and slanted to Republican ideas.
– Yes, if you want to detail why and who’s doing it
– Anti-trust is the AG’s job
– Pioneer was used to reference that all ideologies are generally in agreement. You HAD to know that.
I think you are trying too hard to defend the indefensible.
As long as we have market based healthcare, why would they favor a provider with monopolistic tendencies and a non profit tax status that prevents effective market competition or disruption? It’s the worst of both worlds. A single provider system-so no choice or incentives to drive cost containment, bad for the market so the conservatives are sad. And the result bloats government which makes everyone sad, while screwing over consumers and patients which makes progressive sad.
Like ending the artificial solar cap, this is an area where a reform minded market oriented manager like Baker should be able to excel. I’m surprised he isn’t here.
costing business money? (Just a guess. I don’t know anything).
It’s fruit at the top of the tree. Lots of people waiting to rock his ladder.
The question is always why has no one tried to rein in Partners previously?
It’s that simple.
sure worked out well for her predecessor. Maybe time for a new playbook there.
-Big, bold action?
-Protecting community hospitals?
-Making the ‘big boys’ pay their fair share?
-Taking on powerful constituencies, especially with some big wins?
-Being able to carry a real anti-establishment mantle that is simultaneously deeply populist?
Sounds like the beginnings of a great campaign to me.
Parnters will look impossible to take on or break up until someone finally goes and does it, and then it will have looked really easy in retrospect (it won’t have been, but it will look it).
He didn’t provide links but here’s one with the basic information. health-agency-chief-appeals-to-mass-lawmakers-for-independence
Here is a link to the oversight council’s website: the minutes of the meetings seem to show some concern especially from Administration and Finance about controls on spending at CHIA. Oversight Council Meeting Information
Some information on controversies surrounding CHIA’s assessments and user fees from Paul Levy’s now-defunct blog Not Running a Hospital.
Not mentioned by merrimackguy but relevant: a recent SCOTUS decision that’s now reverberating throughout the whole health IT community. Federal action may be needed to continue collecting data in all-payer claims databases. Supreme Court Strikes At States’ Efforts On Health Care Transparency
Also (as I keep pointing out on this blog) we have to keep in mind Baker’s experience in health care administration and the undisputed success he had with IT consolidation at Harvard Pilgrim. I can see him being skeptical of an independent data collection agency when there are substantial unmet needs in state agency IT. There may also be an argument that the Health Policy Commission serves effectively as an independent agency and would therefore serve as a check on any efforts to politicize CHIA.
I’m not saying that Baker’s ideology and provider lobbying don’t play a role here, but the story’s not as one-sided as johnk is making it.
With transparency, Baker has unequivocally SUPPORTS the idea
Still waiting on Baker’s aggressiveness on this “transparency stuff”, he better get crackin’ the year is half over.
they used the fees to leverage what they were really upset about, oversight.
Baker didn’t give back the fees, he put it into the pool of cash that would go into the make money that regional hospitals will share. So Partners can continue to over-charge 500 million a year, but throws chump change to the regional’s who have little support or choice.
That’s what you support?
…or at very least a law saying thou shalt not charge more than x for a given procedure.
Sadly, his opponent never substantively talked about his background in one of the most hated industries in the country.
his opponent was too busy approving Partners increasing its market presence?
And would’ve been on the ballot in the fall. An all rate payer system
like the one in MD is the next leap in health care reform. We *might* not need single payer if the Feds force the Medicaid expansion on all 50 states and the all rate payer program. Though at that point if the government is picking up the tab for a 1/3 of the people, partially picking up the tab for the next 1/3, and setting prices for all-that’s awfully close while maintaining our existing architecture.
…I signed a petition to bring forward a resolution tomorrow that would put the Mass Dems on record supporting single-payer.