Don’t miss today’s important story by WBUR’s Martha Bebinger about the recession’s effect on health insurance in post-reform Massachusetts. It’s here, and here’s the gist: “The latest numbers show that virtually all Massachusetts residents who have gained coverage since the landmark 2006 law passed are now in a government health care program.”
This wasn’t supposed to happen, Martha recalls. The early mantra of the state’s health reform was “shared responsibility,” meaning that individuals, employers and state government would all share the burden of getting more people insured.
But here’s my analogy: If Massachusetts is the country’s laboratory for health care reform, the recession has contaminated our test tubes, and skewed our results. Martha reports:
WBUR's Martha Bebinger
Many experts agree the recession has played an enormous role in this shift from private to public coverage. Since the coverage law passed in 2006, 411,000 more residents of Massachusetts have health insurance; it’s the largest insurance expansion in the country. In the first few years, the expansion was fairly evenly divided between private and public insurance. That’s no longer the case.According to Nancy Turnbull, an Associate Dean at the Harvard School of Public Health, “virtually everyone” of the Massachusetts residents who have received health care coverage with the implementation of the new law are enrolled in a public plan.
“It’s virtually everyone because the number of people who have employer coverage has gone down,” Turnbull said. “That’s not at all surprising, that’s happening all over the country.”
All this is very politically sensitive, Martha notes: “There’s concern these numbers will reinforce the view that Massachusetts, and by association, the national health reform law, is launching a government health care takeover.”
But it ain’t over till it’s over — that is, the recession is over. The Patrick administration tells Martha the very latest state numbers, still unpublished, will look better. And one more important point, from Harvard’s Nancy Turnbull: “The good effect of our law is that we have not had the large increases in the number of people without health coverage.”
By Nancy Turnbull
Nancy Turnbull, Harvard School of Public Health
Associate Dean of the Harvard School of Public Health
It might be the effects of the thin air here in Colorado, but I am disappointed to be missing the second annual hearings on health care cost trends, which will take place this week. In preparation for the hearings, a flurry of reports, testimony and other material has been issued, all of which is posted on the website of the Division of Health Care Finance and Policy. Lots of interesting early morning reading for someone who hasn’t adjusted to Mountain Time.
Among the most important findings in the new reports is that medical spending is greater for people who live in zip codes with higher incomes than spending in zip codes with lower average income. This correlation was found both in the report of Attorney General Martha Coakley’s office and in one of the reports from the Division of Health Care Finance and Policy. While zip code of residence is not a perfect predictor of any individual’s income, it’s a pretty good proxy, on average.
The fact that average medical spending per person tends to be higher in higher income zip codes than in lower income zip codes, even after correcting for underlying health needs, is actually not really surprising. We know from existing research over many years that there is significant income-related inequality in medical spending in the United States. But these reports are, as far as I know, the first to document these disparities in Massachusetts. And, since the reports look only at people who have private insurance, these spending differences are not due to insurance status. (Lower-income people are more likely to not have any insurance and medical spending is much lower for uninsured people. But these reports consider only insured people with private coverage, and they also adjust spending for health status, two of the factors that would be most likely to account for differences in medical spending by income.)
Income-related inequalities in medical spending are particularly troubling because we know that people with lower incomes have higher health needs. Being a lower income person in the U.S. is bad for your health. So we would expect medical spending to be higher for people with lower incomes. Instead, it’s just the opposite. These inequalities are also cruelly ironic, since the financing of private health insurance is already so regressive: in the individual market and at most employers, the best paid person pays the same premium as the lowest paid person for the same health insurance coverage, which means that lower income people pay a higher proportion of their income for private health insurance. Continue reading
By Nancy Turnbull, associate dean of the Harvard School of Public Health
Last week saw the long awaited release of Health Reform 2.2 (aka Governor Patrick’s proposed payment reform legislation.)
The release is designed to add significant new features to enhance Health Reform 1.0 (the major overhaul of 2006), and its two minor subsequent upgrades from 2008 (provider and insurer cost hearings and special commission on payment reform) and 2010 (more transparency, more commissions).
HR 2.2 survived extensive alpha testing within the Patrick administration, and has now been released in a beta version that can be tried by the legislature. The beta version is about to enter wide release. Extensive usability testing is planned so that others will have the chance to react and suggest revisions. It’s too early to tell if any fatal bugs will doom HR 2.2. The new system appears to be a less drastic departure from the current version of the operating system than some had hoped but many others had feared.
HR 2.2 has many positive new features, including:
- It is designed to be a major new platform to improve system-level performance. While preserving the best features of HR 1.0, it acknowledges that the existing platform on which HR 1.0 was built is costly, wasteful and inefficient, and that dramatic changes are needed to better and more fairly allocate system resources.
- It sets aggressive benchmarks for judging system performance, pegging performance to best practices, including those in other countries.
Given the size of the problem, last night’s final gubernatorial debate included surprisingly little about health care and its ever-spiraling costs. But there were a few choice bits. Nancy Turnbull, associate dean of the Harvard School of Public Health, and Jon Hurst, president of the Retailers Association of Massachusetts, kindly agreed to share their reactions with CommonHealth.
Democratic incumbent Deval Patrick: “Small businesses make up 85% of the businesses here. Their two biggest complaints are the cost of health care and access to capital. And we’ve done more in these areas than any other administration in a very, very long time…in permitting small businesses to buy their health insurance in aggregate through cooperatives to get the same buying power that bigger businesses do.”
“In terms of health care, I like and am proud of our hybrid system — it’s a public-private reform. But I think the next big frontier is cost control, and payment reform is the way to get there, and that will take political courage.”
Nancy Turnbull: Health cooperatives were just authorized in Chapter 288 and are not up and running yet, so no small businesses have saved any money from this approach. And it’s not sure that such cooperatives will result in lower premiums. If they do, it’s quite likely that savings for the cooperatives will come at the expense of higher premiums for other small employers and individuals, which is why many health policy people and consumer groups opposed this provision of the legislation, including me.
Jon Hurst: The cooperatives legislation is a reform the small business community has pushed hard for ever since mandated health insurance passed in 2006. And for good reason. Small businesses have been hammered with 73% increases (about 3 X the rate of big business & big government) since the law passed, and that doesn’t include the increased out of pocket deductible and co-pay costs which have ballooned during this recession. The cooperatives still need implementing regulations which will determine whether small businesses will indeed have equal rights with big employers, allowing them to use cost saving tools including self insurance and more flexible rating systems to encourage wellness and better choices among providers. The legislation was certainly a political compromise and will in fact only allow 85,000 lives to join the cooperatives—representing 10% of the merged marketplace. Perhaps the most important outcome of the cooperatives effort will be whether the results show that the antiquated community rating system used in Massachusetts for groups of 50 and under is indeed discriminatory, as well as counterproductive to the important goals of achieving a healthier and more educated consumer of health care services. Continue reading