The state of Massachusetts has reached a deal with the fifth of six insurers initially denied rate hikes for coverage in that state. While nowhere near the massive increases sought in other high-profile states, Massachusetts’ most recent settlement involved a company’s requests for hikes in the 10% to 25% range for policyholders. Over 90% of coverage in Mass. has been positively affected by settlement negotiations with those five insurers which includes the individual market and small-business purchasers. The process of rate hike negotiations is just another factor in the long history of closely observed operations in a state which guarantees coverage to all of its citizens. | LINK

Those who expected the state with the first-in-the-nation initiative to cover the health care of all of its citizenry will have to hold their collective breaths a little longer. The plans for an overhaul on how physicians and hospitals are paid for quality delivery are on hold as major parties cannot come to an agreement on how this metric should be implemented. Perhaps the thought of examining Massachusetts’ negotiated payment system as a relatively straightforward exercise in healthcare economics was a bit shortsighted.

Combine the complexities of fee-for-service government reimbursements with the intricacies of funding for coordinated care systems; the possibilities of funding an accountable care commission of sorts as a payment governing body; and the simple inertia that current levels of healthcare spending have created in a wasteful state system — and you’ve got a recipe for an overwhelming stalemate. There is a glimmer of hope that one faction’s action will get the legislative ball rolling on this issue: some hospital systems in the state plan to release details on the creation of governance to oversee spending in their ranks. | LINK

While many states, like Minnesota, aren’t interested in creating high-risk insurance pools using federal funds under reform at this point, Gov. Schwarzenegger is moving forward with California’s commitment to do so. Until 2014, when insurers are required to cover patients in spite of deleterious pre-existing conditions, Schwarzenegger has signed bills allowing a fraction of that state’s uninsured to purchase coverage in high-risk pools.

In Massachusetts, where everyone is covered, premium rates continue to soar. Because that state subsidizes everyone’s care, those purchasing short-term plans within that its healthcare marketplace often drive up costs for those who are responsible for paying into the system — both individuals and employers. It appears that short term coverage for sicker people increase the cost of care delivery at a greater rate than anticipated among Massachusetts’ more chronically ill. The governor and insurers are working to close this loophole by restricting purchasing periods. | LINK

It continues to be a rather interesting and fun exercise watching how Massachusetts handles being the example of state-sanctioned guaranteed healthcare coverage. Over the past couple of months the escalating heat brought on by some of the state’s major insurers to test the state government’s reach on the regulation of premiums crescendoed recently, with a judicial ruling that expressed that the state was able to cap premium rate increases coverage for small businesses. Although the insurer in this case (Neighborhood Health Plan) agreed to only a 7.7 percent increase (down from an original 11 percent increase), other insurers are still pursuing the courts via the appeal process.

In a statement, Governor Deval Patrick applauded the settlement. “I appreciate the willingness of Neighborhood Health Plan to work with us to provide immediate relief from skyrocketing premiums,’’ he said, “and hope they will be an example to other health plans as well.’’

Time will tell; but for now, the first test over challenges to the state government’s insurance commission to regulate rates by its insurers guaranteeing small group and individual coverage seems to be in favor of the state. For Neighborhood Health, I wonder if they consider this episode one of “leading by example”. | LINK

Preauthorization as a requirement by insurance companies to continue providing coverage for treatments that end up outside of a policyholder’s terms is nothing new; it is a necessary evil providers must deal with on a daily basis to make sure their patients get the care they need if current covered treatments are no longer adequate. Pharmacologic therapies make up the bulk of treatment reviews Insurance requires as part of preauthorization. But adult mental health services (particularly within the discipline of psychology) in the state of Massachusetts are playing an increasingly controversial role in these administrative matters that place employers, providers, and patients in a protracted battle against insurance companies to continue these types of treatments.

“We are seeing what seem to be excessive preauthorization and other reviews that we don’t typically see for other medical services,’’ said Matt Selig, executive director of Health Law Advocates, a public interest law firm based in Boston.

The advocacy legal firm will probably join other groups in filing legal challenges on behalf of therapists and patients. The largest insurer of workers’ mental health services in Massachusetts says it tries to contain costs by making sure patients continue to receive the covered care they need. It seems as though patients in dire need of those services requiring preauthorization feel otherwise. | LINK

As governors around the country are deciding whether to align themselves politically with Obama’s plan for reform, a report just out details the current state of the healthcare economy in Massachusetts, the first state in the nation with a comprehensive universal coverage mechanism.

With respect to the insurers, the major question is whether or not premium hikes over the past decade further fattened their profit margins. While that parameter may seem readily apparent, the report’s executive summary explains that increases in revenue may be offset by the insurers’ liabilities, investments, and risk-adjusted expenses.

The study comes as insurers are challenging the state’s rejection of premium increases for individuals and small businesses, warning that it could threaten the insurance industry’s financial stability and even push some into receivership.

What remains to be seen among the state’s eight insurers is if they have any more leverage in their quest for justification of premium hikes as a result of the report in light of the recent ruling in favor of the state to cap such increases. | LINK | PDF report from the Mass. Division of Healthcare Finance & Policy

In the Massachusetts healthcare economy, the balance between employer, employee (policyholder, beneficiary), and health plan (insurer) is getting new scrutiny. Its chief executive, Gov. Patrick, filed a bill calling for the broadening of powers of the state’s insurance commissioner in capping rates for care delivery services by hospitals, doctor groups, imaging centers, and insurers. He cites the crippling effect of higher rates on employers and employees of small businesses.

Of course, in a state rocked by lowered reimbursement schedules, a diaspora of primary care physicians to other practice locales with a secondary shortage in those primary care services — the news of capped payments to docs is not generating a lot of support in that camp for Patrick’s plan. And what do the small businesses think? Cautious optimism rules the day. Smaller acute hospitals (who already are at the mercy of government whims with respect to Medicare and Medicaid payments) fear for their bottom lines amid the potential for layoffs and cuts in healthcare delivery services.

Insurance companies have no problem supporting the governor’s proposal, just as long as negotiations of rates with the other parties don’t cut into their bottom lines. | LINK

It was inevitable. Not so much as the ascendancy of former Massachusetts state senator Scott Brown to U.S. Senator status, nor the Republican inheritance of a seat previously deemed as unassailable by any Republican…ever – that of “Liberal Lion” Ted Kennedy. Nope. The totally predetermined response to the reason for the election of a Republican to that vacant seat — that of a referendum on healthcare reform not only in the Mass. Commonwealth, but also by extension, the nation. Right wing pundits and mainstream media outlets wasted no time in adopting the “enough is enough” mantra the movement sees as the singular problematic domestic agenda of the current Obama administration.

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[The following editorial is crossposted at HealthcareWealthcare.com]

I’ve written much on my health policy blog … of the microscope under which the state of Massachusetts is operating its own brand of healthcare delivery in the wake of universal healthcare coverage. The ambitious undertaking by the state’s lawmakers to introduce the concept of universal coverage to its citizens over two years ago attempts to answer the question — can healthcare delivery costs be reined in while mandating care for everyone? The answer is, to the surprise of no one, a resounding “no”. As a matter of fact, the cost of covering an additional 430,000 people has thrown the state’s healthcare economy into a tailspin.

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On the verge of its passage, the reform bill^[1] — which does not house a public option nor a much ballyhooed Medicare buy-in (as if it would), the spinmiesters amongst the Democrats have already started explaining why the party’s acquiescence to the GOP in getting to where we are now is a good thing. Up first, Massachusetts’ only senator at the moment and former pres. candidate John Kerry on why the reform bill is good for his state:

I can announce today not just that Massachusetts will not be penalized for having already reformed its health care system but that the Majority Leader has agreed to include a provision that will provide Massachusetts with additional federal funds for Medicaid for the next three calendar years — roughly $500 million — that’s half a billion dollars — more than we otherwise would have had.

Kerry is essentially promising the state a stimulus package to expand its Medicaid matching funds.  Since Mass. has spent more than double in 2007-08 than what it did in the first year of its Commonwealth Care subsidy, we certainly know that the origins of this $.5B windfall are from nowhere close to Massachusetts — literally and figuratively. Just who is footing the bill for bailing out Kerry’s home turf over its unsustainable healthcare spending? Perhaps he’ll say after he’s re-elected — which is probably the entire point of this photo-op. | LINK

1. The Patient Protection and Affordable Care Act [↩]

At a recent stop in the state to (supposedly) raise money for Gov. Deval Patrick, President Obama deftly avoided discussion of the fierce healthcare reform debate. One can assume, however, that discussions of the Massachusetts pilot program in healthcare access for all occurred privately. And, you can bet that those discussions involved setting a PR agenda to convince skeptical policy wonks that a little pre-emptive damage control is in order if Obama wants to lead by Patrick’s example with respect to reform legislation.

“We did access before costs,” [Gov. Deval] Patrick, 53, said. A federal plan “will have to do it at the same time.”

[Gov.] Patrick said he has been in close contact with the White House and the U.S. Department of Health and Human Services during the health-care overhaul push, advising them on how to “engage the private market and get them to play fair,” the governor said.

Massachusetts rode the universal coverage wave and is currently overseeing an explosion in health costs and spending to maintain it. Clearly, that agenda is not in Obama’s (or the nation’s) best interest. For all of the touting of the state’s (mis)fortunes in its first-in-the-nation status as a bellwhether for reform, there is also enough reality to go around as well. Tax subsidies, tax penalties, and Medicaid expansions don’t come cheaply.  Any connection to a national agenda on reform to the Massachusetts model will have to be made responsibly and lucidly.

Everyone has an opinion on the ultimate mark health reform will make on the economy, the delivery of healthcare, and its impact on patients. Most of those musings can be easily taken with the largest of grains, except those from whom opinions really do matter: healthcare thought leaders and policymakers in Massachusetts — the government-sponsored healthcare proving ground. For all of the song and dance on impact on care quality, disruptive innovation, rationed care, and an altered competitive healthcare marketplace; one aspect on these arguments always comes shining through: nervousness over cost and who will have to suffer the least to come out as if reform never occurred. One thing’s for sure. It probably won’t be the patient. | LINK