universal health care system has been an unqualified success
in providing universal coverage to the commonwealth’s citizens. Over 97%
of Massachusetts residents are insured, more than any other state in the United
States, rivaling coverage levels in the Netherlands and Switzerland —
where universal health care coverage is the law. Also, Massachusetts employers
are far more likely to offer their employees insurance than their national
counterparts. More than 430,000 residents have been enrolled in the new health
care programs since the law was enacted in 2006 by the then-Governor Mitt
Romney, and a liberal Democratic state house.
Initially, because of the program’s success, patients could not
find a doctor for health care when the numbers of new enrollees overwhelmed the
system. But finally by 2008, 92% of these patients had found a primary care
A recent poll in the New England Journal of Medicine
(NEJM) noted that 75% of Massachusetts physicians, both primary
care and specialists, recommend that the Massachusetts health insurance reform
law continue; 29% as is and 46% recommend continuing, but to proceed with
But health care reform has not been a “Massachusetts
Miracle.” Health care cost control has remained elusive. It is easy to
mandate health care, but far more difficult to fund the program. “Cost
containment” is the issue at the state house as Massachusetts health care
premiums continue to rise by 10% to 12% or more every year, nearly doubling the
national rate. These requirements, coupled with the recession and subsequent
decreased revenues, have led to significant tension at the state house.
This resounding success impacts the many participants differently. The
goal of this Round Table discussion is to get input from these different
players: an administrator of the universal health plan, the secretary of health
and human services for the commonwealth of Massachusetts; practice
administrators; and practicing physicians in both the academic and private
arena. I address cost containment as it will affect all parties, and the plans
to change the current reimbursement system and how that will that impact the
participants. In reading their replies, consider whether this state system
might be a model for other states, or is the Massachusetts experience a
microcosm of the direction of the recently passed federal plan?
Barry P. Simmons, MD
|Round Table Participants
Brigham & Women’s Hospital
P. Jonathan Beauchesne
Administrative Director Department of Orthopedic Surgery & Arthritis Center
Brigham and Women’s Hospital
Christopher P. Chiodo, MD
Orthopaedic Surgeon Foot and Ankle Division Chief, Brigham and Women’s
Hospital, Harvard Medical School; Past President of the Massachusetts
Orthopaedic Association Boston
Judy A. Bigby, MD
Secretary of Health and
Human Services Commonwealth of Massachusetts
Practice Administrator Plymouth Bay
Commonwealth of Massachusetts
Scott Oliver, MD
Plymouth Bay Orthopedic Associates Officer of the
Massachusetts Orthopaedic Association
Barry P. Simmons, MD: How has the new
Massachusetts health care plan impacted your ability to care
for your patients and run your office as you desire?
R. Scott Oliver, MD: The orthopedic surgeon in Massachusetts is
responsible for the orthopedic patient in the emergency situation, regardless
of the ability to pay. However, some payments can be obtained for almost all
The health care programs, enrolling over 400,000 residents, can be
divided into three groups:
- Commonwealth Care: a subsidized state program for adults who are not
offered employer-sponsored insurance and have a certain income above the
“federal poverty level.” All children of adults covered by
Commonwealth Care are covered by MassHealth (the state Medicaid program):
132,000 adults, or 35% of the new enrollees, have qualified for this program.
- Commonwealth Choice is a nonsubsidized offering of six private health
care plans. It is sponsored by the “Health Connector,” a state
program that assists Massachusetts residents in obtaining a health care plan.
There have been 151,000 enrollees to date, 40% of the newly insured.
- MassHealth has provided healthcare to an additional 99,000
residents, another 25%.As many physicians know, it is impossible to cover
overhead costs with a practice with solely Medicaid patients; the rates are
simply too low. Currently private healthcare premiums subsidize the
physician’s practice. Medicaid and Commonwealth Care rates of
reimbursement are consistently 60% of standard premium health care rates. Yet,
according to the recent NEJM poll of 2,135 doctors in Massachusetts,
surprisingly 43% had noted that the new healthcare reform had “not much of
an impact” on the administrative burden of running their practice, while
35% of physicians noted health care reform had a negative impact.
P. Jonathan Beauchesne: I’d have to say that generally
speaking, the Massachusetts health reform rules passed in 2006 have had
virtually no impact on our ability to care for patients.
In terms of running our offices, we are always very conscious of our
administrative costs. However, we really haven’t seen any additional
overhead costs directly attributable to the new health system in the
Christopher P. Chiodo, MD: It didn’t. My department and I
treat patients based on their need for care, regardless of their insurance or
ability to pay.
Simmons: Is there decreased reimbursement for the same care given
to patients covered by the new health care system vs. private insurers,
Medicare or Medicaid?
Oliver: As a specialist, there is no requirement to become a
provider to these new subsidized programs of Commonwealth Care with payment at
Medicaid rates. It has been helpful that another 151,000 residents with
Commonwealth Choice now have premium health care insurance providing standard
payment for treatment.
Beauchesne: The fee schedule for the new health care system falls
roughly between Medicare and Medicaid rates. Historically, the patients were
always considered “free-care” and there was zero reimbursement to the
physicians for the care they provided. With the new health care system,
physicians are now being reimbursed for the care that they provide to
individuals who were previously uninsured.
Chiodo: While physicians and hospitals are now paid for their
services under the Commonwealth Care Plans, reimbursements are often slightly
lower than Medicare rates, which do not fully cover physician and institutional
expenses and overhead. Given the state of the current economy, more people also
qualify for full Medicaid coverage, which clearly does not cover our costs.
When compared with payments from private insurers, the difference in
reimbursement under the new reform is even more pronounced. In a certain sense,
this means that payments from private insurers subsidize care provided to those
patients enrolled in state plans. Private insurers may in turn cite this fact
during future contract negotiations, and use it to argue against rate
Ned Hochmuth: For our practice, the reimbursement is the same for
patients who are covered by the new health care system vs. private insurers,
Medicare or Medicaid.
For the population of Massachusetts, the new health care system attempts
to provide universal coverage through two primary plans: Commonwealth Care or
The difference between them is that the Commonwealth Choice plan offers
many options from brand-name health insurance plans. Commonwealth Care provides
low-cost or no-cost health insurance to people who qualify.
There is a difference in reimbursement between the two plans. Physician
practices are reimbursed approximately 40% higher for services provided to
patients enrolled in the Commonwealth Choice plan vs. patients that are
enrolled in the Commonwealth Care plan.
Simmons: What future restrictions and mandates do you see coming
to balance the costs of the program and how will it affect the participation of
Oliver: From an economic standpoint, health care reform has
proven to be an unsustainable financial burden that poses a long-term risk to
the state’s fiscal health. According to the state information statement
released in August 2008, the cost of the subsidized Commonwealth Care program
has more than doubled since its inception, increasing from $630 million in 2007
to $1.1 billion in FY08 and more than $1.3 billion in FY09. This trend will
continue, as state estimates reported by the Boston Globe indicate that the
commonwealth’s subsidized insurance plan will top $1.35 billion in annual
expenses by the beginning of FY12. These increased costs, coupled with
significant decrease in revenues because of the economic situation, places the
state is at financial risk.
To counter these dire predictions, the Massachusetts legislature
established the Special Committee on Healthcare Payment Reform in 2009. This
committee, consisting of bureaucrats, insurance and hospital representatives
and one physician, released a series of recommendations in July 2009, including
that the fee-for-service system to be replaced by a global payment system. But
the legislature has yet to act on any of the committee’s recommendations.
The chair of the Massachusetts House Healthcare Financing Committee,
Rep. Harriett Stanley, said, “We are looking at 5, 10, 15, or 20 years. It
will take that long to turn this entire culture around to be looking at health
care and health care costs very differently.”
The Massachusetts Senate Budget Chief, Sen. Steven Panagiotakos, said
attempts to save money on the state’s ballooning health care costs would
require “foundational transformation.”
Some maintain that health reform has not been the source of escalating
expenses but that it is rooted in the fundamentals of how we deliver and pay
for health care. It has been stated that the current delivery and payment
systems are outdated and inefficient; leading to higher costs — caused,
for example, by unnecessary hospitalizations and emergency room visits —
that often don’t result in better care. There is a need for a
fee-for-results payment system, a system that rewards quality, not quantity.
The special commission will require the development of accountable care
organizations (ACOs) that will accept all or most of all the responsibility of
care that the patients need. ACOs will be composed of hospitals, physicians,
and/or other clinician and nonclinician providers, working as a team to manage
both the provision and coordination of care for the full range of services that
patients are expected to need. The system requires patient-centered care and a
strong dependency on primary care. All payments to specialist physicians will
pass through the primary care physician and the ACO. Some degree of financial
risk will be mandated for the ACO and the physicians involved in the
patient’s care. The special commission recommends that global payments
with adjustments to reward provision of accessible and high-quality care become
the predominant form of payment to providers within 5 years.
Certainly there are many unanswered questions. It is alarming that state
bureaucrats, who rarely enter a hospital, are planning to proceed with
legislation that would completely alter the structure of medicine strictly
based on theory. There has been some reasonable discussion about pilot programs
that would be initiated by the state working through current primary care-based
systems. Nonetheless, there is appropriate concern by specialists relative to
the impact of the future healthcare systems in Massachusetts on their financial
Beauchesne: There has been talk of potential price controls, ie
cuts in reimbursements, on providers. Additionally, the potential for new
regulations regarding coverage limitations or exclusions could make it
difficult for Commonwealth Connector patients to continue to receive the care
they have been receiving.
Lastly, the idea of a state global budget on health care would all but
spell the hallmark of a government-run health care system.
Chiodo: No one is really certain at this point. Some have
speculated that the commonwealth may have to limit its contributions to
Commonwealth Care subsidies and scale back the tax incentives offered to remain
insured. We hope that any financial burdens are evenly distributed and shared
not only across institutions and providers but also across the community as a
Hochmuth: Currently, two Massachusetts insurance companies
require our physicians to provide detailed documentation and reasoning for
certain surgical procedures prior to providing authorization. Medical necessity
criteria are now required for certain procedures to be covered. I believe that
more insurance companies will be imposing tighter restrictions and requiring
more documentation from physicians.
These documentation guidelines that physicians are asked to complete are
time consuming. I believe that the more restrictions and mandates that are put
on the physicians, the less time they have to provide quality care to their
patients. These restrictions and mandates may become too cost prohibitive for
our practice and may negate their participation in our group.
Simmons: Has the Massachusetts universal health care system been
Judy A. Bigby, MD: Massachusetts health reform, Chapter 58 of the
Acts of 2006, has been an unparalleled success. Over 97% of Massachusetts
residents now have health insurance — the highest rate in the country.
More than 408,000 people in Massachusetts are newly insured since the
implementation of Chapter 58. Private group and individual purchase make up
more than 32% of the newly insured, with enrollment in group insurance
increasing by 83,000 lives and individual purchase more than doubling. The
percentage of employers offering health insurance in Massachusetts has remained
steady at 72%, while the percentage of offering employers has been dropping
nationwide. The need for hospital payments for uninsured people has
significantly declined with volume and payments decreasing about 40% between
hospital fiscal years 2007 and 2008, according to a 2009 report released by the
Massachusetts Division of Health Care Finance and Policy (DHCFP).
Public support for the reform continues to be strong. The 2009 DHCFP
report notes that nearly three-quarters of those recently surveyed said they
support health reform in Massachusetts. Also, 70% of practicing physicians in
Massachusetts back the reforms and three out of four surveyed doctors expressed
an interest in continuing the changes, according to a 2009 poll by the Urban
The success is due to the shared responsibility under the law among
individuals, who are mandated to purchase insurance deemed affordable to them;
employers, with new responsibilities to offer coverage to their employees or
pay an assessment; and government which provides premium subsidies for
Chiodo: I would say it has been a success, but still has room for
improvement. We saw an approximately 30% decrease in patients either without
insurance or covered by the commonwealth’s Free Care program. Access to
care for this patient population has indeed increased, and physicians and
hospitals are now reimbursed for services that would have otherwise gone
unpaid. Most importantly, fewer patients face the frightening uncertainty of
not being able to obtain care.
There are some drawbacks, however. Medicaid enrollment has increased
under the program. While this is certainly a step forward in terms of the
number of patients with coverage, Medicaid covers only about 50% of our costs
and results in a net loss for providers. This is compounded by the fact that
the distribution of Medicaid patients across provider groups and hospitals is
not always equal. I would also liked to have seen liability reform incorporated
into the package, especially since the potential savings could have been used
to offset the costs of increasing coverage.
As for runaway costs and whether or not the price tag of the program was
initially underestimated, this is a complex issue. After implementation of the
new laws, the State was faced with a budget deficit and, among other steps, had
to cut subsidies for coverage of legal immigrants as well as eliminate planned
increases in provider payments for Medicaid patients. However, it must be
realized that simultaneously the economic downturn had resulted in a major
collapse of state tax revenue. Further, while initial enrollment in the newly
created programs was brisk, concerns about continued growth in enrollment did
not pan out.
Jonathan Kingsdale: Our law to provide near-universal coverage
has been a remarkable success.
The more than 400,000 newly insured residents of Massachusetts include
those who have been diagnosed early and treated promptly for cancer, heart
disease, diabetes and many other chronic conditions which constitute the vast
majority of medical need and simply do not get adequate attention under
emergency or safety-net charity care. It is literally saving and improving
lives. Reform is also saving the previously uninsured from financial ruin. One
young woman in her 20s is newly enrolled and is taking 17 medications a day.
Another woman in her 20s told us that her cancer surgery and follow-up
treatments had cost well over $100,000. If she had not had access to health
insurance, it is possible her parents would have re-mortgaged the family home
to cover these expenses, but it would have left them destitute.
In summary, more people now have access to preventive and routine care
so that conditions can be treated before they worsen, and to expensive
therapeutic intervention, so that serious illness can be treated without
catastrophic financial consequences.
Primary care and emergency visits
Simmons: Has the universal access made the use of primary care
physician (PCP) visits more common and reduced the number of emergency
department (ED) visits?
Bigby: The vast majority of Massachusetts residents recently
surveyed reported having a personal health care provider, according to the
DHCFP key indicators of 2009, and the Behavioral Risk factor Surveillance
System reports that Massachusetts ranks second in the nation for residents with
a usual source of care.
In the fall of 2008, 91% of adults reported they had a usual source of
care, compared to 86% in the fall of 2006, just after the reform law was
enacted. In the fall of 2008, 69% reported multiple doctor visits, compared to
66% in the fall of 2006, and 84% reported any doctor visit, compared to 80% in
the fall of 2006. Adults are also more likely to have had preventive care
visits, dental visits and prescription drugs, according to Long in 2009 and the
DHCFP 2008 health insurance and access to care report.
Nearly universal coverage has not had a significant impact on ED use.
National data for 2007 from Kaiser indicated that Massachusetts residents
relied more heavily on emergency care than the national average. Adult ED users
in the state were found to be more disabled and more chronically ill and to
report more unmet need for care, despite having insurance and a doctor’s
office as their usual source of care.
A 2009 Robert Wood Johnson report found a primary reason for ED use was
lack of access to care outside regular business hours. The state has embarked
on several initiatives to expand the capacity of community health centers to
reduce the reliance on EDs.
Kingsdale: None of the statistics I have seen indicate that
near-universal coverage has reduced reliance on ED visits. And while I am
unaware of it ever being one of the stated goals of reform, I understand how
many would assume it to be a natural result. It may, in fact, occur over time,
but that will require patients and clinicians to change behavior, and that
won’t happen overnight. It never does. But there are some hopeful signs of
delivery system reform. One is the of community health centers, which serve as
the largest source of primary care for most of the newly insured.
The recent entry into the market and rapid proliferation of so-called
“minute clinics” at pharmacies should also relieve some of the strain
on EDs. It certainly is symptomatic of the need for expanding evening and
weekend hours at traditional primary care settings and improving timely access
for minor illness.
As anticipated, the expanded coverage has had a significant impact on
the use of free care. Now known as the Health Safety Net, its use has declined
by 36% payments are down 38%.
Simmons: Is the commonwealth losing physicians, and is it related
to the universal health care program?
Bigby: According to the Massachusetts Department of Public
Health, the commonwealth is actually repeatedly ranked among the top 10
nationally in numbers of nurses and dentists and first in numbers of physicians
for the population served. Upon further examination, however, a stark contrast
between available resources and health professional accessibility emerges. For
example, while Massachusetts may have the highest number of physicians per
capita, studies show a declining rate of a patient’s ability to seek
primary care services within a week. In 2008, Bruce Auberbach, MD, of the
Massachusetts Medical Society testified that hospitals and physician practices
likewise report problems in recruiting and retaining primary care physicians.
Massachusetts’ recent health reform only exacerbates the lack of primary
care resources further by increasing the demand for these services.
In 2008, the Massachusetts General Court outlined a strategy to address
these concerns with the creation of the Massachusetts Health Care Workforce
Center, housed in the Department of Public Health. Two years earlier, the
Massachusetts Department of Public Health’s Primary Care Office and the
MassAHEC Network, a program of the University of Massachusetts Medical
School’s Commonwealth Medicine division, and Massachusetts Department of
Public Health’s Primary Care Office sought to identify promising practices
and practical recommendations for addressing health workforce shortages.
According to The Massachusetts Medical Society, there is a shortage of
PCPs in the state but that is a national problem which predates the health
reform law. They report however, that even with the shortage, 60% of family
practitioners and 44% of internal medicine physicians are accepting new
Kingsdale: The shortage of PCPs in Massachusetts is certainly not
unique — nor is there any evidence that is worse than elsewhere in the
United States, so I think it is a stretch to blame health reform for that.
There is a shortage of PCPs throughout the entire country. When one considers
the time and expense it takes to go through medical school and a residency, it
is little wonder that many prefer to go into higher-paying specialties.
If anything, better coverage relieves this problem by reducing bad debt
for private practitioners and relieving them of the need to waste valuable time
searching for free care for their uninsured patients. Several doctors have told
me that this is a real time-saver and relief for their offices.
Also, Massachusetts’ insurance reform catalyzed additional reforms
aimed specifically at improving access to primary care. A loan forgiveness
program announced several years ago by Governor Patrick, the Bank of America,
Partners HealthCare and the Massachusetts League of Community Health Centers is
already paying dividends. It has helped repay loans for 103 doctors and nurse
practitioners who provide care to an estimated 182,000 patients at community
There is much more to be done in this area, but Massachusetts is ahead
of the curve and programs such as the one I mentioned are a direct result of
health care reform here in the Bay State.
Simmons: The impression is that the program has been so
successful that the cost has far exceeded what was anticipated. If this is so,
how does the commonwealth plan to fund the deficit going forward?
Bigby: Opponents of federal health reform, in expressing
skepticism for the Massachusetts model, have claimed that health reform here
has resulted in uncontrolled costs. This is not true. As the Massachusetts
Taxpayer Foundation, a business-supported think tank in Massachusetts, found in
its 2009 report, “The cost of this achievement has been relatively modest
and well within initial projections of how much the state would have to spend
to implement reform.” The report credits the high percentage of privately
insured as one of the reasons for health reform’s success within
reasonable costs. As the Center for Health Law and Economics found in their
report Shared Responsibility, individuals, employers and government have shared
the costs of health reform proportionately. They found that because government
costs for uncovered services declined sharply, government’s share of total
payments was similar to its share before reform. As the authors of that report
articulate and people working in Massachusetts health policy knew, the largest
factor contributing to increased spending for health care coverage is health
care cost inflation, which affects all payers.
Massachusetts, like states around the country, the federal government,
the private sector and individuals, is burdened by health care cost inflation
and a payment system that does not reward efficiency. A recent study by the
DHCFP found that Massachusetts rewards those who provide a higher number of
individual services, rather than those that are best at coordinating care or
delivering good quality services in less expensive settings. The report also
found the health care system in Massachusetts dominated by a high number of
specialty doctors — rather than primary care doctors who specialize in
disease prevention and management of chronic diseases — and by academic
medical centers, both of which tend to provide costlier care.
The commonwealth is actively engaged in remedying these problems. The
Massachusetts General Court enacted cost-control legislation in Chapter 305 of
the Acts of 2008, creating a special commission on payment reform that has
recommended that all payers in the commonwealth move to a system of global
payments. The Patrick Administration, the legislature and a comprehensive and
robust group of health care business partners and consumer advocates are
jointly committed to the continued success of Massachusetts health reform and
the cost containment and payment reform strategies necessary to make the entire
system more efficient, while ensuring access and quality.
Kingsdale: That is false. Compared with either the total of $60
billion a year spent on health care in Massachusetts, or the
commonwealth’s $28 billion budget, the net incremental cost on the state
budget of covering over 400,000 uninsured is just $350 million in 2010 compared
to 2006, the last year before reform. This is about one-half of 1% of total
health care spending in Massachusetts and just over 1% of the state’s
budget. While total spending on medical care in Massachusetts — $60
billion a year — is excessive and unreasonable by any measure, this is not
the result or a reflection of health reform.
Ironically, the perception that the commonwealth’s health reform is
too costly was driven by our “success” in covering far more people
than we budgeted for earlier than we expected.
Establishing budget projections for a new health insurance program is
challenging due to a number of variables that have a direct impact on the cost
of the program, most notably the total number of enrollees that will sign up,
the demographic mix of those enrollees, and the pace of that enrollment.
The number of uninsured Massachusetts residents was underestimated in
2006 and the pace of enrollment was also quicker than expected, which is why
initial costs were much higher than expected. We were also very aggressive and
successful with our public education and outreach campaign to get the word out
to everyone about the availability of new plans.
In the first full year of operation, our subsidized program,
Commonwealth Care, came in $156 million over budget. In the most recently
completed year, that same program came in $69 million under budget. At the same
time, we have been able to keep annual trend under 5% since the inception of
the program. That’s about half the average premium increase in the private
Having made a moral commitment to near-universal coverage, Massachusetts
is now taking the lead in cost containment. There is no denying that this phase
of reform will be more difficult than access. But it is a campaign we must win
because reform is not sustainable in the long run without cost containment.
- NEJM 361:e39 number 19: “Physicians’ Views of the
Massachusetts Health Care Reform Law — A Poll” , SteelFisher et al).
- Health Care in Massachusetts: Key Indicators, a report released by
the Massachusetts Division of Health Care Finance and Policy (DHCFP), November
2009. (Available on line at www.mass.gov/dhcfp)
- Poll results by the Urban Institute, as published by Blue Cross
Blue Shield of Massachusetts Foundation, 2009.
- DHCFP, Key Indicators, 2009
- Behavioral Risk Factor Surveillance System (BRFSS), MA Department
of Public Health, Health Survey Program, 2008
- Sharon Long, Urban Institute, May 28, 2009
- DHCFP, Health Insurance Coverage and Access to Care in
Massachusetts: Detailed Tabulations Based on the 2008 Massachusetts Health
- Kaiser, State Health Facts website
- Robert Wood Johnson Report on Emergency Department Visits in
Massachusetts, September, 2009
- Testimony “Health care Workforce Shortages for the Future and
Title VII Reauthorization”. Senate Health Education Welfare and Pensions
Committee. Bruce Auberbach, MD. Massachusetts Medical Society. February 12,
- Massachusetts Medical Society. 2009 Physician Workforce Study,
published September 14, 2009
- Massachusetts Health Reform: The Myth of Uncontrolled Costs,
Massachusetts Taxpayers Foundation, May 2009, pg 2. (Available on line at
- Sharing the Cost of Health Care Reform by Robert Seifert and Paul
Swoboda, April 6, 2009, prepared by the Center for Health, Law and Economics at
UMASS Medical School for the Blue Cross Blue Shield Foundation of
Massachusetts. (Available on line at
- Health Care Cost Trends, a report released in February 2010 by the
Massachusetts Division of Health Care Finance and Policy. (Available on line at
- Jonathan Beauchesne can be reached at the Department of Orthopedic
Surgery & Arthritis Center Brigham & Women’s Hospital, 75 Francis
St., Boston, MA 02115; 617-732-5747; e-mail:
- Christopher P. Chiodo, MD, can be reached at Brigham &
Women’s Hospital; e-mail: email@example.com.
- Ned Hochmuth can be reached at Plymouth Bay Orthopedic Associates,
Inc., 95 Tremont St., Suite 1, Duxbury, MA 02332; 781-934-2400; e-mail:
- R. Scott Oliver, MD, can be reached at Plymouth Bay Orthopedic
Associates; e-mail firstname.lastname@example.org.
- Barry P. Simmons, MD, can be reached at Brigham & Women’s
Hospital; e-mail: email@example.com.