Massachusetts

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Access to health insurance ≠ Access to health care.

June 27, 2011 in Health Insurance, Health Reform, Public Policy | 3 comments

Is the Massachusetts health reform a success?  Yes and no.

In terms of increasing access to health care, it has been an unqualified success.  According to the Economist, only1.9% of Massachusetts residents were uninsured in 2010.

Massachusetts’ health reform has not been able to offer universal access to health care or to constrain costs. “ One in five working-age adults say they have trouble finding a doctor who will see them…Spending on MassHealth, the programme for the poor, rose 40% between 2006 and 2010….average monthly premiums rose by 12% between 2006 and 2008. True, a higher share of firms now offer coverage, but they are also shifting costs for that coverage to employees”

Massachusetts is trying to legislatively block health premium increases.  Reducing health insurance cost, however, will likely drive down provider reimbursement and either increase cost sharing or decrease access to health care.

The key takeaway from this post is the following: “Access to health insurance does not guarantee access to health care.”

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Alternative Quality Contract

March 14, 2011 in P4P, Physician Compensation, Supply of Medical Services | No comments

“In January 2009 Blue Cross Blue Shield of Massachusetts launched a new provider payment system called the Alternative Quality Contract that exemplifies the type of experimentation with novel payment models that the Affordable Care Act encourages. The Alternative Quality Contract is a modified global payment model in which annual payments to medical groups are linked to a per member per month budget.”

Today I will review a paper by Chernew et al. (2011) describing BCBS’s Massachusetts initiative.
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Effect of Massachusetts Health Reform on Hospital and Preventive Care

May 26, 2010 in Health Reform, Hospitals | 2 comments

Kolstad and Kowalski (2010) examine how the Massachusetts individual mandate affected uninsurance rates, hospital and outpatient utilization, and preventive care:

“Among the population discharged from the hospital in Massachusetts, the reform decreased uninsurance by 28% relative to its initial level. Increased coverage affected utilization patterns by decreasing length of stay and the number of inpatient admissions originating from the emergency room. We also find evidence that outpatient care reduced hospitalizations for preventable conditions. At the same time we find no evidence that the cost of hospital care increased.“

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Health Care Reform in Massachusetts

May 3, 2010 in Health Insurance, Regulation | 7 comments

With healthcare reform having passed, how will the health insurance market look a few years from now?  Although Mitt Romney may (or may not) deny it, Massachusetts has been a model for President Obama’s health reform bill.  In 2006, Massachusetts passed its own health reform and when the share of uninsured residents was at 14%.  By 2008, this figure had fallen to 2.6%.  Let us now take a look at the specific reforms Massachusetts implement to increase coverage.

Based on the research of Doonan and Tull (2010), one can divide the Massachusetts expansion efforts into five broad categories.

  • Medicaid Expansion. Massachusetts expanded Medicaid eligibility to all children below 300% of the federal poverty line (FPL) and all adults below 150% of the FPL.
  • New subsidized health insurance exchange.  Commonwealth Care is a program that provides aces to health insurance for individuals with incomes between 150% -300% FPL.  The government subsidizes these plans depending on the individual’s income.  The state moved individuals who were previously in the stat’s uncompensated care pool (UCP) to Commonwealth Care by restructuring the UCP so that copays, deductibles, and premiums were similar to those offered in Commonwealth Care.
  • Insurance Exchange for Individuals and Small Businesses.  Commonwealth Choice is a program that provides a number of unsubsidized insurance plans to individuals and small businesses (with 50 or fewer employees).
  • Mandates.  The Massachusetts legislature enacted an employer mandate and an individual mandate.  The employer mandate stats that employers with more than 50 people who do not provide insurance must pay a “fair share” assessment of $295/employee/year.  The state also mandates that all residents purchase insurance through an individual mandate.  Each year, each Massachusetts resident must submit a Schedule HC to the Massachusetts Department of Revenue to verify that they do indeed have Connector-approved insurance.  After a 90 day grace period, individuals are penalized each month that they are not insurance in the previous tax year.  The penalty for not having health insurance in Massachusetts is generally much larger than what Congress is currently considering.
  • Insurance Regulation.  The Commonwealth Health Insurance Connector Authority (the Connector) created minimum standards for any insurance product to be offered in the state.  Thus, individuals could not bypass the individual mandate by taking out a very inexpensive health insurance product with a $50,000 deductible.  The Connector Board recommended that the minimum credible coverage (MCC) include preventive and primary care, emergency services, hospitalization benefits, ambulatory patient services, mental health services, and prescription drug coverage.  Doonan and Tull (2010) claim that the mandated benefits were fairly generous, but not out line with what private insurance companies previously had offered.  Because there is more heterogeneity in insurance products across the country than within Massachusetts, Congress would have a much more difficult time determining a valid coverage minimum that did Massachusetts.

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Massachusetts Makes Cuts to Universal Health Plan

June 24, 2009 in Health Insurance, Public Policy | 1 comment

The Boston Globe reports that “Overseers of Massachusetts’ trailblazing healthcare program made their first cuts yesterday, trimming $115 million, or 12 percent, from Commonwealth Care, which subsidizes premiums for needy residents and is the centerpiece of the 2006 law.”  The reduction in the Commonwealth Care was caused by the bad economy.  Not only does a bad economy mean fewer tax revenues as earnings are cut, but demand for government health insurance grows as laid off employees lose employer provided care.

Opponents of government health plan may use this as evidence that government-run health care can’t work.  This is not the case however.  In a bad economy with private insurance, workers lose coverage when they lose their jobs.  If they do decide to purchase a nongroup health insurance plan, they will likely choose a less expensive plan.  Thus a bad economy effects individuals similarly with and without government provided health insurance; with fewer resources to go around everyone must cut medical expenditures irrespective of whether there is a government-provided health plan.  

The difference between the less generous insurance benefits is who decides on the cuts.  In a free market plan, individuals decide for themselves how much insurance to buy.  However, for some individuals who lose their jobs, health insurance will be unaffordable.  On the other hand, bureaucrats determine what will be cut in a government health plan.  

Democrats will argue that mediocre insurance for all is better than great insurance for some and none for others.  Republicans will claim that a government-run healthcare system will necessarily lead to mediocre insurance coverage in any bad economy. Further, legal immigrants may not be eligible for Commonwealth Care in order to save money.  Thus, there will still be individuals without insurance.

Who perspective do you think is right?

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50 days to see a doctor in Boston…Is Massachusetts’ universal coverage laws the cause?

June 9, 2009 in Health Insurance, Supply of Medical Services, Wait Times | 8 comments

From the USA Today, here are the wait times to see a doctor in the following cities:

  • Boston: 49.6
  • Philadelphia: 27
  • Los Angeles: 24.2
  • Houston: 23.4
  • Washington, D.C.: 22.6
  • San Diego 20.2
  • Minneapolis: 19.8
  • Dallas: 19.2
  • New York: 19.2
  • Denver: 15.4 days
  • Miami: 15.4 days

The first thing that jumps out from these numbers is that Boston has by far the longest wait to see a doctor.  Is this caused by the universal health coverage enacted in Massachusetts?  The answer is maybe.  Physician supply adjusts slowly (i.e., it takes a long time to finish med school).  On the other hand, Massachusetts decision to increase insurance coverage lead to a spike in the demand for medical services.  Thus, universal health care may have caused the run up in wait times, but this phenomenon may be short lived.  Physicians may migrate to Massachusetts as insurance coverage becomes more available.  

Do wait times reflect quality of care?  If Boston residents have very short waits to see nurse practitioners or physicians assistants, this could be a cost-effective substitute for services provided by physicians in the primary care setting.  Further, longer wait times for specialists could be a good thing.  While longer wait times would certainly hurt some patients–likely the most seriously ill patients–it would discourage other patients from waiting to see a specialist.  This patients could, instead, forego treatment if had a low marginal benefit to begin with or they could rely on their primary care provider.  

Let’s dig deeper into the numbers (see original report):

  • Wait times for Boston cardiologists decreased from 37 days in 2004 to 21 days in 2009.  
  • Wait times for Boston orthopedic surgery increased from 24 days in 2004 to 40 days in 2009.  
  • Wait times for a Boston ObGyn increased from 45 to 70 days between 2004 and 2009 in Boston.
  • Wait times for a Boston Family Practice physician was 63 days in 2009. 

We see that after the Massachusetts health reform was enacted, there was no uniform effect on specialist wait times, but there was a large increase in wait times for primary care providers.  This could be explained by a number of phenomenon:

  • Those who gained health insurance after the Massachusetts health reform were a healthier population and used their new insurance coverage to increase the number of primary care visits, but not specialist visits.
  • After the Massachusetts health reform, the increase in demand was homogenous across primary and specialty care.  However, physician supply adjusted.  Specialist may have been more attracted to practicing in Massachusetts, but primary care doctors were not.  Specialists may have moved to Massachusetts in larger numbers, particularly if New England health plans reimburse specialists at a much higher rate.  
  • This could be a statistical anomaly.  Sample sizes in were less than 20 for five specialities in Boston.

Whatever the case, further study is needed to understand how health insurance expansions affect waiting times in both the short- and long-run.

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Health care in Massachusetts

November 3, 2008 in Health Insurance, Public Policy | No comments

Readers Digest has a nice piece on how universal health insurance is working out for people in Massachusetts.  ”Massachusetts put into practice the health care solution everyone is arguing about. Here’s how it works and what it means for the rest of us.”

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Massachusetts’ subsidized insurance plan to cost $1.35 billion by 2011

February 4, 2008 in Public Policy | Permalink

Government provided health insurance may have advantages, but one of the drawbacks are that these programs are expensive.  According to the Boston Globe (“Subsidized care plan’s cost to double“), the cost of the Commonwealth Care program will increase from $158 million in 2007 to 1.35 billion by 2011 mostly due to increased enrollment.  Enrollment is expected to increase 39% per year over this time period while the cost per person is estimated to increase 23% per year.

Who will pay for this?  Massachusetts solution is to ask for $1.5 billion from the federal government (i.e.: taxpayers from other states will help finance this plan) to cover costs during the next 3 years.

“[T]he [Massachusetts] governor’s spokesman, Joseph Landolfi, said, ‘It is clear that paying for healthcare reform will pose a much greater fiscal challenge than was anticipated by the previous administration.’ “

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