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Tseng ma ag report Presentation Transcript

  • 1. MASSACHUSETTS ATTORNEY GENERAL’S 2011 EXAMINATION OF HEALTH CARE COST TRENDS & COST DRIVERS AAFP STATE LEGISLATIVE CONFERENCE NOVEMBER 5, 2011 ©2011 Office of Massachusetts Attorney General Martha Coakley
  • 2. MA REFORM IN NATIONAL CONTEXT REFORMS MA FEDERALInsurance reform Partially, through• Guaranteed issue market 1990s 2010 Affordable• Acceptance of preexisting conditions Care Act• Modified community ratingExpansion of coverage• Individual mandate Chapter 58 of 2010 Affordable• Employer responsibility the Acts of 2006 Care Act• Medicaid expansion• Insurance exchangeInitial cost containment Chapter 305 of• Investigation of health care cost drivers the Acts of 2008 TBD• Standardized reporting of cost/quality metrics Chapter 288 of• Tools for prudent purchasing the Acts of 2010
  • 3. 2011 EXAMINATION: KEY FINDINGS1. There is wide variation in the payments made by health insurers to providers that is not adequately explained by differences in quality of care.2. Globally paid providers do not have consistently lower total medical expenses.3. Total medical spending is on average higher for the care of health plan members with higher incomes.4. Tiered and limited network products have increased consumer engagement in value-based purchasing decisions. ©2011 Office of Massachusetts Attorney General Martha Coakley
  • 4. FINDINGS CONT’D5. PPO health plans, unlike HMO health plans, create significant impediments for providers to coordinate patient care because PPO plans are not designed around primary care providers who have the information and authority necessary to coordinate the provision of health care effectively.6. Health care provider organizations designed around primary care can coordinate care effectively (1) through a variety of organizational models, (2) provided they have appropriate data and resources, and (3) while global payments may encourage care coordination, they pose significant challenges. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 5. MEASURING HEALTH CARE COSTSPRICE• Negotiated amount insurers pay providers for health care services provided to members.TOTAL MEDICAL EXPENSES (TME)• Total cost of all the care a patient receives (price of services X utilization of services).• Often attributed to the patient’s primary provider group. This shows, for each provider group, how much health care the group’s patients consume on average. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 6. MEASURING HEALTH CARE DELIVERYQUALITY OF CARE• With expert assistance, we reviewed the best available, well-vetted, widely accepted quality measures from state and national agencies and nonprofit organizations.• We focused on outcome measures where available.CARE COORDINATION• We examined how MA providers perform on a variety of quality measures related to the degree of coordinated activity over time and/or across health care specialties. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 7. Relative Payments to Hospitals 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 Hubbard Regional Hospital Saints Medical Center Milton Hospital Noble Hospital Essent - Merrimack Valley Athol Memorial Hospital Morton Hospital and Medical Center Cambridge Health Alliance Massachusetts Eye and Ear Infirmary Mercy Medical Center UMASS - Health Alliance Holyoke Medical Center Quincy Medical Center Lawrence General Hospital Jordan Hospital Boston Medical Center Anna Jaques Hospital Heywood Hospital Southcoast - St. Lukes UMASS - Marlborough Hospital New England Baptist Hospital Wing Memorial Hospital Signature HC - Brockton Hospital Southcoast - Tobey Hospital UMASS - Clinton Hospital Winchester Hospital Lowell General Hospital Baystate Medical Center Vanguard - Saint Vincent Hospital Southcoast - Charlton Memorial Essent - Nashoba Valley Vanguard - MetroWest Medical Center Milford Regional Medical Center Caritas Holy Family Hospital PHS - Emerson Hospital Hospitals from Low to Baystate - Mary Lane Hospital Tufts Medical Center Caritas - Good Samaritan Northeast Health System Caritas - Norwood Hospital Caritas - Carney Hospital Caritas - Saint Annes Hospital Dana-Farber Cancer Institute Partners - Faulkner Hospital PHS - Hallmark Health General Martha Lahey Clinic Baystate - Franklin Medical Center BID - Needham/Glover Partners - North Shore Med Ctr Partners - Newton-Wellesley Hospital© 2011 Office of Massachusetts Attorney High Payments Coakley Mount Auburn Hospital South Shore Hospital Caritas - St. Elizabeths Harrington Memorial Hospital UMass Memorial Medical Center BI Deaconess Medical Center Sturdy Memorial Hospital CCHS - Falmouth Hospital CCHS - Cape Cod Hospital FINDING #1: THERE IS WIDE VARIATION IN THE Partners - MGH BkHS - Fairview Hospital Partners - BWH BkHS - Berkshire Medical Center North Adams Regional Hospital PAYMENTS MADE BY HEALTH INSURERS TO PROVIDERS Cooley Dickinson Hospital Partners - Marthas Vineyard Childrens Hospital Boston Partners - Nantucket Cottage
  • 8. 0.00 0.20 0.40 0.60 0.80 1.00 1.20 MA Hospital 1 MA Hospital 2 MA Hospital 3 MA Hospital 4 MA Hospital 5 MA Hospital 6 MA Hospital 7 MA Hospital 8 MA Hospital 9MA Hospital 10MA Hospital 11MA Hospital 12MA Hospital 13MA Hospital 14MA Hospital 15MA Hospital 16MA Hospital 17MA Hospital 18MA Hospital 19MA Hospital 20MA Hospital 21MA Hospital 22MA Hospital 23MA Hospital 24MA Hospital 25MA Hospital 26MA Hospital 27MA Hospital 28MA Hospital 29MA Hospital 30MA Hospital 31MA Hospital 32MA Hospital 33MA Hospital 34MA Hospital 35MA Hospital 36MA Hospital 37MA Hospital 38MA Hospital 39MA Hospital 40MA Hospital 41MA Hospital 42MA Hospital 43MA Hospital 44 Compared to National Average PerformanceMA Hospital 45 © 2011 Office of Massachusetts Attorney General Martha CoakleyMA Hospital 46MA Hospital 47 MA Hospital Performance on CMS Process MeasuresMA Hospital 48MA Hospital 49MA Hospital 50MA Hospital 51 EXPLAINED BY DIFFERENCES IN QUALITY:MA Hospital 52MA Hospital 53MA Hospital 54MA Hospital 55MA Hospital 56MA Hospital 57 MA PROVIDERS HAVE CONSISTENTLY HIGH QUALITYMA Hospital 58MA Hospital 59MA Hospital 60 FINDING #1: DIFFERENCES IN PRICE ARE NOT ADEQUATELYMA Hospital 61
  • 9. Relative Health Status Adjusted TME 1.000 1.100 1.400 1.500 0.800 0.900 1.200 1.300 1.600 MARLBOROUGH/ASSABET East Boston Neighborhood Health Ctr Neponset Valley Healthcare Assoc NASHOBA IPA HCPA BMC MANAGEMENT SERVICES METRO WEST-LMH HOLYOKE PHO ANNA JAQUES/MERRIMACK/WHITTIER CAREGROUP - N.E. BAPTIST Lowell General PHO Signature Healthcare Brockton Lawrence General IPA Fallon Clinic New England Quality Care Alliance HENRY HEYWOOD MORTON HOSPITAL Caritas Christi Baystate Health WINCHESTER/HIGHLAND HEALTH ALLIANCE Medical Expenses (2009) Atrius Health Beth Israel Deaconess Provider Groups from Low to High TME Southcoast Mount Auburn Cambridge IPA VALLEY MEDICAL GROUP Northeast Health Systems© 2011 Office of Massachusetts Attorney General Martha Coakley Lahey Clinic Central Massachusetts IPA Acton Medical Associates UMASS MEMORIAL MED. CTR. COOLEY - DICKINSON PHO Variation by Payment Method in one Major Health Plans Health Status Adjusted Total STURDY MEMORIAL HOSPITAL CONSISTENTLY LOWER TOTAL MEDICAL EXPENSES South Shore PHO Partners FINDING #2: GLOBALLY PAID PROVIDERS DO NOT HAVE HARRINGTON PHO Childrens
  • 10. FINDING #2: GLOBAL PAYMENTS POSE CHALLENGES, ESPECIALLY FOR SMALLER PROVIDERS• Bearing financial risk through global payments requires significant investment in expertise, resources, and infrastructure, which many providers lack.• Risk contracts expose providers to random insurance risk, which providers, especially smaller providers, are ill- equipped to bear.• We should ensure the incentive to manage risk contracts does not lead providers to avoid patients whose care may be more difficult to manage.• We should address concerns regarding how risk contracts interact with self-insured accounts. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 11. FINDING #3: TOTAL MEDICAL SPENDING IS HIGHER FOR THE CARE OF COMMERCIAL HEALTH PLAN MEMBERS FROM HIGHER INCOME COMMUNITIES• We received health status adjusted TME from the three major insurers in MA for all their commercial members – HMO, PPO, and indemnity.• For each Massachusetts zip code, we compared average TME for members living in that zip code with average income for that zip code, as reported on 2007 federal income tax returns.• The next graph shows that total medical spending for the care of patients from higher-income zip codes is higher on a health-status adjusted basis than total medical spending on the care of patients from lower-income zip codes. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 12. FINDING #3: TOTAL MEDICAL SPENDING IS HIGHER FOR THE CARE OF COMMERCIAL HEALTH PLAN MEMBERS FROM HIGHER INCOME COMMUNITIES 100.0%Proportion of Members at Each Spending Level with Low v. High 90.0% 80.0% 70.0% 60.0% $120,149 Income 50.0% $54,827 40.0% $42,850 $36,390 30.0% $27,802 20.0% 10.0% 0.0% $335 $367 $388 $410 $448 1st 2nd 3rd 4th 5th Members of Major Health Plan by Spending Quintile (As Measured by PMPM Health Status Adjusted TME) © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 13. FINDING #4: TIERED AND LIMITED NETWORK PRODUCTS HAVE INCREASED CONSUMER ENGAGEMENT IN VALUE- BASED PURCHASING DECISIONS• Health insurance products that do not differentiate among providers based on value do not give consumers an incentive to seek out more efficient providers, because consumers are not rewarded with the cost savings associated with that choice.• As a result: (1) consumers are de-sensitized from value- based purchasing decisions and (2) providers are not rewarded for competing on value.• Massachusetts has seen recent developments in tiered and limited network products; these types of innovative products should be further encouraged. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 14. FINDING #5: PPO HEALTH PLANS CREATE SIGNIFICANT IMPEDIMENTS FOR PROVIDERS TO COORDINATE PATIENT CARE• We found that primary care providers, with adequate data and resources, are the foundation of effective care coordination.• Preferred provider organization (PPO) plans do not require selection of a primary care provider, and as such are inconsistent with structured approaches to improving care coordination.• Enrollment in PPO plans is increasing: for the three largest commercial insurers in MA, it has surpassed 40% of their membership. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 15. FINDING #6: A VARIETY OF PROVIDERS WITH ADEQUATEDATA AND RESOURCES CAN COORDINATE PATIENT CARE, REGARDLESS OF ORGANIZATIONAL STRUCTURE• A variety of provider organizational models, with adequate data and resources, can deliver high-quality, coordinated care.• Enhanced availability of information on patient care is essential to supporting care coordination and measuring system-wide performance. © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 16. THOUGHTS FOR PRACTITIONERS1. The importance of access to timely data on patient care2. The importance of effective oversight and solvency standards for providers who contract to manage the risk of patient populations3. The importance of supporting primary care providers who can assist patients in coordinating care based on each patient’s needs and best interests © 2011 Office of Massachusetts Attorney General Martha Coakley
  • 17. RESOURCES & CONTACT INFORMATION• Massachusetts Attorney General’s 2011 Examination of Health Care Cost Trends and Cost Drivers: http://www.mass.gov/ago/docs/healthcare/2011- hcctd-full.pdf• Massachusetts Attorney General’s 2010 Examination of Health Care Cost Trends and Cost Drivers: http://www.mass.gov/ago/docs/healthcare/final- report-w-cover-appendices-glossary.pdf• Massachusetts legislation (Chapter 288 of Acts of 2010) to increase transparency and control costs in health care market: http://www.malegislature.gov/Laws/SessionLaws/Acts/2010/Chapter288• Massachusetts Division of Health Care Finance and Policy materials on cost trends hearings: http://www.mass.gov/dhcfp/costtrends Karen Tseng, Assistant Attorney General, MA Attorney General’s Office Karen.Tseng@state.ma.us; (617) 963-2123