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Massachusetts Health Care
Reform and Impact to BMC
       April 27, 2009
Principles of Massachusetts
Health Care Reform                                2




1. Near-universal coverage

2. Shift DSH funding to coverage

3. Increase Medicaid rates

4. Business does its share
  – Provide coverage, or pay a Fair Share “Tax”


5. Cost & Quality Review
Coverage                                                   3




                             Results

Newly insured to date:       Est. 2.6% remain uninsured,
                             432,000 growth in insured

Expand Medicaid              76,000 growth

New subsidized product       169,000 enrolled

New individual/small group   39,000 enrolled
options
Employer based insurance     168,000 growth
Coverage
                                                             4



Eligibility process challenging for
Low-Income population

Annual eligibility determination required
• Manual, mail-based process results in thousands
   inappropriately losing eligibility

Peak enrollment of 175,000 down to 169,000 resulting from:
• Ongoing churning
• Manual system
Coverage
57% newly insured are in Subsidized                               5



Products

                Commonwealth Choice
                individual/small group
                       product
                                         Medicaid
                          9%
                                          18%




           Employer-based
             insurance
                34%


                                            Commonweatlh Care
                                             subsidized Product
                                                    39%
Newly Insured in Massachusetts
by Region                                                      6




Geographic distribution of newly insured in Massachusetts is
  only available for the new subsidized product,
  Commonwealth Care.

Commonwealth Care enrollment distribution
Greater Boston         44,064
Northern Massachusetts 35,511
Southern Massachusetts 37,325
Central Massachusetts  28,253
Western Massachusetts 23,847

Total Massachusetts              169,000
Funding                                                         7




                             Results

Shift DSH Funding            Safety Net financial support
                             devastated, impacting hospitals
                             serving a disproportionate share
                             of low-income.


Increase Medicaid Rates      Mass. Hospital Assoc. reports
                             actual rate decreased to 70% of
Reform intent to increase
                             costs.
hospital rates from 80% to
95% of costs.
Business, Cost & Quality                                 8




                          Results

Business Does its Share
-Provide coverage         168,000 additional employees
                          purchased insurance

-Pay Fair Share “Tax”     Limited revenue collected


Cost & Quality Review     Efforts recently launched
                          Chapter 305
BMC’s Role in Health Care Reform                                9



Coverage
• Moved more patients to coverage than all other hospitals in
  Massachusetts combined
• 150,000 low-income patients served annually
• BMC HealthNet Plan is the largest insurer of care to
  Medicaid and Commonwealth Care with 250,000
  members.

Financial Impact
• Payments to BMC are down to 64 cents/dollar
• FY 2010, BMC to receive $221 payments cut for low-
  income patient care
BMC’s cost increases averaged only 4% per year 
while payments fell dramatically below cost for                                                                                                            10


the same volume of low income patients
                                    160,000                                                                             $600,000



                                    140,000
                                                                                                                        $500,000


                                    120,000
 Unduplicated low-income patients




                                                                                                                        $400,000




                                                                                                                                   Cost & Payments 000's
                                    100,000



                                     80,000                                                                             $300,000



                                     60,000
                                                                                                                        $200,000


                                     40,000

                                                                                                                        $100,000
                                     20,000



                                         0                                                                              $0
                                              FY 06     FY 07               FY 08                FY 09          FY 10

                                                      Medicaid   Commcare     Uninsured   Cost       Payments

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Boston University Medical Center

  • 1. Massachusetts Health Care Reform and Impact to BMC April 27, 2009
  • 2. Principles of Massachusetts Health Care Reform 2 1. Near-universal coverage 2. Shift DSH funding to coverage 3. Increase Medicaid rates 4. Business does its share – Provide coverage, or pay a Fair Share “Tax” 5. Cost & Quality Review
  • 3. Coverage 3 Results Newly insured to date: Est. 2.6% remain uninsured, 432,000 growth in insured Expand Medicaid 76,000 growth New subsidized product 169,000 enrolled New individual/small group 39,000 enrolled options Employer based insurance 168,000 growth
  • 4. Coverage 4 Eligibility process challenging for Low-Income population Annual eligibility determination required • Manual, mail-based process results in thousands inappropriately losing eligibility Peak enrollment of 175,000 down to 169,000 resulting from: • Ongoing churning • Manual system
  • 5. Coverage 57% newly insured are in Subsidized 5 Products Commonwealth Choice individual/small group product Medicaid 9% 18% Employer-based insurance 34% Commonweatlh Care subsidized Product 39%
  • 6. Newly Insured in Massachusetts by Region 6 Geographic distribution of newly insured in Massachusetts is only available for the new subsidized product, Commonwealth Care. Commonwealth Care enrollment distribution Greater Boston 44,064 Northern Massachusetts 35,511 Southern Massachusetts 37,325 Central Massachusetts 28,253 Western Massachusetts 23,847 Total Massachusetts 169,000
  • 7. Funding 7 Results Shift DSH Funding Safety Net financial support devastated, impacting hospitals serving a disproportionate share of low-income. Increase Medicaid Rates Mass. Hospital Assoc. reports actual rate decreased to 70% of Reform intent to increase costs. hospital rates from 80% to 95% of costs.
  • 8. Business, Cost & Quality 8 Results Business Does its Share -Provide coverage 168,000 additional employees purchased insurance -Pay Fair Share “Tax” Limited revenue collected Cost & Quality Review Efforts recently launched Chapter 305
  • 9. BMC’s Role in Health Care Reform 9 Coverage • Moved more patients to coverage than all other hospitals in Massachusetts combined • 150,000 low-income patients served annually • BMC HealthNet Plan is the largest insurer of care to Medicaid and Commonwealth Care with 250,000 members. Financial Impact • Payments to BMC are down to 64 cents/dollar • FY 2010, BMC to receive $221 payments cut for low- income patient care
  • 10. BMC’s cost increases averaged only 4% per year  while payments fell dramatically below cost for  10 the same volume of low income patients 160,000 $600,000 140,000 $500,000 120,000 Unduplicated low-income patients $400,000 Cost & Payments 000's 100,000 80,000 $300,000 60,000 $200,000 40,000 $100,000 20,000 0 $0 FY 06 FY 07 FY 08 FY 09 FY 10 Medicaid Commcare Uninsured Cost Payments