Posts filed under 'Healthcare'
Kyle Cheney of the State House News Service has been following the discussions on the federal waiver related to the state’s health care reform act (HCRA) and Medicaid programs. (If you do not have a SHNS subscription, get a free one-week trial here because they do great work.) Kyle reports on the press conference held today announcing a deal after numerous extensions provided by the feds as they tried to hammer out a deal that held the federal government harmless and provided the state with the flexibility and resources to make a go of the HCRA.
What the state got was: (1) $21.2 billion over three years in state and federal match ($10.6 in fed and $10.6 in state funding), including support for the HCRA; (2) maintenance of the 300% federal poverty level coverage in the HCRA; and (3) flexibility to use the money over a three-year period rather than on a year-to-year basis.
The $21.2 billion number is $1.8 billion less than the state had asked for, but $4.3 billion more than the last three-year waiver.
The deal was in fact a “compromise.”
- The $4.3 billion, from what we can make out, stays in line with the feds’ desire for federal budget/waiver neutrality. Cost of health care increases seem to be the reason for the increase.
- The Safety Net Care Pool (SNCP) cap was raised a bit from $1.3 billion to $1.5 billion a year based on adjustments for mistakes in the previous waiver’s calculations.
Unlike Secretary Bigby’s representation at the press conference, my information is that there was a good long dispute over the Section 122 payments to Boston Medical Center and Cambridge Health Alliance. This is just hearsay (so don’t hold me or anyone to it), but word is that
- The BMC and CHA payments will be phased down over the next three years from $75 million to $50 million to $25 million. That’s well below the $180 million in special payments going to these admittedly very important institutions.
- The total SNCP cap of $4.5 billion (over three years) will be made available to the state in year one and it will have broad flexibility over how/when to use those funds within the programs under the SNCP. Look for a food fight over how that cap gets distributed. My guess is that there will be lots of moaning if someone else’s ox gets gored to ensure that BMC and CHA are held harmless.
The solution? Distribute any special payments to all hospitals serving the poor based on the data. Do not single out specific institutions. In other words, be fair. Pretty simple, no?
Again, this is just at the level of hearsay. Come back to this space for more soon.
September 30th, 2008
It has been over a decade since Massachusetts took advantage of a federal waiver for its welfare programs. At the time, over 240,000 individuals were recipients of the old Aid to Families with Dependent Children (AFDC) program. Today that number has been reduced to just around 100,000 individuals.
Massachusetts’ waiver allowed it flexibility to experiment with time limits, work requirements, and family cap restrictions to encourage self-sufficiency.
A decade after welfare reform, the Heartland Institute has taken a look at what worked and what didn’t across the 50 states and the District of Columbia.
Heartland’s data suggests we in Massachusetts have some hard questions to answer. By the Institute’s reckoning, on the quality of its policies and the state’s implementation, Massachusetts ranks 46th out of the 51 jurisdictions analyzed. On results, though on the face of it impressive, our 60 percent reduction in the number of TANF recipients low on a relative basis. Massachusetts was dead last in percentage of TANF recipients who joined the workforce.
The Institute also is critical of the Bay State’s policies which are too rigid (drawing people unnecessarily into TANF), lack lifetime limits on benefits, and have few sanctions to enforce compliance with work and other eligibility requirements.
What I find most disturbing is probably what is least politically charged — Massachusetts is among the worst states in the nation in terms of leaving federal income tax credits for the poor unused. The Earned Income Tax Credit (EITC) is federally funded (read: “free” from the state’s perspective) and it was a critical part of the welfare reform law. EITC is a strong incentive for single mothers to seek work. In 2007, a filer with two or more qualifying children could take a credit of up to $4,716. Not bad. And it works: The EITC, according to a number of researchers, lowers dependence on welfare programs and increases the participation of single mothers in the workplace.
OK, so what gives? Reduces the dependence of single mothers on welfare; fully paid for through federal coffers… So why is it that in just a single year almost $2 billion in EITC benefits, or 80 percent of total value, went unclaimed in 2004? Why is it that state agencies do not put more emphasis on educating the poor on this opportunity?
Heartland opines:
The answer seems to be that since the tax credit flows directly to individuals and not through welfare bureaucracies, there is little incentive for state and local welfare agencies to invest in public education programs.
Smells like the agencies are focused on their navels.
August 20th, 2008
From Grace-Marie Turner of the Galen Institute gives the good word on Medicare costs:
The Centers for Medicare and Medicaid Services reported yesterday that average beneficiary premiums for the standard Medicare drug benefit will increase by just $3 a month in 2009, to $28. That is 37% lower than the $44 a month that legislators estimated seniors would pay this year when the Medicare Modernization Act was enacted in 2003.
Based upon bids received for the upcoming open season, CMS says 97% of beneficiaries could avoid any premium increase in 2009 by enrolling in a less expensive drug plan in their region.
And the drug benefit, based upon consumer choice and competition, also is costing taxpayers less than expected: CMS says it will cost $46.4 billion in 2009 vs. $74 billion that had been estimated for this year.
Competition works, even inside a public program, to give people more choices and keep costs down.
August 15th, 2008
Tante grazie to Paul Levy for the nice things he opens with, but he has a less than sanguine reply to my op-ed in the Globe today on the viability of the health care reform act without further some level of reduction in the supplemental payments made to the Boston Medical Center and the Cambridge Health Alliance.
AdamG of the Universal Hub piles on citing Paul.
So, let’s start with niceties. Paul is one of our best public managers. Note BID, note that MWRA. You want Paul on your side. I want Paul on my side, but you can’t always get what you want. I also find a touch too much political spin in the fastball Paul throws my way in suggesting that I am in the long line of “attacks” on BMC and CHA.
On this one, quite simply my math differs from Paul’s:
· I don’t disagree that the expected costs of Chapter 58 are due to costs being underestimated at the start, but that does suggest that the legislation was, while not ill conceived, at least structured poorly. We should be willing to touch up the math so it works – we should not put the reform at risk.
· Paul cites the law’s purpose as providing “greater insured access to health care.” That is only half of the reform. The other half was how to get there—and, again, the reform was a move from supporting institutions to supporting individuals. Prior to the reform, I would not quibble with the extra support needed for BMC and CHA. I would not even quibble with some level of support even today being needed for these institutions. I just don’t think it is close to the $180 million it currently stands at.
· Paul cites insurers and taxpayers as needing to foot more of the bill. I appreciate Paul’s pushing this off to the insurers, but it would be constructive to hear what they can do besides provide affordable plans. I’ll wait to hear more on this. As far as the taxpayers are concerned, they are tapped out on health care: The proportion of the budget dedicated to health and human services is burying all other core services. As far as businesses are concerned, they are tapped out on health care and the recent increases in fees and other levees under Governors Romney and Patrick.
· As Rick Lord of AIM was quoted in the Lowell Sun over the weekend, “What we’ve failed to do in a serious way is address the cost of health insurance and unless we do that health care reform won’t be sustainable in the long term.” There are other things we can and must do over the long term, including some flexibility on mandates and providing clarity on outcome and pricing data to consumers (in an easy to understand way). But in the short term, there is little else we can do to get this waiver through.
· Finally, and most importantly, while I agree with Paul that there is a mouse going through the proverbial snake in terms of pent-up demand for services like mammograms by individuals heretofore uninsured, it is also true that there are more people signed up at this point than the crafters of the legislation foresaw. That should mean that there are fewer people accessing hospitals without insurance. Shouldn’t that mean that the overall costs to the hospitals of providing this care (which they had been providing to “free riders”) should be more predictable and less expensive for the BMC and CHA? Doesn’t that raise the question of whether we should reduce (I never said cut completely) the extra payments to these institutions? The reasonable answer is yes.
July 22nd, 2008
Reading Alan Sager’s and Deborah Socolar’s op-ed in the Globe this morning, I was reminded yet again how the dualistic view of the health care debate in this country is wrong. It simply can’t be an either/or proposition - either access or cost containment. As the authors point out about Massachusetts’ new universal health care legislation:
The law’s proponents underestimated costs and overestimated revenue. Redeeming the law’s promises has therefore obliged the state to spend more to subsidize insurance. This obligation imposes unsustainable financial and political stresses amid a growing budget deficit. Many health reform advocates therefore now declare cost controls crucial to the law’s survival.
Of course, in reality you can have access without cost containment, but politically the drive for universal access will ultimately be undermined by escalating costs. And, conversely, you can always contain costs by restricting access to the healthy, wealthy and wise, but that, too, is politically unpalatable to a lot of people (myself included).
I don’t know what the solution is (Sager and Socolar recommend pushing as much fiduciary responsibility as possible down to doctors, whom they claim control as much as 90% of health care spending), but I do know this: discussing universal access in a vacuum is a political non-starter.
July 21st, 2008
[I]f there is a state budget problem, it is not the result of increased enrollment in Commonwealth Care but rather of the state failing to fully comply with the basic waiver agreement to shift subsidies from health care providers to individuals needing assistance in buying health insurance.
That’s a clear indictment from Greg D’Angelo and Edmund F. Haislmaier of the Heritage Foundation in the just released policy piece entitled Health Care Reform in Massachusetts: Medicaid Waiver Renewal Will Set a Precedent.
The Health Care Reform Act However included hold harmless payments for the Boston Medical Center and Cambridge Health Alliance (so-called Section 122 payments). The payments “were authorized for three years starting at $200 million for FY 2007, declining by $20 million each year.” D’Angelo and Haislmaier note that:
Had initial enrollment in Commonwealth Care come in at or below projected levels, these Section 122 payments would likely not have created a financing issue. But with enrollment running higher than expected, the state has already obligated elsewhere hundreds of millions of dollars that it should otherwise have available to meet the added cost of providing subsidized coverage to more individuals. In FY 2008, Section 122 payments come to $180 million, while Commonwealth Care overruns are $153 million.
D & H finally note that
State payments for uncompensated care do not seem to have decreased as much as these trends suggest they should have. One explanation may be that some hospitals are attempting to compensate for providing less uncompensated care by charging the state higher rates for the uncompensated care they still provide.
Interesting work — and the timing is impeccable given the waiver discussions.
July 11th, 2008
I have argued on this blog before that there may be no more important public policy issue facing the country than the spiraling cost of health care; at its present rate of increase, it will simply render all other spending debates moot.
There may also be no issue more complex than health care. Which is why I think Jeffrey Krasner’s piece on the Coalition for Affordable Health Care in yesterday’s Globe was pretty irresponsible. The offending paragraph reads as follows:
[Harvard Pilgrim CEO Charles] Baker supports so-called consumer-driven healthcare, in which patients pay higher deductibles and copayments as an incentive for them not to go to the doctor too often or use other unnecessary medical services.
The use of “so-called” as a descriptor is loaded; it’s to imply that consumer-driven healthcare is called consumer-driven, but really isn’t. Coupled with a definition that focuses narrowly on one (albeit, at least to my mind, worrisome) aspect and the uninformed reader could only assume one thing: consumer-driven healthcare is a sham.
This was to be a report, not an op-ed.
Now, I’m not entirely sold on consumer-driven healthcare. It would be easy for me, at least easier than it would be for other people. I’m young, healthy, fairly well-off (though my wife might laugh to read it) and something of a policy geek. I would know where to go to get the right data to make informed medical decisions and would have the financial flexibility to pay a little bit more for doctor’s visits and procedures if I felt they were warranted. A single mother working two jobs to make ends meet might not have the same luxuries.
Still, some studies have shown that, when consumer-driven healthcare has been implemented, consumers have taken more and better preventative steps with their health and are more conscientious about taking prescriptions. (Gee. Wonder why?)
This simply goes to say, all options need to be on the table as we explore ways to contain costs. Irresponsible journalism only dumbs down the debate.
June 6th, 2008
I guess the editorial page of the Wall Street Journal does not think that cost overruns of $4 billion over a decade are a good idea. Parochial thinking to be sure. When an editorial opens “Mitt Romney’s presidential run is history, but it looks as if the taxpayers of Massachusetts will be paying for it for years to come,” you can tell it is going to get worse from there.
Some two-thirds of the growth in coverage owes to a low- or no-cost public insurance option. Called Commonwealth Care, it uses a sliding income scale to subsidize coverage for everyone under 300% of the federal poverty level, or about $63,000 for a family of four. Commonwealth Care also accounts for 60% of statewide growth in individual insurance over the last year, and the trend is expected to accelerate, perhaps double.
One lesson here is that while pledging “universal” coverage is easy, the harder problem is paying for it. This year’s appropriation for Commonwealth Care was $472 million, but officials have asked for an add-on that will bring it to $625 million. For 2009, Governor Deval Patrick requested $869 million but has already conceded that even that huge figure is too low.
Mr. Romney’s fundamental mistake was focusing on making health insurance “universal” without first reforming the private insurance market. The “connector” that was supposed to link individuals to private insurance options has barely been used, as lower-income workers flood to the public option. Meanwhile, low-cost private insurers continue to avoid the state because it imposes multiple and costly mandates on all policies.
The real problem in health care is the way the tax code and third-party payment system distort incentives. That’s where John McCain has been focusing his reform efforts - because that really does have the potential to reduce costs while covering more of the uninsured - and Republicans ought to follow his lead.
Pioneer is releasing this summer a framework for a full evaluation of the Health Care Reform Act, including other measures such as who has been switching from private to public insurance, or vice-versa. Clearly, we have focused on the cost containment issue and will continue to do so.
May 28th, 2008
MassInc published a nice piece of research recently that analyzed state spending and held a good forum on it.
The author of the research paper, Cam Huff, found that Medicaid was growing like crazy:
Medicaid spending totaled $7.4 billion in 2006, an increase over 1987 of more than $4.5 billion, or 163 percent. This percentage growth was almost five times that of the budget as a whole. Medicaid’s share of the budget rose from 13 percent to 26 percent between 1987 and 2006. Increases in Medicaid were two-thirds of the overall growth in state spending.
And its notoriously difficult to figure out why:
the program has become progressively more difficult to understand. While it, like the health care system as a whole, is inherently complex, its daunting jargon and baroque accounting raise high barriers to comprehension. The state budget process does little to shed light on how the program operates and what is driving up its costs.
But it’s where the money is, when spending growth is being considered. At its simplest, Medicaid is a short equation:
Eligible Populations X Take-up Rate X Covered Benefits X Utilization Rate X Reimbursement Rate
So which one do you want to cut back on to control costs? And what are the unintended consequences of cuts in each area?
I don’t have the answers here, but this is the real spending puzzle for state policymakers to wrestle with.
May 2nd, 2008
You are constantly berated for not saving money, folks. You overspend. You should put the money in bank accounts and let the government do all the borrowing to pay for the promises it makes to you. From John Goodman (and health blog HERE) is a neat packaging of Social Security and Medicare liabilities we are racking up… As John suggested in his email, read and weep.
On Good Friday (when most people were off, including most reporters) the Administration announced that the following Tuesday during Spring Break (when Congress was in recess and everyone’s attention was focused elsewhere) the Social Security/Medicare Trustees annual report would be released.
Apparently someone isn’t anxious for you to pay close attention to this year’s report. The table below may explain why. The federal government has promised more that $100 trillion in benefits over and above expected taxes and premium payments!
| PRESENT VALUE OF UNFUNDED LIABILITIES |
| Program |
75-Year |
Infinite Horizon |
| Social Security |
$6.6 trillion |
$15.8 trillion |
| Medicare Part A |
$12.7 trillion |
$34.7 trillion |
| Medicare Part B |
$15.7 trillion |
$34.0 trillion |
| Medicare Part D |
$7.9 trillion |
$17.2 trillion |
| Total Medicare |
$36.3 trillion |
$85.9 trillion |
| Total Medicare & Social Security |
$42.9 trillion |
$101.7 trillion |
*These calculations ignore the existence of the trust fund, estimated at a little more than $2 trillion.
Source: Social Security/Medicare Trustees Reports 2008
March 28th, 2008
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