For “Health Care Matters – ‘It Really Does Matter’” Corner

Health Care Cost Containment-Consumers, Unite!

I tried hard to think of a clever and funny tag line for this post.  I finally remembered that health care cost containment is NOT just a clever and funny matter.  It’s got to succeed.  So let me match the seriousness of the problem with the temperament of this post, without losing you altogether.

Massachusetts as Health Care Reform Leader (Again).  Massachusetts’ recently enacted legislation to contain the growing health care costs marks the first significant effort of its kind.  The other 49 states, indeed, the Feds, will be watching while we implement its mission to keep the growth of health care costs to levels at or below the growth of the “Gross State Product.”

Early Forecasts. Unfortunately, early warnings signal the momentum driving cost containment in Massachusetts may be slowing. Carriers doing business in Massachusetts estimate the 2013“medical cost trend,” a key industry measure  based on what providers bill insurers for care and the volume of services performed,will actually increase from between 6 to 12 percent, as compared with the 3.6 percent increase set as a target growth limit in the legislation.  In that case, the Health Policy Commission, the agency charged with enforcing the law, may establish “corrective action plans” for hospitals and doctors to reduce their costs. Under the current law as enacted, the Commission cannot reset the rates, however.  Stuart Altman, the Commission Chair, was recently quoted in a Washington Post article to suggest that if the mission of cost containment in not attained in 2-3 years, the Commission could request the legislature for power that goes beyond its current authority as a “watchdog.”

The traditional forces of carrier and provider lobbies are at work, apparently.  Can we really wait out another 2-3 years to watch whether carriers and providers will essentially comply of their own volition, before giving the Commission the support it will need to effect real results under the law?  The law itself was a compromise among these very forces, which have been battling over the same issue for years.  Why should they switch gears without a palpable means to enforce compliance?

Consumer Engagement.  The legislation references consumer representation on advisory councils appointed under the law. Health Care for All, a well-respected non-profit consumer advocacy group, is in fact mentioned by name in the 350-page law.  Unfortunately, most individual consumers, and most employers who sponsor health insurance, do not understand the health care system in Massachusetts and the applicable laws well enough to influence the policy makers and regulators effectively.

A single consumer voice among the collective voices of the throngs of carriers, providers and their lobbyists can be easily drowned out.  Participants in a recent open meeting of a Commission subcommittee generally acknowledged that the typical consumer does not understand the health policy issues at stake underlying the cost containment law.  There needs to be a broader, and better educated consumer constituency to ensure the implementation of the law is guided in the right direction.

As one such patient/consumer who realized I needed to understand the Massachusetts health care system better, I have elected to actually sit in and participate in Committee meetings that are open to the public.  (These meetings are well attended to capacity with paid employees and agents for providers, carriers, industry associations, advocacy groups and similar agents. I believe I may well be the only person in the audience who is not being paid to attend.)

My passion for health care reform, and concurrently, health care cost containment, recently re-ignited with my experience in 2012 as a patient. As I became aware of the costs and inefficiencies resident in the system during my surgery and subsequent 6-month recovery, I was driven to educate myself on the health care system while evaluating it, in order to be in a position to help improve the system once the opportunity presented itself.

Beginning in early 2012, I met with executives in each of four segments of the Massachusetts health care industry. I spoke with CEOs, CFOs and former CEOs and general counsels of hospitals, clinics and health care systems, health care service providers and pharmaceutical development and medical device companies.  Comparing the insights I gained from these executives and my recent patient experience with my experience as an executive in several different industries in the private sector, I concluded that the nature of the management challenges and economic issues faced by the healthcare industry are truly unique.  Among other issues, the culture of the healthcare community is itself unique and in some respects isolated from the traditional forces that drive efficiency in other industries.  So, we shouldn’t be surprised at data estimating 30% “waste” in the health care system.

The frustration with the system expressed by many individuals, especially those who have not ever worked in the health care industry, also led me to conclude that we need to do a better job simplifying the system, communicating with the community it serves and holding the members of the system accountable for ensuring the delivery of quality care at sustainable costs. Empowering constituents with a better understanding of the system would open up resources to facilitate consensus on regulating a system that works for all.

That’s very easy to “say”.  The recent forecasts of 2013 health care cost growth, even after the enactment of cost containment legislation, prove that it will be very difficult to “do”.

Provider and Carrier Operational Reforms.  Clinicians at a local area provider system have been undergoing “lean process” training.  I was delighted to hear the nurse administering my flu shot, audiologist and dermatologist each tell me about their “RIEs” and lean process training experiences.  The doctors do feel under pressure to perform in less time (15 minute sessions, as an example).  The administrative assistants are worried they will lose their jobs, since their training demonstrates the same job can be done more effectively by fewer people in less time.  It will take awhile for the system to reallocate its resources, so that doctors feel less pressured, and can provide better care to their patients, while the support personnel learn new skills.  But at least this system is making an effort to reduce the waste in health care.

Another example of providers trying to make demonstrable improvements in the ultimate cost and quality of health care is the Iora Health model, founded by Rushika Fernandopulle, M.D., M.P.P.Iora is a perfect example of the rewards for taking a risk on a great idea; it has venture-backed funding.  The real challenge for a system based on primary care over the long term is that ultimately, for it to work, the current payer system must be changed to re-allocate more reimbursement money to primary care services.  And that change must occur in a regulatory environment designed to cap the overall costs of health care.

I have yet to hear of “lean training” programs from the carriers.  I would welcome any anecdotes or evidence confirming that the carriers are making strides to reduce waste in their claims processes.  Doing so would give some comfort to consumers who firmly believe claims adjusters and agents are hired simply to deny claims or delay payment for as long as possible.

Again, I would heartily welcome any evidence to prove I am wrong about the carriers’ failure to take the initiative to render the processing of claims more efficient-“leaner”.

Now a small business owner, facing daunting health care insurance premiums, I want to hold carriers accountable for the same kind of efficiency targets which every other industry in which I have been engaged has adopted.

Consumers from all Perspectives, Unite!  Will the new law, and the Commission constituted to implement it, have enough clout to force these needed changes?  Whatever the shortcomings of the current law, it is incumbent on consumers-individuals, small business owners and other businesses who provide health insurance for their employees, alike- to get up to speed quickly on the policy, economics and politics of health care cost containment in Massachusetts.  It is likewise the Commission’s responsibility to educate the consumers.  With an educated consumer constituency, there will be more voices to force real change in the relationships among providers, carriers and consumers, consistent with the purpose of the health care cost containment law.

As I commented under the Washington Post article referenced earlier:

“The HPC [Massachusetts Health Policy Commission] has a tremendous opportunity to make a difference, regardless of the current level of appropriate enforcement tools. As consumers and patients, we must do our part, along with all other stakeholders in the system, to ensure the triple aim is met while the system is forced to become more efficient. Get educated on the underpinnings of the legislation, the forces at work (lobbies from carriers and providers alike), and vote with your feet!”

The extent to which the Commission opens its meetings, welcomes consumer input from all perspectives and navigates the strong currents in force between carriers and providers, will determine its success in achieving its mission.  The extent to which consumers take the opportunity to participate and raise their voices for improvements in the system, will determine their success in holding the providers, payers and Commission accountable for achieving the mission of health care cost containment.

For anyone who wishes to learn more about the activities of the Health Policy Commission, email a request that your name and email address be included for updates to or check out the HPC website at .

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