The last day of health wonk boot camp kicked off with Acting DHCFP Commissioner Seena Perumal Carrington giving a recap of the past few days. Ms. Carrington spoke about the sense of urgency that has been a constant theme throughout the four days of hearings and how the goals of the hearing – looking at the issues within the Governor’s bill to determine the priorities and what actions need to be taken – have been met. She reviewed the findings of Tuesday and Wednesday’s sessions : that government intervention is needed immediately, though it is yet to be determined how that intervention should be shaped, that transparency is a necessity among both payers and providers, that a delivery system needs to be implemented that rewards value rather than volume, and a health resource planning system needs to be put in place. Despite these determinations, there are still questions and issues that need to be addressed.

One eye-popping headline was that Massachusetts spends around $2 billion on potentially preventable medical care – like preventable hospitalizations, re-admissions and emergency room visits (details below). Reducing spending on these wasteful services are identifiable savings that could be achieved right now with easy to implement payment policies. Maryland had done it (details here). In just the first year they saved over $60 million. Hospital-acquired infections were reduced by 20%; hospital complications were reduced by 12%. They saved this without global payments, but by simply paying a bit less to hospitals with high rates of preventable complications.

As all readers know by now, testimony and presentations are here, and our full report just takes a click.

Following Ms. Carrington’s introduction, the morning session focused on challenges and opportunities associated with care coordination. Stacy Eccleston, Assistant Commissioner of DHCFP, Lois Johnson, Assistant AG in the Health Care Division, and their expert consultant, Dr. John Freedman, presented “Preventable Hospitalizations; Avoidable Emergency Department Visits; Potentially Preventable Readmissions; and Results of Emergency Department Diversion Programs.”

Identifying Immediate Opportunities for Savings – Preventable Events
Ms. Eccleston led off, presenting their findings that in FY2009, $2 billion was spent on potentially preventable events, including: potentially preventable hospitalizations – treatment of conditions for which good outpatient care/prevention care can avoid; potentially preventable re-admissions – subsequent hospitalizations within 30 days of initial visit that are clinically related; and potentially avoidable emergency department visits – not urgently (needed within 12 hours), urgent but primary care could treat, or urgent but preventable had there been good primary care. Most of the excess spent on these avoidable events could be saved with better and more accessible primary care.

In 2008, CMS implemented Emergency Department Diversion Program Grants, through which Massachusetts received $4.5 million to fund a program to reduce avoidable emergency department visits by Medicare patients for non-emergency conditions and improve access to urgent care at community health centers. The program was administered by Neighborhood Health Plan and involved 17 community health centers that expanded their hours, expanded capacity for primary care and urgent care and linked to medical homes. Most of these community health centers experienced a decrease in the proportion of avoidable emergency department visits.

Who Can Coordinate Care Best?
Ms. Johnson then presented results from a study of the challenges of care coordination that the AG’s office completed with the help of Dr. Freedman. The study reviewed a range of 16 provider organizations to determine what makes coordinated care programs successful. The study found that a variety of provider organizations can deliver high-quality, coordinated care – whether they are physician or hospital-based, corporately integrated or large size. There is no preferred ACO model. The study also determined that a common challenge to implementing care coordination is that it is difficult to provide care to patients who chose to obtain some or all over their care outside of primary care networks.

Care coordination requires: 1) PCPs; 2) care management infrastructure; and, 3) data. Primary Care Providers are essential to care coordination because of the referral authority and ability to track patient care and manage recovery. PPOs do not require members to select a PCP, which will pose a challenge to providing coordinated care, especially since membership numbers in PPOs are on the rise. A care management infrastructure is a vital part of care coordination but requires money, time and effort to build, whether it is a fee for service or a global payment system. Data is a requirement because the ability of the market to encourage coordinated care and to measure system-wide performance is hampered by a lack of transparent and reliable data. Not only is the data needed for providers, it is also crucial for policy development and measurement of system change.

Dr. Freedman closed this session by giving his opinion that it is important to keep in mind when implementing care coordination that it is better to maintain options for consumers rather than creating a few, super-sized ACOs.

Communication as the Key? Learning From the Airlines
Jody Hoffer Gittell, Ph.D., Professor at Brandeis University’s Relational Coordination Research Collaborative, presented, “Relational Coordination of Healthcare: Transforming Relationships for High Performance.” Relational coordination is jargon for communicating and relating for the purpose of task integration. Based on her study of the airline industry, Dr. Gittell found that shared goals, shared knowledge and mutual respect could bring about frequent, timely, accurate and problem-solving communication in an organization. In Dr. Gittell’s experience, when an organization has an infrastructure based on communication and integration, it can better connect care providers around patients.

The panelists following included Ray Campbell, ED, Massachusetts Health Data Consortium; Michael Cantor, Quality Medical Director, New England Quality Care Alliance (NEQCA); Howard R. Grant, President and CEO, Lahey Clinic; Barbara A. Leadholm, Commissioner, Massachusetts Department of Mental Health; and Ralph de la Torre, President and CEO, Steward Health Care System.
In her testimony, Barbara A. Leadholm talked about the critical need to ensure behavioral and physical health care are integrated. She highlighted the Massachusetts Child Psychiatric Access Process (MCPAP) as a successful model of care coordination that was designed for and by physicians to promote inclusion of child psychiatry within primary care. She highlighted advantages of care coordination and emphasized the potential of applying a similar model to adult populations. Michael Cantor expressed his support for the report from the Attorney General’s Office, and in particular, the recommendation that all patients should select a PCP and the recognition of the need for improved infrastructure. Cantor talked about having difficulty obtaining resources to hire staff, even with resources in the health care system, and expressed the AGO could encourage insurers to provide data on their cost structure.

In his testimony, Howard R. Grant discussed models of partnership between insurers and provider from his work at Temple and Geisinger. He expressed that since its inception, Lahey has had coordinated care for better quality care and greater cost efficiencies and that it is currently developing greater integration among providers along the full continuum of services. Ray Campbell highlighted four observations that were included in his written testimony: that payment reform is a multi-year, evolutionary process, which will involve a process of trial and error and a move away from a fee-for-service model; that data is essential and indispensible to payment reform for a range of processes that are required for accountable care; that while there is a need for competitive differentiations based on data and analysis, there is also a need for a community and cooperative layer; that investment in data and analysis is critical; and finally, that there is a need for investment in public-private partnerships. Ralph de la Torre was the last member of the panel to testify. He emphasized the importance of financial and clinical integration. He expressed that healthcare reform needs to be approached in a methodical fashion, implemented over time, and look like a long-term business plan. De la Torre also identified that major savings will result from shifting care to the right setting, referring to four settings: tertiary hospital, a community hospital, a doctor’s office, and a patient’s home.
Gittell opened a discussion with the panelists by expressing that while there was agreement on the nature of the infrastructure, there was no concurace regarding who should pay for it. De la Torre expressed that there would not be a single payment model and emphasized that systems with greater numbers of public patients would need assistance from the private and public sector. Campbell expressed that some aspects of the infrastructure – such as data – could be considered a community utility that no one organization would be able to address it on its own. Grant expressed that it was not a matter of new funding, but rather appropriately aligning incentives. Leadholm expressed that from the perspective of the government, she sees a partnership role and emphasized again the need to consider where behavioral health fits in. The panelists also discussed the needs for funding upfront for the creation of infrastructure and a potential risk of developing the wrong infrastructure, and it was suggested that payment reform would liberate reserves that could be used to fund infrastructure.

Following a discussion about the scalability of small provider groups, Gittell drew the discussion to a close. She highlighted the need for effective communication between payers and providers and the need for better integration with behavioral health as two of the recurring themes on the panel.

Role of Govenrment?
In the afternoon, Paul Ginsburg, Ph.D., President of the Center for Studying Health System Change presented on the Role of Government and Market in Reducing Health Care Costs. Dr. Ginsburg testified that market forces and regulations are heavily intertwined, and should be recognized as such. He believes that the relatively recent field of behavioral economics points the way to regulations to support markets. In Dr. Ginsburg’s opinion, the necessary tools are insurance benefit designs, price transparency, provider payment reform (de-emphasize fee-for-service), level of provider prices, and insurance premiums or MLRs. He emphasized that consumers need to be engaged in costs containment.

Federal health reform will require more government role in benefit design, which in Dr. Ginsburg’s view is an opportunity to focus on provider choice. He believes that the key designs of future plans are tiered networks and narrow networks, but predicts that in the long-term, tiered networks will be more important. He spoke to the barriers to tiered networks, for example, some hospitals have refused to contract and have left little choice in some areas, and said the government needs to take action to support tiered plan designs. He cautioned that it is important to regulate network adequacy carefully so as to not undermine plan leverage, and advised against regulating analytic techniques.

Dr. Ginsburg stated that many innovative products – such as bundled payments around hospital episodes and medical home payments, are compatible with each other and can underlie an ACO as potential reforms for provider payments. He said that a key factor is coordination among payers as well as transitioning from a wide variation in private payer rates to more uniform rates. Overall, he feels that Massachusetts has an opportunity to be a leader in payment reform and should pursue both market and regulatory strategies, and realize how intertwined they can be.

Dr. Ginsburg then moderated a panel made up of: Jeffrey D. Selberg, M.H.A., Executive Vice President and Chief Operating Officer, Institute of Healthcare Improvement; Glen Shor, Executive Director Commonwealth Health Insurance Connector Authority; Laurie Sprung, Ph.D., M.P.H., Senior Vice President, The Advisory Board Company; Christopher Koller, Health Insurance Commissioner, State of Rhode Island; and, Christine White, Attorney, Federal Trade Commission, Northeast Regional Office.
Selberg started out by addressing particular sections of the AG’s recent report, and emphasized that the patient should not be fully involved in the transition to a reformed system, rather than just kept in mind. He stated that the main aspects of a new plan should be safe, affordable, equitable, patient-centered, timely and transparent. During the question and answer session, Selberg discussed the morning session’s information about how much hospitals are making from avoidable situations, such as readmissions. He felt hospitals shouldn’t be increasing their margins and profiting on “defects” such as readmissions, and that there should be a refocus on how patients are cared for.

Shor spoke about Commonwealth Care, which insures 45% of Massachusetts residents who have gained coverage since the reforms in 2006. He discussed Comm Care’s practice of negotiating prices of coverage for the populations it covers and how it rewards insurers that innovatively provide high quality at lower costs. Shor discussed the safeguards Comm Care has in place to ensure that the right kind of competition is occurring amongst providers and that the right services are being provided to consumers. The growth of premium costs for Comm Care is must lower than other delivery models, which enables it to accommodate additional people and maintain benefits.

Sprung works with providers who are trying to reduce their costs while providing greater value. The common barriers she sees providers encounter include: uncertainty about the “end game” and about timing; lack of consensus around types of payment models; and the need for multi-million dollar investments to build the infrastructures behind care coordination. Sprung believes the emerging models with the most chance for success are hospital-sponsored creation of networks and large scale, multi-stake holder demonstrations. She spoke to the need for a continuum of providers in a given network and to involve payers and employers in the negotiations of paying on the basis of value not volume.

Commissioner Koller spoke to the unique situation in Rhode Island, in which the health insurance commissioner approves rates because their statutes include affordability. Rates are approved based on factors of administrative costs and projected costs and the focus is on rate, not price. Each year, rate factors are reviewed, and the public is given an opportunity to be involved, which increases transparency and education of consumers. While insurance rate review is necessary, it is not the only answer. Koller said more accountable methods are needed. He also addressed the four systemic priorities for delivery: 1) increase and strengthen primary care provider infrastructure by using incentives; 2) participate actively; 3) pay for electronic medical records; and, 4) advocate to hospitals.

White believes health care should remain, at least in part, a private based industry. The Federal Trade Commission is prioritizing looking into provider consolidations to see which violate anti-trust regulations; however, anti-trust laws are not a cure-all for market violations because many deals fall through the thresholds. Anti-trust regulations really only occur when multiple providers agree to fix prices. White doesn’t believe it seems like a time when providers will start fixing prices, particularly because, at least in Massachusetts, information on price and quality is readily available. White emphasized that having this information, which is not usually available, allows consumers to make informed decisions and has the potential to level the playing field.

Following this panel, members of the public were given an opportunity to testify. Amy Whitcomb Slemmer, Executive Director of Health Care for All and Reverend Hamilton, President of Greater Boston Interfaith Organization, testified to reiterate the challenge they had set forth earlier that day at a rally in front of the State House. HCFA and GBIO are teaming together to ask for a time out – a freeze on premium increases for at least a year while government and policy makers address the issues and craft a meaningful solution. Rev. Hamilton did not deny that it will be a challenge, but said Massachusetts has addressed and met challenges like this one before, such as passing Chapter 58. “If we keep working together, this problem can be solved and we can move on to the next challenge.”

Chuck Green of GBIO and a small business owner testified that he is paying 47% more on his health insurance policy today than he was a year ago. He said there is no explanation for the outrageous jump in costs, and he is struggling to do the right thing and keep carrying insurance. He and his wife are both covered on the policy, and although they are paying $21,000 a year for it, neither feels that they can afford to get the treatment and care they need. “I don’t get it… $21,000 and it feels like we don’t have any coverage…?”

Other topics of public testimony included: providers giving patients information about treatment options and associated costs; making sure that behavioral health care and substance abuse is adequately funded and substantially recognized in the payment reform bill; addressing market dysfunction; examining the drivers of health care costs; and looking at the impact transitioning to a new system may have on certain providers – notably, the Bay State Medical Center, which is already providing higher quality and lower costs than Boston area hospitals and is concerned it is being penalized for a “Boston market problem.”

Ms. Carrington brought Health Wonk Boot Camp to a close with the statement that from these hearings, a report of recommendations will be developed and delivered to the legislature in mid-July.

And if you’ve read this far, congratulations. Your reward is this video on the value of good, coordinated health care. Have a good weekend.
-Emily Sobiecki and a special thanks to HCFA friend Kathryn Vandever [kvandever@gmail.com] who’s looking for a good health policy position in the Boston area