Transforming the Health Care Delivery System: Promoting Transparency, Integration, and Wellness

Posted by: David Morales, Commissioner, Division of Health Care Finance and Policy

Chances are that you’ve never heard about the Division of Health Care Finance and Policy – unless you’re a serious health policy wonk. Unlike many state agencies, the Division’s primary purpose is not to manage direct care programs, but rather inform their development or impact. Since most people never need to directly interact with us, they don’t realize the wealth of information or analysis we offer. Coincidentally, many health care policy organizations rely on or use our reports to develop their own work.

Basically, the Division produces reliable and objective analysis of the Massachusetts health care delivery system … if it’s an important issue in health care, chances are we’re studying it. But here’s my conundrum - how meaningful is objective and quality research if it only gets read and reviewed by a limited audience?

When I started as Commissioner in January, I decided to focus on one very obvious need – engaging all of you with our work. It isn’t easy. I must admit, our stuff is pretty complicated. But it’s also critical – especially given national health care reform and ongoing discussions at the state-level about high costs and the transition to an integrated delivery system.

Over the next several months, I hope to accomplish two things: (a) continue producing high-quality work that helps demystify the MA health care delivery system and informs discussions about health care at all levels, and (b) provide that information in a manner that is easily accessible and understandable to a broader audience.

Specifically, I want to focus a substantial portion of the agency’s analytic capacity as a think tank on three key areas highlighted by findings in our recent cost trends reports (on the marketplace, premiums, and trends in medical claims as well as a final report): (1) Transparency, (2) Integration, and (3) Wellness.

Transparency:  Let’s be honest, today most people who use medical care have no idea what their care actually costs and believe that someone else is paying for their medical bill. As Dr. Michael Collins, chancellor of the University of Massachusetts Medical School and senior vice president for health sciences at the University of Massachusetts, recently wrote in "Transparency a key to reform," an opinion piece in the Worcester Telegram & Gazette, “we need easy access to the true price of our office visits, hospitalizations, and diagnostic tests. If we can find out the price of a hotel room or a cross-country flight with a few clicks of the mouse, we can lift the veil currently covering the price tag attached to health care.”

To that end, we recently proposed regulations to collect and make data available on all health care claims in Massachusetts through a database called the All-Payer, All-Provider Claims Database (the “APCD”).  The database will facilitate unprecedented transparency – via this tool, we can design reports about health care costs, quality, and utilization to assist you in making informed choices about how and where to access care and how much it really costs you or your employer.

Health Care Integration:  When was the last time you visited your doctor and actually had a smooth transition from your doctor to other medical services you needed outside of his/her office? Our data suggests that an effective tool to combat high annual increases in cost is to transition over time to a health care delivery system that provides a full range of medical services in a “one-stop-shopping” manner that eliminates costly intermediaries, reduces unnecessary tests, promotes wellness, and improves health outcomes.

We are developing analyses that will inform the health care system’s transformation toward a more integrated, coordinated, and patient-centered model. For example, we want to provide information on best practices related to care delivery, geographic trends in utilization, physician-hospital links, quality management, capacity, etc. Increasingly sophisticated analyses and data will be needed in order to help develop the most efficient health care organizational structures and optimize performance.

Wellness:  Our delivery system is built to treat (rather than prevent) illness.  We must transition toward a wellness model that promotes primary prevention and primary care. Achieving this change is a cultural challenge we must tackle immediately.  It is a necessary investment that will improve the overall health and productivity of the Massachusetts population. In fact, a recently published HealthAffairs analysis of Medicare spending, "Chronic Conditions Account for Rise in Medical Health Care Spending from 1987 to 2006" found that two-thirds of the rise in national health care spending during this time period was a result of the growing prevalence of treating chronic disease.

Going forward, we intend to partner with key stakeholders in order to design meaningful analyses and provide objective data to the full spectrum of audiences – government, private employers, health care and social service providers, health insurers, and the public. We want to support the development of an integrated health care delivery system that is sustainable, transparent, and accessible to all.

But in order to be successful, we need you to be involved and understand these issues, especially who pays what for different types of medical services. Your voice is critical in ensuring that these important issues stay in the forefront of the minds of policy makers and industry leaders alike.

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Also, as a part of our commitment to transparency and engagement in government, the Massachusetts of Division of Health Care Finance and Policy uses several social media tools including Twitter, Blogs, and RSS feeds. We use these tools to keep you informed about the work we are doing and as a way to get feedback.You can follow us on Twitter at www.twitter.com/masshealthcare. And, you can learn more by visiting the Commonwealth Conversations: Mass Health Care blog.

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Comments

[Ronald Sanfield]

I think this newsletter is a great idea. I began my state government career in the Rate Setting Commission, the precursor to HCF. Aggressive regulation was in full swing at the time, and while there were systemic problems brewing in both the actue and long term care systems, the state had its hands on the controls more securely than now.
We need NEW models of service delivery and they are out there. Today's NYTimes (5/27/10) has a great story about the hospitalist movement, a new medical specialty demonstrating reduced length of stays and more coordinated plans for post-discharge follow up. HCF should bring them in, test their data, then promote the concept if it proves genuine. Besides research and data collection, the health policy units in the Executive branch need to advocate more strongly for values of access, cost-effectiveness, and challenge to the established power centers that are obstacles to change.
This dialogue is a good place to start. Keep up the good work.

[Sean Ward]

I don't know how to solve the problem, but I do know that it's wrong for health insurance costs to rise 20% - 50% per year when the values of our homes have tanked, millions of jobs are gone, and people are losing the quality of life they have worked for years to reach.

This is what I think is happening. In a normal economy someone wants or needs a service and someone else is willing to provide that service for a fee. If the fee is reasonable the consumer pays it and receives that service and the provider gets paid. If the fee is not reasonable the consumer either seeks another provider with more reasonable costs or decides not to purchase the service. This, over time and with many consumers and multiple providers, leads to a balance in which providers adjust their fees to match the consumers’ willingness to pay.

Now, enter insurance. Put a 3rd party into the mix. Now the consumer doesn't care what the service provider charges because they don't feel like they are paying for it so it doesn't matter. The service provider now starts trying to see how much they can squeeze out of a multibillion dollar entity they can't even see instead of pricing their services reasonably to avoid gouging their consumers. The result: Consumers consume with no perceived financial consequence, providers have no reason to control their fees, and the insurance industry just keeps jacking up the costs to the consumers who are now prevented by law from doing the only thing they can to object, cancel the service.

[Jean Russell]

David,
Very well written newsletter. Demystify the MA health care delivery system through transparency and the importance of engagement from the general public are few of the solutions in mitigating the rising cost of health care. This is a great way to communicate to the public the resources being available from DHCFP and the work you do. Thanks

[Jason Feinman]

The basic issues,as i see them are as follows;
1) MDs traditionally are the CEOs of hospitals. A 4 year post graduate degree, a two year residency and an indeterminate internship in medical science has NO bearing on service delivery or business acumen. I work in social services, most of my colleagues who operate at an analogous level never met a program they didn't like, whether or not it was cost effective.
2) The health insurance industry is a significant drag on the financing of health care. How many Blue Cross or Harvard Pilgrim employees actually lay hands on, or even see patients, yet they, as an aggregate group, represent a significant segment of the health care finance "pie"
3)The law of supply and demand dictates that price is a function of supply. Instead of addressing demand side finances, has anyone thought of subsidizing medical education to the extent that it would flood the industry with affordable supplies of health care professionals, thus driving down price. I have never heard this idea even bandied about.
Thank You for your time and attention.

[Richard H. Dougherty, Ph.D.]

To HCF
Even for a health policy wonk, this was a clear, artfully written and compelling newsletter! Thanks for taking these issues on, particularly those related to on the transparency of our data. As someone working on MH and SA related reforms here and across the world, making Medicaid data more readily available to state agencies and external stakeholders will go a long way to improving state agency decision making and motivating change among stakeholders. Let’s start with making the utilization and cost data on the Children’s Behavioral Health Initiative more public for everyone.

On the general health care side, lets’ pick some key procedures and start publishing the scope of variation in payment among payers. The end result will have to be that the variation gets reduced through competitive markets, angry providers and a better understanding of how alternative approaches and services can save money – because now we understand what the costs are.
Thanks.