Mass. healthcare reform and CHA

David Bor MD

Cambridge Health Alliance

Harvard Medical School

Disclosures

No financial conflicts of interest

Doctors are the natural attorneys for the poor because within the examination room or on the wards we are forced to confront the stark and painful reality that inequality contributes to our patients' illnesses and early mortality.

Rudolph Virchow

Agenda

• What’s new?

• Our setting:– CHA: 2004-2013– Romnicare

• CHA experience with Romnicare

• The future?

The safety netIf you’ve seen one, you’ve seen one

• Health centers and public hospitals • Serve uninsured & low income persons • Special services

– trauma, burns, psychiatric care, interpreters

• Special locales: – Inner-city, rural

• Special roles: – train future work force

– Innovators in delivery, public health

– contribute to advocacy

Our setting: CHA 2004-2013

• An Island of Sanity– Integrated academic healthcare system– Covenant with the Commonwealth– Free care pool & DSH funds

• Romnicare

• The Recession

• Three World Series Championships

Cambridge Health Alliance, 1996…

The covenant with CHA’s communities

• Develop Neighborhood Health Centers• Rescue mental health and addictions care• Rescue secondary care hospitals• Provide for special needs:

– seniors, homeless, house-bound, victims of violence, immigrants, those with addictions and mental illness

• Program public health functions:– , TB, HIV, School health, disaster preparedness

Romnicare: Massachusetts healthcare reform

– Expand access, reduce disparities through insurance: – Funding

• Mandate insurance with minimal penalties• Repurpose disproportionate care funds & FCP• Share costs with beneficiaries

– Cost controls -• Cost sharing • Restrain Medicaid growth• Experiment with incentives• Triage by inconvenience

– Unregulated market• ACO consolidation

Impact of Romnicare on CHA

• Financing formula fractures safety net– It’s a revenue problem

• Challenge to/of “underserved”– Health care system– Social care system

• Market culture infects CHA

Mass Hospital MarginsFY 2012

Statewide median (65) 2.8%Teaching (18) 5.0%Community (47) 2.5%DSH (20) 1.3%Non-DSH (36) 3.4%MGH 9.7%BIDMC 5.3%U Mass memorial -0.4%BMC -0.3%CHA -5.4%

CHA financial performancepre and post reform

2006 2009 2012

Net revenue $ 414 $ 473 $ 475

Net income $ (14) $ (37) $ (29)

CHA financial performancepre and post reform

2006 2009 2012

Net revenue $ 414 $ 473 $ 475

Revenue as "support" 47% 32% 29%

Bad debt $12.5 $26

Net income $ (14) $ (37) $ (29)

Medicaid payment to cost trendsMassachusetts Hospitals 2001-2012

(CHA gets ~60% NPSR from low income public payer)

Medicare payment to cost trendsMassachusetts Hospitals 2001-2012

CHA gets about 20% NPSR from Medicare c/w 29% mean

Unregulated “marketplace”Relative payments by commercial insurers

2012

Aetna BC/BS HPHCB&W 1.61 1.41 1.37BIDMC 1.14 1.12 1.15Hallmark 0.95 0.95 0.91BMC 0.96 0.92 0.9CHA 0.76 0.83 0.54

The patient experience:

• Insurance hassles: – Lapses – in and out of insurance– Tiered insurance: – Eligibility determination hassles– No retroactive coverage

• Underinsurance:– More no-shows– Inability to fill scripts– Deferred care

The patient experience

• New health care barriers– Hospital requires payment at PCP visit– Long waits, esp. for psychiatric and SA care– Lost access to post-acute care

• New social care barriers– Don’t qualify for the ride– Restricted housing assistance– Psychiatric day programs, drop in centers

MD experience

• Attempting to predict out-of-pocket costs• Attempting to arrange alternate care• Attempting to conform to:

– Clinical speedup

– Perverse financial incentives

– Micromanagement

– Consultants

• New ethical considerations:– OK not to serve uninsured?

– OK to send poor to collection?

CHA going forward . . .

• New compact with Commonwealth

• Transition toward ACO/PCMH

• Tertiary affiliation

• Expand population served

• National model– Population health– Advocacy

• Austerity

. . . Still

• Best place to work, • Best place to innovate• Best setting from which to advocate

– Restore DSH … fully fund Medicaid– End P4P– Restrain/regulate consolidation– Single Payer !

“Power concedes nothing without a demand.

It never did and it never will”. Frederick Douglass