The Massachusetts Medical Society (PDF)

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					The Massachusetts Medical Society wishes to offer the following commentary relative to the reports as

With regard to Massachusetts Health Care system in Context”

Page 3 of the report “Fee for service payment methods, which offer few incentives” is unsourced. While
there has been discussion regarding this issue, the report issued by the Attorney General indicates that
utilization was not the significant driver of cost. Consequently, while future payment reform should
include incentives for coordination of care and providing cost effective care, there will likely be a role for
fee for services within payment models as is currently used in several organizations within Massachusetts.
Likewise the Attorney General’s report

Cost of care cannot and should not be looked at in isolation. Quality of care is an essential aspect of an
effective health care system. MHQP says that quality healthcare is, as explained by the Institute of
Medicine, means treatment and care that are:

    •   Safe. Treatment helps patients and does not cause harm.
    •   Effective. Research shows that treatments have positive (good) results.
    •   Patient-centered. Healthcare providers (doctors, nurses, and others) treat all patients with
        respect. This means taking into account each patient's values about health and quality of life.
    •   Timely. Patients get the care they need at a time when it will do the most good.
    •   Efficient. Treatment does not waste doctors' or patients' money or time.
    •   Equitable. Everyone is entitled to high quality healthcare. This includes men and women of all
        cultures, income, level of education, and social status.

MHQP data demonstrates that, statewide, Massachusetts physicians excel, performing above the NCQA
national average on 28 of 29 measures. On 15 out of 29 measures they score above the NCQA national
90th percentile (Note: see last page of this report for more detail on these measures).

According to The Commonwealth Fund’s State Scorecard Summary of Health System Performance
presented by Stephen Schoenbaum during the AG hearings, Massachusetts ranks in the top quartile
overall with an overall rank of 7 and scores in the top quartile for access, prevention and treatment,
equity, and healthy lives. Although Massachusetts scored in the bottom quartile for avoidable hospital
use and cost, the states ranked first and second on this dimension of the scorecard, Utah and Idaho, scored
in the bottom two quartiles for access, equity, and prevention and treatment on the health system

performance scorecard. (Note: The Commonwealth Fund’s website lists Idaho as ranking 45th for access
and 49th for equity while Utah ranks 45th for equity--see exhibit 2 on the last page for the slide with all of
the states rankings by quartile from the AG presentation).

On page 7 it is noted that Massachusetts health spending as a percent of GSP is “near the middle of the
country at 13.3 percent. This does not support the argument that Massachusetts is an outlier relative to

In Massachusetts 24% of health expenditures are spent on physicians and other professional services. For
the US overall the total for this portion of expenditures is 28%. While per capita expenditures were
highest for Massachusetts ($6,683) compared to all other states and 27% higher than the U.S. ($5,283), an
analysis of trend data for the time period 1991 to 2004 shows that Massachusetts expenditures grew at a
slower rate (6.3%) than the U.S. (6.7%).i, Private health insurance premiums in Massachusetts grew 3.1
percent in 2008, a deceleration from 4.4-percent growth in 2007.ii Premiums in the U.S. are growing
faster than inflation and wages in the detailed in the charts below:

The chart on page 10 relative to per capita spending indicates that for certain medical services,
Massachusetts spending is higher than the nation; the physician component however is similar to the
nation. In fact the chart shows physician spending when adjusted at 5.7% LESS than the national
average. This further supports the findings that utilization is not a significant driver of cost. In addition,
physician salaries are among the lowest in the nation. Alan Sager of Boston University wrote that in
Massachusetts, average gross income of physicians is only 70.5% of the national average1 .
    Alan Sager, PhD, Massachusetts Health Spending Soars to $62 Billion, Boston University School of
Public Health, June 2006)

Page 11 refers to inpatient vs. outpatient hospital spending; Utilization of outpatient care has increase d
precisely because it is less expensive than inpatient care and has been strongly encouraged by payers as
the preferred place of care if appropriate. Where is the data analysis about the total and unit cost of
inpatient versus outpatient care?

Page 12 relative to insurance coverage; This sections appears to make the mistake of concluding that
deductibles are the best measure of patient cost sharing. Patients also contribute e via co-pays for office
procedures and drugs as well as the employee’s share of the premium

Page 14 relative to workforce data: According to discussions with Massachusetts Health Quality
Partnership and the Board of Registration of Medicine there are a lot less doctors actually providing
clinical care as opposed to holding a license to practice thus making this data suspect.

On page 20 there is little attention paid to such s things as how insurers calculate medical loss ratios and
how administrative burdens are increasingly shifted onto the provider community.

 Alan Sager, PhD, Massachusetts Health Spending Soars to $62 Billion, Boston University School of
Public Health, June 2006.

Page 21 this data seems to differ significantly from the work that was produced by Michael Baillit for the
Payment Reform Commission. The differences indicate the need to be thoughtful as a lot of stakeholders
have had significant engagement in these deliberations.

Conclusions: This report makes sweeping assumptions about the ability of global budgets to save money
without providing supporting documentation or data. The report’s conclusions that Massachusetts
residents have lower cost sharing rates that the rest of the country is based on the faulty assumption that
cost sharing is limited to insurance deductibles as noted above.

The paragraph linking outpatient care to physician incentives is reckless. The report has no direct data
linking physician income to outpatient facilities, especially since it acknowledges that most new facilities’
are entirely hospital based and thus captured in the category of facility costs not physician income. It
does nothing to acknowledge the trend among hospitals to force physicians to give up independent
facilities. There is no data to allow the readers to conclude whether the procedure now conducted in
outpatient facilities would be more expensive than if performed at inpatient facilities, whether outcomes
were better or worse, or who benefited financially from this shift. The same is reflected in Part 3 where it
is noted that there has been an increase in outpatient facilities for procedures and cancer therapies. Is this
a good thing?

On page 7 in Part 3 it acknowledges that the increases in “physician and professional service” category
are attributable “almost entirely” to other professional services”-not physicians. This again reinforces that
utilization and fee increases are not key drivers for the rising cost of care. Family therapy, individual
psychotherapy and psychiatric diagnostic interview exams were among the top 10 growth areas between
2006 and 2008 Is this increase redressing a prior deficiency, or over utilization?

Having addressed these specific issues, we would like to offer the following commentary:

We want take this opportunity to express our sincere concern over the use of rate regulation. Please note
that we are well aware of the pressure that health insurance premiums are putting on small business. We
have heard from many of our members in solo and small practice lamenting the increases that insurers are
passing on to them and their employees yet failing to see any corresponding increase for providing
medical care to their patients. Yet, this move to hold payments for physicians' medical services
accountable to the overall problem flies in the face of some of the findings in the Division of Health Care
and Financing reports. As noted above, in reviewing per capita spending the report notes “While for
certain medical services, Massachusetts spending on health care is higher than the nation, the physician
component is similar to the nation”. In fact, the per capita spending on physicians services is quoted at
being 5.7% less than the national average.

We are also particularly concerned about the impact of this proposal on the ability to recruit and retain
physicians. The Medical Society conducts an annual workforce study of hospital and physician leaders
across the state. Our most recent study shows primary care specialties of internal medicine and family
medicine, dermatology, neurology, neurosurgery, psychiatry, urology, and vascular surgery. A large
majority of physicians – 69% -- reported difficulty in referring patients to a specialist, a recurring problem
from previous years. The difficulty is especially acute with the primary care specialties: 85% of family
medicine and 77% of internal medicine report difficulty in referrals to specialists. We are already
challenged to serve the newly covered patients and their pent up demand for medical care and services

that has accompanied our landmark universal coverage. This highly charged proposed regulatory
framework sends a message to the provider community that Massachusetts is not a friendly place to
practice. We have already heard this at national meetings. We do not believe that is a message any one
of us wants out there if we are to overcome the existing shortages and attract and retain physicians to
provide access to care for the people of the Commonwealth.

We believe that solutions have been identified. Much of the Roadmap to Cost Containment produced by
the Health Care Cost and Quality Council under Secretary Bigby is a thoughtful approach to addressing
the long term problems facing the Commonwealth. The report contains a number of discreet strategies
that embrace a broad approach to cost containment with a broad range of support. In our minds, they are
highly dependent on one another. It also imperative that strong leadership from practicing physician be
present as it is critical to the successful implementation of much of the Roadmap. Expert after expert
cited the need for this leadership. Leadership and participation will be jeopardized by an expedient
attempt to address one aspect of cost containment and has the serious potential to undermine our
confidence to support the ongoing efforts around the Roadmap.

Lastly, there are some short-term solutions we believe can address the problem of overutilization of health
care services and mitigate the need to practice defensive medicine. Defensive medicine can come in
diverse forms including the pursuit of unnecessary labor or radiologic information, medically unnecessary
referrals to specialist and hospitalizations and the performance of invasive procedures to exclude or
confirm diagnoses. In a study conducted for the Medical Society, it was reported that the estimated
annual costs to the health care system in Massachusetts is substantial On the low side, these costs were
estimated to be between $1.1 billion to $1.4 billion annually as the study only reported on the findings
involving 8 medical specialties. The Medical Society has proposed legislation “An Act Relative to
Improving Patients’ Access to timely compensation”. (H.1338 and S.574) that mirrors the success the
University of Michigan Medical Center had in creating an atmosphere that has helped to reduce defensive

    Exhibit 2:




         Quality Insights: Clinical Quality in Primary Care
                                  Massachusetts Statewide Rates
                                   and National Benchmarks

 Statewide, Massachusetts physicians excel, performing above the NCQA national average on 28
 of 29 measures. On 15 out of 29 measures they score above the NCQA national 90th percentile.

                     Click here to search for your doctor's medical group results
                           or to compare measures across medical groups.

Clinical Measure                                 MA Statewide         Nat'l 90th      Nat'l 
                                                     Rate             Percentile     Average  
Click on a measure for more information
Adult Diagnostic and Preventive Care  

Colorectal Cancer Screening Tests (Ages 50 to 
                                                       75.0%            69.6%        58.7%  

High Blood Pressure Control *                          71.1%            71.6%        63.4%  

Using Image Testing for Lower Back Pain Only 
                                                       77.4%            81.1%        73.1%  
When Appropriate  

Spirometry Test for COPD (Chronic Obstructive 
                                                       40.2%            47.6%        37.6%  
Pulmonary Disease)  


Short‐term Medication                                       66.8%           70.8%             63.1%  

Long‐term Medication                                        50.9%           55.7%             46.3%  

Medication Management  

Correct Use of Antibiotics for Acute  MHQP will not be reporting results for this measure this year
Bronchitis                            due to concerns about how it is calculated. Click here to learn
                                           important information about appropriate use of antibiotics.
Yearly Follow‐up to Monitor Patients on Long‐
                                                            83.2%           83.9%             79.4%  
Term ACE Inhibitors or ARBs  

Yearly Follow‐up to Monitor Patients on Long‐
                                                            69.8%           70.4%             61.7%  
Term Anticonvulsant Medication  

Yearly Follow‐up to Monitor Patients on Long‐
                                                            82.6%           83.9%             79.1%  
Term Diuretics  

Yearly Follow‐up to Monitor Patients on Long‐
                                                            82.6%           83.2%             78.9%  
Term Medication  

Asthma Care  

Medications for Children (Ages 5 to 17)                     96.3%           97.5%             95.0%  

Medications for Adults (Ages 18 to 56)                      89.4%           94.5%             91.1%  

Heart Disease and Cholesterol Management  

Cholesterol Screening Test for Cardiovascular 
                                                            98.0%           93.2%             88.9%  

Cholesterol (LDL‐C) Good Control *                          67.9%           70.6%             59.7%  

Diabetes Care for Adults  

HbA1c Test                                              93.0%     93.7%     89.0%  

HbA1c ‐‐ Poor Blood Sugar Control (Lower score 
                                                        17.5%     18.7%     28.4%  
is better) *  

Blood Pressure Control *                                37.9%     41.8%     33.4%  

Cholesterol (LDL‐C) Screening Test                      91.1%     89.8%     84.8%  

Cholesterol (LDL‐C) Good Control *                      53.9%     53.9%     45.5%  

Tests to Monitor Kidney Disease                         88.3%     89.0%     82.4%  

Pediatric Care  

Well Visits for Children 0 to 15 Months of Age          96.1%     90.7%     76.1%  

Well Visits for Children Ages 3 to 6                    92.7%     85.7%     72.2%  

Well Visits for Adolescents Ages 12 to 21               74.2%     63.3%     45.3%  

Correct Antibiotic Use for Upper Respiratory 
                                                        92.9%     93.2%     83.9%  

Follow‐up with Children Starting Medication for 
                                                        47.3%     45.0%     35.8%  

Women's Health  

Breast Cancer Screening (Ages 40 to 69)                 81.7%     78.7%     70.2%  

Cervical Cancer Screening (Ages 21 to 64)               87.5%     86.7%     80.8%  

Chlamydia Screening (Ages 16 to 20)                     54.5%     51.1%     40.1%  

Chlamydia Screening (Ages 21 to 24)                     57.4%     56.8%     43.5%  


     Kaiser Family Foundation. Retrieved on February 12, 2010 from

             Notes: Health Care Expenditures measure spending for all privately and publicly funded personal health care services and
                    products (hospital care, physician services, nursing home care, prescription drugs, etc.) by state of residence.
                    Hospital spending is included and reflects the total net revenue (gross charges less contractual adjustments, bad
                    debts, and charity care). Costs such as insurance program administration, research, and construction expenses are
                    not included in this total. For more information on how these estimates were prepared, please see
         Sources: Health Expenditure Data, Health Expenditures by State of Residence, Centers for Medicare and Medicaid Services,
                  Office of the Actuary, National Health Statistics Group, released September 2007; available at
      Massachusetts Division of Health Care Finance and Policy. February 2010. Understanding HealthCare Costs: Part II: Massachusetts Private Health Insurance Premium
Trends 2006-2008. Retrieved on March 2, 2010 from