Sen Tseii summary Mass Health Care Law

Tisei: Senate takes next step in health care reform
Thu Mar 13, 2008

Malden - In 2006, Massachusetts made history when it became the first state to mandate health care coverage for all of its residents.
Since the passage of this landmark bill, nearly 300,000 individuals have obtained health insurance, and use of the state’s free care pool has declined by 16 percent. Payments to hospitals and health centers for treating the uninsured, which totaled $680 million in Fiscal 2007, are projected to fall to $438 million this year, as more people sign up for coverage.
By most measures, the new law has been a success. As with all major undertakings, however, the transition to universal health care in Massachusetts has not been without a few bumps in the road.
Small businesses, for example, have seen huge premium increases each year, and are now paying an additional $175 million annually under the new health care law. Unless this problem is addressed, the private sector’s ability to continue to insure its employees will be put at serious risk.
From the beginning, critics and skeptics have warned that spiraling costs could undermine this historic undertaking and ultimately lead to its failure. This year, $618 million is being spent on Commonwealth Care, the state program that subsidizes health insurance for low-income residents, but Gov. Patrick has allocated $869 million for this program in his Fiscal 2009 budget — an increase of more than 40 percent.
Obviously, annual cost increases of this magnitude cannot continue without universal health care becoming unsustainable. Fortunately, Senate President Therese Murray is determined not to see that happen.
Last week, Sen. Murray put forth a plan to help rein in costs and ensure that the state’s experiment with universal health care will succeed and not collapse under its own costs. Her bill — known as “An Act to Promote Cost Containment, Transparency and Efficiency in the Delivery of Quality Health Care” — contains a series of reforms she says will “modernize the health care system, reduce waste and inefficiencies, and improve health care quality for every citizen of the Commonwealth.”
Here are just a few of the provisions contained in the bill:
Cost transparency
To get a handle on rising health care costs, the bill calls for the “Health Care Cost and Quality Council” to convene annual public hearings with health care providers. Maintaining an ongoing dialogue will help identify what factors are driving costs and allow all parties to work together to reduce those costs.
The bill also establishes a special commission to review how health insurers manage their reserves and surpluses, and requires hospitals and insurance companies to fully disclose all costs passed on to consumers. If an insurer asks for a rate increase of more than 7 percent, the Division of Insurance and the Attorney General’s Office would launch a public review process, taking a close look at the company’s administrative costs and executive compensation packages to determine if the requested increase is justified.
Gift Ban
Under the proposed bill, drug and medical-device companies would be prohibited from offering gifts of any kind to physicians, their staff and their families, including meals, entertainment, and travel expenses. Violators would face a $5,000 fine, two years imprisonment, or both. However, companies would still be able to offer doctors free drug samples for their patients.
Other states have placed restrictions on the use of marketing gifts by pharmaceutical companies, but Massachusetts would be the first to ban them outright. Minnesota prohibits gifts from pharmaceutical companies valued at more than $50, while Vermont requires companies to disclose any gifts to doctors that exceed $25.
Critics have long maintained that accepting gifts can persuade some doctors to prescribe medications that may not be the most cost-effective treatment for their patients. Given the many ethical questions that arise when companies are allowed to “wine and dine” doctors, this ban will eliminate a major conflict of interest.
Electronic Records
To protect patient safety and reduce medical errors, the bill mandates that all medical records be entered and stored electronically by 2015, and that physicians demonstrate their proficiency in electronic record keeping for certification by the Board of Registration in Medicine.
The bill also mandates that by 2012, Computerized Physician Order Entry systems must be in use statewide. Hospitals that have not implemented the system by this date would not be licensed. The bill also establishes a statewide standard for uniform billing and coding by health care providers and insurance companies to reduce the operational expenses associated with claims processing and eliminate duplication.
The next level
The bill contains several other provisions to move health care reform to the next level, including a requirement that hospitals create “Patient and Family Advisory Councils,” and a proposal to encourage providers to use lower cost generic drugs and therapeutic alternatives instead of automatically prescribing expensive brand name drugs.
The bill also establishes a Purchasing Reform subcommittee to coordinate public and private “pay-for-performance” efforts. The subcommittee will develop strategies for promoting and rewarding health care quality and efficiency.
Murray deserves credit for developing a comprehensive proposal to bring health care costs under control and improve the quality of care. As the Boston Globe recently noted, she has put health care providers and insurers on notice.
While some of the proposed reforms may not drive down costs significantly on their own, collectively they represent a concerted attempt to address a serious problem and ensure that universal health care succeeds in Massachusetts.