Health Care Cost Trends Hearing Remarks

Thank you, Dr. Altman, for that warm welcome and for convening today's hearing. I appreciate the chance to appear before you this last time as governor to offer both some insights on our experience reforming the health care system these last 8 years, and some encouragement as you continue the work.

Before I do, let me also thank Professor Landers and her colleagues at Suffolk Law School for hosting us today.

In my eight years as Governor, "health care reform" -- the broad phrase we all use to sweep in everything from access to affordable insurance to cost containment to changes in the delivery system -- has been about improving the health of the people of the Commonwealth. For me, policy matters where it touches people, and these several policies matter because of what they do or can do to improve the lives of people. Access to affordable care gives peace of mind and economic security to working people and families; increases productivity for large and small employers alike; creates jobs and contributes to the strength of the Massachusetts economy. That's why we in Massachusetts believe that health is a public good, an expression of the kind of community and Commonwealth we are.

This central value motivated a broad coalition of medical, business, consumer and labor leaders, caregivers and patient advocates, legislators and policy makers -- many of whom are in this room -- to come together to invent health care reform in Massachusetts 9 years ago and then, just as importantly, to stick together to refine it as we moved forward. This, I believe, is a critical element of our success here in Massachusetts, and a thing to pay attention to as we go forward.

I use the word "success" without reservation because, by any reasonable measure, health care reform in Massachusetts is a success. Today, more than 97 percent of our residents are insured, including nearly 99 percent of children -- well ahead of any other state. On a range of measures, we are healthier. More employers offer health coverage to their employees than before reform went into effect and we started out with one of the highest levels of employer-based coverage in the Nation. And with the help of the Commission and many providers and payers, health care costs for families and small businesses are coming down.

Of course, we've had our challenges.

While in surveys most people report that they have access to primary care physicians and that they have seen their physician recently, we are at risk of a shortage of primary care physicians. The high cost of medical school makes it necessary for many students to take out loans and the loans make it difficult for new doctors to consider a career as a somewhat lower-paid primary care physician. Loan forgiveness programs such as the one we launched a few years ago may help, but more thought has to be given to solving this problem. Particular attention needs to be paid to how this issue plays out in western or more rural parts of the Commonwealth.

Many small businesses still fail to shop to compare premium rates, leaving them vulnerable to the annual merry go round of premium increases followed by shifting to plans that offer less coverage at the same premium. Changing the culture so that small businesses shop consistently and compare plans thoughtfully will make the market more competitive and, most importantly, benefit the businesses and their employees. The Connector website makes that kind of comparative shopping easy. That function of the website has always worked without issue. Getting small businesses to use it remains a challenge.

The implementation of the medical home model, where a single physician or health organization takes responsibility for the overall wellness of a patient, is a promising strategy to reduce health care costs. But more must be done to encourage more providers to provide and more patients to receive their care in such settings, and for those cost reductions to show up in lower insurance premiums. I realize that this and similar strategies may present added pressure on the teaching hospitals, but it suggests we as a Nation and a state may have to consider new ways to fund the medical research and teaching so vital to our economy and to the future of human health.

And of course, as we all know, the new Connector website was a terrible disappointment last year during the first Open Enrollment period under the ACA. Like the rollout of the Federal Exchange (which notably was built by the same private company), the new Connector website did not offer the smooth, reliable consumer experience we intended. Website outages and instability prevented people from choosing a plan and enrolling easily. Consumer and market frustration was high, call center volumes surged, and paper applications piled up. There's no denying that here, like across the country, the transition to the ACA got off to a rough start.

The first and most important thing you should know is that no one slipped through the cracks, meaning no one lost coverage. In fact, more individuals and families were added to the ranks of the insured. That point has been lost in the upset over the website. My priority above all else -- something I have made repeatedly and abundantly clear to Secretaries Shor and Polanowicz and Executive Directors Yang and Thorn -- is ensuring the men, women and children of our Commonwealth can access the health and economic security benefits of high-quality care, because health care reform is not a website. With the help of Optum, the firm we engaged to replace the original contractor, we added staff to assist consumers the old-fashioned way, eliminating the backlog of paper applications in a few weeks. To date, we have enrolled more than 400,000 additional people into both subsidized and unsubsidized coverage programs. It is abundantly clear that, since the ACA went into effect, even more people are insured than ever in Massachusetts.

You should also know that we have done so within original budget projections. Let me repeat: implementation of the ACA in Massachusetts, even with the website failures, has not blown the health care budget. I have read a number of accounts purporting to show that we have spent more on health care under the ACA than we forecast; in fact, we were right on track with our original projections and did not require any supplemental appropriation. We have been completely transparent about those facts, regularly updating the public about the progress we've made and the challenges we've faced as we worked to re-set our Exchange.

Meanwhile, I am happy to report that the website is fixed. With less than 40 days to go before the next Open Enrollment period, I can tell you that Optum and their partner hCentive have fixed the problems consumers experienced last fall. I have seen it myself. Thanks to a lot of hard work by these partners and our teams at the Connector, MassHealth and MassIT, lead meticulously and tirelessly by Maydad Cohen from my office, the Connector website will offer consumers a full end-to-end shopping experience for Qualified Health Plans on November 15. With the full functionality of the website for small businesses, which has continued without issue, Massachusetts consumers will be able to shop for, and enroll in, all available Connector health plans online this fall.

As you may know, the ultimate objective is for eligible consumers to be able to access MassHealth through the same website. In other words, the endgame has always been a fully integrated eligibility system, meaning that any consumer would ultimately be able to enter a single web-based front door on the Connector website to determine whether she or he is eligible for MassHealth, a subsidized program or something else, then shop for appropriate options, and finally enroll in the right plan. Our original schedule for reaching that milestone was late 2015. I want you to know that that the team is optimistic that we will reach that milestone this fall as well, almost a full year sooner than expected.

Finally, you should know that the additional cost to the Commonwealth of fixing the website issues will be about $26 million. That is a significant sum, but not the hundreds of millions or billion dollar figures that some have bandied about. Maydad Cohen and other members of our team have regularly briefed the Connector Board, the Legislature and the public on the cost of the website, including the cost of settling with the discharged vendor and of engaging the new one. In the end, the Commonwealth will spend about $26 million more on the fully integrated website than we budgeted we would spend, and we will deliver the ultimate project one year earlier than anyone would have thought just a few months ago. Maydad will cover this in greater detail at the upcoming Connector Board meeting, but I thought you should get the headline from me -- again because of the inaccuracies you may have seen reported in the media.

As I close, I return to the central point that health care reform is not a website and to the value that health is a public good. That's why access to good care is important and why health insurance is vital. Of course, the health care system isn't always as efficient or rational as it could be, and some of that is to be expected. People just don't buy health care the way they do soap, and I don't think it's entirely reasonable to expect that they ever will or should. Nevertheless, the new tools that the Legislature has provided to help improve transparency (such as the data that the Center for Health Information and Analysis and this Commission are publishing), or the new tools that health plans are making available (so that patients can know in advance how much a doctor visit or a specific procedure might cost) are all important. Use them. And though I am keenly aware of the economic importance to our economy and our character of our extraordinary health care industry, I urge the Commission to use these data to move the industry to do more of the vital work they do in the most cost effective manner possible -- and to pass more of those savings along to working families and small businesses.

Specifically, as we go forward over time, let us look for responsible options that drive the premiums for working people and small businesses down (not just slow their growth) and also strive for ways to reduce market concentration (not defer to the status quo) so that competition really flourishes and the benefits are enjoyed by all. Over the course of this hearing, you will receive a lot of information about the progress we are making, and perhaps share my pride in it. But if you keep top of mind the people behind the data, you will agree that we have miles to go before we rest.

Even eight years after the implementation of health care reform in Massachusetts, there is still plenty of room to innovate. I know that, just as it has before, the creative tension of this broad coalition will make all the difference. We've shown the Nation the way on universal coverage and cracking the code on costs, but the mark of these undertakings, like any great reform, is constant refinement, learning from our experience and adjusting to that learning. For the sake of the people we all serve, stick together and keep at it.

Thank you all for your service and for your having me this morning. Best wishes as you continue the mission.

Source