What Is the Evidence on Health Reform in Massachusetts and How Might the Lessons from Massachusetts Apply to National Health Reform? Timely Analysis of Immediate Health Policy Issues June 2010 Sharon K. Long The 2010 national health reform legislation—the Patient Protection Providing evidence of the possible gains under national health and Affordable Care Act (PPACA)— reform, Massachusetts’ 2006 health reform initiative has is modeled on Massachusetts’ 2006 improved health care access, use, affordability and quality. landmark reform effort. As in Massachusetts, national reform includes expansions of public historical high in 2009, despite the • Access to and use of health care programs, the creation of health 3 economic recession. in the state improved under health insurance exchanges, subsidies for reform, with more adults low- and moderate-income • The gains in coverage in the state reporting visits to doctors and individuals, an individual mandate, reflect gains in employer- other health care providers and and requirements for employers, sponsored insurance as well as the fewer adults reporting going among other provisions. Given the expansion of public coverage. without needed health care in fall strong parallels between There is no evidence that public 2009 than prior to health reform. Massachusetts’ health reform coverage “crowded out” There is evidence of particularly initiative and national health reform, employer-sponsored coverage in strong gains in the use of the experiences in the Bay State 3, 4 the state. As was true prior to preventive care and prescription provide insights into the potential health reform, the majority of drugs, benefits specified under the effects of PPACA. Massachusetts residents—both state’s new minimum creditable adults and children—continue to Massachusetts’ health reform coverage (MCC) requirements, obtain insurance through their initiative, entitled An Act Providing which outline the key benefits and employers under health reform. Access to Affordable, Quality, cost-sharing provisions that must Accountable Health Care (Chapter 58 • Gains in insurance coverage were be included in a health insurance of the Acts of 2006), aimed to make reported across every population plan if it is to satisfy the state’s comprehensive insurance coverage group examined, including young individual mandate for health available and affordable for residents adults, who are more likely than insurance coverage. In addition, as a first step toward improving older adults to forgo insurance adults in Massachusetts were access, use, affordability, and quality coverage.5 more likely to rate the quality of of health care in the state. The the health care they received as evidence suggests that Massachusetts • Compliance with the individual very good or excellent under 3 has made significant progress toward mandate is high, with the health reform. each of these goals in the years since Massachusetts Department of • the reforms were implemented: Revenue reporting that of the The burden of health care costs roughly 3.5 million adult filers in was reduced under health reform, • In 2008, 96 percent or more of the tax year 2008, only about 45,000 particularly for lower-income state’s residents were estimated to (about 1 percent) were assessed a residents. Out-of-pocket spending have health insurance—well penalty for failing to obtain on health care was reduced and above the 85 percent in the nation insurance when affordable fewer adults reported going 1, 2 as a whole. Insurance coverage coverage was available to them.6 without needed care because of in Massachusetts remained at a costs under health reform, despite Provider Capacity get an appointment as soon as one was the recession.3 The gains were needed, and over half reported that the The constraints on provider supply in particularly strong for lower- ED was the most convenient choice.11 Massachusetts that existed prior to income adults, who are more health reform appear to have been likely to lack the financial Health Care Costs exacerbated by an influx of newly resources to pay for care, and insured residents under health reform. While not driven by health reform, the adults with chronic health As more people obtained health care continued escalation of health care conditions, who are more likely to in the first years under health reform, costs in the state is clearly creating a use health care.7 more people reported difficulties burden for public programs, employers and consumers, much as in • Many racial and ethnic disparities obtaining needed health care despite higher levels of health care use.10 the case in the rest of the country. in health insurance coverage, Addressing those costs is a formidable access to and use of health care, However, by fall 2009, those early increases in unmet need were task, likely more challenging than and health care affordability have expanding insurance coverage. been reduced or eliminated in the reversed, with unmet need in fall 2009 7 state under health reform. below that of fall 2006, just prior to 3 So as not to hold its residents hostage health reform. This reversal likely to the politics of addressing health In addition, support for health reform reflects the state’s efforts to address care costs, Massachusetts made the was quite strong among provider capacity issues and an decision in 2006 to expand insurance Massachusetts residents when the increase in the share of residents with coverage and access to health care legislation passed in 2006 and insurance coverage for the entire year first and then turn to reining in rapidly continues at high levels: More than under health reform. rising costs. Often referred to as two-thirds of adults in the Bay State “Round 2” of health reform, support health reform.3, 8 Furthermore, As part of the state’s effort to address capacity issues, Massachusetts Massachusetts passed legislation in support for reform is widespread 2008 to begin addressing cost across the state, including men and introduced a number of new initiatives, including primary care containment and efficiency in health women, younger and older adults, and care delivery.12 The strategies being higher- and lower-income adults.7 physician recruitment programs, expanded medical school enrollment debated in Massachusetts parallel Support for health reform is also high for students committed to primary those being debated nationally: among providers in Massachusetts. care, and a public-private program to shifting away from fee-for-service to The majority (70 percent) of repay loans for providers at an episode-based payment system, practicing physicians in community health centers, among creating incentives for more efficient Massachusetts support health reform others. Nonetheless, provider capacity and high-quality care, addressing and most (75 percent) want reform to continues to be an issue in the state, as inequities in market power that are 9 continue. about one in five adults reported driving up health care costs (perhaps problems finding a doctor who would through a single-payer rate-setting Challenges to Sustaining see them in fall 2009—either because system), and expanding the adoption of health information technology, Health Reform the provider was not taking new 13 patients or the provider was not taking among other things. Massachusetts, however, is facing patients with their type of insurance challenges as it moves forward with Much as Massachusetts led the coverage.3 In addition, nearly 15 health reform. In particular, two country with its push toward universal percent of adults visited the trends that began prior to health insurance coverage, so, too, is it emergency department (ED) for a reform continue to put pressure on the leading the debate on cost non-emergency condition. Both health care system in the state: gaps containment. However, circumstances suggest barriers to in provider supply, particularly for Massachusetts, like the rest of the accessing care in the community.3 primary care, and escalating health country, would benefit from strong Among adults using the ED for non- care costs. federal leadership on health care emergency care, three-quarters payment reform. There is only so reported needing care after hours, much a single state can do to address over half reported not being able to the systematic problems with the Timely Analysis of Immediate Health Policy Issues 2 nation’s health care payment system, earnings from a health care-related has managed to sustain the gains given the important role of the federal job.14 achieved under health reform. Medicare program and the potential Continuing to sustain those gains will for providers to relocate to avoid state The surprise in Massachusetts is not involve hard choices, as cost cost-containment initiatives. The latter that the state continues to struggle containment, by necessity, must is particularly important in with high health care costs, but that translate into less income for some Massachusetts, where almost one of despite these rapidly escalating costs providers and health plans and, every five households in the state has and the economic recession, the state potentially, less choice for consumers. Timely Analysis of Immediate Health Policy Issues 3 Notes 6 11 1 Turner, J., M. Boudreaux, and V.A. Lyncn. Massachusetts Department of Revenue. 2009. Long, S.K., and K. Stockley. 2009. 2009. “A Preliminary Evaluation of Health “Individual Mandate, 2008 Preliminary Data “Emergency Department Visits in Massachusetts: Insurance Coverage in the 2008 American Analysis.” Boston, MA: Massachusetts Who Uses Emergency Care and Why?” Community Survey.” Washington, DC: U.S. Department of Revenue. Washington, DC: Urban Institute, September. Census Bureau, September 22. http://www.mass.gov/Ador/docs/dor/News/Press 12 http://www.census.gov/hhes/www/hlthins/data/ac Releases/2009/2008_Health_Care_Report.pdf. Office of Health and Human Services. 2008. s/2008/index.html. “Chapter 305 of the Acts of 2008: An Act to 7 Long, S.K., and K. Stockley. 2010. “Health Promote Cost Containment Transparency and 2 Long, S.K., and L.